House of Commons Hansard #107 of the 36th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was devco.


Points Of Order

11 a.m.


Chuck Strahl Reform Fraser Valley, BC

Mr. Speaker, I notice that today we are not starting with Private Members' Business but with orders of the day. I would just like to point out, and ask for guidance from the Chair, that this is, by my reckoning, the sixth time that the member for Pickering—Ajax—Uxbridge has not been available to move ahead with his private member's bill, which means that we will have no Private Members' Business today.

I do not mind if the member for Pickering—Ajax—Uxbridge cannot be here because of an illness, is sometimes unavoidably away or whatever it might be, but when it gets to the stage where we have gone through this six times, it means that someone else's private member's bill does not come forward today because a swap could not be made or whatever.

No doubt, Mr. Speaker, you and the clerks have attempted to get us Private Members' Business today, but it does seem, in my opinion, to be very unfortunate when someone abuses the goodwill of the House and the goodwill of the Chair by continually putting this bill off and not dealing with it.

I would love to debate it, get on with it and have a vote on it, but it appears that there is some sort of strategy, that none of us are aware of, of putting it off indefinitely. This is the sixth time now and today we have no Private Members' Business. The private members in the House deserve better than that.

I would ask the member to reconsider what he has been doing here with this bill. I would also ask the Chair to consider his options as to what can be done to expedite this. It is not right, when we have such little time for Private Members' Business, that even that little time is not available to us.

Points Of Order

11:05 a.m.

Glengarry—Prescott—Russell Ontario


Don Boudria LiberalLeader of the Government in the House of Commons

Mr. Speaker, of course this is not the first time this has occurred. It has occurred with members from various parties where the same or a similar situation has arisen. However, that does not make it right.

I agree with the hon. member that the private member's process that we have is not designed for a bill to come up in rotation, then back down again and never actually be debated. With that in mind, I certainly will bring it to the attention of the hon. member.

Additionally, about a year and a half or two years ago I asked the Standing Committee on Procedure and House Affairs if it could devise a mechanism whereby after a certain number of times there would be a process whereby the bill would go the bottom of the list, cease to be votable or something like that.

I would not be adverse to having a rule like that if members of the Standing Committee on Procedure and House Affairs want to have a look at it again because I agree with the sentiment expressed by the member.

I do not believe there is a strategy or anything like that. Members have done this before. Perhaps what we need is a mechanism to ensure that when a bill is votable it is debated or it ceases to be part of the votable bills so that another bill could become votable. I think that would be a reasonable way to look at it.

Points Of Order

11:05 a.m.

The Speaker

This particular circumstance does cause me some concern. There are two issues here. The first issue that I have been asked to deal with is the point brought up by the opposition House leader, that this particular bill has come up six different times. I am quoting him on that. Every time it has gone around. I believe he is asking me to make some kind of a decision on this particular aspect.

The second thing was brought up by the government House leader. It was mentioned that a year and a half ago the procedure committee was asked to consider this problem in a more general form, not this specific problem, and to give us some guidance as to how many times a bill can come up and then go to the bottom again. I think this is reasonable. I would certainly encourage the committee to consider this sometime soon.

I want to deal with the first issue that was brought up. I wonder if the government House leader would take it upon himself to ask the member for Pickering—Ajax—Uxbridge to please come to the House. I would like hear what he has to say about it. After having heard what the hon. member has to say, I will bring a decision on the first part.

On the second part, I encourage the committee to deal with the recurring problem. We will take it from there.

Budget Implementation Act, 2000Government Orders

11:10 a.m.

Glengarry—Prescott—Russell Ontario


Don Boudria Liberalfor the Minister of Finance

moved that Bill C-32, an act to implement certain provisions of the budget tabled in Parliament on February 28, 2000, be read the third time and passed.

Budget Implementation Act, 2000Government Orders

11:10 a.m.

Etobicoke North Ontario


Roy Cullen LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, thank you for the opportunity to address the House at third reading of Bill C-32, the budget 2000 implementation bill. The measures in the bill were all announced in the 2000 budget.

In this budget, the Minister of Finance reaffirmed that the government would observe its plan of sound financial management, that it would reduce taxes, and invest in abilities, knowledge and innovation. This plan will make it possible for the quality of life of Canadians and their children to be improved.

Several measures in Bill C-32 contribute to improving the quality of life for Canadians. Amendments to the Federal-Provincial Fiscal Arrangements Act, the Income Tax Act and the Canada Student Financial Assistance Act, for example, will strengthen access to post-secondary education, provide support for health care and provide more financial assistance to families with children and students. It is important that these particular measures be in place before the summer recess in order to benefit those Canadians who want and who need them.

Let me take a moment to provide the House with a brief overview of the bill. The first announcement the Minister of Finance made in the 2000 budget concerned increased funding for post-secondary education and health care, thus reaffirming the importance the government attaches to these two areas.

Bill C-32 calls for a $2.5 billion increase in Canada health and social transfer payment for health, social programs and post-secondary education. This is the fourth increase the government has made to the CHST.

The additional funds will be distributed to the provinces and territories on a per capita basis and will go into a trust fund from which they can draw funds for four years once the bill has been passed.

Combined with a value of tax transfers and this new supplement, total CHST will reach almost $31 billion in 2000-01, up from $29.4 billion in 1999-2000. Put a different way, together with the $11.5 billion investment in the 1999 budget, the cash component of the CHST will reach $15.5 billion in each of the next four years. That is a 25% increase in the CHST from the 1998-99 level.

One reason to pass the bill without delay is to ensure that this much needed money gets into the health care system quickly to help Canadians.

A second measure in the bill concerns financial assistance to students.

As hon. members are aware, the Canada student loan program has been making post-secondary education more accessible since 1964. The current agreement under which financial institutions make loans to students on behalf of the federal government will, however, come to an end on July 31, 2000.

The bill we are debating today ensures that the Canada student loans program will continue to serve students after that date. There will be money available for student borrowers after July 31 and there will be no interruption in service.

As I indicated before, it is essential that this measure be in place soon so that there is money available for students who will need loans in September.

A third measure provides increased child tax benefits and indexed GST benefits effective July 1, 2000. To assist families with the added expense of raising children, benefits under the Canada child tax benefit are being increased by $2.5 billion annually by 2004. The government's five year goal is to bring the maximum Canada child tax benefit for the first child to $2,400 and to $2,200 for the second child by 2004.

To achieve these goals, the Canada child tax benefit will be fully indexed. The base benefit and the national child benefit supplement will be increased beyond indexation. The income thresholds for the base benefit and the national child benefit supplement will be raised and the reduction rate for the base benefit will be lowered.

Middle income families will benefit substantially from these changes. For example, the CCTB benefit for a family with two children and an annual income of $60,000 will more than double, from $733 before the 2000 budget to $1,541 by the year 2004. This measure is one more reason Bill C-32 must be passed without delay. Low and middle income Canadian families are depending on the CCTB increases and indexed GST benefits in July.

Another measure in this bill also assists families.

Budget 2000 is extremely generous toward parents of newly born or newly adopted children, increasing the duration of parental leave allowed under the employment insurance program as well as the flexibility and accessibility of benefits.

The duration of parental leave, which may be used by one parent or split between the two, will be raised to 35 weeks. With 15 weeks of maternity leave and the standard two week waiting period, this brings the leave related to the arrival of a child up to one full year.

In addition, the number of insurable hours that must be worked to qualify for special benefits will be lowered to 600 hours from 700 hours. Parents will have increased flexibility to decide whether one or both parents will spend time at home with a new child, as only one waiting period per birth or adoption will be required instead of two.

Income earned while receiving parental benefits will be treated the same as for regular EI benefits and the Canada Labour Code will be amended to protect the jobs of employees in federally regulated workplaces during the extended parental leave period.

Another measure will allow Canadians to further diversify their personal retirement savings plans. The limit on foreign property that can be held in registered retirement savings plans and other deferred income plans will be increased to 25% for 2000 and to 30% for 2001.

Several bodies, including the House of Commons Standing Committee on Finance, the Senate Standing Committee on Banking, Trade and Commerce, and the Investment Funds Institute of Canada have asked that this ceiling be raised.

These increases will also apply to the Canada Pension Plan Investment Board. There is a change in Bill C-32 which directly affects the Canada pension plan. The provinces are permitted to borrow money from the CPP under terms set out in the CPP legislation. Bill C-32 responds to a request from the provinces that was agreed to by the federal-provincial ministers of finance last December as part of the CPP triennial review for a prepayment option for provincial CPP borrowings. The provinces will now be allowed to prepay their CPP obligations in advance of maturity and at no cost to the CPP plan. This will provide provinces which have fiscal surpluses with some flexibility to look for ways to reduce their debt. It also means that more funds will be transferred to the CPPIB and invested in the market at higher expected returns.

On the international front, Bill C-32 amends the Special Import Measures Act, or SIMA, to bring Canadian countervailing duty laws into line with recent changes to the WTO subsidies agreement. Certain provisions in that agreement which rendered certain foreign subsidies immune from countervailing duty action lapsed last December 31.

Bill C-32 allows for the suspension of provisions in the Special Import Measures Act that implement these non-actionable subsidy provisions into Canadian law.

These amendments will ensure that we are not treating our trading partners more favourably than they are treating us in countervailing duty investigations.

The two remaining measures in the bill concern first nations taxation and an amendment to the Excise Tax Act. Thirteen first nations will be allowed to levy a direct 7% GST-style sales tax on fuel, alcohol and tobacco products sold on reserve. The Canada Customs and Revenue Agency will collect the sales taxes and the federal government will vacate the GST room where the first nation tax applies. First nations which wish to follow suit in the future can be granted authorization through an order in council instead of a legislative amendment.

Finally, this bill addresses the issue of tax evasion. The Minister of National Revenue will be able to apply ex parte, in other words, without notice, for judicial authorization to proceed with assessment and collection action in instances where revenues may be at risk if GST and harmonized sales tax registrants are allowed their usual remittance period. Until now the Minister of National Revenue has been powerless to proceed with assessment and collection action before the tax came due.

In short, the measures included in this bill are non contentious and, because of three initiatives in particular, this bill should be passed quickly.

It is essential that the CHST supplement be invested in the health network as quickly as possible. It is essential that the student loans program be in place by September. Finally, it is essential that the child tax benefits be increased and that the indexed GST benefits be available by the end of June.

If these three measures are not enacted before the summer recess Canadians will suffer. While the remaining measures are not facing a similar timeframe, they are nonetheless important for millions of Canadians and for the efficient operation of government.

I strongly recommend that all hon. members give their support to this bill.

Budget Implementation Act, 2000Government Orders

11:20 a.m.


Monte Solberg Reform Medicine Hat, AB

Mr. Speaker, it is a pleasure to rise today to speak to Bill C-32.

Right off the top I want to say that it is interesting that the hon. member across the way did not say that it is important to pass this legislation because it will give Canadians hope, because it will give them new opportunities or provide the hundreds of thousands of jobs that are necessary to help out people on the low end of the income scale. He simply said that some benefits will be increased.

The speech which my hon. friend across the way just gave speaks volumes about the approach of this government. It is always “Let's try to manage the problem”. It will not fundamentally fix it. It will not provide people with opportunities. Instead, it is “Let's manage it. Let's get it off the boil and put it on to simmer on the back burner”. That characterizes the whole approach of this government.

Having said that, I want to talk about Bill C-32 in the context of something the Prime Minister said the other day in Germany. He said that the Canadian Alliance has an agenda of greed. That is a serious accusation and I want to address Bill C-32 in that context. If we asked ourselves what exactly does that mean, it becomes pretty apparent very quickly that there is a huge irony taking place.

What is greed? What does it mean to be greedy? It means taking something that one is not entitled to, something that one did not earn. Thinking about it that way, that perfectly describes the government. It is absolutely true that over the last six and a half years since it has been in power it has taken more and more money from people's pockets, money that does not belong to it. Truthfully, it belongs to the people who earned it. They earned it by working hard. What does the government do? It now confiscates 50% of their income and, in some cases, at the margins people face a tax rate of 60%. That is shameful, but it is what occurs under this government and it is completely unapologetic for it. That is the agenda of greed that we see in Canada. I would argue that when this government taxes $7 billion a year away from people earning less than $20,000, that is an agenda of greed.

What have those people done that they deserve to have that much money taxed away from them? They have worked hard. They may not have skills or education. In some cases they may have fallen on hard times. That is their crime. For that they are punished by paying $7 billion a year in taxes. It is absolutely unbelievable. That does not include the taxes they pay in Canada pension plan premiums, which are going up, and EI premiums. CPP premiums are going up far more than employment insurance premiums are going down. People are paying more and more.

What about brain drain? One of the factors which drives people out of the country is heavy taxation. I would say that is an agenda of greed, of which this Liberal government is guilty. The government is taxing people to the point where they are saying that the government obviously does not appreciate the fact that they work 50, 60 and 70 hours a week, creating, in some cases, hundreds of jobs.

The government taxes the life out of people until they say “Why should I pay these high taxes?” They do not mind paying taxes that are maybe a quarter or a third of their income, but why 50% or 60%? That is what happens to some people at the margins in Canada today. That is greed. It is greed when the government takes money that it is not entitled to.

I think it is greedy when the government puts people in the position in which both parents have to work. How many times have we in this place heard people say “If I had a choice, I would stay at home with the kids. That is what I would prefer to do. That is a choice that I would like to have”. The government taxes people so heavily today that both parents have to work, one just to pay the finance minister.

That is the definition of greed. If the Prime Minister wants to look for an agenda of greed, he should look at his own agenda. It is an agenda of greed when people are taxed that heavily to support the government. It is not like people are getting great services for the money they send to the Minister of Finance and the Prime Minister. Consider the human resources development scandal. What happens?

We have $7 billion a year that comes from people making less than $20,000 a year. A good chunk of that goes to a department like human resources development, and a good chunk of that money goes to things that are, to be charitable, questionable activities. Consider all the money that is poured into the coffers of people who are great political supporters of the Prime Minister.

It is not like there is some objective process that people have to go through to get this money. We know, for instance, that in the Prime Minister's riding, because of political pressure, all kinds of grants to friends of the Prime Minister were approved. These people then gave money back to the Prime Minister for his campaign. Now we have four police investigations in the Prime Minister's riding.

That is an agenda of greed. The government takes $7 billion from the lowest income Canadians and then gives it to its political cronies, who then give it back in the form of campaign contributions. That is an agenda of greed. If there is anyone guilty of greed, it is the Prime Minister and this government.

It is about time that we pulled the mask off and revealed the Prime Minister and government members for what they are. They are people who too often use the tools of government to push their own political ends. That is fundamentally wrong. Many of us were sent to this House to change that, to turn it around. It is absolutely disgusting how the Prime Minister can say with a straight face that the Canadian Alliance has an agenda of greed. That is ridiculous.

Our purpose in this place is to allow people to keep more of the money they earn. That is why we are promoting the tax proposals we are pushing today like solution 17. We are saying that people should be able to keep the huge majority of the money they make and send in enough to ensure that we have a good health care system in Canada and that we can provide for pensions and things people really value.

That is what we should be using government for, not ripping off taxpayers to push the blatant political ends of people in government. That happens all too often. I resent very much the Prime Minister saying that we have an agenda of greed when it is so clear that everything the Liberals do is calculated to take more money out of people's pockets to further their own ends.

I believe in a concept of justice that says we are entitled to what we work for and obtain honestly. That describes 90% of the people in the country. The massive majority of people in Canada work hard, are honest and are willing to pay their fair share of taxes. They do not want to pay a whole bunch of taxes for unscrupulous activities. We have seen that too often in the government. It is time for it to come to an end. People may say it is fine for me to say all this but that I should back it up and explain what I mean.

I do not know for how many months we have been pursuing the human resources minister about the boondoggle in human resources development which is obviously guilty of gross incompetence, political pork barrelling and patronage on a scale that is without precedent. I do not think we have seen anything this bad before.

Let us consider the transitional jobs fund or the Canada jobs fund. The Liberals change names to try to hide what they are doing. If that is not one of the most obvious examples of milking taxpayers to fund political patronage, I do not know what is. Even the human resources development committee has said that this program does not seem to have any criteria. It seems to have a pot of money that allows the minister carte blanche and members across the way carte blanche to fund their ridings, their friends and the projects they personally support in an attempt to lever themselves back into power. It is disgraceful. It has reached the point where even the Liberal chair of the committee brings down a report saying that it has to come to an end and recommending breaking up the department.

The parliamentary secretary says that Bill C-32 is good because it will enhance a GST credit and do this and that. Those guys do not get it. There is a much bigger picture. There is no vision across the way. The Liberals simply ad hoc their way through parliament. It is time for some fundamental changes.

People will ask if we are really in bad shape. Yes, we are and I want to talk about it for a moment. Three weeks ago a report came down from Standard & Poor's DRI Canada which had the audacity to point out a pretty startling fact about which the government should be embarrassed.

The report pointed out that the people in the poorest U.S. state, Mississippi, have more disposable income per capita than the people of Alberta, the wealthiest Canadian province. I would think that would be something government members would be concerned about. If they want to talk about an agenda of greed, how is it that Canada, with its human and natural resources, can be in a position where the amount of money people have left over after the government is done with them is lower than that of the poorest American state, Mississippi? How did that happen? Is it right that it should happen? The money that people have left over to pay for food, shelter and clothing is diminished to the point where there is less in our wealthiest province than in the poorest American state, Mississippi.

That speaks volumes about who really has an agenda of greed in Canada. It is the government across the way. The only reason that happens is because of public policy decisions. The government has decided that the best approach is to tax the hide off people. Then it will decide what is good for folks. With half the income people earn and the government gets to keep, it will decide what is good for them. It will spend it for them. We see it spent on all kinds of foolish projects. We see it spent ineffectively. We see it spent on things that people do not want. We see it spent on things that are contrary to the values of the people it takes the money from in the first place.

We are in a situation today where people in Canada are seeing their standard of living eroded and eroded and eroded. I have given many speeches in this place on this point. It has a lot to do with the government's contempt for people who are entrepreneurs, who risk their life savings to start businesses and who are innovative. I believe it is contempt.

The Prime Minister talked in Germany about the superior values of the Liberal Party and how it cares more. That is a joke. It is ridiculous. As I just pointed out, we are in a situation where the government takes $7 billion a year from people making less than $20,000. How can it say that it cares more? If it wants to have an election on that issue, I say bring it on. Let us have a contest, an election on that. Let us let the people decide if it is compassionate and caring to take $7 billion from people who make less $20,000 a year.

Is it really compassionate and caring to tax people so heavily that both parents have to work, not because they want to work? According to every poll I have seen, 70% of two income families today said that if they had their druthers one parent would be at home with the children. They do not have the option.

Is it compassionate to entrench in the tax system a double standard when it comes to taxation of families? A two income family pays a lot less taxes than a single income family earning the same amount of money. That is the government's approach. It is doublespeak. It hopes that people will simply look at the sound bite and not observe what it really does. As a result, people get more and more cynical about politics, and the government wonders why fewer people come out to vote.

There will be a day of reckoning. I hope we have an election campaign on the issue of Liberal values or social values. The record of the government is reprehensible. It has done more damage than just about any government I can think of in recent memory in Canada. I do not think there has been a government that has damaged the public more.

Let us consider that over the next five years we will probably run a surplus of about $150 billion. The government's approach is to jack up spending even higher, with more and more money going into more programs even though they have huge problems, not only in human resources development but in other departments like industry where there are billions of dollars in corporate welfare.

Let us look at the department of Indian affairs which is full of problems. I see the Minister of Indian Affairs and Northern Development is here. We send billions of dollars into Indian affairs every year, and what do we get for it? We get 70% unemployment on Indian reserves. We see suicide rates that are through the roof. There are substance abuse problems that are unbelievable. Very little money gets beyond the band council level to rank and file natives.

The government will continue to drive spending through the roof. It will take more and more money from people to fund all kinds of programs that do not work. I would say that is an agenda of greed. When people take money that does not belong to them, when they take more than their share of the pie, that is greed. That is unjust. We see it over and over again from the government.

Bill C-32 nods a bit toward things like reducing taxes, but on the other hand the government is ripping more money out of people's pockets. It gives back a little with one hand and takes more and more with the other. It is this duplicitous approach that makes people cynical.

Some people are probably wondering about Canada's position in the world after six and a half years of this approach to government. People say that the economy is moving along fairly strongly and that unemployment is down to under 7%. That is pretty good, but why is it not good enough?

I make the point that we should not be mesmerized by the recent strong growth in the economy. While we all welcome strong growth in the economy we must remember there are two types of growth. There is the type of growth that is premised on strong productivity. There is also the type of growth that is premised on a workforce that is producing more and more and generating more opportunities. Then there is the type of growth that we get by allowing our dollar to sink to ever lower values by basically cheapening ourselves to the point where we in that way attract more investment into the country. That is the approach the government has taken.

Over the last 25 years we have seen a decline in the Canadian dollar. There is no better indicator of the health of an economy than the strength of its dollar. It tells us how we are doing relative to the rest of the world, and certainly in this case relative to the United States. We measure ourselves, I think rightfully, against the United States. We used to have a superior standard of living than that country. According to just about everyone, including the government's own industry minister, our standard of living has now fallen dramatically as against that of the Americans. I encourage people to remember we are a country that is blessed with uncommon resources. We have tremendous resources, human and natural.

How is it that we have seen this decline in our standard of living and this decline in our dollar? It has a lot to do with the sanguine approach of Liberal governments over the last many years and their rah-rah attitude: “We are number one in the world. We will spend our way out of this problem. Let us wrap ourselves in the flag. The other guys are bad because they want to cut taxes”. We have seen that over and over and over again.

The result is that investors see through all that stuff and ask what is really being done to keep the economy competitive. They look at the statistics. They see that our disposable income continues to fall relative to that of the United States. Now, as I pointed out, our wealthiest province has lower after tax income than the poorest American state. They look at things like our productivity. What is happening with Canadian productivity? We know that it has improved a bit lately. However we also know that it is falling further and further behind that of the United States.

We must remember there is only an imaginary line between Canada and the United States and its public policy differences. That is what explains why the U.S. economy is doing so much better than ours. Why is it that in Canada today manufacturers and people in the industrial sector are investing about 30% less on equipment and machinery than they are in the United States? Why is it that we are in a situation today where we have much less spending on research and development in Canada than in the United States? Why is it that we are in a situation where the new economy in Canada is producing fewer opportunities for people in terms of high tech start-ups?

One of the striking facts of the last year was that in Canada there were exactly four initial public offerings for Internet companies on the Toronto Stock Exchange. At the same time in the United States there were 165. It has 10 times the population. I could understand if it had 40, 45 or even 50 more IPOs, but there were 165 IPOs in the United States.

The situation is we are falling behind in that new wealth creating sector that is symbolized by the Internet. Canadians are leaving the country in droves to go to the United States. A recent report from Statistics Canada said that many of the people who we educate here are going to the United States, particularly in the medical field. It talked about doctors and nurses leaving in droves.

The government uses the soothing balm of saying yes, but people are coming in from outside Canada to fill some of those slots. This is where its thinking is so short term and superficial. Instead of replacing those people with people who in some cases are fleeing horrible regimes elsewhere, would it not be better if we were a net winner of brain gain instead of suffering from brain drain, where we are losing all those people in the first place?

How much sense does it make to educate people at huge expense to the taxpayers only to see them go to the United States and other countries around the world? It is crazy and ridiculous that the government says it is not a problem, do not worry about it. It speaks to the sanguine, carefree and even careless attitude of the government.

We could point to so many other things to demonstrate that the government is reckless and careless when it comes to managing the economy. There is the falling dollar and falling productivity relative to the U.S., the falling standard of living and the output per capita.

One of the most amazing statistics I have come across is the one that indicates our output per capita between 1988 and 1998. Canada's output per capita over that 10 year period grew by 5%. What is the significance of that? What is output per capita?

Output per capita is how much on average each person produces for the economy. Why is that important? That is what determines our standard of living. The more we produce per person in an economy, the better the standard of living, the more money people will have, the more money people can use to look after things that are important to them and their families, the more money ultimately that people pay in taxes to the government to fund things that people care about, such as health care and higher education, those sorts of things.

During that 10 year period ours grew by 5%. That is all. In the same period, France saw its standard of living, its output per capita, grow three times faster. Most people would say that France really does not strike them as a country that is at the leading edge when it comes to wealth production but it grew three times faster than Canada.

Australia grew four times faster. The U.S. grew four times faster. Norway grew six times faster. And Ireland? It grew 18 times faster than Canada. Why was that? Is it because Ireland has more resources than Canada? I do not think so. Is it because it is in a situation where it has much better educated people? Hardly. I think we are fifth in the world for spending on education.

We produce some of the best educated people in the world. The fact that we are so often raided by the United States and other countries to pick those people off is a testament to that. What is the difference? Why are we falling so far behind relative to the rest of the world?

One of the big reasons is that in Canada the taxes are way too high. Taxes basically shut down initiative. They send a message to people who are really ambitious or who are prepared to risk a lot of money to get their ideas off the ground, the government tells them to get out of here, that they are not wanted. People will be punished for the crime of trying to create jobs and produce new products and come up with new ideas. People are fleeing in droves.

That is why our output per capita is so pale compared to that of our trading partners around the world. That has to turn around.

The Prime Minister uses a balm and medicates himself with such slogans as the Canadian Alliance has an agenda of greed, when it is precisely the government that has the agenda of greed. Nothing will get better as long as those guys are where they are. Things have to turn around. The government has to be replaced. The Liberals have to be thrown out.

People have to get the message that the Canadian Alliance will allow people to keep more of the money they earn. That is not greed; it is justice. That is being a government that is respectful of the work, effort and risk people take simply to make a living, to try to get by.

It is time to throw off some of the ridiculous slogans we hear from the Prime Minister and really look at the record. How do we do that? How do we turn things around?

The first thing is to have some honest discussion with people. We do not try to medicate the public with slogans about Canada being number one and attack people who have other ideas simply because he chooses not to agree with them. We sit down and address the hard issues.

What are the hard issues? We have to ask how good a job is being done with the money the public already sends in. Is a good job being done? The answer is no. The government is doing a lousy job. Health care is broken. Human resources is broken. Indian affairs is broken. Transport is broken. Defence is broken. Justice is broken. They all have to be fixed. Let us go in there, take the money that is currently being spent and use it more wisely so that people get good results for the money that is being spent. That is the first thing.

Second, what do we do with the $150 billion in surpluses that will come our way over the next five years? The first thing is to recognize that Canadians are among the highest taxed people in the western world. Income taxes are around 50% higher than the G-7 average. Those taxes have to come down.

The people at the low end who are taxed to the point where they can hardly feed themselves should not be paying taxes. People at the middle should get a huge tax break. People at the upper end should get a big tax break too because we want them here. We want to keep them here. We do not want to drive them out. We want them here. They will pay taxes and put people to work. But the government loves to engage in the demagoguery that suggests if people at the high end of the income scale get some kind of tax break, it is bad.

I would submit that the real agenda of greed is the one that comes from the government. It seems to want to tax every loose penny it can find in everybody's pockets.

Budget Implementation Act, 2000Government Orders

11:50 a.m.


Lorne Nystrom NDP Qu'Appelle, SK

Except the Bronfmans.

Budget Implementation Act, 2000Government Orders

11:50 a.m.


Monte Solberg Reform Medicine Hat, AB

“Except the Bronfmans”, as my friend in the NDP said, but it goes beyond that. It goes beyond that because what we see is a government that not only taxes every cent it can find, but then it sends the money to all its friends in what I hope is a vain attempt to lever itself back into power in the next election campaign. I hope Canadians throw out the Liberals for that insult.

It is time to put an end to that crazy way of doing politics. Let us leave that money in people's pockets. Let us show people the respect they deserve. Let us allow them to maintain the dignity that goes with being able to feed our own families. That is something people should ask for and expect as a bare minimum.

How would we do it? The Canadian Alliance says to go through the envelope of spending that currently exists. Get rid of the pork barrelling and patronage and put it into things that people care about, such as higher education and health care. Let us fix the military. Let us do something with the justice system. Let us get the bare essentials fixed.

Let us give people a big tax break. We are advocating a tax plan which would see the basic and merit exemptions pushed up to $10,000 each and a $3,000 per child deduction for every family in Canada with children 16 years of age and under. Right off the bat that would mean a family of four would have $26,000 of tax exempt income.

After that we would tax people at a rate of only 17%. Everyone would be taxed at 17%. That is it. People would say, “I finally get the sense that maybe I am now being taxed fairly. I am being allowed to keep the majority of my money”.

That would have a wonderful impact when it comes to attracting investment and talent back into Canada. By virtue of cutting the top rates from 29% and 26% down to 17%, the capital gains rate would fall down to around 20%. That would be the total rate, 20%, federal and provincial combined. This would be a wonderful incentive for people to invest.

It would mean that we would catapult ahead of the United States, Ireland, the U.K. and Japan. We would start to attract investment and put more people back to work.

Who suffers when we have an unemployment rate of almost 7%? Is it people who have skills? I do not think so. Is it people who have education, who come from a good background? No, it is people at the low end.

The Prime Minister wants to talk about values. Why does he not put in place an investment climate which would ensure that business would come to Canada to the point where so many companies would be looking to hire people that people without skills and education would be sought after? Why is Canada in a situation today where for every job there are three people chasing after it? Why not reverse that? Why not have three jobs chasing every person?

One of the remarkable things about what has happened in the U.S. is the economy is so hot there that many companies cannot find workers so they have set up in what are traditionally known as ghettos. They said to the people, “We know you do not have skills. We know you do not have an education. Some of you have been on welfare your whole lives. But we are coming to your community because we need workers. We will give you on the job training. We will give you skills. We will give you opportunity”. They get experience and contacts. And they get the dignity that goes with being able to look after themselves and to buy food for their families.

That is the great benefit of an economy which moves at its capacity. The government seems to think Canada's economy is wonderful if unemployment is barely under 7%. We have to do way better than that if we want to help all Canadians. The government is not doing it.

That is what solution 17 would do. It would get the economy moving rapidly and would allow everyone to have a chance to have a job, and the opportunities and dignity which go with it.

When the parliamentary secretary gave his speech on Bill C-32, he said that we must pass this right away so people could get enhanced GST credits before the summer. That is nice, but would it not be better to have opportunities and jobs that pay good wages instead?

That is what is happening in the U.S. I hate to keep referring to the U.S., but we used to be on par with it when it came to the standard of living. I do not understand why the government wants to play second fiddle to the U.S. Why does it think that is good?

We hear the proud nationalism coming from the other side, but the Liberals are content to allow the Americans to eat our lunch. Well I am not and the Canadian Alliance is not. We think that investment belongs in Canada. Those jobs belong in Canada. People need more than a GST credit cheque. They need jobs. They need the disposable income and the opportunities.

We are tired of the middling busy work approach from across the way. It is time for a fundamental change in Canada, a change which will allow us to shoot to the front of the pack instead of falling further and further behind, as we have done for the last 20 years. That is just not good enough. It is time to turn it around.

I will conclude by saying that if there is anybody in this place who is guilty of an agenda of greed, it is the Prime Minister and this government. They show absolutely no compunction about taking more and more money out of people's pockets and spending it on things that people do not care about or, in some cases, things that I think are unscrupulous, things that benefit the Liberals to their political ends. That is an agenda of greed. That is what has to come to an end.

I urge people across the country who are watching this to help us bring an end to that by throwing the government out. We have an election coming in the next year. Let us get rid of that government. Let us put in place a government that respects the hard work of the taxpayers and is willing to allow them to keep that money so that they can maintain their dignity and look after their own families.

Let us put in place a government that will stay out of the lives of taxpayers, that will quit interfering in their lives and allow them to raise their children as they see fit. That is what the Canadian Alliance wants. The only way to make it happen is to elect an Alliance government and get rid of the scoundrels across the way.

Budget Implementation Act, 2000Government Orders



Michel Guimond Bloc Beauport—Montmorency—Orléans, QC

Mr. Speaker, it is my pleasure to speak to the House on Bill C-32.

I remind our viewers that this is an act to implement the budget of February 28, which we are to pass so the government may make certain expenditures.

I will say right off that the budget the Minister of Finance presented on February 28 provided for surpluses of some $95.5 billion for the next five years.

Logically we should be delighted. We should say “If the government is accumulating surpluses for the next five years, we are a long way from the budget cuts that were made to eliminate the deficit. We are a long way from the situation in which we had a deficit of $42 billion during the years of the Conservative government under Mr. Mulroney”. Initially this looks like good news.

However, I have to point out, with all due respect, that it does not represent good news if indeed the government will be raking in some $95 billion in the coming five years—it may in fact represent a problem.

Before becoming an MP, I had the opportunity to be a city councillor. I am a resident of Boischatel on the côte de Beaupré and I had the opportunity of sitting on the municipal council for seven years. I will draw an analogy, and it is very relevant to the situation we are in today.

I recall that when I served as councillor between 1987 and 1993 until my election as the member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans we had budget surpluses in certain years. I can still see the mayor of the time busting his britches and saying “We were good managers; we have a surplus”. I am sorry, but what I am saying applies to the Minister of Finance as well. If a government accumulates surpluses shamelessly, it means that it is accumulating them because it is overtaxing.

A government should tax according to its needs, rather than giving way, as this Liberal government has done, to an impulse to overtax and to reduce the income of certain classes of society. We will come back to this, but this is the point I wished to make: a $95 billion surplus over the next five years is hardly good news. It means that this government is cutting too deep and taxing too heavily.

If this government were realistic, it would set taxes at a reasonable level, so that taxpayers could breathe a little easier. They will not breathe any easier with the small tax cuts expected up until 2004. On the contrary, Canadians are still heavily taxed by international standards.

I have this to say to the Minister of Finance, the member for LaSalle—Émard, “If you have a $95 billion surplus, if you think you are so great, you should be able to do something about the real problems”.

I want to talk about a real problem, one which continues to drag on while this government, as usual, does nothing—I am referring to the increase in the price of gas. The present situation in Canada, particularly in Quebec, is completely unacceptable.

Let us not forget that in addition to GST this government collects an excise tax on every litre of gas sold. This excise tax is 10 cents per litre of gas at the pump, and 4 cents per litre of diesel fuel. If this government has a $95 billion surplus, if it is crowing about how wonderful it is, let it immediately suspend the excise tax, in order to give taxpayers and consumers a little breathing space and slow down the inflationary trend resulting from recent increases in the price of gas.

As the Bloc Quebecois transport critic, I am regularly in touch with trucking associations, owners of bus companies, and owners of school and other buses. These people, particularly the truckers, are all telling us that they have no choice but to pass on to consumers the increase in the price of gas.

At present, when young couples building new homes order landfill, or topsoil for their yards so as to start a lawn, the trucker will have no choice but to pass these costs on to them.

The intercity carriers, who are barely making a profit at present, will have no choice but to pass these costs on to the consumer.

Another example would be companies shipping goods by road. If shipping costs rise, the costs of the goods will rise as well. This shows the whole inflationist spiral the recent rise in gas prices has triggered.

Why is the Bloc Quebecois calling for immediate suspension of this tax? To give companies a bit of a chance to catch their breath until prices get back to a reasonable level.

Every member in this House, as well as those watching us at home, knows that the average cost of a litre of gasoline at the pump in Quebec was about 54.9 cents in February 1999.

Everyone finds gas prices far too high. Some people have made what in my opinion is a logical and normal choice: to use public transportation. In major cities, one sees growing numbers of people on in-line skates, or taking the bus or subway. There are people who have decided that, because of the atmospheric pollution caused by automobile emissions, they are going to do their part by choosing not to use their cars to get to work.

That is fine, but there are people who have no choice. Those who are faced with these gasoline price increases are telling us “It makes no sense, we are getting poorer by going to work”.

In February 1999, when the price at the pump was 54.9 cents a litre, no one was saying that it was too much. It had reached an acceptable level, given inflation and people's incomes.

This morning I left my riding of Beauport to come here and I stopped in Montreal, where a litre of gas costs 84.9 cents. There is a huge difference, 30 cents a litre, between the price of 54 cents in February 1999 and today's price of 84 cents, in early June 2000.

This government claims that it is compassionate and that it respects consumers. It keeps repeating that it listens to Canadians, but which group of Canadians does it listen to? It listens to the big contributors to the Liberal Party.

If this government is listening to ordinary people, it should decide to immediately remove the excise tax, which accounts for 10 cents per litre.

The Bloc Quebecois raised another point regarding gasoline prices, namely the government's laxness regarding competition. This government is not doing anything to promote competition. Canada is the only country, relative to the United States, that lets companies be refiners, distributors and retailers at the same time.

Whether these companies are called Petro-Canada, Esso or Irving, they all have their own refineries. They get a margin of profit at the refinery. They send this gasoline to their own distributors and therefore get the profit from the distribution. Then they send the distributors' gasoline to the retailers. They have their own network of service stations—and so they rake in more profit.

Who ends up paying? Who pays the totally unacceptable gasoline prices, like the 84.9 cents a litre they are paying in the Montreal region? Does anyone in this House think this is acceptable?

Budget Implementation Act, 2000Government Orders

12:10 p.m.

An hon. member


Budget Implementation Act, 2000Government Orders

12:10 p.m.


Michel Guimond Bloc Beauport—Montmorency—Orléans, QC

This allows the big companies to report record profits. Things are not going well. The price of gasoline has reached 84 cents a litre, and the companies are announcing record profits. In addition to making record profits, the companies are announcing massive layoffs. In addition to making more money, they are going to get rid of people so they can make even more money.

Is that acceptable in a free and democratic society such as Canada? Absolutely not. The Minister of Industry will say “But this is not our fault. This is a worldwide phenomenon with the prices of OPEC, with the Arabs, Kuwait, the producing countries and Venezuela”.

This is why we in the Bloc Quebecois are saying that it is time to do some housekeeping. It is time to look and see if there is perhaps a bit of incest in the relations among the companies. We should ask the Competition Bureau to do this, but, in the meantime, the government ought to free us, by cutting the excise tax by 10 cents a litre now, to provide the time necessary to look into the situation.

In the House last Thursday or Friday, the Minister of Finance said that the Minister of Industry had commissioned a study. Do people realize when this study will be made public? The Minister of Industry has ordered that it be released by the end of the year—December 31, 2000.

The Minister of Finance promised us wonderful tax cuts. “My February 28, 2000 budget,” he proudly told us “contains tax cuts for 2001, 2002, 2003 and 2004”. Right now, with the recent increase in the price of gasoline and the price of energy in general, we can see that, if something is not done immediately, any gains from these tax cuts will be completely wiped out for certain categories of the public.

This is totally unacceptable. The left hand is promising tax cuts and the right hand—not that there is one—is doing nothing. With the increase in the price of gasoline and energy, the upshot is that any gains from these tax cuts will be completely wiped out until 2004.

There is a lot of talk about gasoline. This inflationary spiral will have an impact on many industries. I mentioned the transportation sector, so food transported by truck, but there are a number of industries using petroleum-based products that will have to pass on price hikes to consumers. I will give an example.

I and the members for Témiscamingue, Lotbinière and Sherbrooke, all of us representing the Bloc Quebecois, visited 21 ridings in Quebec. We travelled to all regions and held press conferences, offering information specific to each of the regions we visited. We were able to note how much change there had been in prices at the pump between February 1999 and when we made our tour in March and April 2000.

At some service stations we held press conferences. The press conference I particularly remember, however, was the one at a greenhouse in Rivière-des-Mille-Îles. One tends to forget that the entire greenhouse industry is heavily dependent on energy costs.

This is the time when we are preparing our yards and putting in our summer plantings, and the nursery owner, who grows potted plants in his greenhouses, told us what the increase in fuel oil meant to his costs. This was a small grower. At the present time, the major producers have the opportunity to heat with natural gas, but operators of small or medium businesses who are trying to earn a living do not have the means to convert to natural gas. They are still dependent on fuel oil, the price of which has risen in leaps and bounds over the past year.

This greenhouse operator told us “I have two choices. Either I keep prices at last year's level, and assume the increased cost of fuel oil, or I try to pass the increase on to the customer. If I do that, I have to compete with the major American chains, which have the opportunity of buying in bulk, so they can really slash their prices. There is no certainty that I will be able to make it through this coming summer”.

The rise in heating oil prices was mentioned in his case, but there is also a rise in the cost of styrofoam containers. Styrofoam is a petroleum based product. Styrofoam suppliers, such as Cascade in the Drummondville region or in the Kingsey Falls region, which produce styrofoam flats and plastics of all kinds, polyethylenes, will be hit with an unavoidable price increase. Farm producers will either absorb it or pass it on to consumers. The wheel keeps turning, and the same consumers, the same taxpayers, take the blow. This government, with its surplus of $95 billion, should do something about the increase in the price of gasoline.

A second aspect I would like to cover, which advanced somewhat last week, is Bill C-205, which I introduced in order to enable mechanics to deduct the cost of their tools. The debate has gone on in this House for some ten years. It involves a job category, a category of employees, vehicle technicians, who earn on average $29,000 a year.

No doubt, Mr. Speaker, you have a car as I do and when you go to a service station or to a dealer's you can see how vehicle technicians, more commonly known as mechanics, are members of a category of employees that work very hard. Sometimes they have to work in very difficult conditions. Their work is very physically demanding. Most of the time they work on concrete floors, in high humidity areas, under vehicles from which water, oil and slush drip in their faces in the middle of winter. These people work in areas where oil, dust, noise and toxic fumes are the norm.

I tabled Bill C-205 because some people told me about this issue. Let me say from the outset that I am not an expert on automobiles. I am not a car buff. I have a hard time just putting oil in my car engine, but luckily I have a good mechanic who does it for me. Some colleagues have asked me “Why are you tabling this bill? Is your father or your brother a mechanic?” Not at all. It is simply a matter of common sense.

During an election campaign, or whenever we try to be receptive to people's concerns, we talk to ordinary people, to workers. We do not only talk to millionaires. On a typical day, a member of parliament is likely to meet many more hard-working, low-income people than he or she will meet millionaires or billionaires.

It is through these encounters that I was made aware of this issue. Workers in the automobile industry told me “It does not make sense; other categories of workers, including musicians, chainsaw operators and dentists, can deduct the cost of the tools required in their employment”.

This is why I tabled Bill C-205 which, incidentally, was voted on on Tuesday. I want to take this opportunity to thank hon. members and to congratulate them for doing so. There were 229 members in the House and 218 of them, from all parties, voted in favour of a bill introduced by a Bloc Quebecois member. I said from the outset that this was a bill that transcended party lines. This was not a debate between federalists and sovereignists; it was not a debate about Quebec versus the rest of Canada. It was simply a matter of common sense and fairness with respect to people whose work is physically very demanding.

I thank the 217 colleagues who voted with me to get this bill through second reading stage.

Mr. Speaker, you are a seasoned parliamentarian, as well as an expert in constitutional law. You know that a bill from a private member, an opposition member to boot, rarely makes it past second reading.

I deplore that 11 Liberal members voted against the bill, but they will have to live with their decision. Votes on private members' bills are free votes, with members voting according to their conscience.

When these 11 Liberal members are visiting service stations and automobile concessions during the next election campaign, I hope that they are given a polite reception by the mechanics, who work very hard in these establishments, but they will have to explain to these mechanics in person why they voted against my Bill C-205. They will have to live with their decision. That is not my problem.

This bill will have to be considered in the Standing Committee on Finance before it can come back to the House at third reading. I hope that the next election, which is expected this fall, will not kill this bill on the order paper. I hope that the government will give the bill top priority so that it can be passed before the next election.

The four year legal mandate is up on June 2, 2001. Last Friday it had only been three years since we were elected. Let us keep in mind that, in Canada, the legal, normal and usual mandate is four years and that, under the Canadian Constitution, up to five years are allowed before an election is called.

It is true that there is a tax cost related to this bill to allow mechanics to deduct the cost of their tools. It is true that this is going to cost the government money, but the Minister of Finance is bragging of having a $95 billion surplus over the next five years. I believe he has the financial and budgetary possibilities of accepting this bill, which would enable automobile mechanics to finally be recognized for their true value and to be allowed to deduct the cost of the tools required for their work.

Let us not forget that my purpose in tabling this bill was to help young men and women who are just finishing school. There are, unfortunately, not many young women working as mechanics but I believe that, as our society changes, it will be less and less a male-only trade, and we will see more and more girls choosing this profession.

Another purpose of this bill was to give young people the chance of getting a job. When a young person finishes school, he usual has debts because of his studies. He then goes to a car dealer or a garage looking for work and the boss is going to ask him, for a certainty, “Do you have your tools?”

We know that the most basic tool set runs between $3,000 and $5,000. There is no certainty that a young person just finishing school, with debts to begin with, is going to have that kind of money, and there is also no certainty that his parents will be in a position to help him either. Any set of tools that are the least bit specialized can run up to $30,000, $35,000 or $40,000.

The possibility of deducting the cost of tools would also be a recognition by this government of its desire to really give young people a chance and the opportunity to find work. I think the Minister of Finance ought to give some thought to this.

Another private member's bill I introduced, which may involve some financial commitment by the government, concerns employment insurance benefits. Over the years, the government has accumulated surpluses in the employment insurance fund.

We in the Bloc Quebecois contend that, since 1993, this surplus has not belonged to the government, but rather to the employees who contribute to employment insurance every week from their pay cheques and to their employers, who also pay employment insurance contributions, the employer's share.

We consider that the surplus of over $31 billion in the employment insurance fund—and I am sure that there is more than that today—belongs to the workers, and thus the unemployed, and to the employers. The employer's contribution to unemployment insurance should be reduced.

During the last break, I visited many businesses in the Beauport industrial park in my riding. People said to me “Mr. Guimond, we could create jobs if we could reduce certain payroll costs, employment insurance contributions, for example”.

When I took my degree in industrial relations, we talked about fringe benefits. Today, we call them benefits. Let me say in passing that these benefits are less and less fringe benefits, a name that is no longer acceptable. Now we talk about benefits.

Today, the employer pays between 30% and 35% of benefits. An employee hired today costs 35 cents for every dollar the employer pays in salary, even before he has worked.

Many SMB owners say “Lower the payroll taxes, lower the contributions to employment insurance, and we will create jobs”. This is all the more appropriate in the context of today's budget surplus of $31 billion.

This is why I introduced my private member's bill and I can hardly wait for it to be debated in this House. I can hardly wait to hear what all my colleagues from all parties on both sides of the House have to say on the matter. I want students excepted from having to pay employment insurance contributions, to have the option of not paying them.

When students do not work enough to qualify for employment insurance, why should they have to contribute if they hold a summer job? We currently have students here. They will begin to work soon, or they did at the end of April or in early May. These students will pay employment insurance contributions. In September, when they go back to school, they will not be able to get employment insurance benefits, because they will be full time students. Since they will not be able to look for full time work either, they will not qualify for employment insurance.

The bill I tabled is designed to allow these students, if they think that they will not work long enough to qualify for employment insurance or that they will have too many hours in class in September, to be exempted from having to contribute to the EI program. Such contributions are an indirect tax.

If these young people have more money available when they are working, it indirectly alleviates their parents' burden. If, instead of getting $195 net per week, a student takes home $210 or $212, he will have more money in his pockets and be more financially independent.

This in turn means that the parents will not have to shell out as much money for a bus pass or a pair of sneakers when classes resume in September. This is the reasoning behind the bill. I do hope that the government, which boasts about a $95.5 billion budget surplus over the next five years, will listen to the public, particularly since the Prime Minister plans to call an election soon.

My 40 minutes are running out quickly. I could have talked about the lack of measures in the February 28, 2000, budget to truly fight poverty. I cannot understand the Minister of Finance, who claims to sympathize with the poor and to understand them. Maybe that is true. Even though he has led a very sheltered life, even though we know he has a bank account big enough to buy out most members here, to buy us all out, he tells us he understands the poor.

Let us not forget that the Minister of Finance is the former president and owner of Canada Steamship Lines, one of the largest shipping companies. He is therefore a prosperous shipowner, a fellow with money coming out his ears, whose company, Canada Steamship Lines, registers its boats abroad in tax havens and does not hire many Canadian sailors so that it can pay the lowest wages possible.

The Minister of Finance says he understands the poor and is concerned about their situation. There must be poor people living in LaSalle, in his riding of Lasalle—Émard. Is there anyone listening who lives in LaSalle or Ville-Émard who thinks that their member of parliament, the Minister of Finance, is someone who understands and is in touch with the poor? Is he someone who makes a practice of visiting soup kitchens and meeting with the poor, the disadvantaged and those who beg for money in Montreal? Does he give them a quarter when he takes a walk along rue Sainte-Catherine? Does this describe the Minister of Finance? No. He is insensitive.

The best proof is that his February 28, 2000 budget contained nothing for the poor. He tried to throw together a few little programs to once again boost this government's visibility. This government has an obsession with visibility. It wants to put the maple leaf everywhere. It even put it on the front of Via Rail trains. I do not know how many thousands of dollars it cost taxpayers to put a maple leaf on the front of Via Rail trains so that moose, caribou and deer watching the train go through the Gaspé park toward the town can be sure that it is really a federal government train. Just to be sure, a maple leaf was added to the front of Via Rail trains. This government has an obsession with visibility.

I believe that, if this government has any sensitivity to the needs of the people of Canada and of Quebec, it should think twice and ensure that there are measures to allow the ordinary people, the members of the middle class, the hard working people who punch the clock in factories and other businesses, those who are supervised by others, those who do not make enough to make ends meet, those who are worried about losing their jobs, those whose have children in Cegep who want to be like everyone else and have things like everyone else, a bike for instance, to be able to benefit from concrete taxation measures.

This is today's reality. Canadian and Quebec society is made up of several different categories of people. I think it is regrettable that this government pays more attention to the powerful. When we realize that the six biggest banks in Canada have recorded a profit of $8 billion in 1999, can this government be one that listens to those who have little? Can we believe that this government is one that listens to the middle class, when we see the six major banks making $8 billion in profits?

While the big banks like Canadian Imperial Bank of Commerce and Toronto Dominion are announcing record profits for 1999—they have never made so much money—2,500 jobs are being cut, branches are being closed, there is no more service. People are being told to use the automatic teller, which will cut down on the number of counter staff needed.

In the branches, the tellers are being forced to tell us “Use the automatic tellers. There is no charge for it”. That is what they are being made to do. I said so the other day to my teller at the National Bank. I said “Do you realize you are working to do yourself out of a job? You encourage me to pay my hydro bill at the banking machine in order to save $1.25. You are doing yourself out of a job”. She said “Mr. Guimond, we have been instructed to direct our clients to the banking machine”.

Can we say we are in a better, more developed, society when we just do business with banking machines? What about humanity's place in society? Where will humans be taken into account once and for all? When are we, as members, going to take those who sent us here into account? They are the public.

This fall we may be going back to the people. What do they expect of us? We must represent them worthily and listen to their needs and concerns.

I hope that the 301 members of the House of Commons will be motivated by one thing, not greed, not power or latching on to it, but the defence honestly and to the best of their ability of the people they represent.

Budget Implementation Act, 2000Government Orders

12:40 p.m.


Lorne Nystrom NDP Qu'Appelle, SK

Mr. Speaker, at the outset I want to say that I will be splitting my time with my colleague from Bras d'Or—Cape Breton.

I want to say a few words on the bill before us today, the budget implementation act, Bill C-32. In many ways I suppose this is the wind up of the budget debate in the House that started back in February. It actually started before that with the finance committee holding hearings around the country last fall, taking ideas to the Department of Finance and giving Canadians the opportunity to have a platform to express their ideas of what should go into the budget.

The great debate really was what to do with the so called fiscal dividend. The prediction made by the minister in London last fall was that we would have a surplus of around $10 billion this fiscal year and $95 billion to $100 billion over a five year period. Since then we have had revisions: this was even too conservative; the surplus would be even higher; and the flexibility even greater than that in terms of the economy that is going pretty well full blast across the country.

The debate is about what we do with the money. We hear from the Reform Party members of course, who basically want to spend all the money on tax cuts. The Canadian people are saying that a tax cut is about their third, fourth or fifth priority. What Canadians have said to us as we toured around the country and in poll after poll is that the main thing they want is to reinvest the money in the Canadian people, particularly in the health care and education systems for our future and the future of our kids. That is where the Canadian people want to go.

We are seeing great opposition to that, not just from the Alliance Party but from the Liberals across the way. The parliamentary secretary knows that the Liberals have cut back on spending on health care by more money than any Conservative government has done in the history of this country. They have cut back on health care by billions and billions of dollars, to the point where the federal government is now paying, in terms of cash, 13 cents or 14 cents on the dollar compared to 50 cents on the dollar some 20 or 30 years ago when medicare was introduced in the country.

After the pushing and prodding by the CCF and the NDP, the Pearson government introduced medicare back in the 1960s. The deal at that time was that the federal government paid 50% and the provinces paid 50%. Under the current Liberal regime, the Liberal government pays 13 cents or 14 cents on the dollar in terms of cash for health care. That is why there is a crisis in health care from one part of Canada to the other.

It is the reason we are now being threatened with bill 11 in Alberta and the opening of the floodgates to a private health care system that would operate alongside a public health care system. In other words, it would be two tier American style health care as a result of a Liberal government not putting enough money into health care in Canada.

That is the major priority of the Canadian people in poll after poll and in calls to our offices, e-mails and faxes. When we talk to people on the street, they want more money in health care. They want to keep a single payer health system, a public health system. We do not want American style health care in Canada. That is the way we will go if we do not persuade the government to change its ways and put more money into health care. The money is there. It is not as if the money was not there like four or five years ago. The cash is there and it is a matter of what to do with this priority.

We are hearing a lot about education from young people and from people in general. They want more federal funds going into post-secondary education and training to prepare people for the new economy. I suggest that knowledge is power and extremely important in terms of building a strong economy for the future. That is the way we should be going in terms of more federal tax dollars going into educating and training people, building a strong economy, and building skills so we can be competitive with the rest of the world in the future.

These should be the two big priorities of the government across the way, but what does the government do? It put more money into cutting taxes in the last budget than it did into health care because it is afraid of the Reform Party, the so-called alliance party which keeps pushing the tax cut issue.

I think we should mention a word or two about the alliance reform party. It is now advocating a 17% flat tax across the board. Regardless of how wealthy we are, we would pay 17% in taxes. On first blush that might sound pretty attractive to some people. Then we find out that for people making $30,000 a year their tax cut would be $488. For people making $100,000 a year, their tax cut would be $7,988. For very wealthy people making $250,000 a year, their tax cut would be $25,988. People making that kind of money should be paying more.

We have historically had a progressive tax system. Currently the system has three different tax rates: 17%, 26% and 29%. The middle rate will be reduced gradually from 26% to 23%. That is progressivity: 17%, 26% and 29%.

When the very same conservatives that now call themselves the alliance reform party were in power, they made the tax system less progressive. There used to be seven or eight different tax brackets back in the 1970s and early 1980s. Now they want to eliminate progressivity altogether. A millionaire will get a huge tax cut. One should vote for the Reform Party if one is a millionaire.

One of the leadership candidates who is an extremist in more ways than one, Stockwell Day, has been pushing the idea of the flat tax and helping the rich for the last year or so. He is not just an extremist in that regard. He is an extremist in all kinds of social conservative ideas as well in terms of intolerance.

That is not the way Canadian people want to go. Canadian people want a progressive tax system. They want to reduce taxes for low and middle income people. They still want enough tax money from those who can afford to pay taxes to invest in health care, education, farmers, the fisheries and the basic industries that provide a job and livelihood for each and every Canadian. That is the way we should go.

It is also interesting how the government failed to eliminate some the loopholes in the tax system. On the weekend I read with interest an article in the Ottawa Citizen of Saturday, June 3, headlined “Taxman ordered to justify $2B deal”. There was the ruling of a judge in a court case on Friday. The Federal Court of Appeal ruled that George Harris, a Winnipeg activist, could take Revenue Canada to court to contest the tax collector's decision to allow $2 billion in family assets, believed to be those of the Bronfman family, to be transferred out of the country and the capital gains to be transferred out of the country tax free. This was a ruling back in 1991 which did not come to light until 1996. The government promised legislation, but the government has not really acted upon the promise to bring in legislation to ensure this kind of thing does not happen.

According to the Ottawa Citizen and the information in the courts, the Bronfman family transferred assets worth $2 billion, I gather stocks in particular, from Canada to the United States in 1991. The capital gains on those stocks were about $700 million. Some officials in the Department of National Revenue, in a secret meeting where no minutes were kept according to the court documents, decided that the Bronfman family did not have to pay tax on that $700 million of capital gains.

Where are the priorities of the government? It will tax the ordinary citizen who is making $10,000 or $20,000 a year. If that person fails to pay taxes he will get a tax notice. He will be penalized and will have interest added to the tax owed. The government will go after him hook, line and sinker until that tax is paid. One could be a widowed granny and the government will go after her, but the Bronfman family with $700 million in capital gains paid not one penny in tax.

Is that fair? Is that just? Is it a true, just and fair democratic society that has a system which is so unfair and so unjust?

I conclude by saying that the Liberals have let this happen. The reform party alliance would make it go even faster. Just this morning its finance critic said he wanted a tax reduction for the wealthy, for the rich. Even my friend from Calgary is hanging his head in shame when he hears those words. The wealthy and the rich, the Pocklingtons and the Bronfmans of the world, would get a tax cut from the reform party alliance.

That is not where the Canadian people stand. The grassroots people say they want tax fairness, tax justice and equality. They want money in health care and money in education to build a strong economy.

Budget Implementation Act, 2000Government Orders

12:50 p.m.


Rob Anders Reform Calgary West, AB

Madam Speaker, 22 times since the Liberals were elected in 1993 they have raised personal taxes.

Did they raise taxes once for combat bras? Did they raise taxes twice for sex changes for soldiers? Did they raise taxes three times so that they could allow the Bronfmans an easy out? Did they raise taxes four times so that they could pay for the fountains in Shawinigan? Did the raise taxes five times so that they could fund dumb blonde joke books?

The list goes on. I would like my colleague to respond and let us know why the Liberals raised taxes so many times.

Budget Implementation Act, 2000Government Orders

12:50 p.m.


Lorne Nystrom NDP Qu'Appelle, SK

Madam Speaker, I am not a Liberal so I guess the member should ask that question of Liberals across the way.

I suppose one reason they raised taxes so often was that they wanted to spend $60 million on an unelected Senate. I know my friend is very interested in the Senate issue in terms of trying to abolish the unelected Senate. We may disagree on what it should be replaced with, but certainly spending $60 million on an unelected Senate is a waste of taxpayer money.

There are all kinds of other waste as well. The member enumerated some of them. I am aware of some of the ones he has talked about, but I do not know about sex changes for soldiers. Maybe he could elaborate on that, but I certainly know about the fountains in Shawinigan and all kinds of other money wasted across the country.

The one I referred to specifically was letting the Bronfman family get away with not paying a penny in taxes on the $700 million in capital gains. The member makes a very good point. If we do not tax certain things then other people will be taxed to fill the gap. If the Bronfmans are not taxed on $700 million worth of capital gains, who will pay the bill? It will be ordinary working people in British Columbia, Saskatchewan or anywhere else in the country. They then pay the bill.

That gets back to my original point that we need a fair tax system based on the ability to pay. It should be a progressive tax system, not a flat tax system because the wealthy people get away with a better deal when everybody pays the same tax rate. A progressive tax system based on the ability to pay is the way to go, with tax reductions for middle income people, with a lot higher exemption that would exempt more and more poor people, and with tax credits for children so that we have a children's agenda to invest in the future.

Budget Implementation Act, 2000Government Orders

12:55 p.m.


Peter Stoffer NDP Sackville—Eastern Shore, NS

Madam Speaker, one of the great platforms of the New Democratic Party is the reduction of the dreaded GST and in Atlantic Canada the HST. Could my hon. colleague from Regina elaborate on what a reduction of the GST would do for all Canadians?

Budget Implementation Act, 2000Government Orders

12:55 p.m.


Lorne Nystrom NDP Qu'Appelle, SK

Madam Speaker, a reduction in the GST would be the best way to reduce taxes in a very fair and balanced way for ordinary Canadians. One point in the GST means about $3 billion in terms of total government revenue.

In essence the GST is a flat tax. Everyone pays the same tax. When someone gets a haircut one pays 7% whether it is wealthy person, a poor person or a middle income person. Some people do not get haircuts so they are at tremendous advantage here in the House of Commons. It does not make much sense to reduce the GST for our friend from Vancouver, but for most people a reduction in the GST is the quickest way to create a fairer tax system.

It is also the quickest way to stimulate the economy by putting more money back into the hands of consumers, particularly ordinary people who will spend it on the necessities of life and in turn create jobs.

Budget Implementation Act, 2000Government Orders

12:55 p.m.


Michelle Dockrill NDP Bras D'Or, NS

Madam Speaker, I rise today to speak to Bill C-32, an act to implement certain provisions of budget 2000. This morning I listened with great interest when the government member spoke about the wonders of budget 2000 and the wonderful effects its implementation will have on Canadians. I thought about how a country measures success and realized that a country measures success by the success of its citizens.

The Minister of Health and other government members talk about health care and the fact they have reinvested in health care because Canadians have said they want to maintain a public health care system. I wonder why the government does not want to talk about the realities we see every day, certainly in my part of the country, with respect to what government cuts have done to health care.

Recently I turned on the television to watch a program about two individuals in two different provinces in Canada. One was a young woman who had been diagnosed with a cancerous brain tumour and had to undergo surgery. Unfortunately she ended up disabled. She was only in her early thirties. It was found out later that the tumour was not cancerous, that it was benign. It was the matter of a misdiagnosis.

The other case involved an older gentleman with some abdominal pain. He went to the hospital and was diagnosed with cancer of the bowel. Following surgery, approximately 10 or 12 days later he died because of complications from the surgery, only for his wife to find out that he too had not had cancer.

The show went on to talk to approximately seven Canadian pathologists. The commentator was asking them how this could happen in Canada. The pathologists said very clearly that it was because there was not enough money being invested into the system. There are not enough pathologists in Canada. The number they quoted was 59 pathologists for every million.

I come from the health care sector. I have found myself asking on a number of occasions what kind of a country we live in. I heard the remarks of my hon. colleague in the Bloc. He asked whether we were living in a better society.

When I listen to government members, I guess from their perspective there are some people who are living in a better society. The hon. member for Regina—Qu'Appelle has just mentioned a couple of them, those individuals in Canada who are not scraping by on a daily basis. What about the areas of the country where people are not doing all that well, as in the unfortunate case of Cape Breton? What is the government's answer? It does not want to talk about the reality that we have 1.5 million more children who will go to bed hungry than we did 10 years ago. The government does not want to talk about the fact that we are hearing from doctors and health care professionals that there is a major problem with the health care system and we need the government to reinvest money.

Nobody is saying that the system does not need to be changed. From the perspective of the health care system, we all know there is a need for innovation, but we also know, and we are being told on a regular basis, that the government has to put back what it took out of health care.

In my part of the country we have 25% poverty. Child poverty is much higher. Government members would tell us that their commitments to EI, health care and education have made things better for Canadians. Better for all Canadians, or better for some Canadians? We see on a regular basis that the answer to that question is that these policies have not been for the betterment of all Canadians.

Five or six years ago Canadians were willing to do their fair share to deal with the deficit. That was our responsibility as Canadians. People did that, especially the workers. As we all know, the government obtained its surplus on the backs of Canadians.

We are all familiar with a program that used to be called unemployment insurance. It was there in case we lost our job. It was a safety net to help us until we got another job. The government changed the name to employment insurance and it has become nothing more than a cash cow to generate revenues for the federal government. Might I say that those revenues are not assisting the unemployed.

Only 30% of unemployed women in Canada qualify for employment insurance. We have heard government members and the Prime Minister recently say that there are problems with employment insurance which will have to be fixed. Maybe that will secure some seats for them in Atlantic Canada.

What has the government done? In my part of the country it has is changed the boundaries. We used to have five regions in Nova Scotia. The proposal of the government is to take it down to three regions. The government says it will do this to ensure that the areas of the country which have the highest rates of unemployment will receive what the people need. The reality is, in my part of the country the changing of the boundaries will mean that the people of Cape Breton will now only qualify for 30 weeks of employment insurance, rather than 32 weeks.

Something I have always found phenomenal when listening to government members is that they are wonderful at confusing Canadians with numbers. We always hear them talk about 18% unemployment in my part of the country. I have had the occasion to ask Statistics Canada how the unemployment rate is measured. An official told me that if people were unemployed for two years they would be included in the data of Statistics Canada. I do not know about central Canada, but in Cape Breton if someone does not have a job for two, three, four or five years, they are still unemployed. They still do not have a job. However, unless they have been unemployed for two years they are not included in the mechanism used by the government to measure the number of unemployed. With the changing of the zones in my part of the country Cape Breton will fall under an unemployment rate of 15%.

When I go home and talk to my constituents about the policies and the changes that the government is talking about, people laugh. They know it is not 18%. They know the rate is closer to 40% or 45%, with some areas of Cape Breton at 50%. With the stroke of a pen the government will now officially say that the unemployment rate on Cape Breton Island is 15%.

I go back to my original comment. How do we as a country measure success? Do we not measure it by the success of our citizens? It certainly appears that the government does not measure its success by its citizens. If that were the case, then the government would be addressing the issues and the concerns directly affecting Canadians from coast to coast to coast.

When government members talk about how good the budget is, I hope some of them have a conscience and recognize in their own heart that this budget will not assist the number of Canadians who have been drastically affected by the policies of the government.

Budget Implementation Act, 2000Government Orders

1:05 p.m.


Rob Anders Reform Calgary West, AB

Madam Speaker, in 1996 the Liberals increased the burden with regard to overseas employment tax credits, such that people had to leave Canada to find jobs because jobs were not available here, partly because of high taxes. They were faced with an increased tax burden.

When people have to leave Canada because of high taxes, when the Liberals increase the tax burden, something which is truly egregious, are they doing so to fund a subsidy to Wal-Mart? Are the Liberals increasing taxes to fund a subsidy to Safeway? Do the Liberals raise taxes to give a subsidy to Bombardier? Do they raise taxes so they can give a subsidy to Shoppers Drug Mart? Do they raise taxes on Canadians so they can give more out in corporate welfare?

Why are there so many tax increases when there is so much waste?

Budget Implementation Act, 2000Government Orders

1:05 p.m.


Michelle Dockrill NDP Bras D'Or, NS

Madam Speaker, as my colleague from Regina—Qu'Appelle said, I would never attempt to speak on behalf of government members or even attempt to explain why they have done what we have seen them do over the course of the last six years.

It is important to note for my colleague from out west that we on Cape Breton Island have never complained about paying our fair share. In all of the years I have lived on Cape Breton Island, I do not remember ever hearing one person complain about paying their fair share. What I have heard people talk about is the unfairness of the tax system.

I would like to leave my hon. colleague with the message that my constituents tell me all the time. They tell me that they would like to have a good job so that they could pay their fair share.

Budget Implementation Act, 2000Government Orders

1:10 p.m.


Peter Stoffer NDP Sackville—Eastern Shore, NS

Madam Speaker, I have a question for my good friend from Cape Breton. The question concerns what is happening to the economy in terms of the thousands of men who are losing their jobs and the effect that will have on the women and children, their families.

The women and children are usually the forgotten ones when it comes to budgets and tax cuts. What happens to the women and children when their husbands, in the traditional roles of Cape Breton miners and steelworkers, lose their jobs due to economic concerns? The Liberal government basically forgets that Cape Breton Island even exists.

From her own personal experience, if the hon. member could elaborate a bit more on that, I am sure the House would be greatly enlightened by her wit and wisdom.

Budget Implementation Act, 2000Government Orders

1:10 p.m.


Michelle Dockrill NDP Bras D'Or, NS

Madam Speaker, I will try to provide my colleague with some wit and wisdom.

As I have stated over and over again in the House, it is unfortunate every week when I go back to my part of the country to see the overwhelming effect government policies have had.

As my colleague from Sackville—Musquodoboit Valley—Eastern Shore has said, a number of the people who are being adversely affected are children and women.

Just recently I had the occasion to talk to a young couple. He worked on a fishing boat. We all know what has happened to the fishery on the east coast. He lost his job. His wife was a process worker in a plant. They were sitting in my office with the most beautiful three and a half month old baby girl. They were in their late twenties and thought they had the world by the tail. Neither one of them had a job. We talked for a while. The woman finally broke down and told me that she had just put the last diaper she had on her daughter. That is the reality in my part of the country, day after day.

Budget Implementation Act, 2000Government Orders

1:10 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Madam Speaker, it is with pleasure that I rise today to speak to Bill C-32, the budget implementation act for the 2000 budget.

It is important to take stock of where we are as a country and how we have achieved our current financial position. This is the third budget in which Canada has had a surplus. While the Liberals opposite will crow and take credit for this fiscal achievement, the very policies that were required to lead Canada to this point in economic history were vociferously opposed by the Liberals prior to their forming the government. I will refer to a few of them specifically: free trade, the GST, the deregulation of financial services, transportation and energy. All of those things the Liberals campaigned and fought against. Prior to 1993 they were completely and diametrically opposed to them.

Since then, unburdened by the yoke of principle, the Liberals have embraced these policies and in some cases have claimed some level of originality in introducing them or spearheading them.

It is important that we raise this issue at this time because on Thursday of last week McGill economist Tom Velk and historian A. R. Riggs released a paper evaluating Canadian governments back to World War II on economic criteria. It should come as no surprise to members of my parliamentary caucus in the Progressive Conservative Party that the best economic record of any Canadian prime minister since World War II was held by none other than Brian Mulroney. I think it is important that we recognize the vision and courage of a prime minister who actually took the big steps, who did not ignore the global trends and made the structural changes to the Canadian economy that were necessary to lead Canada into the 21st century.

The headline in the National Post on Thursday was “Mulroney ranked first, Chrétien dead last as leaders of the economy”. The Ottawa Citizen said “Recession beating Mulroney as economic champ, study says”. The study referred to a number of specific criteria upon which the economists based their judgment.

In applauding Mulroney, the professors said that he presided over a general fall in interest rates that lasted more or less the entire term of his office. Inflation took a beating during the Mulroney years. Mulroney, unlike the present Prime Minister, inherited a troubled economy with tremendously high interest rates and high inflation. They said that low income Canadians fared better under Prime Minister Mulroney than they did during the Liberal administrations of the present Prime Minister or under Mr. Trudeau. That may surprise some of the members opposite, but the numbers speak for themselves.

The study credited the vision and the courage of the Mulroney government in embracing the policies of free trade and the GST. These were not easy policies to embrace or to spearhead at a tumultuous time in Canadian political history. In fact in what was referred to as the free trade election in 1988, over half of Canadians voted against free trade. The question of course should not necessarily be what policies are the most popular, but what policies will lead to the greatest level of economic growth and prosperity for Canadians.

That was a government that was not focused on next week's polls as much as the present government is. It was focused on the challenges and opportunities facing Canadians well into the next century. The record of that government speaks for itself not just in terms of what it achieved during its years in office, but what its policies have achieved since then and are destined to achieve well into this century.

In studying the record of the current government, it said that under the tenure of the current Prime Minister and Minister of Finance, the dollar is lower than it has every been in Canadian history. Productivity is comparatively low and its growth has lagged behind that of the U.S. Per capita GDP is lagging comparatively to our trading partners. In the last 10 years Canada has had a GDP per capita growth of about 5% while countries like Ireland have had a 92% growth in GDP per capita. The U.S. and Germany have had a 15% growth in GDP per capita.

As our neighbours to the south and our trading partners elsewhere are improving their productivity, production and success, we are lagging behind. As citizens in other countries are getting richer, the Canadian citizenry is getting poor. Nowhere is that more exemplified than the dramatic and significant loss in the value of our dollar since 1993. Under the Mulroney government, the dollar lost one cent in nine years of power. The dollar has lost around nine cents since the current government took power.

Every time the dollar drops, Canadians effectively have a pay cut. We depend on our trading relations with other countries for many of the goods and services that Canadians need and enjoy. When the dollar drops, the purchasing power of Canadians drops and their standard of living drops. There has been a significant drop in Canada's standard of living over the past several years. In the 1990s, take home pay in Canada decreased by about 8%. This was during a period when Americans enjoyed a 10% increase. An 18% gap has erupted between Canada and the U.S. in terms of disposal income or take home pay at the end of the day. That is disturbing.

One of the impacts of that has been an unprecedented level of brain drain. The number of Canadians who are going to the U.S. to seek greater levels of opportunity and prosperity has grown from 16,000 per year eight years ago to about 100,000 per year last year.

It is not just the number of people who are going. The most disturbing area of this trend is who is going. In evaluating the type of people who are going we see that some of our young, bright talents, some of the best and brightest we have in Canada, are choosing to pursue their futures and opportunities in the U.S. Ultimately the loss will be to Canada not just in terms of future tax revenue, but in terms of the ability for these individuals to build stronger companies and ultimately a stronger country. It will ultimately benefit the U.S. and not Canada.

We should be doing more to keep these individuals and talents as opposed to driving them away. Before we decide what policies we should be implementing to keep them here, we should be evaluating what specific current policies are having such a deleterious impact on our ability to keep those people.

Certainly the Canadian tax system represents one of the largest impediments to growth and prosperity. It is not the only clue to the brain drain crisis but it is a very important area of public policy that we need to be concerned about. I can give a couple of examples of the degree to which our tax system affects the brain drain.

Let us say a technology worker, a programmer in Vancouver, makes about $70,000 per year. That individual is in the top marginal tax bracket in Canada. We hit our top marginal tax bracket at $70,000, even after full implementation of the budget's initiatives. In the U.S. one does not hit the top marginal tax rate until about $400,000 Canadian. As a result, the software programmer in Vancouver will be paying federal and provincial taxes combined of about 52% of his or her income. At the same level of income, about $70,000 Canadian, about an hour and a half away in Seattle, that same individual would be paying about 26% of his or her income, effectively half the level of taxation that he or she would be paying in Vancouver.

Frankly for someone with a family and who is making student loan payments, car payments, mortgage payments and hockey costs for children, or whatever it is, that is not a lot of money. The notion that someone making $70,000 in Canada today is rich is probably wrong-headed. We are taxing those people as if they were fabulously wealthy. That is one of the reasons we are driving people, particularly within that critical $70,000 to $100,000 range, out of the country. Those are the people we need.

Another area where we need to address our tax issue significantly is at the lower end of the scale. Currently, our basic personal amount even after the budget is almost $8,000. That is far too low. The U.S. equivalent threshold in Canadian dollars at which an American starts to pay taxes is around $11,000. We call ourselves a kinder, gentler nation yet we start taxing people at about $8,000.

In the short term this should be increased to about $12,000 and over a period of time should be increased beyond that. In the short term we should be looking at an increase to $12,000. That would take millions of low income Canadians off the tax roles. It would reduce the tax burden of all Canadians in a fair and equitable manner.

In terms of impact on the new economy, there is probably no more negative tax in Canada than our capital gains tax regime. The recent budget and this budget implementation act would see a reduction in the capital gains inclusion rate from 75% down to 66%. That would still leave us with a 13% disadvantage over the U.S. in the critical area of capital gains. No form of taxation affects the new economy more than capital gains taxes.

The currency in terms of compensatory assets in the new economy is clearly stock options. Increasingly, whether it is in biotechnology or e-commerce, stock options are used to incent and attract talent and to keep talent. In Canada we have a 13% disadvantage even after this budget in the very critical area of capital gains taxation.

The reasons the government will not reduce capital gains tax further have very little to do with realities. It is very dangerous when we build public policy, as is often done in this place, around perceptions and not reality. Let me deal with a couple of those perceptions.

First, there is the perception that capital gains taxes are paid largely by the rich and it would be inequitable to reduce capital gains taxes and thus to reduce taxes on the rich. Over 50% of capital gains taxes in Canada are paid by people who make less than $50,000 per year. Individuals throughout the small growth companies, from the receptionists to the CEOs, are all incented and paid with stock options.

Also, with the level of market participation that exists today, more so than ever in the history of Canada, Canadians are investing in the equities markets through secure long term vehicles such as mutual funds. They are able to achieve diversification with a relatively small amount of investment and as such are participating in record numbers at this point.

The other perception is that somehow we cannot afford to eliminate the capital gains tax, which is what I would like to see done. A Progressive Conservative government would eliminate personal capital gains tax. Some people say we cannot afford to do that.

The capital gains tax only brings in around $1 billion per year. Estimates I have heard in terms of personal capital gains tax in recent years are revenues ranging from $700 million to about $900 million. If we assume that there will be some shift in the way employees are compensated as a result of the capital gains tax elimination, let us say if it goes from $1 billion to $1.5 billion, that is a very conservative estimate of the loss of revenue to the Canadian government. Ultimately that revenue would be made up significantly by the increased level of activity and by the unlocking of capital.

Effectively one of the most pernicious impacts of capital gains taxation is the degree to which people make decisions not based on economic or business realities and criteria, but instead on tax criteria. People hold on to investments far longer than they would have normally and do not make the types of investments they probably should be making in some of the new economy vehicles and opportunities. That locking up of capital denies many of Canada's growth industries, particularly in the knowledge based sector, access to the needed capital.

We live north of the greatest capital markets in the world, the U.S. We cannot afford to penalize and to handcuff our technology sector. In any of the knowledge based areas of our technology sector, whether it is biotechnology or information technology, we cannot afford to deny these players, the individuals who are building their companies and who are building a stronger and more competitive Canada, the opportunity to access capital.

Effectively by locking up this capital in Canada's capital gains prison we are actually preventing these companies from growing here in Canada. Ultimately in many cases these companies are gravitating south of the border in trying to raise capital.

The venture capitalists, whether it is Perkins or the Sequoia capitalists of the world, are investing in these companies and are then encouraging these companies to move their research and development activities and manufacturing south of the border.

While we would like to think that these investments can be made—and do not get me wrong, I encourage foreign investment in Canada's growth industries, we need the investment—I do think there is a significant risk which is borne out by the fact that when this foreign investment is made, it quite frequently leads to a movement or a migration of the companies and the innovators to the U.S. It stands to reason that over a period of time that would have a significant cost to Canada.

The fact is that by unlocking this immense pool of capital to reduce or, as we are proposing, eliminate personal capital gains tax in Canada, we would actually be able to fund and raise capital for these innovators here in Canada.

There are innovators in the financial service sector now who are already doing that. The one which comes to mind, Yorkton Securities Inc., has demonstrated that it is Canada's top investment bank in the knowledge based industries. We are putting in front of the Yorktons and in front of the McLean Watson Capitals, which are raising money for Canadian knowledge based industries, the barriers to success which ultimately threaten their ability to raise the capital they need to invest in the innovators who we as a country need to grow and develop greater successes here in Canada.

If we are not competitive in that new economy, a lot of these arguments are effectively moot. Our ability to afford the social investments that Canadians value and treasure, whether it is our health care, our social safety nets or the transfers to the provinces, become moot if we cannot afford them. It is critical to build a tax system around growth, not greed, so that we can afford the types of social investments that Canadians want well into the next century.

For some Canadians there is a belief that these investments, whether it is in our health care or equalization systems, define us as a country. It is very important to get our fundamentals correct, that we reduce our debt in real terms, that we reduce over a period of time not just our tax burden but that we use a system of tax reforms to do what is required to make Canada more competitive in the new economy.

I believe we can achieve success with visionary policies that will lead Canada proudly into the 21st century, but we have to move now. This caretakership government, which is taking baby steps when other countries are taking gigantic leaps, is clearly not appropriate or helpful.

Budget Implementation Act, 2000Government Orders

1:30 p.m.


Rob Anders Reform Calgary West, AB

Madam Speaker, there have been a number of tax increases that have been brought in over the last number of years.

The Liberals brought in 62 different tax increases since they took government in 1993. One of those was an increased tax on energy conservation and on pollution abatement equipment. That tax which the Liberals brought in in 1994 resulted in $45 million more.

The ironic thing is that we often hear the Liberals talking about how they care about the environment but they actually brought in an increased tax, $45 million more, for investigations into energy conservation and pollution abatement equipment. That is awfully strange.

The question I have for my colleague is whether or not that money was raised so that things like video tracing the history of Chilean poets in Montreal for $28,000 is an example of where that money was going. Is the history of Chilean poets in Montreal the reason why the Liberal government went ahead and brought in a $45 million tax on conservation?

Budget Implementation Act, 2000Government Orders

1:35 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Madam Speaker, it is clear that we need a significant level of tax reform and tax reduction.

The member referred to a specific tax under the Liberal government. I in fact was not aware of that tax and I appreciate his bringing that to my attention. Relative to his citing one specific incident or evidence of spending, the history of Chilean poets in Montreal, I am not aware of that specific investment. However, since Pericles and ancient Athens, civilized societies have invested in culture. Whether he believes that the history of Chilean poets in Montreal is relevant or irrelevant, it becomes a very dicey question to determine whether one cultural investment is worthy or one is not. To try to discern whether that is worthy borders on censorship.

I can point to many ways, particularly relative to the ministry of HRDC, where the government has continued to play the old game of picking winners and losers and ultimately doing what politicians do best in terms picking more losers than winners and interfering in the private sector in the course of that. I would argue that while there may be some sensationalist benefit to identifying specific cultural investments, the substantive waste in HRDC is probably a more reasonable target for the hon. member to cite.

I also urge him to consider that there are some elements of culture that simply will not be privately funded and from which there is a collective benefit to investing in Canada. While I cannot comment on that specific example because I have not studied it, as a Canadian I do value the fact that we have an extremely diverse culture that contributes significantly to the cultural mosaic of our country. That the government does play a role in the infrastructure of that is a valued tradition that Canadians in my riding and elsewhere value.

Budget Implementation Act, 2000Government Orders

1:35 p.m.


Peter Stoffer NDP Sackville—Eastern Shore, NS

Mr. Speaker, I did appreciate the attitude and approach of my hon. colleague from Kings—Hants and his party. We on this side of the House support that initiative as well.

It was his government, the Conservatives, that brought us the dreaded GST. Now the Liberals in Atlantic Canada have tacked on the HSC which has created quite the underground economy. Last year, according to the auditor general, federally and provincially that equated to almost $12 billion of untaxed underground economy going on in this country.

What does the hon. member, who is the finance critic for his party, and his party plan to do to reduce the underground economy and start reducing or eliminating the dreaded GST?