Madam Speaker, I would like to address two issues today. One of them is a four year old commitment by the Liberal government across the way. The other is the question raised in rhetoric by many Liberals also across the way of oil companies versus the government. If time permits, I would also like to address the question of provincial cuts versus federal cuts.
I will read into the record a portion of a transcript of committee evidence from the Standing Committee on Transport hearing on December 4, 1996. Appearing before the committee was the finance minister of the day who coincidentally is still finance minister. The transcript starts with my portion where I stated:
With regard to highways, one concern I always have at any committee is that if you hold hearings and almost everybody says the same thing, then, at least as a committee, we have an obligation to report that and to focus some of our recommendations based on that. The dedication of fuel tax is just one of those things.
In addressing the Minister of Finance, I said:
You yourself said today that the federal government spends about $300 million a year on highway infrastructure, but takes from my province of British Columbia alone you take almost three times that in federal fuel taxes. The provincial governments have a role to play in that, but the role we have to look at is ours. Now, I believe what you have said is correct. We can't just suddenly say sorry, we're going to dump that, about $5 billion altogether, into a dedicated fund. But we have to start. I think it is the right way to go. If the economy were better, then I would say yes, we have to transition fast. You're correct, the economy is very fragile, so we have to transition slow, but I still think it's the right way to go and we should try to start something along that line.
Would you agree we should at least examine the possibilities of starting something on that concept, even if out of the 10¢ it's 1¢ or 2¢?
The finance minister replied:
I must say I have probably a lot more difficulty with the concept of dedicated taxes having been the Minister of Finance for three years than I did when I was in opposition, because there is no doubt a certain warping of the mind occurs when you get this job.
I responded by saying:
I always wondered what happened.
The minister continued:
—I think your question is a very valid one, and the way you put it is very good. The fact is it is really not something we could contemplate doing now, simply because I think the most important thing, and I know you agree, is to solve our fundamental financial problem and we really should not limit our flexibility at this time.
Now, you're suggesting that what we might do, given that problem, is to start very small and build on it, if I understand what you have just said...I guess my answer to you...would be that you put the question well. There will come a time when we will have more flexibility and your suggestion is one we could perhaps consider. But I must say we would have to be generating, from my point of view, reasonably substantial surpluses before I would want to entertain the concept. Let me be very clear to you, because I think you've put the question in the proper tone, and that's the way in which I would want to respond.
I will move ahead a little to where the finance minister said:
The reason my original answer to your question was that we might be in a position—we're not in a position to examine it now, but we might be in a position—to examine it at a time when we're generating substantial surpluses is simply that you're not wrong when you say, look, if you spend a dollar now you might well save yourself $5 down the road. It's not that you're wrong in that at all. It's just that this applies not only to highways; it applies to a vast range of projects governments should really be involved in. I would say to you that if you're going to adopt that concept, we're going to get into a long line of priorities, and we do not have the money at the present time to go that way.
What I would really say to you, however—and I think this is going to be very important—is that there is going to be a second stage of the financial debate in this country when we go beyond the deficit to start talking about the debt-to-GDP ratio, the debt as a percentage of our gross domestic product. At that point the argument you're bringing forth is going to become very important.
He ended by saying:
I'm sorry to take so long, Chairman, but I think (the hon. member's) questions are very good. I guess it's a function of timing.
That was 1996. We now have a huge surplus. I think that function of timing has come. It is time for the government to start considering removing some of that tax and dedicating a portion of it to fix the highway infrastructure so that Canadians will know that they are getting value for the money that is being taken from them.
I would also like to read from a recent report by Statistics Canada that suggests the sole reason for gas price increases in real dollars is a change in tax levels. The Statistics Canada report adjusted 1957 gas prices to 1995 dollars which worked out to 56.6 cents per litre, broken down as 39.9 cents for the gas itself and 16.7 cents for taxes. That was in 1957. In 1995 the actual non-adjusted cost of gas was 56.1 cents which broke down as 29.8 cents for the gas and 26.3 cents for taxes. During the period of the report, the gasoline price alone dropped by 25% when the cost of taxes alone jumped by 57%. In 1957 the pump price of gasoline included 29% in various taxes. By 1995 the pump price of gasoline included 47% in taxes.
It is easy to blame the oil companies for the current price increases. Big corporations in general and the oil companies in particular are not very popular these days. The culprit in our current price jump is a combination of international crude oil prices and government taxes. Of those two, the one we can attempt to do something about is taxes. We should not let the government off the hook by laying the blame in the wrong place.
One hon. member across the way when questioning my colleague who spoke just before me brought up the question of whether the federal government should be dropping the price of its excise tax unless the provinces agreed to do the same.
Might I point out that my province of British Columbia has some pretty trying conditions to maintain our highways through the mountains and all the valleys, across rivers and the many bridges that we have. My province spends a substantial amount of that highway tax on highways. The federal government spends $300 million nationally but it takes $1 billion from my province alone.
To put out a suggestion that the federal government will only cut its excise tax if our province also matches it is completely out of line. Our province is already using that money for its original intended purpose. The federal government is spending less than 5% of its take on that same purpose.
In terms of environment versus conservation, there are those who suggest that if we drop the price of gas, then the use of gas is going to go up. In fact the Liberal government in response to the Kyoto convention has floated out the notion of a 38 cent per litre increase in the excise tax over a nine year period in order to force people to conserve gasoline.
That is the thinking of someone from a high density urban centre where there is all kinds of public transportation and different means for people to get around. It is incredibly punitive on people in rural areas from British Columbia to Newfoundland and everywhere in between. It also shows very narrow thinking. It totally ignores the problems of things that have been brought up extensively today such as heating oil.
The government collects what was termed when it began a highway tax. Then it put it on everything. Right now the government is taxing low income people using heating fuel. More often than not it is low income people who use that particular type of source, not high income people.
If the government would start with getting rid of the special excise tax that it put on to deal with the deficit we no longer have and stop this insane nonsense of taxing its own tax, maybe Canadian taxpayers would see a little relief at the pumps. The hon. member for Pickering—Ajax—Uxbridge said in the past that there is price fixing between the gas companies yet the government wants to put out a requirement that those prices be fixed before it acts.
