House of Commons Hansard #153 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.

Topics

Budget Implementation Act, 2001Government Orders

12:35 p.m.

Liberal

John McCallum Liberal Markham, ON

Mr. Speaker, we are not overtaxing given the information we have at this time. The point the hon. member and the newspaper article fail to grasp is that the number of emplanements is not the same as the number of $12 charges. Some people flying from A to B to C will pay only $12 but when they fly from A to B and then from B to C that will be two emplanements. In calculating the number of emplanements we reduced the gross total by 25% to allow for these flights from A to B to C. That was the logic.

As I have said a hundred times by now, if air travel proves to be stronger than thought at the time it will be cause for celebration because the economy will be improving faster than we had believed. Should that be the case, at the appropriate time the government has the authority to lower the charge.

Budget Implementation Act, 2001Government Orders

12:35 p.m.

Progressive Conservative

Gerald Keddy Progressive Conservative South Shore, NS

Mr. Speaker, because the debate pertains to budget implementation, I have two questions. The first question is for the secretary of state and it concerns the $7.2 billion designated for actual security in this country. How long will it be before that security spending is in place? Most of the promises we have heard in the budget are simply to do something at some time in the future.

My second question concerns the capital gains deferral promised in the last budget for private woodlot owners. The regulatory regime to go along with that is not in place yet. Who will actually benefit from this new capital gains deferral and by that I mean who will be described as a private woodlot owner? Who will intergenerational apply to and what will be the definition of sustainable woodlot?

What we do not want to see in the budget is a repeat of the last budget where we saw volunteer firefighters get a $500 tax deduction that did not apply to them.

Budget Implementation Act, 2001Government Orders

12:35 p.m.

Liberal

John McCallum Liberal Markham, ON

Mr. Speaker, with respect to the hon. member's first question, I believe the budget announced $7.7 billion for security over a period of five years.

The second question was of a technical nature regarding the woodlot owners. I do not have all the answers to that question but I will get back to the member as soon as I can.

Budget Implementation Act, 2001Government Orders

12:35 p.m.

NDP

Lorne Nystrom NDP Regina—Qu'Appelle, SK

Mr. Speaker, I want to ask the minister a question in his capacity as an economist. He is saying to the House on the $24 tax that whether it is a long haul flight or a short haul flight, the cost of security is still the same.

If we buy the argument that the cost of security is still the same because it is going through the same security people, as an economist what is his prediction as to how this will affect people flying a short haul distance as opposed to long haul distance? The cost of the ticket will be increased by a much larger percentage on a Regina to Winnipeg flight than on a Vancouver to Toronto flight for example. As an economist, when there is that kind of increase, which would be a considerable percentage increase, what kind of a slowdown does he predict we will see in traffic on short haul flights?

I think of the small airports such as Grande Prairie, Alberta and Prince Albert, Saskatchewan where many flights are extremely short haul, where a $24 tax on a return ticket can be well over 10% or 12% of the ticket. However if there is a $24 tax on a ticket from Vancouver to Toronto return, it is only 1% of the cost of the ticket.

What is his projection as to the impact on travel for short haul flights if this tax remains in effect for a year at the $24 rate? I know he will say that it will be reviewed in the fall but let us assume it will stay in place for a year. What will be the impact on short haul travel as opposed to long haul travel in this country and the impact on some of the small airports?

Budget Implementation Act, 2001Government Orders

12:40 p.m.

Liberal

John McCallum Liberal Markham, ON

Mr. Speaker, there is less than a year between now and the fall so there is a possibility of adjustment in less than a year. I would defend the $12 fixed amount on grounds of equity principally because the cost of this additional security is not a function of the price of the ticket and it is not a function of the length of the flight. The security cost is as great for Victoria to Vancouver as for Victoria to St. John's, so it is fair.

I take the member's point that the impact may be greater on the short haul flights because it is a larger percentage of the total ticket. However it is still equitable to allocate the charge according to where the actual costs are incurred which is what this measure does.

Budget Implementation Act, 2001Government Orders

12:40 p.m.

Canadian Alliance

Jason Kenney Canadian Alliance Calgary Southeast, AB

Mr. Speaker, witnesses from the transport department admitted at committee that this tax would be imposed on travel even from airports which do not provide security service.

The Vancouver International Airport Authority, for instance, operates a subterminal called the Vancouver South Terminal, out of which there are 10 and 15 minute float plane flights to places like Salt Spring Island, with a $30 or $40 fare. The transport official told us at committee that people flying out of a subterminal of the Vancouver airport will end up paying the $24 round trip tax on what could be a $30 base price ticket but that there will be no security there. One does not go through a screening machine to get on a four person float plane to go to Salt Spring Island from Vancouver.

How can the government charge a tax for a service that is not rendered? How can it force people to pay for security that they do not get and, frankly, in that instance they do not need?

Budget Implementation Act, 2001Government Orders

12:40 p.m.

Liberal

John McCallum Liberal Markham, ON

Mr. Speaker, I believe 89 airports have security processes and they are the ones subject to this charge. If one is flying from a small airport in the north to another small airport in the north which do not have those security services, then one does not pay the charge.

The list of airports affected is a dynamic, ongoing list. If there are additions or subtractions to the security services at any given airport, it will be reflected in changes to the list going forward.

Budget Implementation Act, 2001Government Orders

12:40 p.m.

Bloc

Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Mr. Speaker, I would like to ask the secretary of state a question. I have already asked it of the Minister of Finance, who has, as usual, given me a non-answer.

When reference is made to the user pay principle in connection with this air security tax, is it not incorrect to apply it in this context, because we know very well it is not a matter of user pay? It is not merely passenger security that is involved, but everyone's security. Six months after the events of September 11, we know that the passengers on the planes were not the only victims. There were also the people in the twin towers.

Would it not be a good idea, then, for everyone in Canada to pay for these new security provisions, not just the carriers, because this will mean the death of some of them?

Budget Implementation Act, 2001Government Orders

12:40 p.m.

Liberal

John McCallum Liberal Markham, ON

Mr. Speaker, as I have said, the costs are not wholly borne by users. They pay $2.2 billion of the total of $7.7 billion, or 30% of the costs.

It seems to us reasonable that users pay 30% of the costs; this is not the entire cost.

Budget Implementation Act, 2001Government Orders

12:40 p.m.

The Deputy Speaker

Is the House ready for the question?

Budget Implementation Act, 2001Government Orders

12:40 p.m.

Some hon. members

Question.

Budget Implementation Act, 2001Government Orders

12:40 p.m.

The Deputy Speaker

The question is on the motion. Is it the pleasure of the House to adopt the motion?

Budget Implementation Act, 2001Government Orders

12:40 p.m.

Some hon. members

Agreed.

Budget Implementation Act, 2001Government Orders

12:40 p.m.

Some hon. members

No.

Budget Implementation Act, 2001Government Orders

12:40 p.m.

The Deputy Speaker

All those in favour of the motion will please say yea.

Budget Implementation Act, 2001Government Orders

12:40 p.m.

Some hon. members

Yea.

Budget Implementation Act, 2001Government Orders

12:40 p.m.

The Deputy Speaker

All those opposed will please say nay.

Budget Implementation Act, 2001Government Orders

12:40 p.m.

Some hon. members

Nay.

Budget Implementation Act, 2001Government Orders

12:40 p.m.

The Deputy Speaker

In my opinion the yeas have it.

And more than five members having risen:

Budget Implementation Act, 2001Government Orders

12:40 p.m.

The Deputy Speaker

Call in the members.

(The House divided on the motion which was agreed to on the following division:)

Budget Implementation Act, 2001Government Orders

1:25 p.m.

The Deputy Speaker

I declare the motion carried.

I wish to inform the House that because of the proceedings on the time allocation motion, government orders will be extended by 30 minutes.

The House resumed from March 1 consideration of Bill C-49, an act to implement certain provisions of the budget tabled in Parliament on December 10, 2001, as reported (with amendment) from the committee, and of the motions in Group No. 1.

Budget Implementation Act, 2001Government Orders

1:30 p.m.

Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Mr. Speaker, I am very upset about what is happening in the House. I am starting to feel the same as did the former member for Cypress Hills--Grasslands, Lee Morrison. In his last statement in the House he made reference to the fact that he considered his years in parliament to be a waste of time. I am starting to feel that way too, Mr. Speaker. I am starting to feel as though I should stay at home with my family and enjoy my life because this place is becoming increasingly useless.

Budget Implementation Act, 2001Government Orders

1:30 p.m.

The Deputy Speaker

Order. I would ask members to take their discussions to the appropriate lobbies.

Budget Implementation Act, 2001Government Orders

1:30 p.m.

Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Mr. Speaker, I would have been more pleased had you invited them to be quiet and listen to what I had to say because I think it is important.

My former colleague from Grasslands in Saskatchewan said that his years here were a waste of time. This is what I am starting to feel.

We have had a number of good times in the finance committee over the last three or four years. I have served with some enthusiasm on that committee. We have had a considerable impact. We have had a good collegial attitude. We have been professional. We have listened to witnesses and have included what they have said in our reports.

Unfortunately, as I mentioned in my speech on the budget, most of our budget recommendations were not included in the finance minister's budget this year. However, we worked independently as a committee to give the finance minister advice so that the tax burden and the expenditure of public moneys would be in line with what Canadians wanted. That has now completely deteriorated. That is so frustrating.

All the Liberals just voted for closure. They said that they want to stop debating this. I have an inkling that most of them have not read the transcripts from our committee. They do not know what the issues are. All we are told is that they want to get this thing on the road so they can start collecting a tax so please stand up when told to. All of the members, including those who crossed the floor from the opposition benches to the Liberal benches, voted to shut down the debate.

Closure and time allocation would not be necessary if we treated with dignity the ideas and the conclusions of members of parliament and, as a matter of fact, the recommendations of the witnesses at the committee and the questions and concerns expressed by all committee members. I emphasize that all members of the committee were interested in hearing more details. This did not happen.

Instead, when it came time to vote, the members who had heard the witnesses, who had been there to hear our arguments, for the most part were pulled off the committee. Substitute members were put in whose only credentials were that they were able to vote the way they were told.

In other words, every amendment that came from an opposition party would be routinely defeated. A number of amendments came from the Liberals because the legislation was not perfect. They found a whole bunch of areas in this legislation which they wanted to change at committee stage and so they did. They brought in their amendments and all of those amendments passed and for good reason.

As a matter of fact, if members came to committee with an amendment and said that they had missed something and wanted to fix it, I would vote in favour of it at committee. Why not? My job is to do what is best for the citizens of Canada.

Yet in Bill C-49 there is the imposition of a tax. The parliamentary secretary will use perfect hindsight next fall when he looks at this new tax. He will look in his rearview mirror and will see all of the airlines that have gone out of business or that have cut services. Then the government will adjust the tax, after the damage is done.

Time allocation would have been unnecessary if members of the committee had been free to exercise their own judgment and to recommend to the Minister of Finance that the tax should be revised now to prevent the damage that it will do instead of looking at it in the fall to see what damage has been done. It is atrocious. Parliament is totally missing its responsibility and the opportunity to do what is right. I am appalled by that.

Those members very gladly step up to the plate for the Prime Minister and say that they will have more dignity because the Prime Minister will arrange for them to have bigger and better salaries. I say let them have the dignity of thinking and voting for themselves, whether it is on time allocation or in committee.

Let Liberal members get that dignity, then they will earn their salaries. Right now they could all be replaced by a bunch of little pneumatic dolls with little buttons that run a little air pump so that they stand up to vote on command. That is really atrocious.

I am very appalled. Perhaps next fall we will see on the news the impact this will have had on the airline industry and in services to small communities. Perhaps next fall when we look back at the damage that has been done the Liberals will say that a member of the House and the finance committee had the foresight to see this and warned the members, but they did not pay attention. They blindly went ahead and imposed a head tax for security instead of actually doing what was recommended by common sense, by the witnesses, and I am sure by economists, if they had had a chance to study it.

That brings me to another very important point. Why is closure being used when an economic impact study has not been done? It is incredible that we would put our country's airline industry at risk by imposing a tax when the department officials have admitted that they have not done an economic impact study on what the results of the new tax will be. They are just guessing. The finance minister pulled $12 and $24 out of a hat. It is incredible. In the United States the fee for airline passengers is $2.50 U.S. with a maximum of $5 on a trip.

Earlier today the parliamentary secretary said it is a very simple tax. That is not what the witnesses told us. That is not what people from the airline community have told us in their submissions to us. They have said this is an incredibly complex tax. It is based upon where a flight starts, where it ends and in some cases where it has been in between.

Did the passengers have to go to a major airport to make a connection to another little town? Perhaps they went from little town A to little town B , but they happened to go through Vancouver or Toronto to get there. What is the impact and who will pay the security tax? In some cases the passengers do not even go through security because the same gate is used. It is absolutely incredible that these people should be taxed.

The most important consideration is that the burden of funding the security issue is being placed entirely on airline passengers. We are ignoring the fact that on September 11 most of the people who died were not in airplanes. It is of public interest to have secure airways. The excessive tax will kill the very industry that needs to provide safe services. Sure, it will cut off airline terrorism, because there will be no more airlines on which to fly.

Words fail me, which does not happen often. I am out of words to say what a huge error we are making here and how despicable it is that this parliament with all this collective talent, and intellect presumably, is unable to see the situation which is so obvious.