House of Commons Hansard #47 of the 36th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was housing.
The House proceeded to the consideration of Bill C-10, an act to amend the Municipal Grants Act, as reported (with amendments) from the committee.
Municipal Grants ActGovernment Orders
The Acting Speaker (Mr. McClelland)
There are 44 motions in amendment standing on the Notice Paper for the report stage of Bill C-10.
The motions will be grouped for purposes of the debate as follows:
Group No. 1: Motions Nos. 1, 2, 4 to 19 inclusive, 41 to 44 inclusive.
Group No. 2: Motions Nos. 3, and 20 to 40.
The voting patterns for the motions within each group are available at the table. The Chair will remind the House of each pattern at the time of voting.
I shall now propose Motions Nos. 1, 2, 4 to 19, and 41 to 44 to the House.
Ghislain Lebel Bloc Chambly, QC
moved:
Motion No. 1
That Bill C-10, in Clause 3, be amended by replacing line 8 on page 2 with the following:
““business or professional occupancy tax” means a tax levied”
Motion No. 2
That Bill C-10, in Clause 3, be amended by replacing line 29 on page 2 with the following:
“constructing a new immovable or a new real property,”
Werner Schmidt Reform Kelowna, BC
moved:
Motion No. 4
That Bill C-10, in Clause 5, be amended by adding after line 25 on page 7 the following:
“(1.01) If the Minister decides not to make a payment under subsection (1) to a taxing authority applying for it, the Minister shall, without delay, provide the authority with written reasons for that decision.”
Don Boudria Liberal Glengarry—Prescott—Russell, ON
Mr. Speaker, I rise on a point of order. I wonder if the House would agree that we deem the motions to be moved, seconded and read.
Municipal Grants ActGovernment Orders
The Acting Speaker (Mr. McClelland)
The government House leader has requested that all of the motions be deemed moved, seconded and read. Is there unanimous consent?
Werner Schmidt Reform Kelowna, BC
moved:
Motion No. 5
That Bill C-10, in Clause 5, be amended
(a) by replacing line 26 on page 7 with the following:
“(1.1) If a”
(b) by replacing line 29 on page 7 with the following:
“may supplement the payment but where the Minister decides not to do so, the Minister shall, without delay, provide the taxing authority to which the payment is to be made, with written reasons for that decision.”
Ghislain Lebel Bloc Chambly, QC
moved:
Motion No. 6
That Bill C-10, in Clause 5, be amended by replacing line 26 on page 7 with the following:
“(1.1) If a”
Werner Schmidt Reform Kelowna, BC
moved:
Motion No. 7
That Bill C-10, in Clause 5, be amended by replacing line 35 on page 7 with the following:
“that the”
Motion No. 8
That Bill C-10, in Clause 9, be amended
(a) by replacing line 27 on page 10 with the following:
“(2) Subject to subsection (3), if a frontage or area tax is payable over”
(b) by adding after line 31 on page 10 the following:
“(3) The Minister shall notify a taxing authority to whom a payment in lieu of a frontage or area tax is payable over a period of more than one year, which method of payment referred to in subsection (2) will be used to make the payment, and shall, without delay, after that notification, provide the authority with written reasons explaining why that method was chosen by the Minister.”
Ghislain Lebel Bloc Chambly, QC
moved:
Motion No. 9
That Bill C-10, in Clause 10, be amended by replacing line 12 on page 12 with the following:
“made in lieu of a business or professional occupancy tax by”
Werner Schmidt Reform Kelowna, BC
moved:
Motion No. 10
That Bill C-10, in Clause 10, be amended by replacing line 13 on page 12 with the following:
“the Royal Canadian Mint, Canada Post Corporation and Canada Mortgage and Housing Corporation and every corporation included in Schedule IV;”
Motion No. 11
That Bill C-10, in Clause 10, be amended by replacing line 21 on page 12 with the following:
“a frontage or area tax and, in the case of the Royal Canadian Mint, Canada Post Corporation and Canada Mortgage and Housing Corporation and a”
Ghislain Lebel Bloc Chambly, QC
moved:
Motion No. 12
That Bill C-10, in Clause 10, be amended by replacing line 23 on page 12 with the following:
“ments in lieu of a business or professional occupancy tax;”
Werner Schmidt Reform Kelowna, BC
moved:
Motion No. 13
That Bill C-10, in Clause 10, be amended by replacing line 25 on page 12 with the following:
“the Royal Canadian Mint, Canada Post Corporation and Canada Mortgage and Housing Corporation and corporations included in schedules III or IV,”
Motion No. 14
That Bill C-10 be amended by adding after line 27 on page 12 the following new clause:
“10.1 The Act is amended by adding the following after section 9:
9.1 For greater certainty, the Governor in Council shall not make regulations adding the following corporations to Schedule IV: (a) the Royal Canadian Mint; (b) Canada Post Corporation; and (c) Canada Mortgage and Housing Corporation.”
Ghislain Lebel Bloc Chambly, QC
moved:
Motion No. 15
That Bill C-10 be amended by adding after line 27 on page 12 the following new clause:
“10.1 The Act is amended by adding the following after section 9:
9.1 (1) No regulation made by the Governor in Council under section 9 shall come into force unless it has been approved by a committee of the House of Commons that is designated or established by the House for that purpose.
(2) A regulation approved by a committee of the House of Commons under subsection (1) comes into force on the day following its approval.”
Werner Schmidt Reform Kelowna, BC
moved:
Motion No. 16
That Bill C-10, in Clause 11, be amended by replacing line 39 on page 12 with the following:
“authority.
10.1 Notwithstanding anything in this Act, where a corporation included in Schedule III or IV is authorized to make a payment to a taxing authority in lieu of a real property tax, a frontage or area tax or a business occupancy tax, as the case may be, pursuant to regulations made under subsection 9(1), and decides not to make that payment, the corporation shall, without delay, provide the authority with written reasons for that decision.”
Motion No. 17
That Bill C-10, in Clause 11, be amended by replacing line 39 on page 12 with the following:
“authority.
10.1 Notwithstanding anything in this Act, where the Royal Canadian Mint, Canada Post Corporation or Canada Mortgage and Housing Corporation is authorized to make a payment to a taxing authority in lieu of a business occupancy tax and the corporation decides not to make that payment, the corporation shall, without delay, provide the authority with written reasons for that decision.”
Motion No. 18
That Bill C-10, in Clause 13, be amended by replacing line 10 on page 13 with the following:
“(b) the Royal Canadian Mint, Canada Post Corporation and Canada Mortgage and Housing Corporation and every corporation included in Schedule”
Ghislain Lebel Bloc Chambly, QC
moved:
Motion No. 19
That Bill C-10, in Clause 13, be amended by replacing line 12 on page 13 with the following:
“or professional occupancy tax, comply with any regula-”
Motion No. 41
That Bill C-10 be amended by adding after line 40 on page 14 the following new clause:
“15.1 (1) The Minister shall, within twelve months after the end of each fiscal year, cause a report on the administration of this Act during the preceding fiscal year to be made.
(2) The Minister shall cause a copy of the report referred to in subsection (1) to be laid before the House of Commons on any of the first fifteen days on which that House is sitting after the day on which the report is made.”
Motion No. 42
That Bill C-10 be amended by adding after line 40 on page 14 the following new clause:
“15.1 (1) The Minister shall, within twelve months after March 31, 2004 and every four years after that, cause a comprehensive review and report of the provisions and operation of this Act during the preceding four years to be made.
(2) The Minister shall cause a copy of the report referred to in subsection (1) to be laid before the House of Commons on any of the first fifteen days on which that House is sitting after the day on which the report is made.”
Motion No. 43
That Bill C-10 be amended by adding after line 40 on page 14 the following new clause:
“15.1 (1) The Minister shall, within twelve months after March 31, 2005 and every five years after that, cause a comprehensive review and report of the provisions and operation of this Act during the preceding five years to be made.
(2) The Minister shall cause a copy of the report referred to in subsection (1) to be laid before the House of Commons on any of the first fifteen days on which that House is sitting after the day on which the report is made.”
Motion No. 44
That Bill C-10 be amended by adding after line 40 on page 14 the following new clause:
“15.1 (1) The Minister shall, within twelve months after March 31, 2003 and every three years after that, cause a comprehensive review and report of the provisions and operation of this Act during the preceding three years to be made.
(2) The Minister shall cause a copy of the report referred to in subsection (1) to be laid before the House of Commons on any of the first fifteen days on which that House is sitting after the day on which the report is made.”
Werner Schmidt Reform Kelowna, BC
Mr. Speaker, actually Bill C-10 is not that bad. It is a reasonable bill because it changes the title of the bill to refer to payments in lieu of taxes rather than grants in lieu of taxes. That is a pretty reasonable thing to do.
Another thing we need to recognize is that the bill provides a certain element of fairness and equity to municipalities so that they can actually predict what will be happening and they can make projections in terms of budgeting.
The bill is supported by the Federation of Canadian Municipalities. It is certainly consistent with Reform Party policy, which is that governments should be paying the same property taxes that other citizens of Canada pay. It is very important that we have fairness, equality and equity in the whole business of property taxes as far as the government is concerned.
However some very significant amendments need to take place at this time. In particular, we need to recognize the accountability factor in this bill.
The bill provides discretionary power to the minister. It gives the minister the discretionary power to do a number of things. He may pay the taxes; he may not pay the taxes. He may make those payments or he may not. He may pay those taxes late. If they are paid late, he may decide whether or not they are in fact late. He also may decide whether he should pay supplementary payments, such as interest payments, on those particular late payments of taxes. All of that is at the discretion of the minister. The same discretion also applies to the corporations. While the constitution provides that the Government of Canada cannot be forced to pay property taxes or make payments in lieu of taxes, the coercion element cannot be done unless there is a constitutional amendment.
Another factor could be introduced here. That factor is to ensure that the minister, when he decides to change the assessment, the time of payment or the supplementary payments in lieu of interest or a late payment, in all of those cases the minister should be required to provide a reason for his particular delay or his change or amendment of the amount that he should be paying to the respective municipalities. That should be a requirement of the minister. It does not ensure that the minister does not have discretion; he does have discretion, but he must account for that discretion.
I think that is a reasonable amendment. It is one which I think we should all expect. Why is that so important? In lieu of what has just happened to one of the minister's colleagues in Human Resources Development Canada, I would think that the minister would welcome that kind of accountability. Then the municipalities could not say, “He is just doing this for his friends. His friends, if he has some in municipal government, get paid right away and they get paid the exact amount. Others who are not his friends get paid later or they do not get paid interest or whatever”. There could be no accusation of favouritism. I think the minister would welcome that sort of thing. The same argument applies to the crown corporations.
I want to refer to how serious this can become. There are some things that happened in that audit which was done recently. I want to read a couple of those things into the record.
One of the findings of that audit was on 13 signatures that were selected during the file review. It was revealed that in three cases out of the 13, that is almost 25%, the delegation instrument, that is, giving somebody the delegated authority to sign something, in three instances out of 13 files, which is 25%, the signing officer, that authority, could not be produced. In 25% of the cases the guy had delegated power but he could not actually say who had delegated that power to him. This is serious.
In six cases, almost half, the delegation was only valid upon notification of acting and for a limited period of time. No such notification had been received for the period the document was signed. Even if the delegation had taken place, it was for a very specific time, a time in which the person with the delegated power exercised signature authority that was outside the parameters originally delegated to him. That is pretty serious.
There is another one case under contracting. In four contribution agreements out of every ten reviewed, irrelevant clauses in standard agreements were not crossed out or blanks were not filled in to specify conditions such as the periodicity of the submission of claims or the period of notification if it were necessary for HRDC to terminate the project before completion.
Listen to this one. In one-third of the projects reviewed, the original dollar value of the agreement was upward in most cases. In 36% of these cases the reason for the amendment was not documented. It requested one amount, the amount was reviewed and it increased in 36% of the cases. This is the kind of thing that should never happen. This has to be revealed through an audit as an indictment of the process.
What we are trying to introduce in this legislation is a clause that would protect and help the Minister of Public Works and Government Services. It would be amended in such a way that it would make it easier for him to have an administration that is sound, honest, trustworthy and transparent and where the processes will bear examination. It will make it clear to all and sundry that the minister is doing his job uprightly, honestly, fairly and in the best interests of all Canadians.
That is what the amendments in group one are all about. We specifically suggest Motion No. 4. The bill currently reads that “the minister may make payments”. It is not possible, as I indicated before, that he be forced to make those payments. We would suggest, however, that if he does not want to make those payments, then he must justify that particular situation.
Are there such cases? Yes, there are. There is a dispute right now involving the Halifax Citadel with regard to who should pay the taxes on the property. The Department of Public Works and Government Services has agreed to pay for the part that is a shelter but not for the entire structure. The argument is that this has to be interpreted. The department is suggesting that the interpretation be done by a court, which is not unreasonable.
On the other hand, should the assessment be left to professional assessment people? I think this is an argument that clearly shows that Public Works and Government Services has done something right. It is asking some good questions. However, the point remains that there has to be a reason given whenever these payments are stopped. In this case the payments were stopped. The minister should be required by law to give a reason for his particular noncompliance.
The other case has to do with the advisory panel that falls under Group No. 2, which I will not deal with here.
I will now deal with Motion No. 7. Motion No. 7 would amend the ministerial discretion which says “in the opinion of the minister” as pertaining to the period that the payment has been unreasonably delayed. The municipality sends out a notice of taxation indicating that the bill is due at a particular time. The dates are very clear and very specific. If the payment is not made at that time but made at a later date—let us say it is due on July 1 and the payment is not made until July 31—according to the act, if in the opinion of the minister that payment is late, he may recognize it. This is not a matter of opinion. It is very clear that if the taxes are due on July 1, they are due on that date, not on July 31. If the taxes have not been paid on July 1, then they are late.
This amendment makes it clear that the minister should have a clear explanation of what it is he is doing when he opines a shift in date like this.
What this really does is it puts the payment in lieu of taxes on a more solid footing and moves in the direction of making the minister accountable. It is in the interest of all Canadians, and I think in the interest of the minister, to have that kind of protection in law. The minister would now be able to withstand any audit that might cast aspersions that he has not administered his department well.
Claude Bachand Bloc Saint-Jean, QC
Mr. Speaker, I am delighted to speak to Bill C-10. We have been following it closely for some time in the riding of Saint-Jean.
We will be debating something very important here. Historically, the Queen did not have to pay taxes to her subjects. This is an old issue. The Anglo-Saxon people were great colonizers and their practice was, as soon as they conquered part of a continent or a country, to establish a rule that the Queen, who had conquered the land, did not pay taxes to her subjects. Quite the reverse, her subjects were to pay taxes to her, often excessively.
Today we are in a longstanding debate, which the government is trying to update, because it has been going on for some time. There have been changes over the years. In the early days of Confederation, the federal government, following in the tradition of its predecessors, did not want to pay taxes to the people and to municipalities. They did not want to make transfer payments. The idea was to collect money to enrich the central government.
Over the years, the government was obliged to assume certain responsibilities, because the people in the municipalities knew very well that they had to pay their municipal taxes to the municipality. Not only did they pay taxes to the federal government, but they had to pay them to the provincial government, and they paid property taxes to the municipalities.
It was rather difficult for a subject to pay taxes on the full assessed value of his residence and see that the Queen or the central government did not pay taxes on federal buildings in municipalities. Still the principle that the Queen does not have to pay taxes was maintained in part.
To avoid saying that these were taxes the federal government had to pay, they were called payments in lieu of taxes. This is the point at which the arbitrariness starts, because I pay taxes on the full assessed value of my residence, but things are not at all the same for the federal government, which never pays on the full assessed value of buildings and land it owns in municipalities.
Over the years, some municipalities have come to realize that the situation was not only arbitrary, but that it was also extremely difficult to budget year after year, because they find themselves at the mercy of the minister who can say “Listen, I sent you X number of dollars last year or two years ago. Now I am considering reducing that amount”.
I will give the figures for Saint-Jean. The city of Saint-Jean has a budget of $50 million, out of which $4.2 million come from a federal transfer in lieu of taxes. This is easy to understand. There are many federal properties in the riding of Saint-Jean, including the military base, Agriculture Canada's research centre and the old military college. Incidentally, I hope the government will announce in its February 28 budget that it will correct the current situation and reopen the military college. However, this issue was already a concern when that institution closed.
When the military college closed, the city of Saint-Jean was getting $900,000 in taxes from that institution. Members can see why the city is anxious to find out what will happen regarding these taxes.
That amount was maintained in the money given to the military college, with the result that, today, the city of Saint-Jean receives $4.2 million from the federal government, out of a budget of $50 million.
But when we found out that a consultation would take place and that it would be important for the federal government to determine certain conditions and provide certain specifications on how it was going to hand out that money from now on, I immediately warned not only the city of Saint-Jean, but the various municipalities in which there are federal properties. I did that because the examples from recent years clearly show that when the government wants to reform soomething, it is never because it wants to give back more to the public. It is always to give less.
There are many typical examples, including the Canada social transfer. At one time, before the Canada social transfer, the federal government was giving money to the provinces for social assistance, health and post-secondary education. What has the Liberal government done since 1994? It has put all this into a single program, a single item called the Canada social transfer. And the amounts transferred are no longer the same. The provincial government is currently experiencing a $1.7 billion shortfall. No wonder things are bad in emergency wards, not only in Quebec, but in the other provinces also.
Another example is unemployment insurance, now dubbed employment insurance, where, in the name of reform, the government has managed to arrange for individuals to receive less. Right now, the government is pocketing between $6 and $7 billion, having reduced eligibility for these programs and worked it so that now people pay premiums from the first hour of work.
A lot more goes into the government coffers than comes out, with the result that the government is getting richer.
We wanted to be sure that when the government said that it was going to consult, to set up a panel with the municipalities to discuss the issue, that these municipalities would not be left worse off. We know what happens when the municipalities have less. The federal government hangs on to the money and the provinces, municipalities and citizens are left to make up the difference.
The public is sick and tired of taxes and tell us so repeatedly. I hope that the government is now going to introduce parameters that are just and fair for municipalities.
In this connection, we have suggested a number of changes that I hope will be implemented. An advisory panel has already been set up, that will advise the minister when there is a dispute with the municipalities. While we are on the topic, one thing we would really like to see is a lot of surveyors because they have the necessary specialization and will probably establish as fairly as possible what the federal government owes the municipalities.
This will also end arbitrary actions for once and for all. The city of Saint-Jean will be able to annually budget an amount that it can be sure to have, instead of the minister getting up on the wrong side of the bed one morning and closing a federal institution in a municipality and he no longer paying the taxes since it has been closed or he wants to sell it to someone else. Until it is sold, the municipality is in limbo, sort of, deprived of revenue from the federal government.
I think that if we want the minister to have a good advisory panel, this must include surveyors, and in order to keep this from ending up, as usual with the Liberals, as another patronage plum, or nepotism, it is also important for these people to be appointed by a public competition.
So, generally speaking, we are fairly satisfied to put an end to the arbitrariness. With the new measures, we feel the municipalities are going to be in a far better position to prepare their budgets efficiently, and I also hope the government will not take seize the opportunity to say “Now we have new parameters, we will reduce our transfers a little”.
We will keep an eye out for this. It is very important for those of us in the City of Saint-Jean and in the surrounding municipalities to be able to plan budgets properly year after year. There are many federal buildings and we want to ensure that the revenue from them will at least be the equivalent of what we were receiving before.
We hope these new parameters will mean more municipal revenue instead. It is important for me to speak on this matter today because of the importance of federal government buildings to the municipalities in the riding of Saint-Jean.
Nelson Riis NDP Kamloops, BC
Mr. Speaker, I appreciate the opportunity to participate briefly in today's debate on Bill C-10.
More than anything else, this bill reminds us of that horrible time in Canadian history when the Conservatives formed the government. It is one of those points that we cringe to recall, but it is real. Those early years in the 1990s were terrible years for Canada, terrible years for Canadians and, quite frankly, a disaster for the House, with continuous contempt of parliament and a disregard for the rules and traditions of the House of Commons.
Municipal Grants ActGovernment Orders
An hon. member
Which the Liberals pretended they cared about then.
Nelson Riis NDP Kamloops, BC
At that time the Liberals indicated that they were concerned. Now they have demonstrated that they are probably worse.
I want to concentrate on the Conservative government under Brian Mulroney, and later Kim Campbell, because they started what this bill attempts to address. In 1992, one of the low points in the history of our country when the Conservatives were in office with a huge majority, they decided they were going to do something to punish municipalities from coast to coast. There were thousands of municipalities and the Conservatives said “We are going to freeze our grants in lieu of taxes to the municipalities”.
The municipalities had just gone through difficult, struggling times and were trying to predict their revenues for the next year. After all, they were, and are, the closest government to the people in terms of delivering programs. The municipalities make decisions on sewers, water treatment, road building, sidewalks, tot lots, parks and recreational facilities for the people of their cities. Given the fact that most Canadians are now living in cities, the municipal governments have become very close to them.
The municipalities depend on their ability to predict revenue sources to plan their budgets. There are somewhere between 50,000 and 60,000 federal properties in cities, which are all supposed to make grants in lieu of taxes. This enables the municipalities to plan and budget for the future, to plan to introduce new programs to assist the needs of the people in the various municipalities across the country. Along came the Conservatives, who said “Forget all your work. Forget all your planning. Forget all your projections. Forget all the improvements you want to make to your city. We are going to freeze your grants. We do not care what you think. We do not care what you say”. There were no consultations, no discussions. They said “We are so smart because we have formed the Conservative government in Ottawa. We are going to freeze your grants in lieu of taxes, and to hell with you. We do not care what you think”.
Nelson Riis NDP Kamloops, BC
They froze their grants right off. Imagine what that did to the leaders of the municipalities across the country. They were shocked. All of a sudden their plans went out the window. They had been dutifully planning, working hard on behalf of the residents of their cities, all for naught because the Conservative Government of Canada froze their grants overnight without telling them anything about it.
You know how wrong that was, Mr. Speaker. You know how wronged the people of Canada were at that point. You knew what a wrong and inappropriate decision that was to take, but the Conservatives took it nevertheless. It was a very dark day for our country and a very dark day for the House of Commons.
I know that my colleague from Winnipeg—Transcona remembers the day when that announcement was made. It was a very dark moment, but that is what we have to live with from time to time. My friend from Winnipeg—Transcona says that to this day he has not gotten over that shock. I know he means it because it was one of those dastardly deeds that takes place every now and again in the House of Commons.
Something had to be done. We could not allow the federal government to do whatever it wanted to anybody and at any time. Constitutionally it had the right, and it used it in a very brutal and inappropriate fashion.
I congratulate the people at the Federation of Canadian Municipalities for the excellent work they do on behalf of municipalities across the country. They have a thoughtful, very democratic, grassroots approach in terms of policy direction. They said “Something has to be done. We can't have this any longer”. Therefore, Bill C-10 started that long process and today it is at report stage and we are looking at some of the amendments put forward by my hon. colleagues.
It is a bill that we support as New Democrats. Anything that brings transparency, anything that brings a sense of reasonableness, of decency, of fairness, of equity has to be supported. This bill is a major step in accomplishing that.
Basically, the bill will change the term “grants”. Let us face it, today “grants” has become a four letter word. It has five letters, but basically it is a four letter word. It is a nasty word because of what the Minister of Human Resources Development has done. It is a very bad word because of the abuse, because of the political favouritism, because of the patronage, because of the pork-barrelling that the present government used when granting moneys to various organizations.
Government members said “We have to get away from the use of that term, so we will call it payments in lieu of taxes”, known as PILTs. That makes sense, payments in lieu of taxes.
I recognize the positive aspect of this legislation. If there is a federal piece of property in a municipality, the federal government is obligated to pay taxes to the municipality to reflect the property value. That is how municipalities raise their funds, through taxation, through property taxes. The government recognizes that federal properties must pay taxes; however, there is a wrinkle. There is always a little wrinkle. I applaud my friend from Kelowna for pointing this out.
There is a lot of discretion in the bill. This group of amendments speaks to how the minister can decide whether the government should make payments, whether it should pay penalties on late payments, whether it should hold off making payments and so on. There is a lot of discretion which is left to the minister.
If there is one thing we have learned in the last few days it is that when there is discretion left in the hands of ministers they sometimes seem to abuse it. I use the example of our friend, the Minister of Human Resources Development, whose constituency, by and large, does very well economically and gets tonnes of grants. As a matter of fact, I think we would look long and hard to find a single business or a single organization in her constituency that did not get a grant. She went up to people who were walking down the street and said “Excuse me, I am the Minister of Human Resources Development. Do you want a grant?” Why not? It is very serious. That was a clear abuse of that position.
We are trying to find a way to get around this in the legislation. I applaud my friend from Kelowna, who said that we must ensure there is a clause which requires the minister to explain why he or she is not doing what is asked by the legislation.
We support this group of amendments. They state that if the minister in his or her wisdom decides not to pay the taxes on federal property in a particular city, that minister has to explain why he or she is not doing that.
There are problems, and I will refer to two of them. My friend mentioned already the situation in Halifax with the Citadel and the discussion of who owns that piece of property, how much of it is federal and how much is municipal. There is also the issue of first nations properties within city limits. Is that federal property or is it first nations property? Where does that come in?
There are areas where it will take discussion and perhaps, in the end, even a court decision before the final outcome is determined.
This group of amendments would give the minister some flexibility. However, ministers who have flexibility cause Canadians to squirm. Therefore, we are saying “Yes, we will give the minister flexibility to deal with these special cases, but the minister must explain why he or she is not paying the taxes that the municipality is expecting”.
Angela Vautour NDP Beauséjour—Petitcodiac, NB
Mr. Speaker, I am pleased to have the opportunity to speak to the first group of proposed amendments to Bill C-10.
Although I believe that the bill still does not go far enough to ensure that municipalities get their fair share of property taxes from federally owned property, I believe that it is an improvement to the original Municipal Grants Act.
When the bill went to committee, my colleague, the member for Tobique—Mactaquac, was successful in having his amendments adopted by the Commons committee. One of the provisions of the bill would create a new advisory panel to resolve disputes between the government and municipalities over evaluation of federally owned property and payments owed to municipalities.
Originally Bill C-10 proposed that the Minister of Public Works and Government Services appoint all the panel members, pay them, choose the chairperson, and he would be able to fire them at any time if he disagreed with any of the panel's decisions. This was a problem because public works is involved in most of the disputes.
One of my colleague's amendments would give the panel members more independence by having them appointed and paid by the cabinet instead of the minister. This would ensure more balance and fairness within the panel, although I personally would have preferred a much more independent structure.
It is very clear that municipalities are not being treated fairly with the system that is now in place. I met with the people of the municipality of Alma last week and they have very good reason to be upset with the government. This is what the citizens of the municipality of Alma had to say about this matter:
We are very concerned with this government's cuts in federal payments in lieu of taxes that our municipality has been recently experiencing. We are the Service Centre to Fundy National Park, which is located in the Alma Parish. We have federal buildings inside the municipality as well, those being the Alma Post Office and housing owned by Fundy National Park.
Also they obtain money from the provincial government to help cover fire protection for the local service district, which includes the national park.
They go on to say that the assessments for the outlying areas were cut by $2.5 million, which was reflected in a decrease to the municipality over $3,000. They also lost $34,166 in federal assessments, which cost them a decrease of another $3,921 in revenue.
A small community with a population of approximately 312 residents cannot afford these cuts, as it cripples a community such as Alma.
I agree with the people of Alma and I must add that the citizens of the community of Dorchester in my riding are finding themselves in the same situation because they have in their community a federal correctional building.
I sometimes wonder if this is part of the government's long term plan in closing rural communities.
Let us face it, first we took away employment insurance benefits, which directly affected small rural communities. That forced people to leave their communities, which forced schools to close, meaning less families building in communities. If that is not enough to shut down the community, the government cut federal payments in lieu of taxes to make sure these municipalities could not survive. That is the Liberal way.
Unfortunately the amendments we are debating today will not fix all of the problems within the Municipal Grants Act and I will explain why. One of the amendments proposed today is that we change the language of the legislation so that the federal government is compelled to pay its tax bills just like every other municipal taxpayer. I certainly agree with the intent of this amendment, but unfortunately municipalities are not recognized as a level of government in the constitution or by the federal government. They are entirely a creation of the provincial government. It is understandable that my friend would come up with a simple solution, which, on the face of it, would appear to make sense. Why not treat the federal government like any other taxpayer?
The problem is that we have a constitution that we have to live with today. Although I am sure that we all have things we would like to see changed in the constitution, none of that will happen today. According to our constitution, as it is now, municipalities do not exist, they have no jurisdiction in law and they do not have any official relationship with the federal government or the crown. Therefore, the federal government cannot be bound by any decisions made by a municipality. It can only undertake to voluntarily follow a decision or a bylaw passed by a municipal government.
These amendments, although well meaning, would have the effect of changing the constitution without going through the constitutional amendment process. Nevertheless, I congratulate the member for having brought forward this point for debate. This is a subject which merits further discussion.
With respect to Motion Nos. 8, 9, 11 and 12, the member for Kelowna is attempting to address the outstanding issue concerning business occupancy taxes and certain crown corporations. Specifically these amendments would require Canada Post, the Royal Canadian Mint, the Canada Mortgage and Housing Corporation and similar crown corporations to pay business occupancy taxes.
Certainly the mandate of these crown corporations has changed over the years since the Municipal Grants Act was last updated. It used to be that these crown corporations served a purely public policy purpose and in the unlikely event they every made a profit it was more by accident than by design. Now these corporations serve two purposes. Not only do they continue to serve an important public policy role, but they also have the mandate to earn a profit in order to recover costs and to lessen the burden on taxpayers.
I agree with the hon. member for Kelowna that if these crown corporations are conducting business and earning a profit they should be paying business taxes. The question is how much. After the discussions our party had with representatives from the Federation of Canadian Municipalities, and after having questioned witnesses from the FCM at the public works committee, we are convinced that this is a problem that will soon be solved.
Municipalities and the federal government are continuing to negotiate over what portion of each crown corporation is devoted to purely profit making activities. That discussion is not yet finished. Municipalities have asked us not to hold up this bill while those negotiations are ongoing as there will be an opportunity to fix that issue in the very near future.