Debates of June 7th, 2000

Income Tax Act Amendments, 1999

[An hon. member]

Not to mention rubbish.

[Jim Hart, Reform, Okanagan—Coquihalla, BC]

It is rubbish. This is a real blow to Canadians like people in my riding who work hard. At the end of the year they try to have some disposal income left over so that maybe they can send their children through university, take a bit of a holiday or make renovations to their homes. There are a number of things they could do, but their disposal incomes have shrunk so much that they cannot do many of those things.

The Liberal government policy of high taxation is a blow to Canada's economy as a whole. In Toronto last March a summit of 200 chief executive officers, brought together by the council on national Issues, tried to come up with remedies for Canada's poor economic performance compared to a number of other new economic jurisdictions. While Canada fell behind during the 1990s, Ireland, a nation that traditionally had a lower standard of living than that of the United Kingdom and much lower than that of the European community, has become an economic hot spot.

We might ask ourselves another question. Why has Ireland, but not Canada, been able to draw in so much high tech wealth and talent, when high tech companies in Canada continuously loose many of their brightest and best employees to the United States market? The answer is taxes. During this past decade Ireland has acted decisively to lower taxes, creating a pro-business atmosphere. Ireland now has one of the lowest tax rates and, as a result, one of the most buoyant economies. The standard of living of its citizens has also increased dramatically vis-à-vis its neighbours.

At the same time Canada's standard of living under the regime of Liberal governments has decreased dramatically vis-à-vis that of the United States. Ireland has achieved financial prosperity for its people partly through a conscious policy decision of a government not afraid to cut taxes. Our government does not believe that but I will continue anyway. I know its members are making notes on this point.

Canadians are not as fortunate as people in the United States or in Ireland. The modest tax cuts in the current Liberal budget will do nothing to stem the slide of our standard of living or the flow of skilled Canadians to lower tax jurisdictions in the United States. Like Ireland, Canada must act decisively through conscious policy decisions. This is what Canadians expect of their Liberal government.

The Liberals have gone out of their way to make it difficult for small businesses to conduct business in Canada. Any contractor who subcontracts work to others is now forced by the government to police them by filing a summary of contract payment forms with the Canada Customs and Revenue Agency. This is an additional burden on small businesses with serious fines of up to $2,500 for those who fail to file their summary of payment forms on time.

The current Liberal budget also fails to make serious inroads into paying down debt. The Liberals have totally forgotten about the debt. I think their strategy was that they would try to confuse the public with relation to balancing the books, the deficit and the debt, which are two different things. The Liberals do not like to talk about the debt any more, which is at approximately $580 billion. This has remained steady for the last two years with only a minute reduction of $6.4 billion scheduled over the next five years.

At the rate we are going it could take 100 years. You will be a very old man, Mr. Speaker, before our national debt is paid off. We should contrast that to the United States which intends to pay off its national debt in 12 years.

Without a feasible game plan to pay off our national debt in a timely manner, the standard of living of Canadians will continue to decline. At the same time the lower taxed, debt free U.S. market will continue to attract Canada's best and Canada's brightest. It is called the brain drain.

The Prime Minister does not believe it exists. In fact it does. It is happening in my riding. It is happening in your riding, Mr. Speaker. It is happening right across the country. Our brightest university students are finding high tech, medical and research jobs in the United States and are leaving our country. That hurts our productivity and it hurts the country's future.

To make matters worse, Canadians are also deeply concerned about the way the Liberal government spends their hard earned tax dollars. Instead of offering Canadians tax relief, the Prime Minister and the Minister of Human Resources Development have spent the last two months demonstrating to Canadians why they should not trust the Liberal government with their money. It is reflected in the polls. We see the Liberals plunging in the polls, and that will continue.

The scandal surrounding grants and contributions for a variety of ill defined and unproven job creation schemes clearly shows that the Liberal government has no sense of financial accountability. The scandal does not stop at the Department of Human Resources Development.

The auditor general has pointed out that numerous other departments mismanage billions of dollars in grants and contributions. Our tax dollars are being spent on make work projects designed in effect to re-elect or try to get Liberals re-elected, not to serve the best interest of all Canadians coast to coast to coast.

That fact that real permanent jobs and economic prosperity can only be created through a combination of real tax relief, not disguised tax relief like the Liberals try to give us, and business friendly policies is of no consideration.

Ireland is an example that is ignored by the government. The Liberals are so out of touch with the average Canadian taxpayer that they were actually considering giving subsidies to NHL hockey teams last January.

While the Liberals mismanage billions of dollars in one portfolio, they grossly underfund other portfolios such as health. Health care, for example, is the number one concern shared by my constituents and I am sure every one across the country.

By the year 2004, the Liberal government will have starved the provinces of $35 billion for health care at a time when the population is rapidly aging. New technologies are advancing which come with a very hefty price tag.

Since 1993 the Liberal government's contribution to health has been slashed by 28%. The Liberals claim they will put $2.5 billion back into health care every year for the next four years. That sounds pretty good, but the reality is there is still a serious funding shortfall of $25 billion. The provinces are up in arms, and rightly so. While the Liberals would rather funnel this money into the ridings of the Prime Minister or senior cabinet ministers, hospitals across the country are suffering.

In my own riding the hospitals are suffering. The people of Princeton, B.C., were recently told that they would lose eight acute care beds at the Princeton General Hospital. That may not sound like a lot, but it is a 45% reduction. At the same time the demand for those acute care beds is increasing. There is a nursing shortage which means that the hospital is unable to carry out its caregiving activities. Acute care patients will now have to travel at least an hour and a half to receive the medical attention they need. It is clearly unacceptable.

Why is it that the Prime Minister can funnel money that should be spent on priorities like health care into pet projects like a water fountain in the Prime Minister's riding? How can the Liberal Party justify these actions? Members opposite should be absolutely ashamed of what is happening.

Another example from my riding is the case of the Okanagan Similkameen Neurological Society, the child development centre that helps children with neurological disorders. It is a very prestigious institution and does excellent work but it has a budget shortfall of about $200,000 each and every year.

For the last two years, I have had the privilege and opportunity of hosting a golf tournament where we get businesses, community leaders and people from the area to sponsor and make donations to this one day fundraising effort. It has become quite a great event. In fact, this year the charity golf classic raised about $17,000 for the child development centre.

The $200,000 shortfall that institute experiences each and every year should not have to be made up by golf tournaments and fundraising activities like that. These people are doing necessary work that benefits the community. It is part of the health care system but it has a shortfall.

It is about time the federal government ponied up to the table and started to put back into health what it took away. The people of Okanagan—Coquihalla demand it and people across the country demand it. What the government is doing with Bill C-25 is not good enough, despite its best efforts.

There are some other areas of concern in my riding when we talk about how taxes are collected and the implementation of the budget.

For years we have had problems at the Penticton airport. It is all part of the nationalization of the airports policy where the federal government was going to transfer the operations of the airport to the city of Penticton. Unfortunately, there is a land claim involved in this and an agreement cannot be reached. It is at a stalemate. It has been going on for years, and it is frustrating.

One of the things that happened was that a Liberal senator came out to Penticton one bright morning and arrived without any announcement. He did not even tell the mayor of Penticton that he was coming. In his hand he held a cheque for 650,000 taxpayer dollars. A couple of flags were flying and a podium had been set up on the runway at the Penticton airport so he could tell the people of Penticton that the federal government was going to put $650,000 into repaving the Penticton airport. It needs to be done but why was this done in secrecy?

The other thing that happened was that the Penticton Indian Band came out and stopped the work from proceeding. The federal government knew there was a problem yet it came in under the cover of darkness, trying to put one over on the people of Penticton and the Penticton Indian Band. It is absolutely outrageous what the government is doing with taxpayer money.

I want to make the point very clear that this budget implementation bill, Bill C-25, is 100% pure balderdash.

When we go to the gas pumps and fill up our gas tanks, we pay taxes. Canadians have heard for years that the tax money was to improve highways. Does it ever get to improve highways? I do not think it does. As a matter of fact, I know it does not because we have a stretch of highway between Peachland and Summerland in my riding that is a very dangerous highway. The coroner has said that it is one of the most dangerous highways in Canada. Almost every week there is an accident on that highway, some minor but some have also fatal. The people of the Okanagan area are saying that they want that highway to become part of the national highway system. There has been no action by the government whatsoever, even though Highway 97 is a key transportation link from Alaska all the way down through the United States. Highway 97 is very important to the economy not only of the people of the Okanagan but the economy of the entire province of British Columbia because it is used to transport goods and services.

What I am saying is that the people of Okanagan—Coquihalla are fed up with the Liberal government. They feel isolated because they do not get the things they need. When the government finally comes through with something it is something that is not a priority item for the people of the riding. The government just continues on its merry way doing these crazy things.

The people of B.C. will soon feel the effects of the Nisga'a agreement. The B.C. ministry of agriculture of the NDP government has admitted in a memo that it was a template for future land claims agreements. When we passed the Nisga'a agreement in the House what we in effect did was allow the creation of some 1,600 other sovereign nations in Canada. We should think about the devastating effect that will have on our country and British Columbia in particular because most of those will be in the province of British Columbia.

When we start connecting forestry, natural resources, the economy of British Columbia and what the Nisga'a agreement has done, we will feel more and more severe effects from that agreement.

Canadians and people in my constituency are also concerned about our criminal justice system. I had a terrible thing happen in Summerland, my hometown, where a person who was on day parole murdered two women in front of one of the woman's pre-school children, a two year old and a four year old. The fellow was on day parole from Calgary.

The rules say that Correctional Service Canada is supposed to put a Canada-wide warrant out within 10 minutes. Twenty-four hours had elapsed in which time this person allegedly travelled to Summerland and murdered, execution style, the two women. It was horrific. That same person is now playing with the court system, using every legal option available to him, firing his lawyers and using all kinds of delaying tactics.

What has the government done to improve the criminal justice system? Where is the money that should be allocated to do that. We will not find it in Bill C-25.

Another problem the federal government created across the country, with the impact being felt particularly in British Columbia, was when it negotiated the softwood lumber agreement. In Boston Bar just outside Hope, British Columbia, there is a large sawmill and lumberyard employer by the name of J.S. Jones Holdings Inc.

When the softwood lumber agreement was being negotiated, the government looked at a mill's production and the amount of wood it was transporting to the United States over a two year period. J.S. Jones was in a situation where it was re-tooling its shops. Half of the mill was shut down while it was putting in new equipment. It was upgrading its equipment because it wanted to produce a good quality product in the best possible way.

When the quotas were finally handed out, J.S. Jones did not have enough quota to continue operations. Workers are on lay-off notice right now. That agreement will shut down the largest employer in the Hope and Boston Bar area and put 200 people out of work. What does Bill C-25 hold for those folks? Absolutely nothing.

The softwood lumber agreement negotiated by the Liberal government has to be scrapped. If we are a free trade country, and we are supposed to be, then let us put the free trade agreement in place.

We heard something from the parliamentary secretary about hep C victims and Bill C-25. The only people who have to worry about income tax implications when it comes to hep C victims are the lawyers because they are the only ones who have been paid.

I meet with the victims of hep C in my riding of Okanagan—Coquihalla. Leslie Gibbenhuck and her family have been in my office in Ottawa and I have been helping them all the way along. There is no relief for these folks in sight but the Liberal government has made sure that all the lawyers have been paid.

When it comes to Bill C-25 and hep C victims, this bill falls short again. Why can we not ensure that those victims are paid? It is very sad.

Another issue that is important to the Okanagan region is the wine industry. We have some of the best produced wines not just in the country but in the world. We have award winning wineries. I have more wineries in my riding of Okanagan—Coquihalla than any other constituency in Canada, yet this federal government has failed to recognize the vintners quality assurance, the VQA label we see at the top of all Canadian produced wines. The best wines have the VQA symbol.

Agriculture Canada and this government will not endorse the VQA as the standardization of wines for Canada. That seems like a simple thing. Do members know what that means for our industry? It means that the Europeans will not accept our wine. Last year they imported about $1 million worth of Canadian wine. Do members have any idea how much wine we imported from the European community? Canada imported $385 million worth of wine from Europe. As a matter of fact, the Europeans have totally banned our ice wines. I think that is terrible.

The wine industry is growing and jobs are being created in the Okanagan Valley, but this federal Liberal government will not do one small thing for these people and all the wine industry in Canada, which is to accept the VQA. The government has known about this issue for years and it has done nothing to address it.

Despite Liberal promises in Bill C-25, the Canadian Alliance is the only party in the House today with an effective financial plan to increase the wealth of Canadian families while allowing businesses to thrive in a competitive environment. We call it solution 17.

Solution 17 is a tax system with a single income tax rate of 17% for all Canadian taxpayers combined with a number of progressive deductions. Every single Canadian would benefit financially from our plan.

Highlights of solution 17 include an increase to the basic personal and spousal credits to $10,000 from $7,131 and $6,055 respectively. RRSP limits would be significantly increased to $16,500 from $13,500. Businesses would thrive in a solution 17 economy. The corporate tax rate would be reduced from 28% to 21% while the small business tax rate would be reduced to 10% from 12%.

Solution 17 would encourage success and risk taking by reducing the capital gains tax to 20% from 40%. It would remove 1.9 million low income Canadians from the tax roles altogether. That is so good I want to say it again. Solution 17 would take 1.9 million low income Canadians off the tax roles completely. That would benefit families.

Solution 17 eliminates the current discrimination against single income families vis-à-vis dual income families. Currently, a single income family of four earning $45,000 per year pays 136.5% more in federal tax than a dual income family of four with the same income level. Is that what the Liberals call fairness in our tax system? I do not think so. This is an absolute fact. This is not the smoke and mirrors of the Liberal government. When we get into it, it is terrible what the Liberal government has done to families.

Under solution 17, the Canadian Alliance plan, single parents would receive a significant increase in the amount that can be earned before earnings become taxable. The threshold for a single parent of one will increase to $23,000 from the current $13,186. That is a $9,814 increase which is substantial. The Canadian Alliance will be presenting solution 17 in detail as we get closer and closer to the election.

The whole notion in this debate that the Liberal government is somehow offering tax relief to Canadians is a falsehood. It is just not happening, as can be seen from my remarks. The Liberal Party has always lived by a tax and spend tradition and it is continuing today. It is about time we put an end to it.

The Liberals tax everything. If it moves, they tax it. If it moves slowly, they tax it. If it moves fast, they tax it. If it stops, they subsidize it and try to get it moving again. They tax, tax, tax. It is what they do. They cannot help it.

The people of Okanagan—Coquihalla of course will be voting against Bill C-25.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I rise on a point of order and seek unanimous consent to ask a question of the member who just spoke.

[The Acting Speaker (Mr. McClelland)]

The hon. member for Regina—Lumsden—Lake Centre has asked for the unanimous consent of the House to break from the orders to ask a single question and receive a single response, the sum total of which will not exceed three minutes.

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mr. McClelland)]

A member can deny unanimous consent provided the member is in the purview of the Chair. It is to vote that a person needs to be in his seat.

[Dale Johnston, Reform, Wetaskiwin, AB]

Mr. Speaker, I rise on a point of order. I could not help but note some of the excellent points made by my colleague from Okanagan. I was just reflecting how too bad it is that there are no ministers in the House to hear those great comments.

[The Acting Speaker (Mr. McClelland)]

The hon. member for Wetaskiwin is a learned and long time member of the House. He knows full well we do not refer to the presence or absence of members in the House. He knows full well that members are occupied in other parliamentary duties, in committee and all over the place, so that their absence here does not necessarily reflect the absence of members of parliament doing parliamentary work.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I rise on a point of order. During the course of his remarks, the member for Okanagan—Coquihalla made reference to particular support for all these great tax breaks. As the member would recall, Bill S-9 which was passed—

[The Acting Speaker (Mr. McClelland)]

Nice try, but that is debate.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, the 1999 budget presented by the Minister of Finance was terribly disappointing, given the immense possibilities for intervention that we calculated were available, even as far back as 1998. The surplus, which he estimated at a minimal figure, was in fact far larger than he implied.

To give the taxpayers, who are entitled to know the true state of this country's finances, a bit of an idea of the situation, in the three years between 1997 and 1999 the Minister of Finance made a forecasting error of an average of $15 billion. He was an average of $15 billion off in forecasting the surplus.

Year in and year out since 1998, the Minister of Finance has been forced to revise his forecasts on the surplus. Again recently he told us in the 2000 budget that his forecast surplus for the next five years was $95 billion in all. Knowing him, it is far more than that. The Minister of Finance is, once again, being sneaky.

When the forecasts are looked at by anyone, whether by specialists or by the Bloc Quebecois, we expect as a minimum over the next five years, conservatively, a surplus of $140 billion.

So the minister could have done far more in 1999 to help those who are worst off, the most disadvantaged, and could have taken a different tack as far as tax reform is concerned, particularly by decreasing the income tax. He could have re-established a proper employment insurance program, but he did not either then or in his budget 2000.

Recently, I read a document which the Prime Minister of Canada presented in Germany. In this document, The Canadian Way in the 21st Century , he said the following:

The success we have achieved as a nation has come not only from strong growth but from an abiding commitment to strong values—caring and compassion, an insistence that there be an equitable sharing of the benefits of economic growth.

A little later, page 5 of the document states:

—a society of excellence with a commitment to success—

In speaking of Canadian society, the Prime Minister added:

—a society where prosperity is not limited to the few, but is shared by the many and where every child gets the right start in life.

Since 1993, when this government came to office, the third way, the Canadian way, has primarily consisted of cutting everywhere, particularly in the Canada social transfer and in the employment insurance program. The government also constantly displays inertia with regard to tax reform to lighten the burden of low and middle income taxpayers.

The Prime Minister's document presents a picture that is just the opposite of reality in Canada. It says that children must get the right start in life, but since this government has been in office, the number of Canadian children living in poverty has increased from one million to one and a half million. There are 1.5 million children who are not all getting the right start in life, to use the expression found in the document entitled The Canadian Way in the 21st Century . In this document, the Prime Minister describes a theoretical reality, a utopia, a picture that is totally different from the true picture in Canada.

The Prime Minister talks about an “equitable sharing of the benefits of economic growth”. For the past seven years, the economy has constantly been growing. This is unprecedented. The economy is continually growing. How is it that we find ourselves with figures such as the ones I just mentioned, with 1.5 million children living in poverty, while there were one million in 1993, before this government took office?

How is it that, for all categories, particularly single mothers with children, poverty has increased so steadily? How is it that, for the first time in 30 years, it was noted—by the National Council of Welfare—that the income of seniors had dropped? This is something not seen in 30 years, since measures such as old age pensions, and so on were introduced to help old folks, as they were then called, out of their poverty. How is it that we have reached this state of affairs?

The situation for female seniors living alone is even worse. They are one of the poorest categories in the country.

When the government is talking about sharing, equity and compassion, how is it that—the Prime Minister is going to say this in Germany, but he would not dare to say it here—the situation in Canada is actually the opposite? If the government has so much compassion, how is it that, when it tabled its budget in 1999, and again last February, it did not restore the Canada social transfer that has been so drastically cut since 1994?

How is it that this situation is allowed to continue and that, in 2001-02, there will be cuts of more than $30 billion in the Canada social transfer to the provinces to fund health, postsecondary education and social assistance, and income security for the poorest Canadians?

How is it that in 1993, 1994, 1995, 1996, 1997, 1998, 1999 and 2000, this government, with all its compassion, has not set aside one additional dollar for the construction of social housing, when people growing poorer and poorer are spending over 50% of their income on accommodation? Already at 30%, people are considered badly off and unable to afford to put a decent roof over their heads, buy food and clothing, pay for drugs, and so on.

How is it that this compassionate government has been working since 1993 to make people poorer? How is it that for about the past four years the new employment insurance plan has marginalized some 60% of the unemployed? How is it that such a compassionate government is allowing a situation to go on in which, according to its own figures, only 43% of the unemployed are entitled to employment insurance?

How does this government, with the Canadian way, the third way of the Prime Minister, let the situation happen? How is it that, despite the huge surpluses of the past three years, the government has given no thought to the disadvantaged? Is this the Canadian way? Is this the third way? Is this a vision?

We in the Bloc Quebecois think it is, because, since this government came to office, the only way it has shown us is the way of further centralizing powers in all areas of jurisdiction. It involved keeping taxpayers' money in its pockets. It involved stealing money from the unemployed and putting it in its own pockets. It involved stealing money from the most disadvantaged. It involved taking money from the poorest families in this country. It involved stealing bread from the mouths of the 500,000 children who have been added to this government's record of poverty since its arrival in office.

That is what the Minister of Finance is doing. That is what this government has done since 1993.

If the Minister of Finance forecasts a surplus of $95.5 billion for the next five years, it means that some of the 30 million Quebecers and Canadians will have less in their pockets. This means that those who already did not have enough have just had some of what they did have stolen from them by the Minister of Finance.

Over the next five years, the plan is to take still more from them. Their money will be taken from them. What little they have in their pockets to meet their basic needs will be taken from them. That is what is being announced to us.

When the minister tells us that there will be a surplus of $95.5 billion—that is a very conservative minimum, because our estimate is $140 billion, and our forecasts have not been a single percentage point off since 1994 when we started doing them—this means that he is going to get it somewhere, and that somewhere will be our pockets, as it has been since 1993.

Part of the large surpluses that have accumulated in the past three years, and will continue to accumulate in future, comes essentially from three sources: cuts to the Canada social transfer, which goes to provide sick people with a decent health care system, cuts to the Canada social transfer for income security—those poor children I referred to a while ago—and cuts to post-secondary education. This is the first major source: the Canada social transfer.

The next is the employment insurance surplus, which is some $6 or $7 billion every year.

The Minister of Finance helps himself to that. Already a $32 billion surplus has accumulated in the employment insurance fund, and the Minister of Finance has helped himself to it. Most of it comes from small and medium size businesses and from workers. He also helps himself from the pockets of the unemployed who are not eligible from employment insurance.

That is the Canadian way. That is what the Canadian way has meant to us since 1993. There is no compassion; they go after the most disadvantaged, they cut transfer payments to the provinces.

The government leaves it up to the provinces, which provide the first line of direct services to the public, to deal with problems that have their roots here. In the meantime, the Prime Minister travels all the way to Germany to talk about the Canadian way.

It is the same with taxes. The situation is so serious that the federal tax has become a major contributing factor to families getting poorer. This is unprecedented. Originally, federalism meant policies based on fairness, compassion, redistribution and equalization. We now have a situation where, from a tax point of view, instead of helping poor families and families saddled with huge responsibilities, the government is crushing them.

Families—and I am talking about families with two adults and one child—start paying federal tax as soon as their income reaches $13,700. By comparison, families begin to pay tax to the Quebec government only when their income reaches $30,000.

At the federal level, because of the tax structure and the lack of indexation during all these years, a family with two adults responsible for a dependent child starts paying federal tax when its income reaches $13,700. Of course, this is hard to understand for a millionaire, for the Minister of Finance, for a shipowner who does not pay tax in Canada but, instead, pays a minimal amount to tax havens. It is difficult to understand that an income of $13,700 is well below the poverty threshold.

The poorest find themselves in that category: $13,700, two adults, one income and one dependent child. They pay federal income tax in order to fatten the surplus of the Minister of Finance, to cover the income tax he does not pay because his ships fly the Panamanian flag, because he does business in the waters off tax havens. As the Minister of Finance, he takes money from couples with one child when their income reaches $13,719, whereas in Quebec it is at $30,000—a bit better—that this family starts paying income tax.

The government has not reformed taxes, as we have been asking it to do since 1993. The aim of such a reform is to re-establish some balance and fairness in the federal tax system, which now adds to poverty.

With the tax paid at this income level, it means that the people Statistics Canada and others call the poorest people, the most disadvantaged, who spend probably more than half their income on housing, who have a hard time making ends meet, are beginning to fill the pockets of the Minister of Finance, a millionaire shipowner, the owner of ships flying the Panamanian flag, who pays tax elsewhere than in Canada.

I do not understand why, up to now, people have not rebelled more against this. It is an absolute scandal to find ourselves in such a situation. And the federal tax system is not unfair solely for a family of two adults and one child. It does not add to the poverty of just this one socio-economic category; it also adds to the poverty of a single parent family with two dependent children. This family too starts paying income tax at $13,719. It is already having trouble—because it is usually headed by a single mother with children—making ends meet. There is never enough at the end of the month to feed and dress her two children, keep them warm and pay the rent. This government, with the Minister of Finance at the helm, will drain them of the few resources they have.

That, then, is the Canadian way, the Prime Minister's third way: crushing the weaker members of society, who can barely manage, crushing the most disadvantaged, those who are already discouraged and depressed, who have perhaps lost the will to fight. And all to help the rich get richer. The opposite of Robin Hood is what the Prime Minister's third way is.

In the 1999 budget, the one that we are interested in, there was one tax relief measure, and one only, that made sense. I should say that it was consistent, because in my view, it did not make sense, but perhaps it did to the millionaire friends of the Minister of Finance and the Prime Minister.

The 3% surtax was abolished. This was a surtax introduced in order to reduce the deficit. The thinking was that, since there was no longer a deficit, they would abolish the tax. What is not mentioned is that the category that has benefited most from the elimination of this 3% surtax is those with incomes of $250,000 and up.

These guys, the Prime Minister's friends, people like Mongeau and company who are getting their palms greased with our money—you know, the buddies—got a $3,700 tax break in one shot, whereas single families with two children earning $13,719 a year got nothing in 1999.

In 2000, they will not get much more. A few years down the road we might hope that, with full indexation of the tax tables, they might start paying taxes on a slightly higher income of $14,000, $15,000 or $16,000. Nevertheless, they are below the poverty level and federal taxes are making them poorer.

This is compassion, according to the Prime Minister of Canada, who goes to Germany to deliver his speech. He is afraid to deliver it here, because he is afraid that people will point out to him that the only tax break in 1999 was for the rich, and that it is the same thing in 2000. The only significant tax break was the lowering of the surtax from 4% to 3% in 1999, and its phasing out in 2000.

Again, those who benefit from the bulk of this tax break, which amounts to more than $4,000 in the 2000 budget, are people making over $250,000 a year. This is what the Prime Minister calls compassion and a fair redistribution of the dividends of economic growth.

Taxation is one of the reasons retired couples over 65 years of age are getting poorer. I mentioned earlier that for the first time in 30 years the welfare council found the elderly were getting poorer. This is happening for the first time in 30 years, because measures had been taken to allow senior citizens who had worked all their lives to have a decent retirement income. Yet, retired couples over 65 start paying federal tax when their income reaches $20,000. An annual income of $20 000 is not much. It is below the poverty level, yet federal income tax makes those people even poorer.

With surpluses coming out of his ears, the Minister of Finance could have made a small effort in 1999 and in 2000 and reduced income tax, given back what he took to the poor, made the employment insurance system somewhat fairer, invested more money in social housing and restored some balance in the tax system.

If he believes that surpluses are still not high enough, when he is strangling us with income tax, crushing the neediest and raising all statistics on poverty, the minister might have changed the corporate tax system as well. He could have forgotten his cronies. He could have said to Thomas d'Aquino and others, as well as to large companies, that the time has come for them to pay income tax like everybody else.

The statistics are alarming, at least the ones we know about, because the Minister of Finance stopped publishing this type of data several years ago, the statistics on taxes deferred by large corporations and due to Revenue Canada. This is alarming.

Figures were published by the Canadian Labour Congress, figures which we had ourselves compiled in 1994 when we arrived. In 1995, we could no longer compile these numbers because the Department of Finance had asked, by order of the Minister of Finance, that the data no longer be published.

Some large corporations, which make a profit year in and year out, have paid no income tax for the last ten years. In 1994-1995, it was estimated that the federal government was losing $35 billion a year. The situation has not changed considering the fact that, since 1994-1995, our economy has been growing and businesses, especially large ones, have been making record profits.

Believe it or not, even the most profitable businesses never pay taxes even if they owe taxes to the federal government. For example, Bell Canada, whose chairman, Mr. Monty, has been appointed as head of the millennium scholarship foundation, owes Revenue Canada $2.1 billion. These taxes are deferred year after year, but it is money owed to Revenue Canada.

BCE, Bell Canada Enterprises, which includes all of Bell Canada's communications businesses, owes Revenue Canada $2.3 billion. I see that the secretary of state is smiling over there. I do not see anything funny in the fact that businesses such as Bell Canada and BCE, which are worth billions and are making money, and whose chairman, Mr. Monty, has stated that he wanted to buy CTV for $2.3 billion, are not paying taxes. That is exactly the amount he owes Revenue Canada.

In other words, Bell Canada Enterprises wanted to buy CTV with our money, the money it owes us. Let us not forget that, when BCE does not pay its taxes to the federal government, that money has to come from somewhere. It is taxpayers like you and me, the single parent with dependants, who have to make up in part for the taxes not paid by Mr. Monty and Bell Canada. They will also have to make up in part for the taxes not paid by the Minister of Finance. They will have to make up in part for the taxes used for patronage, for contracts awarded by the CIO, the Canada Information Office.

We saw that this week. The Bloc Quebecois leader and House leader have raised these questions with my colleague for Chambly. People's palms are being greased with our tax money. It is already hard enough to earn a living, to have to file our income tax, because doing so—excuse the expression—irks us, but what is even worse is to know that these people are using our money to butter up their friends. The Mongeau affair is just the tip of the iceberg.

With the Human Resources Development Canada scandals, the CIO scandals, with communications contracts being awarded for the monkey business of having federal ministers traipsing about Quebec spreading propaganda, trumped up contracts for checking spelling and punctuation to the tune of $250,000 and other such stupidities, we can see where our money is going.

When we see a grant intended for the riding of our colleague from Rosemont end up in the riding of the Prime Minister, when the invoices supporting this are not forthcoming, there is a problem. We can now see that the scandals, the propaganda, the buddy system, the sloppiness in administering public funds, have become systemic. We have, to use Fabienne Larouche's term, become a banana republic. This is totally senseless.

The Minister of Finance, with surplus money spilling out of his pockets, is announcing some very bad news at the same time. It is very human to behave that way: the more money a person has, the less attention a person pays to it, especially when it is someone else's money. The Minister of Finance will have a big surplus over the next five years, a lot of money but not his. In time, the financial administration will become still sloppier. The Minister of Finance has surplus money coming out of his ears but it is not his money, so what does he care? This government's sloppiness will increase, that is a sure thing.

Therefore, the Minister of Finance is announcing the very bad news for Quebecers, who pay $32 billion in taxes to this government, that their hard-earned money, part of which goes to the federal government, is being used for propaganda, choosing political friends, greasing the palms of party friends, providing grants so as to arrange under the table for donations to the Liberal Party of Canada. This is unacceptable.

The 1999 budget is like the other ones; it is just like the others. It is, in any case, just like the 2000 and 1998 budgets.

It is a totally heartless budget, compared with the third way, supposedly the Canadian way, as presented by the Prime Minister.

These budgets contain no provision for lightening the burden of low and middle income taxpayers. Like the others, this budget offers nothing to ease misery in Canada. On the contrary, it contains the seed of what appeared in the last budget and what may well appear in future budgets, the failure to restore the Canada social transfer.

The government will continue to dip blithely into the annual employment insurance surpluses of $6 billion to $7 billion by keeping contributions high.

As for tax cuts, we can forget about those, because every time the Minister of Finance makes a dramatic announcement about lowering taxes, a closer look reveals that he has done nothing. A closer look reveals that he is taking away with one hand what he is giving with the other.

Mention was made of cost recovery for expanding government services, particularly for agricultural SMEs. The government lowers taxes a bit and increases indirect taxes by implementing cost recovery for expanding federal programs, which was recently criticized by the Canadian Federation of Independent businesses as one factor cutting into the competitiveness of SMEs.

I would like to make one further comment about this budget. The 1999 budget contained a sad piece of news. It had to do with the level of compensation for victims of contaminated blood, of hepatitis C.

The House will remember, as the Bloc Quebecois has done since the beginning of this issue, in connection with the work done by the member for Drummond and continued by the member for Hochelaga—Maisonneuve, that victims who contracted the disease before 1986 and after 1990 are still not entitled to any compensation, although they contracted the disease in exactly the same way as everyone else.

It is sad to be talking again about the 1999 budget when we know that there may be thousands of people who deserve compensation because they have suffered serious health consequences. Some of them may already have died. With surpluses of $95.5 billion, this government is not even thinking about revisiting this issue and providing compensation for victims who contracted the disease before 1986 and after 1990, who have still not received anything.

I will conclude by saying that, for all the reasons I have given and because of the fact that there has not been adequate compensation for hepatitis C victims, the Bloc Quebecois will be voting against this bill, with our usual vigour.

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

Mr. Speaker, I would like to say a few words in this debate in terms of some of the important tax issues that are being implemented by this legislation.

When we look at the taxation system, Mr. Speaker, I think you would agree even from the Alberta perspective that the tax system must be fair in how it treats ordinary people. I also hope you would agree that the tax system should be very progressive.

We should have a tax system that taxes people on their ability to pay. We have moved away from that a bit in the last few years in terms of what the Mulroney government did when it reduced the number of marginal tax brackets from seven to three. Now we have a 16% tax bracket, a 26% tax bracket and a 29% tax bracket. The 26% would be rolled back to 23% which will make it a bit more progressive.

One thing I have been advocating is that we should make it a bit more progressive. If I had my way on the drawing board, I would return to maybe not seven tax brackets, but five marginal tax rates. There would be a bit more progressivity in the system. The United States has more tax brackets than we have.

We should also raise the basic exemption for Canadians to an amount much higher than what it is today. Today I think it is $6,700 or $6,800 for Canadians across the board. I would like to see it go up to $10,000 or $12,000 in terms of making it more progressive. Also, lower income people would not be taxed to the same extent as they are today. It would take many more people off the tax rolls.

I do not want to speak for too long. My friend in the Conservative Party from Nova Scotia wants to say a few words before we adjourn, so I will try to keep my comments to about 10 minutes. Perhaps you could give me the nod at that time, Mr. Speaker.

There are a couple of things which I think should be talked about a bit more in this country. Often the comparison is made by more conservative minded politicians, in particular the people in the Canadian Alliance, that taxes in Canada are so much higher than in the United States.

A study came out in the news today which compares income tax rates in Canada and the United States. I am sick and tired of comparing apples and oranges, just comparing tax rates in isolation. The study says that in general the tax rates in the United States are lower than those in Canada. I will give a couple of examples.

In 1997 a family with an income of $40,000 paid about $6,900 in income tax in Canada. In the United States they paid about $5,200 in income tax.

If we look across the board we find that the percentage in this country is a bit higher in every bracket, high, middle or low than it is in the United States. What is forgotten are some of the other costs of living in the United States.

For example, in the United States if one is lucky enough to get health care, one may have to pay $1,000 U.S. a month. Health care in Canada is paid through general revenue and general taxes. That is one of the benefits of our taxes. The taxes are a bit higher and one reason for it is we do not have health in the private sector. We do not have private premiums. We do not have a user fee or a user tax on health care. In the United States it costs perhaps $1,000 a month to get health care.

Also in that country around 40 million people or more are not insured. There are about 100 million people who are underinsured in the United States for health care. That is a radical difference between our country and the United States.

If the average family is paying an extra $2,000 or $3,000 in taxes a year, health care by itself will more than eliminate the gap between the American taxpayer and the Canadian taxpayer. If one is paying $1,000 U.S. per month in premiums for health insurance, that adds up to $12,000 to $13,000 U.S. or about $18,000 Canadian per year for health insurance. Our health insurance comes out of general revenues from the provincial governments in the main but also from the federal government under a cost sharing plan. That is one of the benefits of being in Canada.

I want to throw two other arguments on the table as well. It is rather facetious just to compare the tax rates of the two countries.

Canada has a much lower crime rate than the United States. That makes our cost of living lower than that of the United States in terms of policing costs. It makes insurance costs in Canada lower because the crime rate is radically lower. We do not have to carry a handgun or weapons or have the insecurity in most parts of the country that we see in the United States. Again, when making tax comparisons, an issue like crime is not factored in in terms of the higher costs south of the border.

The third area is education. Everyone knows it costs an awful lot more to send a young person to university in the United States than it does here. Tuition fees are too high here; we all agree on that. Many of us are lobbying the federal government to put more money into post-secondary education and are lobbying the provinces to make sure they put more money into it and tuition fees are lowered to make university education more accessible to everyone.

In the United States tuition fees often are around $15,000 U.S. per year. For a unique university such as Columbia it could be perhaps $25,000 U.S. a year for tuition. We are looking at $15,000 to $30,000 Canadian and more in tuition per year for a student in the United States. Someone told me today that the average student debt in the United States is probably over $100,000 U.S. My recollection is that the average student debt in Canada is between $15,000 and $25,000 Canadian.

Again one reason that the student debts and tuition fees are lower in this country is that the money comes out of taxes to a much greater extent than in the United States of America. We are getting some benefit from the taxes that Canadian people are paying.

When we hear the arguments by members in the Canadian Alliance that our taxes are so much higher than the United States, they are really comparing apples and oranges. They are not comparing some of the benefits that we get from the taxes we pay.

There is a very strong argument that we be concerned that there is enough taxpayers' money to ensure that we do have good progressive programs, that we do have social programs, that we do have an infrastructure. There is a role for government and for the mixed economy in this country. The economy should not be left totally to the free market.

I look at some of the leadership candidates of the Canadian Alliance, like Tom Long and others, who believe that almost everything should be left to the so-called free market, that there should not be a role for government. That party is almost anti-government in what it advocates, not so much the former leader of the opposition as Stockwell Day and Tom Long who are on the far right, the extreme radical right.

There is a role for government. If there is a role for government, then we have to have a fair taxation system so we can fund the government programs. The whole issue in Canada is fair taxes and making sure we have a tax rate based on the ability to pay, so that the ordinary citizen pays less in taxes, so that the poorer people do not pay taxes and the wealthier people in some cases pay even higher taxes than they do today.

I will give an example of what I mean. The Bronfman family is one of the wealthiest families in this country. In 1991 the Bronfmans moved a lot of their assets, I believe it was stocks, to the United States from Canada. Officials in the Department of National Revenue, under the previous government, made a ruling that the Bronfmans would not have to pay capital gains tax on the appreciation of their assets when they moved them out of the country to the United States. According to the auditor general and according to information that has now come out in court cases, the Bronfman family basically got a $700 million gift when they moved that money out of Canada into the United States.

On the other hand, if an ordinary bus driver in Kingston, Ontario owes $200 or $300 to the federal government, the Department of National Revenue will track that poor bus driver down and demand that he pay the bill and that he pay interest on top of it, but not the Bronfman family. They got a $700 million tax holiday, a tax gift, because officials in the department of revenue were able to write it off.

We need tax fairness. Four years ago the current government said that it would bring in legislation to change this. That did not happen until a ways and means motion was tabled in the House yesterday. That will bring in some legislative changes promised back in 1996.

This is what I mean when I talk about tax fairness. The Bronfmans with a family trust can get away with a tax gift of $700 million, and the ordinary citizen who owes a few hundred dollars on a tax bill is hounded, searched down, charged a penalty and interest. That is not fair. It is unjust. That is what I mean by tax fairness and equity in terms of how we treat people.

Some people say we should not do it that way, that we should have a flat tax where everyone pays the same tax rate. The Peter Pocklingtons and the wealthier people would pay the same tax rate, such as 17%, as the middle class. That would increase the burden on the middle class or would cut back on government programs, or a combination of both. I do not believe that is tax fairness either.

These are some of the issues I wanted to raise. Before I cede my place on the floor to a member of the Conservative Party, I conclude by saying that the main issue is fairness when it comes to taxes. There should be no special status and no special exemptions for wealthier people or bigger corporations, like the family trusts we have had in the past.

I believe in tax fairness. I believe lower income people need to get a tax break.

I also believe there is a role for government. We need a government that is proactive, a government that will provide leadership in terms of stronger social programs. There is a role for a mixed economy in this country. I think that is the direction most people want to go.

If I read public opinion correctly, I think the ordinary working families believe that large corporations have too much control and too much influence over the agenda of our country. Canadians see the Liberal Party as being a bit wimpy in terms of standing up to the agenda of large corporations. Canadians want the government to have more spunk and more backbone. They want a people's agenda, where people are put first and there is a more equitable distribution of wealth and power. That is the way the ordinary people of Canada want to go.

We have tremendous opportunities. One way to give people opportunities and to build a strong country is to make sure that we have a very fair and equitable tax system.

[John Herron, Progressive Conservative, Fundy Royal, NB]

Mr. Speaker, I am pleased to speak to Bill C-25, an act to amend the Income Tax Act, the Excise Tax Act and the Budget Implementation Act, 1999.

For Canada to succeed in a global, knowledge based economy we must be more innovative, productive, invest in skills and development and seek out new opportunities around the world. The Liberal track record, however, has been declining productivity and investment, with record levels of taxation, and punishing regulations and red tape. The government is not providing Canada with the leadership and the vision it needs to maintain our competitiveness and our place in the world as we head into a difficult era of global economy.

Canada has the second highest corporate tax rate in the industrialized world. I am sure the House is also aware that as a percentage of our economy Canada has the highest personal income tax rate. Some individuals may look at that and say that we are perhaps getting a good bang for our buck. We are able to maintain these taxation rates and still maintain our position in the global economy. The fact is that those individuals are wrong.

It is true that we have a very valuable society. Our health care system is a treasure. It is a valuable program which Canadians hold very dear. I prefer Canada's health care system to that of the United States. I do not know if the House is aware, but I know the new member for St. John's West is aware that half the bankruptcies in the United States are created because people get sick. Thirty million Americans do not have access to any health care system whatsoever. If someone gets sick it should not result in economic hardship or economic ruin.

Canada is an export driven country. We need to remain so to keep our competitiveness. Canadians have always valued our capacity to build prosperity, to build a stronger nation. It was the Progressive Conservative government of 1984-93 that was indeed a prosperity builder. I want to illustrate that fact by talking about not only privatization and deregulation issues brought forth by the Progressive Conservative government, but also the fact that we really led the G-7 in terms of winning the war on inflation between 1984-93.

This is best illustrated with the free trade agreement. In 1988 our trade with the Americans was approximately $90 billion. The members from St. John's East and St. John's West both know that our trade with the Americans now is $260 billion each and every year. Our growth has come from the economy.

We are also coming through one of the most buoyant periods of economic growth in the industrialized world. Growth in the United States was 18% between 1992 and 1998. In the U.K. and in Germany, in the same time period, their growth was 14%. The Finns had very similar growth.

We could look at the Irish economy. They took very bold, progressive steps in terms of getting their corporate tax rates slashed in half and exponentially lowering their personal tax rates. The Irish economy over that same period doubled.

What the Progressive Conservative Party of Canada is advocating is that we need to do with tax what the Progressive Conservative Party did for trade in order to build a more prosperous society. We set leadership. In fact, just recently a study by very learned economists and political scientists at the University of McGill, which ranked former prime ministers, stated that our government between 1984 and 1993 did far more to prepare Canada to take its appropriate place in the world as a world economic leader than any other government before it.

There are some initiatives that we want to put forth at this point. We think it is wrong that individuals who make $14,000, which is less than the poverty line, should have to pay any tax at all. As a first step, our tax task force report, which was voted on by the membership of the Progressive Conservative Party in Quebec City, stated that the basic personal exemption should be raised to $12,000.

That fundamental initiative on its own would take two and a half million Canadians off the tax rolls overnight. Those two and a half million Canadians simply should not have been put there in the first place.

In terms of getting our economic fundamentals in order to maintain our world competitiveness, we need to address the national debt. Quite simply, it is a mortgage on every Canadian, in particular a mortgage on every young Canadian. I have referred to the national debt as being fiscal child abuse, as we are mortgaging the fiscal competitiveness or the economy of every generation yet to be born.

While the government will say that it has made a payment on the debt or lowered taxes, it is taking baby steps while the rest of our trading partners are taking giant leaps.

I am very proud of our conference that we held in Quebec City, where the membership of the Progressive Conservative Party said that, at a minimum, our party would pay down the national debt by an aggressive legislative format. That is the minimum that we owe every young Canadian.

When I advocate lowering taxes it is not simply for the sake of lowering taxes, it is to maintain our world competitiveness and to instil more growth and investment in our economy overall.

I would like to talk about another issue that I am very concerned about, and that is the issue of brain drain. In order to keep our best and brightest within our borders in this global economy, our most entrepreneurial, the individuals who invest, and the risk takers, we need to provide them with a tax regime in which their initiative and their intellect will be rewarded.

In that vein, let us ensure that Canada's taxation rate can fund the economy which we need. The Progressive Conservative Party believes that a strong economy is the root of providing a healthy and educated society.

Before we do anything else, when it comes to income tax implementation or the focus of the budget, let us do the following fundamentals properly. Let us pay down the national debt in a legislative way. Let us ensure that our tax regime in terms of our personal taxes and corporate taxes becomes more competitive. Let us put money back into our priority spending areas in terms of post-secondary education. We know that the average student debt of $30,000 is wrong. We want to fix that. We also want to put more money back into our health care system. Let us pay down the debt. Let us lower taxes. Let us invest in health care and post-secondary education.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I appreciate the opportunity to speak for a few minutes to Bill C-25. Primarily what I want to do in the few minutes that I have is to debate some of the misconceptions that are out there.

First of all, when I asked the Minister of Finance a question the other day about a plan for debt reduction, he went on and on about how the debt is in fact going down as a ratio to GDP. However, he failed to answer the real question, which is, why not reduce the debt itself, because it is not going down.

The budget documents of the last couple of years indicate very clearly that the Liberal plan is to keep the debt constant in terms of dollars and to hope that the GDP goes up and the ratio of debt to GDP goes down, which in fact it is because our economy is growing, so the GDP is going up.

As my hon. colleague from the Conservative Party just said, the debt is a huge load on our country because of the interest payments required.

My second point concerns the misconception about our solution 17. NDP members in particular keep talking about this as being a tax reduction for the rich, saying that it would be unfair to poor people. It is really quite the opposite. I find it very difficult to defend against what they are accusing us of, because what they are accusing us of is exactly the opposite of what it is.

This plan would be more progressive than the one we have now, which, because of its steps and different rates, takes huge leaps. In some instances Canadian citizens who earn more money actually take home less because of the change in the rates as they go from one category to another. There is a tremendous disincentive to being successful, to working and earning money.

The one rate plan which we are proposing would make a smooth transition and would be truly progressive. By example, a single mom with one child, under the present Liberal government, pays $1,700 in taxes. Under our plan she would pay $170. In other words, she would get a 90% tax break, a 90% reduction.

For the many Canadians who are making less than $20,000, the government takes between $6 billion and $7 billion from them in taxes. Our plan would take them off the tax rolls completely, giving them a 100% tax break.

Compare, for example, another single mom, this time a rich mom who has an income of $240,000 instead of $24,000. Ten times as much income. She would pay $36,890 in income tax. In other words, 10 times the income, but 217 times as much tax. That is progressive. The Liberals have their system going so that it is even more abrasive than that.

The final point I would like to make is that it is not tax rates that pay for things like health care. There is this misconception out there that if the tax rates are cut, there will be less money for health care. That is not true. NDP members keep saying that we will take it away from the middle class or we will have less money for programs. That is not true. Anybody who knows any economics at all has heard of the Laffer curve, which shows that there is a maximum rate of income which is produced at certain percentage rates of income tax.

We are past that point. Reducing the tax rates would almost certainly increase total government revenue, giving us more money. That is the misconception that I wanted to correct.

[The Acting Speaker (Mr. McClelland)]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker (Mr. McClelland)]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mr. McClelland)]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Mr. McClelland)]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Mr. McClelland)]

In my opinion the yeas have it.

And more than five members having risen: