Mr. Speaker, I am extremely pleased to participate in the debate on Bill C-10 since I once held the position of president of the Federation of Canadian Municipalities.
I would like to clear up a misunderstanding that has been presented to the House.
This legislation is something that the FCM has wanted since the arbitrary freeze and the 10% reduction the Tories brought in in December 1992. Two weeks ago federal officials briefed the FCM on the policy initiatives and proposed regulations in the bill. While it is true that the FCM general membership has not had a chance to review the details, the executive director of the FCM and the director of policy have reviewed it. I can say from long experience if there were problems in the bill, I for one would have received a call because I am in constant contact with my municipal colleagues.
This bill is something we have wanted for many years, particularly since the December 1992 announcement by the then Conservative Minister of Finance who brought in the 10% reduction. This is an extremely important bill for municipal governments.
To clarify in terms of how we got to this stage, the Municipal Grants Act and various acts establishing crown corporations provided for federal payments in lieu of taxes, PILTs, based on local property taxes in 1950 following years of persistent representations by the FCM. The purpose of making the PILTs is to ensure that the federal government meets its financial obligations to those municipal governments where federal properties are located. In this way we underline the principles of fairness and equity so that they are upheld.
In 1992 the federal government paid $426 million on departmental properties. In addition, federal crown corporations responsible to the treasury board paid $175 million. In December 1992 the Conservative government imposed a two year freeze on property taxes without any consultation. This was done at a time when many municipal governments had already established their 1993 budgets. The freeze was clearly arbitrary. No concern for any of the levels of property tax payments was expressed when this was done.
An important principle behind federal payment of property taxes is that municipal governments and local taxpayers should not be at a disadvantage for having a federal property in the community which could otherwise be taxed at the applicable rate. All properties should be taxed equally regardless of ownership.
What happened in 1992? The Conservatives imposed a freeze on crown corporations with unfair tax advantages over the private sector competition, at the expense of homeowners and businesses. As the largest property owner and taxing authority in this country, the Canadian government set a dangerous example when it declared a freeze on property taxes to some 2,200 municipal governments with federal properties. This 10% reduction was unacceptable to the municipal leaders and to the general public.
Fortunately in 1993 this government came to power. It sent out an immediate note that it was prepared to work with municipal governments. I would point out that in 1993 it was this government which supported the Federation of Canadian Municipalities in its national infrastructure program. It was this government which supported and has promoted the 20% club, which is to reduce CO2 emissions by 20% over 10 years. It was this government which supported municipal governments and provided the tools when it came to urban crime and safety issues.
This government has nothing to apologize for on this issue. This government clearly has worked every step of the way with municipal governments to make sure that the legislation which they have been asking for is before the House today.
After the 1993 election the newly elected Liberal government committed that all increases in PILTs on departmental properties would be met for the second and final year of the freeze. The freeze on crown corporations was lifted outright in the second year.
Moreover, the Minister of Public Works and Government Services and the President of the Treasury Board agreed in 1995 to negotiations with the FCM on longstanding municipal concerns respecting laws and regulations governing PILTs. Rules governing federal payments respecting law regulations have long been an issue between the federal and municipal governments. 1996-97 was a watershed. The FCM and federal officials had intensive negotiations. My colleague from the New Democratic Party referred to the technical steering committee that was set up. That culminated in an agreement in 1997.
I was present when that agreement was reached. My colleague from Dauphin—Swan River was one who was concerned as well when he was mayor. Issues such as the following ones were agreed to. Interest on late payments would come into effect. There would be improved assurance on payment amounts and greater timeliness of payments. The federal government and crown corporations would begin to make PILTs on property improvements subordinate to buildings commonly found in the private sector, including fencing, paving, sidewalks, et cetera.
I am very pleased that the government has now brought legislation to the House which will modernize the Municipal Grants Act to improve fairness and equity. What is very important to municipal leaders is that we now have predictability of federal payments in lieu of taxes to approximately 2,000 municipal governments.
I congratulate the minister of public works and the Federation of Canadian Municipalities for the work they have done over the years which has led to this historic occasion. The legislation has been changed to payments in lieu of taxes. That in itself is an important recognition. The federal government is not giving out grants. It is paying taxes like everyone else. It is no different from anyone else and it is prepared to pay on time like everyone else.
A goodwill clause has been introduced to better reflect the nature of the program and the relationship between the federal government as a property owner and municipal governments. Of particular importance, and what highlights the very positive relationship which has developed since the coming to power of the Liberal government, is that despite recent increases in payments in lieu of taxes brought about by provincial assessment and taxation reform, there is nothing in this legislative package which causes a reduction in the payment to a single municipal government. The government could always appeal its assessment like we can, but it would go through the same process.
I had the opportunity to consult with municipal leaders in my riding during the summer last year. The feedback was extremely positive. Many of the issues raised are now contained in the legislation.
The Minister of Public Works and Government Services has clearly listened. The parliamentary secretary to the minister indicated the minister had 11 consultations around the country. The feedback was extremely positive. The government, rather than imposing freezes or reductions, has been working co-operatively and constructively with municipal governments, particularly with the Federation of Canadian Municipalities. I am very delighted to note that many of the issues have been addressed.
The legislation empowers the Minister of Public Works and Government Services to pay at his discretion supplementary amounts when payments are delayed. A dispute advisory panel can be established under the act with expert representation from all provinces and territories to recommend to the minister appropriate solutions for disputes by municipal governments and the department concerning payment accounts. It also commits to meeting municipal payment schedules when information is provided on an equivalent basis to that accorded to taxable persons. There is the introduction of compensation for late payments and authority to make payments when tenants on federal properties default on their tax obligations.
These are important changes under which the government accepts a position much closer to that of other property owners regarding its tax obligations. What a difference seven years makes. This bill marks a turning point in the federal government's relations with municipal governments through co-operation, consultation and respect. These changes confirm a new era.
If there are concerns by the opposition or if some municipal governments look at the bill and want to slightly change it, after this bill is passed at second reading it will go to committee. I presume that is where, if needed, any i 's will be dotted or t 's will be crossed.
Canada's largest urban centres such as Toronto, Vancouver and Montreal will benefit significantly from these changes. There will be no more unilateral tax freezes, no more tax reductions by the federal government and no more changes without consultation.
We have to work together remembering that there is only one taxpayer. The goal of the government is very clear. For federal leaders and municipal leaders, it is the same. We have the common goal to serve the taxpayer best.
This bill fulfils the commitment which the government made when it came to power in 1993 having been part of the negotiations from 1993 to 1997. It is a commitment I am very proud of. The government has this legislation before the House.
The FCM was very anxious that this legislation came before the House because it provides the predictability. It provides the fairness. It provides the equity. These are things which those of us who have been involved in this issue for some time have wanted. This legislation recognizes the realities of the 1990s. It is legislation that is modern and reflects the desire of governments to deal with each other in a fair and clear manner.