House of Commons Hansard #81 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was finance.

Topics

Income Tax Amendments Act, 1997Government Orders

12:35 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Madam Speaker, it is with pleasure that I rise in the House today to speak to Bill C-28 which offers a wide range of tax related measures, most of which have been discussed at great length in the House by myself and other members.

The bill demonstrates the Liberal philosophy to governing our country: government by knee jerk reaction, crisis management and economic tinkering. Liberal governments do not plan to fail but quite frequently they fail to plan.

Effective economic policy needs to be consistent and the vagaries of politics cannot interfere with the economic direction of the country. In the Liberal war of politics versus economics politics always wins. Unfortunately Canadians frequently lose. That goes back to 1974 with wage and price controls, the 18 cents per gallon tax, the budget of Joe Clark and the Liberals' flip flop on that, their flip flop on the Pearson airport deal, helicopters, GST and free trade.

However, I am pleased that at least they have maintained the policies of the previous government to the extent that those policies have been largely responsible for the government's ability to reduce the deficit. The types of policies I am speaking of are free trade, GST, deregulation of financial services, transportation and energy. Those were the policies of the previous Conservative government which provided the government with an opportunity to make some choices for the future of Canadians. I say with great confidence that not a member on the government side of the House today would disagree that their previous policies are clearly failing ordinary Canadians.

In Bill C-28 the finance minister tinkered with several areas to provide minimal targeted tax relief. He complicated a tax code which is already far too complex. Canadians should not need tax accountants or even tax lawyers to deal with their governments. Even the Americans are moving toward streamlining their tax measures when the Canadian tax code is far more complicated.

The targeted education tax measures in terms of basic direction and intent are very strong. We suggested as part of our prebudget position that the government move toward providing better incentives for investments in RESPs and providing more flexibility for Canadians to invest in their futures and the education of their children.

However, this type of stop gap, one off, cobbled approach to education will not be effective without a holistic approach to economic public policy. Public policy should be designed to provide opportunities for young Canadians in Canada not only to obtain an education but also after their education.

The recent government budget announcement relative to RESP changes follows on the heels of the proposed changes in the bill. If we look at tomorrow's edition of Investor's Digest we see an article by Brenda Robertson which reads:

My problem with the RESPs is that they're already too complicated for investors. The new grants—will probably create more confusion.

This case in point is from the mouth of a tax accountant who probably prefers a complex tax code at some level. She is saying that it is actually getting too complicated for the ordinary Canadian to benefit from.

In the PC plan for growth we call for government to allow Canadians to have more flexibility with their RESP contributions and transfers from their RRSPs, but only as part of a holistic policy toward economic growth, one that combines tax relief, lower income taxes, lower payroll taxes, greater opportunities for jobs and growth in Canada that would keep young people here where they belong.

Let us look at what the government's policies have done to higher education in Canada. We can start with Nova Scotia, the cradle of higher education in Canada, and the immediate situation of the faculty strike at Dalhousie University. Dalhousie is my alma mater. Its students felt that their concerns were being overlooked in the recent election by the two levels of government, both the provincial Liberals and the federal Liberals. The Dalhousie students union spent $40,000 to buy television advertising to make sure Nova Scotia voters were reminded of the education crisis which was looming because of federal cuts to health and social transfers to the provinces.

The student debt load has grown in recent years by 280%. The debt load at the completion of a four year degree now averages $25,000. In 1993 only eight students in the maritime provinces had debts exceeding $30,000 after their four year programs. In 1997 there were over 900. The number increased from 8 to 900 in that short period of time.

Why is student debt load ballooning out of control? It is partially because of the cuts to transfers but also because of the general unemployment situation. Tuition has only increased by 110% but student debt has increased by 280%. The disproportionate growth in student debt is due to the general unemployment situation. Students are competing with graduates for jobs that were previously within the exclusive domain of students.

It is ludicrous to address the issue of student debt load without addressing the issue of general unemployment. That is why we need to address the issues of reducing taxes, growing the economy and providing an economy that creates jobs and provides a better opportunity for young people to work, provide for themselves and supplement their incomes while going to university.

Acadia University is in my riding. Its students just went through a near crisis because of a strike that loomed for several months. Uncertainty was created. Many of those students who were having difficulties came to my office to seek advice. They were not finished their degrees. They were faced with a faculty strike and already had $30,000 in student debts. What a great way to start their careers.

The chain of events since 1993 on both the federal scene and the provincial scene in Nova Scotia has been unfortunate for the Liberal Party of Canada and its cousins in Nova Scotia. For the first time in Nova Scotia's history a governing party has failed to win its successive second term.

The legacy of Russell MacLellan, who called the federal budget an excellent budget for Canadians and for Nova Scotians, is that the Liberal Party lost 20 seats. The Liberals went from 39 to 19 seats in Nova Scotia. Russell MacLellan is kicking himself today for not speaking up when he was in Ottawa and for not speaking up in previous budget debates when the government was adamant that health care and education would be cut to the bone.

National leadership is required at all levels to ensure young Canadians receive the best education in the world to get the best jobs in the world. Leadership is not about federal or provincial jurisdiction. It is about federal and provincial co-operation. The struggle to raise the living standards of a nation is inextricably linked to the quality of its education system in a knowledge based society.

While we need a strong education policy we also need to address tax policy. We need tax relief to keep our best and brightest in Canada and to stop the brain drain that is sapping the lifeblood from Canada's future. Sherry Cooper from Nesbitt Burns stated that the government's changes or lack thereof to education and tax policy will turn Canada's brain drain into a brain train to the United States.

Once our students leave school the economic outlook for them in Canada is very bleak. Canada continues to have a youth unemployment rate of over 17%. Highly educated and motivated Canadians are being forced to leave the country in search of work. As an Atlantic Canadian, I have seen the brain drain issue for a number of years. For over 30 years families have watched their young people leaving Atlantic Canada and going to central Canada to seek opportunity. Unfortunately it is now an issue with which all of Canada is familiar. Across Canada young people are leaving and families are watching their children leave Canada to go to the U.S.

Every year 80% of Waterloo computer science graduates go to the U.S. The combination of higher income and lower taxes in the U.S. is too seductive to walk away from. Canadians need bold action from the Minister of Finance to reverse this exodus. Yet the Liberal policy is to maintain high payroll taxes and the highest income taxes in the G-7. These policies run counter to the most basic of free market logic.

Bill C-28 epitomizes this Liberal philosophy. Instead of making substantive changes to initiate growth in the economy the minister has nickelled and dimed the Canadian people by offering targeted tax cuts in politically palatable areas. If the PC Party plan for growth were implemented we would see the basic personal exemption increased to $10,000. That would take two million low income Canadians off the tax roles. Instead the Canadian government offered Canadians a stop gap solution, an increase of $500.

In fact the tax relief for a Canadian making $10,000 per year in this budget works out to $80 per year. That is an insult. There is no member on the government side of the House here with me today who would disagree that it is an insult.

The fact is that $80 per year amounts to one cup of coffee per week at Tim Horton's, one cup of coffee per month at Starbucks.

It is unacceptable, frankly, that this government has balanced the budget on the backs of ordinary Canadians and now refuses to provide any benefits back to the ordinary Canadian taxpayer.

My Liberal colleagues told this House about the marvellous tax relief and what they have provided for Canadians, and clearly that is not the case. In fact, again, I urge members to pick up a copy of tomorrow's Investor's Digest . In terms of tax relief it states, “What's going to happen when we head into the next recession with nine per cent unemployment, crippling taxes, massive debt and a weak dollar? Presumably, having spent the fiscal dividend on education the Finance Minister will have little recourse but to run renewed deficits as income slows”.

Again, this government is making the wrong choices. It fails to deliver the opportunity to average Canadians to make their own choices as to what to do with their fiscal dividend. This government may have moved into the black, but Canadians are still running in the red. Personal debt is at an all time high in this country.

Bill C-28 makes 15 small and favourable changes, arguably, to the tax code for selective groups, but again this is not sound economic policy. It further complicates the tax code. Certainly we would prefer to see some tax breaks for some Canadians as opposed to no tax breaks at all. But what about really addressing the issue of the egregiously complicated and not user friendly Canadian tax code and making it easier for average Canadians to deal with their own government?

Canadians have not experienced a real after tax pay increase since the early 1980s. Personal disposable income has dropped by 6% since 1991. In Canada the Liberals have maintained high payroll taxes and they continue to believe that we can create a growth economy with a high tax economy. It is not possible and we are going to continue seeing a gap in the standard of living between Canadians and Americans.

If we look at Bill C-28 and the revisions to the CHST, the Canada health and social transfer, the CHST helps the provinces pay for health, education and welfare. In the Atlantic provinces where the local tax base is not as strong as it may be in some parts of the country to pick up the slack when these cuts are particularly draconian, the effects of changes and cuts to the CHST are dramatic and the impact is devastating.

The government talks about having established a cash floor for the CHST funding. The fact is that the cash floor is established on a national level. The fact is that seven of the ten provinces will continue to receive less money every year for the next four years, including provinces like Nova Scotia.

When the government talks about cash floors it should realize that health and education spending in many provinces is not a matter of having a floor. It is subterranean. It is not up to the national standards and the Liberal answer is to cut further the cash transfers to the provinces in those areas.

Our platform would call for a provincially reached cash floor level that would truly establish the long term stability of social investment in each province of Canada. We need a plan that ensures equity and equality of opportunity for all Canadians.

This Minister of Finance would like Canadians to believe him when he says in a press release that “Governing is about choices, priorities and values. Our choice is clear. Health care is a priority for this government”.

Based on the Liberal convention of last weekend and the outcry of Liberal delegates from across Canada for this government to start investing more in health care and to start dealing more with the health care crisis of this country, obviously health care may be a priority for the Liberal Party at a grassroots level but it is not a priority of this government.

I said a few minutes ago that there was not one government member on this side of the House who would disagree with me when I say that the government's policies are clearly missing the mark. There may be one now.

We will continue to offer our positions and our beliefs which represent our unwaivering belief in the free enterprise system. The free enterprise system is the best system to provide all Canadians the opportunity to succeed and prosper in this country.

We also believe that the free enterprise system is only going to be successful and sustainable if all Canadians have access to the levers of the free enterprise system and to the levers of growth to bootstrap themselves and their families.

We need a government that is prepared to commit to sound strategic social investment in areas that will include the competitiveness of Canadians in a global environment as we enter the 21st century, as well as a government that will couple this investment with tax reduction and provide Canadians the types of opportunities they need and deserve right here in Canada.

Canadians need a plan for growth. That is what the PC party is offering Canadians. It is not offering a stopgap, one-off approach to economic policy but a holistic economic policy that will provide Canadians with a plan that will work and will put more Canadians back to work.

Income Tax Amendments Act, 1997Government Orders

12:50 p.m.

Stoney Creek Ontario

Liberal

Tony Valeri LiberalParliamentary Secretary to Minister of Finance

Madam Speaker, the hon. member said something along the lines that the government spent the fiscal dividend on education, that the economy is going to decline, that it will go into a downturn and then we will be back into deficit financing.

I am sure the hon. member was here when the budget was put forward. The finance minister said that we would balance the books this year, next year and the year after that for the first time in a very, very long time.

In fact, if we look back to 1993 we have not missed a target. We have always bettered the target. I am not sure whether the hon. member really has his facts right. He should probably clarify that.

On the other point, the hon. member talked about the transfers and the importance of transfers to the provinces. I agree with him that transfers are important to the provinces. However, I also want to remind the hon. member that during the 1997 election his party was promoting the fact that we should eliminate all cash transfers and just deal with tax points; in effect, eliminate the federal role in transfers to the provinces completely.

I am sure that is something members of the Bloc Quebecois would agree with, but I am not sure it is something that the hon. member wants to stand to defend, that being the elimination of the federal presence in transfer payments to the provinces.

I ask the hon. member, when he speaks about transfers, whether he would pay some attention to the tax points portion of the transfers and the fact that equalization payments to the provinces in Atlantic Canada were not in any way affected. Those provinces require assistance and this government did in fact make those changes in consultation with the provinces.

I ask the hon. member whether he is prepared to stand to defend the fact that his party wants to eliminate the federal presence in transfers to the provinces.

Income Tax Amendments Act, 1997Government Orders

12:50 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Madam Speaker, I thank the hon. member for his question. When he quoted me, in fact, I was quoting Brenda Robertson who writes for Investor's Digest . I urge the member to pick up a copy. It comes out tomorrow.

Income Tax Amendments Act, 1997Government Orders

12:50 p.m.

Liberal

Tony Valeri Liberal Stoney Creek, ON

Do you agree with her?

Income Tax Amendments Act, 1997Government Orders

12:50 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Yes, I do agree with her when she says that what is going to happen when we head into the next recession with 9% unemployment, crippling taxes, a massive debt and a weak dollar is that we are going to have to spend and, after having spent the fiscal dividend, we will have little recourse but to run renewed deficits as income slows. That is a basic argument of mathematics.

The hon. member and his government are actually content with spending money without providing any meaningful tax relief to Canadians.

Let us hear what Sherry Cooper of Nesbitt Burns says. She says we are pouring all this money into education and scholarships and then the better and brighter will go straight to the U.S. where taxes are massively lower.

This member stands behind a millennium scholarship fund which does not kick in for two years. This fund will cost $2.5 billion and will help only 7% of students seeking higher education. It is appalling that he would be proud of it.

In 1984 when a Conservative government was elected the deficit as a percentage of GDP was 9%. We reduced that to 4% by 1993.

His government maintained our policies, including free trade and the GST. We deregulated the national energy program, which I hope my colleagues in the Reform Party have some appreciation for.

Income Tax Amendments Act, 1997Government Orders

12:55 p.m.

An hon. member

Two years too late.

Income Tax Amendments Act, 1997Government Orders

12:55 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

An hon. member opposite said it was two years too late. It was a heck of a lot faster than the previous government.

We deregulated financial services, energy and transportation. Those policies helped this government. They helped lay the groundwork for this government to continue to eliminate the deficit. In fact, we could say that this Liberal government is a government of sound and original ideas. Unfortunately its original ideas are not sound and its sound ideas are never original.

The hon. member talks about the CHST transfers and the fact that our party espoused a tax point solution to this issue. How can the member say that transferring greater authority to the provinces to determine the future of their health and social spending is a bad thing when he is part of a government that has reduced health and social spending by 35% over four years? How can he say that the federal government can be trusted with that responsibility when there are a lot of provincial governments out there which are fearful of further draconian cuts in the future from a federal government that is as heavy-handed as this one has been?

Income Tax Amendments Act, 1997Government Orders

12:55 p.m.

Reform

Val Meredith Reform South Surrey—White Rock—Langley, BC

Madam Speaker, can this member explain to Canadians why his government, in the nine years that it was in power, did not get rid of the deficit when the economy was in a growth situation and would have allowed it to reduce the deficit? Can he explain to Canadians why the Conservative Government between 1984 and 1993 allowed the deficit to reach $42 billion and allowed the national debt to more than double?

Income Tax Amendments Act, 1997Government Orders

12:55 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Madam Speaker, obviously the hon. member was not so disenchanted in 1988 with the Conservative government's policies that it prevented her from running as a candidate.

Obviously she felt quite comfortable in the Conservative Party's policies between—

Income Tax Amendments Act, 1997Government Orders

12:55 p.m.

Reform

Val Meredith Reform South Surrey—White Rock—Langley, BC

Madam Speaker, as a point of order, I should advise the House and Canadians that I did run in 1988 as a Reformer because I was terribly distressed with what the Tories were doing as a government.

Income Tax Amendments Act, 1997Government Orders

12:55 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Madam Speaker, I seem to have struck a chord.

In any case, the economic policies and the mess the government of Brian Mulroney inherited dictated that we had to reduce by 15% per year program spending growth. We reduced it to zero by the time we left office. Beyond that we were able to not only reduce program spending, which was out of control at that time, but we were also able to reduce the deficit as a percentage of GDP.

We were also able to implement policies which have been absolutely essential in reducing the deficit, including the GST, which is a consumption tax that is a heck of a lot better than the manufacturers' sales tax which it replaced.

Then we implemented the free trade agreement.

We were the party that supported free trade before the members on the government side had ever supported it. Those are the types of difficult innovative policy decisions which have provided to Canadians today a fiscal dividend. The fact is those were the right policies then and are the right policies now.

Income Tax Amendments Act, 1997Government Orders

1 p.m.

Reform

Gerry Ritz Reform Battlefords—Lloydminster, SK

Madam Speaker, I just had one comment on the member's speech.

The European model puts a lot more emphasis on trades people. When people are educated in that way it tends to lead to the quicker creation of jobs. These people finish their courses within six months to two years as opposed to university classes which take two to six years. This gives them a chance to get something on their resume. They can always go back for further education.

Does the member see that type of program working for Canadians?

Income Tax Amendments Act, 1997Government Orders

1 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Madam Speaker, I thank the hon. member for a very good question. There is a tremendous amount of duplication of efforts between provincial and federal governments in Canada.

If we look at the education system and training in Canada, we see that part of the problem is that there are so many programs which are not tied together that we do need a more cohesive approach to training, education and more research into apprenticeship programs. I think there is a significant amount of potential, especially in the areas of tying education to the jobs of tomorrow.

I believe governments have to look ahead to see where the employment trends are going and then federal and provincial governments should be compelled to work together to ensure, either through apprenticeship programs or through a better secondary and post-secondary education system, that our young people are provided with the skills and tools they need to survive and prosper here in Canada.

Income Tax Amendments Act, 1997Government Orders

1 p.m.

Reform

Gerry Ritz Reform Battlefords—Lloydminster, SK

Madam Speaker, I will be sharing my time with the member for Calgary West.

As we debate this bill and some of the amendments this afternoon, I cannot shake the belief that the governments that introduce these massive omnibus bills can only have one of two motives in mind. The first motive, I would think, is that they are probably in a desperate hurry or, second, that they have something to hide.

Let us look at the first case scenario. Is this Liberal administration in any sort of a hurry? I cannot see why. The Prime Minister has spent this past weekend shortcutting democracy by laying claim to future mandates with his millennium scholarship fund and prebooking dollars for future programs.

Along with his lack of vision, I cannot see any reason why he would see a difference between 1968 or 1998 let alone the next millennium where he has already committed such a large chunk of our money.

Maybe we can find a sense of urgency in the office of the prime minister in waiting, formerly known as the finance minister. He is so eager to put his stamp on the economy that he has created this 464 page rubber stamp to enshrine Liberal tax policy in a never-never land of complexity, manipulation and government interference and intrusion into other government jurisdictions.

This Liberal government is asking Canadian taxpayers to think happy thoughts and fly straight on and never think of their income as their own, never believe one can make personal choices without first filtering the money through massive bureaucratic programs.

However, since this has been a feature of Liberal tax policy for the last three decades, we cannot see why anybody would be in a hurry. What can I conclude? This government has something to hide. What does it have to hide? We are told that this government is so open and transparent that it is now telling us what it is going to do with our tax dollars years from now.

Somehow taxpayers who are looking at another four years of diminishing net incomes and the next generations faced with paying off this massive debt we have accumulated, almost $600 billion, big government debt cannot find as much cause for celebration as members opposite would like us to believe.

Part of what the Liberals are trying to hide is the fact that they have completely ignored the wishes of the Canadian people, all those people who came to the finance committee last fall making presentations.

At this time of the year when millions of people are tied up trying to figure out their complex tax forms, this government offers nothing to simplify that process. On the finance committee we heard those witnesses last fall testifying that payroll tax cuts were essential to promote further prosperity and spin the economy in this country.

The finance minister offers us 10 cents off the EI premium while jacking CPP premiums through the roof. What is he up to with those excess premiums?

As it turns out they look real good when placed on the asset side of the ledger. They go to pay down the deficit, not to provide the training or the employment benefits this country so badly needs.

It turns out that the public pension surpluses also serve to make the government look good. No one on the government side wants all this to be as open to the public as they claim they do. Perhaps it is not that the Liberals have something to hide but something they want to protect. From what this bill contains I would have to conclude that they want to protect their ability to intrude in and control every aspect of Canadian economics and governance. Taxing municipalities that are only trying to pay for the downloading of services that was begun by the present finance minister is ridiculous. Where do the Liberals believe these profits are going? We should be encouraging cities and towns to be more flexible, not less flexible.

As for the perceived conflict of interest by the finance minister on clause 241, much has already been said. I want to offer my support to my colleagues on this side of the House.

I will not support Motion No. 3 because it simply adds to the bureaucracy of administration and it does so in the area of the provincial jurisdiction. What we are looking for is simplicity in the tax code and a vision from this government that recognizes that money left in the hands of those who produce it is much more effective than all the tinkering with an outdated tax code that only gets more incomprehensible and complex to those of us who are forced to use it.

Income Tax Amendments Act, 1997Government Orders

1:05 p.m.

Reform

Rob Anders Reform Calgary West, AB

Madam Speaker, I challenge the member here to tell Canadian taxpayers, because he has talked about tax increase after tax increase, how many tax increases this Liberal government has introduced since it became government? That is the challenge I lay to him.

Income Tax Amendments Act, 1997Government Orders

1:05 p.m.

Reform

Gerry Ritz Reform Battlefords—Lloydminster, SK

Madam Speaker, it is a very in-depth question and I am not sure anyone has a complete handle as to all the insidious tax bites that we have seen throughout the country. I believe the number is somewhere around 37.

Most people have no concept of where that tax bite is getting them other than when they look in their wallets at the end of the month. The month drags out to 30 or 31 days and their wallets are only good for about 20 or 21 days. We are seeing that shortfall in revenue, disposable income, taxes that show the average family of four paying out $21,000 for income tax and only having $17,000 of its incoming going to food, shelter and clothing. It is creating a generation of have nots in this country.

On top of that, these are the same people who are being asked to finance the increase in CPP. They are the same people who are being asked to finance the paying down of the debt that we have seen accumulate over the past 30 years. It is quite a challenge to most people out there to make both ends meet and still come up to the tax levels that have been created for them in this country.

As other speakers have indicated, it creates tremendous brain drains. We see people educated here who cannot afford to work here leave the country. That is revenue that is lost to this country for generations to come. It is a shame. We have to stem that tide. We look to this government to give us the leadership and the direction to slow that tide down, turn it around and get those people staying at home working where they should.

Income Tax Amendments Act, 1997Government Orders

1:05 p.m.

Stoney Creek Ontario

Liberal

Tony Valeri LiberalParliamentary Secretary to Minister of Finance

Madam Speaker, the hon. member talked about laying claim to future governments. Then he criticizes the government with the millennium scholarship fund. I would offer to the member the explanation that what this government is doing is not laying claim, we are paying for programs rather than shifting the burden to future governments.

We are being criticized by the Reform Party for actually paying for something that has been announced and is quite transparent. He knows where the $2.5 billion is going. He keeps standing up in this House and telling people. That is fine.

I have a question about the comment he made about taxing municipalities. If he votes against Bill C-28 and wants to eliminate that provision he is referring to, has he talked to corporations and told them that the Reform Party is in favour of allowing municipalities to compete tax free with private corporations? Is that what the Reform Party is in favour of? If he votes against Bill C-28 and that provision is removed that is what he would be allowing.

Income Tax Amendments Act, 1997Government Orders

1:10 p.m.

Reform

Gerry Ritz Reform Battlefords—Lloydminster, SK

Mr. Speaker, I thank the parliamentary secretary for his question.

It is quite an in-depth study that needs to be done in all areas of the country. He asked me to say that municipalities would be in direct contradiction to private corporations in that they are tax free. The one program that pops to mind is the infrastructure program which hit municipalities using their own resources against private corporations in order to qualify for the infrastructure money. Towns and villages were doing their own sewer and water to make that program go further and not go to private contractors. There are several instances of that in my riding.

The member talked about corporations being in competition with government. Canada Post is a prime example. People in my riding are forced by law to charge three times the rate that Canada Post charges for the same service. That is a direct contradiction to what the member is trying to get across.

The member brings up the millennium scholarship, an intrusion into provincial jurisdictions. The members for the Bloc made that very clear. I hear that from home as well. We are booking money out for future generations to pay for. It does not kick in soon enough. It does not cover enough people. The representations on the finance committee from students from the Canadian Association of Students said they want that needs base. Let us have the money working for us today, not further down the road. It does not go far enough fast enough.

Income Tax Amendments Act, 1997Government Orders

1:10 p.m.

Reform

Rob Anders Reform Calgary West, AB

Madam Speaker, I would like to boil this down for the taxpayers watching at home.

This is Bill C-28. See how thick it is. That is what the Liberals call a neutral tax or something that is a tax simplification or tax relief. That is what they call tax relief. It is a telephone book. A telephone book means that taxes are becoming more complex. It is not as though we were not complex already. Walter Robinson of the Canadian Taxpayers' Federation sent a survey to all the members in the House of Commons and asked whether MPs do their own taxes. A large portion of MPs do not actually do their own taxes.

We are the people who pass the laws in this country. We are the ones who create taxes or change taxes. A Reform government would provide tax relief. Nonetheless, many of us as law makers do not do our own taxes because they have become so complex. Tax accountants and tax lawyers making their living doing taxes advocate that taxes should be made simpler and less complex. They as well as the taxpayers are crying out for help.

I see something as large as a telephone book. Members across the way in the Liberal government are the architects of the slash and burn in health care and the architects of tax increases. They tell us this is a good change to the taxes. Shame on them. How can they continue to justify Bill C-28 and its myriad of tax changes and tax increases as something that is good for the country?

There is no tax relief here. During the last election I do not believe the Liberals advocated increasing taxes when going door to door. Yet they have increased taxes twice since the last election and 36 times during the 35th Parliament. I bet any money that at any door they went to not a single taxpayer begged to have their taxes raised. Yet the Liberals have so willingly fulfilled that task and filled their pockets.

Disposable incomes have continued to decline since 1987. I know that the Tory across the way likes to quote from 1991 onward, but the fact is that real disposable incomes have continued to decline since 1987. Taxpayers need a break. They can only go so long. They can only suffer much.

There is no tax simplification by introducing something that looks like a telephone book. Nobody can pull the wool over my eyes and those of the taxpayers by telling us that there is tax simplification going on here. Indeed this bill is adding more regulation on top of regulation.

Number three, there are new taxes on municipal utilities. One government is taxing another level of government. It is bad enough when the government taxes the citizenry, the businesses, the employees and employers, but when it starts taxing other levels of government, indeed the desperation is thick.

Number four, this bill returns nothing to the health and social transfer. There were promises made by the Liberals in the last two elections.

In the election for the 35th Parliament in 1993 the Liberals said “Make us the government and we will guarantee the funding for health care and education and guarantee the health and social transfers”. What actually happened? The Liberals cut $6 billion out of the health and social transfers.

What has that meant? That has meant that the federal government is responsible for the hospital closures in this country. That is what it means. It is the federal Liberals passing the buck on to their provincial counterparts which is closing hospitals across this land. Their broken promises in 1993 and their broken promises in 1997 are closing hospital beds in this country.

The Liberals have cut the heart out of health care and they have the audacity to stand in the House and have their minister say that they are the friends of health care, when indeed waiting lists have grown longer and doctors and nurses are leaving this country. The Liberals are the architects of the slash and burn policies in health care.

The Liberals say one thing in the election but then deliver a far harsher stroke when it comes to their cuts in these areas. They download on the provinces. Shame on them.

The tax bill in this country is going to go up by $6 billion this year. That is not tax relief. That is more money coming from the pockets and the wallets of the taxpayers and going into the government coffers. It is a tax increase. Six billion dollars more are being taken from taxpayers this year than last year.

What does it mean in terms of this whole debt situation? We have all heard about these huge numbers in the debt but I am going to boil it down. Six thousand dollars out of the average taxpayer's salary goes to paying just the interest on the debt. That is $6,000 that could be allocated to a whole host of other things. The average taxpaying family is spending $6,000 just to pay the interest on the debt which this government and its past incarnations helped to create.

What about the contingency funds the government talks about? It would take 200 years to pay down the national debt by using these $3 billion contingency funds. The real travesty is that the Liberals are not even moving along that track because the contingency funds are being used to fund new program spending. That is exactly what they are doing. That amounts to a $45 billion payment we have to make every year just to pay the interest on the debt. As I said, that $45 billion translates into $6,000 for every family in this country.

I have been attacking the government. I have been attacking the Liberals for what they have done on taxes, but I am going to speak to the poor suffering some of the Liberals have undergone.

I speak of the poor finance minister. Yes, he is a millionaire. Yes, he is involved and owns through various arm's length relationships the Canada Steamship Lines. The poor finance minister has had to take his money and shelter it. He has had to put his assets offshore because taxes are too high in this country and he does not want his companies to pay tax in this country.

Do you know what? I feel for him. The hearts and the minds of this country's taxpayers bleed for our finance minister because while he recognizes that taxes are too high and while he does not want his own companies paying those high taxes, he has raised taxes on the rest of Canadians 38 times since the government has been in power and since he has been finance minister. Yet he shelters his own money offshore.

I feel for him because he has to fly Bahamian flags and not those of his native Canada. I feel for him because he likes the Netherlands Antilles with a 15% withholding tax as opposed to a 25% withholding tax. It works very conveniently into his trusts and his arm's length relationships. Shame on him. He should be paying tax in this country. If he is raising taxes on Canadians, he should have the decency to pay taxes in this country while Canadians suffer those bills. I feel for the finance minister.

High taxes have created a brain drain. Young professionals, people with a good university education, or any level of education, they do not even have to have a high school education, are leaving this country to go to other places with lower taxes.

I want to mention some of the 38 tax increases the Liberal government has brought in since it has been in power. It went ahead and changed the tax treatment of securities. It taxed dividends. It taxed insurance companies. It accelerated capital cost allowances. It increased excise taxes on gasoline and tobacco. It restricted the tax assistance of RRSPs and reduced the RRSP withdrawal age to 69. It increased EI premiums. CPP premiums will go from 5.2% to 5.4% to 5.6% to 6.0% to 6.4% during the government's term. Shame on the Liberal government for all its tax increases and the complications.

Income Tax Amendments Act, 1997Government Orders

1:20 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Madam Speaker, I listened and I am almost stunned at what I heard. The member went through a litany of points. It makes me wonder how Canadians feel when they hear information which is conflicting with fact. How do they feel when they know that information given in the House of Commons is just wrong? Do they wonder whether or not the member is somehow trying to make a point by hoping somebody would not understand that there are reasons for things and that representations are somehow relevant?

The member talked about personal income taxes and made some comments about how people do not do their own tax returns. This year taxpayers can actually file their income tax returns over the telephone with a touchtone phone. It takes less than 10 minutes because the vast majority of taxpayers have very straightforward tax returns and they can get quick returns.

The member went on to say that the Income Tax Act is the size of a telephone book. The member has implied somehow that the Income Tax Act which individuals have to deal with is as thick as a telephone book and they have to know everything that is in it. What the member did not say is that the Income Tax Act of Canada includes corporate income taxes which is the vast majority of the tax act. It also includes interpretation bulletins, information circulars and regulations which guide the Income Tax Act when people are interested in what is in it.

The member implied that the tax relationship with the Netherlands Antilles somehow had something to do with the current finance minister, that he was somehow getting around something. That is to suggest there is something wrong. We have tax treaties with countries around the world. We have those treaties so we can promote bilateral trade and cultural exchange. Those are good for Canadians because 40% of our GDP is export oriented.

The member has given information which is incorrect. He has given information which is not in keeping with the facts. I really am very sorry that Canadians have to bear some of this stuff, even when it gets down to that somehow the terrible government has restricted RRSPs.

The current RRSP limit for Canadian taxpayers is $13,500 per year. A person has to make $75,000 a year to be able to reach that maximum. That means 5% of Canadians cannot put in more because they have more income. He is talking about less than 5% of the income earners of Canada. The member is somehow suggesting to all Canadians that this is unfair.

The issue is that the member has put a bunch of information on the table which he knows is incorrect. Canadians deserve an apology for the incorrect information which was suggested as the truth by the member.

Income Tax Amendments Act, 1997Government Orders

1:25 p.m.

Reform

Rob Anders Reform Calgary West, AB

Madam Speaker, words spoken like only a tax and spend Liberal could speak them.

The fact is that in 1996 the average family paid $21,242 in taxes and spent $17,415 on food, shelter and clothing combined. According to the Fraser Institute the average family paid $27,000 in 1997. Under this Liberal regime, the gap continues to widen between what people pay in taxes and what they spend on food, clothing and shelter. That is a fact.

A Liberal bragging about how electronic filing is saving the government money in terms of getting people's taxpayer dollars to them more quickly and easily is like someone plucking feathers out of a goose and saying he can get the feathers out of the goose with the least amount of squawking. He can take money with the fewest complaints. How dare he? And he is defending the complexity of the tax code?

Income Tax Amendments Act, 1997Government Orders

1:25 p.m.

Bloc

Odina Desrochers Bloc Lotbinière, QC

Madam Speaker, we are now at the final stage of Bill C-28, a bill that has been widely talked about this past month.

While this bill is just hours from being passed, the persistent doubt the people of Quebec and Canada have concerning clause 241, which would place the current Minister of Finance in an apparent conflict of interest situation, has still not been dissipated.

In spite of the dozens of questions asked by the Bloc Quebecois and the other opposition parties, the Prime Minister and his Deputy Prime Minister have been passing the buck to each other in this House, systematically refusing to provide answers to the opposition, which wants this matter clarified once and for all.

Moreover, all the efforts made to have the Standing Committee on Finance hear witnesses on this issue have been vain, except for the Prime Minister's ethics counsellor, who appeared before the committee to say that there was an apparent conflict of interest.

In this respect, while the Liberals are doing their very best to protect their finance minister's image, I will take a moment today to quote exactly what the ethics counsellor said in his testimony before the finance committee; incidentally, he was one of the very few witnesses allowed to testify before the committee.

We will share with you what we have heard Harold Wilson himself say. On the subject of whether the Minister of Finance may receive information on his holdings placed in trust, he stated that all ministers “may receive is periodic information on the overall value but not the composition of their holdings, as well as data sufficient for the purposes of filing their taxes”.

He stated further “A blind trust agreement was not appropriate, however, in Mr. Martin's situation, since his holdings are not publicly traded. In this type of situation, my office requires the establishment and disclosure of a blind management agreement. This places in the hands of the supervisors or trustees the assets held by Mr. Martin in Passage Holdings. Mr. Martin is obviously completely aware of the nature of his private interests”.

No wonder the Minister of Finance is tempted to hide in Bill C-28 a clause which would benefit his little ships.

Mr. Wilson also argued that certain provisions of Bill C-28 were in fact dealt with by the secretary of state so that his boss, the finance minister, would not be put in an awkward position.

Mr. Wilson was clear on this. He said “It is the secretary of state who made all the decisions. Therefore, there was no real conflict of interest. Still, Mr. Martin sponsored the bill and some members were of the opinion that this in itself is an apparent conflict of interest”.

Mr. Wilson added “If I had been informed ahead of time, before the bill was introduced, discussions would have taken place on how to best proceed to introduce the bill on behalf of the Minister of Finance, who is responsible for all tax legislation”.

The Prime Minister and the Deputy Prime Minister continue to deny these facts. Why? As we know, the Liberals were told to keep their mouths shut on this issue. It is clear. The gag order given by the Prime Minister to his caucus has been complied with ever since the whole thing came up in the House.

Since February 5, when the Bloc Quebecois showed what is really behind Bill C-28, the opposition has had to deal with a gag order co-ordinated by the Prime Minister's office. Why do the Prime Minister and his government stubbornly refuse to give answers to the opposition on this issue? Why? Because they are embarrassed. They are trying to hide the truth regarding this issue.

Let us not forget that the ethics counsellor clearly said in his testimony that the bill had not been drafted in according with the rules and that, if this had to be done again, some specific measures would have to be taken to avoid a repeat of this situation.

Mr. Wilson is the Prime Minister's ethics counsellor. He is not an independent counsellor, he is paid by the Prime Minister. A historic precedent took place when representatives of the four opposition parties held a joint press conference to ask the government to get to the bottom of the issue. Again, the Prime Minister said no. He did not want to comply with the opposition's request. The Liberals stubbornly refuse to shed light on this very suspicious matter.

Early in the week, in order to solve this impasse, which is totally the doing of the Prime Minister, the Bloc Quebecois proposed a reasonable solution: to take clause 241 out of the bill. Again, the Liberals said no. When the vote was taken last evening in this very House, the Minister of Finance, the Prime Minister and the Deputy Prime Minister were all conspicuously absent. Pure coincidence? No, rather part of the Prime Minister's day-to-day plan to continue to protect the image of the Minister of Finance in this case.

A few minutes ago, my colleague from Saint-Hyacinthe—Bagot introduced another amendment to refer Bill C-28 back to the Standing Committee on Finance. That would enable us to question witnesses so as to clarify the situation for once and for all. I therefore wish to state that I fully endorse the amendment proposed by my colleague for Saint-Hyacinthe—Bagot, which in my opinion reflects the numerous opposition interventions over the past month or more.

Moreover, it is in the same vein as the proposal made in this House by the Prime Minister. When he was being questioned about Bill C-28, he said: “If you are not satisfied with the answers, use the Standing Committee on Finance to ask all the questions you want to ask”.

That is what we are calling for today. We are asking the Prime Minister to move the debate back to the Standing Committee on Finance. We will see then who is right.

Allow me to add that, if the Prime Minister and his government refuse this new request from our party as well, they will have to face negative public opinion.

I hardly need point out that the position of Minister of Finance in a Parliament like ours is a vital one, and its incumbent cannot draw even a hint of suspicion. He must have the full confidence of the public, particularly since we are well aware that this particular finance minister aspires to be Prime Minister some day. He would have no problem following in the footsteps of our present Prime Minister, mind you, since the PM contradicts himself continually in his statements in this House, except in the case of Bill C-28. That is another matter. He is protecting his Minister of Finance.

The Prime Minister has an opportunity to rebuild his credibility in the matter. He must accede to our latest request, otherwise we will continue our research. And so long as we have not obtained what we are after on behalf of the people, we will keep digging.

I would also like to raise other important points in this bill, including the points concerning transfer payments to the provinces. This government is stubbornly maintaining its planned cuts to the provinces. What the Prime Minister is trying to get us to swallow is twisted.

In fact, the Prime Minister is saying simply that the planned cuts of approximately $48 billion have been reduced to $42 billion. That means that the provinces and the people will have to face $30 billion in cuts, $12 billion of which will be in Quebec alone.

The additional billion and a half dollars announced by the Prime Minister and his Minister of Finance represents nothing more than a purely vote getting move. Who is going to pay the social costs of the budget policies of the present Liberal government? The sick, the unemployed and society's most disadvantaged. These are the people who are the true artisans of the balanced budget delivered last month by the Minister of Finance, not the Prime Minister or the Minister of Finance. The people are doing the work.

This new social injustice is unacceptable, and the Bloc Quebecois will vote against Bill C-28. We already know the Liberal reaction: the opposition will vote against a budget that gives more than planned to the provinces. We are familiar with it, the demagoguery of the current Prime Minister.

The truth is that this government refuses to admit to its responsibility for the state of health care services. When a government like the Liberal one cannot even acknowledge a poor choice in its latest budget, when we see the federal Liberals encouraging the government to debate a matter of provincial jurisdiction, we begin to understand why this government and its disastrous Prime Minister are trying to hide the truth in the Minister of Finance's apparent conflict of interest in Bill C-28.

In closing, if the Prime Minister really wants to show his good faith in this matter, he should return Bill C-28 to the Standing Committee on Finance, enabling this Parliament and the people to see the situation in its entirety.

Income Tax Amendments Act, 1997Government Orders

1:35 p.m.

Stoney Creek Ontario

Liberal

Tony Valeri LiberalParliamentary Secretary to Minister of Finance

Madam Speaker, I have a comment but I do not think there is anything I want to actually ask the member about. I want to clarify some comments the hon. member made which were not correct. I would like to ensure that the record shows the correct information.

The hon. member made reference to the ethics counsellor, that the ethics counsellor found the appearance of a conflict of interest on the part of the Minister of Finance. Both the member and I were at the meeting and the answer the ethics counsellor provided was that there was no conflict of interest and no appearance of a conflict of interest.

To go further, the member stated there was some doubt as to whether the Minister of Finance acted properly. In fact the minister quite rightly did not act at all. All decisions and discussions were held by the secretary of state.

The Bloc Quebecois keeps moving on this issue. It started by hurling accusations that the FAPI rules were in jeopardy. Then the Bloc members said that the clause would benefit the minister. Now the assertion is that there is an apparent conflict of interest.

In fact the answer given to the members of the Bloc, the members of this House, was that there is no apparent conflict of interest. There is no conflict of interest. The Minister of Finance will not in any way benefit from this bill. It has been said over and over again but those members continue on this track. Those who make this charge knowing full well that it is false demean this institution and demean public life. Pure and simple they are engaging in the most cynical kind of politics. It is something Canadians will not stand for.

I would hope the hon. member has the courage, if he feels so strongly about this, to go outside and make those accusations. But he knows that what he is saying is false and is pure politics. There is no room in this House for that kind of politics.

Income Tax Amendments Act, 1997Government Orders

1:40 p.m.

Bloc

Odina Desrochers Bloc Lotbinière, QC

Madam Speaker, I have here Mr. Wilson's statement. On page 7, he says “Nonetheless, Mr. Martin sponsored this bill and certain members—”

Income Tax Amendments Act, 1997Government Orders

1:40 p.m.

The Acting Speaker (Ms. Thibeault)

I must remind the hon. member that he may not identify a minister by name, but must use his title.