House of Commons Hansard #25 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was gst.


Sales Tax And Excise Tax Amendments Act, 2001Government Orders

12:10 p.m.

Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Madam Speaker, I was in the middle of an exciting discourse when we were interrupted for members' statements and questions and all that other exciting part of the day. I was in the middle of telling the story about how taxation policy affects behaviour.

My colleague from Calgary spoke about the fact that rich people being taxed on the size of their windows put very small windows in their houses in order to reduce taxation. The tudor type of architecture with the small windows was the result of a taxation policy many years ago.

I was in the middle of relating the fact that my father, who bought a new car every three or four years, thought about buying a new car in 1991 when the GST came in. He went to the dealer and found one he liked. He was ready to buy it until he looked at the bill. It had a huge amount for GST. My dad said that he had already paid income tax on the money he had earned and that the government now wanted him to pay what was left on the GST. He decided not to buy the car. He walked away from the dealership. He did not close the deal. He said that he would keep his old car.

The local dealership lost business, the salesman lost his commission and the owner did not make a profit on the sale of the car. The result of that, I believe, ripples down through the whole economy. My dad, being a frugal person who spent his money wisely over the years, made that decision because of the GST. I believe hundreds and probably thousands more Canadians postponed purchasing decisions based on the GST. The GST thereby has had a huge effect on the economy of the country. Taxation has a huge effect on the economy.

We are here today discussing the GST. We are making small changes to it in order to improve it. I believe to this very day that there is a lot of anger out there about this most hated tax.

There are businesses in Edmonton close to where I live that advertise sales in the papers that are called GST events. They do this today, 10 years after the tax was imposed. Just about every week one of the furniture companies or car dealerships will have a GST sale. In smaller letters, the ads say that the company will pick up the GST.

Companies could simply say that they will give buyers a 7% discount. Some people will show up and pay attention to it. However, when a great big sign says “We will pay the GST”, even though it is only 7%, people will go to the sales. It makes them feel good when they do not have to pay that hated tax.

I come from the province of Alberta where we had no sales tax until the GST. It was wonderful. If an item was marked $4.99, we would pay with a five dollar bill and get a penny back. It was very healthy for our economy. Why is it that Alberta is a province which is so well off compared to some of the others? I contend that one of the reasons is that over the years Alberta has had a much more rational and less offensive tax policy.

It affects me to this day as I spend approximately half of my time in Ottawa as a member of parliament and the other half in other parts of the country, most of it back home in Alberta. Perhaps I should not say this, but whenever I need to buy something I buy it in Alberta and bring it back here.

I do not usually have time during the day to go to the stores around here, but even if I did I would postpone it. Not long ago I needed some videotapes in my office to record one of my colleagues giving a speech in the House. I bought them in Alberta because I did not have to pay a provincial sales tax. The provincial government may look at all the money it gets from this tax, but we should look at all the money it avoided.

A number of years ago the provincial government of Saskatchewan imposed a tax on fuel. It then made a rule that every farmer and every businessman who submitted their receipts at the end of the year could get a rebate of that tax. In other words, the purpose of the tax was simply to tax people from out of the province.

I and hundreds of other people responded to that. My family still lives in Saskatchewan. I go to visit them. What did I do? I used to drive from my home to Swift Current where my family lives. I would visit with them, fill up and drive home again. After this tax was brought in I drove to the last gas station at the Alberta border. I filled up, drove to Saskatchewan to visit my family, drove back to that town in Alberta and filled up there in order to avoid this tax.

Introducing that tax did nothing for Saskatchewan. The numbers show that its revenue went down as a result. Meanwhile it had a huge administrative boondoggle, taking money and giving it back. How am I relating this to the GST? Let me just finish the Saskatchewan example.

Its revenue went down and its local businesses lost business. A local business used to sell me a tank of fuel every time I went down there. After the tax was brought in, and in fact I do not know if it still has this tax, I got into the habit of filling up in the last town in Alberta, whether it was Wainwright or Provost; driving to Saskatchewan; and making sure to get back there before I was out of fuel.

I did not give them the business any more so they lost the profit. They could have made some profit from me, but they lost it because of their government's tax policy.

The GST does the same. I do not know whether Canadians are aware that the GST brings in approximately $50 billion a year of gross revenue. Members will be amazed when I tell them that approximately $25 billion of it is sent back in refunds and rebates. That is absurd. Why have a system where the money just spins in circles in a huge centrifuge? The only thing we are supporting by it is a huge army of government bureaucrats whose only job is to process the payments of people who have put money into a pot when in fact they will get it back.

Not long ago a lady in my riding phoned me and said that her small business was in trouble. It had a couple of gravel trucks to haul snow in the winter and to help with road construction projects in the summer. Its old trucks were just about worn out.

If that small business were to buy a new truck, the value of the truck could be depreciated over time, but when it is purchased the GST must be paid in full upfront, even though it was entitled to some of it back in terms of the way this money goes swishing around. It is a terribly silly, useless, ill conceived and badly administered tax. It was then and it is now.

I am sorry that I have to end my remarks. Maybe I should ask for unanimous consent since no one else seems eager to speak. May I have another five minutes? I would love that.

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

12:20 p.m.

The Acting Speaker (Ms. Bakopanos)

Is there unanimous consent for the hon. member to have five more minutes?

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

12:20 p.m.

Some hon. members


Sales Tax And Excise Tax Amendments Act, 2001Government Orders

12:20 p.m.

Some hon. members


Sales Tax And Excise Tax Amendments Act, 2001Government Orders

12:20 p.m.


Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Madam Speaker, with all due respect for my colleague from the Alliance, I must say that he had enough time to express his point of view. If he wanted more time he should not have shared his time with his colleague.

I am pleased to have the opportunity to speak to Bill C-13, concerning changes to the excise tax and to the payment of GST-HST refunds.

We would have appreciated it if the Minister of Finance had used this reform of the excise tax to abolish, at least on a temporary basis, the gas tax, in order to give a break to independent truckers, in particular, and everyone working in industries that rely heavily on gas.

Way before the last election, we urged the Minister of Finance and the Liberal government to take this measure to help those who are being badly hurt by the ups and downs, but mostly the increase in the price of gas, natural gas and heating oil. Since the minister was tinkering with the excise tax, we would have expected him to suspend on a temporary basis the excise tax on gas.

We are disappointed by this omission given how serious the situation is for some taxpayers, particularly, as I mentioned, the independent truckers who have been having a lot of trouble these last two years to make ends meet.

Second, we would have liked to see—and it is sad to say that we would have liked to find certain things in Bill C-13 that are not there—the Minister of Finance, in this harmonization exercise between the tax provisions on GST and harmonized sales taxes or the provincial sales taxes like the Quebec sales tax, remember that the GST and the Quebec sales tax were harmonized several years ago.

The Quebec government footed the bill for the harmonization of the GST and the QST. It was never compensated for the subsequent tax revenue losses. It was a disappointment to us, three and a half years ago, when the Minister of Finance signed agreements with three of the maritime provinces for harmonization of the provincial sales taxes and the GST and, moreover, gave these provinces $900 million in compensation.

Quebec has been demanding the same compensation since the federal government, that is to say the Minister of Finance, announced this $900 million compensation package for the three maritime provinces for the harmonization of their sales taxes and the GST. We are entitled to such compensation. According to calculations made by us and by the Government of Quebec, the amount of the compensation could be in excess of $2 billion, if we use the same figures the Minister of Finance used when three of the maritime provinces accepted to harmonize their provincial sales tax with the GST.

We find nothing about this in the bill, even if it deals with harmonization of the GST and of harmonized or provincial sales taxes. This is great disappointment.

Since our arrival here in 1993, we have been asking the federal government for real tax reform. This is not to say that the harmonization provisions contained in the bill are not valid; quite the contrary. The bill contains very good provisions, and I will come back to them later. The bill deals with issues which should have been dealt with years ago, namely the harmonization of federal and provincial sales taxes.

However, we have asked the minister for real tax reform. We did not ask for this on a partisan basis. Since 1996 we have bein conducting studies and making serious proposals to the finance minister regarding an indepth reform of personal and corporate taxes.

Our proposals were so devoid of partisan thinking that when we, in the Bloc Quebecois, tabled our analysis reports, the government was delighted and considered them as serious proposals for tax reform. Unfortunately, since 1996, apart from having congratulated us for our excellent work, the Minister of Finance has not undertaken any real tax reform.

Year after year, in all his reports and more recently again, the Auditor General of Canada, Mr. Desautels—whom I congratulate, by the way, on his excellent work over the past 10 years—spoke of the need for a real tax reform. In his 1992, 1996 and 1998 reports, he also mentioned the disastrous effects of certain federal tax provisions and of the tax agreements between Canada and other countries throughout the world, the result of which could be to erode the federal tax base.

This means certain provisions could decrease the tax revenues the federal government could collect if the Income Tax Act were properly enforced and if fiscal co-operation accords, or tax treaties, were signed with countries whose tax rates were similar to Canada.

This is very important. It is so important that in his final report, which was a sort of legacy, Mr. Desautels, the auditor general, said, and I quote:

One of the biggest threats to the tax base lies in the international activities of Canadian taxpayers, particularly the use of tax havens. This is not unique to Canada; many nations are working individually and together to find solutions.

In report after report since 1992, the auditor general has spoken about the danger to the tax base of Canadian taxpayers' international activities, which are based on tax agreements signed with countries not considered to have a normal tax system.

They are seen as tax havens, countries whose rates of taxation are so minimal and their tax treatments so preferential compared to what we have here and in the United States, that these provisions, which are permitted under the tax agreements between Canada and these countries, lead to a substantial amount of tax avoidance. It means that, because of investments made elsewhere throughout the world in these tax havens, the federal government has been losing tax revenues at an alarming rate, particularly over the past 10 years.

I will quote some figures to give members an idea of the size of this phenomenon. In 1999, the last year for which this kind of data is available, money invested by Canadians abroad totalled $257 billion.

Nearly $28 billion of the $257 billion were invested in three countries considered as ideal tax havens, that is countries where the corporate tax rate, for example, is nil in some cases. It is 0% in some countries, and 2% to 3% in others. Three as the countries at the top of the list as ideal tax havens have received nearly $28 billion in Canadian investments abroad.

This means that 10% or so of direct Canadian investments abroad have gone to three countries considered as tax havens, with tax rates that are ridiculously low or non-existent. They are Barbados, the Bahamas and Bermuda.

Canadian investments in these three tax havens are larger than all the Canadian investments in the whole of Asia. Barbados, in particular, accounts for $17 billion in direct investments, and these investments are larger than those made by Canadians in Japan, France and Mexico taken together.

Is it normal that a country like Barbados, with a very small population, can account for that much direct investment by Canadian taxpayers? As I mentioned, Canadian citizens have invested $17 billion in this small country.

With regard to investments in tax havens, they have been growing considerably over the last 10 years. I will give some revealing figures. I think the finance minister should have dealt with tax reform long ago, and he had a good opportunity to do so, and should have reviewed the tax conventions Canada has signed, particularly with countries considered as tax havens.

There are 28,000 companies, subsidiaries of Canadian, British and other corporations, operating in the Cayman Islands, the population of which is only 30,000. Members will admit that there is something odd about the way the Cayman Islands attracts businesses in view of its population.

In the Turks and Caicos Islands, a British colony north of Haiti, there are 7,000 people living in the whole of the Turks archipelago—not to be confused with the country of Turkey—but there are 16,000 companies, Canadian for the most part.

There is something odd about the way these countries attract billions of dollars in Canadian investments. The federal government's inaction on this issue has been condemned not only by the Bloc Quebecois and sovereignists, but also by the OECD, the Organisation for Economic Co-operation and Development, which published a report a few months ago.

The report says that OECD countries that have relations with countries that are considered as the worst tax havens, the worst contributors to tax evasion—the money that does not go into federal coffers, but rather into investments made by the wealthiest Canadian taxpayers in these countries—should denounce or cancel tax conventions signed with these countries.

The three worst countries mentioned in the OECD report—we have nothing against the people of these countries, but it is the OECD that says this—were Barbados, the Bahamas and Bermuda. It is Canadians who are making these foreign investments in the Bahamas.

The OECD condemns these countries as being the worst in terms of tax evasion and as being ideal tax havens. The OECD is asking its members—Canada is a prominent member—to cancel tax conventions that might exist between Canada and other OECD countries and tax haven countries. Far from abolishing them, Canada is promoting these countries that are considered as tax havens and promoting Canadian investment there.

To make a long story short, a tax convention is an agreement between Canada and another country to avoid double taxation of the profits of branches of Canadian corporations abroad, in other words, to avoid the profits being taxed in the country where the branch is located and taxed again by federal tax authorities when they are brought home.

Normally tax conventions are very useful and perfectly justified. A corporation cannot be taxed in the United States on the profits its branch generates there and taxed again when these profits are brought back in Canada. It would be absurd.

Since tax levels in Canada, in the United States and in most OECD countries are more or less the same, give or take a few percentage points, we can justify the existence of and need for tax conventions. Profits generated by Canadian branches abroad, in Europe, for example, cannot be taxed at 30% in Europe and then taxed again at the same level here. It would not make any sense.

When it comes to countries that are considered tax havens, with tax levels of 0% on corporate income—in the Bahamas—or 2.5%—in the Bermudas, we have to ask why Canada should sign tax conventions with them, especially since the OECD has just condemned this practice, which the Bloc Quebecois has been criticizing since 1993. It does not make any sense to sign tax treaties with countries where the tax levels are so totally different from ours that they are considered tax havens.

We must bear in mind that what is invested in these countries is not taxed in Canada and that Canadian taxpayers must therefore make up for this loss in tax revenues.

It is not because we now have a budget surplus that we should let go of some of our tax revenues by signing tax treaties with countries identified as tax havens, let go of hundreds of millions, if not billions of dollars, in current and future taxes on investments.

We have nothing against wealth or against the wealthy, but there is a limit to being the laughing stock of the world, when our taxpayers have to compensate for the inaction of the Minister of Finance in the area of tax reform.

I said it before and will say it again, the Bloc is no longer the only one to urge the government to terminate the tax treaties signed with some 30 countries that are considered the worst tax havens in the world. Since the release of its recent report, the OECD is going after governments that are unfairly attracting investments and are hurting most member states of the OECD with their tax provisions, which are much too lax.

Furthermore, it is rather strange—and I will be able to ask the Finance Minister about this later—that we still have a tax convention with the Bahamas, for example, while the OECD financial action task force on money laundering, or FATF, in a report tabled on June 22, 2000, points the finger at countries that are not co-operating in the fight against money laundering.

Among these are two countries with which Canada has tax conventions and where Canadian investments are astronomical, not to say unbelievable. I am talking about the Bahamas and Bermuda, the two countries Canadian investors like best.

How can it be explained that, the OECD having condemned these countries as being rather lenient with regard to money laundering, Canada still has a tax convention with them, especially the Bahamas?

Somewhere in all of this there is a problem bordering on the ethical. If it were the Bloc Quebecois saying so, one could say that these are partisan comments, despite the fact that we have tried since 1993 to act in a non-partisan way to propose real measures and to speak for Quebec and Canadian taxpayers on tax reform.

However, now the OECD has just released a report that points the finger at 35 countries meeting the criteria of tax haven. The finger points as well at countries which do not co-operate in the area of money laundering. Yet we continue with our tax conventions with these countries. There is a serious problem in this regard.

Not only do we retain the tax conventions but we encourage Canadian investors to use these tax havens to swell Canadians' savings. The government is encouraging this tax evasion.

On July 16, 1999, for example, the Canadian Departments of Foreign Affairs and International Trade published their calendar of special events for 1999-2000 in CanadExport , the departments' major trade publication. Included was the title of a conference, a seminar given by the Departments of Foreign Affairs and International Trade “Demystifying Tax Havens”.

The federal departments and the Government of Canada promote tax evasion, promote the outflow of capital to tax havens. These are the topics covered, in broad terms, in this seminar organized by the federal government. They discussed the origin of tax havens and their use as a financial strategy imagine that. They encourage the use of tax havens to avoid federal tax abroad. Great morality, this government.

They also discussed the criteria for selecting a good tax haven. Not only was the use of tax havens being promoted but they also said “Listen, the best one is probably the Bahamas. There is no corporate tax. You can do whatever you want. There are no labour laws and no environmental laws to speak of. Use the best tax haven”. This is the message that was conveyed.

The fourth theme of the conference—and this is shameful—was “Tax havens and Canada's tax laws and how to get the most out of your tax havens”. Unbelievable. A seminar organized by the federal Department of Foreign Affairs and International Trade teaches investors how to save as much federal taxes as possible. They are told to take their money abroad, to the best rated tax havens, while the taxpayers who are here and who cannot afford to pay for financial planners and to invest in tax havens continue to pay, continue to be choked by the tax system in spite of the tax reductions recently announced by the government. These reductions are totally inadequate, given the margin available to the government to lower taxes. The middle income taxpayers, middle income families, are the ones paying, not millionaires.

Millionaires and billionaires use the federal government's services to send money abroad without having to pay any taxes to the federal government. The result is that we, the majority of low and middle income taxpayers, continue to pay taxes and to be choked by the tax system. This is unbelievable.

It is not just the OECD report that provides a picture of the 35 countries considered to be tax havens. There is also a report from the task force on money laundering, which says that Bermuda and the Bahamas are among the countries that do not co-operate in the fight against money laundering.

Those two countries are considered by Canadians as tax havens par excellence. Not only do they choose them themselves, but the federal Department of Foreign Affairs and International Trade tells them how to use them. One day we will have to wake up. The members will have to wake up, put on the brakes and say that this is enough.

The tax system has to be changed. We have to make sure that there will be no tax treaties with countries considered as tax havens in the future.

I once read a statement made by David Dodge, the former deputy minister of finance and now governor of the Bank of Canada. He said that we have to maintain our tax treaties with the underdeveloped countries because they help to create jobs and wealth in those countries. Fat chance. They have nothing to do with job creation or economic growth.

The only thing that tax treaties with those tax havens do is give millionaires and billionaires a chance to get even richer. Those who already have money manage to escape taxation here and to make even more money because they pay very little, if anything, in income tax in the host country. That makes absolutely no sense.

Since 1993 we have been denouncing the existence of tax treaties between Canada and the worst tax havens in the world. Despite our criticism and despite recent criticism by the OECD, which is not a branch of the Bloc Quebecois, or the Parti Quebecois calling for the elimination of tax treaties with countries that favour tax avoidance, we are here dealing with bills aimed at rectifying certain situations or harmonizing certain taxes. Obviously, we support this type of measure, but there is a fundamental problem with regard to our tax system and tax treaties that needs to be dealt with.

Before the election, considering the fact that the fight against the deficit had turned into a surplus accumulation exercise by the finance minister, I expected a little more decency, a little more serenity with regard to tax reform. I expected the government to announce a thorough reform of our tax system and a review of problematic tax treaties.

Instead of that, we heard statements of intention and statements based on the government's past actions. It says that it has indeed brought in tax reform but that there is always room for improvement.

I am not known for being mean but there is a great sense of urgency here. When we know that it is not only the opposition parties that are calling for a thorough reform of our tax system and a review of tax treaties but also the OECD, it means that the whole industrialized world unanimously agrees that we need to review our tax practices.

I am amazed that this has not been done earlier because all the evidence is there. Since 1993, use of these tax havens has climbed sharply. However the example has to come from the top down and, in this regard, the Minister of Finance is not setting a very shining example. He himself has companies in countries considered to be the worst tax havens.

He has companies in Liberia, the Bahamas and Bermuda. How can someone have any political will to reform the tax system, to review tax agreements between Canada and Bermuda or the Bahamas, for instance, when he himself is involved in these countries and benefits from the tax agreements between Canada and these tax havens? It seems to me that such a person does not have a very strong political will to reform and to review tax agreements. That is the result.

The members opposite should stop looking so shocked every time we raise this problem. This is directly related to what the Minister of Finance is. He is a shipowner. He owns companies. He has 13 subsidiaries in other countries considered to be tax havens and identified as such in an OECD report. He is taking advantage of this tax avoidance. How could he be expected to be interested in reviewing all this?

He cannot review it because he is both judge and judged. That is why, given what we know, we should be asking questions. Is it urgent to review tax agreements? The answer is yes.

First, we should review all tax conventions Canada has signed in recent years and, in particular, conventions with countries which are on the OECD list and are considered the worst tax havens.

Second, talking about the preservation of the tax base, the auditor general has made it crystal clear. He said that one of the biggest threats to the tax base lies in the international activities of Canadian taxpayers, particularly the use of tax havens. The situation is critical.

We have a problem if we do not act immediately to review and, if need be, cancel tax conventions with countries which make tax avoidance easier, something rich Canadian taxpayers take full advantage of, and with countries which do not co-operate adequately in the fight against money laundering.

Third, if the finance minister feels he is both judge and party to the case because of his companies and subsidiaries located in countries considered to be the worst as far as tax havens and tax avoidance go, he should step aside and let somebody else do what has to be done.

It is however doubtful that the Minister of Finance will start a movement to reform tax conventions and taxes which could enable us to ensure that the most serious threats to the tax base, as criticized in 1992, 1996, 1998 and recently in the auditor general's report, which covers the past 10 years, are countered. Until they are, I do not think this objective will be met.

I challenge the government to truly reform taxation.

Bill C-13 deserves some praise. Taxation is harmonized, especially the GST and the HST, which have some value and which were long expected. However, the minister and the government must do more than that. That is important but reform of the tax conventions and of taxation is vital and fundamental.

The surpluses are piling up in government coffers. It is a simple arrangement. Everyone is cut off and it piles up. Do the people not entitled to employment insurance, who call for more money for health care and are cut off by the government, the students wanting more money for education and who are cut off by the federal government, realize that there need not have been cuts, if we had had responsible government and a Minister of Finance who was not both judge and jury in recent years?

They would have kept their tax base. We could have built up surpluses, but ones paid for by those with the means to pay and to fund and not have them accumulated through savage, drastic and inhuman cuts to employment insurance, savage cuts to health care and savage cuts to education.

We must realize that every time a billionaire invests money in the Bahamas with the help of the federal government and of the Department of Foreign Affairs and International Trade, that money is no longer in the federal treasury. The Minister of Finance then gets new money from the poor, from the unemployed, from students who have a hard time making ends meet and from the sick. Is it not indecent to maintain the status quo because the Minister of Finance is both judge and jury here?

In the coming weeks, we will continue to harass the government regarding this important issue since the future of the federal tax base is at stake. It is an unbelievable injustice that this government is promoting when it uses tax havens to tell millionaires and billionaires “Such is the Canadian tax system; here is what our tax treaties with the Bahamas, Bermuda or Liberia provide and what you should do to take advantage of these tax havens to the fullest”.

The government is telling rich taxpayers how to avoid paying taxes in Canada by using tax havens that are being condemned by the OECD and that often do not co-operate in the fight against money laundering. This is serious stuff.

While we support Bill C-13 because some provisions are worth supporting, we are sending a wake up call to the public and asking the Minister of Finance to stop looking after his own interests, to stop being judge and jury and to let someone else undertake a true tax reform, a comprehensive review of all the tax treaties signed by Canada with countries that are considered to be tax havens. We will fight tooth and nail for that.

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

March 2nd, 2001 / 12:55 p.m.


Lorne Nystrom NDP Regina—Qu'Appelle, SK

Madam Speaker, I want to say a few words on Bill C-13 which is before the House today. It deals with a whole number of taxation issues. I only want to make about three different points to facilitate this bill going before the committee.

First, the tax bill deals with the GST. It is rather ironic that between 1990 and 1992 the party across the way, and I remember it so well, promised to get rid of the GST. I remember the Minister of Canadian Heritage even resigned her seat to go back and get a mandate from the people in Hamilton East because of the promise to scrap the GST, the goods and services tax. Now we have a government that is bringing in amendments to the GST and a taxation regime that includes the GST. No wonder people are cynical of this institution.

If elected, the Liberal Party promised to get rid of the GST. I notice almost every Liberal has left the Chamber in shame. There is only one Liberal left in the House and he is hanging his head because of the embarrassment.

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

12:55 p.m.

The Acting Speaker (Ms. Bakopanos)

I am sure the hon. member, who has been in the House longer than I have, knows full well we should not talk about the presence or absence of other hon. members of the House.

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

12:55 p.m.


Lorne Nystrom NDP Regina—Qu'Appelle, SK

Madam Speaker, you are absolutely accurate. The rules of the House say we should not do that. I just wanted to point out the truth to the Canadian people. I am sorry that is a violation of the House rules.

I can say that the only member in the House is hanging his head in shame because the promise on the GST was broken by his party. I remember that so well. There is a second Liberal over there and she is hanging her head in shame as well over the broken promise on the GST.

That is a promise they made. It was a solemn commitment to the Canadian people. I remember the leader of the opposition at the time, who is now the Prime Minister, getting up in the House and talking about getting rid of the GST.

He would say that it was is time to get rid of the GST, that it was not a fair tax at all and that if Canadians elected the Liberal Party the GST would disappear”. The GST is still here for Canadians.

The GST is still here. It is a very unfair tax. It is a tax that is really like a flat tax. No matter what one's wealth is one has to pay the same 7%. When we buy some hardware goods, or a car, or get a haircut or buy a new tie, there is a 7% tax that everybody pays. Even a really wealthy member like the member across the way from near Toronto has to pay 7%, the same as some poor guy in Kamsack, Saskatchewan. It is a very unfair and unjust tax.

Our party has said that we should start reducing the GST, starting with 1%, and take it off books and necessities. Eventually we should eliminate the GST because it is a very unfair tax. That used to be the position of the Liberal Party before it was influenced and terrified by the Alliance and the Reform, so it moved to the political right. That is the first point.

The second point I want to mention deals with the comments made by the finance critic from the Canadian Alliance. He stated that taxes are horrible, that taxation is an awesome power in the hands of parliament, said that taxes are much too high and that taxes should be reduced.

In some cases taxes are too high, and the GST is a good example of that, but instead of talking about a general across the board tax cut, we should be talking about a progressive tax system that is based on the ability to pay. It use to be that way but it was changed a number of years ago by the Mulroney government and continued on by the Liberal Party across the way.

A recent CBC poll released a few days ago asked Canadians what they felt was the most important issue in the country. Over 40% of them said that investment in social programs, in particular, health care, was the most important issue, whereas only 7% said lowering taxes was the most important issue.

Members of the Canadian Alliance have said time and time again that there should be a radical reduction in taxes across the board. Canadians do not want that.

The Alliance Party is really an anti-government party. It does not believe in government nor in public institutions. It wants to privatize almost everything. It probably even wants to privatize the post office and go to pony express or whatever. It does not believe in the Canadian Wheat Board, the CBC or a public one tier health system that is supported by the tax system of all Canadians. That is where the Canadian Alliance stands but it is not where the Canadian people stand.

It is important to point out in the debate today that we need a taxation system that is progressive and based on the ability to pay. We need a taxation system where wealthy people pay more taxes and ordinary people pay less taxes and get a decent tax break. The position of the New Democratic Party and an overwhelming majority of Canadians is that we should have a taxation system where the wealthy and the large corporations pay their fair share.

The Canadian Alliance stands up for the very wealthy and the large corporations. It is getting more and more of its money from those large corporations. It is no longer grassroots party of ordinary Canadians. People should realize that as we talk about this issue today.

The last point I want to make is in regard to household debt. Household debt is at an all time high. When big tax cuts are made they mainly go to the wealthy people not to the ordinary people who have huge household debts. The Vanier Institute recently stated that during the decade of the 1990s, the wealthiest 20% of Canadians saw their incomes go up by about 6.6% and the poorest 20% of Canadians saw their incomes shrink by some 5.2%.

For a number of years, throughout the fifties, sixties and into the seventies, there was a gradual reduction in the gap between the rich and the poor. In the 1990s, at the end of the Mulroney years and into the years of this government, the gap between the rich and poor has widened once again. The rich are getting richer and the poor are getting poorer. The Canadian Alliance wants to spread it even wider by having a flat tax where everybody would pay the same rate. This would mean that the rich would get richer and the poor would get poorer. That is exactly the way the Alliance Party wants to go.

We need a progressive tax system with five or six different tax brackets based on the ability to pay. We have to eliminate flat taxes like the GST. We have to phase them out because it discriminates against the poor. That is exactly what Canadians want.

Canadians want a progressive tax system based on the ability to pay. They also want to make sure that there are enough taxes in the country in order to invest in infrastructure, social programs and into the institutions that are important to them. They want enough money raised through taxes to make sure that we have not just $500 million for farmers but a couple of billion dollars to help farmers. That is what taxes are all about.

However, we get the Alliance Party saying that there is spending madness going on by the Government of Canada. What is that? Is it too much money for the old age pensioners, the poor, the farmers, the fishermen and the health care system?

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

1:05 p.m.


Pat Martin NDP Winnipeg Centre, MB

Squandering money on the poor.

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

1:05 p.m.


Lorne Nystrom NDP Regina—Qu'Appelle, SK

As my friend from Winnipeg said, squandering money on the poor. That is the position of the Alliance Party. My goodness, the Liberal Party is not too far behind in its shift to the right.

We need a tax system that is fair and just. We need a tax system that raises enough money to support public institutions and the infrastructure of the country. Infrastructure has been cut back over the last number of years, particularly in the 1995 budget, and it is time to reinvest in ordinary people. That is what the debate is all about.

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

1:05 p.m.

Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Madam Speaker, I welcome the opportunity to respond to the member's speech.

Usually I rise on points of order when members do not get the name of our party right, but I will simply say that member from the CCF has really misrepresented our position. When he talks about our party not being concerned about those who are less wealthy, he is misrepresenting what we actually believe.

We believe that it is best for people to have a job. We have a tax policy that would reduce taxes according to our actual numbers. If he were to be intellectually honest enough and actually look at them, instead of just spewing about them, he would see that the greatest tax reductions in our plan are for exactly the people he is talking about. In other words, when some of the rich people get a tax reduction, those who are in the lower brackets get a 100% tax reduction. That is not good enough for him. I do not know what he is asking for.

With respect to the tax for the rich, we believe that those who are well off should not be punished for their successes. Those are exactly the people we need to drive our industries, to produce jobs, to hire people and to take poor people, give them employment and get them off the welfare rolls.

Our view is that the measure of the effectiveness of our economy is not how many people we have on welfare but rather how many people we get off welfare. That is what our position is and frankly I do not care whether the member from the CCF has a response to that or not.

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

1:05 p.m.


Lorne Nystrom NDP Regina—Qu'Appelle, SK

Madam Speaker, the member over there is the author of the hidden agenda.

During the election campaign, do members not remember when he made the great statement about privatizing old age security and the Canada pension plan? He said that if the Alliance Party was elected it would privatize those things, that people would have monster RRSPs. He said that would be the panacea to get the government off the backs of Canadians, that everyone would be in the private sector investing in the stock market. Do members remember that in the campaign?

I remember picking up the Globe and Mail and reading a big headline about privatizing pensions and getting rid of old age security and the CPP. The member for Elk Island was the author of that hidden agenda. He even took his own leader by surprise.

That is the kind of member we are dealing with here. When he talks about these kinds of issues he fails once again to mention the tax policy of the Alliance Party. It is a flat tax policy. It wants a single tax rate. With a single tax rate, someone who is making $300,000 or $400,000 a year will get a bigger break then the ordinary citizen who is making $30,000 or $40,000 a year teaching at an elementary school in Churchill, Manitoba. Those are the facts.

That is exactly where that party stands. It wants a big break for the wealthy. It believes that the free market will look after the poor. It believes in what is called the trickle down theory of economics, that if we feed enough oats to the horse, eventually enough will trickle through the horse to feed the sparrows. That is exactly the philosophy of the Alliance Party of Canada.

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

1:05 p.m.

Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Madam Speaker, how grateful I am for the opportunity that the member from the CCF has given me to say that during the campaign I too was grossly misrepresented in that case. I bear part of the responsibility. By giving an interview to a member of the press, I made the gross error of forgetting that I was not in a debate in the House of Commons. I got into a debate with the interviewer and I probably said some of the things that were reported about me. I greatly regret having given him the interview because it gave him, during the time of the debate, the two or three quotes that he needed.

My apologies to you, Madam Speaker, the Canadian people and to everybody for that. It was a misrepresentation of what we really want to do. We want to fix things and improve things for Canadians.

With respect to the hon. member's statement on taxes for the rich, it just is not true. Let us say, for example, that I was walking along with my little grandson and we were carrying some stuff. Let us say that I had a load of 100 pounds on my back and my little grandson was carrying five pounds. Somebody else comes along, maybe my grandson's dad, my son, and says that he will help carry that. He takes half of my load and he takes all of his son's load. My grandson had a 100% reduction in his load, from five to zero, and I had a reduction in my load of 100 to 50. Sure I got a bigger reduction but it equalizes it out.

It is just totally intellectually dishonest for that member and the members opposite to so misrepresent our tax policy because it just is not on.

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

1:10 p.m.


Lorne Nystrom NDP Regina—Qu'Appelle, SK

Madam Speaker, I wish to respond to the hon. member from the time warp who was talking about the CCF. That was about 40 years ago. However, I realize he is a bit behind the times.

It is the policy of the Alliance Party to have a flat tax, a single tax rate. The former Reform Party and now the Alliance Party both have this idea of a flat tax. Even the great socialist in the United States, George W. Bush, has rejected that as being unfair and unjust and yet the Alliance Party is advocating a single tax rate so that a wealthy person making $300,000, $400,000 or $500,000 a year or a millionaire making over $1 million a year would pay the same tax rate as a high school teacher making $40,000 or $50,000 a year. That is not fair and it is not just. It is not equality of condition.

I am glad that party is saying that because I now know where that party stands. It is a party of the past. It is a throwback to the forties and fifties when the rich would get richer and the poor would get poorer and be grateful for it. That is the Alliance philosophy. Thank God about 90% of Canadians reject that philosophy and that attitude.

I am sure that the more Canadians hear about it, the smaller and smaller the Alliance Party will get because it represents a very small point of view. Even the leader of the Alliance Party has put that member so far back on the backbenches that he is always hiding behind the curtain because of his points of view.

I am glad this issue has been raised today. I am glad the people are now seeing where the Alliance Party stands. It stands for wealthy people. It stands against public institutions such as the wheat board. It stands against a one tier health care system. It wants two tier health. It wants private clinics. It wants whatever is good for capital and whatever is good for the wealthy people. It does not want pensions for senior citizens. It wants to get rid of the Canada pension plan. It wants big RRSPs, which will help the wealthy, and to hell with the poor, the ordinary citizen of Canada. That is exactly where it stands. Before long, it will become an historic artifact in the history of Canadian parliamentary annals, just like the Social Credit Party so many years ago. Its hero was Bill Vander Zalm in British Columbia. We can see what has happened to Mr. Vander Zalm and the Social Credit Party.

Now the member from Vernon is getting up on his feet. He was a member of the Social Credit Party. He is a worshipper of Bill Vander Zalm. That is the kind of politics that was rejected by the people of B.C., and it will be rejected by the people of Canada.

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

1:10 p.m.

Canadian Alliance

Darrel Stinson Canadian Alliance Okanagan—Shuswap, BC

Madam Speaker, I cannot just sit and listen to the ramblings and the ravings of the hon. member from down on the far reaches of the opposition benches.

Maybe I should explain a little bit that there is a big difference. I know it is hard for the member to comprehend so I will say it very slowly so that maybe he will really understand. The difference between a single rate and a flat rate tax is deductions.

In a single rate tax standard deductions are allowed. That is the policy. Those making over $100,000 are taxed more. It is unfortunate to say but it is the truth.

Let us go into the history of the NDP. We are all well aware of how the NDP got ahead in British Columbia and how it stole from the blind and from charities through bingo hall services. That is common knowledge. We have also seen its socialistic attitude: the more people work, the more will be taken away from them. We are well aware of that attitude in British Columbia under the NDP regime in place there now.

We do not have far to look to see what NDP members think about private medicine. Their own leader uses private medical services in Canada. The hon. member knows that, yet he will stand here and tell the world that NDP members do not do that. That is their policy. What is good for them is good for them, and the rest of Canada can do without.

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

1:15 p.m.

Progressive Conservative

Greg Thompson Progressive Conservative New Brunswick Southwest, NB

Madam Speaker, thank goodness there is no question attached to that statement. My colleague from the NDP would be on his feet until at least supper hour.

This is an interesting debate today. We are talking about Bill C-13 which proposes technical adjustments to the GST. As my colleague from the NDP mentioned, it is probably a debate that under normal circumstances we would not be having. Witness red book one.

I am not sure whether or not red book one brought you to this place, Madam Speaker, but it certainly brought a number of Liberal MPs to the House of Commons. The election of 1993, among other things, was based on the promise to eliminate the hated GST.

The government received dividends from the GST in more ways than one. It obviously received political dividends, because it brought a lot of its members to the House under what in the real world are called false pretences. It is probably unparliamentary to say that, but I am being more generous than I should be. Obviously it worked.

The government has been in power now for over seven years and we are still saddled with the hated GST. Just by way of comment, I should mention that we supporting the technical changes to the GST. We will not hold them up. At least one person is applauding over there. I did not hear the parliamentary secretary applauding yet but I am sure he will before the day is out.

Talk about fooling the Canadian public. During the 1993 election I fought the issue as a government member, as a Conservative. It was the last year of the manufacturers' sales tax. Before the 7% GST we paid a hidden 13.5% federal sales tax on automobiles and other goods. It was hidden in the cost of automobiles and every other commodity.

We paid a price for our intellectual honesty. We said that we would eliminate the hidden tax and that from then on Canadians would see it at the point of purchase. In other words, if they bought a $10,000 car, 7% of it would be GST. Seven hundred dollars would be seen upfront. Someone buying a $20,000 car in 1991 would pay $1,400 in tax upfront. They would see it.

Many Canadians were surprised. They did not believe we had a hidden federal sales tax, which we did, but the old sales tax restricted our capacity as an exporting country. It was all part of the parcel.

We also brought in the free trade agreement, but that alone was not enough. We wanted to restructure how we did business in the country. We revised the tax rules. We brought the number of tax divisions down from a high of nine to around five in one fell swoop.

We then brought in the GST which levelled the playing field for exporters. It made us competitive in the international world, which we were not under the old system. The last year we had the manufacturers' sales tax was 1989-90. In that year that tax brought in $17.8 billion, which is quite a bit of money.

This year the GST will bring in $55 billion compared to the old system that brought in $17.8 billion. It is interesting that we will take $32 billion of that and pay it out in GST rebates to Canadians outside the higher income levels that the NDP sometimes mentions in terms of unfairness. It is a fair tax policy because a lot of the money is distributed to Canadians who need it via the GST rebate.

That is an astounding figure. When we do our research we find that the government talks about a $22.8 billion revenue from the GST. It excludes the gross. It only talks about the net. The gross income for the government under the GST is $55 billion and $32 billion of it is distributed to Canadians who need it. That is a lot of money.

Another point is that taxation must be fair. It must be perceived as being fair. My NDP colleague talks about it being unfair because the 7% applies to everyone. It is true that a millionaire or someone at the poverty line pays the 7% GST, but lower income Canadians get the benefit of the GST rebate which makes up for the lack of fairness. That was not present under the old system when the tax was actually hidden. That is a major improvement.

Another point is that we can never lose sight of fairness in taxation and what has to be taxed to make the system fair for everyone. A fair system must tax consumption. It must tax capital and incomes. We cannot simply take a tax and cover one base. Some people would argue that we should do away with the GST and just tax incomes, which would be completely unfair and unacceptable and would not work. It has never worked in any jurisdiction that has tried it and it certainly would not work in Canada.

We must spread out the way in which we collect taxes because if the government is smart and considerate in how it spends the taxes it takes in, at the end of the day it will benefit all Canadians.

When we are talking about tax bills as we are today we should point out that the government should consider bringing in a budget. It is March 2 and we do not have a budget. We are still working with a mini-budget from last fall, which was very convenient because it was brought in on the eve of an election.

I suggest the Prime Minister was smart enough to call the election knowing full well that some of the danger signals were out there, that we may be heading into a recession come early winter, late winter or possibly early spring. That was one of the things that motivated the Prime Minister to call an early election. Much to his credit he won it. We were right in terms of what might be happening in the economy. Some of the danger signals are out there.

On that point I will read into the record a comment from Don Drummond, the former assistant deputy minister to the Minister of Finance. He now works as an economist for TD Bank. Just last week in his article entitled Using the Federal Budget Surplus: Is there any left? he wrote:

Confused about the fiscal prospects of the federal government? If so, you are not alone. The October 2000 Economic Statement and Budget Update provided fiscal projections to 2005-06. However, those projections do not reflect the tax cuts promised in the Statement, nor the spending commitments made subsequently in the Red Book III and the January 30, 2001 Speech from the Throne. In addition, the economic assumptions underpinning the October Update now seem decidedly optimistic for the short term. To date, no attempt has been made by either public or private bodies to cut through the confusion.

Things have changed dramatically in the last 90 days. It was only 90 days ago that we stopped knocking on doors in an attempt to get elected. A lot has changed. We see some of the biggest and best corporations in Canada and in North America laying people off.

I see you signalling me, Madam Speaker. If I am getting the government in trouble in terms of time, I am sure you will rise and I will sit down. We want the legislation to pass. We do not want to delay it.

The government should bring in a budget to reflect today's reality because we are in the midst of layoffs. As we speak, the new president of the United States, George W. Bush, is proposing huge tax cuts which will put pressure on Canada to do the same.

We must attract business to Canada. We must do what it takes to keep the economy moving. It appears the U.S. wants to do that, but we are in a period of suspended animation: the world is good, why worry? It is not so. There are troubling signs on the horizon and we must move to do something about it.

In closing, I hope the government will at least take that into consideration in the next few days. We must do something. We cannot stand still. We must move to reflect times as they now are. Times have changed dramatically in the last 90 days since the last election.

Sales Tax And Excise Tax Amendments Act, 2001Government Orders

1:25 p.m.

The Acting Speaker (Ms. Bakopanos)

When we resume debate on the bill, the hon. member will have eight minutes and thirty seconds left in debate.

It being 1.30 p.m. the House will now proceed to the consideration of private members' business as listed in today's order paper.

Right Of Landing FeePrivate Members' Business

1:25 p.m.


Pat Martin NDP Winnipeg Centre, MB


That, in the opinion of this House, the government should eliminate the Right of Landing Fee (ROLF) on all classes of immigrants to Canada.

Madam Speaker, I am very pleased to be able to debate this important issue of national interest. A growing group of Canadians is calling on the government to eliminate the right of landing fee on all classes of immigrants. To the government's credit, about a year ago it eliminated the right of landing fee for all refugees. The same reasons why that was a good idea apply to all new Canadians and all immigrants. We believe it should be done away with altogether.

This marks the sixth anniversary of the right of landing fee. It was introduced on February 28, 1995. At that time we were in a deficit situation, the government was in a cutback mode where all programs were being reviewed and a great deal of effort was being made to enter into cost recovery mechanisms. When it introduced the right of landing fee the idea was that it would help offset the costs of some of the services new Canadians use, whether language training or settlement services. In actual fact, that money was never considered a dedicated fee for service. The money went into general revenues. It never really did get directly connected to the services it was meant to fund. In fact, during that period, program spending was being cut, hacked and slashed in the immigration department. Therefore, there was no direct correlation.

This is frankly why many critics of the right of landing fee call it a tax. The term that is being used is a head tax. The government does not like to hear that but this has become the same as the much loathed head tax of recent history. I remind the House that from 1885 to 1923 the government imposed a head tax on all Chinese immigrants to Canada. It started at $50 and rose to $500, specifically to bar entry to Chinese people coming to this country.

Many people view the head tax in the same way. It is a racist head tax because it is selective by nature. In other words, the $975 fee that is charged to every landed immigrant does not seem like an insurmountable barrier for a person coming from western Europe, Australia or the United States. However, for a person from the Sudan, the Philippines or Southeast Asia, that could be two years' salary. Therefore, it is an actual barrier to immigration. This is why we feel not only is it a financial burden on people who might choose to make Canada their home, it is a real blow to their morale.

New Canadians are wondering what kind of message we are trying to send out. The Minister of Citizenship and Immigration says they want to open the door wider and invite more new Canadians to this country. At the same time they put financial barriers that are true obstacles to many people, especially from certain parts of the world. In other words, the door is open if one can afford this fee for the privilege of coming here. The door is not so open for people who come from some parts of the world, such as the developing nations. These people need the refuge and the sanctuary that Canada offers arguably more than people from developed countries.

As I pointed out, there is a growing movement around the country of people who feel very strongly that the government should eliminate the head tax on all new Canadians, like the Ad Hoc Coalition Against the Head Tax. In fact, there is an organization of organizations that formed specifically around what it felt to be an unjust head tax.

The Canadian Ethnocultural Council has been working very aggressively on this issue. The Canadian Council of Refugees has made representation to the Canadian government demanding or strongly advocating the elimination of the head tax. The national Filipino association is on the record. The Maytree Foundation, the Canadian Labour Congress, the getting landed project and the Caledon Institute of Social Policy are on record. In fact, the Liberal Party of Canada, at its 1996 federal convention, passed a resolution for a review which would lead to the elimination of what we call the head tax. A lot of ethnic minorities within the Liberal Party were horrified when their government sent the message to the world that it was not as open a door policy as was thought.

The United States has a fee for service type charge associated with becoming an immigrant to that country. However, for a family of four in the United States, the total fees and charges would be about $1,580. In this country it would be about $3,150 for a family of four.

Let us look at the revenue. If immigration is supposed to be some kind of revenue generating service that we are offering here, let us be honest about that and say it. If the money is not going into settlement services and into actual language training or whatever it might be but is going into the coffers of the government to do with whatever it pleases, then it is another tax. As a matter of fact it is a lot of money. The government gets about $200 million per year from this head tax. Over six years, that is $1.2 billion.

When the Minister of Finance crows about getting out of the deficit situation and showing a surplus, let us look at where he is looking to find the revenue. There is $8 billion a year from unemployed Canadians with the EI fund surplus and $1.2 billion over this period of time from the poorest of the poor, those struggling new Canadians who might seek to make Canada their home.

I firmly believe the time has come for the government to act unilaterally. We do not need a change in legislation to eliminate the head tax. In fact, the minister has the right to implement, to raise, to lower or to eliminate any service charge or fee under the Finances Administration Act, I believe, section 19. The minister can simply act unilaterally because it is the right thing to do. She does not have to wait for the House of Commons to direct her that way. Enough Canadians have spoken.

I am going to cut my remarks short in a moment or two in the hopes that members from other parties will add their voices to emphasize the overwhelming support for the idea of eliminating this right of landing fee.

As I mentioned when it was first introduced, the idea was that it would directly offset the cost of running the immigration department. Now we have seen that there is no direct connection to the fee being charged and the service being rendered. It is not a fee for service as such, it is in fact a tax and an imposition.

Perhaps the most damaging thing about this head tax is not the financial burden it places on those who might seek to make Canada their home, it is the blow to the morale of recent newcomers to this country and those who would seek to reunite other family members and bring them here. They are having this hurdle thrown in their way, this unnecessary and I believe unwarranted obstacle to something that the government claims it is very interested in. It is always saying that family reunification is one of the three pillars of the immigration policy of the country.

The government has made it far more difficult since 1995 for any family to hope to bring other family members here, especially if they are struggling in a financial way.

I am going to end my remarks now. I hope to have some minutes at the end of the one hour and at that time I would be happy to conclude.

Right Of Landing FeePrivate Members' Business

1:35 p.m.


John Bryden Liberal Ancaster—Dundas—Flamborough—Aldershot, ON

Madam Speaker, I rise on a point of order. Being that this is private members' hour, I would like to seek unanimous consent to make Bill C-234 votable.

This is a bill that would amend the Supreme Court of Canada Act and require the supreme court to consult parliament in the context of its deliberations on charter challenges.

I have numerous representations from all sides of the House, from MPs who would like to speak to this bill. If I could get unanimous consent, I would be deeply grateful.

Right Of Landing FeePrivate Members' Business

1:35 p.m.

The Acting Speaker (Ms. Bakopanos)

Does the hon. member have the unanimous consent of the House to make Bill C-234 votable?

Right Of Landing FeePrivate Members' Business

1:35 p.m.

Some hon. members


Right Of Landing FeePrivate Members' Business

1:35 p.m.

Some hon. members


Right Of Landing FeePrivate Members' Business

1:35 p.m.

Gatineau Québec


Mark Assad LiberalParliamentary Secretary to Minister of Citizenship and Immigration

Madam Speaker, I welcome this opportunity to speak on Motion No. 231 from the hon. member for Winnipeg Centre on the right of landing fee.

This past week the Minister of Citizenship and Immigration introduced Bill C-11 in the House. The bill does not change the right of landing fee provisions and the reasons are rather simple. It is meeting the legitimate policy goal that the government has set for it and other fees for a range of federal services. There is no meaningful evidence that it has harmed Canada's ability to attract immigrants. Moreover when it comes to questions of how best to use money for our immigration program, dropping this fee is far less important than putting funds into better and faster processing.

First, let us be clear on what we are talking about and where this fee comes from. Back in 1995 the government made a series of important decisions that were necessary to get Canada's public finances back into shape. One of the most fundamental was that we decided that we needed to do more so that people who clearly and directly benefit from programs and services pay a portion of the costs associated with those services.

That is how the right of landing fee was introduced and set at the reasonable rate of $975. It was decided that fee would be paid by newcomers to Canada aged 19 and over.

It is charged to people coming to this country as qualified workers, entrepreneurs, business people, investors or members of the family class, regardless of the country of origin and the province of destination. If for some reason someone who paid the required fee does not get permanent residency in Canada, that amount is reimbursed.

The government decided to introduce the fee because the direct beneficiaries of immigration are those who come to Canada themselves. These people benefit from efficient immigration programs and services. They certainly benefit from the opportunity to prosper in Canada.

In the early 1990s, the immigration program was subjected to the same budget cuts as the whole of government. Then, in the consultations the government undertook in 1994 about what improvements should be made to immigration, it asked Canadians what they thought about the idea of introducing a fee that would help support immigration programs and services. According to a poll conducted on the subject in 1996, at least 72% of the respondents were of the opinion that this was a good idea and that the amount was reasonable.

The government examined the costs of providing these services and came to the conclusion that an amount of $975 was fair and reasonable. Therefore, in the 1995 budget the Minister of Finance announced the creation of the right of landing fees. Under this initiative, a loan program was introduced to help those who were unable to pay the fees immediately but could repay it later.

I believe that was a very important element. It was not considered as a burden for the newcomers. They could take their time to pay back this amount, as they were now living in a much more prosperous country than the one they had left.

For example, not everyone gets admitted, while others decide not to continue their application for different reasons. Citizenship and Immigration Canada had to manage a substantial refund process. It had to work with fluctuating currency rates and similar difficulties. From April 1997 we allowed clients to pay the fee at any time up until they received their visa. That has made financial arrangements simpler for everyone concerned.

The second major change came in the 2000 budget. That was when the government lifted the right of landing fee requirement from refugees. Effective February 28, 2000, the government recognized that these people have faced enormous difficulties and hardships. It knew that lifting the fee would help their resettlement and yet mean just a reduction of about $15 million a year in revenue from the fee.

The member for Winnipeg Centre thinks we should go further. He wants Canadian taxpayers to pick up the whole tab for services to immigrants. He would be happier to take away the $131 million a year from settlement programming to implement his proposal. He is quite happy to see the people who directly benefit from these services, most of whom are skilled workers, entrepreneurs or business immigrants, not paying any kind of fee.

Obviously we cannot agree. The facts tell us there is no compelling argument to change a system that works. Has the right of landing fee reduced Canada's attractiveness to potential immigrants? Far from it. There is no evidence that the fee has had any impact on application levels at all. If anything, the application levels are rising. There is no evidence that potential applicants are ignoring Canada as a possible destination in favour of places that might have lower fees.

Let us recognize that there are many fees being charged by other major immigrant receiving countries, much higher than those in Canada.

The Canadian public still strongly supports these fees, which ensure that those who benefit from a very important service help to pay part of the costs involved.

If we decide to eliminate an entire source of revenue in one area, there are in fact only two options left if we do not want to modify the general financial balance. We can compensate by digging a little further in somebody else's pockets, or we can reduce the services that this revenue is supposed to support.

During the consultations on immigration carried out recently by the government, the following question was asked: “If we had more money for immigration, what would you like to be done?”

Three suggestions came out: to reduce or eliminate the landing fee; to direct spending on faster processing of the immigration applications submitted by the men, women and children who want to settle in Canada; or to sustain higher levels of immigration.

The top priority by far was to accelerate the processing of the immigration applications, which speaks for itself.

As members of parliament, most of us hear complaints from constituents and can see just how long it can take sometimes to process an application.

We know that the people on the front line of our immigration system work real hard but there are often delays due to the background checks, health information and security assessments that are required. It is not surprising that reducing processing delays is a top priority. In fact, the delays are mainly due to the great number of applications. Those who travel around the world know that Canada is the best country in which to live.

The Minister of Citizenship and Immigration has said that the new bill and some associated changes will lead to the system working better. Of that we are convinced.

Several client service improvements are already being tested. This will lead to faster processing and is entirely consistent with what the minister has learned from Canadians, including people who deal with immigration issues on a daily basis, like most of the members in the House.

Quite simply, there is no reason to accept this motion. Let me summarize some of the reasons. The right of landing fee applies to people who receive the direct benefit of immigration to Canada. That in itself is a tremendous benefit.

It does not apply to refugees who come from badly stricken areas of the world. It has no impact on immigration levels, far from it, and where necessary people can take out loans to cover the immediate cost of the fees, loans that are repaid. Canadians agree strongly with the principle of ensuring that immigrants pay at least some of the direct costs of their programs and services.

Finally, people have recognized that we would gain far more important impacts and benefits from any new money for immigration by putting it into a faster processing system.

I know this has been a concern for many people, but I would like to point out that in the last few years we have seen people coming to Canada under incredible conditions, in the bilge of boats. We know that real criminals brought these people here by boat. These people paid $8,000, $10,000 or $15,000 to come here under extremely terrible conditions. This shows that $975 is very little compared to these amounts.

Right Of Landing FeePrivate Members' Business

1:45 p.m.

Canadian Alliance

Deepak Obhrai Canadian Alliance Calgary East, AB

Madam Speaker, excuse me. I am honestly laughing at the last remarks of the parliamentary secretary. He compares criminals, human smuggling, and says that is more expensive, and the $975 the government is charging is justifiable. I cannot believe he is tying these things together.

Right Of Landing FeePrivate Members' Business

1:50 p.m.


Mark Assad Liberal Gatineau, QC

Madam Speaker, I rise on a point of order. I object to the hon. member taking my words out of context. That is not what I said.