Debates of April 6th, 2000

Income Tax Amendments Act, 1999

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I rise to speak to second reading of Bill C-25, the Income Tax Amendments Act, 1999.

Even though the 2000 budget was brought down in February, hon. members can appreciate that the legislation before us today stems from the 1999 budget. These are the measures that should be the primary focus of this debate.

Bill C-25 seeks to implement a large number of initiatives designed to ensure tax fairness, including personal income tax measures, announced in the February 1999 budget, and certain other measures dealing with the demutualization of insurance corporations, the fiscal situation of the trust established by the federal and provincial governments to provide compensation to hepatitis C victims, and the taxation of first nations.

Before I discuss the specifics of the bill, however, I will take a moment to put the legislation in context. The fundamentals of our government's tax policy are crystal clear.

First, our approach to tax relief must be fair, which means starting with those who need it most, low and middle income Canadians, especially families with children. Second, we must place priority on personal income taxes where the burden is greatest and where we are most out of line with other countries. Third, we have to ensure that Canada has an internationally competitive business tax system. Fourth, because of our debt burden, tax relief must not be financed with borrowed money.

The government remains committed to providing substantial tax relief to Canadians on an ongoing basis. Last fall Canadians were promised in both the Speech from the Throne and the Minister of Finance's economic and fiscal update that the government would set out a multi-year plan for further tax reductions.

Budget 2000 delivered on that commitment through a five year tax reduction plan which indexes the tax system against inflation, reduces the middle tax rate and overall cuts taxes by at least $58 billion by the year 2004, an average annual tax cut of 15% with even greater relief for families with children. It is a plan that will provide further real and lasting tax relief for all Canadians, but it is also a plan whose foundations were laid in previous budgets, including the one of 1999.

Getting back to that budget and the legislation at hand, hon. members know that tax revenues finance important government programs that Canadians need and value such as health care and education. Therefore, there must be a balance between keeping taxes low and providing a source of revenue for vital social and economic programs.

If they are to become permanent, tax relief measures must be affordable and they must not jeopardize the soundness of Canada's finances.

For the first time since 1965, the 1999 budget provided an opportunity to offer tax relief to all taxpayers, without the government having to borrow money. Low and middle income Canadians are the ones who will benefit most from these measures.

Each of our budgets to date has provided targeted tax relief to achieve social and economic goals. Areas of support include students, charities, persons with disabilities and the children of parents with low incomes, groups where it would be most beneficial.

Eliminating the deficit in 1997-98 opened the door for the government to begin broad based tax relief measures. The 1999 budget builds on these measures as part of our long term strategy to permanently reduce taxes.

Together the 1997, 1998 and 1999 budgets reduced the income tax burden of Canadians by some 10%. This is a significant step, but we have moved further. Combined with the actions in the 2000 budget, annual personal income tax reductions will total 22% on average by the year 2004-05.

The measures in Bill C-25 go a long way toward helping the government reach this target. This is the context within which today's debate on Bill C-25 is taking place. These measures are all part of the government's commitment to tax fairness and our long term tax reduction strategy.

Initially, three comprehensive tax relief measures were announced in the 1999 budget, and these measures are all included in the bill before us. Provided this legislation is promulgated, each of these measures will be effective July 1, 1999.

First, the amount of tax exempt income that Canadians may earn has been increased. Budget 2000 raises this amount further, but that will be discussed in another debate.

Under the present income tax system basic personal, spousal and equivalent to spouse credits ensure that individuals and families receive a basic amount of income tax free. The 1998 budget raised the amount of money low income Canadians could receive on a tax free basis by $500. The 1999 budget extends this relief to all taxpayers and increases that amount by a further $175.

As a result of these two measures all taxpayers will benefit from a basic personal credit sufficient to allow the receipt of up to $7,131 of tax free income. That is an increase of $675 over what was available in 1997, and in budget 2000 we increased that even further.

The amount upon which the spousal credit is calculated will also be increased by $675 to $6,055. The threshold where the spousal credit begins to be reduced will increase from $538 to $606. In addition, the bill eliminates the general 3% surtax for all taxpayers.

With the books balanced, the 1998 budget was able to eliminate this surtax for taxpayers earning under $50,000 and reduce it for those with incomes between $50,000 and $65,000. Now it is abolished completely. Together the 1998 and 1999 budget measures removed 600,000 Canadians from the tax rolls and reduced taxes for all 15.7 million Canadian taxpayers.

While all taxpayers will benefit from these measures, low income earners will have the most to gain. For example, under the 1999 budget measures a single filer earning $15,000 will pay 15% less federal tax while a similar individual earning $30,000 will pay 6% less tax.

I have more examples. A typical one earner family of four that receives an annual income of $30,000 or less will pay no net federal income tax. A similar family earning $40,000 will enjoy a 15% federal income tax reduction.

I will now deal with some of the other tax equity budget measures contained in the bill before us, beginning with income splitting among children who are minors.

As members know, the progressive structure of the rates is one of the basic principles of our personal income tax system. It goes without saying that high income individuals are in a better position to absorb a higher tax rate than lower income earners are.

Income splitting occurs when high income individuals arrange to divert income to low income earners, generally family members, to avoid tax.

The tax benefits of income splitting can usually only be accomplished by high income individuals with dependants. Even then, these arrangements are only effective for certain types of income.

As hon. members will appreciate, a tax system that enables some to income split through corporate structuring while denying it to others is not sustainable both in pragmatic terms and from a tax fairness perspective. Fair taxation based upon a taxpayer's ability to pay, which is reflected through the progressive rate structure and uniformly applied, is the only sustainable approach.

To improve the fairness and integrity of our tax system the bill introduces a special tax aimed specifically at structures designed to split income with minors. Applied at the top marginal rate on the income of individuals aged 17 or under at the end of a taxation year, the types of income to which this special tax would apply include taxable dividends and other shareholder benefits on unlisted shares of Canadian and foreign companies received from a trust or partnership, and income from a partnership or trust where the income is derived from a business carried on by a relative of the child.

Another measure in the bill deals with retroactive lump sum payments on which individuals are taxed in the year payment is received, even though a significant portion may relate to prior years.

Because of the progressive rate structure of the income tax system, the tax payable on these payments can be appreciably higher than it would have been if payments had been staggered and taxed upon receipt.

Those who receive eligible retroactive lump sum payments of $3,000 or more will be able to calculate the tax under a special relief mechanism.

Income eligible under this mechanism will include certain office or employment income, superannuation or pension benefits, spousal or taxable child support arrears and EI benefits.

Another measure in Bill C-25 affects Hutterite colonies which for income tax purposes qualify as communal organizations. These organizations own property on a collective basis and typically carry on farming and related businesses. They are subject to section 143 of the Income Tax Act, which is meant to subject their income to a level of taxation that is roughly comparable to the level of taxation on farming income earned outside these organizations. This is achieved by allowing the income earned by these organizations to be allocated among their adult members.

However, the method of allocation of income for communal organizations has remained the same since the mid-1970s. This method has permitted income to be allocated to only one spouse per family in a communal organization, while general income tax rules have been changed to make wages and salaries paid to spouses employed in farming and other businesses tax deductible. This is despite the fact that, generally speaking, each adult in a communal organization makes a direct contribution to the income generating business activities of the organization.

Therefore, in order to maintain a roughly equivalent level of taxation on income earned by communal organizations and on general farming income, the tax burden on communal organizations would be reduced by allowing allocations of income to both spouses in a family under section 143.

The bill also deals with misrepresentations by third parties.

Criminal and civil penalties are imposed when taxpayers attempt to evade payment of their fair share of taxes through fiscal misrepresentation. However, there is no specific rule for assessing the application of civil penalties to individuals who make false statements regarding the fiscal obligations of another taxpayer.

This bill introduces two civil penalties applicable to third parties who make false statements that could be used for tax purposes. One concerns tax shelter and other tax planning arrangements. The other concerns advising or participating in a false tax filing.

These changes stem from various recommendations made by the auditor general, the public accounts committee and the technical committee on business taxation.

The integrity of the tax system and the market for professional tax services are not well served if the tax law does not provide for the application of civil penalties against those who make false statements which could be used by a taxpayer for a purpose under the tax law.

A culpable conduct test, consistent with the types of conduct which the courts have in the past applied civil penalties to taxpayers under the tax law, will be instituted. This test applies to conduct which is tantamount to intentional conduct, shows an indifference as to whether the tax law is complied with, or demonstrates a wilful, reckless or wanton disregard of the law.

The bill also provides a reliance on good faith exception to the culpable conduct standard. However, this exception will not apply to persons who promote or sell tax shelter arrangements, as these arrangements have the potential to adversely affect the tax base and taxpayers to which such arrangements are promoted.

As well, the Minister of National Revenue has indicated that the Canada Customs and Revenue Agency will be taking special administrative procedures in respect of the third party penalty proposal. In particular, the Canada Customs and Revenue Agency will conduct a head office review before assessing any third party civil penalty. It will also be seeking private sector input on the development of guidelines for the administration of third party civil penalty rules.

I now want to discuss the tax situation which arises when a holder of an RRSP or a RRIF dies and the value of the RRSP or RRIF is included in the holder's income for the year of their death. This income inclusion is offset by RRSP or RRIF distributions made after death to a surviving spouse. This same offset is available to financially dependent children or grandchildren, but currently with the restriction that this treatment is only available where there is no surviving spouse.

In both cases, these distributions are included in the income of beneficiaries. When the beneficiary is a spouse, a minor or a disabled child, there are mechanisms which allow the tax on these distributions to be carried forward.

The 1999 budget removes this restriction. When there is a surviving spouse but the RRSPs or RRIFs have been left to dependent children, they, not the deceased's estate, are responsible for any resulting income inclusions.

This tax treatment is beneficial because income tax rates for dependent children would be expected to be low. It is meant to provide tax assistance to dependent children at the time of a parent's death.

Turning now to tax relief for Canadians with disabilities, hon. members are aware of the government's continuing commitment to help these Canadians by building on the assistance that is already available. In the last two years additional assistance has been provided through such measures as a caregiver tax credit, a refundable tax credit for low income earners with high medical expenses, and the addition of new eligible expenses under the medical expense tax credit, the METC.

The METC is being extended further to cover expenses for the care of people with severe disabilities living in a group home, therapy for those with severe disabilities and tutoring for the learning disabled. In addition, talking textbooks for individuals with perceptual disabilities who are enrolled in educational institutions will be included on the list of eligible equipment for persons with disabilities.

Moving on to another tax credit, some hon. members may be aware that the production or processing of electrical energy, or steam for sale, was not eligible for the manufacturing and processing profits tax credit. Given the changes and restructuring that the electricity generating industry is currently undergoing throughout North America, there is now increased competitive pressure on Canadian producers of electricity.

To help this sector compete, corporations producing electrical energy for sale or steam for use in such production will now be eligible for the manufacturing and processing tax credit.

Bill C-25 also regularizes the situation where interest is calculated with respect to a corporation on an underpayment of income taxes for one taxation year, while interest is concurrently owed to the same corporation on a tax payment that is higher by an equal amount for a different taxation year.

The fact that the interest on the refund is taxable while the unpaid interest is not deductible results in a net cost to the corporation. The discrepancy in interest rates only makes matters worse.

This situation is not unusual, as corporations with complex tax returns are often in a position where multiple taxation years are reassessed at the same time and income and expenses reallocated from one taxation year to another. Bill C-25 institutes a relieving mechanism, enabling a corporation to request that both amounts be offset for interest calculation purposes.

Canada's investment services industry is another area where fine tuning is required due to the rapid growth of mutual funds and other investment vehicles. Canadian service providers are concerned that foreign funds which engage them may be taxable in Canada because of our tax rules. A new rule, and I can reassure the House that this is not a tax exemption, ensures that engaging a Canadian firm to provide certain investment services does not mean that a non-resident investment fund is carrying on business in Canada.

Where this rule applies, Canadian corporations with customers in other countries will continue to pay tax in Canada on their profits. Similarly, foreign funds receiving revenue of Canadian origin remain subject to Canadian income tax.

This measure will help the Canadian investment services sector to compete internationally.

Investments by individuals in labour sponsored venture capital corporations, or LSVCCs, is another area where the federal government provides generous tax assistance in the form of a tax credit. Many provinces provide similar assistance. Measures were announced last year to help LSVCCs continue to be important suppliers of venture capital to small and medium size businesses.

The 1999 budget contains additional measures to encourage LSVCCs to focus more on small business investments and to clarify the rules that apply when a LSVCC is part of a merger or other corporate restructuring.

A final budget measure in the bill further extends the surcharge on large deposit making institutions under part VI of the Income Tax Act to October 31, 2000. This 12% capital tax surcharge was introduced in the 1995 budget and extended in subsequent budgets.

Let me now provide hon. members with a brief overview of the measures in the bill which were not part of the 1999 budget.

First, the bill helps to implement taxation agreements with first nations by providing for a reduction in federal tax for individuals who are subject to the income tax legislation of certain first nations. This amendment puts the federal government's tax sharing agreements with self-governing Yukon first nations into force.

With respect to personal income tax collected from residents of these Yukon first nations settlement lands, the federal government will vacate 75% of its tax room for the Yukon first nations governments to occupy.

The bill also ensures that the tax burden of an individual subject to first nations taxation is the same as in surrounding jurisdictions.

Bill C-25 also includes a provision which exempts from tax the trust established by the federal, provincial and territorial administrations to compensate hepatitis C victims.

The tax treatment of demutualization is another non-budget tax measure in the bill. As hon. members know, demutualization is a process whereby mutual insurance companies owned by their voting policyholders can convert to ordinary stock companies owned by their shareholders. This allows additional capital to be raised in the stock markets to support the business operations of insurers.

Federal insurance legislation has already been passed to permit large life insurers, regulated under Canadian law, to demutualize.

The Department of Finance released draft rules on the income tax consequences of demutualization on December 15, 1998 and has worked closely with the demutualizing insurers since that time in refining these rules.

The basic cash treatment for cash demutualization benefits is that they are treated as dividends and therefore are subject to the low rate of tax for dividends. There is no immediate tax benefit associated with a policyholder receiving a share as a demutualization benefit but a capital gain would be recognized once the share is sold.

Legislation to ensure that the guaranteed income supplement of elderly policyholders is fairly calculated after they receive demutualization benefits was enacted by parliament earlier this year.

The measures in Bill C-25 are not contentious. They are well thought out and all adhere to the principles of tax fairness. Each measure addresses an inequity, inconsistency or discrepancy in the tax system. Each improves the operation of the tax system. Many of these measures are the result of consultations with the industry or clients affected, a process to which our government is dedicated in any major policy change.

As hon. members can see, even if the various elements of this bill are not interconnected, they are all aimed at improving the situation of the Canadian taxpayers and enhancing the equity of the tax system.

With the five year tax reduction plan set out in Budget 2000, which brings in the most significant structural changes to be made in the federal tax system in more than ten years, the measures in the 1999 budget are in line with the government's long term tax reduction strategy.

I urge my hon. colleagues to pass this bill without delay so we can move on to budget 2000 and enable Canadians to benefit fully and quickly from the government's five year tax reduction plan.

[Paul Forseth, Reform, New Westminster—Coquitlam—Burnaby, BC]

Mr. Speaker, it is April and it is snowing outside. It is cold comfort for the hapless taxpayer, as we just heard from the previous speaker.

Before us we have Bill C-25, an act to amend the Income Tax Act, the Excise Tax Act and the Budget Implementation Act, 1999, tendered by the Minister of Finance. This bill is representative of how the government spends the people's money. We must remember that fact; it is the people's money and not the government's.

We know that the Liberals, in an overall sense, tax too much, spend too much and then end up owing too much. It could be said that they are just the lowly Liberals; they exist, therefore they will spend. Because of that nature, the economy is not in great shape, especially when we compare ourselves to the world community.

In considering how our future is being squandered by the waste and mismanagement of the government, we need to hold this administration to account and to outline a real vision of hope and responsibility of what could have been done. We have so much potential as a country but what stands in our way is the ideology carried by the Liberals in budget after budget. It seems Canada is always described as having a great future as far as living memory recalls, but when will it ever arrive?

This bill still represents an old style of governance that does not reflect what the country needs in wise fiscal management. However, it is somewhat in character with what the Liberals calculate they can buy votes with and keep the national attitude going that it is the Liberals who will dole out local favour to those who ingratiate themselves to the party rather than administer it as a trust for the protection and sustenance of all.

The Minister of Finance and his minions know, for example, that HRDC spending is only marginally successful as an overall economic benefit to the economy as compared to alternative strategies. However, the government pursues them anyway no matter how much it will hurt the country in the future because in the short term politicians can make political spin and political boasting about their accomplishments. Patronage and vote buying may influence elections, but it is a perpetuation of the rape of the country for the favoured few.

The electorate needs to distinguish between wise economic governance and crude vote buying, which has now been fully revealed in the House, and what is the character of a Liberal. It is very hurtful behaviour to the country economically and, in a moral sense, it is wrong.

Specifically in the bill, the amendments implement certain measures announced in the budget of February 16, 1999. Also included are income tax amendments to implement a measure relating to taxation agreements with aboriginal groups, included in a notice of ways and means motion tabled in the House of Commons on December 2, 1998, and income tax amendments relating to the demutualism of insurance corporations that were released on December 15, 1998. In some ways it is a technical bill, but it is representative of a misguided and hurtful quasi-socialist ideology with a lot of old style political conniving thrown in.

What the bill is part of is an overly intrusive administration that is Keynesian to a fault. Voters must understand that Liberals cannot manage. When they influence the economy for party interests rather than in the interests of every citizen, we see the reason why historically our country has always come in as an also ran, never great, never bold, full of unrealized potential.

Fiscal decisions are measures of how a government attempts to influence the economy. The national budget generally reflects the economic policy and it is partly through the budget that the government exercises its three principle methods of establishing control: the allocative function; the stabilization function; and, the distributive function.

To understand how we are doing as a country, we must look hard at the world of nations in the global village market so to speak. The comparative picture is not great. Responsibility for Canada's measure of prosperity rests mostly with our own governments and not outside forces. When we hear socialist talk of globalization, it often leads to feelings of helplessness, resentment and envy. The NDP have done fairly well with its politics of envy. Certainly with inadequate economic attitudes, a country can feel like flotsam in the great tide of global economic change.

The irony in globalization is how much importance it places on local attitudes and strategies as determinants of national success. Never before has the maybe tired phrase “think globally, act locally” had more meaning, especially in the realm of macroeconomic. Canada need not be a victim of forces reputedly beyond its control. The degree to which this country shares and engages in the wondrous economic opportunities created by globalization and new technology depends in good measure on what we do at home to be effective abroad. Understanding that we are powerful rather than weak, that we have choices to make rather than immutable facts to accept and that we are as good as anyone else on a level playing field is the key to our national prosperity.

The stakes go far beyond simple measures of per capita wealth and gross domestic product, although those matter very much. Canada's real per capita GDP grew by only 5% in the 1990s despite our embrace of freer trade, some tax reform and other adjustments, for they were too timid. The real per capita income of the Americans rose almost four times; of the Dutch, five times; of the Norwegians, six times; and of the Irish an astounding 18 times, almost doubling in a decade. The Irish might now have higher incomes than Canadians.

Faster rates of growth beat the higher standards of private and public consumption, better housing, more cultural expression, better education, health care, environmental conditions and leisure opportunities. The converse is also true that the evidence is that the more socialistic or centrally controlled the national economy is, the more impediments there are for open markets to function, the worse off are the people both in their household budgets and in their more polluted environment and in their more circumscribed lives with the lack of basic human rights.

However, the rewards of a global consciousness for local competitive conditions go deeper. They ensure that a compelling variety of career opportunities exist for the next generation. Creative and exciting jobs will exist in those localities that learn to serve global markets well. Of all the things we owe to the next generation, this is the most important: good jobs for their own sake and economic freedom to fulfil natural potential. However, the Liberals have not been able to create the needed optimistic economic climate required for growth because they have been too socialistic and too prescriptive for the average taxpayer.

An in-depth 1999 survey of 50 leading corporations in Canada revealed some sad realities. Forty per cent of chief executives from Canadian and foreign-owned companies alike put the probability that their own jobs would leave Canada within 10 years at 50/50 or higher. An exodus of chief executives or legal head offices does not put at risk all the Canadian jobs of such companies, but the place where a company's decision making power resides is linked to everything from the opportunities opened to talented Canadians to the potential for strategic alliances with other Canadian companies and broad synergies.

Twenty years ago many Canadians worried about the presence in Canada of foreign-owned companies with significant operational responsibilities here. Many of those firms have since centralized power in their home countries, leaving their Canadian branches with externally directed world product mandates. Now the pressing concern is whether globally successful Canadian-owned companies will stay here or even start here. Why would they? The Liberals tax too much, spend too much, owe too much and they cannot manage the people's money.

We have much higher corporate and personal tax rates, more restrictive regulations governing mergers, compensation, exchange listings and tax deferrals. There is a brain drain from the universities. Inflexible unions and rigid labour markets hold us back. Boondoggle waste starves needed infrastructure investment. Sadly, we still have a cultural hostility to economic success.

Many Canadians dismiss business community concerns, especially after the turmoil of the 1980s, but they can be explained in large part by mismanagement of public finances from government rather than private sector activity. Many more changes are required to reap the benefits and opportunities of globalization. As the most recent federal budget showed, we have not understood how urgent these issues are and how amenable they remain to our own decisions. The Canadian Alliance clearly says that we could do so much better as a country. Canada's story is one of missed opportunity, a story of what could have been if we had a more competent and ethical government.

For example, we have warned for the need to anticipate high interest rates and its consequences, but the debt bomb has been left ticking away. We should have been accomplishing more in reducing the national debt. Every prudent householder and small business owner knows that when times are more prosperous it is time to put the finances in order to withstand a future downturn. It means paying down debt to reduce interest payments. At the same time, capacity room is created for borrowing later should it be necessary. This applies to the country as well. If we do not reduce debt when times are good, when will it every be appropriate, when the economy is in recession and revenues are falling while expenses are rising? Hardly. That again is the Liberal record.

Canada has enjoyed almost nine years of uninterrupted moderate economic expansion, which, among other benefits, has helped the government to eliminate the yearly deficit. Long term economic policy should be such that the government sets its fiscal levels of taxation and expenditures to promote economic growth without inflation. As the economy continues to grow, while running close to capacity, and as the unemployment rate declines, the threat of inflation grows.

These circumstances call for rapid debt reduction and limited, if not zero, increases in government spending. Debt reduction itself will restrain inflation somewhat and holding back expenditures will dampen the damaging economic fires. The old habit of the Liberals is to use rising government revenues to spend for redistributive programs rather than reduce debt. It is reasoned that there are potentially more votes when the government writes cheques to people than relieving burden that is not immediately evident.

This approach has two problems. First, increased expenditures fuel inflation in a heated up economy resulting in higher interest rates. Second, high levels of taxes that were necessary to slay the deficit are out of line with those in other developing countries.

High taxes act as a break on future growth as money seeks to escape the claw of the tax man. High taxes discourage risk taking and tend to send investment offshore. That means no growth. Without growth there will be less income to redistribute and fewer resources to put medicare or other social programs on a stable, sustainable footing and be more shielded from the ups and downs of the world economy.

Taxes can be significantly and permanently reduced only if the interest on the national debt can be reduced. Our permanent outstanding debt is more than $570 billion. It costs more than $40 billion per year just to pay the interest. This is the single largest program of government. For each $1 billion of debt reduction, interest payments would decline by at least $60 million, funds that could be either spent on programs or applied to tax reductions.

The biggest part of the so-called $58 billion in tax reductions announced in the recent federal budget is scheduled to take place three, four and five years from now, long after the mandate of the current government runs out. It is an insincere ploy to make that kind of future commitment when a future government cannot be held to them. It was a wrong choice.

If debt were reduced more aggressively now, the government would gain future room to manoeuvre in two ways. First, the current interest payments would decline and second, a return to deficits would be less a possibility.

Another way of looking at things is the present surplus is hurtful high taxation and the money could be more productively left in the hands of the consumer and entrepreneur, rather than languish in the hands of a government bureaucrat.

Fortunately the debt to GDP ratio is gradually declining. The main reason is moderate growth of the economy and not a decline in the debt through wise management. The debt ratio could decline even faster if only the government devoted more appropriate effort toward planned debt reduction rather than increased program spending. Among other things, increased spending will further complicate the workings of monetary policy and will probably result in yet even more pressure for higher interest rates. As interest rates rise, so will the cost of servicing the debt. It is a vicious cycle which the Liberals have ignored because they chose questionable spending schemes instead of tax relief, internal reallocation and debt reduction.

The way things stand, when a downturn occurs, and it surely will come soon enough, government revenues will decline, interest payments will remain at choking levels and expenditures on employment insurance and welfare will increase. We could easily be right back in the deficit spiral that nearly destroyed the country and the few revenue reductions in the recent budget may never occur. All the sacrifices of the past few years will have been for naught.

We are not out of the woods. Our national balance sheet is far from strong. Until we pay down a good part of the national debt for past unwise spending, we will still be at serious risk. Without real debt reduction, the promised tax adjustments may just disappear.

We cannot put groceries on the table with headlines and budget speeches. We cannot put more money on people's kitchen tables with Liberal Party economics. Personal relief is what Canadians really want and need. They want more money left in their hands for economic freedom. They want more groceries. They might even want to buy a pair of jeans, but they will not be able to do that with this bill because it just does not leave them nearly enough money.

Instead of giving Canadians a fake break, we should give them a real tax break. The Liberals unreasonably disturb the market, confiscate too much from the taxpayer and then poorly and inefficiently deliver high priced services.

The preferred choice is solution 17 of the Canadian Alliance. Our proposal will dramatically lower taxes for all Canadians and ensure that middle class Canadians whom this government is targeting end up with more real disposable income in their pockets and not just a headline and a speech which does them nothing.

The finance minister said in his 1995 budget speech that subsidies to business impede growth. All economists know that this is true in the Canadian context, however the finance minister continues to rubber stamp all kinds of subsidies to business. The minister has previously admitted that government cannot pick winners, but losers can pick governments. Truer words were never spoken.

There have been many losers who have not only picked the pockets of this government, but have also taken resources from the average taxpayer. Yet the finance minister rubber stamps more of these spending schemes. They go to the human resources minister, the Indian affairs minister, the industry minister and the Canadian heritage minister.

Too often they are used for things which appear to be political slush, or things which are of such low priority that they are seen by the average person as complete rip-offs. In some cases they go to some of the wealthiest companies in the world, and too often to boards of directors associated with the Liberal Party that is close to their political fundraising.

In my theme of the character of Liberal style spending and governance, I want to touch briefly upon what has been going on in the Department of Human Resources Development.

Back in January we brought to light an audit which revealed all kinds of mismanagement and a callous attitude toward the hard-earned money taken from Canadians. We found there was little or no monitoring of files on over $1 billion worth of grants and subsidies. There were many cases where applications were not even submitted but grant money was given to people. We found all kinds of unbelievable things especially in Liberal ridings.

The sad thing is that instead of following accepted standards of professional public administration, program designs were flawed and unreasonably open to political interference in what should have been business standards and program delivery decisions rather than questionable political favours. When they were found out, a six point fix-up plan was hatched afterward with a promise to do better. The plan is an unbelievably simple recitation of the most basic procedures that ordinarily should be followed in any federal program.

The conclusion from all of this is irrefutable and absolutely conclusive. The Liberals cannot manage. The more we have dug, the worse it gets. The government hangs onto every bit of information as long it can, running a game of confusion all geared to hide the true nature of the Liberal style of the money game.

The Indian affairs minister has all kinds of disasters going on in his area and the police have been called in to conduct investigations in the Prime Minister's riding. This has happened at a time when the finance minister has brought down a budget that has more of the same. There is even more money in the budget going to the human resources minister. It is almost like a dare to stick it to the taxpayer one more time. It is unbelievable after the record of poor program design, general mismanagement and even outright political meddling.

The ministerial accountability rule dictates that at least several ministers should resign in view of this. They are responsible for the planning, approval and ultimate delivery of those programs. There is no question that they should resign.

The government spends about $13.5 billion a year on grants and contributions. The entire time the government was cutting the heart out of health care, it maintained very questionable spending for grants and contributions.

The Liberals' desire to spend for their friends and to support their outmoded prime the pump economic strategy kept them funding these pet projects. They made a cruel heartless choice. They cut hospital beds across the country so that they could fund hotel beds in Shawinigan. That is what it appears to be.

Repeat that word picture a thousand times across the country. The Liberals call these schemes job creation. When challenged about its claim of 30,000 jobs, the government cannot provide any quality evidence that it produced significant program goals. Many of the companies just got the money and then went bankrupt. For many there were no records, but for the Liberals it was only $1 billion so who needs to keep records? Many of these programs likely hurt more than they helped.

We must also remember that this comes on top of massive tax increases which the government has brought forward over the six and a half years it has been in power. Canadians know that at the end of the day they will be paying more in taxes than they did when the Liberals took power. We would never know that from reading a headline the other day, “$58 billion in tax relief”. The real impact is that Canadians will still be paying a lot more in taxes than when the government came to power, about $700 per family.

We can congratulate the government for pulling the wool over the people's eyes, including a lot of the fawning, unquestioning media, but the truth is that Canadians will still be paying taxes that are far too high even after the implementation of this bill. Canadians will see the effect on their pay stubs as the year progresses, as the changes in this bill and others are implemented.

In addressing budget 2000, I am sure all members are conscious that millions of Canadians have hopes and dreams for themselves and their children that can be affected by the spending and taxation policies and budgetary promises of the federal government. For example, if the federal government wastes taxpayer dollars through irresponsible spending, then it is Canadians who will suffer. They are the ones who then have fewer dollars available to fund services such as health care which Canadians value highly.

If the federal government taxes Canadians too heavily, it is the take home pay and the bank accounts of individuals, families and employers that are savaged. It is Canadian jobs and economic opportunities that are smothered, or exported to more friendly economic climates.

If the Minister of Finance makes promises and commitments in his budget which are then broken, if the truths asserted in the budget turn out to be half-truths, then it is the faith of Canadians and the integrity of the government itself which are eroded.

Indeed that is where we are at, for fewer voters bother to exercise their hard won right to vote at the ballot box. In each election the percentage of turnout is going down as people get fed up and disengage from the political life of our country. That is what the Canadian Alliance can mend and change, putting real power and democratic influence into the hands of the electorate.

It is clear from the last budget that the highest priority of the Liberal government is not tax relief but increased spending of taxpayers' dollars. The budget reveals that the government will be spending more this year than provided for in last year's estimates. In other words, the promises in last year's budget to limit spending for this year will once again be broken. The chronic tendency of the government to break promises to limit spending has often been criticized by the auditor general. One expert said:

While responding to health care needs and refurbishing the RCMP and military spending clearly reflect the priorities of Canadians, taxpayers should be concerned about the fact that the government is using the surplus of over taxation to fund these priorities. Instead of reallocating from existing budget envelopes by ending corporate welfare, winding down regional development schemes and ending job creation boondoggles, the feds have opted to use the surplus of over taxation revenues to fund new initiatives. The finance minister and his colleagues have ignored the obvious lessons arising from the HRDC. This puts a blemish on this taxpayer friendly budget.

Until the government embarks on a legislated line item plan of annual debt reduction, we will continue to lose on average $114 million a day to institutional bondholders. Reducing debt today cuts tomorrow's taxes.

After years of deep cuts in the wrong places, the Liberals began restoring the Canada health and social transfer, the CHST. However by 2002 federal spending on health care will only reach 1995 levels. The CHST allocation hardly revitalizes the system. What it does not do is take into account an increasingly older population, expensive advances in technology and advances in capabilities.

The announced $2.5 billion is spread over four years and the provinces are free to spend it on universities and colleges as they see fit. This freedom may be good, but the overall picture and economic environment set by the federal level is insufficient. The budget increase will not fix the crisis in acute care, update old technology or heal the shortage of medical and nursing professionals, let alone build new programs.

The Canadian dollar falls to 63.5 cents U.S. and the Prime Minister's response is “No problem”. Canada's best trained people leave for the United States and he says “What brain drain?” The human resources department is found to have mismanaged at least $1 billion in jobs funds and according to the auditor general untold billions of dollars have been wasted. The Prime Minister calls it a minor administrative problem.

Given that history, imagine my smile when the recent Liberal Party convention highlighted the great danger in being next to the world's most dynamic economy. A danger. Anti-Americanism has always proven to be a valuable tool when it is time to rally the troops of the NDP or the Liberals to justify more intrusion of government into markets.

Given that virtually every economist has noted that our growth in the past six years has been a result of our record trade surpluses with the U.S.A., cabinet should be a little embarrassed by focusing on our proximity to the U.S.A. as a big problem. There is little doubt that our future prosperity is based on the American economy remaining strong. Canada is riding the American economic wagon, yet we are complaining about the driver.

In an effort to excuse more government regulation and intervention, focusing on preventing American takeovers of Canadian companies in certain sectors might be worthy of some discussion, but it misses the bigger problems. While too many members of the media play into the fearmongering politicians who decry American ownership in Canada, a real threat to our economy is the huge amount of Canadian money leaving the country. In 1998 a total of $17 billion came into Canada from the United States while $54 billion left.

I do not know why it is so hard for some people to understand that when money leaves it takes jobs and tax revenues with it. When money comes in, most of the jobs stay here and only perhaps some of the profits leave the country after a lot of taxes have been paid.

In the corporate world as much as 70% of all taxes collected are unrelated to income, so the vast majority of tax revenue generated from businesses stays here. The government does not acknowledge the negative economic impact of capital outflow, but the amount of money leaving the country may be the biggest economic problem we face because of the poor economic climate the Liberals have created.

In the past 10 years $135 billion more left the country than came in. If the Liberals want to focus on just one economic problem, this would be a good place to start, and the solution would not be more government intervention, as that would be identified as a major cause of the problem.

There has been a surplus in the last few years despite poor priority allocation, as it has been done with high levels of taxation, which has been an unnecessary drag on economic growth. The budget should be balanced every year, save for times of national emergency. However, it should be balanced at a lower level, where there is not a wasteful confiscation of citizens' labour and production, for at some point taxation even becomes a moral issue of basic economic freedom. The basic economic freedom of Canadians is too tightly held by the government. An excess surplus year after year can also be seen as evidence of burdensome, hurtful taxation.

Concerning taxation, the net impact of the last five Liberal budgets has been to raise Canada's tax bill some $6 billion in 1999-2000 above what Canadians would have paid under the 1993 tax regime.

If Canada needs to reduce taxes, what about the bill before us today? At first glance the bill tries to pass itself off as legislation to bring about tax relief to Canadians. A closer look reveals that for each token tax relief measure there is an accompanying tax grab through another initiative. Specifically, clauses 3, 6 and 8 are revenue generating amendments. Clause 12 enhances incentives for labour sponsored venture capital corporations, which are known to distort the market with respect to sound investments. The other changes in the bill are primarily of a housekeeping nature and include items such as RRSP proceeds on death, demutualization of insurance companies and the hepatitis C trust fund.

In contrast, the Canadian Alliance single rate tax plan, solution 17, would deliver significant, deep, across the board tax relief. The basic personal exemption would be increased to $10,000 and it would also introduce a $3,000 per child standard deduction. Once implemented the measures would remove 1.9 million low income taxpayers from the tax rolls as well as increase disposable income and financial freedom for all taxpayers.

Under our plan taxpayers would pay a maximum federal rate of 17%. The 5% surtax would be eliminated and capital gains would be reduced. Our overall tax relief proposals would improve incentives to work, encourage investment and business risk-taking entrepreneurship and help stem the costly brain drain.

We still have the overwhelming crushing tax burden faced by Canadian taxpayers and businesses. We still have one of the highest personal income tax rates in the G-7. The token measures outlined in Bill C-25 do nothing to reduce that burden. Once again the government masquerades as a proponent of tax relief while simultaneously hiking taxes elsewhere.

However, solution 17, our single rate tax plan, offers real, comprehensive tax relief compared to the tinkering the government has proposed in the bill. Try as it may the government will attempt to portray these legislative measures as a symbol of its ongoing commitment to generous tax relief, but it is our duty to expose the plan for what it really is: tinkering, tokenism, empty of the priorities this country needs.

At the end of January we released the details of solution 17, our 17% single rate tax. Solution 17 is designed to deliver significant tax relief to all taxpayers and it would take 1.9 million low income Canadians completely off the tax rolls.

Here is why we believe this is the right time for major tax reform in Canada and why we believe a single rate plan would be the best vehicle for delivering tax fairness and tax relief to all Canadians. Right now Canada is in a tax crisis. We are paying too much, losing too many people and businesses to the United States, discriminating against families who want to care for their children, creating disincentives for people to work for themselves, to get out of the welfare trap, and penalizing people who want to save and invest for their own retirement and security.

The federal Liberals argue that Canada's fiscal dividend should be used to increase the size of government. Yet the recent OECD analysis of member countries shows that only Denmark, Norway, Sweden and Iceland spend more per capita on government spending than we do in Canada. With our high tax load and the finance minister predicting surpluses approaching $100 billion over the next five years, the timing could not be better for significant across the board tax relief.

Not only is the government taking too much from us in taxes, it is taking it in the wrong way. Over the next few years as we look at growing surpluses we will have a golden opportunity not only to reduce the actual tax load aggressively and quickly, but to reform the tax system to reduce or at least minimize the harm that the system imposes on Canadians' lives.

Canada's current income tax system is structured around three main tax brackets and a surtax. What is wrong with this? The severity of the jump in marginal rates at low income levels exacts a heavy toll on all our taxpayers and, ultimately, the economy. The highest marginal rate, about 50%, kicks in at roughly $60,000, compared to $430,000 in the United States. The U.S. rate is about 39.6%, depending on the state.

There is a massive disincentive to work and save and invest.

This discriminates also between single and dual income families. It leads to accounting gymnastics. Our plan would bring a single rate tax system, augmented by significantly increased personal and spousal deductions and a restored deduction for dependent children. Every Canadian would see lower taxes under this plan. It would maintain all existing deductions and credits, with three significant exceptions. The personal and spousal exemption would be increased and equalized, and we would introduce a standard $3,000 children's deduction to acknowledge the family expense of raising children.

In our plan 1.9 million low income Canadians would be completely taken off the tax rolls. The impact of any single marginal tax rate would then depend on the base exemptions and the rate selected. If we combined the single tax rate with lower taxes for all and greatly enhanced personal exemptions to assist those at the lowest income range, everyone would benefit. That is what would be achieved under our single rate plan.

Under our single marginal rate not only would those individuals and families with a greater ability to pay now pay a greater absolute amount, they would also pay at a greater proportion of income than those at the lower end. A single rate system of taxation would do something else. It would remove the massive disincentive to work, to save and to invest, which is currently the case in Canada. It would end the penalty for hard work and success.

Our current multiple rate system penalizes extra work. Why be more productive or take an extra contract only to have Ottawa take an even higher percentage of the fruits of our labour? Why take investment risks, saving for the future, when Revenue Canada will get a bigger chunk of our effort? This marginal tax penalty would be removed under a single rate system.

A single rate tax would end the existing discrimination between single and dual income families. Right now families who choose to have one parent stay at home are taxed at a higher marginal tax rate. They are penalized by the tax system if they choose to stay home with their children. A single rate system would remove this discrimination and, along with a significant per child deduction, would lower the overall tax burden for families. The Canadian Alliance is the real family friendly party.

Not only would our single tax rate bring income levels more in line with our largest trading partner, it would significantly lower capital gains taxes. This would discourage the brain drain in key sectors of our economy and encourage new businesses and the venture capital formation necessary to attract the well paying jobs that build wealth and ultimately raise the standard of living for all Canadians.

The benefits of a single rate are obvious. A single low marginal rate would eliminate the discrimination between families and would deliver tax relief for everyone. It would eliminate the disincentive to succeed. It would increase take home pay. It would encourage more high tech firms to set up shop in Canada, and it would make all of us more internationally competitive in the new global economy.

It is a plan that would promote growth and wealth creation by making all taxes simpler, flatter and lower. It is a plan for today and a tax plan for Canada's future, and it is all possible using the same economic assumptions and basic numbers of the Minister of Finance.

In conclusion, if we can deliver such an astounding package compared to the Liberals, the basic question must be asked: What are the Liberals doing with the money? They are wasting it and mismanaging it.

This bill does nothing to change the conclusion of the argument that I have made today, and that is that the Liberals cannot manage.

[The Speaker]

I see the hon. member has finished his speech. With your permission, I am going to recognize the member for Saint-Hyacinthe—Bagot, and he will have the floor when we resume debate after Oral Question Period. This will allow us to get in a few more Statements by Members in the extra minutes.

French-Speaking Minority Communities

[Yvon Charbonneau, Liberal, Anjou—Rivière-Des-Prairies, QC]

Mr. Speaker, the Minister of Health announced on Tuesday the creation of the Consultative Committee for French-Speaking Minority Communities.

Under section 41 of the Official Languages Act, the Government of Canada has an obligation to enhance the vitality of the English and French linguistic minority in Canada. The creation of this committee is an important step, honouring the global commitment made in this regard.

One of the priorities of the minority official language communities is access to health care services. There is no doubt that this committee will be attentive to the comments of these communities.

It will play a major role in bringing together the representatives of the French-speaking minority communities, Health Canada, Canadian Heritage and the provinces.

Dr. Hubert Gauthier, the head of the St. Boniface general hospital, will co-chair the committee with Marie Fortier, the associate deputy minister at Health Canada.

Parliamentary Prayer Breakfast

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, on April 28, 1999 the entire country was shocked to learn of a shooting in a school in Taber, Alberta, a small town in my riding. The shooting took the life of a 17 year old young man by the name of Jason Lang.

The thought of losing a child is every parent's worst nightmare, but it was all too real for Reverend Dale Lang and his wife Diane. Who could have blamed them if they had become angry or bitter?

But the Langs are people of extraordinary faith. This morning Reverend Lang addressed hundreds of parliamentarians, diplomats, dignitaries and members of the public at the annual national parliamentary prayer breakfast where he delivered a truly inspiring message of forgiveness.

Where does the strength and healing come from which allow them to forgive the person who killed their son? Reverend Lang knows that it comes from God; a humbling reminder, colleagues, that there is an authority greater than the supreme court and the Parliament of Canada.

Toyota Motor Manufacturing Canada Inc.

[Janko Peric, Liberal, Cambridge, ON]

Mr. Speaker, yesterday Toyota Motor Manufacturing Canada Inc. announced plans to build the award winning Lexus RX300 sports utility vehicle beginning in 2003 at its industry leading plant in my riding of Cambridge.

This good news translates into new investment of $650 million, the creation of 300 new jobs in Cambridge, an increase in the plant's capacity from 200,000 to 220,000 vehicles per year, and a spinoff expansion of eight new Lexus dealerships throughout Canada.

Toyota Canada president Yoshio Nakatani stated: “The Cambridge-built Corolla is the best selling Corolla in Canada, and the RX300 is the best selling Lexus. Now they will both be stamped `Made in Canada'.”

Prior to this announcement, Toyota created 2,800 jobs in Cambridge and invested over $2 billion in the facility which industry analysts rated as the most productive auto assembly plant.

Gasoline Pricing

[Guy St-Julien, Liberal, Abitibi, QC]

Mr. Speaker, I have been speaking out about the high cost of gasoline in Canada and Quebec since October 1999. Six months later, a group of Bloc Quebecois members has decided to tour the province starting only on April 3. I can certainly understand their action, especially after the budgets of the federal and Quebec government were presented.

Since October 1999, these Bloc Quebecois members have had the opportunity, as members of an opposition party, to use an opposition day to debate the cost of gasoline in Canada and Quebec.

Why does the Bloc Quebecois not want this opposition day, a day for Canadian and Quebec consumers?

Triple “A” Basketball

[Grant McNally, Reform, Dewdney—Alouette, BC]

Mr. Speaker, the B.C. Triple “A” high school basketball championships were held last month and schools from my riding of Dewdney—Alouette certainly did us proud.

On the senior girl's side, the Heritage Park Highlanders from my hometown of Mission fought through the tough competition and came away with the championship after beating the Port Moody Blues in the final. This was the Highlanders second consecutive finals appearance and their first ever provincial championship.

On the senior boy's side, the Pitt Meadows Marauders made it a Dewdney—Alouette finals sweep with a dramatic come-from-behind overtime victory over the Terry Fox Ravens. The underdog Marauders showed tenacity and grit as they carried on the winning tradition of their school which has produced many champions, including the late Greg Moore of Indy cart racing and Brendan Morrison of the Vancouver Canucks.

I congratulate the players, coaches and parents of the Heritage Park Highlanders and the Pitt Meadows Marauders for their impressive victories at the B.C. championships. They prove that Dewdney—Alouette is the home of champions once again.

Youth Manifesto

[Andy Scott, Liberal, Fredericton, NB]

Mr. Speaker, “Thank you from the whole of my heart for making this dream come true. You have made hearts beat passionately to reunite in a country called Canada under the protective wing of a maple leaf”. So spoke Ralitza Houbanova from Bulgaria who, along with 350 youths from all over the world, attended the first ever World Parliament of Children in Paris last October. During that parliament the final draft of the youth manifesto for the 21st century was adopted and will be communicated to the United Nations this year.

Thanks to a grant from Canadian Heritage, the forum for young Canadians has brought 22 students and teachers from 11 countries to Canada to join the two Canadian students who represented Canada.

The world delegation of students will present the youth manifesto for the 21st century in the Senate chamber on Monday morning, hosted by the speakers of the Senate and the House, the Deputy Prime Minister and the UNESCO representative for Canada. I encourage all to attend.

Stephen Leacock

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, the great progenitor of Canadian humour and comedy, Stephen Leacock, is back to promote literacy, literature and laughter in his first national tour in more than half a century.

Incanpopcult is an independent performing arts company located in my riding that has joined VIA Rail and McLelland & Stewart to assist Professor Leacock in his whirlwind tour to cheer up Canada.

Neil Ross portrays Stephen Leacock and Aaron Duncan is Stevie, Jr., supporting his famous father in a breathtaking array of roles and multi-instrumental displays of musical virtuosity. A significant number of performances across the country are fundraisers for local and regional chapters of the Ontario Literacy Coalition and its provincial counterparts.

I invite all colleagues in the House to support their local literacy foundation by attending Stephen Leacock's whirlwind campaign when the train pulls into the towns and cities in their ridings and enjoying an evening of sketches and monologues that defined our nation.

Correctional Service Canada

[Myron Thompson, Reform, Wild Rose, AB]

Mr. Speaker, I would like to paraphrase from a letter I received from the guards at the Edmonton maximum institution to the commissioner of Correctional Service Canada:

The members of...Local 30168 instructed the Executive to request your immediate resignation from your position as the Commissioner of Corrections Canada. This request is in response to your actions which have brought CSC's reputation into disrepute and have undermined the public's confidence in the ability of CSC to properly protect them.

We believe that you have misused your authority to spend taxpayer money, that you have been unable to meet the standards you have set for correctional officers and you have refused or have been unable to effectively address the concerns of the frontline staff.

Correctional officers who participate in competitions are required to take a values and ethics test. The Members of this local believe if you were given this same test you wouldn't have a chance at passing.

My lesson today for the solicitor general is simple. If one wants to know what is going on, sometimes one has to talk to the custodian, not to the CEO. The message is loud and clear coming from every direction that Ole has got to go.

Firefighters

[Lorne Nystrom, NDP, Qu'Appelle, SK]

Mr. Speaker, firefighters are twice as likely to suffer fatalities on the job than the average Canadian worker. The rate of occupational related diseases for firefighters is among the highest.

For all these reasons firefighters cannot fully enjoy the Canada pension plan. They have been requesting for years that they be allowed to qualify without penalty for reduced benefits in the CPP at the age of 55 and for full benefits at age 60, rather than the current ages of 60 and 65.

Moreover, firefighters would like to see the government commit to the following: (a) increasing the maximum pension accrual rate from 2% to 2.33%, (b) improving aircraft rescue and firefighting standards at Canada's airports, (c) creating an agency with the mandate to investigate hazardous work sites and enforce workplace safety rules, and (d) creating a federally funded public safety officer compensation fund for the survivors of public safety officers killed in the line of duty.

I ask the government once again to do justice to these brave people who put their lives on the line and to heed their requests, which I think are perfectly reasonable and supported in the main by the commons finance committee. In particular, I am talking about the CPP section of their request.

Immigration

[Eleni Bakopanos, Liberal, Ahuntsic, QC]

Mr. Speaker, Canada has a long tradition of solidarity and openness. We cherish these values. This is why, in budget 2000, the government included an important measure affecting all new refugees.

Effective February 28, the landing fee has been eliminated for refugees. That fee, which was introduced in 1995, was designed to have those who benefit from social programs shoulder a share of the costs. This $975 fee had to be paid by all immigrants and refugees aged 19 and over.

The government is aware that refugees arriving in Canada have limited funds and face many obstacles, so it has decided that it is time to exempt refugees from the landing fee. I would like to congratulate the government.

This exemption will certainly alleviate their financial situation and help them in rebuilding their lives in Canada. The Liberal government listens to all people and promotes access to enrich our Canadian diverse culture.

Gasoline Pricing

[Jocelyne Girard-Bujold, Bloc, Jonquière, QC]

Mr. Speaker, gasoline prices recently shot to a staggering new high in my riding of Jonquière.

Between January 1999 and January 2000, the average price for diesel fuel increased by 40%, while the price of gasoline rose from 54.4 cents to 75.6 cents a litre between June 1999 and April 2000.

Meanwhile, the federal government is acting like a hypocrite. If we calculate the revenues from the federal excise tax, the GST and the taxes paid by oil companies, we soon realize that the federal government has a margin of over $6 billion.

Because the government seems to be in no hurry to act on this issue, the public has decided to try to shake the government out of its lethargy. Since Monday, the residents of the Saguenay-Lac-Saint-Jean region have been boycotting Petro-Canada.

If the Minister of Finance wants to end that boycott, he will have to take steps to lower the price of gasoline. With the fiscal flexibility he has, the minister can lift the 10 cent federal excise tax until gasoline prices get back to normal.

The minister must stop letting the provinces take the blame, he must assume his responsibilities—

[The Speaker]

The hon. member for Egmont.

Air Canada

[Joe McGuire, Liberal, Egmont, PE]

Mr. Speaker, the monopoly that exists in airline travel in eastern Canada has resulted in Air Canada becoming an arrogant, overbearing, corporate bully with little or no understanding of customer service or regional needs.

What used to be a one and one-half hour flight from Charlottetown to Ottawa when I was first elected in 1988 can now be an overnight trip. A flat tire in Halifax at 4.30 in the afternoon can mean an overnight stay in Montreal because Air Canada dropped its connection to Ottawa. Flights are cancelled without warning and customers are expected to be happy.

I used to feel slighted as a customer if all I got was a sandwich or a bag of nuts to eat on a suppertime flight, but now I am more than happy if I can get a seat.

A good transportation system is vital to a region's economy. It is inevitable that the economic advances made by P.E.I. over the past 10 years in tourism and business diversification will be undone by the present airline monopoly which occurred after the bankruptcy of Canadian Airlines and the reduction of Air Canada seats when it took over Canadian's assets.

We need to regulate this company or, even better, we need competition in eastern Canada in the airline industry.

Muharan

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, today is a very special day of celebration for our Muslim community in Canada and elsewhere. It is the commencement of the first day of Muharan, which is the first month of the Hijra calendar in the Islamic religion.

Muharan marks the new year for approximately 1.2 billion Muslims throughout the world and in Canada where followers of Islam are estimated to be about 350,000. Canadians of the Islamic faith contribute to Canada as citizens in all our provinces. Whether they are Canadian by birth or as new citizens, they manifest their allegiance to Canada and follow the spiritual guidance of the Holy Koran.

On behalf of all of us in the House of Commons I extend best wishes to all constituents and friends in the Muslim community. Sana Mubarak and Nawroz Mubarak .

Tartan Day

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, today Canadians of Scottish descent are celebrating Tartan Day. Tartan Day is the anniversary of the signing of the Scottish Declaration of Independence, the Declaration of Arbroath, in the year 1320. Since that time this date has held immeasurable historical importance and significance to Scots the world over.

The contribution of Scottish immigrants to the history and evolution of North America in general and to Canada specifically has been and continues to be both massive and proud. As a result, numerous provincial legislatures have passed resolutions proclaiming April 6 to be recognized as Tartan Day, as did the province of Ontario in 1991.

It gives me great pleasure on behalf of the St. Andrew's Society of Saint John, New Brunswick, to wish all Scottish Canadians a very joyous Tartan Day.

Editorial Cartoonists

[Eugène Bellemare, Liberal, Carleton—Gloucester, ON]

Mr. Speaker, editorial cartoonist show politicians in a most humorous fashion. Every morning they deliver an editorial comment that often rings truer than any essay and often is more jabbing than any given editorial.

As politicians we have a deep affection for these cutting editorialists. Canada's editorial cartoonists are among the best in the world. There is hardly an office on the Hill that does not have a framed editorial cartoon proudly hung on one of its walls.

As a cartoonist in my spare time and a former teacher of visual arts, I am honoured to welcome the Canadian Association of Editorial Cartoonists. Their charity auction “Cocktails and Cartoons” will take place this evening in Room 200 of the West Block.

I am sure that all my colleagues in the House salute Canada's cartoonists for their community support and for the amusement they bring us.

We hope that you will continue to inject a little humour into the national political scene.

Bill C-20

[Madeleine Dalphond-Guiral, Bloc, Laval Centre, QC]

Mr. Speaker, since yesterday, ten Bloc Quebecois members have been criss-crossing Canada with a letter to MPPs from the leader of the Bloc Quebecois.

They want to bring home to Canada's elected representatives Bill C-20's threat to democracy, specifically the hijacking of the prerogatives of legislative assemblies and the double standard that the federal government wants to apply to the votes cast by Quebecers.

In his letter, the leader of the Bloc Quebecois points out that, with Bill C-20, the federal government is granting itself the power to judge the validity of decisions taken democratically by elected representatives of legislative assemblies. By calling into question the 50% plus one rule, it is contradicting its own foreign policy, under which it recognized the results of the referendum in East Timor.

Bloc Quebecois members will be reminding provincial representatives that Bill C-20 provides no solution at all to the Quebec question and that, for there to be any resolution, Canada will have to admit that there is a Quebec people and that it is entitled, if it wishes, to have its own country.

Parliamentary Prayer Breakfast

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, this morning the keynote speaker at the annual parliamentary prayer breakfast gave us a dramatic definition of forgiveness. Pastor Dale Lang and his wife Diane said goodbye to their son Jason a year ago when he was shot in the tragic high school shooting in Taber.

This morning Pastor Lang reminded us that we live in a self-centred, selfish, impatient society. We have denigrated and diminished the value of being a human and the value of human life and have glorified violence.

Thousands carry pain and rejection, loneliness and hurt, but he also told us that we can be healed if we practise forgiveness. He shared his deep gut wrenching pain at the death of his son, but he also shared how God gave them the strength and grace to forgive the troubled young man who caused that death.

God bless Dale and Diane as they bring this powerful gift of forgiveness to our nation's young people and to all of us. Perhaps we should all pray the words of the song “let there be peace on earth, and let it begin with me”.

Immigration

[David Price, Progressive Conservative, Compton—Stanstead, QC]

Mr. Speaker, the new immigration and refugee bill has just been tabled and many of the recommendations made by the Progressive Conservative Party of Canada are included, but there are some key points not in the bill, points recommended by me and the committee.

The first is photos and fingerprints on first contact with refugee claimants. Many of our witnesses strongly suggested this as a real means of control. The second is a safe third country. It is mentioned in the bill but that is all. This has been in law since 1988, but the government has not taken steps to negotiate the necessary agreements and the bill has no teeth to make it do it.

Appointments to the IRB are still political. This is a job that requires a very special expertise, not a political connection. Unfortunately this issue is not addressed in the bill. I hope the committee will have the backing of all parties to make proper amendments to the bill.

Canada Development Corporation

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, I have a document in my hand that shows that five months ago the ethics counsellor was concluding his investigation of the finance minister's potential conflict of interest in the tainted blood scandal. The ethics counsellor answers to only one person, the Prime Minister.

Can the Prime Minister tell us why after five months we are still waiting for a report from the ethics counsellor?

[Herb Gray, Liberal, Deputy Prime Minister]

Mr. Speaker, this matter is in the hands of the ethics counsellor. It is up to him to say when he has finished his report. The Prime Minister has said that when he receives the report he will make it public.

I also understand that today a spokesman for the ethics counsellor said that there has been no political interference in the work of the ethics counsellor in looking into the matter in question.

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, is it not interesting that yesterday, when we asked questions about this, the government forgot to mention that this report was concluded five months ago.

According to a letter from the ethics counsellor dated November 8, 1999, it says “This will now allow my office to conclude our investigation of the allegations of conflict made against the finance minister who was a member of the board of the Canada Development Corporation during that period”.

If they do not have anything to hide, why in the world have we not seen the report yet?