Debates of Feb. 7th, 2002

Budget Implementation Act, 2001

[The Acting Speaker (Mr. Bélair)]

In my opinion the nays have it.

And more than five members having risen:

[The Acting Speaker (Mr. Bélair)]

Call in the members.

And the bells having rung:

[Gerry Ritz, Canadian Alliance, Battlefords—Lloydminster, SK]

Mr. Speaker, I rise on a point of order. There have been discussions among the House leaders that we go back to Bill C-49. There are a number of questions we would like to raise and speakers we would like to add to the list. If you would seek unanimous consent to get us back to Bill C-49, we would deem it not put and continue debate at second reading on the bill.

[The Acting Speaker (Mr. Bélair)]

Is there unanimous consent to revert to Bill C-49?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, I rise on a point of order. In light of the unusual circumstances in the House, there have been some discussions during the period the bells were ringing and I believe we have an understanding that we will not have a vote at this time with respect to the budget bill but will return to debate at second reading of the bill.

There is an understanding among the parties that we would debate Bill C-49 for the balance of the time available today and tomorrow and that we would conclude debate at the end of the day tomorrow with any votes required at that time deferred until after the week parliament is adjourned.

[The Acting Speaker (Mr. Bélair)]

There are two issues. First, the vote that was supposed to be taken will be deferred until Monday in two weeks when we return.

Second, is there unanimous consent to revert to Bill C-49 and resume debate under the conditions that have been described?

[Some hon. members]

Agreed.

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Mr. Speaker, I thank the government House leader. He was a very good boss in the past. The opposition won the voice vote. We are happy to see the official opposition was opposed to Bill C-49.

The bill would give enactment to several provisions of the budget speech of last December. Last week we concluded debate on the budget and voted on the ways and means motion. Bill C-49 is further to the ways and means motion.

[Gerald Keddy, Progressive Conservative, South Shore, NS]

Mr. Speaker, I rise on a quite simple point of order. Since the member did not show up for his speech, should the rotation not move on and the next speaker be up?

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Speaker, I rise on the same point of order. The member of the Conservative Party said that because the Alliance member did not speak when it was his place on the list we should therefore move to the next in line.

No one in the House stood so we should continue with the rotation as it was before.

[The Acting Speaker (Mr. Bélair)]

Regarding the point of order of the hon. member for South Shore, the rotation was as follows. Before the vote was called it was the hon. member for Jonquière who should have been followed by a Liberal member when we resumed debate.

Given that no Liberal stood, the next one in the rotation is a Canadian Alliance member. This is why I recognized the hon. member for Calgary Southeast who still has the floor.

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Mr. Speaker, as I was saying before being so rudely interrupted, Bill C-49 seeks to give statutory effect to provisions included in the ways and means motion and announced in the budget of last December.

As my colleagues before me have said, we in the official opposition oppose the bill just as we opposed the budget and the ways and means motion. Through the bill the government fails to reflect the priorities of Canadians at a time of serious economic decline. It fails to grasp the opportunity to increase Canada's productivity, competitiveness and standard of living at a moment when we see our dollar at all time lows which reflect a decline in our standard of living.

The bill would fail to provide any stimulation for the economy at at time of job loss, increasing unemployment, and economic decline in the midst of recession. It would fail to offer any reduction in the national debt at a time when Canada continues to have the third largest debt to GDP ratio in the OECD among the major developed countries. It would fail to reallocate resources from low and falling priority areas such as corporate welfare, subsidies to bloated crown corporations like the CBC and grants and handouts to interest groups into high priority areas such as national defence and security.

The budget, its ways and means motion and Bill C-49 all represent an enormous missed opportunity for which ordinary Canadians will pay in terms of seeing our standing of living and economic prosperity continue to diminish.

Bill C-49 seeks to do specific things. First, it would create the Canadian Air Transport Security Authority. We in my party support the creation of the Canadian Air Transport Security Authority, in particular the provisions of the bill which allow for the employment of air marshals.

We in the official opposition take considerable pride in the fact that while we have no real political power in this place we have the power of ideas. Following the great tragedy of September 11 we introduced an entire suite of security related proposals which we had long advocated but which gained new relevance in the post 9/11 world.

One of the proposals was to create a corps of armed air marshals to serve as law enforcement officers on civilian aircraft. My colleague from Port Moody--Coquitlam--Port Coquitlam, the opposition transport critic, did a superb job of making the argument for letting Canadians know they would have secure enforcement of the law when they boarded an aircraft, the absence of which was a contributing factor to the tragedy of September 11 where the four hijacked aircraft were without air marshals.

There has never been a hijacking of a commercial civilian flight where an air marshal has been aboard. Terrorists throughout the world now know countries like Canada which take the matter seriously will be much less hospitable targets for hijackers and terrorists aboard aircraft given this provision of the bill.

Again, while we do not have formal political power in this place we have the power of ideas. In the debate that occurred last fall we saw Canadians respond positively to the idea of air marshals even though initially the hon. Minister of Transport dismissed the proposal as somehow “un-Canadian” or “not in the Canadian way”. I think those were his words. However at the time he suggested through the minister of defence that it would be appropriate for CF-18 fighter aircraft to patrol the skies over our major metropolitan areas ready and willing to shoot hijacked aircraft out of the sky.

It struck Canadians as being absurd and ridiculous that we were unwilling to place a trained, armed, discreet air marshal aboard a flight, yet we were willing to watch for hijacked planes with fighter aircraft. Fortunately greater common sense prevailed around the cabinet table. I commend the Minister of Transport for accepting a sound idea from the opposition which is partly implemented in the bill.

While we support the principle of a transport security authority, we do not support the means by which it will be funded in the bill. The bill provides for the notorious $24 round trip flat charge for all domestic flights, even those where there may not necessarily be an air travel security arrangement. There are many short-haul flights off the west coast, off the east coast and in the north where scheduled aircraft take a small number of travellers who do not have to go through airport screening. Yet these people in many instances will have to bear the burden of the $24 flat fee. We anticipate it will raise at least $430 million this year.

We in the opposition have asked the government to give us clear assurances that the new air security charge will not end up being used in a fashion similar to that of employment insurance premiums, namely as a slush fund for general government revenues. We are very concerned that it could run a considerable surplus above and beyond the actual costs associated with the new security measures in the air transportation authority and that the surplus could be siphoned off for general purposes in the general revenue fund, thus undermining the ostensible purpose of the charge.

The government has not provided the House with adequate assurances that this will not occur. Frankly, given the experience we have had with other taxes and charges, we are going to oppose the bill in part because we believe there is a very great likelihood the air security charge will end up providing for much more than just air security in terms of a government tax grab.

On that point, the transport minister has on occasion suggested that the $24 round trip charge on domestic flights was somehow the adoption of a recommendation by the Standing Committee on Transport and Government Operations. Nothing could be further from the truth. In fact, as my colleague from Port Moody has so frequently pointed out, the transport committee recommended a shared cost structure for new air security measures, a cost that should be borne more or less equally by the traveller, by the government, by the airlines as well as by the airport authorities themselves.

One might say that ultimately there is only one customer and the costs would filter down to the customer. Perhaps, but it would be far more rational to see the kind of blended funding of new security measures recommended by the transport committee. In fact, that is what happens in most other jurisdictions. In the United States the security charges are a fraction of what are being proposed here, which are two or three times higher than what is charged in the United States on similar flights.

This is really a very blunt instrument the government has created in terms of a $24 flat fee. One could fly from Victoria to St. John's, Newfoundland in business class at a fare of about $4,500 and pay the $24 charge. Yet one could fly from Vancouver south harbour terminal to Salt Spring Island at a $60 fare and be paying the $24 fee. This would represent a price increase of nearly 50%.

This could put many short-haul domestic air carriers out of business. WestJet, the most vibrant, competitive and successful airline in Canada, has complained bitterly about the impact the fee will have on companies such as itself which are very sensitive to price. They work very hard to produce a good product at a very low price. When a flat fee of $24 is imposed on every single ticket they sell, including $70, $80, $90 tickets between western cities for instance, this will have a very detrimental impact on their bottom line just at a time when we need to do more to create increased passenger traffic on our domestic airlines.

My colleague from Port Moody--Coquitlam will be addressing these issues in greater detail later in the debate. Let me just say that this is a very wrong-headed approach the government is taking with respect to the new transportation security costs. It will end up costing Canadians jobs.

The bill also seeks to make some changes with respect to the Employment Insurance Act. In particular it extends benefits for parents of newborns who need to have extended stays in hospital. This is obviously something anyone would want to support. All parties would say the government ought to do whatever it can to assist parents who find themselves with medical difficulties with newborns. However, let me raise the question as to whether or not the employment insurance system is the right place in which to provide such assistance.

The employment insurance program, particularly after the retrograde changes made in this parliament last year, has grown far beyond its original conception as a program to provide limited insurance to people who lose employment for a short period of time while they seek new employment. That kind of program run on an actuarially sound insurance basis is sensible.

Governments for the past 25 years, and especially since the so-called reforms to employment insurance in 1972, have continued to layer upon the EI system new mandates and new programs which are not immediately related to the question of employment insurance per se. This has created an enormous program which has required enormously high premiums to finance it. In so doing consecutive governments have seen the unintended consequence of an employment insurance program which in many respects is a disincentive to employment.

The premiums themselves a payroll tax are a tax on job creation, particularly insofar as they are disproportionately borne by employers. We know there is an enormous notional surplus in the EI fund of upward of $40 billion and an annual surplus of at least $6 billion. The government is skimming several billion dollars a year in premiums above and beyond benefits paid out through the program. We are killing jobs through extraordinarily high premium levels. They are unnecessarily high. Also we create incentives for people not to work through the design of the program, particularly through some of the regional special elements of the program, through the lack of experience rating in the system.

If we as a country want to become more competitive and more productive, if we want more and better paying jobs, if we want a 90 cent dollar as opposed to a 60 cent dollar, if we want a standard of living that equals or exceeds that of our friends in the United States, one of the things we must do is to liberalize our labour markets.

One thing we at the federal level can do is reform the employment insurance system along the lines of an actuarially sound, experience rated insurance program. For people who have lost their jobs through no fault of their own, it would provide a good benefit on a short to medium term while they seek gainful employment. It would not treat people in different regions differently.

Other supplementary programs, including the maternity benefits in the bill, and important social policy objectives would be provided through other programs. They would not be loaded wrong-headedly into an employment insurance program.

Yesterday I met with members of the Canadian Restaurant and Foodservices Association. It represents an industry that employs over one million Canadians, particularly younger Canadians who are at the entry level in the labour market. They are getting their foot up on the first rung of the labour market ladder. They are people who make the minimum wage or slightly above it. That industry is very, very sensitive to payroll taxes. They told us as parliamentarians that if there were to be a significant reduction in EI premiums, this would likely result in tens of thousands, if not hundreds of thousands of new jobs, particularly for people at the entry level of the labour market.

It seems to me we should listen to sensible proposals from organizations such as CRFA. They have proposed, and the finance committee echoed their call in its prebudget report, a yearly basic exemption of I think it was $2,300 in EI premiums. An employer could hire a young person, or a new employee of any age of course, and would be exempt for the first $2,300 in EI costs. Perhaps we could come up with a lower exemption if there is not the fiscal capacity for a YPE of that size in the employment insurance system right now.

The principle they are driving at is to create incentives for entrepreneurs in industries like theirs, in service industries, to hire more people and to create more wealth and more employment in our economy. I wish the government would listen to recommendations such as theirs.

The bill also seeks to make changes to the Income Tax Act further to the October 2000 budget. This allows me to say that in this budget there actually is no net tax relief.

The government claims it is in the process of its so-called $100 billion tax cut. That is a very bogus figure. Anybody on the other side of the House who is serious about this will acknowledge that number was arrived at for strictly political purposes and has very little basis in fact.

In reality, any objective economist who can read an account or any sensible person with a pencil and a calculator who looks at the Liberal budget will realize that the tax cuts scheduled in the October 2000 budget amount to less than $50 billion. In fact, we calculate that they amount to about $43.7 billion.

A huge chunk of the so-called tax cut is taken up by a $23 billion increase in Canada pension plan premiums over the course of that budget's five year cycle. The government is also counting increases in the child tax benefit, which is a social transfer program, an entitlement program, as a tax cut, which is disingenuous. It is counting the value of reindexation of the tax code as a tax cut. In a sense the government has said that it will no longer force people into higher tax brackets as they get cost of living adjustments. In other words it will stop raising taxes, but it will count that as a tax cut, which is pretty specious.

In this particular budget the government will not be initiating a single personal income tax cut in the bill before us. There is a small two point rate cut in the corporate income tax. There is a measly five cent reduction in employment insurance premiums. However, that is quickly gobbled up by $2.08 billion in Canadian pension plan premium increases, the $430 billion air security tax to which I have referred, and by the nearly $500 billion in additional tobacco taxes.

To be on the record in this regard, we are not necessarily against raising tobacco tax prices to reduce demand among youth, but we think that it should not be a back door tax grab. Any increased revenues in that area ought to be offset by tax reductions elsewhere. This all adds up to a net tax increase this fiscal year of $1.258 billion. That is madness in the current economic context of a recession.

We had negative growth in the third quarter of 2001. We had negative growth in the fourth quarter of 2001. Those two consecutive quarters with negative growth constitute a technical recession. We are almost certainly in either negative growth or a stagnant economy right now.

Let me close by saying that we will oppose the bill on the grounds that it provides for no reallocation of resources to the critically important areas of defence and security. It does nothing for the economy. We will oppose the bill as vigorously as we did the budget.

[Paul Szabo, Liberal, Parliamentary Secretary to the Minister of Public Works and Government Services]

Mr. Speaker, I heard the words bogus and disingenuous and a total denial of whether or not there were certain tax cuts. The member has stated a less than accurate situation.

Prior to reindexing the system each and every tax period the opposition party continued to show they were tax increases because there was no indexation. They constantly counted up the number of tax increases. Now that there is indexation he is saying that is not a tax cut. He cannot have it both ways.

The member also includes CPP premium increases as a tax increase. He well knows that the CPP is a separately funded instrument. It includes not only Canada pension plan retirement benefits. There are spousal benefits and death benefits available to children and spouses. There also is a disability insurance component for Canadians. This will ensure stability of the Canada pension plan.

His party has said that it wants to scrap the CPP and have mandatory RRSPs. He cannot have it both ways. This program is very important to Canadians.

With regard to the child tax benefit he says it as disingenuous because it is not on the tax return. Family allowance used to be on the tax return. It was taxable and deductions were allowed, et cetera.

Now that it has been taken off the tax return it gives us an opportunity to deliver child tax benefits to families each and every month rather than their waiting for a year before filing a tax return. It is not taxable so the money gets to people's hands when they need it. For the member to say that there were no net tax benefits to Canadians is simply wrong.

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Mr. Speaker, I am talking about truth in advertising and that is not offered in the budget. I said that bracket creep prior to the reindexation of the tax code constituted an annual tax increase, but I also said that stopping a tax increase was not a tax cut. People running stores increase prices every year. It is ridiculous to say if one year they decide not to increase them they are therefore cutting their prices. I thought the member was an accountant. I do not know how he gets that twisted logic.

I have considerable regard for the member, but in terms of the CPP either he has been grossly misinformed or he is misinforming the House when he says that the opposition seeks to scrap the Canada pension plan. He knows that is not true.

We have proposed in the past and continue to propose a degree of freedom for younger Canadians to direct a portion of their mandatory pension premiums into self-directed investment vehicles as opposed to a government invested fund. That is not scrapping the CPP. He knows that perfectly well. I see that his nose is growing.

In terms of the child tax benefit I simply said that this was a transfer program disguised within the tax system. It is not a tax cut. It is a targeted entitlement. It is essentially a redesigned version of the old family allowance, which is fine.

We could have a legitimate debate about that, but the point is that it is wrong to count it as a tax cut. When we include CPP increases this year and other increases in the budget for taxes there is a net tax increase in the current year in the midst of a recession. That is not good fiscal policy.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, at the beginning of his speech, my colleague referred to the matter of the tax to counteract terrorism in the air.

He said that the Standing Committee on Transport suggested that, rather than being 100% user-pay, the cost should be split 50-50 between users and the government.

I would like to list the Quebec airports that will be affected by this charge: Alma, Bagotville, Baie-Comeau, Chibougamau, Gaspé, Îles-de-la-Madeleine, Kuujjuaq, Kuujjuarapik, La Grande Rivière, La Grande-3, La Grande-4, Blanc-Sablon, Mont-Joli, Montréal, Quebec City , Roberval, Rouyn-Noranda, Sept-Îles and Val-d'Or. These are, basically, all the regional airports there are in Quebec. The rest of Canada must all have similar lists.

Would the suggestion by the Standing Committee on Transport not have been preferable to the government's plan to tax only users, which will have a regressive effect in the regions, where there is no great likelihood of terrorist activities? Might we not have been in a far better situation as far as regional economic development is concerned if the transport committee's suggestion had been accepted?

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Mr. Speaker, I agree entirely with my colleague. He is correct to point to the recommendations of the transport committee. The transport minister stood in the House to try to mischaracterize the recommendation of that committee. He suggested that it said costs should fall on the traveller.

It did say that but only in part. As my colleague pointed out, it suggested that the costs should be borne by different players including the government, regional airport authorities, airlines and travellers.

I am interested to hear that in Quebec there are small regional carriers similar to those in the west, and I believe on the east coast and in the north, which have little or no security needs, a very low price structure, and for whom this $24 fee could represent potential bankruptcy given the enormous sometimes 50% increase in the price of a ticket for small domestic regional carriers. That is not sensible when we need to be supporting the airline industry.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I am pleased to have the opportunity to join the debate on Bill C-49 on behalf of the constituents of the riding of Winnipeg Centre. I would like to add some remarks about the bill respecting an act to implement certain provisions of the budget tabled in parliament on December 10, 2001.

This omnibus bill deals with a number of issues that have been touched on by other speakers. I would like to go over them briefly and then deal with some of the shortcomings and serious omissions that we wish would have been dealt with in the budget.

The first point of great interest to Canadians that we note in Bill C-49 is that it will establish the Canadian air transport security authority, CATSA, to deliver improved security at Canadian airports and on board flights.

The new authority is to have the full power of a crown corporation. I note with interest that it will be run by 11 government appointees, a rather odd arbitrary number, one would think at first glance. It is probably how many old Liberal hacks needed patronage jobs on any given day so they conveniently rounded it out to the odd number of 11.

Our point of view is that the authority would abide by business standards rather than safety standards. CATSA may well turn around and hand off the duty or the responsibility for delivering the security to the airport authorities.

We really do not know. We are being asked to buy a pig in a poke when we hand over the authority to this newly established organization. We really do not have any firm understanding or any real picture of how it will ultimately wind up.

Who will be delivering the service? Will they be public servants? Will they be private sector employees? Will they be better trained? Is there any real obligation? Will any rules be put in place under this new authority to assure Canadians of an improved airport security system?

That is an unknown commodity and we are very critical of that. The government has been unable to paint a picture of what we will be buying, and we are buying.

The hon. member for Calgary Southeast very capably pointed out that we would be paying $24 per round trip on every flight, whether it is from Winnipeg to Toronto, Vancouver Island to Vancouver or any little hop, skip and a jump. That $24 could in fact represent 30%, 40% or 50% of the airfare.

The Minister of Finance is like Rumpelstiltskin in this regard. He is turning straw into gold. He took a negative situation, the need for improved security, and turned it into a revenue generator. By its own admission the government will only spend $2 of that $12 per leg fee on the actual implementation of improved airport security. The other $10 is another cash cow.

The government seems to find very clever ways to generate revenue that no one ever would have dreamed of. We have to give it full points for that. It turned the EI system into a cash cow. It turned the public service pension plan into a cash cow. Now, of all things, it has turned airport security into a revenue generator. We are very critical of this issue.

We are not really sure what will be the status of the working people who currently do the checks at airports. We do not know if they will be federal employees. Currently most of them are represented by the United Steelworkers of America.

It becomes a jurisdictional issue too. If they are to become public federal employees, will they then be represented by the Public Service Alliance of Canada or will they maintain their relationship with their former union? What about the terms and conditions of their workplace? Will the collective agreements be modified or interfered with in any way?

These are unknown commodities on which we have not had much direction from the government or any indication of how these issues will be resolved.

The NDP caucus has serious reservations and concerns about this new CATSA. We do not feel that the Canadian public feels any safer as a result of the implementation of this aspect of the budget.

We note with interest that in the U.S. the extra service fee or charge is $2.50 per flight compared to $12 per leg here or $24 for a round trip. How does the government justify that? Where will it spend this extra $2.2 billion?

We have written a blank cheque. It is estimated that throughout the year the fee would generate $2.2 billion. We have no idea how that money will be spent or any guarantee at all that the money will be spent to try to improve the safety issues at airports. We do not know what the federal government has in mind for it. It will just go into general revenue.

The federal government was also very shrewd in making a further revenue grab now because it caught Canadians at a very sensitive and vulnerable time. Immediately after this terrible tragedy is when it polled Canadians. At that time about 80% of them supported the idea.

When asked if they would be willing to pay a bit more on every plane ticket to ensure they were safe or safer, about 80% of Canadians gave approval, I suppose, to implement some sort of a surcharge. However I criticize the government for taking advantage of people's vulnerability after such a terrible tragedy.

If we asked the same question today I think we would get dramatically different results now that Canadians have had time to deal and cope with the tragedy of September 11. Those are our observations on this aspect of the implementation bill.

I would like to touch now on another thing Bill C-49 intends to do. It intends to implement the amendments to the EI act relating to maternity and parental benefits in certain situations.

The NDP aggressively argued for that part of the EI program to be amended. The federal government did listen but it missed the opportunity to implement a comprehensive review of EI to make the program work again. It is again tinkering and fiddling with the edges of EI, throwing a little bone to those who are advocating on behalf of working people. However the great EI robbery continues in that every month that goes by there is a surplus of $700 million in the EI program. Working people and their employers are paying in $700 million a month more than is being paid out. That is absolutely unacceptable. We have raised it time and time again. The government again has chosen to bypass the issue in this particular budget.

We argue and have maintained all along that the EI system has ceased to be an unemployment insurance system because hardly any unemployed people actually qualify for any benefits. If less than 40% of unemployed people are eligible for any benefits, how is it a universal unemployment insurance program?

We have also made the point that a program is mandatory if one has to pay into it even though one has a less than 40% chance of collecting. In our mind and point of view, to deduct something from a person's paycheque for a specific reason and then to use that money for something completely different is an absolute breach of trust.

When money is deducted from the employees' paycheques for the purpose of receiving benefits and some income maintenance in case they become unemployed, they have the reasonable expectation that the money will be there if they need it. They do not want to find out after they become unemployed that they are not eligible for benefits. For the life of me I cannot understand how the government has gotten away with this year after year.

The EI fund has become the government's number one revenue generator. If we look at the $100 billion surplus over five years that the Minister of Finance points to and often brags about, $8 billion per year is coming from the EI fund, for a cumulative total so far of $40 billion in surplus contributions in the EI program. That money was supposed to go for income maintenance for unemployed workers.

The impact in my riding of Winnipeg Centre alone is $20.8 million per year. Just the changes made to EI in 1996 caused a loss of income maintenance and benefits in my riding alone of $20.8 million. Imagine trying to attract a new business to a community that had a payroll of $20.8 million per year and what a difference that would make to an inner city riding like mine. The inverse is also true. When $20.8 million is sucked out of the local economy in my riding the impact absolutely is devastating.

While we support the implementation of the amendments to the EI Act regarding maternity leave and parental benefits, in all good conscience we have to point out that the EI system is still an absolutely dysfunctional, broken instrument and should be dealt with promptly so that it provides the benefits people actually need.

Regarding the income tax amendments announced in the 2001 budget, we support the small business taxation deferral. We think it is a sensible thing.

The second item we cannot understand is allowing apprentice vehicle mechanics to deduct a portion of their cost of new tools. Why were only vehicle mechanics mentioned? I am a journeyman carpenter by trade. An apprentice tries to buy one new tool with each paycheque because one has to slowly acquire a garage full of tools to be able to practise the craft. Why did the government not involve all skilled tradespeople? It is an insult to those of us who have gone through the trades and are not offered this special benefit.

There have been private members' bills in the House--I think it has been raised 10 times over the last decade--calling for a tax deduction for all tradespeople. Why the government stopped short and only gave it to auto mechanics is an absolute mystery to me. While we wish the vehicle mechanics well, and I am sure they will enjoy this small benefit, we really regret that it did not include other working people.

The last thing I would mention regarding Bill C-49, the budget implementation act, 2001, is the $2 billion strategic infrastructure fund. I know all members will want a chance to have a go at this. People have already nicknamed it the strategic Liberal fund because no one is convinced there will be any more fairness in the distribution of these moneys than there has been in any evidence of other corporate welfare that we have seen handed out to Liberal ridings around the country. We are as critical of this as we are critical of, for instance, the technology partnership loans from Industry Canada.

I would like to give an example of why we disapprove of the structure of the infrastructure fund. I think anybody who reads the documents I have here will agree that the other structures were no good either. What I am reading from is a list of the cumulative technology partnership loans from 1996 to 2002 . The other column is donations to the Liberal Party from 1996 to 2002.

The first thing I want to point out is that every one of the following companies are stable, healthy companies that do not really need any kind of loan to keep operating. We are giving corporate welfare to companies like IBM, Bombardier, Spar Aerospace, Pratt & Whitney and Raytheon Canada. These are the companies that are lining up at the trough and getting these handouts.

[Bev Desjarlais, NDP, Churchill, MB]

Did any go to the lumber industry I wonder.

[Pat Martin, NDP, Winnipeg Centre, MB]

Here is one example that might interest the hon. member. In 1996 to 2002, Bombardier received $87 million of these particular loans and its donation to the Liberal Party in the same period of time was $411,713. Even more startling is that out of all the loans only 2% of that money has been paid back. Out of $1.7 billion in loans, less than $20 million has been paid back. These are not loans, they are gifts. There is no yardstick to measure progress by. There is no obligation for companies to create a certain number of jobs. There is no obligation for companies to expand and grow their companies. It is simply that they are given the money and then at election time they are asked for their cheques.

Pratt & Whitney Canada is not a small company. I do not really know why it needed $301 million worth of technology partnership loans. It would have done this research anyway because it is a healthy, vibrant company that wants to grow and succeed. During the same period of time it sent $131,373 to the Liberal Party. That is a big chunk of change. That is more than the Royal Bank gave. This is a whopping contribution.

SNC-Lavalin, one of the largest and best engineering firms in the world and one we are proud to have in the country, received a technology partnership loan. I do not understand why a company like that would get a loan since it is not a high tech company. However after receiving an $8.7 million loan it kicked back $129,656. That is the highest ratio so far that we have come across. This is staggering .

Everyone can understand why we are apprehensive when we see another $2 billion strategic infrastructure fund being set up under the control and direction of the Deputy Prime Minister, not some arm's length, impartial and objective board that would review these grants and send the money around the country. It will be on the basis of a phone call to the Deputy Prime Minister. No one can tell me that those choices do not get political. It is only natural. We are very critical of this program.

The real contrast that brought this to my attention yesterday was a bunch of students demonstrating on Parliament Hill about high tuition fees. In fact demonstrations were being held in every major city right across the country. The students were arguing that they were being crippled by the high cost of education and that they wanted something to be done about tuition fees. What struck me as I was doing this research was that the payback of student loans by university students was about 94%. The other 6% get hounded mercilessly by the federal government. They are pursued and dogged right around the country. Their wages are garnished. They are harassed and harangued for relatively small amounts of money. Here we have a much larger distribution of money, so-called loans, with a payback rate of 2%.

Those companies are the corporate welfare bums of this decade. We need to start using that language again because it is absolutely scandalous. I would rather advocate on behalf of those students who are doing their best to pay back their loans and put an end to this.

If there is anything about the current budget that we are critical of it is that it has failed to do anything about the growing gap between the rich and the poor. Whenever we raise this, and the NDP is always harping on it, people want to know where the money will come from. They do not want their taxes raised so that more money can be spent. The government does not need to raise taxes. It needs to stop throwing our money away. If it would stop giving our money to the corporate welfare bums we would have a little bit of money for some social spending. We would be able to invest in people for a change. What irritates the NDP is the blatant evidence of waste and mismanagement of that type.

I come from the riding of Winnipeg Centre and, as I have told the House before, it is a very low income, inner city riding. I would like to point out some new statistics that illustrate some of the shortcomings of the budget: 49% of all families in my riding and 52% of all the children in my riding live below the poverty line. Could the government tell me what there is in the budget that I can tell the people of Winnipeg Centre will improve their day to day lives in any way, shape or form? I cannot find anything. For some reason there has been a conscious choice not to bother with this pressing issue. The bottom 20% of the electorate is ignored.

Either the government has given up trying and do something about this alarming incidence of poverty because the job is too tough or, in a very cynical way, it has disregarded this part of the electorate because they do not vote.

Everybody knows that low income people at the bottom 20% of the socio-economic ladder do not come out and vote. Therefore I suppose they do not deserve the attention of a government that is more preoccupied with power than meeting the basic needs of a great number of Canadians.

When I look at the budget and the implementation bill, Bill C-49, I do not see anything in it that I can bring back to my riding and tell people that things will be a little bit better next year. I guess the $500 million for Africa is kind of nice, but that will not elevate the standard of living conditions for the people in the riding of Winnipeg Centre.

We thought we were going to make some breakthroughs. The aboriginal people in my community listened to the Speech from the Throne and to all the flowery language. This was to be the decade when we would finally address some of the historic grievances the aboriginal people have had about their treatment in our society. There is nothing about that in the budget either. All those things went down to the bottom of the list of priorities. We can find very little solace or comfort in the budget or in Bill C-49.

[Loyola Hearn, Progressive Conservative, St. John's West, NL]

Mr. Speaker, I have a couple of questions for my hon. colleague.

First, he talked about HRDC. Although we cannot put the blame on local offices which must do what they are told and operate with what they have been given, in the member's dealings with the upper echelons of the department has he found that the department is in a state of complete and utter chaos?

Second, I would like the member to comment on a comment he perhaps made when he talked about the grants given to corporations. I agree with him to a large extent that is what they are because of the payback ratio. Most of these grants came from the Department of Industry. The member is perhaps casting aspersions on the former minister. I wonder how he can rationalize that when the same minister, as premier of Newfoundland, as has just been determined by the auditor general's report, took our budget from a $30 million deficit to a $350 million deficit?

Does he not think that he should have the same right to contribute to the deficit here federally?

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I thank the hon. member for that intervention. I will agree that I find HRDC dysfunctional to the point of being out of control. It is simply too big.

I remember when the government pulled HRDC together into this super portfolio, under Lloyd Axworthy at the time. People wondered then if that amount of activity could be managed under one portfolio. The answer, now that we have the experience, is simply no, it cannot. It should be split up. It should be divided into manageable chunks and administered in a way that actually meets the needs of Canadians so that people can get some actual service.

In terms of the many grants I was speaking about, all of them were from Industry Canada. This is a program under Industry Canada, but there are many other grant programs which I presume have comparable records in terms of the ratio of money paid back.

The former Minister of Industry was known as a real master of these grants. He knew that he could tap into this fund without any question, without any real qualifications, without any yardstick to measure progress, as I said before. There were no outcomes required, whereas I would think that when we are giving money away we would like to be able to say “I'm going to lend you $1 million for this company if you create 20 jobs in the community”. There should be some kind of predictable outcome. Two years later we could go back to see if there were or were not 20 jobs created. That is the way in which we would be able to measure progress. There are none of those checks and balances in these programs.

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Mr. Speaker, I commend my colleague from Winnipeg for his remarks. As well, I was very happy to hear the question asked yesterday, I think by his leader. I hope that, contrary to stereotypes, social democrats in the NDP and free market conservatives in the Alliance can work together against Liberal corporatism. The stereotype is that New Democrats always want intervention in the economy even if it does not make sense and Conservatives always want to support corporations even when it does not make sense. He has demonstrated that this is not the case, for which I commend him.

Would not the hon. member remark on the fact that these major corporations like Bombardier and SNC-Lavalin are in a better position to get financing from banks and financial institutions if they need it, as opposed to financing from government? Is it not true that if a small business in his riding needs new equipment or a new computer and goes to a bank, it will have a much higher chance of getting turned down than one of these major corporations? There are no low interest, forgivable loans for those struggling small businesses in his riding or mine that are trying to create wealth and that do create more jobs than those major corporations that are big donors to the Liberal Party.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I thank the hon. member for Calgary Southeast for the question. First, I would agree that maybe the thinking toward the corporate sector is maturing. Those of us who have often been critical of the corporate sector recognize that there are three legs to the economy. There is the corporate private sector, the public sector and the volunteer sector. We do not think the corporate sector should go away. We just think it should run by a set of rules that meets the needs of people, et cetera, as well.

The hon. member raises an excellent point about small business. That is why the Canadian Federation of Independent Business is one of the best advocates and the most outspoken group on this issue of corporate welfare bums, because small business is not a beneficiary of this kind of patronage program. There is no comparable program to assist the struggling mom and pop store in my community to grow its business, whereas the larger companies, and the member made a very good point, could get a better loan rate at the banks than the Government of Canada could, for heaven's sake, because they are such healthy established companies. When a company has all it needs, it seems to be able to get more on the basis of a phone call, but when a company is struggling and really could create jobs there is no comparable program for it.