Debates of April 30th, 1998

Canada Evidence Act

[Some hon. members]

On division.

[The Speaker]

I declare the motion carried.

(Bill read the third time and passed)

[Marlene Catterall, Liberal, Ottawa West—Nepean, ON]

Mr. Speaker, could we now see the clock as 5.30 and proceed with Private Members' Business?

[The Speaker]

Is it agreed?

[Some hon. members]

Agreed.

Income Tax Act

[Paul Szabo, Liberal, Mississauga South, ON]

moved that Bill C-244, an act to amend the Income Tax Act and the Canada Pension Plan (transfer of income to spouse), be read the second time and referred to a committee.

Mr. Speaker, this bill is dedicated to my 16 year old daughter Whitney who said to me that the bill made so much sense the government should just do it.

In the words of Dr. Benjamin Spock, despite all the hard work, taking care of children and seeing them grow up to be fine young people gives most parents their greatest satisfaction in life. Intuitively he recognized the linkage between early childhood development and healthy adult outcomes. Today scientific research has proved that linkage and sent out a powerful message calling on governments to invest in children.

Bill C-244 is as much a health bill as it is a taxation bill. It proposes to amend the Income Tax Act to permit income splitting between spouses where one of them chooses to provide direct parental care in the home to their preschool children.

I first introduced this bill in the House of Commons on October 5, 1994 and laid out the substantive reasons why investing in children was both a fiscal and a social policy imperative. Research not only sustains that assertion but also provides compelling evidence that the quality of care during the formative years is one of the most important determinations of lifelong physical, mental and social health.

To recognize the importance of societal contribution of providing direct parental care this bill seeks to provide a tax break to families by allowing one spouse to pay the other through income splitting. As a consequence, the stay at home spouse would also be eligible to earn Canada pension plan benefits and both jobs and child care spaces would be freed up.

In the past I have also proposed other tax breaks such as the establishment of a caregiver tax credit or the converting of the child care expense deduction to a non-refundable tax credit and extending it to families with a stay at home parent. Regardless of the approach, the common feature is effectively to invest in the quality of early childhood care.

With regard to economic considerations, even the most conservative estimates of savings on health, social programs and criminal justice costs are $2 return for every $1 invested. It has not been until recently that researchers discovered just how significantly early childhood experiences affect the outcomes of our children. As such, the estimated potential economic return is likely understated.

In October 1994 before the standing committee on health Dr. Fraser Mustard, founder of the Canadian Institute for Advanced Research, presented substantive evidence that childhood outcomes were not a question of being rich or poor but rather of other factors related to the quality of care during the formative years. He also referred to the comprehensive research conducted by the Carnegie task force on meeting the needs of youth and children which was published in its 1994 report entitled “Starting Points”.

Its researched observed that good physical and mental health, the ability to learn, to cope with stress, to relate well with others and to have a positive outlook were all rooted in the earliest experiences of life. They concluded that where, how and with whom children spend their early years of life are the most important determinants of health.

I will summarize some of the key findings of the Carnegie research. At birth the brain is far from fully formed. In the days and weeks that follow vital neural connections called synapses form among the brain cells and create maps or pathways along which learning will take place. The first three years are crucial in establishing these connections and it is estimated that 80% of the lifetime development of the human brain takes place at this time.

The synapses do not, however, form automatically. Babies need food for their brains as well as their bodies, but not just good physical nourishment. They also need loving, responsive caregiving. They need to see light and movement, to hear voices and above all to be touched and held.

If we conceive of the brain as the most powerful computer imaginable, the child's surroundings act like a keyboard inputting experience. The computer comes with so much memory capacity that during the first three years it could store enough information that an army of people could input during that time. What sets the brain apart from the electronic computer is its fragile and ongoing relationship to the world around it. With proper stimulation brain synapses will form at a rapid pace, reaching adult levels by age two. By the end of three or four years the pace of learning slows because the synapses begin to wither away. Synapses that are not used are destroyed forever.

The quality of nutrition, caregiving and stimulation that a child receives determines not only the number of these connections or synapses but also how they are wired for both cognitive and emotional intelligence. As with cognitive intelligence, the development of emotional intelligence appears to hinge on the interplay between biology and early experience.

How infants are held, touched, fed, spoken to and gazed at seem to be the key to laying down the brain's mechanisms that will govern feelings and behaviour. On the other hand, an adverse environment can compromise a young child's brain functions and overall development, placing him or her at greater risk of developing a variety of cognitive, behavioural and physical difficulties. In some cases these effects may be irreversible.

Researchers have concluded that the incredible pace of learning in the early years will never again be attained in later years. Therefore if the brain development is slow at the beginning playing catch-up is vastly more difficult and costly in terms of personal sacrifice and social resources.

In April 1997 the Carnegie research was further corroborated by studies presented at the White House conference on early childhood development. The principal finding was that the neurological foundations for rational thinking, problem solving and general reasoning appear to be established by age one. The studies also found that spoken language has an astonishing impact on an infant's brain development.

For example, the number of words an infant hears each day from an attentive engaged adult is the single most important predictor of later intelligence, school success and social competence.

The study suggests that infants need not only a loving but also a talkative and articulate caregiver and that a more verbal family will increase the child's chances of positive health and social outcomes. The results further suggest that the period from birth to three years is so critical that parents actually play a more critical role in the child's intellectual development than teachers will at school.

They also reported that before birth genes predominantly direct how the brain establishes basic wiring patterns. Neurons grow and travel into distinct neighbourhoods waiting for further instructions. After birth, however, environmental factors predominate.

Further support for this research occurred in the fall of 1997 at the international conference of the Society of Neuroscience. Researchers reported that parental care makes such a lasting impression on an infant that maternal separation or neglect can profoundly affect the brain's biochemistry with lifelong consequences for growth and mental ability.

Children raised without being regularly hugged, caressed or stroked were found to have abnormally high levels of stress hormones. Although scientists have reported for decades that maternal deprivation can cause serious behavioural problems, researchers now find that neglect can warp the brain's neuro circuits, leading to higher levels of stress which can impair growth and development of the brain and the body.

These studies have all been well accepted by the world's leading child development experts. On April 23, 1998 the Canadian Institute of Child Health also announced its concurrence with the research to date. In a booklet entitled The First Years Last Forever it states:

At birth the brain is remarkably unfinished. The parts of the brain that handle thinking and remembering, as well as emotional and social behaviour, are very underdeveloped. The fact that the brain matures in the world, rather than in the womb, means that young children are deeply affected by their early experiences. Their relationships with parents and other important caregivers, the sights, sounds, smells and feelings they experience, the challenges they meet, do not influence just their moods.

These experiences actually affect the way children's brains become “wired”. In other words, early experiences help determine brain structure, thus shaping the way people learn, think and behave for the rest of their lives.

One of the overall concerns of the institute is as follows:

Our youngest children and their families are in a quiet crisis. The crisis is jeopardizing our children's healthy development, undermines school readiness, and ultimately threatens our economy.

As a result, it also concludes that more attention must be paid to the quality of care during the first three years of life.

Other significant support comes from the national forum on health which issued its report early in 1997. One of its major concerns related to early childhood development:

Evidence suggests that deprivation during early childhood can impair brain development and permanently hinder the development of cognition and speech. The impact on children's physical and mental health is significant and can only be partially offset by interventions later in life. The environment in which children are raised affects not only the number of brain cells and connections but also how they are `wired' which, in turn, influences their competence and coping skills.

The forum concluded there was an urgent need to invest in children and stated that failure to invest in the early years of life increases the remedial cost of health, education, social services and criminal justice costs. It also noted that children who are poor have more sickness, chronic illness, higher rates of injuries, more severe injuries and higher rates of death.

The forum states that while it firmly believes the primary responsibility for raising children lies with parents, it is in our collective interest to ensure the well-being of our children.

With regard to financial support, the forum pointed out that Canada is the only western industrialized country that does not take into the cost of raising children in the family home when determining how much tax families with children should pay compared to those without children.

In its interim discussion paper the forum went so far as to say that the Income Tax Act discriminates against families with children.

In its final report the forum recommended greater horizontal equity for families with children by reducing their overall tax burden to reflect our commitment to ensure that every child has an opportunity to realize its full potential. In relation to horizontal equity, the gravest social injustice of all time has to be the abandonment of the stay at home parent.

Managing the family home and caring for preschool children continues to be in my view the most important job in the world. It is an honourable profession which has not been recognized for its valuable contribution to our society. It is unpaid work but it is vital work which deserves to be compensated, and that is the point of Bill C-244.

This raises the question of parental preferences for caring for children. A 1997 Compass Research survey conducted in Alberta found that 95% of respondents felt that it was best for infants and preschoolers to be cared for by a parent. An earlier Canada-wide poll conducted by Decima Research found that 70% of parents of preschool children where both parents worked would prefer to have one of them provide direct parental care in the home if they could afford it.

Should a parent have to choose between the job that they need and the child that they love? Norway for example says no and announced that starting in August 1998 the government will pay $570 a month per child under three years of age where one parent provides direct parental care in the home.

The research evidence is irrefutable. The first years do last forever in terms of physical, mental and social health, but also in terms of societal health. The 1996 longitudinal survey on children and youth showed that 25% of Canadian children enter adult life with significant emotional, behavioural, academic or social problems. According to Dr. Steinhauer of Voices for Children, with one in four children entering adult life significantly handicapped, we can look forward to a society that will be less able to generate the economic base required to supply the social supports and services needed by one in four adults who are unable to carry their own weight.

To meet the needs of children in a diverse society, the preferred strategy is to provide flexibility, options and choices so that parents can determine the best possible care for their children. Given the clear linkage between the quality of care of children and lifelong health, we all stand to benefit by investing in children.

In his 1994 economic statement the finance minister acknowledged that linkage when he asserted that “good fiscal policy makes good social policy, and good social policy makes good fiscal policy”. Now that we are well under way to restoring Canada's fiscal health, the time is right to invest in the health and social well-being of Canadians in order to secure our fiscal health over the long term. In that context let there be no doubt that investment in early childhood development represents our best opportunity for sustainable returns.

For all these reasons I strongly encourage the Government of Canada to make investing in children a principal theme in its next federal budget. Within that envelope, consideration should be given to initiatives to address among other things parenting education, prenatal nutrition, fetal alcohol syndrome, early childhood development, community based child programs, and taxation of families with children. These are but a few elements of a pro child policy that will help to ensure not only the development of healthy children but also of a healthy country.

[Lorne Nystrom, NDP, Qu'Appelle, SK]

Mr. Speaker, I want to say a few words on the private members' bill put forth today by my good friend from Mississauga.

First I compliment him on the work he has done on this issue over the last few years. I thank him for the copy of his book. He has put a lot of work into this issue. We should all commend him for the extra parliamentary hours he puts into this very worthwhile issue.

I am sure the member remembers that back in November 1990 Ed Broadbent was retiring as leader of the federal New Democratic Party. The last speech he made in the House as leader was one in which he talked about a need to eradicate poverty among children. I remember that very well. He was sitting about three or four seats over to my right. He made that speech. There was general consensus in the House of Commons that it was a very laudable objective which we should strive for in the next decade. That decade is almost over. We have less than two years to go before the new millennium and we probably have more child poverty now than we did in 1990. We have regressed rather than progressed.

That is a sad commentary on our country, a country with tremendous wealth and tremendous abundant resources. We are extremely fortunate that our country has all these resources. It is like a beautiful necklace of jewels and gold, the resources that are here in this country. Yet we cannot organize it in terms of public policy to make sure we bring children out of poverty and give them an opportunity and a chance. That has to be a very laudable goal and a very laudable objective.

I certainly agree fully with the member across the way that investing in children should be an objective not just of this parliament but for all of us in Canada, the provincial legislatures, the Parliament of Canada, the municipalities and likewise because the future of the country is our children. If we do not invest in opportunities for young people, we are going to have more crime, more unhappiness, more unhealthiness and more social problems.

They are laudable goals and objectives. The member certainly has his heart in the right place.

The member talked about the specific amendment to the tax act and the Canada pension plan. Again his heart is in the right place but I have some questions on whether or not this is the only area that we should move on.

This will enable a taxpayer to make a tax contribution to the Canada pension plan on behalf of a non-income earning spouse. More often that would be the female rather than the male. If we looked at this economically and ran it through a computer model, we would find that this bill would benefit only a small segment of our population, mainly the higher income part of our population. That is the part of the population which may have one spouse working and can afford to contribute into a tax benefit program in the Canada pension plan on behalf of the other spouse.

My riding is comprised in part of the inner city of Regina where there are a lot of low income folks. In those kinds of homes where only one person is working, probably nine times out of ten, maybe 99 times out of 100, the spouse cannot afford to make a contribution, tax credit or not, to the Canada pension plan of the other spouse.

It is a bit like the spousal RRSP which is a very good idea for people who can afford it. It has helped a lot of people and we do not deny that. We are not saying that we should tear it apart. But when we look at the facts, we find that the spousal RRSP helps in a great preponderance of cases the higher income people who can afford to make that contribution. Someone who hypothetically makes $80,000, $100,000 or $200,000 a year, and whose spouse is not working can easily afford to maximize his or her own RRSP contributions and then maximize the spousal RRSP.

With the change in the Income Tax Act as proposed by my friend from Mississauga South, they could max out in terms of the taxable contribution to the CPP on behalf of the spouse.

These are some of the problems I have with the bill before the House today. I suppose the bill would have been more equitable back in the 1950s and 1960s when there was a greater preponderance of one wage earner households, back in the days of Archie Bunker and Leave it to Beaver when the only person working in the family was the male. In those days it would have covered a wider sweep of the population. Again it does not mean the member's heart is not in the right place.

What do we have as alternatives? The main alternative is to make our pension system more progressive and more encompassing to cover a broader sweep of people. Instead we now have a federal government which for new seniors, for people who have turned 60 after December 31, 1995, wants to abolish the old age pension, the guaranteed income supplement and the tax credit for seniors and replace them with what is called the seniors benefit. The seniors benefit will be determined by a means test. In other words it is going back to the 1920s, 1930s and 1940s before we had universal old age pensions. The pensions are taxed back from the wealthier people based on a progressive taxation system.

The current old age pension is a monthly pension that most Canadians are entitled to. Those benefits are taxed. They disappear for single seniors whose incomes are higher than $85,000 a year. If they make over $85,000 a year, there is a claw back. This was brought in in the Mulroney days. The old age pension is taken back by the government. For a couple, that pension disappears after they earn more than $170,000.

There is a progressive scale here. Everybody is entitled to it but the more money you make, the less you get. When a single person makes $85,000 a year, they stop getting the old age pension. When a couple makes $170,000 a year, then they receive no old age pension.

In addition to that, there is a guaranteed income supplement. It is a supplementary benefit that is not taxed and is there for only the low income old age pension recipients. A poor person in this country, and I represent a lot of them in the city centre and small towns in my riding, can receive the maximum guaranteed income supplement along with the old age pension. The GIS is not taxable but the OAS is taxable. It is a fair system. It is a progressive system that is geared to helping those who are the most in need.

Regrettably what is happening is that this system is going to be abolished. We are going back to the past. There will be a means test. People who make a few dollars will not receive an old age pension or the seniors benefit while those who make a few less dollars will receive part of the seniors benefit. Starting from dollar one, a person will be judged as to whether or not they qualify for the seniors benefit.

That is the concern I have with some of the details of the bill we are talking about today. The member is going in the right direction in terms of his heart and is being very thoughtful, but again I think we could put the money into a more progressive pension system.

In addition to that, this House just recently voted on the Canada pension plan. It made it a more regressive plan. It upped the premiums by 73% over six years. It cut down what people will receive from the plan during that same period of time. It particularly hit widows and people on CPP disability, again going in a regressive way.

It is a sad commentary to have those things happen from a Liberal government that at one time had a proud heritage of being compassionate, caring and progressive in this country.

I see the member from Hamilton across the way hanging his head in shame at the regressiveness. This government is more conservative than Brian Mulroney back in the 1980s. It is no wonder the member from Hamilton is hanging his head in shame. He used to be a progressive Liberal. Now he is to the right of Brian Mulroney in destroying the old age pension in this country.

[Stan Keyes, Liberal, Hamilton West, ON]

Mr. Speaker, I rise on a point of order. Before the hon. member gets all exercised, I just want him to know that I am working on facts here and that in fact the benefits received by seniors are not means tested.

[The Acting Speaker (Mr. McClelland)]

Hon. members will know that is certainly not a point of order. It is probably a point of debate.

[Maurice Dumas, Bloc, Argenteuil—Papineau, QC]

Mr. Speaker, I am pleased to speak today on Bill C-244, which was introduced by my colleague for Mississauga South.

This bill would enable a taxpayer to transfer part of his or her income to a spouse who remained at home to rear children, to enable this person to make contributions to the Canada pension plan.

The intent of this bill is a praiseworthy one, greater financial independence at retirement age for whichever spouse remained at home to look after children. I say spouse, but generally speaking that person is still the wife.

The logic behind Bill C-244 is the following: a worker would be authorized to transfer part of his income to his spouse on his income tax return. For application of the Canada Pension Plan Act, the income thus transferred would be considered income from self-employment. For the recipient, would this self-employed status confer the tax deductions related to self-employment?

If so, the stay-at-home spouse would pay both CPP contributions, the employer and the employee share, which would entitle her to a larger pension upon reaching retirement age.

In order to make such a transfer, the couple must have a child who is not attending school full time, and the couple must not, of course, claim child care expenses.

This is where my first criticism comes in. Is this not a way of using the wife as a tax shelter? The societal view behind this bill is that women are at home looking after children. There is an obvious risk that the male partner may ask his female partner to stay home and look after the children, in order to take advantage of this tax measure.

This view is contrary to a modern family policy aimed at improving women's autonomy and their participation in the labour market.

The family policy put forward by Quebec, with a day care system for children over the age of three at $5 a day, and the additional social assistance provided by Newfoundland for day care expenses are cases in point.

Every major report on women and the labour market released since the 1970 report of the Royal Commission on the Status of Women in Canada emphasized the fact that child care is an essential service if women are to participate fully in the labour market.

My second criticism is the following: What about individual autonomy, especially that of women? There is a risk that the income transfer will take place on the tax return only, making the woman dependent on her husband. This is a backward approach that makes no sense at a time when the income of EI and welfare recipients is being cut to encourage them to go back to work.

Besides, it would be unfair not only from a tax point of view but also for single parent families, most of which are headed by women who have to put their children in day care so they can go to work.

I am convinced that women re-entering the labour market would rather rely on a family policy adapted to their needs like the one in Quebec than lose their autonomy and be subsidized to stay at home.

Finally, this tax measure will cost the federal government in terms of lost tax revenues. Instead of sinking money in such a controversial measure, the federal government should transfer to the provinces the money they are entitled to and let them implement a family policy suited to the 21st century.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, I am delighted to rise to debate Bill C-244. I commend my hon. colleague from Mississauga South who is probably the most distinguished champion of fairness for families in the tax code. He has a noble record of promoting the importance of family in Canadian public policy as the basic institution of our society. This bill is one more effort to his credit. It follows on the successful passage of his private member's Motion No. 33 in the previous parliament which also sought to change the treatment of two parent families under the income tax code.

I and most of my colleagues from the official opposition support the intention of this bill. As a general rule I oppose proposed amendments to the Income Tax Act because I believe our 1,300 page tax code is too complex as it is. I believe in principle that tax policy ought to be neutral with respect to the choices that people make and that it ought not to be a vehicle for social or economic engineering or central planning. To a very large extent I would submit that the present tax code has become precisely that.

The hon. member for Mississauga South and I have had, and I am sure will continue to have, many provocative debates about the advisability of adopting a flat tax model which would replace the 1,300 page tax code and the several hundred pages of attendant regulations with a simple, pure, neutral and clean flat tax system. That is what I would prefer.

The other night I voted against the private member's bill of one of my colleagues, a bill which sought to provide for the deductibility of mortgage interest payments for the principal residence of taxpayers. I oppose measures of this nature in principle. I seek to remove the complexity from the tax code, not add to it.

Having said that, the current tax code in all its complexity is scandalously weighted against the most important institution in society and that is the natural family, the nuclear family, the traditional family, call it what we will, apply whatever adjective we want. The fact is the best social program is a strong family. The best school and day care is a strong family. The best day care workers and teachers are good parents who have time to spend with their children.

For too long legislators, bureaucrats and regulators have sought to diminish the role of that nuclear family. We have done so by creating a tax code which actively discriminates against the choices of many families that opt to have one of two parents stay at home to raise their children.

The hon. member for Mississauga South gave what I thought was insightful background data on the remarkable importance of parental bonding in the rearing of children in their early years. It almost could be taken as a given that the more parental contact there is in the early years of childhood, the better the child rearing experience, the better the child is as he or she matures, the better the family is, the better society is.

We ought to seek at the very least to create a tax code which treats families that seek to maximize their time with their children neutrally or at the very least, as someone proposed, we ought to make amendments to the tax code to positively discriminate in favour of such families.

In the current tax code there are no provisions for income splitting. There are no provisions which recognize that millions of Canadian two parent families give up a second income, forgo that extra household revenue in order to make the economic sacrifices necessary to spend more time with their children.

What do those families get in return from the tax system? They get utterly no recognition of making what is a responsible, I would argue the most responsible, social and familial choice. In fact, if families choose, as many do for legitimate and understandable reasons, to contract the services of a third party day care provider, the government says they are permitted to write the costs of those third party child care expenses off against their taxes through the child care tax deduction. What this does in effect is force the one income two parent family to subsidize through its taxes the choices of two income families that opt to raise their children through third party day care. This is completely irrational.

I truly feel for the many hundreds of thousands of families that feel this discrimination every day and are frustrated by it.

Bill C-244 would seek to mitigate part of this unfairness by permitting one spouse to deduct payments from another spouse for the raising of children at home. This would essentially allow families to contract for child care services in the house as opposed to doing it as a third party contract with some profit or non-profit day care operator.

A wife who works in the workforce can say to the husband “You are going to be my day care provider for our children. I am going to pay you to stay at home to raise the children and you are not going to be penalized”, or vice versa. It does not matter which gender is involved. What matters is the principle that families ought not to be discriminated against for making choices they believe are right.

During the election campaign as I went around my broadly middle class constituency with many young families, I found no issue that resonated more strongly with many of my constituents than the need for tax fairness for those families. These measures would go a long way toward providing that kind of fairness.

If I could use this opportunity to make an advertisement for the policy proposed by the Reform Party in this respect, we have proposed converting the child care tax deduction into a refundable credit that would be available to all families, to all parents. This refundable credit would, in a sense, be a subsidy for low income families that currently cannot take advantage of the deduction because many families do not have sufficient income against which to apply the deduction.

A refundable credit would provide recognition of the at home child care implicit expenses of many low income families. They would get a credit for it and families all the way up the income scale would get the same kind of recognition which they now are denied unless they pay for third party child care.

All members of this House surely must recognize that for too long we have allowed our laws to discriminate against the basic institution of our society. It is time to act. For too long too many governments, this government, the preceding government and the government before that, built up a tax code that made the wrong choices about families.

I know many members here agree with me. It is time for us to work together in a non-partisan way to see that legislation like Bill C-244 is enacted so that we can allow Canadian families to make the choices they believe are best for their children.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, it is with great pleasure that I rise today to speak on behalf of Progressive Conservatives and all Canadians on Bill C-244.

As well, I commend the member for Mississauga South on this initiative and on his hard work and diligence in representing and seeking solutions and assistance in visionary policy on behalf of Canadian children.

As everyone knows, the importance of child friendly policies are absolutely essential, especially as we enter the 21st century as a knowledge based global society. I think it has never been more important than now to invest in our young people.

I have some difficulty with the complicated nature of the changes to the tax code. I would echo some of the comments of my hon. colleague from the Reform Party on this.

As everyone knows, today millions of Canadians are filing their income tax returns and millions of Canadians have hired accountants and tax lawyers to enable them to effectively liaise with their own government.

It is an affront to a democratic society that in an industrialized nation with a high rate of education, Canadians need to hire professionals just to deal with their own governments on something as fundamental as paying taxes.

It is clear that we definitely need to simplify the tax code and the size of the tax code. I studied taxation law at university and got a finance degree. The tax code is egregiously complicated. I have some difficulty with any measure that serves to further complicate the tax code.

I do respect the premise under which the member for Mississauga South brings forward this legislation. If one parent wishes to stay at home in a family during the formative years of their child's upbringing I do not believe they should be penalized by the tax code, which currently is clearly the case.

I am interested also to learn that the hon. member has brought forward other proposals, including the conversion of the child care expense deduction into a non-refundable tax credit and extended it to families with a stay at home parent. I believe that is the kind of policy that would be less complicating potentially than the current legislation we are discussing but would have a similar impact. I think the important thing is that the intent and the impact is very sound. Again we are supportive of that intent and that potential impact of tax policy that will reduce the disincentive currently for families that are trying to do the right thing and look after their children.

The difficulty with tax policy, like so many public policies, is the law of unintended consequences. When we have, as my hon. colleague from the Reform Party has pointed out, a tax code of 1,300 pages it does bring to light the fact that there are a lot of unintended consequences with a tax code that complicated.

This week in the finance committee we are studying Bill C-36 regarding the creation of the millennium scholarship fund. One of the witnesses was David Stager, an economics profession at the University of Toronto. He stated unequivocally that adequate support in a child's formative years has a far greater social and economic impact than funding later in life.

An investment in preschool education, particularly prior to age three, will provide society with a better return on that investment than an investment in primary education. An investment in primary education will provide society with a better return on investment than an investment in secondary education. An investment in secondary education will provide a better return on investment than an investment in post-secondary education.

At a time when we are committing $2.5 billion worth of Canadian taxpayer funds to the millennium scholarship fund I think it is time that we really worked together in the House to develop solutions similar to what the hon. member for Esquimalt—Juan de Fuca has suggested in head start programs, for instance, which are designed to reach out to high risk children who are most vulnerable.

One of the studies that was conducted in the United States accounts for the result that $1 invested in children in high risk situations up to age 3 will provide society with a return of $7, I believe, by age 25, if one combines employment insurance costs, welfare costs, if one considers the costs of the judicial system, the police and the penal system, all the things that occur because children are neglected up to age 3.

It is absolutely essential that we develop some way either through tax policy, and that is one alternative—I respect the hon. member for Mississauga South for bringing light on this issue—or through direct programs that would be designed to effect change in that area. Perhaps it is time for us in the House to look at a national head start program.

My own preference when I am talking about tax policy is to simplify the Canadian tax code and thus make it fairer. Not necessarily reducing all taxes but reducing some of the absolute gross unfairness that exists in the Canadian tax code. I believe that if we do simplify the tax code and we do make the tax code essentially what it should be in the first place, a revenue generating vehicle and not a vehicle for social engineering, we can then use social policy to invest strategically in those areas where Canadians need investment most. One of those areas might be a national head start program.

To the hon. member across the House who just asked if I filed my return, no, but I will be shortly. It is so complicated.

The head start program that is currently in Moncton, New Brunswick was modelled after similar programs in Hawaii and Michigan. These programs do not address the economic situation of the parents as much as they address the social aspect and the interplay between the parent and the child.

My concern with some of Bill C-244 is that it does have the potential to benefit some families, depending on incomes, significantly more than other families. I would favour, for instance, the member's earlier initiative of the tax credit. I think that is far fairer in many ways.

I urge this House to continue to work in a multi-partisan way to develop solutions. When we hear a member of the Reform Party talking about a head start program, I think that is very positive. When I see a member of the Liberal Party developing policies relative to the task, I see that we are all looking for the same end although we may differ on the means. However, I suggest we continue this dialogue and continue to develop, debate, discuss and implement policies that will work.

We are again concerned about further complicating the tax code. There is a strong argument to be made that there is a current punitive treatment of families trying to do the right thing for their families. Perhaps that playing field needs to be levelled in the short term. Tax reform of this nature is better than no tax reform at all. However, let us keep our eye on the ball for the long term.

The best policies in the long term involve a simpler, fairer and less complicated tax code which benefits all Canadians and a government that is not afraid to invest strategically in the needs that face Canadians as we enter the 21st century at a time when it is more important than ever in a global knowledge based society that our young people are provided with the best opportunities in the world, that we have a society that is not only prosperous but fair, that the equality of opportunity is not just a phrase but a fact in Canada and that we are not having debates on child poverty in this House 10 years from now.

[Stan Keyes, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, I want to first take this opportunity to applaud my colleague, the member for Mississauga South, for the dedication and effort he has put into this and other bills which are ultimately aimed at this country's greatest asset, our youth.

I am proud to say this government is placing a priority on supporting Canadian children and Canadian families. The current income tax system attempts to strike a balance between treating all individuals the same and considering different family circumstances. As a result, taxes are collected largely on the basis of individual income, treating individuals as equals in assessing their ability to pay.

At the same time, the tax system recognizes that family circumstances affect ability to pay.

My colleague's Bill C-244 appears to be aimed at putting in place further recognition of family circumstances by providing additional measures in support of families with children and a stay at home spouse. I appreciate the principles behind this bill. Indeed the tax system already includes a large number of measures that recognize and help alleviate the extra financial responsibilities of families with children.

For example, the current personal income tax system allows the transfer of unused, non-refundable credits from a lower income to a higher income spouse in order to lower overall family tax burdens.

I am not certain that the benefits of this bill are distributed widely enough given the high costs of this measure. Only about 975,000 one earner families with children would benefit under this proposal. This represents about 8% of Canadian families.

At the same time, the total cost of this measure would be approximately $1.2 billion in reduced federal income taxes and a further $800 million in reduced provincial taxes for a total of over $2 billion. In my judgment this is too expensive given the small number of beneficiaries. For example, the $2 billion total cost of Bill C-244 would be enough to increase the child tax benefit which was received by over three million Canadian families with children by about $350 per child.

While I share the goals put forward by my colleague in Bill C-244 of ensuring that Canadian families with children are supported by the tax system, the specific provisions of the bill are not the best way to accomplish this. It would be administratively complex for both government, employers and individual taxpayers. It would distribute benefits too narrowly given its $2 billion price tag.

The current individual based tax system achieves a good balance between equity and administrative efficiency for the vast majority of taxpayers. The current tax system already contains a number of measures that recognize the special circumstances faced by families, the child tax benefit and GST credits, married and equivalent to married credits.

I can assure my colleague from Mississauga South this government will continue to work with him and as a government on improving the benefits the current system delivers to Canadian families in a fair, efficient and effective manner as the fiscal situation permits.

[Walt Lastewka, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, I would be remiss in not congratulating the member for Mississauga South for his continuous work in this area. I take great pride having a member in the House who touches the hearts of all members in an area of expertise that he is devoted to and continually brings to the attention of the House. This is an area of democracy that brings home to us the importance a member like the member for Mississauga South can have. He has made Canadians aware of this area. He has allowed members to discuss properly and with decorum a matter that is very close to Canadians. I congratulate the member for Mississauga South.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I thank all my hon. colleagues who spoke on Bill C-244. I appreciate their kind words. As a member of parliament, it can only help to encourage members to continue to work hard to resolve some of these issues. I want all members to know that I'll be back.

I will respond quickly to a couple of points that were raised. The NDP member suggested there seemed to be something for some people but not for others. He is quite right. The bill does focus on the middle class. The member should remember that the child tax benefit is only for low income Canadians who make under $25,000 in family income. The middle income earners really do not qualify for that.

On the other hand, the child care expense deduction is available for families where both parents work, but it is not available for those who provide care in the home to their own children. What is really left out here is the unpaid work, that vital work of providing care to children, and it is the stay at home parent who does this. At a time when home based businesses are becoming more prevalent there may be some more opportunities.

The Bloc member suggested there is an expense and that we should be careful about spending a lot of money. There is not just an expense but an investment that would result in lower health care costs, social program costs and criminal justice costs. We have to look at investing in the longer term to secure our long term fiscal health.

Both the Conservative and Reform members talked about the tax code. Surely we will be moving toward tax reform. I hope we will get the process started in this parliament.

When we consider the childcare expense deduction, $7,000 for a preschool child, high income earners where both are working will get a tax refund of $3,500. A low income earner would only get a tax refund of $1,750, all other things remaining equal. That means that someone who is paying $7,000 for childcare gets $1,750 more back if they have a higher income than someone with a lower income. It makes no sense. There is no fairness. There is no equity. It should be changed.

I hope this House will look at a way to determine whether or not the childcare expense deduction is an equitable instrument within our tax act to deal with the necessary expenses of raising children.

Finally, my colleague from Hamilton referred to the cost. There is no question. There is a big outflow in terms of reduced tax revenue. There are also some inflows to the extent that someone would withdraw from the workforce and provide direct parental care. Some unemployed people on welfare or EI are going to take those jobs, relieving us of the EI and welfare costs. They would also pay taxes on their income, which apparently we have lost. There are some offsetting revenues. Not all of them. There already are some parents who stay at home. They are sacrificing the opportunity to earn income.

I do understand the mathematics, but I also believe in my heart that the National Forum on Health is correct when it says that for every one dollar invested we will over the long term get two dollars back to cover our health care costs, social program costs and criminal justice costs.

To close, I want to thank my 16-year old daughter Whitney who said to me “Dad, this bill makes so much sense the government should just do it”. She has been a very staunch supporter of her father who is away so often. She is very interested in the divorce bill that I had about requiring mandatory counselling prior to legal separation. She tells me about the circumstances in her school and about children whose mothers and fathers are not at home. She is concerned about that. Even at the age of 16 our children recognize that there are problems. They detract from a child's ability to achieve his or her full potential.

I again thank all hon. colleagues for their very kind words. I intend to continue to work on behalf of the family and Canadian children.

[The Acting Speaker (Mr. McClelland)]

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

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, the Canadian opportunities strategy that was announced by our government in the last budget is a very important and significant initiative. As part of this initiative, Canadian millennium scholarships will benefit more than 100,000 students. Likewise the plan will provide assistance to students with their student debt loads. There are many other advantages and features of the Canadian opportunities strategy.

The labour market has a supply side and a demand side. The Canadian opportunities strategy deals mostly with the supply side. The demand side of the labour market is driven by potential employers, both private sector and public sector employers.

In my view the Canadian opportunities strategy deals more particularly with the supply side of the labour market. It provides Canadians with greater access to education and training. Many or most Canadians view training and education as a means of obtaining a job or a career. All Canadians want to be contributing members of society and to have the means to care for and nurture their needs and the needs and aspirations of their families.

The question often boils down to: What do I educate or train myself for? Most Canadians would like to have some degree of confidence that the education and training they are acquiring is providing them with skills that will be in demand in the future.

The Canadian Manufacturers Association reports labour skill shortages in the following areas: marketing jobs, 29%; design jobs, 27%; engineering jobs, 26%; machinist jobs, 23%; software programming jobs, 22%; tool and die jobs, 21%; and on and on it goes.

These shortages are significant particularly when we look at unemployment and youth unemployment. The level of unemployment although much improved since 1993 is currently hovering around 8% nationally.

It is a well accepted fact that in Canada we are currently experiencing a shortage of information technology professionals of between 20,000 and 30,000 people. In my own riding of Etobicoke North which is quite industrial with aerospace companies and a pharmaceutical industry, I often hear that some of their jobs remain unfilled due to what they describe as a lack of qualified personnel. This troubles me, particularly given the number of unemployed people in my riding. I refer to the problem as the skills gap.

Last year I hosted a workshop in my riding and I brought together business leaders, educators, student career counsellors, young people and human resource professionals. At this meeting representatives from Humber College, York University, the Etobicoke School Board, the University of Toronto as well as representatives from companies such as Allied Signal Aerospace and Schukra Manufacturing, and many other stakeholders exchanged views on the skills gap problem.

I was seeking solutions and ideas at the micro level that perhaps could also be applied at the national level to deal with this problem. At this workshop, consensus emerged quickly around a single theme: the need for industry, public sector employers and educators to communicate better, to better anticipate the skill requirements of tomorrow and the future.

One of the complicating factors is the rapidly changing world in which we live and the continually changing labour market. A number of us in this House have spoken out on the need for the federal government to assume a leadership role in bringing industry and educators together to better plan for the future. The provinces and the territories clearly have a major role to play in education and training, but as a federal government we can use our powers of moral suasion and policy levers to bring the various parties together and to facilitate a constructive dialogue.

It was for these reasons that I was very pleased to see in last September's throne speech a commitment from our government to develop a plan to match the skills being taught to young Canadians.

[The Acting Speaker (Mr. McClelland)]

In response, the hon. Parliamentary Secretary to the Minister of Transport.

[Stan Keyes, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, jobs, economic growth and youth are top priorities of the Government of Canada and these are major undertakings. As the hon. member for Etobicoke North has learned with all the hard work he has done in his riding, there are no single quick fix solutions nor is it the responsibility of any one level of government.

I am pleased with the number of measures that have been undertaken since 1993 which have created jobs and have ensured a skilled labour force for the future.

For instance as part of our initial red book commitments, the government promised to deliver on a youth employment strategy to give young people the skills necessary to succeed in the current and future labour markets, and we have delivered.

The government has also continued to work with the sectoral partnership initiative, SPI. It brings together employers, workers and other stakeholders in a particular industrial sector to define and address the human resources challenges facing the sector. Work through this initiative includes the establishment of sector councils which provide support to the private sector to develop the infrastructure necessary for the development and implementation of a particular industry's human resource strategy.

There are more than 20 sector councils operating, including councils for software, auto repair service, electrical and electronic manufacturing, and biotechnology, just to name a few. The work being done by the sectoral councils is important. In fact Human Resources Development Canada is currently consulting with the software sector council with regard to further research related to skills gaps.

In conclusion helping Canadians find jobs and be prepared for the changing work world is something that requires a collaborative effort on the part of governments, businesses, communities and individuals.

The Government of Canada will continue to work closely with provinces, industries and other stakeholders so that all Canadians, including our young people, can assume their rightful place in the workforce.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, on April 1, I asked the Minister of Transport a question about the relocation of the Lévis station. I pointed out that I was surprised that the station would be relocated to a point west of the Chaudière River, at least eight kilometers further away than initially planned.

In his reply, the minister seemed astonished by my question. On April 20, I decided to write him a letter to provide further information, and I would like to share some of what I said with the House.

In my letter to the Minister of Transport, I wrote:

First of all, I would like to say that, despite the answer you gave me in the House, I never told you I was happy that the Lévis station was being closed, since I have not spoken with you since February 20.

In a communiqué I issued that same day, however, I said I was pleased that you had excluded the possibility of having trains reverse over the Quebec City bridge to the Sainte-Foy station.

As for the rest, I was resigned to your decision, even though I knew it was not the best solution for the south shore, because you required that services be maintained at the Lévis station until a new station is opened on the south shore. At the time, I thought this station would be built on one of three sites previously recommended by the mayors of the RCM of Chutes-de-la-Chaudière.

A few weeks later, on March 21, 1998, we learned from the media in my region that Via Rail intended to build this station at least eight kilometres further away than the three alternative sites initially proposed and, worse yet, right in the middle of an industrial park where the environment was far from attractive.

Since the idea of closing the Lévis station first came out, stakeholders have always thought that a new station would reduce passenger traffic, because of the distance from the downtown cores of Quebec City and Lévis. In fact, a study done for Via Rail by SETRA in 1996 forecast a 28.7% decrease in passenger traffic.

Since you asked the Standing Committee on Transport to make recommendations to you on ways of making Via Rail's operations more cost-effective, I have trouble understanding how you could approve an option that would decrease its revenues and force it to spend additional money to set up a shuttle between this new station and the downtown cores of Quebec City and Lévis.

The Standing Committee on Transport was equally astonished on March 24 when members of the Coalition pour le maintien et l'utilisation accrue du rail gathered 11,241 signatures of people in favour of maintaining the Lévis station. The chairman of the committee, whom I may not name, because he is sitting opposite, had proposed to other members of the committee that this relocation be re-examined as part of a tour the committee was planning to make.

I am not the only one astonished by the Minister of Transport's decision. Members of the standing committee, members of the coalition, south shore mayors, and even the mayor of the municipality in which the new station will be located, Richard Blondin, also expressed their surprise.

I impatiently await the reaction of the parliamentary secretary who, I hope, will provide me with more valid justifications than those I received the other day from the Minister of Transport.

[Stan Keyes, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, I am sure the member for Lévis will be elated with this answer. The station at Lévis on the south shore of the St. Lawrence River is currently used by VIA for its eastern transcontinental and Gaspé trains.

The intercity service between Montreal and Quebec City crosses the river at Ste. Foy and uses the Gare du Palais station in downtown Quebec City. This service does not use the Lévis station.

After the normal public hearings process the National Transportation Agency authorized CN to abandon its Montmagny subdivision, the south shore line used by VIA to serve Lévis. The abandonment was originally set to take place February 18, 1997. However, the line has remained open so that VIA and the government could look at options for the eastern transcontinental and Gaspé trains that would continue service to the south shore area near Quebec City.

In light of CN's decision to abandon the Montmagny rail line VIA would either have to purchase and upgrade the line or else use another site to service the south shore. After carefully considering the options, the Minister of Transport concluded that temporarily keeping the station open and building a new station is the most economic way to serve the travelling public.

The minister announced the decision on February 20. VIA has been asked to conduct a study to ensure that there are no significant disruptions to customers who will need to travel between the new station and Quebec City.

In response to the minister's concerns VIA was instructed to negotiate temporary arrangements with CN to keep the trains operating to the Lévis station. The line has been officially abandoned, but VIA has temporarily leased the tracks from CN.

The decision to relocate the station has the support of the local municipalities—and I cannot stress that enough—which want to convert the CN line into a park and bicycle path.

This decision balances the needs of the travelling public and VIA Rail, as well as the wishes of the local municipalities to make better use of the existing rail line.

[Gilles Bernier, Progressive Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, in December of 1989 our Progressive Conservative government announced a compensation package for all victims of HIV tainted blood. This package was universal and compassionate. Justice Horace Krever in his report asked that a compensation package for hepatitis C victims be universal and the health minister himself promised these victims that it would be compassionate. This package is neither.

The health minister put on his lawyer's hat and drew an arbitrary line of January 1, 1986, not based on doing what is right, but doing what he thinks he can get away with. The result is that 40,000 innocent victims, who through no fault of their own were infected with this fatal disease, are being abandoned by this heartless health minister who cares more about the government's wallet than he does about our health care system.

When thousands of Canadians, through no fault of their own, suffered as a result of the Saguenay and Manitoba floods did the government say “It is not our fault so we will not pay”? No. It helped everyone.

When millions of Canadians suffered injuries as a result of the ice storms in eastern Ontario, Quebec and the maritimes this year did the government try to weasel out of helping those victims because it did not cause the disaster? No. It put together a compensation package that was universal and compassionate.

Just this morning the immigration minister stated “If you stand on principle and have political courage then you must be willing to pay the price”. I could not agree more. Unfortunately, the government has demonstrated that it is completely devoid of principles, has no courage and is definitely not willing to pay the price.

For the last month the health minister has tried to hide behind the ten provinces who, because of the 40% cut in health transfers, had no choice but to sign on to his bargain basement package. Now we see that the health minister's house of cards is beginning to fall.

Yesterday the Quebec National Assembly passed a unanimous resolution calling on the government to compensate all hepatitis C victims. This morning the province of Ontario, this afternoon the province of Alberta and about half an hour ago the province of British Columbia echoed that same request.

The only time this government shows compassion to Canadians is at election time. What is left now for these victims is that they will have to spend precious years of what is left of their lives in court fighting for compensation which they should rightfully receive. Undoubtedly, many will win those court cases and because the government will have to pay millions of dollars in legal fees the package will ultimately end up costing much more than any universal compensation package that could be announced now.

These victims want and deserve to be compensated. Judge Krever wants all victims to be compensated. The provinces want all victims to be compensated. Canadians want all victims to be compensated. Even the Liberal government's own backbenchers want all victims to be compensated.

The question is, will the health minister do the principled thing, do the politically courageous thing, do the right thing and pay the price? From one human being to another, will he renegotiate the hepatitis C compensation package? It is time for this health minister to shape up or ship out.

[Stan Keyes, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, on March 27 the federal, provincial and territorial ministers of health announced the strategy to deal with the hepatitis C infections from our blood system.

They have worked hard to put together a very substantial plan. Up to $1.1 billion will be used to address harms that might have been prevented had things been done differently between 1986 and 1990 in our blood system. This will provide for up to 22,000 people.

Our approach to this terrible situation is one that is not based purely on court cases, nor is it all about money. It is about finding the best way to resolve these issues without creating other problems in the process.

Canadian society has not yet discussed, never mind decided about no fault insurance for its health care system. We had to be careful not to embark on that road before these discussions could take place.

They also had to address the court actions against the federal government. They could have just allowed those to continue, but the federal health minister is on the record as having supported the idea of trying to steer these cases away from the courts before we started the process leading to the federal, provincial and territorial governments' announcement last month. Trying to avoid the courts was something they wanted to see happen and they are hoping their approach will lead to that as soon as possible.

The Minister of Health has answered questions about the rationale for hepatitis C assistance. He has explained the parameters that Canadian governments have established. He has explained the dangers of being careless in making this kind of public policy; that is, the dangers of being hasty and irresponsible.

To the hon. member opposite I say it is not a question of what is right or what is wrong, it is a question of what is the responsible thing to do on behalf of all Canadians.

[The Acting Speaker (Mr. McClelland)]

The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 6.20 p.m.)