Debates of June 12th, 2000

Canadian Tourism Commission Act

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the yeas have it.

And more than five members having risen:

[The Deputy Speaker]

Call in the members.

And the bells having rung:

[The Deputy Speaker]

At the request of the chief government whip the recorded division is deferred until tomorrow at the conclusion of the time provided for Government Orders.

The House proceeded to the consideration of Bill C-24, an act to amend the Excise Tax Act, a related act, the Bankruptcy and Insolvency Act, the Budget Implementation Act, 1997, the Budget Implementation Act, 1998, the Budget Implementation Act, 1999, the Canada Pension Plan, the Companies' Creditors Arrangement Act, the Cultural Property Export and Import Act, the Customs Act, the Customs Tariff, the Employment Insurance Act, the Excise Act, the Income Tax Act, the Tax Court of Canada Act and the Unemployment Insurance Act, as reported (with amendment) from the committee.

Sales Tax And Excise Tax Amendments Act, 1999

[Art Eggleton, Liberal, for the Minister of Finance]

moved that the bill, as amended, be concurred in.

(Motion agreed to)

[Art Eggleton, Liberal, for the Minister of Finance]

moved that the bill be read the third time and passed.

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

Mr. Speaker, I welcome the opportunity to speak to the House today at third reading of Bill C-24, the Sales Tax and Excise Tax Amendments Act, 1999.

By way of introduction, the measures contained in this bill, while wide ranging, all fall within the broad sphere of the government's ongoing commitment to an effective, efficient and fiscally responsible government. The intent of the legislation before us is to make our tax system more simple and more fair not only for individual Canadians but for Canadian businesses as well.

It is also in line with our government's commitment to sustain and improve our federal taxation system so as to encourage harmonization and federal-provincial co-operation.

Bill C-24 is aimed primarily at improving application of the goods and services tax, the GST, and the harmonized sales tax, the HST. It also contains some important proposals relating to specific taxes on certain products.

As hon. members are familiar with this legislation, I will briefly reiterate some of the key measures contained in the bill.

The government is committed to reducing smoking in Canada particularly among young Canadians. Bill C-24 contains measures with respect to the taxation of tobacco products that reaffirm the government's commitment to work in concert with the provinces and territories in order to reduce tobacco consumption in Canada, while at the same time maintaining vigilance in combating the level of contraband.

An important component of Bill C-24 reflects the government's responsiveness to the health and social needs of Canadians. For example, Bill C-24 proposes to provide a sales tax exemption for respite care for Canadians who are providing care for family members, very often an elderly parent or a disabled child. In past budgets the government has introduced numerous measures to assist individuals with disabilities. The bill builds on such actions by extending sales tax relief to the purchase of specially equipped motor vehicles for transporting individuals with disabilities.

In this same area, other measures contained in this bill relate to GST and HST exemptions on speech therapy, osteopathy and psychotherapy.

Bill C-24 reflects the government's commitment to making the taxation system fairer for Canadians. That commitment is translated into a number of different provisions.

The bill provides charities whose main purposes include the provision of care, employment, employment training or employment placement services for individuals with disabilities the capacity to compete on an equal footing when selling goods or services to GST registered businesses. Bill C-24 also refines the rules for the streamlined accounting method for charities.

A number of amendments contained in Bill C-24 are aimed at clarifying and refining the application of our sales tax system. In response to representations from the tax and business communities, these amendments will ensure consistency and fairness in the application of the GST and HST in a number of key areas.

For instance, further to the process of co-operation between the federal government and businesses in the energy sector, this bill proposes certain amendments simplifying the application of the GST and the HST in this sector.

These amendments will help Canadian businesses to remain competitive internationally.

With respect to other international commercial transactions, the bill also proposes to make air navigation services provided to carriers tax free in relation to international flights, and to refine the rules for exports of goods by common carriers.

Bill C-24 proposes a number of enhancements to the design and delivery of the visitors rebate program to further promote Canada as a destination for tourists and a place to hold conventions, for example by reducing the GST and HST costs associated with providing conventions to non-residents. These proposals will help to promote Canada as a tourist destination and to support the tourism industry in the creation of employment.

The federal government will continue to consult with the business community to improve the operation of our sales tax system. In that regard Bill C-24 contains a number of proposals to improve the rules relating to certain business arrangements and ensures that the legislation accords with the policy intent.

Our government is also continuing its efforts to improve the application and enforcement of our sales tax system. Bill C-24 amends a number of provisions in these areas, in some cases in order to bring them into line with existing administrative practices and, in others, in order to increase the effectiveness of assessment, appeals and collection provisions in general.

As I mentioned earlier, Bill C-24 also contains measures relating to taxes and tariffs on specific products. In accordance with the 1997 decision of the World Trade Organization, the bill contains the amendments that repeal the provisions relating to the excise tax on split-run editions of periodicals.

With respect to tariffs, Bill C-24 implements proposals to increase certain duty and tax exemptions for persons returning to Canada after a minimum period abroad. These proposals will make it more convenient for travellers to clear Canadian customs.

Our government remains committed to increasing aboriginal self-government and has frequently reiterated its desire to conclude tax agreements with first nations interested in exercising fiscal authority.

This bill proposes technical amendments to improve harmonization of first nations sales taxes with the GST, and to ensure that the definitions in implementation legislation are consistent with those used in other federal statutes.

In conclusion, the measures contained in Bill C-24 which I have outlined here today propose to improve the operation of our tax system while at the same time responding to the social issues that are important to Canadians.

I therefore urge hon. members to give their full support to this bill.

[The Deputy Speaker]

Order, please. It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for York North, Infrastructure; the hon. member for Mississauga South, Health; and the hon. member for Cumberland—Colchester, Airports.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I would like to add some comments to the debate on Bill C-24 as reported to the House by the committee.

The parliamentary secretary has just finished giving us a quick summary of some of the main points of the bill. Most of what he has said sounds pretty reasonable. What I find absolutely incredible is that he can say in such nice smooth language what the bill does not say at all. I need to reword that. He described the bill in nice, smooth language but the bill itself is convoluted legalese which I defy even an accountant to understand. It is absolutely incredible.

I have read a number of things in the bill. I will give one little example. One thing the bill does which the parliamentary secretary did not allude to is it clarifies the tax situation with respect to HST and GST when it involves barter exchange. I read it twice and I still cannot clearly understand it. I would have to get a tax lawyer to help me interpret this. I cannot understand whether bartering is out of the tax loop or in. I think it is out as a result of the bill. I will read a little bit of it because it is so incredibly interesting. It reads:

(6) For the purposes of this Part, each of the following is deemed not to be a financial service:

(a) the operation, maintenance or administration of a system of accounts, to which barter units can be credited, of members of a barter exchange network;

(b) the crediting of a barter unit to such an account;

(c) the supply, receipt or redemption of a barter unit; and

(d) the agreeing to provide, or the arranging for, anything referred to in any of paragraphs (a) to (c).

That is clear, is it not? It goes on to state that this section is is deemed to have come into force on December 10, 1998. That was a year and a half ago. It goes on:

(3) If a designation of a barter exchange network under section 181.3 of the Act, as enacted by subsection (1), takes effect on the day on which this Act is assented to, that section applies to the giving of any property, service or money at any time before that day, by a member of the network or the administrator of the network, in exchange for a barter unit that could be used as full or partial consideration for supplies of property or services between members of the network as if the designation and that section had been in effect at that time, provided that no amount was collected as or on account of tax in respect of the supply of the barter unit.

That is perfectly clear. And it goes on and on like that. It is endless.

I stand to be corrected but the bottom line is that if people arrange to have a barter unit established with an administrator, they can so register it. If they then exchange goods and services in return for these so-called barter units, which is perhaps a new currency to be introduced in Canada outside of the Bank Act, then they can exchange those barter units for other activities, services or products and they are not considered taxable.

I would venture to guess that if this is actually implemented in this way, then competing with the loonie will be the boonie, the barter unit. People will be using it in great amounts in order to avoid the GST. Why? It is very clear.

One of the things the parliamentary secretary said was that in order to encourage the use of Canadian facilities for conducting conventions and meetings of international organizations, the GST rules would be altered so there would be a GST exempt portion for those people who are from outside the country. That is a clear admission on the part of the parliamentary secretary that where GST is applied it makes Canada less competitive. The government is ready to remove the GST on that part of it in order to make it more competitive. That makes sense to me.

Generally it is true that the more an activity is taxed, the less there is of that activity. The less the government taxes it, the more it will get of that activity. If international organizations are encouraged to have their meetings here, which of course would bring a lot of money into the community and the country, then reduce the tax.

How I wish we could persuade the federal government to apply that principle to our own citizens. We are taxed to death. The GST is one of those taxes. And this bill does a lot to change the way the GST and now the GST and HST rules are applied.

It is interesting the government would choose to bring in these amendments to the GST. We know the Liberals were first elected to government primarily on the promise that they would eliminate the GST. There are a whole bunch of really good quotations by the Prime Minister when he was in opposition. He said, “I am opposed to the GST. I have always been opposed to it and I will be opposed to it always”. Back in 1990 when the GST was being introduced he said he would always be opposed to the GST. The Liberals at that time were sitting on this side of the House and the Mulroney Conservatives were on the other side and were proposing this wonderful new GST.

After all these years of GST the government in a piecemeal way, one little group at a time, is saying that it should take the GST away because it is unfair, inhibits economic activity, is bad for business, costs the government too much money, or whatever. Now it is introducing some amendments in this bill to change some of the GST rules.

Here is a quotation from the individual who is now the Deputy Prime Minister. On December 21, 1992, he said “The thinking is that we want to get rid of the GST”.

A little less than a year before the 1993 federal election when the present Prime Minister was leader of the opposition he said “We will replace it. No doubt about it”. In retrospect I guess he has a bit of doubt. He also said “We will replace the tax. This is a commitment. You will judge me by that. If the GST is not gone, I will have a tough time in the election after that”.

He further said “The only specific promise I am going to make is to replace the GST”. I guess we have it replaced all right. It is now the GST-HST in those provinces that have bought into it. Instead of being 7% it is 15%. Yes, it was replaced. Was that a great commitment?

Interestingly just weeks after the 1993 election when asked by a reporter what he would do about the GST because of his election promise, the Prime Minister said “It will be gone in two years”. That was 1993. According to very simple arithmetic, much beyond the ken of mathematicians on Liberal side, two years after 1993 is 1995. We would have expected by 1995 that the GST would be gone. Is it gone? I do not think so. It is still here. It is as big as ever.

Let me refer to the Prime Minister speaking in the House Commons. We can look it up in Hansard . In 1994, again just six months after the election, he said “We hate it and we will kill it”. That is what he said in the House of Commons, still thinking about his election campaign, but he never really did it.

Here we are some six and a half years after that election and the Prime Minister and the Liberals have done nothing to change their so-called election promise to get rid of the GST but they are removing it.

How can I stand in the House and either speak or vote against a reduction of GST as applied to vehicles needed by people who are handicapped? One would have to be very thoughtless to say no. If someone is handicapped and needs a special vehicle to haul them around, it would be wrong to say that we think the federal government should get some GST money out of that vehicle or the extra fittings required to make it work for them.

I will have a little dilemma because I will vote against the bill due to all its flaws. Despite that, it is like eating tapioca pudding that has some gravel in it. In this case some of the good tasting parts are the reduction of the GST for people who have special needs because they have disabilities. To exempt them from GST is the right thing to do, but how about all the other people who have needs?

How about students who have to pay GST on books? To add insult to injury, they are now paying it two, three and four times. Let us take a look at our pages in the House, young people who are students. When they buy a used book they end up paying GST on a book that has already had GST paid on it. I know all of them would love to keep the books they used when they were students in their youth as an ongoing building of their personal libraries. However they will not be able to because of the high cost of education. They will put their books up for sale. Those books, which have had the GST paid on them when they were new and first bought, will have the GST paid on them again the third time, the fourth time and however many times they are recycled.

If students who are trying to obtain an education are charged GST on books every time the books are moved from one owner to the other, the word I use is greed. It was invented by the Prime Minister. It was used by him just a couple of weeks ago. He talked about people who want to keep some of their own earnings as being greedy.

I say it is a greedy government that does not have consideration for young people trying to get an education. It insists on taxing them to death on their earnings and then when they use the earnings that are left over for the books they need for their education they are charged GST on them. There is nothing in the bill about reducing the GST to zero on reading materials and on books. To me that is a huge flaw. That alone is a good reason to vote against the bill. It is totally inadequate in that regard.

A number of other things in the bill are commendable and a number of them are very questionable. As legislators in the country we have an obligation to stop the huge tax bite. The little things that the government does from time to time by changing a little tax rule here and a little tax rule there do not make it any simpler. In fact it greatly increases the complexity. It does not relieve Canadian taxpayers of their crushing tax burden in any substantial way. It is just a little dithering and nothing substantial happening.

I cannot stand in the House to talk about a budget implementation bill, some of which goes all the way back to 1990, believe it or not, without also mentioning that the Canadian Alliance has a very good tax plan that has the approval of many Canadians and many notable economists including Dr. Mundell, a Nobel Prize winner. He said that our plan was workable, that it would give a substantial kick to the economy and that it would give real tax relief to Canadian families who are struggling to make ends meet. That is the type of tax overhaul the country needs.

Of course we have critics who say a flat tax is only a tax cut for the rich. They try to make political hay out of that. I do not apologize for the fact that under our plan everyone pays less taxes. The fact of the matter is that the Liberals always misrepresent this aspect of our plan incorrectly. The Minister of Finance particularly loves to talk about it. He gives a totally false message that it is for rich people only.

Contrary to the Liberals, we would take some two million Canadian taxpayers off the tax rolls completely, those people who make less than $20,000 for their families per year and are deprived of at least $6 billion of their earnings by this government. Six billion dollars of tax revenue comes from Canadian families whose family income is less than $20,000 a year. It is shameful, absolutely shameful.

Our tax plan would give them a 100% tax break. It is true that when people earn more money they would pay the same rate of tax on all their earnings. That does not mean that people who make more money pay less. They pay proportionately more. It is a truly progressive system. Anyone who says otherwise is not staying with the facts but is distorting them.

I emphasize that this is the way to go. It has the approval of no less than the WEFA group, which has done financial studies for the Department of Finance and the Minister of Finance in the production of his budget and his income projections for the government. By using that same model and running our proposal we showed that every year tax revenue to the government would go up. That is even before we take into account the boost that a massive tax break would give to our economy.

Government revenue would go up. There would be more money available for health care and education. There would be less money under our plan for boondoggles and for building fountains in Shawinigan. The money would dry up for fountains very quickly if we were in power because we simply do not believe it is correct to use the hard earned money of long suffering taxpayers to try to bolster the re-election chances of anyone including the Prime Minister.

We would straighten all those things out. With us at the helm of government, Canadians would find some real tax changes and changes to the system, not just the tinkering around the government is prone to doing. It sort of dilly-dallies and never really gets around to doing anything substantial.

I would like to say a little about some of the other matters that are involved. There is a whole bunch of provisions in the bill on changing different things including charities. The parliamentary secretary alluded to that point, but there is one that is really interesting. It would exempt second language training in French or English from the GST if that training were provided by vocational schools or individual contractors.

That is a step in the right direction, but once again the Liberals are guilty of tinkering. What they have done is said that students studying math or science have to pay the GST on that. However, French speaking people learning English or English speaking people learning French will be exempt from GST on that. They just cannot do that. They cannot just pepper away—I guess the Prime Minister likes pepper—at wee spots in the Income Tax Act and exempt this group, exempt that group and double the tax on this group and so on.

We need a massive overhaul, one that is consistent, one that is logical, one that makes sense, one that helps the economy, one that leaves more of the money people have earned in their own pockets and puts the country at a competitive edge such that it has never seen.

I would like to see the country run ahead in terms of its economic activity per capita vis-à-vis the United States and other G-7 countries and our trading partners. We have the potential to achieve that. We have a vigorous, well trained population. We have a wealth of resources unmatched in the world.

Despite the fact that Liberal members are all sort of shaking in their pants these days, we have a relatively stable political country. Our political regime is relatively stable. We change our governments by election. I always say we do it with ballots instead of with bullets. That is something we want to preserve in Canada.

We have all these positive things going for us, but what do we have? We have a country that is struggling, a country where our young people find it impossible to get jobs. They are lured to the United States because of lower taxes and higher salary offers. We keep on struggling in this country because of our excessive tax regime. I think we need to pay attention to the facts here and not put our heads in the sand any longer.

I know there are many Liberals in the House who would just love for me to carry on for a long time, but I will have to disappoint the vast majority over there. I will stop at this stage and say that I will be voting against this bill for the reasons I have mentioned. I will also continue to press forward for a new system, a new regime in this country, a system that is fair, that bolsters our economy and that leaves more of the people's hard earned money in their pockets so they can provide for their own needs and the needs of their families.

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

Mr. Speaker, I want to say at the outset that I will be splitting my time with the lugubrious and illustrious member from Kamloops.

[The Deputy Speaker]

Does the House give its consent for the hon. member for Regina—Qu'Appelle to split his time?

[Some hon. members]

Agreed.

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

Mr. Speaker, I want to say a few words on the GST bill, but I will first respond to the member for Elk Island who talked about the Alliance Party's new tax policy being a fair one, which is 17% across the board.

I want to tell everybody that its tax policy would give a big tax cut to the wealthy and the rich, because someone who makes an awful lot of money, as supposedly my friend from Alberta on my left does, making $300,000 or $400,000 a year, one can just imagine the kind of tax break he would have if he had a 17% tax break compared to what we have today in this country.

I was on an airplane a few hours ago. I picked up a newspaper and noticed that one of the candidates for the leadership of the Alliance Party, Tom Long, had a fundraiser in Muskoka. I think when we look at where political parties get their money from, it tells us a lot about political parties. I remember the reform party, since I come from the west, talking about being grassroots and representing ordinary people who come and put money in a hat and it picks up a few dollars here and there.

Tom Long had a fundraiser in the Muskokas. What do members think they charged for this fundraiser? First, it was not a big dinner with steak and wine; it was finger foods and the sipping of champagne. What do members think they charged? The member from Kamloops has guessed $100, while someone else has guessed $200. They charged $5,000 a person to go to a fundraiser for a leadership candidate of the Alliance Party, some grassroot party, some party in touch with ordinary people. It has become the party of Bay Street, the party that has been hijacked by the Bay Street barons. That is what has happened to the reform party of Canada, and then it pretends that it is speaking for the ordinary people of this country.

[Nelson Riis, NDP, Kamloops, BC]

Madam Speaker, I rise on a point of order. I normally would not interrupt my friend, but he obviously has made a mistake in his speech when he said they were charging $5,000 per person to attend that fundraiser. I wonder if he could—

[The Acting Speaker (Ms. Thibeault)]

That is not a point of order.

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

Madam Speaker, according to a very reliable newspaper, the Hill Times , it was $5,000 a person. Around 100 people attended this function in the Muskokas. They raised around $500,000 for the leadership campaign of an ordinary grassroots Canadian named Tom Long.

[John Williams, Reform, St. Albert, AB]

Fine fellow.

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

A fine fellow, I am told by the reform MP next to me. We now have a party that really is the party of the rich, the party of the powerful, the party of Bay Street, the party of the insiders, the party of the backroom boys. I am talking about Tom Long here. I am not talking about the old reform party that at one time said it was speaking for the ordinary citizens. This is the new party that wants to appeal to Ontario. It is the new party that is trying to imitate Brian Mulroney, despite the fact that he called it the reform party in pantyhose the other day.

That is what has happened to the Alliance Party of Canada. I can tell the House that there are a lot of people in my riding, ordinary folks, who voted reform—

[The Acting Speaker (Ms. Thibeault)]

On a point of order, the hon. member for Elk Island.

[Ken Epp, Reform, Elk Island, AB]

Madam Speaker, normally we would have an opportunity for debate after a speech. I think this is the last of the speeches where we do not. I would not raise this point but I really think he is quite irrelevant vis-à-vis Bill C-24.

[The Acting Speaker (Ms. Thibeault)]

I was listening to the debate and I am sure the hon. member was just about to make a link between his propos and the bill we are debating.

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

I began my remarks by saying that the 17% flat tax proposed by the reform party, or the Alliance Party, would favour the wealthy people of the country, people who make $300,000 to $600,000 a year or more. I said that indicative of that of course was a fundraiser by Tom Long. Maybe I have to repeat that. An invitation was sent out inviting people to a fundraiser at a cottage in the Muskokas where they could eat some caviar and sip champagne. The cost was $5,000 a head. I am sure a lot of people sitting in the House, who are members of parliament from the Alliance Party, could not go.

I do not think my friend from Vancouver could afford $5,000 for an evening with Tom Long. I do not know if my friend over there from Elk Island could afford $5,000 for an afternoon with Tom Long, but that is now what the party is targeting. It is targeting the wealthy people in the country which is why it is proposing tax reform in Canada.

A flat tax of 17% would see a major reduction for the wealthy, a major reduction for the privileged and more taxes for the ordinary citizen, the ordinary middle class working family, and of course major cutbacks in government services such as health care and education. People should be fully aware of what the new Alliance Party stands for. That is the kind of tax reform we do not want at all.

I want to turn my attention to some of the reasons why the bill was brought in today. It was to amend—

[The Acting Speaker (Ms. Thibeault)]

On a point of order, the hon. leader of the government in the House.

Business Of The House

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Madam Speaker, I wonder if the House would give me consent to propose the following motion without debate. I move:

That the House shall continue to sit after 6.30 p.m. on June 12 and June 13 for the purpose of considering the Government Orders, provided that during that time the Chair shall not receive any quorum calls, dilatory motions or requests for unanimous consent, except for a motion to adjourn proposed only by a minister of the crown;

That, notwithstanding any standing order or usual practice of the House, the Minister of State and Leader of the Government in the House of Commons shall immediately introduce and first reading shall be given to a bill entitled “An Act to amend the Parliament of Canada Act and the Members of Parliament Retirement Allowances Act” which shall be disposed of as follows:

1. The House shall proceed to the second reading stage of the said bill when it has disposed of the third reading stage of Bill C-24 or at 6.30 p.m. this day, whichever is earlier, and, when no additional member rises to speak, all questions necessary for the disposal of the second reading stage shall be put without further debate or amendment and, if a division thereon is requested, it shall be deemed deferred until 5:15 p.m. on June 13;

2. After the said bill is read a second time, it shall be referred to a committee of the whole House, provided that, after no more than one hour of consideration by the said committee, every clause or other question necessary for the disposal of the committee stage of the said bill shall be deemed to have been carried, without amendment, on division; and

3. The third reading stage of the said bill may be taken up at or after 6.30 p.m. on June 13 provided that, when no additional member rises to speak, all questions necessary for the disposal of the third reading stage shall be put without further debate or amendment, and, if a division thereon is requested, it shall be deemed deferred until the expiry of the time for consideration of Government Orders on the next sitting day.