Debates of Nov. 5th, 1999

Plain Language Act

[Ted White, Reform, North Vancouver, BC]

moved for leave to introduce Bill C-311, an act to promote the use of plain language in federal statutes and regulations.

Mr. Speaker, I am sure that many members of the House, and perhaps all members of the House, have from time to time been asked by constituents to provide copies of bills. Some of them are very complicated and lengthy; for example, Bill C-2, which is presently before the House.

The purpose of this bill would be to get those bills into plain language that the folks who vote for us can actually understand, and which would make it clear to the courts that we do not want judicial activism.

(Motions deemed adopted, bill read the first time and printed)

National Archives Of Canada Act

[Mac Harb, Liberal, Ottawa Centre, ON]

moved for leave to introduce Bill C-312, an act to amend the National Archives of Canada Act and the Statistics Act.

Mr. Speaker, the purpose of this enactment is to mandate the chief statistician of Canada to transfer to the national archivist of Canada all census information that has been collected since the 1906 census and information that will be collected in every future census. Such transfer is currently prohibited. The national archivist of Canada may make such information available to the public for research and statistical purposes, provided that 92 years have elapsed since its collection.

(Motions deemed adopted, bill read the first time and printed)

Via Rail Commercialization Act

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

moved for leave to introduce Bill C-313, an act respecting the commercialization of VIA Rail Canada Inc.

Mr. Speaker, my bill is very simple. It concerns the privatization of VIA Rail. VIA Rail sold a part of its company to the private sector and then years later proceeded to try to compete with it. It is subsidized to the rate of over $500,000 a day, 365 days a year.

If it is going to use taxpayer money, it is time it was privatized, met good commercial standards and either run on its own merit or, if necessary, shut down and other companies which are more equipped to deal with good private sector practices could take over, as has been done by the Rocky Mountaineer in British Columbia.

(Motions deemed adopted, bill read the first time and printed)

Firearms Act

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

moved for leave to introduce Bill C-314, an act to amend the Firearms Act and the Criminal Code (no registration of firearms that are not restricted or prohibited firearms).

Mr. Speaker, the firearms registration legislation, when it was passed, had two parts. One was the registration of long guns, the other was new measures to deal with the criminal misuse of firearms.

My bill would simply deal with the first part, the registration of long guns. Few people see any advantage to this. It is incredibly costly. It is causing all kinds of bureaucratic problems. The money which the system costs could be more effectively spent on such things as better policing, better equipment for the police, DNA data banks and many other things.

It is a phenomenal waste of money. Let us spend taxpayers' money wisely. We cannot prevent crime by hassling law-abiding citizens.

(Motions deemed adopted, bill read the first time and printed)

Petitions

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to present a petition on behalf of a number of Canadians, including those from my riding of Mississauga South. The petitioners would like to draw to the attention of the House that the consumption of alcoholic beverages may cause health problems, and specifically that fetal alcohol syndrome and alcohol related birth defects are 100% preventable by avoiding alcohol consumption during pregnancy.

The petitioners therefore call upon parliament to mandate health warning labels on the containers of alcoholic beverages to caution expectant mothers and others of the risks associated with alcohol consumption.

[Leon Benoit, Reform, Lakeland, AB]

Mr. Speaker, I am happy to present a petition on behalf of constituents who believe that the reference to God should remain in the preamble of the charter of rights and freedoms because the preamble acts as a foundation to the charter and subsequent sections are based on facts set forth in the preamble.

The petitioners therefore petition and pray that parliament oppose any amendments to the charter of rights and freedoms or any other legislation which would provide for the exclusion of the reference to the supremacy of God in our constitution or in legislation.

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

Mr. Speaker, my constituents have been very busy. I actually have 15 petitions. However, for the sake of brevity, I have grouped them into five groups. I will be extremely brief in introducing the petitions in their particular grouping.

The first group is similar to the petition just presented. My constituents ask that parliament not amend either the charter of rights and freedoms or the national anthem to remove the name of God.

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

Mr. Speaker, many of my constituents have put together a petition which calls on parliament not to accept a redefinition of the term “spouse” that would lead to it including same sex couples.

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

Mr. Speaker, the third group deals with the issue of child pornography. The petitioners call on parliament, at the earliest possible opportunity, to invoke section 33 of the charter of rights and freedoms, the notwithstanding clause, to overturn the ruling that has been very distasteful for many in British Columbia.

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

Mr. Speaker, the fourth group of petitions is rather thick and deals with immigration. The petitioners call on parliament to enact changes to Canada's immigration laws to allow the deportation of obvious and blatant abusers of the system. They also ask that claimants demonstrate through identification documentation or other means that they face genuine political persecution.

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

Mr. Speaker, ironically on the day that I put in my private member's bill that deals with the firearms requirements, the final petition I am presenting also concerns firearms. The petitioners call on parliament to repeal the act respecting firearms and other weapons and to replace it with legislation that deals specifically with criminals instead of law-abiding citizens.

[The Speaker]

As a normal rule, we only have a maximum of five, but the House seemed receptive today so I thought I would let the hon. member give all his petitions before the break.

[Nelson Riis, NDP, Kamloops, BC]

Mr. Speaker, pursuant to Standing Order 36, it is an honour to present a petition on behalf of a number of constituents who give a long list of reasons that they do not like the Senate. I will not go into the details as I have presented these in previous petitions. Basically they are calling upon the House of Commons to take whatever measures are necessary in order to abolish the present Senate.

Questions On The Order Paper

[Derek Lee, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

I ask, Mr. Speaker, that the remaining questions be allowed to stand.

[The Speaker]

Is that agreed?

[Some hon. members]

Agreed.

The House resumed consideration of the motion that Bill C-10, an act to amend the Municipal Grants Act, be read the second time and referred to a committee.

Municipal Grants Act

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, I was saying that in a civilized society, when a municipality develops an area or a street, or rebuilds infrastructures such as water or sewer pipes that are obsolete, blocked or broken, it is the abutting owners, that is the people living on either side of the street, who pay for such works.

However, the federal government is no ordinary citizen, even though it uses such infrastructures. Take, for example, a federal pier. Piers are huge things, even small ones. If a pier, a airport facility or something similar is located across from a federal lot or on it, there are astronomical costs involved just to go by the government's facilities, but the government refuses to pay.

The government claims that these services are not for its servicing and does not want to contribute. In the bill, the government declines any responsibility regarding the payment of what is normally paid by abutting owners in the case of ports or national airports. As is always the policy with this government, the little guy the one who ends up paying. The little guy is the one who subsidizes the federal government and its facilities. And this is profoundly unfair.

Clearly this government is past master at the art of getting the most disadvantaged to pay. Employment insurance was mentioned earlier. This cannot go on indefinitely. As we say in more colloquial terms, “the government is fouling its own nest”, and in the end, sooner or later, it will pay.

Let us take the example of its cutting its transfers to the provinces, notwithstanding the expected profits, the expected surpluses of $95 billion in the next five years. The government cut transfers to the provinces for health care. In Quebec, we are told that the figures are hard to grasp, but over the past five years. it is something like $7.5 billion or thereabouts. And it is the seniors who are suffering the most as the result of these cuts.

As we know, seniors tend to support the party currently in power. They are hurting themselves and do not seem to realize it. The time for the government to be taking people and seniors for granted because it is the federal government and Liberal to boot is past. It thinks everything is automatic, that seniors will vote for this government. Unfortunately for the government, this is not always true, and these people are beginning to realize that this government, with its policies, is picking on the neediest, and they are often seniors, unfortunately.

Bill C-10—we are not going to quibble about it—is even better than what we used to have, except that the minister should perhaps go back to his drawing board and, in so far as possible, try to eliminate the discretionary power he is being given. We know all about ministerial discretion—wisdom is not always the result when the minister exercises his discretion. The door is often opened to criticism and, even more often, to charges of political scheming.

We are told that our courts are backlogged. It is up to the lawmakers to do everything possible to ensure that laws are as clear as possible, so that challenges are kept to a strict minimum. Eliminating court backlogs and doing their job of drafting policies that are models of clarity, which Bill C-10 unfortunately is not, is how the lawmakers can help society. The Bloc Quebecois is still going to support this bill, however.

The Minister of Public Works' press release put it this way “Modernized Municipal Grants Act Improves Fairness of Federal Payments in Lieu of Taxes”. I would have said the opposite.

The government has to realize that its very presence in a municipality generates costs for the whole community that it is not prepared to assume. Why do the federal government and Her Majesty not behave like good citizens?

It seems to me that their primary concern ought to be projecting the image of a good citizen, one that pays its way in society and gives the municipalities their due. Federal buildings on provincial land also benefit from services, particularly in recent years when the government emblazons every federal building or office with a huge Canadian flag. It is all very well to seek visibility, but the government should, in my opinion, start with paying its dues.

The Bloc Quebecois is probably going to vote for this bill, but we will have questions for the minister when it is referred to a committee.

Mention is made of extensive consultations, but the Union des municipalités du Québec, one of those consulted, complains of the very tight deadline. The bill was introduced barely a week ago, and its full impact cannot be gauged within a few days. Far more time than that is needed.

We ask the minister, when the bill goes to a committee, to show some public spirit and perhaps bring before the committee some amendments to take away the minister's discretionary power, which does not augur well.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I appreciate the opportunity to enter into the debate on Bill C-10.

I know from the investigation I have done that this bill comes to us as a result of two years of exhaustive consultations with various parties, most significantly the Federation of Canadian Municipalities which is the organization that represents municipal governments. There were many compelling issues which it had to address. From what I can understand the consultation process went very smoothly and people were well satisfied.

That satisfaction ended rather quickly when the FCM felt quite strongly that this bill was introduced too quickly. The FCM was not given the time to review the contents of Bill C-10 and have further consultation with its members. In other words, we are dealing with this bill now without having given the FCM the opportunity to do a broad consultation with its membership to look at the actual document.

We would hope that after the FCM has had the time to open this document and look at the various clauses that it would meet many of the issues which were identified in the consultation process. I understand that there are many compelling issues because this bill deals with property taxes and we all know how critical property taxes are to municipalities. Taxes are really their only source of revenue. The way property taxes are levied on federal government properties and the way municipalities can collect those taxes is obviously of key and paramount importance to anyone involved in municipal governments.

Property tax is the basis for the major source of revenue for municipal governments. It is the tax base that provides for the provision of municipal services and amenities. It is the capital against which municipal government itself can borrow for various undertakings. Control over property tax and the authority to set taxes from year to year is the only thing which gives municipal councils the ability to function and to flourish and to do their job.

Obviously the FCM took a very keen interest in this issue when the Municipal Grants Act came up for amendment and the consultation period began. It is a mystery as to why we would jeopardize such a co-operative undertaking as the consultation period by bringing the bill forward now without giving the Federation of Canadian Municipalities time to consult one more time. We should have given it time to ask: Is the document the way we want it? Have all the bases been touched? Is the bill going to give satisfaction to the many concerns we have regarding municipal taxation et cetera?

The Municipal Grants Act and various other acts establishing crown corporations provide for federal payments in lieu of taxes. They are called PILTs, payments in lieu of taxes. They are based on local property tax rates and the assessed values of federal properties. That is pretty straightforward. I did not have too much trouble following up to that point. It does get rather complex though. We are dealing with a very complex set of issues when dealing with the assessment of property taxes on properties owned by the federal government.

Most people do not realize that the federal government only began paying property taxes to municipalities in 1950. Until 1950 the federal government did not pay property taxes to municipalities for the properties it owned. It was only after very aggressive lobbying and representation by the Federation of Canadian Municipalities that it undertook and finally succeeded in having the federal government pay its fair share for the properties which it owned within the municipal regions around the country.

The purpose in making PILTs is to ensure that the federal government meets its financial obligations to those municipal governments where federal properties are located. In this way the principles of fairness and equity can be upheld.

That is the goal. That is the objective. In my conversations with the FCM that is all it really wanted, to have the principles of fairness and equity upheld. I am hoping to demonstrate how the federal government breached that noble aspiration. It really failed to be fair and reasonable. The principles of fairness and equity were not upheld in 1992.

In 1992 the federal government paid $426 million on departmental properties to the municipalities, a fair whack of dough by anyone's account. In addition, federal Crown corporations responsible to the treasury board paid another $175 million.

It seemed all would be well with the land and people would be generally satisfied to receive payments to offset their own costs in running their municipalities. However, in the last month of 1992, the federal government imposed a two year freeze on property tax payments. This is a luxury the federal government has. Arbitrarily, out of the blue, the federal government simply said to the municipalities that it did not want to pay any more property taxes because it was in sort of a budget crisis or a deficit situation. As one way to reduce its deficit it said that it would not pay its taxes to them.

Now there is a concept. I wonder how long we would get away with making a statement like that to the federal government. If my personal household finances were in disarray, which in fact they are, I cannot say to the federal government that I will not pay my taxes for two years until I catch up on my other obligations. It would not work.

We can see why the municipalities were very concerned that the federal government had the control, power and authority to arbitrarily and unilaterally announce that it would not pay property taxes any more. When the Municipal Grants Act came up for review there was a great deal of attention paid from across the country.

There was no prior consultation with the Federation of Canadian Municipalities or with any municipal governments, many of which already had their budgets prewritten for 1993. They had already planned on a certain amount of money coming in during 1992 that they were to spend in 1993 when their intergovernmental partner arbitrarily announced it would not give them the money. Understandably it caused some furor across the country.

This freeze came just weeks after the Federation of Canadian Municipalities finished participating in a two year evaluation of the municipal grants program by the department of public works. It had just gone through a long, drawn out consultation with the municipalities. Again, much in the same way it happened here, the federal government arbitrarily stopped the consultations and did something that was entirely negative.

The two year evaluation at that time concluded that federal property tax payments represented the government's fair share of local costs as property owner. The freeze was arbitrary. No concern over levels of property tax payments was expressed in the evaluation.

An important principle behind the federal payment of property taxes is that municipal governments and local ratepayers should not be at a disadvantage by having federal properties on land that could otherwise be taxed by a private sector owner at a better rate.

In other words, it should not be a liability to have federal government buildings within municipalities, but in fact it is if they have to forgo revenue. If they cannot charge the federal government tax at the same mill rate they would be able to charge a private sector company on that land, surely the municipalities are at a real disadvantage.

We must structure the Municipal Grants Act in a way that people do not view having the government department as a liability, especially one which takes up a large area. That is land which could otherwise be taxed at a reasonable rate of return and the municipality could prosper and function.

All properties should be taxed equally regardless of ownership. That is the principle we want to see reflected in Bill C-10. There is some concern within the Canadian Federation of Municipalities that may not be the case. It really has not had time to review Bill C-10 because it just showed up on its doorstep a few days ago and we are debating it in the House of Commons already. There is a great deal of concern out there.

As the largest property owner and taxing authority in the country, the Government of Canada set a dangerous example when it declared a freeze on property tax payments to some 2,200 municipal governments with federal properties in their municipalities.

I know the federal government owns 50,000 buildings across Canada. Actually I have heard a figure as high as 68,000 buildings across Canada. That is an awful lot of property on which it should be paying taxes at a normal mill rate to municipalities. They should celebrate when a government department wants to move to their area. They should not have to be suspect and worried about a net loss by hosting the federal government in their communities.

The FCM, Public Works Canada and the Treasury Board Secretariat formed a joint technical committee on PILTs in the spring of 1993 to look at options for long term improvements in arrangements for federal payment of property taxes and to consider the implementation of the freeze.

Through its political and technical representations, FCM succeeded in having the federal government interpret the freeze on departmental properties such that it met all increases in PILTs during the first year of the freeze. There was some satisfaction. Some very in-depth negotiations went on and some very capable people on the part of the FCM came forward to represent, thankfully, the people who live in the municipalities.

We have to remember that municipal governments are really the level of government most close to us. They take care of our immediate needs in terms of road repair, garbage collection, fire departments and cats stuck in a tree. They are the ones who will help.

It is very important that they are adequately funded because people often question what gets done with the taxes they send to the federal government. Often the federal government is dealing with things that are at a level three steps removed from the ordinary Canadian. It is very important what happens to the PILTs. What the FCM does with its PILTs is very important to Canadians.

The FCM made federal property tax payments a major issue in its call to action during the 1993 election campaign. I dare say it played a big role in the 1993 election campaign.

We all know what happened in 1993. The government of the day was humiliated. It was absolutely dismantled. It went from a couple of hundred seats down to two. It was partly this campaign from municipalities, people who had direct contact with their people, that probably led to that. They were so dissatisfied, in fact so horrified by the arbitrary freeze of their property tax payments, that they were angry at the government of the day in such a way that I believe they did help shape the results of that 1993 election campaign.

As a result of the strong municipal support for FCM's 1993 election campaign on PILTs, the newly elected government committed that all increases on PILTs, on departmental properties, would be met for the second and final year of the freeze. They were getting some satisfaction from the newly elected government after the 1993 election.

They are disappointed now, though, that the newly elected government that took power after 1993 is acting in the same kind of arbitrary way. It is not dealing with the monetary issue, but it is arbitrarily ceasing the very productive consultation process and showing up with the document we call Bill C-10 without giving the FCM a real opportunity to screen it, to test it and to make sure the language is such that it will meet the needs and very real concerns we see in the position paper.

We all know that acts do not get opened for amendment every day. It is very difficult. Once we have an act open for amendment, that is the opportunity to amend any section of the act. We are not limited to the one or two specific reasons the government opened it up. We might want the opportunity to make an amendment to a completely different section. We want to make sure to get it right because we do not get chances every day to amend legislation.

I strongly voice my concern too. Why did the government stop listening? When things were going so well and it looked like some co-operative settlement might be arrived at on what to do with the Municipal Grants Act, why did it then begin to act with such a heavy hand and arbitrary way?

As a result of the strong municipal support for the FCM's campaign, again the newly elected government committed that all increases on PILTs would be met for the second and final year of the freeze. The freeze on crown corporations was lifted outright for 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.

I will summarize what we have seen as the real concern through our research on this issue. The real concern is that there should be rules in place in the Municipal Grants Act to ensure that neither party can arbitrarily alter the terms and conditions of the relationship by simply backing out, as we saw in 1992. We also want to make sure the assessment on government buildings is no different from the assessment on private sector buildings.

The predictable consequence of that is that no municipality would want a government department to set up shop in its area because it would be forgoing revenue. Why on earth would a municipality want all that space occupied by a freeloader, one might say? I do not think any responsible municipal government would encourage that.

The rules governing federal payments of property taxes have long been an issue in relations between federal and municipal governments. There is a long history that goes back to 1950 when the federal government did not pay any taxes at all on its buildings. It was only after quite a brouhaha that the FCM got satisfaction and the federal government started paying any taxes whatsoever.

Under the Municipal Grants Act the government is able to set its own assessed values on properties and pay lower property taxes. That is a key point that we would like to see addressed in Bill C-10. The government should not be able to arbitrarily say what it will pay per year for occupying a couple of acres of land. That is a big brother type approach that is outdated and obsolete. It does not speak well of the type of intergovernmental relations we would want to see.

Currently federal reviews of property values frequently lead to the retroactive reduction of PILTs, causing severe financial disruption to municipal governments. I use the example of 1992 where 2,200 municipalities already had their budgets set for 1993 only to lose their main source of revenue, the federal government tax transfer or the payment of property taxes from the federal government to the municipalities. We cannot have that.

The only recourse of the municipalities is to the municipal grants review committee comprised of appointees of the minister. If they have a grievance about the way property tax values were assessed, their only avenue of recourse is to a group of the minister's own appointees. That is not in the interest of basic fairness or natural justice either. I cannot see how that is fair. I know that is one of the issues that is addressed in Bill C-10. They want an appeals board or an advisory committee that will be structured in a more fair and democratic way.

One thing I will certainly say about the Federation of Canadian Municipalities is that it is nothing if not democratic. It has great consultation with its people. It does not move forward on an issue until it has done broad consultation across the country. It truly builds consensus on issues before it makes an announcement. Hence its frustration that it is not able to have that level of consultation about Bill C-10.

After heavy and long drawn out negotiations in 1995 there was a consensus report of the joint technical committee on PILTs to which I referred. Many of the issues I started my remarks with stem from that report, such as the critical importance of having a guaranteed stream of taxation revenue that they do not have to worry about being arbitrarily interrupted by one party and the fact that property taxes should be set at the same level for government buildings as they are for private sector buildings to avoid the bizarre spectre of losing revenue by having a government department set up shop in a community.

With those few reservations and criticisms our party is reviewing Bill C-10 with the guidance and direction of the Federation of Canadian Municipalities. If it is satisfied with the bill we will do what we can to help get it through to give the federation the security it wants on at least the issues addressed in Bill C-10.

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

Mr. Speaker, I am pleased to have the opportunity today to speak on Bill C-10, the proposed changes to the Municipal Grants Act, or what will become the payments in lieu of tax act.

This might not be the most exciting legislation to be debated in the House this fall. Discussion of process and the internal mechanics of government are unlikely to make coverage of parliamentary debates one of the top rated shows on Canadian television, but it is certainly important legislation.

I will begin by bringing to the attention of members of parliament a concern expressed to me about the breakneck speed this legislation is being rushed through parliament. From there I want to review some of the history of the legislation, both the background and some of the most recent problems that have led to this new bill.

From there, I will present a brief overview of the bill from my own perspective and then dive into an analysis of some of the changes proposed, particularly with respect to the dispute advisory panel.

Finally, I will give hon. members my critique of the bill and I will try to persuade them that the legislation needs more work.

Yesterday, in conversations my staff had with representatives from the Federation of Canadian Municipalities or FCM, it was made abundantly clear that municipalities and their organizations do not appreciate having this legislation rammed down their throats.

Municipalities were not given any advance notice that this legislation would be introduced. No information, no background notes, no news releases, no summaries or other materials were sent out to municipalities. They have also not had time to study the bill and respond to it. In the case of FCM, it has not had time to consult its members on the bill.

This begs the question: If this is such a great piece of legislation, then what is the rush? We all know from experience that when legislation is rushed through the House, mistakes often get overlooked. Quick legislation is bad legislation.

As a member of the House and as a member of the committee that will attempt to clean up any mistakes in the bill, I call upon the government to allow more time for the House and the standing committee to work on the bill and more time for municipalities and other stakeholders to ensure the legislation will correct past problems without creating new ones.

Speaking of past problems, the very fact that we have a Municipal Grants Act is a bit of an absurdity of history in that the federal government does not officially recognize the existence of municipalities. Towns, cities and local service districts are not mentioned in the constitution. They have no official mandate. They are entirely creations of provincial governments. Furthermore, the federal government has a constitutional exemption from paying local taxes.

The problem is that the federal government, which owns property in almost 2,000 municipalities across the country, benefits from all kinds of municipal services such as water and sewage, roads and other infrastructure. Those services are not free. In spite of its constitutional exemption, the federal government should pay for those services like every other good property owner.

This paradox was resolved in 1950 with the passage of the first Municipal Grants Act, which has been updated and revised many times, most recently in 1980. Since 1980, there have been a number of issues pop up that the current legislation does not and cannot resolve. This is the basis of the bill we have before us today.

For example, a couple of years ago, I remember that there was a dispute between the Department of Fisheries and Oceans and local municipalities as to whether the department had to make a payment in lieu of taxes on wharves.

Not too long ago, the federally owned Aeroports de Montréal protested a property evaluation by the city of Dorval. Ottawa re-evaluated the land at $100 million less than the property assessment and told the city that if it did not like it, it could contest the figure before the federal government appointed tribunal.

In my own province of New Brunswick, the provincial department of municipalities estimates how much municipalities will receive from federal payments in lieu of taxes and pays them that amount. The department then goes about collecting the payments from the federal government. However, it is only some time later that the federal government actually pays the amount due and in some cases the payment has taken years.

In 1995 the city of Halifax yelled foul when after increasing the evaluation of the Citadel for $15 million to $36 million, the federal government reduced its evaluation from $15 million to $1.2 million. Short of going to court, the two governments had no way of resolving this dispute.

In 1992, the Government of Quebec gave municipalities the right to replace all or part of their business occupancy taxes with a new real property levy. The result was a sudden $41 million increase in federal payments to Quebec municipalities.

In Ontario, the provincial government eliminated its business occupancy tax. To make up for lost revenue, Ontario municipalities increased their commercial real property tax rates by an average of about 45%. These reforms cost the federal government as much as $100 million a year more in payments in lieu of taxes and in leasehold occupancy costs. Furthermore, crown corporations are paying approximately $30 million more.

As well, a freeze on the payments from 1993 to 1995 made municipal governments distrustful of the federal government and made the current system unreliable.

Clearly, it is time to update the legislation to deal with these problems that have presented themselves in recent years.

The bill before us today proposes changes in a number of areas. The bill would change the name of the legislation from the Municipal Grants Act to the payments in lieu of tax act, while references in the legislation to “grants” will be placed with the word “payments”. This is to better reflect the nature of the program and the relationship between the Government of Canada as a property owner and Canadian and municipal governments.

The bill proposes introducing compensation for late payments by the federal government to municipalities. It would also give the authority to Ottawa to make payments when tenants on federal property default on their local tax bills. These are important changes under which the federal government accepts a position much closer to that of other property owners regarding its tax obligations.

It would establish a dispute advisory panel under the act with a minimum of two board members from each province and territory. The advisory panel would recommend solutions to the minister when disputes arise between municipalities and the federal government over the appropriate amount of payments.

Outdoor swimming pools, golf course improvements, outdoor theatres, residential driveways and employee parking improvements would be added to the definition of federal property and the bill would clarify the wording of the act as it relates to other non-building structures.

As well, Bill C-10 proposes to improve the predictability of payments for municipalities by clarifying how payments are calculated for federal farm property, how deductions are calculated when municipalities are unable or unwilling to provide the federal property with equivalent services to those received by similar private property or structures. It will also clarify the status of Parks Canada assets as federal property.

Although the bill does introduce some important changes, there is one important area where I have strong reservations. Other than in clause 4 of the bill, which states that the intent of the act, and which I think is a waste of space as it accomplishes nothing, I would say that 90% of the bill is an improvement over the existing legislation. The important exception is in clause 14, which would establish a new disputes advisory panel.

There are two major difficulties with this proposed new panel, the first being one of fairness and balance and the second being the composition of the panel.

Let us imagine a court trial in which the defendant got to pick his own jury, pay the jury and install himself as the final judge with no chance of appeal. How do we think the defendant would do? I suspect he would win just about every case. Would anyone describe the system as fair? I do not think so.

Yet this is exactly the kind of dispute settlement panel that the minister has proposed in Bill C-10.

Differences in opinion often arise between municipalities and the federal government over how much the crown owes for payments in lieu of taxes. These disputes are often based on the evaluation of a property or the definition and classification of a property.

What the minister has proposed is that he should establish an advisory panel composed of a minimum of 2 persons for each province and territory for a total of at least 26 members. The members would be chosen only by the minister. The minister will decide how qualified the members of the panel need to be. He will pay them $125 an hour plus expenses and they will report only to him.

The minister can fire any or all members of the board at any time for any reason if, for example, he disagrees with their decision. He can completely ignore any decisions of the panel if it suits his purpose and his decision is absolutely final. There is no appeal.

Not a bad deal. So much for fairness.

On issues related to the composition of the panel, let us look at clause 14 in more detail. As I have said, subclause 1 proposes a panel consisting of no less than two members from every province and territory with relevant knowledge and experience. My first reaction was that once the bill passes, there are going to be 26 very happy Liberals across the country who will have brand new patronage jobs. After all, $125 per hour plus expenses is a pretty good day.

At present, the minister has an informal advisory committee that has a chairperson and two members from the three provinces where there are currently outstanding disputes with municipalities, namely in Alberta, Nova Scotia and New Brunswick. On any particular dispute, the two members from that province and the chairperson meet to resolve the dispute. Once all the disputes have been dealt with, the committee of three is disbanded. In other words, this is a temporary committee brought together and paid on an as needed basis, and when the job is done everyone goes home.

What the minister is proposing is that we will replace this as needed committee of 3 with a permanent panel of 26 members or better. My question is that, for example, if no payment disputes arise in the territory of Nunavut in the next 30 years, why do we need to have at least 2 permanent members from Nunavut on the committee before they have anything to do? The same is true of any other province or territory. Why should the government undertake a rigorous search process and ask professional people to serve on a panel and then never give them anything to do? Would it not be better to wait until a dispute arises?

It is interesting to note that there is not upper limit on the number of persons who can be appointed to this panel.

Subclause 1 also does not define what is meant by “relevant knowledge or experience”. I assume this is also left up to the minister. There are several professional bodies of appraisers in the country, such as the Appraisal Institute of Canada and L'Ordre des Evaluateurs agréés du Québec. I do not think it would be too much to require members of the panel to have some sort of professional designation. Otherwise, we leave the system open for abuse and we start to see such things as a panel full of members who have no qualifications to hold office other than the fact that they are Liberal Party members or once gave money to the Liberal Party.

Subclause 2 sets out the mandate of the panel as being to advise the minister on disputes over payments with municipalities. However, there is nothing in the bill to indicate how the minister would handle potential conflicts of interest where panel members are concerned.

For example, it is reasonable to assume that since many of the experts on valuation of property work for or with municipalities, that at some point there will be panel members who might be employed with municipalities. How is the panel supposed to conduct itself if a dispute arises with a municipality, and one or more of the panel members who will adjudicate the dispute actually works for that same municipality?

Similarly, under subclause 5, the bill indicates members of the panel may be employed in the Public Service of Canada. What would be the approach if a dispute arises concerning the same federal department? It is clear that the legislation must indicate how the panel would deal with conflicts and potential conflicts of interest.

Subclause 3 sets out the duties of the chairperson as supervising and directing the operation and functioning the advisory panel. It does not, however, give a clear indication of the workload of the chairperson. Is this a full time job? Apparently, if the chairperson picks up the phone to call a panel member for two minutes, he or she can then bill the taxpayers for $125 plus expenses for an hour's work. These things need to be clarified.

Going back to subclause 1, it says that members of the panel serve at the pleasure of the minister. This is a legal term meaning that at any time and for any reason the minister can fire any or all members of the panel. As a result, panel members may be reluctant to give independent advice or to reach a decision on a dispute that they feel the minister might disagree with.

I would much rather see the phrase “good behaviour” used as it gives a much greater degree of independence to panel members to reach independent decisions without fear of repercussion from the minister. I feel that this would give better balance to the panel's decision and result in better settlements for taxpayers.

I will be working with municipalities and municipal organizations over the next two weeks in an effort to find areas where the bill needs to be fixed. I will also be looking for solutions to the problems I have enumerated today.

Looking at the bill in its entirety, it is generally an improvement over the present act, legislation of 1980. It goes a long way toward addressing some of the problems that have cropped up in recent years.

However, it is clear that this bill still needs a lot of work. I look forward to fixing the bill in committee. The bill should not be defeated at this point because it is imperfect. Nevertheless, the problems need to be dealt with.

My party and I call upon other members of the House to support the bill at second reading so that we can get it into committee and hopefully fix some or all of these problems. I also call upon the minister to be open to working with members of the committee to find ways to make the bill work better for him, for his government and for Canadian taxpayers.

Based on how well we do in committee, members of parliament can then decide at third reading if the bill in its final form is worthy of our support.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

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.

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

Mr. Speaker, the hon. member from the Liberal Party had a very nice speech. I have the utmost respect for this gentleman but I have one question. I listened to his speech. He said that this bill will be fully debated in committee. That is exactly what I said in my speech. He is just repeating what I said. I said that our party will support the bill at second reading. We hope that in committee we will be able to bring about the necessary changes so we can support the bill at third reading. If we are not allowed to bring about changes in committee, we will not have a choice but to vote against the bill at third reading.

I was surprised to learn that the hon. member opposite was a former president of the Federation of Canadian Municipalities. My staff was in contact with people in that organization just yesterday. They are very upset that this bill is being rammed through the House at this time, because there were no consultations.

Would the hon. member agree to give the municipalities more time to look at this piece of legislation in order for them to decide what they agree with or do not agree with? As the former president of the Federation of Canadian Municipalities, he should know how the municipalities work. The government should have used caution and not moved so fast.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, I wish my colleague had been here in 1992. With those kinds of comments we might not have had the Tories impose the arbitrary freeze and reduction on municipal governments. Where were our friends in the Tory party in 1992? Unfortunately they were not here, but that is history.

I would point out to the hon. gentleman that the FCM was fully briefed two weeks ago. The president of the FCM will be at committee. There certainly will not be any ramming. I presume there will be full debate. I hope to take part in those discussions. Even though I am not a member of the committee, I intend to show up. This is obviously something that is near and dear not only to my heart but to all colleagues.

We are in agreement. I was very heartened to hear that the member will support this legislation. Unfortunately his predecessors were not as generous or enlightened as the hon. gentleman across the way. I thank him and look forward to his support.

[Inky Mark, Reform, Dauphin—Swan River, MB]

Mr. Speaker, I listened carefully to the speech of the member for Oak Ridges. When he was president of the Federation of Canadian Municipalities he certainly listened well and he did a very good job.

I have a problem with his statement that the government believes in being fair and equitable. How can the federal government see itself as being equal to every other taxpayer in the country when it thinks it should be exempt from paying taxes?

I contacted people at the Federation of Canadian Municipalities yesterday to talk to them about Bill C-10. To my surprise, they informed me that they had no idea the bill had come back to the House. I know for a fact that it has taken at least three years for the government to take action on some of the recommendations the FCM made to it.

I would like the hon. member for Oak Ridges to respond to the question of fairness and equality as between the federal government and Canadian taxpayers. As well, why was the FCM not informed that the bill would be tabled in the House this week?

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, I thank my hon. colleague opposite for his questions. I have the greatest respect him. In our previous lives we used to correspond a lot, but we never actually came face to face until we came to the House. I do not think it was a surprise to either of us that we have a fair number of things in common when it comes to municipal concerns.

First, this legislation will treat the federal government as a taxpayer, just like everyone else. The government will pay on time. It will pay penalties if it does not. The bill will ensure that if there is an assessment question the government will go through the same process as taxpayers go through.

As far as the Federation of Canadian Municipalities is concerned, it was briefed two weeks ago. The minister in June 1998 went to the FCM convention along with the Prime Minister. It is too bad the Leader of the Opposition was not there. He missed a tremendous speech on this issue.

This is what happened. The minister, in consultation with the FCM, in June said to over 2,000 delegates “I want to hear from you”, which is why the round tables were set up across the country. I am sure the minister met with mayors and councillors in their ridings to get feedback so that the minister would hear the concerns of the grassroots. That is what happened.

The bill will be going to committee after second reading. I can guarantee members that the president of the FCM will be there and that he will make any comments with regard to anything in the legislation that the FCM may have a question about. But to suggest for a moment that it was not briefed is not the case. I do not know to whom he was speaking at the FCM, but the executive director and the policy director were fully briefed. They knew what was in the bill. Two weeks have gone by and my phone is not broken, but they did not call me.