House of Commons Hansard #119 of the 36th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was gas.

Topics

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1:15 p.m.

Progressive Conservative

John Herron Progressive Conservative Fundy Royal, NB

Mr. Speaker, I compliment the Leader of the Opposition on a number of his remarks and, in particular, his commitment to lowering taxes. We in the Progressive Conservative Party know that is how to grow an economy.

I want to clear up something that happened yesterday. When the Prime Minister referred to the fact that he was the Minister of Finance at the time that gas taxes were increased 9 cents per litre, was he or was he not a member of that government and did he support the budget that actually increased gas taxes during the Getty regime?

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1:20 p.m.

Canadian Alliance

Stockwell Day Canadian Alliance Okanagan—Coquihalla, BC

Mr. Speaker, clearly, as a newly elected MLA, yes, I was a member of that government and that was when that tax was put in. It was not put in while I was finance minister, as some have unfortunately tried to indicate. It was about a year after I was elected when that tax went in.

I will admit my deficiency. I was not able to stand as a lone member and turn the tide of that particular request. I was deficient in not being able to hold off the horde of others who wanted to see that go forward. I apologize for that.

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1:20 p.m.

Liberal

Alex Shepherd Liberal Durham, ON

Mr. Speaker, I listened very intently to the Leader of the Opposition's speech. I think he would agree that taxation is all about choice. What he is asking us to do today is to make a choice on $700 million worth of revenue coming into the federal government.

The government has made a commitment to reduce debt. For every $10 of debt we reduce we also reduce $1 forever because it is a debt off our shoulders.

At the same time, we also note that fossil fuel is creating more air pollutant problems. Five thousand people died last year just because of airborne pollutants. As a societal good, is it really the duty of governments to be reducing consumption? When the cost of fossil fuel went up during the Reagan administration in the mid-eighties consumption went down. We should be promoting the use of alternative fuels and the reduction of fossil fuel not in fact celebrating them.

From the member's knowledge as a treasurer, how much of that barrel of oil goes into the provincial royalty payments?

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1:20 p.m.

Canadian Alliance

Stockwell Day Canadian Alliance Okanagan—Coquihalla, BC

Mr. Speaker, I will keep all those questions in mind. First, on the issue of the environmental effects, we are talking about people who have to drive to work every day. We are talking about truckers. We are talking about people whose livelihood and transportation needs depend on gasoline.

If nothing had happened at all over the last decade or so in terms of a reduction in pollutants, then I think the point would be stronger. The fact is that just with the elimination of lead in gasoline alone, 85% of particulate has been removed from the atmosphere. There is clearly more to do. A number of provinces are allowing electricity and other forms of energy to be plugged into the power grid system which people can then order. Wind power, for instance, is already being plugged into the power grid in some jurisdictions.

Many things are going on for the good and proper pursuit of the reduction of particulate in the atmosphere. This, however, should not be used as an excuse by the government to be taking in more money than it should be.

In terms of the overall amount going into the treasury, and I obviously cannot quote the figures of the last month or two, but there has been quite a shift not just in the corporate percentage of revenue coming in but in the overall revenue. As a matter of fact, about two years ago in Alberta, as I recall the figures, the resource royalty amount coming from crude oil alone had dropped from just below $2 billion to about $545 million. So there has been a very significant reduction in terms of the overall royalty, but again an increase in the economy.

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1:20 p.m.

Liberal

Steve Mahoney Liberal Mississauga West, ON

Mr. Speaker, I too congratulate the Leader of the Official Opposition on his maiden speech. However, I am a little curious and wonder if he might be able to respond to a question.

I will go back to November 29, 1999 when that member was the finance minister in Alberta. In his second quarter fiscal update he went to great pains to celebrate increased revenue in the province of Alberta, which he clearly said resulted from what were stronger energy prices.

I wonder how he reconciled his position to the people of Alberta, when he was known as the shah of Alberta, of celebrating oil prices in those days and then stand here today and take the position that he is taking when Alberta's surplus of $5 billion results directly from $4 billion in energy—

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1:25 p.m.

The Speaker

Our time has virtually expired. I will permit the hon. Leader of the Opposition to respond and then I will listen to a point of order.

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1:25 p.m.

Canadian Alliance

Stockwell Day Canadian Alliance Okanagan—Coquihalla, BC

Mr. Speaker, I am humbled by the amount of fascination with my previous history. As an elected person, as we all are, with virtually no ego at all, I hate talking about myself but when I have an opportunity like this I find it irresistible.

The $5 billion surplus figure that he just quoted is of course now. I was not there enjoying that type of surplus. What he left out of the figures that he was also quoting for 1999 was that 1999, closing out the year for 1998, was a phenomenal year of expansion and growth in the economy in Alberta. There was about $1 billion less in terms of resource revenue that year. There was $1 billion less in 1998 than in 1997 and yet the economy continued to expand, which continues to make my very precise point.

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1:25 p.m.

Liberal

Dan McTeague Liberal Pickering—Ajax—Uxbridge, ON

Mr. Speaker, I rise on a point of order. In the interest of ensuring that we achieve goals for Canadians in common, and with the Leader of the Opposition here, I ask for unanimous consent to amend the motion by deleting everything after the word “consumers” and replacing it with the following, “especially those with low incomes. This House calls upon the government to assist Canadians in coping with the rising financial burden and that this House strongly urges provincial and territorial governments to consider providing similar assistance”.

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1:25 p.m.

The Speaker

Does the hon. member have permission to put the motion?

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1:25 p.m.

Some hon. members

Agreed.

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1:25 p.m.

Some hon. members

No.

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1:25 p.m.

Reform

Chuck Strahl Reform Fraser Valley, BC

Mr. Speaker, I rise on a point of order. As a member of the government, I would encourage the member to put that on the order paper for tomorrow and we would be happy to debate it at that time.

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1:25 p.m.

Willowdale Ontario

Liberal

Jim Peterson LiberalSecretary of State (International Financial Institutions)

Mr. Speaker, I will be sharing my time with the hon. parliamentary secretary.

What I would first like to look at is who the real culprit is when it comes to Canadian taxes on fuel versus the oil producers and the cost of oil. The simple fact is that two days ago the benchmark October contract for West Texas intermediate crude was $36.51 U.S. a barrel. A year and a half earlier in 1998 it was less than $11 U.S. Obviously the price of crude is the real culprit. This is why the finance minister will be taking very constructive steps, I hope, with his G-7 counterparts in Prague this weekend, to try to deal with the very serious impact on the economies of all the countries in the world.

The second point I want to talk about is the impact on truckers. To the extent government taxes add to the cost of diesel fuel, are these taxes mainly provincial or federal? Let us look at the federal taxes.

We have a GST of 7% but it is fully refundable to truckers. They do not pay it so it cannot be the GST. Is it the excise tax? The excise tax federally is four cents. It does not fluctuate with the price; it is constant. This is the lowest excise tax in the G-7 and it is fully deductible for tax purposes. Four cents, yes. It is deductible and it costs less for the trucker.

Let us look at the provincial taxes. In Alberta truckers pay a nine cent excise tax on their diesel fuel.

I want to look at this issue raised in the House today through the motion. It was the member for Pickering—Ajax—Uxbridge who first raised the issue of fuel tax prices in the country. Now we see very quickly, for the first time in history and never talked about before, that members of the official opposition are running after the parade, trying to catch up to it and get in front of it, but they are stumbling all over themselves in so doing. Nothing could be greater evidence of their craven efforts to grab headlines and of their abject incompetence in coming to grips with this particular issue.

Let us look at the motion before us. It talks about the severe hurt to Canadian truckers and homeowners. Then what does it propose as the antidote to this harm? Two things: cut the federal excise tax by 1.5 cents per litre and eliminate the tax on the tax for gasoline. That is what those members are proposing in this opposition day measure to deal with this huge issue we face in terms of the cost of fuels. How will these two little tax measures they propose help truckers and homeowners?

First, truckers. Let us look at the 1.5 cents per litre cut that has been proposed. It never applied to diesel fuel and it does not today so it cannot be that. Since the GST does not hit the truckers, there is no tax on the tax. So the measures have absolutely no impact on truckers. How will they help truckers? Not one nano-cent.

How about the homeowners the opposition talks about? Since there is no federal excise tax on heating fuel, their proposed 1.5 cent tax cut will not help them. And obviously there is no tax on tax. How will these proposed measures, the opening salvo of the official opposition, help homeowners? Not one nano-cent.

In conclusion, these proposed measures if enacted would have zero impact in helping homeowners and truckers.

Let us say the 1.5 cent tax cut went through. Even if it did, would car owners ever see it or would it just be swallowed up by the producers? These are very real concerns. In rejecting a fuel tax cut less than a year ago for Alberta, the present Leader of the Opposition said:

Will it flow through to the people? Will it be reflected at the pump? What kind of guarantees have we got that gas retailers are also going to drop the price?

There are no guarantees in this motion reflecting these very real concerns expressed by the Leader of the Opposition. I just listened to him a few minutes ago. In response to questions dealing with this issue, he said that he really does not favour tax cuts, that he prefers tax rebates. Then why did he not bring forth tax rebates in the motion? Even the Leader of the Opposition is admitting that it is a flawed motion. Is there a guarantee in the motion that a cut would be passed on to the consumers? Not one nano-cent.

This is either very cheap politics or it is total legislative incompetence on behalf of the official opposition. Canadians will not buy into this phoney motion because it will do nothing to help the homeowners, the truckers, or the people buying gas at the gas pump and they are not going to be hoodwinked by this type of flim-flam.

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1:35 p.m.

Reform

Jay Hill Reform Prince George—Peace River, BC

Mr. Speaker, what a diatribe that was. It is perfectly understandable how the junior minister would state that it is total legislative incompetence for us to put forward a motion to reduce taxes. I know that to reduce taxes is completely against anything a Liberal has ever stood for.

The big issue here is how the cut to fuel taxes would be guaranteed, I think is the word the hon. member used, to be passed on to the consumer, to the gasoline purchaser. If the federal government is waiting for the provinces to come on board so that they can jointly reduce fuel taxes, how would that ensure that the joint cuts would be passed on to the consumer?

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1:35 p.m.

Liberal

Jim Peterson Liberal Willowdale, ON

Mr. Speaker, that is a very good question. The Leader of the Opposition has adumbrated that this is indeed a very important question. He has suggested rather than just have a tax cut that we have a rebate. That could be a very real possibility.

I wish that whoever drafted the motion had talked to the Leader of the Opposition first, because he might have indicated that maybe just cutting gas prices will not be passed on. When there are fluctuations at the pump of five or six cents a day, a one and a half cent cut, even if there were goodwill to try to pass it on, would not even be noticed by the people. This is why the government is looking very seriously at the issue and is looking at other mechanisms for ensuring that a reduction of these very onerous fuel prices for all Canadians will have the best impact in terms of where they are most needed.

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1:35 p.m.

Reform

Jay Hill Reform Prince George—Peace River, BC

The hon. member did not answer my question.

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1:35 p.m.

Liberal

Jim Peterson Liberal Willowdale, ON

Of course I did not answer the hon. member's question because I said we are looking at mechanisms for passing it on. The hon. member's leader has suggested that it is not tax cuts but rebates. I am saying that this is at least slightly more thoughtful. I wish that the motion you brought forward had reflected the latest thinking and maybe it is just today—

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1:35 p.m.

The Acting Speaker (Mr. McClelland)

I must interrupt. I do want to remind members to address each other through the Chair as we indicated earlier.

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1:35 p.m.

Reform

Myron Thompson Reform Wild Rose, AB

Mr. Speaker, earlier this morning I made a phone call to my riding and talked to a friend of mine, a farmer. He informed me that his crop which is not harvested is now covered with about three inches of snow. It does not look very promising for farmers to get their crops off. He also knows about the debate today. He realizes that farmers surrounding him are in a bad position not only because of the failure of the government's AIDA program, which has just not been successful at all, but also because farmers realize once more that they will have no say on how they will be able to market any crop of wheat and barley they do get off. He is saying to fight tooth and nail on behalf of farmers to see that at least we can get this much relief. We need help.

I am surprised the agriculture minister is not in here demanding his government help the farmers to what little extent it can. The farmers are major consumers and it could amount to significant dollars that could save farmers.

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1:35 p.m.

Liberal

Jim Peterson Liberal Willowdale, ON

Mr. Speaker, farmers do not pay tax on coloured diesel. It is very simple.

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1:35 p.m.

An hon. member

Simple.

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1:35 p.m.

Liberal

Jim Peterson Liberal Willowdale, ON

Farmers get a rebate for the GST and they do not pay the tax on the coloured diesel.

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1:35 p.m.

Reform

Myron Thompson Reform Wild Rose, AB

Everybody should be a farmer.

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1:35 p.m.

Liberal

Jim Peterson Liberal Willowdale, ON

Mr. Speaker, I suspect that the hon. member does not know what the facts are concerning farmers. It takes a city boy from Toronto to tell him.

Having said that, the party opposite has twice rejected a motion that would allow those hit hardest by these high fuel prices to be compensated through assistance. That might be one of the ways in which the compensation goes back to those who need it most.

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1:40 p.m.

Etobicoke North Ontario

Liberal

Roy Cullen LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I am pleased to be involved in this debate.

When the Leader of the Official Opposition gave his maiden speech he said initially that we should remove the partisanship in this debate and let us work in the interests of all Canadians. I almost fell for it until all his colleagues burst into laughter. I should have known that nothing has changed.

My colleague the member for Pickering—Uxbridge—Ajax tried to introduce an amendment to the motion and members of the Alliance used the trick that they have used ever since they came here. They used a procedural ploy. Canadians who are watching the debate may not fully comprehend the subtlety of it; it is procedural gobbledegook frankly. They denied Canadians the opportunity to see a real debate and denied members of the House an opportunity to choose either their motion or an amendment to the motion proposed by my colleague.

Nothing has changed. They talk about a new way of doing parliament. They talk about how their name is different but I look across the Chamber and the people are the same, except perhaps for one, and the policies and philosophies are exactly the same.

I would like to talk about fuel costs. Of course rising fuel costs are a concern to all Canadians. We need to understand what is driving the increase in energy costs.

In the last 12 months the price of crude and the price of fuel at the gas pump has about doubled but surprise, surprise, the federal taxes have not changed. The excise tax on gasoline and diesel is on a per litre basis. It does not change when the price goes up or down. If the government reacted to the concerns of Canadians and who knows, maybe it will, but it would not be because we are the culprits. It would be because we would be concerned about the plight of a number of Canadians and the amount they have to pay at the gas pump and the concern about the heating fuel costs for the upcoming winter.

We need to put the whole debate into another context as well. If we compare the taxes on gasoline in Canada with the industrialized world, our taxes as a component of the total pump price are actually relatively low at around 42% on average. In many of the OECD countries they are 70% to 75%.

Gasoline taxes in Canada comprise about 42% of the price at the pump and are very low by international standards. All we have to do is travel to see the price of gasoline at the pump in places like the United Kingdom and other parts of Europe. I am not trying to trivialize the problem but we need to understand that our gas taxes here in Canada are really low in comparison to the other countries of the industrialized world.

When was the last time that the taxes went up over a long weekend? It does not happen. The taxes have not changed for many years. We are talking about a situation of pricing policies of oil companies.

The member for Pickering—Ajax—Uxbridge and I have been working on this issue for some time. Through his leadership our caucus has been concerned about energy costs for some time. The caucus made a number of recommendations which have led to action on the part of the government by the industry minister with reviews of the Competition Act. That is an area where we have jurisdiction. It is an area where the government might act to put more teeth in the Competition Act.

In talking about fuel costs, we are obviously looking forward, but we have to be concerned about the context of the debate. As I pointed out earlier in rebutting the leader of the Progressive Conservative Party, it was during the tenure of the Tory government that diesel excise taxes were invented and the excise tax on gasoline was increased six times.

Likewise, we can look across the floor to the Leader of the Opposition. When he was in the legislature in the province of Alberta fuel taxes went up six times. In the province of Alberta they now sit at nine cents a litre. Our excise tax on diesel fuel is four cents a litre compared to the Alberta government's fuel tax of nine cents a litre.

Some people say that the federal government should just act unilaterally. I was on a talk show last night in Edmonton. I was reminded many times that these were not government tax dollars but the tax dollars of Canadians. If we are trying to alleviate the concerns of Canadians, why would we not be concerned about the question of whether any reductions in excise tax will flow through to consumers? Are we saying that we would reduce excise taxes? If they did or did not get into the hands of consumers is an irrelevant question. Let us do it. Let us show leadership.

As the Minister of Finance has said, if we are to provide real relief for Canadians we have to work in concert with the provinces. Unlike what some members have proposed in the House, the provincial taxes on fuel are in general higher than the federal excise taxes on gasoline and on diesel, for sure.

The problem is that the motion before the House seems to have been crafted in a very hasty fashion. If one were a cynic, one would say it is based on political opportunism. It talks about heating oil, consumers and truckers. As my colleague earlier pointed out, the motion fails miserably in trying to address these questions.

For example, there is no federal excise tax on heating oil. That is the first problem. The second problem is that they talk about alleviating the problems of truckers. I have great sympathy for truckers. I have a lot of trucking companies in my riding. When truckers pay the GST they receive a GST input credit when they pass it on to their customers. The GST they pay is a flow-through. All of us in the House understand that.