Mr. Speaker, I would like to respond to this private member's bill, put forward by the hon. member for Lévis-et-Chutes-de-la-Chaudière. Frankly, the bill sounds a bit like a broken record and essentially repeats the same old demands for subsidies and tax breaks which our government has been hearing from the shipbuilding industry since 1997.
The industry is asking for a tax haven, but the Canadian taxpayers are asking for tax breaks.
Canadians are very clear. They do not want government to artificially prop up industries through interventionist and costly financial measures like the one suggested in Bill C-213.
During the second reading debate the hon. member for Elk Island argued that the bill's proposed loan guarantee program, similar to the American Title XI program, would be cost free. He said “The American taxpayers have not shelled out one red nickel in order to implement the program”.
Let me put this myth to rest right now. Loan guarantee programs are not free of cost. In 1998 costs to the American government were roughly $3 billion U.S. for contingent liabilities and almost $2 million on default payments. Based on our neighbour's experience it is evident that such a program would be very costly to set up.
The hon. member also contended that if ships built in Canadian shipyards were exempted from the regulations relating to lease financing, the existing depreciation rates for ships would apply without any restrictions. Consequently, he argues, the tax disadvantage that prevents ownership or lease financing of ships would be eliminated.
The fact is that the shipbuilding industry already has access to accelerated capital cost allowances. These are more generous than for any other industry in Canada, and even more generous than tax credits in the United States.
Furthermore, Canadian taxpayers would never accept both an accelerated CCA and an exemption from leasing regulations. If this were permitted the cost of a ship could be written off more than once and it would create a tax shelter. That is what the current leasing regulations help us avoid.
A third measure proposed in Bill C-213 is yet another demand for a tax break. It would create on a national basis the same type of program that Quebec set up in 1996-97. The tax measures proposed in the bill are not only costly to taxpayers, they are old, tired, interventionist tools from the past, the very tools which Canadians want us to stop using.
We must take charge of the future, not by returning to the past, but by investing in innovation, by training smart workers and giving them upgraded equipment and production techniques to do the job, and by forging alliances that will lead industries in the pursuit of excellence.
The policy instruments used by the federal government are modern instruments. They concentrate on areas that can make a real difference and that use taxpayers' money wisely. The acquisition of new builds in Canada by the federal government is done on a competitive basis and is restricted to Canadian sources.
I know that we have agreed to a four minute limit. There is much more I could say in explaining in detail why this is simply not a good suggestion in the private member's bill, however well intentioned. Canadians simply do not want to return to those kinds of mistakes from the past.