Debates of Sept. 25th, 1998

Special Import Measures Act

[Bob Kilger, Liberal, Stormont—Dundas, ON]

Mr. Speaker, I rise on a point of order. There have been some discussions among the parties. By agreement, we would ask that we extend the debate for no more than 15 minutes.

One of our colleagues from the opposite side is making every effort to arrive in the next few moments to participate in the debate for approximately 10 minutes. Perhaps we could extend the question and comment period by five minutes so that hopefully the member will arrive. We will conclude no later than 1.45 p.m.

[The Deputy Speaker]

Is there unanimous consent to proceed as outlined by the chief government whip?

[Some hon. members]

Agreed.

[Bob Speller, Liberal, Haldimand—Norfolk—Brant, ON]

Mr. Speaker, I want to thank the hon. member for his remarks earlier today.

As I listened to the concerns of the hon. member regarding certain issues on this debate, the hon. member questioned the issue of our trading situation with the cross-border crisis with North Dakota and some of the other states in the United States in terms of stopping our trucking operations going across with agricultural products.

On the one hand, one of the hon. members said that we should be taking very strong, very tough action. I sat on the SIMA committee in the past. The dissenting report said that we were going too strong with SIMA, that we should not be taking the tough action.

Could the hon. member explain to this House the differences in approaches by two different members in his party?

[Jim Gouk, Reform, West Kootenay—Okanagan, BC]

Mr. Speaker, each of us deals with the problems that affect our own ridings. Of course we all work in concert with one another in a co-operative method not only within our own caucus but with those from other parties as well. If there are problems for Canadians, I do not really care if they are represented by Reform, by Liberals or by whomever. I do think we need to talk and work that out.

In terms of tough action, yes, we do need to take tough action but not knee-jerk tough action. The tough action we need to take needs to be planned out. It needs to be done in such a way that it leads to the kind of outcome we are looking for.

Tough action is necessary for that but not just fast reaction to an individual instant. If we look at the overall problems we have with trade in and out of our country, if we sit down and plan where we are going and then determine how we will get there, we will have better trade relations across the border. I think things will certainly be much fairer for Canadian manufacturers and also for Canadian consumers.

[Bob Kilger, Liberal, Stormont—Dundas, ON]

Mr. Speaker, I rise on a point of order. For clarification, I understand that the member has arrived to participate in the debate on Bill C-35. There will be no questions or comments to that member and of course the question can be put at the termination of that 10 minute period.

[The Deputy Speaker]

Are the additional understandings expressed by the chief government agreed to by all hon. members?

[Some hon. members]

Agreed.

[The Deputy Speaker]

I was going to seek clarification on that point. I thank the chief government whip.

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

Mr. Speaker, it is a pleasure to speak on Bill C-35. I would like to thank my colleagues from the government and all members in the House today who have allowed me to speak for 10 minutes on Bill C-35 which is the Special Import Measures Act. This is an important bill. It goes into some extremely important issues that are affecting my constituents in British Columbia and are affecting Canadians across this land.

British Columbia has been particularly hard hit by the economic downturn the whole country has seen. Some people point legitimately to the Asian flu and others point to the Russian meltdown. Although those have had a contributory effect, there is much we can do within our own house to rectify the situation at least in part. I would ask the government to please look into this.

To the government's credit, it has actually employed something from Industry Canada that has improved the Small Business Loans Act. It is going to provide small businesses with an added amount of capital which will enable them to restructure and work on their businesses and become more competitive.

One of the problems is that the private sector is finding it increasingly difficult to actually work in today's environment. I am going to illustrate some of these areas and try to develop some solutions that exist and which we can use in this House. We can gather together with other Canadians and even our provincial counterparts to employ them in the policy area to help the private sector employ more Canadians and become more competitive in an economic environment which is becoming increasingly more global and more competitive.

The first area which I alluded to yesterday was our high taxation rates. The high taxation rates today when we compare them to the situation down south are quite traumatic. An American two-earner family will take home 44% more in their pockets than a Canadian two-earner family. That is a significant difference. Also, the top marginal tax brackets make it very difficult for business people to invest in their businesses.

Some very interesting work has been done on surtaxes. If we look at the many surtaxes that now exist in our country, those surtaxes significantly compromise people to invest in companies, hire more people and invest in the future of the country. It is estimated that a $1 extra surtax would actually diminish productivity by about $64. The reason is that taxing more at the top end or adding more taxes on to anybody actually decreases the amount of investment that goes into the private sector. The behaviour of individuals is such that they work less and because they work less, less money is paid in taxes to come back to the public coffers.

Not only do we have a decrease in competitiveness by taxing more, we also have a decrease in the ability of people to work harder and a diminishment of money that comes into the public coffers. What does that do to the most disadvantaged people in our country? With less money coming into the public coffers, less money is available for our social programs, for health care, education, pensions and others.

In the Conservative regime, I believe it was in 1992 when Mr. Mulroney actually decreased taxes for a short period of time and there was an actual increase in the amount of money going into the public coffers. This would have provided governments with more money for programs necessary to help the most underprivileged in our country, to help our health care system and to provide for the educational framework our young people desperately need to become employable in the future. After that the Conservative government then taxed more which actually resulted in a decrease in money going into the public coffers. This is very significant and something we cannot ignore.

The other added factor of increasing taxes is that it actually drives our best and brightest to south of the border and to other countries. It also drives Canadian companies to other countries. We have had a massive brain drain. In my profession among physicians, some of our best specialists, particularly our orthopaedic surgeons and neurosurgeons have gone south of border, two-thirds of our neurosurgeons and one-third of our orthopaedic surgeons.

We are going to have a gap in specialists in nephrology dealing with people with kidney problems. We are going to lose about 40 people from this country over the next 10 years. This is a significant problem given the fact that more and more people are actually going to need specialist care for renal problems.

The cause of this is the high taxation rates and the dampening effect of the egregious rules and regulations that we have which prevent the private sector from being as aggressive as it can be.

One of the things that is killing our private sector, if we speak to the business community, is the corporate surtaxes, the surtaxes that occur in specific businesses. There is also the capital gains tax which is preventing them from being able to sell their businesses and properties and reinvest that money in their own companies. That is why a lot of companies are holding onto their assets. The corporate tax rate is a huge disincentive. If they sell their assets the capital gains will be so high they will incur a loss.

The status quo with high taxes, and specifically with the capital gains tax on corporations, causes an inertia within the system that prevents companies from generating the finances to reinvest within their own companies. The government should carefully look at removing those taxes. It would benefit the people who are most disadvantaged in our society. If companies cannot hire, people will be unemployed. That causes a greater demand on our social programs and also, from a societal perspective, greater social problems.

We could also create strategic alliances. The Canadian Export Development Corporation has been very much an innovator in developing ideas of strategic partnerships. I implore the government and companies to look at strategic alliances where companies that have different areas of specialty can work together to further a particular product. That situation can even occur across borders.

A natural alliance would be the United States. There are companies in the U.S. and Canada that have specialties in certain areas. If they were to form strategic partnerships they could be a very aggressive tool and an effective marketer of their particular business abroad. Since we live in an era of globalization, that would make Canada a more effective competitor internationally.

Years ago I tried to take all the best ideas I could find from Canadians across the country and put them on my website. The private sector could then extract the information and use it to their advantage. I know there are members of the House who will be working very hard to stimulate companies in their ridings to be more effective.

Although we support Bill C-35, there are some amendments that could be made. Examples have been put forth by my colleagues with respect to baby food. Heinz got a monopoly because the public interest was not taken into consideration. Those things must be carefully looked at when dealing with international trade issues.

The government has to deal with decreasing taxes in an effective manner, looking at innovative ways in which it can provide a lower tax rate for people in the lowest socioeconomic area. If these things can be done we will be able to provide a better state of affairs for Canadians across the country.

The government can also increase the foreign ownership maximum on RRSPs from 20% to 30%. With the lack of confidence that Canadians have in the CPP, it would be very important and useful for the government to give Canadians the option of helping themselves by enabling them to increase the foreign ownership content of their RRSPs.

[The Deputy Speaker]

Pursuant to order adopted earlier this day, the House will now proceed to deal with the question on Bill C-35.

Is the House ready for the question?

[Some hon. members]

Agreed.

[The Deputy Speaker]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Deputy Speaker]

I declare the motion carried.

(Bill read the second time and referred to a committee)

[Tony Valeri, Liberal, Stoney Creek, ON]

Mr. Speaker, I rise on a point of order. My understanding was that the bill was actually going to be referred to the Standing Committee on Foreign Affairs and International Trade.

[The Deputy Speaker]

Is it agreed that the order be amended to refer the bill to the Standing Committee on Foreign Affairs and International Trade?

[Some hon. members]

Agreed.

[The Deputy Speaker]

It being 1.45 p.m., the House will now proceed to the consideration of Private Members' Business, as listed on today's order paper.

The House resumed from May 5, 1998 consideration of the motion.

Canada Student Loans

[Murray Calder, Liberal, Dufferin—Peel—Wellington—Grey, ON]

Mr. Speaker, I am grateful for the opportunity to respond to the motion of the hon. member for Vancouver East regarding the Canada student loans program.

Let me begin by assuring the hon. member and the House that the government is always very much aware of the needs and problems of young Canadians pursuing post-secondary education. It is this very concern that prompted the government to enter into consultations with the public, the provinces and the territories on ways to improve the system of providing loans to Canadians students.

Indeed, last February's budget incorporated many of the recommendations of the report of the Standing Committee on Human Resources Development, measures which ensure Canadians have access to post-secondary education.

The fact is that developments affecting the student loans program have rendered the motion under discussion largely irrelevant. Let me illustrate.

The motion calls first of all for the reversal of the privatization of the Canada student loans program. But the Canada student loans program has not been privatized.

Prior to 1995 the program provided financial assistance to students in the form of 100% government guaranteed loans from private sector lenders. Lenders financed and distributed the loans to students and were responsible for collection. There was little incentive for the lenders to police the loans, so the federal government ended up holding more than $1 billion in unpaid loans for which it had reimbursed the lenders under the guarantee provisions.

In 1995 new financing arrangements were introduced which enhanced lender accountability and improved client service. But these arrangements do not by any means constitute privatization. Governments, not the lenders, continue to determine student aid policy and the nature of the Canada student loans program.

Under the new risk-shared financing agreement, government payments against loan guarantees will decline from $382 million in 1996-97 to $67 million in 2000-2001. Abandoning these arrangements, which I assume is the intent of the hon. member's motion, would cost Canadian taxpayers a great deal of money. Government payments against loan guarantees would increase. We would lose the benefits of sharing the risk with the lenders and the government would have to pay penalties for breaking lender agreements before their expiry in the year 2000.

Next, the motion calls for the government to reject proposals for income contingent loan repayment. There is no difficulty here since the government has already rejected proposals for income contingent repayment. Students, lenders, the provinces, the territories, education organizations and groups made it clear that they do not consider income contingent repayment a viable option. The repayment schedule would be too long and accumulated interest payments would be too onerous.

Ontario is the only province that has shown any interest in income contingent repayment. But while the federal government worked closely with Ontario to analyse various models of such a system, the government has also respected the view of the remaining provinces, territories and stakeholders.

Lenders declined Ontario's invitation to implement a provincial income contingent repayment scheme for 1999. What the federal government has done, however, is incorporated income sensitivity into the new interest relief program and debt reduction measures announced in the federal budget.

The motion calls upon the government to implement a federal student grant program. Once again the Government of Canada has already done that. Canada study grants are available for the following students: high need part-time students; students with a permanent disability; female doctoral students in certain fields of study and, as announced in the recent budget, students with dependants who can demonstrate a financial need. Canada study grants, totalling $145 million, will be available in 1998-99.

In addition, the $2.5 billion Canadian millennium scholarship fund will provide an average of $3,000 each year, to a maximum of $15,000, to more than 100,000 low and middle income students for the next 10 years.

That leaves us with the consideration of the motion's last recommendation, accessibility as a new standard for post-secondary education.

On this point I should emphasize that accessibility has been a fundamental principle of the Canada student loans program since its inception in 1964. Indeed, the government's ongoing commitment to the principle of accessibility was clearly demonstrated in the 1998 budget. A key element of that budget was the Canadian opportunities strategy which will help ensure that Canadians continue to have affordable access to post-secondary education.

The federal government is working toward harmonization of Canada student loans with provincial student loans. Accessibility is one of the key principles of a harmonized student loan regime.

Since the federal government's interest in post-secondary education is shared with the provinces and the territories, the government carries out continuous consultations with student groups, educators, lenders, provincial governments and the territories. Further developments in financing and ensuring accessibility to post-secondary education will involve all of these groups, as they have in the past.

The Government of Canada is pursuing a course that is in the best interests of students across the country. They are our future. Considered in the light of the work that has already been done, we must conclude that the motion of the hon. member for Vancouver East is irrelevant.

[Maurice Vellacott, Reform, Wanuskewin, SK]

Mr. Speaker, I want to commend my NDP colleague for precipitating the discussion we have before us today. The issue of students struggling with their debt loads is very crucial and an issue of great interest to many across the country.

We agree that governments need to help students financially, but what is the best way? I think that would be the crux or the nub of the difference on all sides of the House.

My main contention this afternoon in the matter of the student debt problem will be that since both students and society benefit from education, both should contribute financially. We need a balance here.

Students cannot be without benefits because in this era in which we live an education is the path to a good income. On the other hand, society also benefits because in the economy in which we live Canada cannot prosper without an educated workforce. Hence the balance and hence both should be contributing.

But this particular NDP motion before us puts too much onus on society, letting students off the hook, while the Liberals put too much onus on students, letting society off the hook and without responsibility in this matter.

This NDP motion does not take seriously enough student responsibility in this. It puts too much emphasis on grants. Money does not grow on trees. The taxpayer pocket is not a bottomless pit. I also want to emphasize the fact that Reform does advocate interest free student loans. That is what we mean in this income contingent loan plan and program. I will explain more of that later.

On the other hand, the Liberals are not taking seriously enough society's responsibility for educating students. I will describe for members the Liberal approach and its effect on students. As we know, the Liberals have made some massive cuts in transfers to the provinces. This has led to tremendous problems with student debt. Rather than restore funding for post-secondary education, the Liberals have brought in a number of measures that merely attempt to patch-up the mess they have made of many students' financial situations.

They prefer to help students in debt by means of tax relief on the interest portion of payments, interest relief extended to graduates if they go to the next step and need more help. Before we have any applause from the opposite side of the House, I want members to know that this is going downhill from here. It is a downward spiral and we finally get to the bottom.

I guess the Liberals next stop-gap measure from there would be to provide an extended repayment period for those who need it. If that does not help then an extended interest period for individuals who continue to face financial difficulty. Then they come again with cap in hand, on bended knee if maybe to have a reduction in the loan principal for individuals who still face financial difficulty.

These measures hardly represent a bold initiative to address the problem of student debt levels. They do nothing to prevent students from falling off the cliff of financial disaster. They merely attempt to cushion the impact when they do fall to the bottom. It would be like having a sign around a treacherous corner, a curve with a cliff with a steep drop-off. Instead of having warning signs or doing what can be done to prevent falls off the cliff, they have ambulances at the bottom of the cliff. They are reactive measures rather than proactive measures that provide a genuine solution.

The Liberal approach to student loans makes the following situation possible. I reiterate the example of a student who gets a low paying job. Now he is attempting to make payments on his student loan. The tax relief on the interest portion of his payments does not help because he does not get his refund until after tax time. In the meantime he cannot make the payments. So he applies for interest relief. He jumps through that bureaucratic hoop to qualify. If he is still in trouble he must make another appearance to beg to have that payment period extended.

If that does not solve the problem then he can apply for an extended interest relief period. Once again he goes cap in hand, on bended knee humiliated to beg for assistance with his education. If problems persist he might qualify for a reduction in the loan principal. It is exactly this kind of situation that is repeated time and again across our country with students in respect to debt.

This reveals the inadequacy of the Liberal approach with regard to student debt. It keeps students in debt and offers assistance only after things have gone wrong. Instead of repairing the leaky boat of funding for post-secondary education, the Liberals have offered a hodgepodge of measures to help students after the Titanic is already going down and students are up to their neck in water. At that point they come in with these supposed solutions. Rather than trying to help students from the outset so they can avoid a financial crisis, the Liberals approach appears to be that of assisting students after they find themselves in the middle of the crisis.

It is like a brick wall set up by the Liberals that students have been trying to jump over. Far too many have been breaking bones on the wall, unable to jump high enough. The Liberal response is to have some doctors on hand on this side of the wall as they bounce back bruised, bleeding and broken. They have them there to treat the injured. But the Liberals say that under no circumstances should that wall be lowered so as to reduce the risk of injury in the first place. Students are left to continue worrying, anxious about the matter and damaged and hurt over the course of their lifetime.

Reform believes that it is administratively inefficient to help students in stages like that. On the other hand, Reform's across the board proposal of interest free loans is what students would prefer. I could liken the approach of the Liberals in the matter of student loans and the recent changes even to a patient screaming from pain there in the corridor of the hospital. The doctor kind of saunters in and he gives a little pain killer, just enough to take the edge off but there is still a lot of discomfort. But the patient at least is not yelling any more, at least for a while. Then the doctor waits until the patient is screaming again before administering a little more painkiller again to take the edge off. But there is still lots of discomfort.

My point is simply the doctor never really relieves the pain, just as the Liberal approach never really addresses the problem of student debt. It just catches them one by one trying to soften the impact, as they fall off the cliff and crash, rather than setting up a program that prevents them from crashing in the first place.

Reform's principles with respect to education are fairly clear. I cite principle number six from our blue book: “The people of Canada are this country's most valuable resources and that the nurturing and development of human knowledge, skills and relationships are keys to full participation in the knowledge based service economy of the 21st century”. In other words, people are the resource. People are what counts here. They are the most valuable resource we have.

The leader of the Reform Party said on October 21, 1994 in Commons debate: “One of the few areas where Reform does not advocate any spending reduction is in the area of financial support for post-secondary education. Post-secondary education as an investment in Canada's future is so important that we are prepared to make massive spending reductions in other areas, some focused government spending in areas like health, education and the basic social safety net”. We are prepared to do that in order to make and maintain the current levels of funding for post-secondary education.

I suggest that of all the things the government does, of all the money it spends, its one true investment in the future is its investment in the education and training of the young generation of Canadians.

Reform has a balanced approach where both students and society contribute with federally funded income contingent loans. There has been misunderstanding about what Reform means by income contingent loans, so I will read our policy statement: “The Reform Party believes that the federal government should institute a federally funded income contingent loan plan that is as near to being interest free to students as possible”.

Let us be clear about several things. First, in the Reform Party policy the banks would not be the lenders. I think that should make my colleague from the NDP happy. Rather than the loans being through the banks and therefore making money off our students, the loans would be federally funded. In our plan the student would be lent money and asked simply to pay back the same amount without interest over time at a pace in keeping with the graduate's income.

That proposal then would solve the perceived problem brought forth by the Canadian Federation of Students. It said that in such an income contingent loans program, a misunderstanding of Reform's proposal, the flexibility of the payments geared to a graduate's income works against the student since graduates with lower incomes will by necessity repay their loans over a longer period of time and will be paying a great deal more in interest payments than those with high incomes.

But if they are only paying toward the principal there is no interest. Benefits are extended longer based on that graduate's income and there is no downside to this. Because Reform would like to see students get interest free loans this problem would be completely avoided.

It has been a privilege to speak with respect to this motion. We cannot support the motion as it presently stands, but I do thank the hon. member for precipitating and provoking discussion on this very crucial area of the student debt problem today.

Dna Identification Act

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I regret to inform the House that after consultation an agreement could not be reached under the provisions of Standing Orders 78(1) or 78(2) with respect to the third reading of Bill C-3, and act respecting DNA identification and to make consequential amendments to the Criminal Code and other acts.

Therefore under provisions of Standing Order 78(3), I give notice of my intention to propose at the next sitting a motion to allot a specific number of days or hours for the consideration and disposal of proceedings at the said stage.

The House resumed consideration of the motion.

Canadian Student Loans

[Richard Marceau, Bloc, Charlesbourg, QC]

Mr. Speaker, as always, it is a pleasure to rise in this House to speak to a number of issues of great importance to Quebeckers and Canadians alike.

As I read the motion of the member for Vancouver East, I realized there was no question of the member's good faith. No indeed. However, is she indeed talking about new national standards in her motion? This goes right to the heart of the Quebec-Canada debate.

To most Quebeckers, federalists or sovereignists, the word national refers to Quebec and not Canada. Here, the reference to national standards, to most English Canadians in the rest of Canada, means Canadian standards for Canada.

As I said, this goes right to the heart of the Canada-Quebec dichotomy. It indicates an obvious lack of understanding of Quebec, its reality, its values, and the will of all Quebeckers, federalist or sovereignist, to defend certain jurisdictions awarded Quebec in 1867, the main one being education.

In Quebec, we have had our own system of loans and grants for over 30 years. This was one of the major achievements of the quiet revolution headed by the Liberal government of the time under Jean Lesage with the support of a few important ministers, including Georges-Émile Lapalme and, naturally, René Lévesque.

Quebec's system of loans and bursaries works very well, and suits everyone. I can quote a figure in support of this: the average debt load for a university graduate in Canada is $25,000, whereas it is $11,000 in Quebec. It is therefore easier for a Quebec student to graduate from a university in Quebec, find a job and repay his or her debt. It is easier when the debt is smaller than that of a student completing university in English Canada.

I speak from experience, having taken much of my higher education in Quebec, but having taken some of it in Ontario.

Finally, what the member is after, when we read between the lines to find her objective, is to have a Quebec system or equivalent throughout Canada, because the Quebec system works well. It is efficient, inexpensive, fair and equitable.

We recently had an example of national standards in education with the current Prime Minister's toy, a monument to his rule: the millennium scholarships. It was clear that in Quebec none of the stakeholders—young people, student federations, labour unions, universities and their presidents, political parties—were interested in these scholarships.

Millennium scholarships are awarded partly on merit instead of being solely based on the needs of individual students. That is unfair because we know full well that students with less privileged backgrounds find it much harder to study because they must hold one, two or even three jobs, which of course interferes with studying and getting good grades in university.

Most parties in this House, with the exception of the party opposite I believe, strive to avoid overlap. Education being a provincial jurisdiction, establishing national standards, that is federal standards applied in a provincial jurisdiction, would only result in more overlap, more spending and ultimately bureaucratic chaos that would benefit no one except the bureaucratic machine itself, which has a tendency to develop programs just to support itself and prosper.

I mentioned earlier that, in putting this motion forward, the hon. member was not showing bad faith, far from it, but rather a misunderstanding of Quebec that is unfortunately endemic in Canada, as I myself experienced in Ontario.

Finally, it always boils down to the same issue. Here we have two distinct societies sharing the same legal framework. The solution is very simple: each one should have sole jurisdiction over education and every other area in the public domain. That is what is called Quebec sovereignty.