Debates of May 10th, 1999

Income Tax Amendments Act, 1998

[The Acting Speaker (Mr. McClelland)]

Questions and comments. The hon. member for Calgary East.

[Peter Adams, Liberal, Peterborough, ON]

I rise on a point of order, Mr. Speaker.

I heard the hon. member ask me a question, but it is my understanding of the standing orders that I am not allowed to reply. Is that correct?

[The Acting Speaker (Mr. McClelland)]

The hon. parliamentary secretary will have an opportunity to be recognized on debate and certainly then he will be recognized for questions and comments.

[Deepak Obhrai, Reform, Calgary East, AB]

Mr. Speaker, I will give the hon. member across the way an opportunity to reply to my colleague.

I have a very short question for my colleague. This legislation is piecemeal tax relief. What is his view of the fact that the finance minister is now talking about giving tax relief through stock options to address the brain drain in the high tech industries?

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, I thank the hon. member for Calgary East for the question. It raises another question. Why does the finance minister not recognize particularly middle income Canadians and the terrible tax burden they are under? If he is going to give tax relief on the stock options to the high tech people, why is he singling them out for special favouritism? Why is he doing that? If he believes in tax relief, why does he not reflect it with a policy and program that is going to give broad based tax relief to working Canadians, particularly those in the middle class?

It is shameful that the finance minister would consider a proposal like that.

[John Cummins, Reform, Delta—South Richmond, BC]

Mr. Speaker, I would like to make a point to my hon. friend.

About a year ago I received a letter from a constituent of mine which has to do with the complications in the income tax form. I am going to quote from it. Dalton Fisher states:

I have just added up my expenses and my income and find that I cannot afford to hire a tax consultant to do my taxes so therefore I have provided a sheet of paper complete with all my income and expenses and I have filled out my tax form to the best of my ability. I therefore submit the same for your audit. Or for your acceptance.

I would like at this time to submit that if the tax form were made simpler then most people would gladly fill out their entire form and make life simpler for the tax department and for the average taxpayer.

I think he has a good point. I would like my friend to comment on that.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, this has been a request we have had from Canadians all across the country. They have been tearing out their hair for years in frustration over the complexity of the income tax form. It might be good for H&R Block and the accountants but for the average Canadian of which there are far more, the tax form the government uses is absolutely ridiculous in its complexity.

Certainly Dalton Fisher's suggestion that we have a very simplified tax form would be a very welcome relief for Canadians. But once again this is talking about common sense, something we have not seen from this Liberal government since 1993.

[The Acting Speaker (Mr. McClelland)]

Resuming debate.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, I rise on a point of order.

I would like to ask for unanimous consent, particularly because the hon. member for Port Moody—Coquitlam—Port Coquitlam did not have a chance to ask an intelligent question—

[The Acting Speaker (Mr. McClelland)]

That is not a point of order, and it would not have been acceded to in any event.

[Grant Hill, Reform, Macleod, AB]

Mr. Speaker, today I would like to take a different approach on reviewing Bill C-72, which is an act to amend the Income Tax Act and implement measures announced in the February 1998 budget. I did hear some of my colleagues talk about the 1999 budget. I am going to focus my attention on the 1999 budget.

I want to say right off the bat that it is very easy for an opposition politician to criticize. We can criticize almost anything. It is also as easy for a government member to put a spin on something that is very positive. That is part of the government-opposition interchange.

It is interesting when a member of the government does a critique of its own budget. That has happened. I am not going to embarrass him by identifying him specifically, but there is a current sitting member of the Liberal government who is a well respected accountant. He came from an accountancy background to this place. I have talked with him personally. I find him to be a logical reasonable individual.

The member said that he would try to do a critique, a review of the budget each time it came out. He has no axe to grind. He has no reason to put a spin on the proposal. He is a straightforward accountant. For the benefit of Canadians, I would like to go over the things that he says about the 1999 budget. Next year there will be an implementation bill just like this one for the 1999 budget.

On the issue of the surplus that has been reported in the current budget, there is an $11.5 billion surplus just reported in this budget. This MP says, and says it very plainly, that the $11.5 billion surplus comes from increasing tax revenues, not from spending cuts. Let me quote that specifically again. The surplus in this budget comes not from spending cuts, which is what the government has been saying over and over again, but from increasing tax revenues.

As an accountant he went through and picked out the figures. This is very useful. He also made a condemnatory statement when he said “These figures here I think have been massaged”. A Liberal member of the government commenting on the Liberal budget said again “These figures here I think have been massaged”.

He turned his attention to spending. The first budget from the Liberals came down in 1994. The last budget was in 1999. He went back and looked at the spending in 1994. This is discretionary spending, something the government could do something about. In 1994, $56.7 billion was spent. In 1999, $54 billion was spent. We heard over and over again about the huge amounts that spending had been reduced by. The difference is $56.7 billion down to $54 billion, a grand total of $2.7 billion, not the figures we have been hearing.

Then he turned his attention to taxes. He did exactly the same thing. He went back to 1994 and to see what the government took in in taxes, and this is a public document and a public record, and the projection for 1999. He found that in 1994 the government took in $116 billion in taxes. In 1999 it proposes to take in $157 billion in taxes. That is an increase of more than $40 billion.

We will go back to the original statement. The original statement was plain, that the surplus in the budget comes not from spending cuts but from an increase in revenue.

I have listened to my colleagues across the way say that it is because the economy is working so much better and they are getting more tax revenue. There is some truth in that statement. There is more revenue because the economy is better, largely because of provinces that are now booming. The provinces that are booming are provinces that have actually had a significant change in their taxes.

The member talked about the debt. He said “My government promised to put revenue excess to pay down the debt”. He looked at the figures. Accountants really have a talent for this. He looked at the figures and found that there is no reduction in the debt. To the member across the way who said that the government has reduced the debt by $30 billion, this is what his compatriot said. There is $580 billion of debt now and that is shown right through to 2000-01. As plainly as I can state it in the member's words there is no reduction in the debt. It is difficult to refute when the figures are so plain.

On the issue of the way the accounting is done is where the member's comments become so perfect. As an accountant he said “The finance minister has hidden some revenue”—interesting words for an accountant—“in things like the $3 billion contingency fund”—which is an emergency fund—“or into lump sum payments for health care which will not be spent until next year”. The member then followed that statement by saying “This flies in the face of good accounting”.

Hark to the words of the auditor general who said exactly the same thing “this flies in the face of good accounting”. The auditor general will not sign off on this method of accounting, nor will the sitting Liberal member who is an accountant. This money will not be spent this year. It should not be booked this year. It should not artificially reduce the deficit.

I digress from the member's comments and ask why would the finance minister not want Canadians to see the surplus? Could it possibly be because there is a lot of pressure on him to spend that surplus now, to go back down the deficit road? I think so. Could it possibly be that the finance minister wants to hold on to any surplus so that it could be used closer to an election? Possibly. Interesting questions.

The Liberal MP, an accountant, then turned his attention to public debt charges. This is interesting. We are told debt charges are going down. The cumulative debt and cumulative interest are going down. That makes sense. The interest rate is going down. In 1997 the public debt charges were 40.9% and in 2001 the public debt charges are 43.3%. They rose. His comment was “He is showing”—that is the finance minister—“cumulative interest going up, yet we know market debt is going down. Something does not add up”. These are not my comments and not my criticism. These are the comments and criticism of the Liberal MP who is an accountant.

On the surplus he says plainly that the government expects an $11.5 billion surplus. He said “I think if it”—the budget—“was based on generally accepted accounting principles, yes, there is a surplus and the public has a right to know how much it is”. We come back to the issue of the hidden surplus. I query again why would the surplus be hidden? The Liberal accountant MP asked the question, not myself. I do not know who asked the question, but he was asked whether the current budget gave a clear and accurate picture of government finances. His answer was an emphatic no. The answer from that sitting Liberal MP was no when asked whether the budget gave a clear and accurate picture of government finances.

It is interesting to look at the way the government balanced its books, which is something I do not believe the public has a good grasp of. The budget was a health care budget. My prime interest in being in the House is health care. We saw all the advertising and heard all the talk about an $11.5 billion increase to health care funding over the next five years. That in itself was wonderful news. We would expect bells to ring across the country when the public heard about it. How could anyone criticize it?

I am not now speaking for the accountant across the way. I am speaking for myself. Since 1993 I have watched cash transfers to the provinces drop $21.4 billion in the previous five years. Let us think of the cumulative effect on the provinces of them dropping $21.4 billion in five years. In the next five years they are to rise $11.5 billion. Is there any wonder why there is no cheering? Is there any wonder why there is no excitement? Is there any wonder why there are still long waiting lines for health services?

I listened to a colleague across the way haranguing the Ontario provincial premier on Thursday on the issue of health care. He said that the provincial government in Ontario had done terrible things to health care. The figures are plain; $1.3 billion were put into health care by the Ontario government while the federal Liberals took out $3 billion.

How could an individual Liberal in good conscience say what he said? It is a great difficulty. I will say it again as plainly as I can. Over five years $21.4 billion was taken out of health transfers and over the next five years $11.5 billion will be put back in. When I speak to kids in grade eight they say to me “Doc, the math doesn't equate”.

The budget is very easy for an opposition politician to critique. I have chosen to use a Liberal MP's critique of it to say that all is not as it is spun. Are there good things in the budget? Let me take a few moments to say yes, there are. Are there things that I will not critique? There are. I believe there are things that my Liberal accountant colleague across the way would say are positive in an attempt to say there is some balance. None of these words were my critique, except for the health care critiques. They are the ones that are probably the most condemnatory.

Let me summarize the comments of the Liberal MP accountant. I have not identified him so that he will not be embarrassed. In summary, the budget surplus comes from increasing tax revenues, not from spending cuts. The debt will the same from now until 2001 according to the budget projections. The Liberal MP stated on the accounting that the finance minister had hidden some revenue. This flies in the face of good accounting practice. On the public debt charges, something is going on that does not equate.

When asked if the budget gave a clear and accurate picture of government finances, and I wish I had asked him, the answer was a simple straightforward categoric no. The auditor general said it. The Liberal MP said it. The accountant MP said it, and I will rest my case with his words.

[The Acting Speaker (Mr. McClelland)]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Lambton—Kent—Middlesex, Agriculture; the hon. member for Sackville—Musquodoboit Valley—Eastern Shore, Fisheries.

[Lee Morrison, Reform, Cypress Hills—Grasslands, SK]

Mr. Speaker, I am very interested in the hon. member's comments on the underfunding of medicare. He is, after all, very familiar with the system, having worked in it.

The problems with medicare are not confined to any particular province or to any particular stripe of provincial government. I live in Saskatchewan, the cradle of medicare, which has a dreadful situation. I do not blame the provincial government. I do not agree with its politics, but I cannot point to the provincial government and say it has allowed the system to collapse out of malice or ineptitude. It has collapsed because of chronic underfunding from the federal government, which has lowered its annual contributions from 50% when it started out down to about 15% now. No provincial government can stand that.

There are hospitals in Saskatchewan where elderly helpless people have to rely upon relatives and friends to bathe them and to feed them because there simply is not enough staff to carry the load. I have had personal experience in this regard.

I have lived in several Third World countries and that is the way hospitals operate there. When did we get to that stage of development in Canada? This is awful. I blame the members over there totally for this situation. They took $21 billion out of the health system in a period of only five years and now, whoopie, they are to put $11.5 billion of it back over the next five years. For that we are supposed to be eternally grateful.

The hon. member is a medical doctor. I would like him to comment more fully on that. I am sure his range of knowledge is wider than mine. I can speak only anecdotally, having seen these things with my own eyes. I would like him to say whether he believes any province is doing worse than another or can be blamed for the disastrous condition of medical care in Canada today.

[Grant Hill, Reform, Macleod, AB]

Mr. Speaker, I lived in Saskatchewan for a period of time. I just recently completed a tour of that province on this issue. It is true that there are problems in Saskatchewan. A number of hospitals were overbuilt in the years of largesse, building up a fairly significant debt structure in Saskatchewan.

Specific to Saskatchewan, it spent more on health care during the time of the cuts. It is closest to the people who are ill and has the most accountability. Every province in Canada but two during the times of reduction found funds by priorizing and cutting funds in other areas.

The part that troubles me most is that there were other choices for the federal Liberals to cut. There were large grants to successful businesses totalling billions of dollars. There was the opportunity to remove regional grants that were choosing areas in which to place money. There were significant areas of spending that were completely useless and easily totalled the $21.4 billion over five years.

How was that cut from health care? It was hidden under the Canada health and social transfer. The public was ready for deficit reduction at almost any cost, until it found out that the cost was our grandmas and our grandpas on waiting lists.

That is why health is now the most important issue and why it is so politically popular to say somebody else will be the scapegoat. The fact of the matter is the public does not care. It does not want to point at anybody. It wants the health care system fixed and that is what we should be expending our efforts doing.

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Mr. Speaker, I am very pleased to rise in debate. As my colleague from Cypress Hills—Grasslands stated, we in Saskatchewan have taken a terrible beating in health transfer costs because of the government opposite.

If I were to talk about individual cases which have come across my desk, I would be speaking at midnight about the horror cases in my province. People would like to blame that totally on the provincial government. When a any government issues a figure of $11 billion it sounds good, but it forgets to tell us to divide it by five.

On the way into work the other morning a radio host had three people on his show representing the three parties in Ontario in the upcoming election. I could not believe what one individual said, that we just could not stand any more tax cuts. If there is anything the country needs right now, it is individual tax cuts. A T-shirt can be seen on almost any street in any Canadian city which says “Tax me, I am a Canadian”. I have three brothers who went state side and stayed there to develop their professions for obvious reasons. They could not stand the Canadian tax regime.

It used to be in April of any year most senior citizens on my block would come to me with their tax forms. They would ask me to fill them out. It was a very simple form and I gladly did it. Now it is no longer a simple form. It has become a very complicated form. Only a government can produce a complicated form for a very simple process of collecting income tax from an 85 year old lady.

Let us talk about simple forms. Saskatchewan farmers used to get a form from the government by mail. I cannot ever remember a form coming from the government on Internet. They have to apply for it or have to go to the RM office for it. It constitutes about 40 pages even though the form itself may only be seven or nine pages. The farmer looks at it and says “It is like my income tax. I cannot fill out this form”.

Members opposite tell me that it is a very simple form. Of the hundreds of people who phoned in, I only know of three who actually tried to fill it out themselves.

We continue to completely ignore the wishes of the people. One Norwegian chap phoned me and said that he thought the government should get a very simple form with only three lines on it. The first line would be “How much did you make?” The second line would be “What were the expenses?” The third line would be “Kindly remit the rest”. That is about the way it is.

I have to congratulate those who figured out the AIDA form. They did a masterful job. It would take real brains to figure out how to force a person farming to put all of this down on a form, only to find out how much money they made and there would not be any help coming. That is the kind of form it is. It is a Rubik's cube.

Canadians have a right to know about our budget. When I was asked on television what I would say about the budget if I were the finance minister, I said that I would say this to all of the employees and workers in Canada: “Thank you very much. We just robbed you of $26 billion bucks. Thank you very much, workers and business people, because that is what we took away from you in extra employment insurance premiums”.

Another thank you should be mentioned. We ought to thank those who contribute to the pension fund because the government is dipping into that fund and will take out $30 billion.

The “tax me, I'm a Canadian” theory goes beyond just income tax. I must mention something that really bothers me. There is excessive income tax, but the government is also finding the ways and means in different departments to take more funds.

Where I live partly borders on the state of Montana and partly on the state of North Dakota. There are nine border crossing points and many of my people live closer to a hospital south of the 49th parallel than they do to a hospital in the province. Members will know that when their wife is expecting they will take the shortest route in the case of an emergency.

That is what happened to a family that lived almost 70 miles closer to a hospital in Montana than they did to a hospital in their province. This couple has paid their income taxes and has watched the form grow and grow. They have watched their taxes, municipal taxes and school taxes, grow until they are at the point that they get the AIDA form and they do not even know if they can fill the thing out. On three occasions Brian and Louise did not have much choice. Away they went. After less than 30 miles they were in a modern hospital. Three of their four children were born stateside, just a few miles across the border.

They are Canadian people. Both mom and dad were born here in Canada. Both paid large income taxes. Both paid huge agriculture taxes. Both paid huge road taxes, and they do not have any roads. Their children received their birth certificates from the states. The oldest boy is now 14. Guess what? He has to get a SIN number to take his driver's training. Guess what? It is going to cost Brian and Louise $75 a kid, or $225, for them to get their SIN numbers. Talk about a government that does not miss a beat. Congratulations. If it can get its hands in the pockets of a Canadian citizen, it certainly knows how to do it. These people and many people who cross the border in an emergency situation in my constituency use the hospitals in the United States. It is not out of preference, it is because of an emergency. They do not ask the provincial government or the federal government to pay their costs, they just do it. But when these three individuals want to get their social insurance number it will cost them $75 apiece.

Who do they contact? They contact their member of parliament. What will their member of parliament do? Just what I said I would do; not only will I speak in the House about this, but I will write the particular authorities to complain bitterly.

We need to humanize this whole idea of extracting money. We simply make fools out of ourselves by doing this. These three little kids, born to Canadian parents, have lived here, have been raised here and went to school here, but the government says “Give us a little more”, and they are protesting.

Finally, I want to draw the attention of the House to another factor. I mentioned this case before. There was a single working mother who had two children. The government finally caught up with her husband and extracted a lot of money from him for support payments. He was made to pay three years of support payments, which amounted to about $11,000. What did the government do? It said “Give us $5,500 all at once”. My argument is that members opposite are wrong. It should have been divided by three and it should have been at that rate, but so far this valiant young mother has not heard from Revenue Canada.

I think that Canadians deserve a little more attention. Perhaps the government could humanize its approach to Canadians. We are human beings. Brian and Louise do not have $225. They do not even know if they will be able to plant a crop because of this.

Not one cent of AIDA money, to my knowledge, has been dropped into the province of Saskatchewan. I know the minister says that the farmers in Prince Edward Island have it and the farmers here have it. They all had their forms before ours were printed. I would bet that our income tax forms arrived at the same time. I know that mine did.

My constituents are like other constituents. The young people move away. There are more than 200 students going to university in Minot. Why? Because they can get bursaries and grants and it is cheaper. Why do we do this? Why do we continue to tax ourselves to a standstill?

I most certainly will not be supporting Bill C-72. I cannot do it. My conscience would not let me do it even if I were sitting on the other side of the House, but I expect that all of those members will support it.

[Charles Hubbard, Liberal, Miramichi, NB]

Mr. Speaker, I am somewhat amazed to hear the hon. member. He may recall last fall when he and I had a lengthy conversation on the farming problems in the province of Saskatchewan. Following that we implemented a program which provided some $900 million to help the farmers across this country. Where does the member think that $900 million came from? Was there some magic pot or was it from taxation?

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Mr. Speaker, I am glad the hon. member asked that question. First of all, when that program was announced there was some reluctance on the part of Saskatchewan to even opt into it because basically, as this House knows, most of the farmers in Canada live in Saskatchewan. Therefore, the greater proportion of the 60:40 split would have to be borne by the provincial government. The province opted in, but, interestingly enough, just a week later the agriculture minister for Manitoba said “We are opting in because only 15% of our farmers will qualify”. What did the minister of agriculture for Manitoba know that we did not know?

I now know that less than 15% of our farmers will qualify because of the Houdini form that has been sent out. The government is returning to Canada's number one industry, Saskatchewan's number one industry, $900,000, which is a great deal less than was spent on the floods and the ice storms, and those people deserved it. Is the government trying to say that the people out there do not deserve it? They did not deserve the forms which were sent out. Most assuredly, that is the biggest disaster they have had so far.

[Lee Morrison, Reform, Cypress Hills—Grasslands, SK]

Mr. Speaker, when the hon. member for Souris—Moose Mountain was talking about disasters in the medical system in Canada I thought he would probably mention another case from his riding which I believe is the most atrocious I have heard so far.

An elderly man was suspected of having a brain tumour. He needed an MRI. With Canada's wonderful system he could get one within a year. He thought that was a little tough, so he went across into the United States, as just about everybody does in that part of the world. He got his MRI and was told “You, sir, have a brain tumour. It is growing rapidly and if you do not get it removed right away you are going to go blind”. So he said “I still have a few years left. How much is it going to cost?” He was told it would cost $40,000. He said “I just happen to have saved in my lifetime $40,000, and my sight is worth it, so go for it”. They operated and removed most of the tumour. The gentleman went home quite content.

Then he decided that for his checkups, which he had to have after major surgery of that nature, including another MRI, at least he would get that done in Canada and it would be covered by our wonderful medicare system. Lo and behold, he was told “No, my friend, you had that work done in the United States. To hell with you. Go back there to get your MRI checkups because we are not going to have any part of you here in Canada”.

It is absolutely unconscionable that Canadians would be treated that way. First they get driven out of their country to seek medical care and then, when they come back, the bureaucrats are so mean-spirited that they will not even give them follow-up care.

I am curious. I would ask the hon. member what is going on with that particular case now. Does he have any new information?

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Mr. Speaker, in that case the individual tried through various means and ways to get some support, or at least to get back what it would have cost in Canada, or a portion thereof, but he was not able to do that. He saved his own life. The officials refused to give him treatment. He was refused that surgery outright for at least three months. He would have been dead. He saved his life and now, as my hon. colleague has mentioned, he has been denied follow-up care simply because he used the services at a clinic which is world famous.

We have to face reality. There are hundreds of cases like this. The least the government could do would be to pay a portion of their expenses, at least the same portion as they would have paid here. That is not the only case. There are three more, Mr. Speaker, but I know that you do not want to hear about them right now.

[The Acting Speaker (Mr. McClelland)]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker (Mr. McClelland)]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker (Mr. McClelland)]

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

[Some hon. members]

Agreed.