Mr. Speaker, I am honoured to stand in the House of Commons in Ottawa, representing the people, the taxpayers from my riding on this issue of great importance.
I appreciate the member who brought this bill forward. He, like many of us, recognize that there is an economic climate in Canada which makes it very difficult for our businesses, both small and large, to compete in the international market. Having this bill brought forward helps to signal to all that we have to do some things better than they are currently being done.
However, right at the beginning I have to indicate that although I am much in favour of promoting industry, business, and especially international trade, at this stage in my analysis of the bill I will be voting against it because of reasons I will express during my speech.
I would like to outline some of the things that are included in Bill C-213. I know that the deputy leader of the Tory party, the member for Saint John, who has major shipbuilding interests in her riding, has expressed interest in this and has said repeatedly that this will not cost the taxpayer a penny. She keeps assuring us that this will not cost the taxpayer any money. However, in my reading of the bill I do not see how that can be avoided since there are several provisions in the bill which I believe will cost the taxpayer money in directly subsidizing and propping up an industry which is not viable under our present rules in the country.
I am not sure that members of the Tory party, the Clark party, are true Conservatives because they are also promoting this type of socialistic propping up of a company. I am sure when their turn comes they will express what they really think about this. I look forward to hearing their arguments. I will put forward my arguments now. When their turn comes they will say what they want to say.
This bill, in its purpose, indicates that it is to promote shipbuilding in Canada and to make Canadian shipyards more competitive. I cannot argue with that. That is a very high and viable goal. I think all members in the House would agreed to it. However, it then goes on to say that this will be done through the establishment of a program where a maximum of 87.5% of the money borrowed by a company from a financial institution to purchase a commercial ship built in a Canadian shipyard will be eligible for a couple of benefits from the taxpayer.
This is where the cost to the taxpayer comes in. Canadians may say that they want to do that. They may say that they want to pool all their money and give it to these other businesses whether they can compete globally or not and in that way they will keep them in business and keep people working. That is not a bad goal. When we come right down to it, it is good to have people employed. It is good to have them working on things, especially when it comes to an export market.
However, the first of the benefits that the taxpayer will have to pick up is the guarantee by the federal government in the event of a default in the repayment of the loan. I do not see how the taxpayer is off the hook on that clause. Very clearly, some of the people who will be entering into a contract with a shipbuilding company for the building of a ship will not be able to pay for whatever reason. That happens in some proportion in all industries. With this guarantee, the taxpayer will end up paying the banks the amount of the default. That is what this says and that is how I understand it.
The other members who are promoting the bill may try to convince me that is not what it says, but those are the words and I can only go by the words.
The bill goes on to say that there are some conditions of bearing a rate of interest comparable to other loans from financial institutions to large and financially strong corporations. This is not a bad idea. This one would cost the taxpayers nothing. To say that a company is maybe not as strong as it could be and guarantee that its interest rates would be lower should actually increase the probability that it will be able to pay back the loan and it would increase the probability that the taxpayers would not be on the hook for it.
Then we go on. The Liberals are saying that they want to improve the tax treatment for lease financing for the purchase of a ship built in a Canadian shipyard. I would venture to say that it is probably a laudable goal for all businesses to have better tax provisions so that business can thrive whether it is a shipbuilding company or any other company in the country.
I would love to hear an explanation from the proponents of this bill about the last item, which I also believe will cost the taxpayers money. It says that this will provide for a refundable tax credit for a portion of the costs relating to the construction or refit of a commercial ship in a shipyard located in Canada or the conversion of a ship in such a shipyard. This is a tax expenditure. It is a refundable tax credit that will go to either the shipyard, if the ship is being built for someone outside the country, or to the owner of the ship if it is a Canadian shipping company. Perhaps this would be a way to provide an incentive for our finance minister's company to bring its ships back to Canada and actually fly a Canadian flag on them and pay Canadian taxes. That would be very interesting. Maybe we can buy the finance minister back. The costs to the taxpayer are included in that.
As I said at the beginning, given my present analysis I will be voting against the bill because of the very broad principle that I do not think the government should have the ability to take money out of the pockets of hard-working Canadians right across the country in order to prop up businesses that are not able to compete on an international basis because we have gone international now. It is not a valid use of the taxpayers' money.
I know exactly what they are going to say now, “How about the western farmers?” How about them? I had a farmer in Saskatchewan say to me “If I would have had a reasonable tax rate in the last 30 years, thanks to the Liberal and Conservative governments, I gave so much money in taxes, I would now be out of debt and I wouldn't have to worry as much in hopefully this short time of an agricultural income downturn”. We are taxed to death in this country”.
We need to have a reasonable tax regime not only for the shipbuilding companies but for all of them.
Whereas rolling stock on the railroad has a depreciation rate of about 10% per year and there is a decreasing balance of up to 40% for rolling stock for trucks, we already have a rule in place that allows them to depreciate on a straight line depreciation of one-third of the cost per year. In four years, because it has only half in the first and the last year, the total cost of the ship is totally written off as a tax write-off. That is a very favourable provision. I think taxpayers are already giving a considerable impetus to this particular industry.
We also need to get really with it in terms of our negotiations with other countries, particularly our large next door neighbour, and insist that we get fair rules. It is generally known, for example, that ships that are built for the American market, both military and domestic, must be built and must be maintained in the United States, whereas in Canada that is not true.
I am so sorry that my time is up. I would like to say that my mind is still open but I have those questions about the bill. I think we have a better way of solving this problem.