House of Commons Hansard #60 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was mechanics.
Message From The Senate
The Speaker
I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed certain bills, to which the concurrence of this House is desired.
The House proceeded to the consideration of Bill C-22, an act to amend the Income Tax Act, the Income Tax Application Rules, certain acts related to the Income Tax Act, the Canada Pension Plan, the Customs Act, the Excise Tax Act, the Modernization of Benefits and Obligations Act and another act related to the Excise Tax Act, as reported (with amendment) from the committee.
Lawrence MacAulay Liberalfor the Minister of Finance
moved that the bill, as amended, be concurred in.
Income Tax Amendments Act, 2000Government Orders
The Speaker
Is it the pleasure of the House to adopt the motion?
Income Tax Amendments Act, 2000Government Orders
Some hon. members
Agreed.
(Motion agreed to)
Income Tax Amendments Act, 2000Government Orders
The Speaker
When shall the bill be read a third time? By leave, now?
Lawrence MacAulay Liberalfor the Minister of Finance
moved that the bill be read the third time and passed.
Roy Cullen LiberalParliamentary Secretary to Minister of Finance
Mr. Speaker, I appreciate the opportunity to address the House at third reading of Bill C-22, the income tax amendments act, 2000.
The bill would implement key elements of the government's five year tax reduction plan, the largest tax relief package in Canada's history, and would legislate the technical amendments in Bill C-43 which died on the order paper last fall. Each measure in the bill is based on the principles of fairness and equity in the federal tax system to which we have been committed since 1993.
The most important component of the bill delivers measures announced in the 2000 budget and last October's economic statement to set out a multiyear plan for further tax reductions.
This plan, which provides $100 billion in tax relief by 2004-05, will reduce by an average of 21% the federal personal income tax paid by Canadians.
Families with children will receive an even larger tax cut of about 27% on average.
As of January 2001, tax rates on all income levels were reduced and the 5% deficit reduction surtax was eliminated. The low and middle income tax rates fell to 16% and 22% respectively. The top 29% rate was reduced to 26% on incomes between $61,000 and $100,000, which means the 29% rate applies only to income over $100,000. As all the economists and analysts have noted, the timing could not have been more perfect to bring in these tax cuts.
Increased support for families with children would be provided through the Canada child tax benefit. The maximum Canada child tax benefit for the first child would rise to $2,372 in July, well on the way to the five year goal of $2,500 by the year 2004.
For the second child the maximum Canada child tax benefit would increase to $2,308 in July 2004.
These amendments must be in effect by July 1, so that families can get this benefit within the set timeframe.
Other amendments to personal income tax are specifically designed to help those who need them most.
The bill would increase the amount on which the disability tax credit is based. It would expand the list of relatives to whom the disability tax credit can be transferred to make it consistent with medical expense tax credit rules and it would allow speech language pathologists to determine eligibility for the disability tax credit with respect to speech impairments.
In addition, the bill would increase the maximum child care expense deduction for children for whom the disability tax credit can be claimed and the amounts on which the caregiver and infirm dependant credits are based.
It would also include certain incremental costs under the medical expenses tax credit when a principal residence is built for people with mobility impairments.
Moreover, an amount of up to $3,000 in scholarships, fellowships and bursaries will be tax exempt, provided the student is eligible for the education tax credit. Self-employed workers can deduct from their income the share of the contributions to the Canada pension plan or to the Quebec pension plan paid by the employer for their own benefit.
Other personal income tax changes clarify the rules under which clergy can claim a deduction for their residence, allow Revenue Canada to release information about former registered charities under certain conditions and exempt municipalities from filing T4s for volunteers to whom they paid not more than $1,000.
Another element of the tax reduction plan would help make Canada's business income tax more internationally competitive. Corporate tax rates would drop to 21% from 28% for businesses in the highest tax sectors to make them more internationally competitive, beginning with a one point tax cut effective January 1, 2001.
By the year 2005 the combined federal-provincial tax rate would drop from the current average of 47% to 35%, five percentage points lower than the U.S. This would put our businesses on a more competitive level with other G-7 countries and serve to attract investment and create jobs.
The plan also provides a tax deferred capital gains rollover for investments in shares of certain small and medium size businesses, and a 50% reduction of the capital gains inclusion rate. Thus, the highest federal-provincial tax rate on capital gains will be lower than the same combined rate in the United States.
Increasing the employee stock option deduction from one-third to one-half means employees in Canada would be taxed more favourably on stock option benefits than employees in the United States. In addition, the bill would allow the deferral of tax on certain stock option benefits and an additional deduction for certain stock option shares donated to charity.
Bill C-22 would ensure a comparable tax system for Canadian banks and foreign bank branches operating here. It would strengthen the thin capitalization rules, phase out the special tax regime for non-resident owned investment corporations and introduce a temporary 15% investment tax credit for grassroots mineral exploration.
Technical amendments include extending the additional capital tax on life insurance corporations until the end of 2000 and clarifying the tax treatment of resource expenditures and the rules governing gifts of ecologically sensitive land.
There are three remaining measures I will touch on briefly before closing.
The first would introduce changes to the taxation of trusts and their beneficiaries, in particular property distributed from a Canadian trust to a non-resident beneficiary, mutual fund trusts, health and welfare trusts and those governed by RRSPs and RRIFs.
New antiavoidance measures will ensure that transfers to trusts cannot be used to unfairly reduce taxes.
The next measure would ensure that Canada retains the right to tax immigrants on gains that accrue during their stay in Canada. It would also clarify the effects of new taxpayer migration rules on rights to future income and allow returning former residents to unwind the tax effects of their departure regardless of how long they were non-resident.
To avoid international double taxation, former residents would be able to reduce Canadian tax payable on their pre-departure gains by certain foreign taxes paid on the same gains.
Another measure would make advertising expenses in periodicals with at least 80% original editorial content fully deductible and those in other periodicals 50% deductible regardless of ownership.
After July 1996 Canadian pension funds and other entities that own Canadian newspapers qualify as Canadian citizens under the ownership requirements of the Income Tax Act.
Before closing, I wish to mention that a number of amendments were made to this bill in committee. On behalf of the government, I wish to thank members of the Standing Committee on Finance for their detailed examination of this bill.
Improvements have been made to several provisions, including those affecting back to back loans, weak currency debts, foreign accrual property income, partnerships, mortgage investment corporations and segregated fund trusts, just to name a few.
Each of these amendments contributes to fairness in the tax system.
I remind the House that fiscal responsibility for government is fundamental and tax cuts are essential. At the same time we are committed to maintaining an effective, fair and technically valid tax system. Without a doubt this is the thrust of Bill C-22.
This bill will implement the key features of the five year tax reduction plan, which will lighten the tax burden on all taxpayers, strengthen support for families with children, and increase the competitiveness of the Canadian corporate tax system internationally.
I urge all my hon. colleagues to keep in mind that Canadian children need the Canada child tax benefit increases on July 1, a fact that makes speedy passage of the bill essential.
Ken Epp Canadian Alliance Elk Island, AB
Madam Speaker, I seek unanimous consent of the House to split my time with the hon. member for North Vancouver.
Income Tax Amendments Act, 2000Government Orders
The Acting Speaker (Ms. Bakopanos)
Is that agreed?
Ken Epp Canadian Alliance Elk Island, AB
I am honoured to stand in the House today to speak to Bill C-22, an act to amend the Income Tax Act. Actually it was the Liberal Party election act. Members will recall that the finance minister announced most of the provisions that we are dealing with today just days before the election was called. Of course he had no idea that the election would be called four days later. After he did his economic update and announced these things in the House in October 2000, it came as a total surprise to him that lo and behold the Prime Minister announced an election.
I would like to begin by asking a simple rhetorical question. If there are policies that are necessary just before an election, how come those policies are not necessary between elections? Therein lies a very important question.
We have dealt with it over and over. We dealt with it not long ago when we were dealing with the equalization act. Suddenly it was necessary to lift the cap. It was done because there was an election coming. Believe it or not, the voters bought into it. A whole bunch of them in Atlantic Canada replaced sitting members with Liberal members because the Prime Minister said that the cap would be lifted.
When the legislation came in we dealt with it in the House. We did indeed lift the cap but for one year. We had some questions about the whole equalization process. We thought it should be revisited in order to look at it rationally because it was a very convoluted system. The opposition parties suggested that if it was good for an election year to lift the cap, it should be good policy to lift the cap in the long term. The government said no to that amendment.
All the Liberal members stood on command and voted against the amendment. That is a curiosity to me. If it is good economic policy we should be doing it, whether or not there is an election. If it is not good economic policy then we should be able to communicate to Canadian taxpayers why it cannot be done, and hopefully they would then trust that we would be fiscally responsible in managing their money properly. That is how we would gain their support.
Now we have Bill C-22, an act to amend the Income Tax Act. It goes on from there, but really it is a bill to enact the provisions of the Liberal fall election campaign in 2000. Our party is leaning toward supporting the direction the Liberals are going in. After many years, being a grassroots party and representing the wishes and sometimes the demands of Canadian voters and taxpayers, we brought to the House the wishes of Canadians on fiscal matters.
The Liberal government loves to tax and spend. It loves to take money out of the pockets of taxpayers and then roll it out during an election campaign so that hopefully it can stay in power, which is its overarching principle. Four days before the election was called the Liberals said that what the Canadian Alliance was saying was right on. The polls told them that. If they wanted to win the election, they had to do these things during the election period so that they could get re-elected.
The government introduced a number of measures, some of which are included in the bill. We are now debating what the government promised, just by coincidence, four days before the election was called.
I would like to say a little about those things. First I want to give very low marks to the Liberals but high marks to their communication department. They have spin doctors who work very well. They are able to communicate with straight faces to the Canadian people that there is a $100 billion tax cut. One billion dollars is an awful lot of money and $100 billion is massive. It boggles the mind.
I have sometimes used this example when I talk to students and we talk about the way in which governments spend money, and the way they tax and so on. Sometimes we also talk about the debt. When the Liberals came into power they inherited a debt of around $520 billion. They allowed it to grow to almost $580 billion.
We will be very fortunate if by the end of the government's mandate, say in the year 2004, although the Prime Minister will probably call an election in 2003, but certainly by the end of 2004, we will be back down to the debt level that we were in 1993 when it took power. However, the spin doctors are able to convince Canadians that the Liberals are excellent stewards of the public money. They are telling Canadians to trust them because they will manage our money properly, notwithstanding that the debt is much higher than it was when they took over.
I said that the magnitude is in the billions of dollars. I do not have the exact numbers before me because I was not planning on using this example. However, when I talk to students about $1 billion I ask them how long it would take them if they had to spend $1 million at a rate of $1 per second? Some of them guess a bit and then I tell them the answer. As I recall, if they started at midnight on January 1 it would take them until January 11 or 12 before the money would be gone, approximately 11.5 days to get rid of $1 million at $1 a second.
Then I ask them how long it would take them to spend $1 billion? Again, they guess and then I tell them the answer. I tell them that to spend $1 billion at the rate of $1 per second would take until September, 31 years later. That is how long it would take to get rid of $1 billion.
Here we have a government claiming through its spin doctors a tax cut of $100 billion. That is spin doctoring at its finest. The $100 billion includes a lot of money that it just decided not to take.
I will give another example. Let us say I decided to give my wife some money to spend on a house, which I know she would love, and told her that I was going to give her $20,000 more than I planned to give her. Under my breath I would mutter that I was planning on taking $18,000 away from her. She could say that $20,000 was great but the fact is it would only be $2,000 because it would include the $18,000 that I was going to take out of the housing fund.
This is what the government has done. It is claiming $100 billion in tax relief, but included in that is a whole lot of money that is represented by money that it could have taken but which it has now decided not to take.
For example, a couple of years ago the government announced that it was restoring indexation. There was no mention made of it being retroactive, so perpetually taxpayers were still suffering the removal of indexation on the tax rates over the last number of years because the government flattened the thing out. We were paying a whole lot more taxes because of bracket creep. When the government reintroduced it, it started from the present position and did not go back. Therefore, the errors of the previous years continue to be perpetuated.
One of the things the government is claiming is that due to indexation this is a tax cut. It is not a tax cut at all. The government said that it would take $10,000 from each taxpayer and now it is saying that it will only take $8,000. In that case, the government is calling this a $2,000 tax cut but it is still taking the $8,000. To call that a tax cut is inaccurate.
Furthermore, we have the child tax benefit. It is true that in the legislation the child tax benefit would be increased but that is not a tax cut. It is an expenditure. It is a case of the government thinking of a way to spend some money on behalf of families. In a way, I have some sympathy for that position but it cannot properly or legitimately call it a tax cut. That is spin doctoring and it is not acceptable in terms of the actual message that is being put out there.
The bottom line is that the actual tax cut is not $100 billion. It is actually closer to $50 billion and that is spread over five years.
We have a whole bunch of questions with respect to the bill but the government has decided to go ahead with it. We know its members will vote for it and it will happen. I will concede that families with children would get more money from the spending program and so for them it is an advantage. For families without children, such as in the case of my wife and I whose children are grown up and have left home, there would be no tax cut. It is a spin doctoring myth.
The bill also has implications in the area of tax rates. We talk about the single tax rate. The opposition and some of the other parties, and when I talk of opposition I mean the Liberals who are in opposition to us, totally misrepresented what a single tax rate does.
Our plan was to have one rate of tax at 17% and then subsequently we revised it so that it would apply only to $100,000 of taxable income. That still included all of the present deductions. None of them were to be taken away. However, instead of talking with Canadians and honestly debating its plan versus ours, the government has totally distorted what it said about our plan and then proceeded to knock it.
It is really an unfair thing. It is as if we have two car dealers and one dealer, trying to promote his product, says that the wheels fall off his competitor's cars as soon as they are driven 10,000 kilometres. It is not true but that is what he says would happen. He repeats it over and over again and then asks, with great passion, whether the customer wants to buy a car with wheels that fall off after being driven 10,000 kilometres. The customer says, no, and the car dealer suggests that the customer buy his car.
That is what those Liberals did. I almost used a bad adjective, but thankfully I caught myself. They took our plan, totally distorted what it did, developed animosity against that caricature of what we were proposing and asked Canadians to vote for them.
There are still thousands of Canadians who want to trust their governments. They want to trust their politicians. During an election campaign when these things are said Canadians think that if their trusted government leaders are saying something it must be right so they therefore believe them.
I will take a ten second diversion to say that the same distortions happened when the Minister of Citizenship and Immigration said what she said. That was a hurtful and total distortion for a person like myself whose family members have worked all around the world with people of all kinds of different backgrounds, helping them. To be labelled the way the immigration minister labelled us and then have Canadians say they would not vote for us because we were scary is hurtful and wrong.
If we want Canadians to trust us we have to start dealing openly and honestly with them. We have to tell them the truth and start debating the Liberal proposal versus ours. That unfortunately has not happened. I resent this.
I taught mathematics and computing for 31 years in my life prior to becoming a parliamentarian and when people misuse math I get just about as upset as I do when they describe me in pejorative terms. The government had Canadians persuaded, and this is one thing in the bill, that it would reduce the lower tax rate from 17% to 16%. It had the gall to go to Canadians, say it was reducing the rate to 16% and claim that was even better than the Canadian Alliance proposal.
However, it was worse than that. In every category, including that first category at the low rate, our tax plan would have given Canadian taxpayers a greater tax break. The reason was simple. Even though our rate was 17%, it was on less of taxpayers' income. We proposed, for example, that a two parent family with two kids would not pay any income tax on the first $26,000 of their earnings. The Liberals ignored that. They ignored the fact that we would increase the exemption. All they did was talk about the fact that they would reduce the lower rate to 16% from 17%.
I resent it when people trade on a misrepresentation of mathematical facts. This is what the government has done and this is what we would be passing with Bill C-22. If we pass the bill later today we would be approving the reduction of that rate to 16%. Canadians would get a smaller tax break than they would have had they voted for us because of the fact that the Liberals have a great deal of expertise in messaging, in telling people “this is what is” when in fact it is just the opposite.
In passing Bill C-22 the Liberals ought to send out a press release to say that while they would be reducing the income tax rates and going from three levels to four, while they would be decreasing the 17% rate to 16%, the 25% rate to 22%, the 29% rate to 26%, and retaining the 29% rate for everything over $100,000, there is something else. I would like that press release from the Liberal government to also say in bold letters at the bottom of the page “Please note that Canadians were hoodwinked into voting for a party that proposed this bill and got it pushed through the House and that it gives taxpayers a smaller tax break than, first, they deserve, and second, what the Canadian Alliance would have given them”. That is what the press release should say. I am expecting the Minister of Finance to put that on the bottom of the press release later today or next week when this bill is finally passed.
I am sure that will happen. I see the parliamentary secretary over there grinning from ear to ear, which of course shows compliance with my present request.
The fact of the matter is that a $100 billion tax cut is a $50 billion tax cut or even a little less if we look at how much the taxes are actually being cut. The rest is spin doctoring. The fact of the matter is that this would produce a tax cut smaller than the tax cut we would have provided.
There are some other provisions in the bill with which I happen to agree. There is a disability tax credit. There is also the issue of children. Families have big expenses when raising children. The government is going in the right direction here by making it slightly easier for families, but it does not come anywhere near recognizing the actual costs of raising children. We would have substantially increased the deduction for children. The government has not done that. The taxpayers would still pay taxes on the money and if they qualify they get a tax credit. Most people in the middle income bracket with two earners have the promise of a child benefit for which they are not eligible. Their taxes would stay the same. The government is not reducing the taxes yet is announcing with this bill that taxes would be reduced.
I regret that my time is up, Madam Speaker, but thank you for giving me the time to express my views on the bill. I will vote against the bill for the reasons I have articulated.
Ted White Canadian Alliance North Vancouver, BC
Madam Speaker, I thank the hon. member for Elk Island for such an interesting speech. I would like to expand slightly on one of his points. It has to do with the size of the debt. The fact is that even after all these years of Liberal government and the claims of fiscal responsibility the debt is still larger than when the Liberals took office. Taxpayers are still paying $40 billion a year in interest.
My colleague talked about the examples he uses when he speaks at high schools. There is one in the Vancouver area that I use to illustrate the size of this $40 billion debt and what it really means. It is fairly well known that right at the moment the Lions Gate bridge is under reconstruction. To build a brand new Lions Gate bridge would cost about $200 million. Canada could build 200 brand new Lions Gate bridges every year with $40 billion.
Ted White Canadian Alliance North Vancouver, BC
Yes, that is just the interest on the debt. Imagine the amount of infrastructure that could be built if we were not paying so much interest on the debt: 200 brand new Lions Gate bridges every year. That is four every week, four brand new highway bridges that could be built every week. These are huge bridges, not just normal small highway bridges. This is enough money to twin the freeway in Vancouver every month.
These are enormous amounts of money we are talking about and the bill would do very little to reverse the legacy that really dates back to the Trudeau days. All these problems that the bill would take tiny little steps to address go back to the days of Trudeau.
I have an article here written by Michael Campbell, quite a well known author in the Vancouver area, about the problems we have today and how they relate to those days of Trudeau. It does relate directly to the bill. I would like to read a little bit from the article because it illustrates the size of the problem. It was written on October 3, 2000, a little while after all the public outpouring of grief after Mr. Trudeau's death. Michael writes:
Trudeau is the godfather of Canada's interventionist government policies regarding the economy. It was Trudeau who spearheaded the drive for the “Just Society” through aggressive increases in government spending and wealth distribution that led to Canada leading the world in the growth of taxation.
It was the Trudeau government that brought Canada's federal deficit from zero in 1968 to $38 billion by the time he left office in 1984. It was the buildup of debt during the Trudeau years that laid the foundation for today's $40 billion in interest payments.
While socialists or Marxists might like to take credit for the philosophical underpinnings of his economic policy, it was Trudeau who put the thoughts into action.
In 1968 the federal government launched what was then called the short-term bailout of the Cape Breton Coal Company—
Do you remember that, Madam Speaker? It was a short term bailout in 1968. In the year 2000, after $1.7 billion in subsidies had been spent on that project, it was finally shut down.
Michael Campbell continues:
It was during the Trudeau era that unemployment insurance subsidies became a way of life for some in the Maritimes with the results still well in evidence today.
Under Trudeau we got nationalization of companies and industries. Canada curtailed foreign investment and exploded the government bureaucracy.
But his legacy extends beyond specific economic policies into a mindset that still dominates the landscape today in Canada.
We are still stuck with the problem that was built up in the country during the Trudeau years, as Michael Campbell notes:
It was during the Trudeau years that the anti-business, anti-success attitude—referred to by Nobel Prize-winner Robert Mundell as the chief obstacle to our economic prosperity—took hold and flourished.
Marketing all government policies as part of the pursuit of the Just Society has permanently linked the concepts of government intervention and justice in many people's minds.
We see the results today where opposition to extending government programs is regularly regarded as a form of inactivity at best and godlessness at worst.
As (the) Prime Minister...has told us regularly, only the selfish and greedy want to lower taxes. Only the most cold-hearted could oppose a national day-care program or business subsidies.
What's interesting to note is that before we headed on the path toward the Just Society, Canada had the second-highest economic output per person in whole world.
This fact is important to note. Before we headed down the Trudeau road we had the second highest economic output per person in the whole world.
Michael Campbell continues:
The latest numbers from the OECD put us at 20th out of 29 in the developed world. Our economy grew at an average pace of five per cent, excluding inflation, before 1968, which is 40 per cent higher than the average since.
Whatever economic indicator we look at since the Trudeau just society began, we have gone downhill in economic performance every way we measure it.
Michael Campbell says:
Our federal debt has grown from 0 to $750 billion, while our currency has gone from being at par with the U.S. dollar—
It is below 65 cents today. How can anyone spin doctor it so well? It is absolutely amazing to westerners that somehow there is this line at the edge of Manitoba and everyone to the east of it cannot see what is going on. They have bought into this terrible scam that was started back in 1968 and has been perpetuated.
As for the pursuit of the just society, poverty advocates tell us that nothing has changed. There are more people in poverty than there were before, which always leaves us somewhat startled considering that so many Canadians continue to call for more of the same policies.
The bill, as I have mentioned, would really just take tiny baby steps to reverse that terrible Trudeau legacy that has led us to where we are today. Also part of the Trudeau legacy is the beginning of western alienation. It was Trudeau who gave us the finger from the train in Kamloops many years ago. It was Trudeau who started the national energy program that destroyed the economy in Alberta.
Still to this day the west is not getting its fair share from this Confederation. For example, my colleague from Elk Island mentioned that there was recently a temporary increase in the transfer payments, but he did not mention that more than half of that went to Quebec, which somehow still manages to portray itself as a have not province.
It is totally ludicrous that this situation exists. I know from working here on the Hill that practically every product we use, every service we obtain, is supplied by Quebec. The pens and pencils, the paper, the water supplies, the computers, the people who work here: just about everything comes from Quebec. This shows that the Quebec economy is extremely well diversified. They build automobiles. They have manufacturing plants for aluminum extrusion. They export electric power. It is a complete mystery to me that it is a have not province. It is certainly a mystery to the people out west who are receiving less than their fair share of the transfers.
For example, spending in B.C. by the federal government is comprised of direct goods and services expenditures as well as transfers to individuals in the form of EI payments, pensions and so on. However the one area of spending that is 100% under the control of the government is the procurement of goods and services.
If we look at the data from 1992 to 1998, and that is the latest year for which we have figures available, on average the federal government spent about $3 billion on goods and services in B.C. in each of those years. Our share, based on the population, should have been between $4 billion and $4.5 billion. That difference amounts to a shortfall for B.C. in goods and services alone of $9.5 billion in just six years.
Worse still, no attempt has been made by the Liberal government to correct the problem. It has kept that figure stagnated between $1 billion and $1.5 billion steadily since 1993. It has done nothing, not a thing to increase it.
In a typical year, taking into account all federal transfers to the province of British Columbia, we receive about $1.7 billion less than Ottawa collects in revenues from B.C. For example, in 1998 the following differences can be found between British Columbia's actual share of expenditures and the hypothetical share based on population.
We had a goods and services procurement shortfall of $1.178 billion, almost a $1.2 billion shortfall. We had a shortfall in transfers to persons of $40.4 million and we had a transfer to business shortfall of $89.89 million.
In addition, because B.C. is rated as a have province despite our awful NDP government and the terrible deficits that it runs, we received approximately $1.1 billion less in direct transfers to the provincial government.
Of course it is no secret that B.C., Alberta and Ontario all contribute to the so-called equalization transfers to Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, P.E.I. and Newfoundland. Quebec is the strange one and how it still qualifies as a have not province despite its productivity is a mystery.
I noticed recently that the government of Quebec announced a tax holiday for some types of business. Equalization transfers are supposed to be based on the government's inability to raise sufficient revenues from its residents, so how can a government justify giving tax reductions to some businesses and at the same time saying it cannot raise enough taxes so it wants more equalization payments?
I suppose in theory the government of B.C. could reduce all the taxes to zero for its constituents and then say that it cannot raise any money from its constituents and ask Ottawa to transfer all the money back to it. It is a ludicrous equalization program in which we find ourselves entangled. It does not make sense at all.
It is interesting to note the fiscal outflow from B.C. caused by the weak federal spending on goods and services. It is not only proportionately higher than any other province, but it is higher in absolute numbers of dollars. We receive $295 less per capita than any other province. It is just not fair.
With the Prime Minister regularly saying that westerners would get a better deal if they voted Liberal, I hate to think of the mess we would be in today if that had happened. When we look at that federal debt and the way it was exploding in 1993, I well remember the Liberals and the Progressive Conservatives calling us extremists because we wanted to balance the budget back in 1993 with our zero in three plan that we promoted in 1993 to get the government's fiscal policies under control.
At that time every government in the country was running deficits. The federal government was running $40 billion deficits a year and we were called extremists for wanting to fix that problem. The government and the Progressive Conservatives scared people by saying we were extremists.
We managed to get 54 members into the House. We made the difference because today when we look across the country there is not a government, federal or provincial, that does not want to balance its budget. All of the credit, 100% of the credit for that goes to the Reform Party of Canada and the Canadian Alliance for taking it from extremism to being mainstream.
Anybody who tries to claim that it was the Liberal government that did it is misinformed or misinforming because it was not the Liberal government that did it.
The way to correct western alienation is not for more people to vote Liberal. It is for the government over there to stop the scare tactics, to stop the distortion of facts and to start looking at what is best for the country. What is best for the country is not what is contained in the bill. It is a sham, a complete sham.
As my hon. colleague said, we will end up at the end of this term with more debt to pay and with $40 billion a year in interest payments. If we had followed the Reform Party plan that was promoted in 1993, we would already have significantly paid down our debt. We would be in the range of $30 billion a year in interest payments, freeing up $10 billion a year to spend on infrastructure and other programs.
It is frankly dishonest to present the bill to the House and accuse us of holding it up when we are trying to take our entitled time to show the people of Canada exactly what is going on.
The bill is not only a sham. It adds to the complexity of the tax act. Every one of us in this place gets complaints from our constituents about the complexity of the tax act. There is hardly anybody who can even do their own tax returns any more; they have to hire an accountant or a specialist to do them. The Canadian Alliance promoted, which should be included in Bill C-22, a reduction in the complexity rather than an increase in it once again.
My colleague from Elk Island mentioned briefly how the numbers actually do not tell the whole truth. In my finishing minutes I would like to go over those numbers quickly.
The government claims a $100.5 billion gross tax reduction, but when we take off $3.2 billion over five years for social spending because of the child tax benefit, which is really spending and not a tax reduction; when we take off the $29.5 billion over five years for increased CPP premiums; and when we take off the $20.7 billion over five years for cancelled tax hikes due to indexation, we end up with $41.7 billion in tax relief over five years.
That is better than nothing. We are pleased that at least there is some. It certainly is not honest to portray it the way it has been on the other side of the House. The biggest problem we still have is the size of the debt and the size of the annual interest payments which, as I said at the beginning of my speech, could build 200 brand new Lions Gate bridges every year.
Joe Comartin NDP Windsor—St. Clair, ON
Madam Speaker, I did have a different introduction to make, but after listening to my colleague from the Alliance I thought it might be important to point out to him and other hon. members of the House that the first government in Canada to balance the budget was an NDP government in Saskatchewan after some horrendous budgetary practices by the prior Progressive Conservative government.
We were the first ones. There were terrible practices by the prior government. It was a right of centre government, by the way. We take some pride in having been able to do that and, quite frankly, in the history of the administration of the finances of that province all the way back to when it was led by Premier Tommy Douglas.
I rise today to speak in opposition to the passage of this bill and wish to do so from a number of perspectives. I will start with the issue of the environment as that is my responsibility as critic for my party.
Earlier this week we had the opportunity to come together as a House on an issue proposed by the Progressive Conservatives with regard to the protection of water in Canada. All members of the House, with the exception of the Bloc, supported that motion and rightfully so.
When we look at these budgetary items we cannot help but realize the height of hypocrisy when the government side proposes that our finances be handled in this way. At the same time it ignores to a very significant degree the responsibilities of the government to provide necessary financing for a municipal infrastructure program to deal with the crisis facing Canada with regard to providing safe water for all citizens.
We see figures from the municipalities on what it will cost to treat our water and our sewage. The type of dollars they are talking about are no way reflected in the budgetary items before us. The figure proposed by the Federation of Canadian Municipalities is $16.5 billion. The allocation from the government for all types of municipal infrastructure is only $2.5 billion over six years, which is simply not enough.
I would like to present some statistics on the situation leading up to the financial statement. In the decade from 1989 to 1998 there has been a dramatic shift in wealth and we have seen the impact it has had on family incomes. If we break down by 20 percentiles all families in Canada, the statistics show that from 1989 to 1998 the families at the lower end of the scale dropped in income quite dramatically.
The poorest level dropped 17% in earning abilities in that period of time. The lower middle income group dropped 13%. The middle income group dropped 4%. The upper middle income group went up by 1%. The top end families that earned $114,000 in 1989 went up to $124,000, or a 9% increase, in 1998.
Clifford Lincoln Liberal Lac-Saint-Louis, QC
Mr. Speaker, allow me to join all Canadians in congratulating the makers of Atanarjuat: The Fast Runner , which has been selected for screening in the non-competitive un certain regard section at this year's Cannes Festival. Atanarjuat: The Fast Runner is Zacharias Kunuk's first feature film and Canada's first Inuit language feature film. It is an exciting action thriller set in ancient Igloolik and produced in Nunavut by an Inuit company using local cast and crew.
In addition, a France-Canada coproduction entitled La répétition , along with The truth in advertising , a short film by Torontonian Tim Hamilton, have been nominated for a Palme d'or award in the best feature film and best short film categories respectively.
Other Canadian films will also be shown in the festival during international critics' week. They are the first feature length film by Quebec producer Bernard Raymond, La femme qui boit , and the France-Canada coproduction entitled Le pornographe . We can be proud—
Ken Epp Canadian Alliance Elk Island, AB
Mr. Speaker, since I have been a member of parliament, now a little over seven years, there has been a curious thing happening here in Ottawa and I would just like to draw the members' attention to it.
When we go to the airport, the taxis can only carry passengers in one direction. There is somehow a rule somewhere that says one company gets the right to haul passengers from the airport into Ottawa and the other companies haul passengers from Ottawa to the airport. Therefore, every other cab is empty.
This has huge implications to costs. Some of these taxi drivers running empty half the time are making very little money. They are not able to pay as much taxes. It is definitely tough on the environment because we have all these vehicles spewing exhaust gases.
I think, if the federal government were responsible, it would look into this and not only give permission but require taxis to carry passengers in both directions.
Jean Guy Carignan Liberal Québec East, QC
Mr. Speaker, on July 1, Canada Post will be issuing a stamp commemorating the former Prime Minister of Canada, Pierre Elliott Trudeau.
It is no mere accident that the date of July 1 was chosen, it being the national day of this country, Canada, to which Mr. Trudeau has left such a great legacy.
It would be hard to list all of his accomplishments, but among them are the Official Languages Act, the Canadian Charter of Rights and Freedoms and patriation of the Canadian Constitution, not forgetting his contribution to our foreign policy, to improving the status of women and native people, and to promoting the French fact in Canada.
I congratulate Canada Post on this initiative to commemorate the contribution to this country by a great man, Pierre Elliott Trudeau, recently selected as the Canadian personality of the century.
Marcel Proulx Liberal Hull—Aylmer, QC
Mr. Speaker, on May 3 the Government of Canada launched the second edition of the Canadian Museum Treasure Hunt.
This is an interactive learning game on the Internet, created to celebrate International Museum Day, which falls this year on May 18.
Through the treasure hunt, young people can discover 23 Canadian museums. Its purpose is to encourage young people to visit museums and learn about Canada and the world.
I invite young Canadians, as well as the not so young, to join in this ingenious treasure hunt by visiting the websites of the Department of Canadian Heritage and Virtual Museum Canada.
Have fun, everyone.
Sophia Leung Liberal Vancouver Kingsway, BC
Mr. Speaker, I am proud to congratulate the six outstanding students in my riding who have been awarded millennium scholarships for 2001-02.
The students are Stacey Chiu and Khanh Nguyen from Windermere Secondary School, Steven Co from Vancouver College, Jatinder Man from St. John's School, Esther Tain from Burnaby South Secondary, and William Wu from Charles Tupper Secondary School.
Those six students have worked hard to achieve those scholarships. I hope all members of the House will join me in congratulating them and indeed all scholarship winners from across the country.
Jason Kenney Canadian Alliance Calgary Southeast, AB
Mr. Speaker, the Mike Harris government has done it again. Since 1995 it has continued to produce tax cutting, deficit reducing budgets that have put Ontario back on track. The most recent budget is no exception. It took the first steps toward eliminating the job killing capital tax, and Ontario's tax incentives are being completely reviewed.
I am especially thrilled that the Ontario government took the principled and courageous decision to recognize the enormous sacrifice and the public good done by tens of thousands of Ontario families who, for reasons of conscience and obligation, send their children to independent schools and pay for those schools with after tax dollars, many of these families with very modest means and incomes.
The refundable tax credit for receiptable independent school expenses announced yesterday is a policy that the Canadian Alliance has promoted. We are delighted to see that the Mike Harris government, against the shrill voices of the Liberal opposition and the big union special interests in Ontario, has decided that parents should be able to decide what is in the best interests of their children, and they should not be penalized for doing so. We want to commend Jim Flaherty.
Serge Marcil Liberal Beauharnois—Salaberry, QC
Mr. Speaker, this Saturday, May 12, is International Nurses Day. The theme for 2001 is “Nurses, always there for you: united against violence”.
This will be an opportunity for us and Canadians to recognize the important work these health care professionals do for each of us and all of society. Whether they work here or abroad, nurses make a difference in the quality of care provided.
With the new developments in health care, they are increasingly called on to work together with other professionals in health care. Their expertise and know-how often make them the central workers in the community. In the current context of resource shortages, they are creative and innovative.
I wish all nurses an excellent day.