Debates of March 11th, 2002

Budget Implementation Act, 2001

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I am pleased to address Bill C-49, an act to implement certain provisions of the budget tabled in Parliament on December 10, 2001.

As the Bloc Quebecois critic on transportation, I will discuss the infamous tax on airline security. But I would be remiss if I did not take this opportunity to comment on the remarks made by the Liberal member who just spoke regarding the investments made by this good Liberal government, including in health research.

It was mentioned that the government doubled its investments in health research. This is fine, except that when it comes to finding new technologies to cure sick people and discovering new drugs for them, we must ensure that this is done through the universal medicare program that exists across Canada.

When the time comes to pay for the research conducted to help cure the sick—with the product of that research— it is the provinces that foot the bill. The federal government is only contributing 14% of health costs in the Canadian provinces. Such is the reality.

It is fine to double investments for research, but if the government wants to be logical in its approach, it should double its investments in health across Canada and Quebec. That would ensure fairness. Instead, the government is doubling investments for research in health. Again, that is fine, except that in a universal system, it is Quebec's social program that pays to treat the sick, to treat Quebecers who are in poor health, with the product of that research.

The federal government is not ensuring that investments keep pace. It has doubled investments in research, but it has not doubled their amount or their percentage in terms of health costs across Canada, particularly in Quebec. This is why all the Canadian provinces are once again unanimous in saying “the federal government only pays for 14% of health costs across the country”.

What the provinces are asking the federal government is very simple: to up its contribution to 18% in the coming years. But there is nothing in this budget in this regard. Do not try to find new money in all that is proposed in Bill C-49, the act to implement certain provisions of the budget. There is nothing in it for health related costs. Nothing has been increased. There is no indication that investments in health across Canada might be doubled.

I will continue more specifically with the measure that involves a tax, once again. In order to solve security problems—which is all very fine in itself—the government has decided to create a Canadian Air Transport Security Authority for the purpose. The decision was made to allocate to it a budget of $2.2 billion over five years in order to bolster security in airports across Canada. Obviously, despite a surplus estimated at over $9 billion—we shall see within a few weeks—the decision was made to create a $12 air travel tax for an outward bound trip, and $12 for the return half, for a total of $24, the famous 12-24 tax.

Taking this past weekend's newspapers—and I do not have any problem with doing so—more particularly a Canadian Press story of Saturday March 9, picked up in Le Droit , reference is made to the fact that “The air security tax will apparently bring in more revenue than is necessary”.

So, the decision has been made to create a tax that will bring in more revenue than is necessary. No studies have even been done. This has been proven in the House, because the Minister of Finance has been asked and has responded: “Given the urgency of the situation, we have not had the time to carry out an exhaustive study”.

Today, they are imposing a $24 tax that will bring in more revenue than necessary. What is more, an article in the Journal de Montréal on Sunday March 10 quotes the Minister of Transport as saying “The airlines should cut ticket prices”. The airlines had the responsibility for part of security—spending $120 million on it—but now it is the responsibility of the state. Quoting again from this article, “The Minister added, however, that any such decision should be left to the discretion of each carrier”. They will not, of course meddle directly in the administration of the airlines, but a tax will, nevertheless, be imposed, saying “It is up to the companies to lower the price of their tickets”.

This industry has undergone drastic drops in business because of the tragic events of September 11. Yet the federal government has never done anything to bail it out. Forget it, no help has ever been forthcoming.

Companies were compensated for the six days that airspace was closed, which is only right. Then they received a small amount of compensation for the increase in insurance premiums. As for anything else, that was it, nothing.

It was decided that free market forces would be allowed to operate. The result was the closing of Canada 3000 and cut-throat competition by Air Canada, which created subsidiaries, such as Tango, to try to shut down almost all other air carriers throughout Canada.

Free market forces were allowed to operate and Canada's sorely burdened airline industry was saddled with a tax which will not apply to all airports in Canada; we have drawn up a list. Twenty airports in Quebec will be affected, as opposed to 15 in Ontario.

I would like to read the list of airports in Quebec which will be affected: Alma, Bagotville, Baie-Comeau, Chibougamau/Chapais, Gaspé, Îles-de-la-Madeleine, Kuujjuaq, Kuujjuarapik, La Grande Rivière, La Grande-3, La Grande-4, Lourdes-de-Blanc-Sablon, Mont-Joli, Montréal (Dorval international airport), Montréal (Mirabel international airport), Québec (Jean-Lesage international airport), Roberval, Rouyn-Noranda, Sept-Îles, Val-d'Or.

All these cities in the regions will be stuck with a new tax. I can never say it often enough: when we want to discourage people from smoking, we increase tobacco taxes. The government has increased the tax on flying. It has created a new tax and it thinks that this will encourage people. It is even telling air carriers, “You should lower air fares. We did not help you when you needed help. We let free market forces operate, but now we are going to tell you what to do. We are going to tell you that you should lower the cost of a ticket by $24 so that passengers do not notice they are having to spend $24”.

I repeat, it is one surprise after another in the House. The Liberal government will never cease to surprise me. One day, Quebecers and Canadians will catch on.

One day, the government will have to account for its management. It is not true that companies can always be told what to do, how to operate, when the government is not investing a cent, in the airlines for instance. This is a real problem.

The federal government never once helped out this industry that experienced the heaviest losses in the history of Canada and Quebec in such a short time. It decided to charge users a tax to try to give a boost to business. Once again, it has the gumption to say in the House that it doubled health research, but at the same time, it did nothing to invest more in the health care system, in treatments needed by sick people. When we find a drug for a someone who is sick, we have to be able to buy the drug, to buy the technology and to train staff. This means nothing. The government decided to double its research budget, but is not investing any more in the health care system. That is left up to the provinces.

The same can be said of the airline industry. The government decided to create a new tax. Today, in order to help travellers swallow the bitter new tax pill a little easier, the Minister of Transport said, and I quote, “the airlines should lower their ticket prices”.

So, every time the government invents a new tax, it is up to the industry in question to find a way to absorb the costs for the Liberal government's good decisions.

I repeat, what has happened in the airline industry is serious, it is a situation without precedent in history. I think that some day, and I hope it will be as soon as possible, people will judge the government for its acts, for the fact that it has come out of this so brazenly, without investing, and letting companies such as Canada 3000 go bankrupt, leaving workers on the street.

[Irwin Cotler, Liberal, Mount Royal, QC]

Mr. Speaker, today marks six months from September 11, the day the world was changed and where the protection of human security emerged as a central motif in budgetary planning and process which was finally expressed in Bill C-49.

The protection of human security, as I have said in the House, includes not only funding the components of a counterterrorism law and policy. It includes investing in people, in securing and sustaining a healthy and holistic environment, and in improving the health of Canadians by investing in the environment.

Indeed investment in a healthy environment, as in Bill C-49, can confer an economic benefit in job creation and the promotion of technological innovation, a resource and energy benefit in the conservation of energy and increasing the security of energy supplies, and a health benefit in improving the quality of our air and water and in reducing the toxicity of our environment.

For example, it is estimated that air pollution is responsible for 16,000 premature deaths and hundreds of thousands of incidents of illness. There are at least 10,000 abandoned toxic sites across Canada, including some 5,000 within federal jurisdiction.

It can confer a heritage benefit in the protection and conservation of our natural heritage and a political and juridical benefit in permitting us to undertake our responsibilities as global citizens.

One can only welcome, therefore, the investment in tax initiatives in Bill C-49 intended to promote and protect a cleaner and healthier environment, including a partenariat with communities to help the environment and support for communities both urban and rural that actively contribute toward a healthier environment.

Launched last year and administered by the Federation of Canadian Municipalities, part of this partenariat, the green municipal enabling fund and the green municipal investment fund have been effective in stimulating community based feasibility work and investments in more than 100 projects to improve the environment in diverse areas such as energy and water savings, community energy systems, urban transit, waste diversion and renewable energy.

The budget doubles the green municipal enabling fund and the green municipal investment fund at a cost of $25 million and $100 million respectively in the current fiscal year. These funds in addition to the new strategic infrastructure fund and the existing infrastructure fund will help protect our natural heritage while creating jobs, promoting technological information and providing affordable housing.

It will protect air quality and promote energy efficiency through incentives for clean energy and energy efficiency. Renewable energy and reducing energy consumption are essential components of the government's strategy to address climate change and improve air quality.

Budget 2001 supports this objective by investing $260 million in a 15 year program that will offer production incentives for electricity that is produced from qualifying wind energy projects and will encourage investment in these wind energy projects.

Budget 2001 also invests $5 million a year to broaden eligibility for the income tax incentives that apply to renewable energy and certain energy efficiency projects.

It will promote sustainable woodlot management. The budget sets aside $10 million a year to eliminate a provision related to the intergenerational tax deferred rollover for farm property that sometimes led to the premature harvest of woodlots. This will ensure better management of the resource.

The next area is the toxicity of contaminated land. Across Canada as in most countries in the world contaminated land lies unused and unproductive. Such sites known as brownfields may have the potential for rejuvenation, bringing both health and economic benefits to communities.

Therefore a little noticed but very important item in the budget is that in response to the government the National Round Table on the Environment and the Economy has agreed to develop a national brownfield redevelopment strategy to ensure that Canada is a global leader in remediation.

There is a recent series of federal initiatives in support of the environment such as an initial $100 million for the sustainable development technology fund to stimulate the development and demonstration of promising new environmental technology, a contribution of $60 million to the Canadian Foundation for Climate and Atmospheric Sciences to support academic research on climate change and air pollution, $150 million to renew the climate change action fund, $60 million for energy efficiency and renewable energy programs to lay the foundation for future greenhouse gas emission reductions in accordance with the Kyoto protocol by facilitating the development of technology and supporting energy efficiency and renewable energy projects, and $90 million allocated for the national strategy on species at risk to support habitat stewardship programs and other species protection activities.

This leads me to address three important initiatives regarding the promotion and protection of a healthy environment by way of conclusion. The first relates to the Kyoto protocol. As we can appreciate the world's climate is changing at an unprecedented rate. Without government action the long term consequence will be dramatic. In the north of Canada, as the Minister of the Environment has demonstrated, permafrost and sea ice are in retreat or melting. As a result Hudson Bay polar bears are at an increased risk of starvation because of a shorter seal hunting season.

The cost of moving supplies to communities on resource development projects is increasing because the ice road season is shorter and the traditional lifestyle of aboriginal peoples is threatened. We also feel its effects in the south with droughts affecting the agriculture and forestry sectors and the lower water levels of the Great Lakes disrupting our inland shipping routes.

In a word, both domestically and globally climate change is a major environmental problem that has an impact on the quality of life of all. Fortunately this past summer 178 countries finally reached agreement on the primary rules to implement the Kyoto protocol. In Marrakesh, Morocco in November we reached a final agreement on the crucial legal and technical details for the implementation of the protocol.

Canada played a key role in the four years it took to conclude the international rules to implement the Kyoto protocol. We now have a solid agreement that is good for Canada, that is good for the economy, that is good for the environment. We have a deal that will allow Canada and other developed countries to achieve the greenhouse gas emission reduction commitments they made in the Kyoto protocol in ways that are environmentally and economically sound in both the short and long term.

Admittedly there are challenges to overcome in reducing our emissions but there are also opportunities. Canadians have considerable expertise in clean energy and energy efficiency and there will be vast new markets for our know how.

Like the industrial revolution and the information technology revolution we are now in the cusp of the clean energy revolution. Clean sustainable energy can do much more than just reduce the risk of climate change and ensure cleaner air. It can also bring jobs, investment income and a competitive edge.

Similarly we recognize that the actions that need to be taken to achieve our climate change commitments will have costs, but there are also significant benefits such as lower health care costs resulting from cleaner air; job creation through, for example, cost effective building retrofit projects; lower costs for the forestry and agricultural sectors through the adoption of sustainable production methods; lower operating and production costs from energy efficiency; and revenue sources for municipalities from, for example, using landfill gases to generate electricity and the potential for exporting our technology and expertise.

When we hear the fears expressed with regard to the economic costs we should look at it in its total context, not only in terms of the economic costs but the economic benefits and the benefits to the environment, the benefits to health and the benefits to job creation and the like.

This brings me to my second major initiative: the species at risk bill. I support the amendments from the Standing Committee on the Environment and Sustainable Development that were put forward in three respects. The first is strengthening habitat protection in areas of federal jurisdiction. This addresses the most contentious issue of witnesses with Bill C-5, that it does not make the protection of critical habitat mandatory even in areas of federal jurisdiction.

While the committee amended the bill to make habitat protection mandatory in areas of federal jurisdiction, protection is delayed for at least two years after listing until the action plan stage. This will allow ample time for input from provinces, territories, stakeholders and negotiating voluntary stewardship agreements with landowners or companies.

The second amendment I support is ensuring that the decision to list a species is science based and accountable. Bill C-5 allows cabinet complete discretion to decide which species to list at risk. There is no requirement to act based on science, no time limit and no obligation to provide reasons for not listing a species. It is important to note that a decision not to list a species can result in a species extinction.

The committee made three changes to the process for listing species. Cabinet will have six months to decide whether to accept a recommendation by the scientific committee. The recommendation then takes effect if it is not varied or rejected by cabinet and the minister must give reasons if the recommendations are not followed.

These changes were themselves a compromise.

The third recommendation that I would--

[The Acting Speaker (Mr. Bélair)]

I am sorry to interrupt the hon. member but he is over his 10 minutes.

[Peter Stoffer, NDP, Sackville—Musquodoboit Valley—Eastern Shore, NS]

Mr. Speaker, as you can tell, only Liberals can make that last budget sound so rosy. It is unfortunate that they tend to forget a lot of things that happened before and after that budget. Two committees come to mind, one being the environment committee and the other being the transport committee.

My colleague from Windsor--St. Clair worked very hard on the environment committee. Members of the committee came to unanimous agreement on various amendments and brought the bill back to the House of Commons only to have the Liberal government rip the guts out of those amendments and proceed in its own way. This made a facade of the environmental committee's work.

The committee does not need to go back to Canadians to ask for their opinions because it has already done that. The committee heard from industry, environmental groups, aboriginal groups, the provinces and so on. To delay that process another two years makes committee work a facade, and it is most unfortunate.

The transport committee made a unanimous recommendation to have a labour representative on the board. What did the government do? It slapped its Liberal members on the head and told them it did not care what they thought. It told them it would proceed in its own unilateral approach. That does nothing for democracy in Canada.

I want to speak about the $24 airport tax. Instead of listening to reason and reducing the tax, what did the government do? It imposed a $24 fee on airline fares, $12 one way and $24 return. I could not believe the transport minister had the gall to do this. To offset the new Liberal tax, the government asked the airline companies to reduce their fares so the travelling public would not be harmed by the tax. I do not think I have ever heard a minister of the government say that before. It is funny that I never heard the Liberals say that when the GST was brought in. I never heard them say that when all the other taxes were brought in. I never heard them tell the business community to lower its prices so they could add even more taxes. It is unbelievable.

If this new $24 charge goes forward, the government will take approximately $60 million per year out of the local economy of Atlantic Canada. How much money will the Liberals put back into Atlantic Canada for security reasons? I suspect they will take a lot of that money and put it into the RCMP, the coast guard or into ports and then tell everyone to look at what they are doing.

[Peter MacKay, Progressive Conservative, Pictou—Antigonish—Guysborough, NS]

The ports police.

[Peter Stoffer, NDP, Sackville—Musquodoboit Valley—Eastern Shore, NS]

My colleague from Pictou--Antigonish--Guysborough brings up a good point. When my former colleague, Peter Mancini, was in this place he pushed very hard to reinstate the ports police, an initiative which I supported. We need him back.

However I suspect the airport surcharge will be used to offset security means in other areas. The government will make air passengers pay for that.

My Liberal colleagues across way will not put in $60 million worth of security at airports in Atlantic Canada but that is what they will take out. They will divert that money into other areas and that is offensive to the people of Atlantic Canada, especially to the people my area. I represent the Halifax airport and it is absolutely criminal for the government to do that.

The government talks about balanced budgets. If it were not for employees and employers of this country, there would be no balanced budget. The government has used the money from the EI fund to offset its other items in the budget for a long time. It is completely unacceptable that workers and small businesses have to pay for the fantasy work of the Liberal accounting spin doctors over there. That $24 surcharge is completely unacceptable. The government will not put that money back into Atlantic Canada. We are asking the government to reduce that cost.

No one is denying the fact that we have to put more money into security and that the airports are a good place to put it. On top of every other fee Canadian air travellers have to pay, it is completely unacceptable to charge them that much money. Just as unacceptable is the fact that the government has asked when airlines to lower their fees when they are struggling.

There is another point in the budget that the Liberals never mention. I and my colleague from Nova Scotia, and others probably, received over 106,000 phone calls from Canadians who received the most offensive letter I think I have ever seen from anybody in government. It is halfway down the first page of the new form they got for the disability tax credit. It is not a review. It is not to see if anyone is cheating the system. It blatantly says that if a person can go 50 metres on a flat surface with a device, they can no longer qualify for the disability tax credit. That is one of the most offensive things I think my colleagues in the Liberal Party have ever done in their history of being in government.

Can anyone imagine that? Because of new wording in that form, our amputees, our elderly and our veterans no longer qualify for the measly disability tax credit. The maximum allowable was only $1,000. In most cases in my riding, and I have had well over a couple of hundred calls on this, the average disability tax credit refund was about $450. The government is taking that money away from the amputees, the mentally challenged and the physically disabled of this country. That is one of the most offensive things I think I have ever seen from any government, let alone this Liberal government.

I encourage the government to stop that form, to drop it, to put a moratorium on it and to allow people to claim their disability tax credit. It should then work with the various organizations.

My colleague from Dartmouth has been front and centre on trying to encourage the committee and the government to stop harassing the most vulnerable in our society in order to put that money into other areas.

The government is very good at wasting our tax dollars. It spent over $1 billion on a home heating oil rebate. Seven thousand people in the United States got the rebate. Every prisoner in literally every jail cell in the country got the rebate. People who did not even buy fuel got the rebate and thousands of dead folks got the rebate. We know now that it was just a typical move for the government to spend the money and hope the election would go its way. That is unacceptable.

The Liberals spent $1.6 billion on the technology transfer programs. Again, no accountability. Only 2.5% of that money has ever been returned. The Minister of Industry called it an investment but there has been no clarification on where those taxes actually went.

The Minister of Public Works spent $500,000 on a study and nobody knows where the study is or what it is for. The money would have done a lot for the people of Canso, Nova Scotia, for example. My colleague from Pictou--Antigonish--Guysborough has been fighting very hard for the people of Canso. But no, it has to go to the government's Liberal friends for a report that nobody knows anything about or even knows where it is. It is incredible.

There are concerns about the military. Everybody was telling the government to put more money into the military: the Standing Committee on Defence and Veterans Affairs; the auditor general; the Conference of Defence Associations; everybody. If there was ever a time to put more money into the military, it was then. What did the government do? It put in $1.2 billion over five years when everyone was saying that we needed a minimum $1 billion just to start. Half of that money has already been spent on Operation Apollo. The money given to the military through the budget is woefully inadequate.

I have to reiterate my opposition to this budget and our party's opposition. The $24 surcharge is far too much. The disability tax credit is an affront to the most vulnerable in our society and our military deserves a lot better than what it got from the government.

[Steve Mahoney, Liberal, Mississauga West, ON]

Mr. Speaker, it is actually quite interesting to listen to the cries of great indignation from members opposite. The left side of the spectrum does not suggest anything in the form of a positive debate in relationship to the air security charge. It just simply criticizes without putting forward some substantive alternatives. I have not heard anyone give an alternative.

I think we all know we are here tonight debating amendments to the budget bill that was introduced several months ago. We now find ourselves in a position where we have to vote on amendments that do absolutely nothing other than stall, delay and allow members opposite to get up and tell people about issues that have no relationship whatsoever to the budget bill.

Do we want a delay? A debate in parliament would be interesting if we focused on the issue instead of the government being put in a position where, to actually implement changes to the budget, the savings to the taxpayer and the reduction in taxation to Canadians, we have no alternative but to introduce time allocation.

Why would that be? One would think that the members opposite would want the government to get on with a bill that introduces dramatic savings for the taxpayer. As an example of that savings, a two earner family of four with an income of $60,000 would save $1,000 in federal taxes this year. That is a reduction of 18%.

Am I being told in this place that people on the opposite side do not want taxpayers to get those savings? A one earner family of four earning $40,000 would pay $1,100 less in taxes and by 2004 this family would pay almost $2,000 less in tax, a 59% reduction in the amount of taxation that those hard-working Canadians would have to pay.

What we hear from colleagues opposite is just constant criticism instead of getting on with the implementation of a budget bill that would return money directly into the pockets of Canadians.

While we are on the issue of taxation, let me suggest that there is more than one way to reduce the tax burden or expense burden on hard-working Canadians.

Interest rates, for example, were reduced by about 3.5% last year. A reduction of 3.5% means quite a lot to a family seeking a mortgage of $100,000. A one hundred thousand dollar mortgage in my community does not buy much, but in many parts of the country it does. The annual mortgage payments on a $100,000 as a result of the reduction in the interest rates, which are clearly a result of the sound fiscal policies that this finance minister and the government have implemented over the past several years, will cost $2,200 less to carry than it would have one year ago.

Is that a tax reduction? No, not directly, but it sure makes a heck of a difference to a couple raising a family and trying to buy a home. To a small business, a loan of $250,000 will cost $9,000 a year less than it would have cost one year ago. Is that a direct tax reduction? Obviously it is not. However, on the cashflow and the bottom line of that small business or on the monthly budgeting of that family trying to buy their first home, these are real hard savings. This is money in their pockets.

We are debating whether or not there should be an air security charge instead of getting on with returning to hard working Canadians the money that they have earned and are paying in high interest rates, high carrying costs or taxes. As I say, there is more than one way to skin that particular cat.

I hear members opposite say that only Liberals can make this draconian budget, as they refer to it, sound good. Let me share some of the benefits that have come about as a result of the budget.

There is $24 million over two years to support sector councils. A sector council is a group of people from business and labour. They have been put together to deliver training programs on the ground to people who are working but are seeking to upgrade their skills or people who are trying to enter the job force, be it through an apprenticeship program, through organized labour or a community college.

These sector councils have been created in the province of Ontario, for example, because the federal government has been unable to enter into a labour market development agreement with the province. Obviously it is the largest province and the one with the greatest need for this kind of training and skills development, yet we have been unable to get an agreement from the Government of Ontario. We had to find an alternative way of ensuring that the training dollars actually get to the men and women who need them. The sector councils are a good way of doing that.

There have been concerns expressed in some areas that those sector councils are not totally funneling the training money to the union halls and places where some of the training takes place. That is a concern but it is not a budget concern or a concern for this particular debate. It is something we need to work out with HRDC, the province of Ontario and the sector councils.

Another item in the budget is a $10 million a year increase to improve support for persons with disabilities who pursue higher education. A member opposite rails against the government because of our treatment of people with disabilities. There is a clear commitment to people with disabilities in the form of tax breaks. We should get on with implementing the bill so that the money can flow to the people who need it.

There is $15 million a year to encourage the acquisition of trade skills. As my youngest son is currently studying to become a carpenter and is working with the carpenters union in the greater Toronto area, I think this is incredibly important.

The immigration committee deals with the issue of the types of people we want as new immigrants. One of the suggestions I have made is that a skilled tradesperson should be treated the same as a university graduate. In determining their eligibility to come to this country, people in the trades who have bona fide certificates saying they are pipefitters, steamfitters, carpenters, electricians and on down the list should get the same number of points as people who have bachelor of arts degrees. I am confident that is going to happen.

Something which has not been given a lot of attention in terms of the budget is that $13.5 million has been put in place to help young entrepreneurs. Through the Shad Valley program for kids going on to university and through the Canadian Youth Business Foundation dollars will be matched to create a pool of $26 million that will be made available for start up costs. This will help young Canadian entrepreneurs fulfill the dreams many of them have about building their own businesses.

On balance, the budget clearly sets out a direction that is positive for the economy and positive for all Canadians. Members opposite know it but they just will not admit it.

[Lynne Yelich, Canadian Alliance, Blackstrap, SK]

Mr. Speaker, today I am speaking on a concern I have with the proposed air security surcharge. The Liberals' Bill C-49 introduces an air travel tax of $24 and is set to become effective April 1. As a person who travels frequently, I find this tax outrageous. As a parliamentarian, I find it unnecessary.

On the six month anniversary of the attacks on America and the World Trade Center it is evident that the world is still mourning. As well we see that what happened just a short six months ago is still fresh in our minds. It was these acts that prompted the government, my colleagues and myself to take a closer look at the security measures that we take in this country.

When our neighbour is this vulnerable a target for terrorism, then we have to ask how safe we are. I believe, as do my colleagues in the Canadian Alliance, that we need heightened airport security, but to gouge Canadian travellers with this new tax is to wrongly take advantage of their fears and their mourning.

The tax as it stands now will hurt Canadian travellers and ultimately the companies that supply this travel to Canadians. Surely the government would know better than to implement a tax that will destroy smaller air carriers and limit the choices of travelling Canadians. Surely common sense would prevail.

I believe that if one has the courage to stand and criticize someone's ideas, then one must be prepared to give a better solution. The Canadian Alliance, and specifically my colleague the member for Port Moody--Coquitlam--Port Coquitlam, has brought forth a number of alternatives and improvements to this tax.

The first suggestion, and probably the most important, is that air travellers should contribute to the cost of improved airport security but they should not bear the total weight of these new improvements.

The approach taken by the United States is to have air passengers pay for part but not all of the cost of aviation security. A fee of $2.50 per flight to a maximum of $5 per day is a much more reasonable and workable fee.

The Standing Committee on Transport and Government Operations agreed unanimously that having the travelling public pay for 100% of improved airport security would be an exorbitant tax and would be unfair, yet this is exactly what has happened.

Mark Hill, the vice president of WestJet was quoted as saying “Once the tax is implemented, we believe that traffic will evaporate off the short haul routes. Once the traffic goes, we will have to back out of some of our short haul flying. Once that begins, the genie is out of the bottle and it is very hard to stuff the genie back into the bottle once that happens”.

These comments scare me. They scare me because they affect my constituents directly.

Saskatoon airport services most of my constituents. Its flights service travellers primarily to Winnipeg, Calgary, Prince Albert and Regina. These are all short haul flights. If this tax dissuades short haul flights, then it will destroy the business that is fundamental to the Saskatoon airport. This means not only the loss of valuable resources for my constituents but also the loss of jobs and a valuable part of the Saskatchewan economy.

Doug Schmidt, a WestJet pilot who originated from my area, was in Ottawa recently. As a concerned pilot he presented a petition to the Canadian Alliance opposition critic for transport to be tabled in the House of Commons on behalf of the WestJet pilots, flight attendants and fellow employees.

The petition urges the government to scrap the currently proposed system and replace it with one that is fair and equitable. The petition suggests that a percentage of airfare based formula would be far more fair to all air carriers, air travellers and supportive to airport communities.

The petition also outlined some very stark examples of what is wrong with the tax. On a $57 one way ticket between Edmonton and Calgary, a flat rate of $12 will represent more than a 20% increase in price for travellers. This increase in price could very realistically result in the removal of this short haul flight. However the same $12 fee on a $319 fare from Moncton to Vancouver will represent only a 4% increase. This increase is reasonable for long haul flights. This example clearly shows the discrepancy and the unfairness of the tax.

Mr. Schmidt and his co-workers brought forth this petition because they feel strongly about the company that they work for. They believe in their company. It is also driven from a fear that this tax will destroy this company which is largely based on short haul flights.

I was overwhelmed by the effort made by WestJet employees to save their company. I was even more overwhelmed when at a recent community event constituents rallied to sign the petition and show their support for the short haul flights. These constituents wanted to express personally the value that these short haul carriers have in their lives.

The service provided by WestJet and similar companies, and the affordable rates that they provide, are what Canadians have come to expect. It is what they deserve. Bill C-49 will surely take this away from them. How can we stand by and let this happen?

The Saskatchewan government has also been very vocal about questioning this new tax. Saskatchewan's own highways and transportation minister was quoted as saying that the Saskatchewan government fully supports enhanced security, but it is adding its voice to the growing number of others questioning the federal government's decision to beef up national and international airline security at the expense of local airports and short haul passengers.

I support my provincial government in this line of reasoning. It was clear the government was not willing to help Saskatchewan farmers with this budget, but I am surprised that it would add to this disgrace by destroying our air industry.

David Eckmire, chair of the Air Services Group, said the fee will generate $5 million annually from travellers using the Saskatoon airport which almost equals the airport's entire operating budget.

Many within the airline industry view this new airport security tax as a tax grab. It has not gone unnoticed that the money will go into the general revenues of the federal government and not a special security fund. My airport of Saskatoon, Saskatchewan will pay in taxes what is equal to its operating budget and in the end it will be stashed away into a federal reserve, benefiting no one. Tell me, where is the common sense?

This tax will be extremely detrimental to smaller communities, communities that are in my riding of Blackstrap.

I had mentioned earlier the need for the government to apply common sense to the airport security tax. Now I am going to put forth some common sense statements made in several of the presentations to the finance and transport committees.

Mark Hill, vice president of WestJet, suggested that a flat fee would be simpler to administer. This would mean that the tax would be based on a percentage of the fare and not a head tax. This system would be far less detrimental to short haul flights. Mr. Hill went on to tell the finance committee that this tax will be an auditing nightmare for airlines to try and figure out who owes what to whom and when.

Mr. J. Clifford Mackay of the Air Transport Association of Canada said “The implementation of this new tax or charge is frankly extremely complex. We have spent hundreds of hours trying to figure out how to do this. It is not going to be easy”.

Randy Williams, the president and CEO of the Tourism Industry Association of Canada, said “This tax will hurt an industry still recovering from the September 11 terrorist activities and the economic slowdown”. He went on to say that the travelling public does not support this tax.

These are very important points. They illustrate quite clearly that the government ignored the work in committee, the airline industry and the travelling public when it introduced Bill C-49.

This sort of separation between the people and the government is what has caused so much distrust and resentment for the political process. If we want to restore the belief of Canadians that their government is working for them and not against them, then we need to start listening to these common sense statements.

The government ignored them. I am asking members of the House from all parties to think carefully about why they are here. I want them to consider what is best for their constituents and what is necessary for a healthy airline industry in Canada. I am certain when they have done this that all members will vote against the implementation of this tax and they will do so with a clear conscience.

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

Mr. Speaker, last evening I was with my family as we watched the special two hour program commemorating the tragic events of September 11. For all Canadians and in fact for all those who value and respect the democratic system and the safe countries we have, that program reminded us why it is so important to have security in our nation and in all democratic nations.

That is why this is predominantly a security budget. If September 11 had not occurred, clearly there would have been resources to dedicate to many of the issues that members of parliament would like to see the government provide for the people of Canada, but the agenda was basically set.

I have often talked about families in the House. There is a saying I have used often and that is that strong families make a strong country. I want to reflect a little on what makes strong families. For me the measure of the strength of a country really is the measure of the health and well-being of its people.

I want to look at the budget and determine how this budget is addressing the health and well-being of Canadians. First, on the security issue, which this budget has as a predominant theme, there was no question that we had to address the security deficiencies we saw given the events of September 11. Within that budget there is $2.2 billion related to air travel safety. We know how important that is.

As a member of the transport committee, I took the opportunity to visit with other colleagues of the House and our American counterparts and look at what they were doing. We came forward with a report. Much of it is reflected in the provisions being proposed in the budget and I am very pleased about that. We did our job and the Minister of Transport listened to the report. We have important initiatives to ensure airline and airport safety.

Just to give members an idea of the impact of September 11, the United States passed legislation in November. The U.S. wanted to do that before its Thanksgiving week. Thanksgiving in the United States is the single largest travel period for Americans. Our American counterparts passed the legislation, which incorporated virtually every possible initiative they could think of, including training flight attendants in the martial arts to defend themselves.

It did pass, it was put in and people were assured that the provisions were there to ensure safety. The government wanted to get people travelling again. What was the result? Only 80% of the planes were actually flying during that Thanksgiving week and of those planes only 80% of the capacity was utilized. That means basically that only about two-thirds of the airline capacity of the United States was actually utilized during the biggest week of travel for Americans. It had an enormous impact on their economy. It demonstrated not only to Americans but to Canadians as well how important it was that we put in a security package that would help to restore the confidence of the travelling public, because we depend so very heavily on that, not only for personal travel but for commerce.

In fact, of our exports, 75% goes from Canada to the United States. It was important to deal with security issues at the border. It was important to deal with security issues at airports and with airlines. It was important to deal with intelligence, policing and emergency preparedness. The point of this is that a country that does not have security cannot have sovereignty. That is what it comes down to. We need a sovereign country and we need a strong security system to ensure that safety and that security for the families of Canada who make this such a strong country.

What else does the budget do for families? Obviously income taxation is an opportunity for us. As members know, the government has a $100 billion tax cut plan. It is fully protected and we are proceeding ahead so that Canadians will see, as they will when they do their tax returns, that their refundable and non-refundable credits have been indexed and that all the other provisions in the income tax return have now been indexed. As well, the effective rates of taxation have gone down. It means that Canadians in fact have more money as a result of reduced taxation and that will continue.

We also have our $23.4 billion support program for health and early childhood development. The government has been working very carefully and diligently with the provinces and the territories to ensure that our children, who are our future, are taken care of. We must have the kinds of programs that take into account the fact that, hard as it is to believe, 25% of children enter adult life with significant mental, social and behavioural problems. This is a very large number. It is why the Government of Canada has invested so heavily over all these years in our health system and in early childhood development issues: to make sure that our children have a chance to grow up and develop into healthy, well adjusted, contributing citizens of our country. That is another aspect of what we are doing for the family.

Obviously families are stronger when family members have jobs, yet for people to have jobs there has to be a strong economy. It means that we have to invest in areas where we can stimulate economic activity, areas such as the infrastructure program. There is the $2 billion strategic infrastructure program and the $600 million for highways announced in the year 2000 budget. These kinds of initiatives reflected in this budget are important.

We have also had tax incentives for small businesses to ensure that they, the creators of most of the jobs in Canada, are getting the assistance and support they need, such as the cashflow assistance through the changes introduced in the budget. This will ensure that they can be strong and create jobs for the families of Canada.

Further on the health front, there is the arrangement that was negotiated by the Government of Canada with the provinces to ensure that there is appropriate funding for health care. It is very important that our health care system be there if and when we need it. It is not a health care system for anyone other than those who need it. It is not a matter of whether a person has money. It is a matter of whether a person needs our health care system and we are dedicated to that.

Also in the budget are certain initiatives with regard to new skills, particularly Canadian study grants for students with disabilities and initiatives for youth entrepreneurship, which the member for Mississauga West championed right across Canada, consulting with young people and businesses to find out how the government can help young entrepreneurs get the start that they need so they can have these kinds of jobs. Again, this is another way to help strengthen the family.

There is also the amount of dollars invested in research. The research and innovation file has been a very significant part of the overall initiatives to ensure that we have leading technology, that we have the kind of investment in leading edge technologies such that Canada is in fact a leader. Those are important aspects. Not only do they help stimulate jobs in that sector, but to the extent that Canada has these new technologies and that we have the expertise there, we create new jobs, new industry and new opportunities for people, again helping people have jobs through a strong economy.

As well, on the environment the government wants to make sure that we can do everything possible to ensure that there is a healthy environment for Canadians. My constituents have told me that air and water quality issues are very important. They want to see the government take important steps toward ensuring that we are protecting our natural resources, our air and our water, to ensure that our families have a safe, secure and healthy environment in which to live.

These are but some of the elements that we have incorporated in this budget, not only in this budget, but building on previous budgets, and I am confident that the government will continue to build on this important legacy.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, there are so many areas in which to criticize the government in terms of general fiscal direction at this time. I do not have to remind anyone in the House of the decline of the Canadian dollar by 20% under the government's stewardship as a result of its failure to adapt and develop policies in Canada that reflect the needs of the 21st century, particularly in terms of what has happened in other countries. As other countries have focused on productivity and on the type of tax and regulatory reform to vault their economies proudly forward, the government has dilly-dallied, dithered and focused on short term focus group economics and on next week's polls as opposed to the challenges and opportunities in the next century.

I will not focus on the lack of vision. Canadians are aware of that. Canadians are aware that the government has done nothing for nine years except basically live off the proceeds of the previous government's policies, including free trade, the GST and deregulation of financial services, transportation and energy, which were all the very policies that party opposed in opposition and then swallowed themselves whole in government to accept, to embrace and to live off the proceeds of.

However, I will not be pithy and partisan today in the House of Commons. Instead, I will focus on some of the specific shortcomings of the current piece of legislation at hand.

First, the government has imposed a $2.2 billion tax. It is not just a fee, as even the Minister of Finance in the House of Commons is referring to it. It is a tax on Canada's most vulnerable industry, the airline industry, during a period of time when we see the great and tremendous need for competition in Canadian airspace, which is so sadly lacking. It is a tax aimed disproportionately at discount and short haul carriers, the very type of competition we need across Canada, particularly in regions like Atlantic Canada and British Columbia at a time when those regions depend on affordable access for air travellers.

There has been absolutely no impact analysis by the government, either by the Department of Finance or by the Department of Transport, on what the impact of this new $2.2 billion tax will be on competition in Canadian airspace, on the regions of Canada and on the struggling airports. In and of itself it is dismaying that the government would not do any type of study of what the impact of such a major policy would be.

Further, we have learned this week that the Department of Finance actually based the $2.2 billion tax figure, the $12 per flight or $24 per round trip, on specious data. The bureaucrats in the finance minister's department actually developed their estimate of what that fee ought to be on information that was categorically wrong, on estimates that actually reduced what the realistic number of air travellers would be, in an effort to inflate revenue over the next several years. The government has now created, through this new air security tax, a $1 billion surplus for itself which will go into general revenue.

The Minister of Finance is saying “we will revisit this”. The government is saying “we will revisit this in the future and if it is too high, we will cut it back”. Why should we believe the government when it is the same party that promised to scrap the GST when in opposition and then after forming the government embraced the GST? Now the Prime Minister brags about the GST and takes credit for it during foreign travels.

It is offensive that the government is trying to profit on the back of Canada's most vulnerable industry, the airline industry, and in fact in many ways is exploiting the genuine sympathies of Canadians in a post-September 11 environment to actually create another cash cow for Liberal spending in other areas. That is obviously wrong.

I was disappointed that the government did not move more aggressively on one specific area of policy, one further area: to eliminate the capital gains tax on gifts of listed securities. In the legislation, the government does make permanent the 1997 reduction of capital gains tax on gifts of listed securities to 50%. That is a baby step in the right direction, but the fact is, in the U.S. or the U.K., universities, hospital foundations and general charities all benefit from government policy whereby there is absolutely no capital gains tax on gifts of listed securities. This means that our Canadian universities, our Canadian hospital foundations and our charities, ranging from the big charities like the United Way in Toronto to the smaller charities across our country, operate at a competitive disadvantage with charitable foundations, organizations and philanthropic interests in the U.S. and the U.K.

Clearly this is bad public policy. At a time when the government has so dramatically cut social spending and transfers to the provinces we need to engage our volunteer and philanthropic sectors more fully. At the finance committee we asked representatives of these sectors what we ought to do to increase levels of donation and participation to meet the needs of Canadian communities. Every one of the witnesses before the committee said we should eliminate the capital gains tax from gifts of listed securities.

The government has failed to do this. The previous reduction of the capital gains tax on gifts of listed securities has resulted in over a billion dollars going from private hands to charities in Canada over the last four years. Completely eliminating the capital gains tax on gifts of listed securities would have an amazing impact on the growth of charitable contributions in Canada at a time when social needs across the country have expanded and governments are playing smaller and smaller roles. We need to do everything we can to ensure the volunteer sector has every possible advantage and tool at its disposal to succeed.

The cost to the government today of completely eliminating the capital gains tax on gifts of listed securities would be about the same as the tax revenue loss in 1997 when the government reduced the capital gains tax by 50% on gifts of listed securities. However the impact would be far greater. The United Way of Greater Toronto has received gifts of shares exceeding $10 million since 1997. In every province across Canada, from universities in Nova Scotia to hospital foundations in Toronto and British Columbia, there are examples of charities and community based foundations that have benefited as a result of the policy.

This would have been a simple way for the government to demonstrate that it cares for community based organizations which are trying to meet the needs governments have become less able to meet in recent years. The government has failed to move more aggressively. There were members of the Liberal government on the finance committee who supported a PC/DR motion to amend Bill C-49 to completely eliminate the capital gains tax on gifts of listed securities. The motion exists in the group today because we were successful at the finance committee. The government must now reintroduce a motion to reinstate the previous policy.

We will be voting in favour of making permanent the 50% reduction in capital gains tax. We support it as a baby step in the right direction. However we are profoundly disappointed that the government did not take advantage of an important opportunity to eliminate the capital gains tax from gifts of listed securities. The government ought to move to a broad based policy of eliminating the capital gains tax permanently in any case.

We did not have a capital gains tax in Canada until 1971. No tax has a more pernicious and negative impact on the growth of capital, investment, productivity and jobs across Canada than the capital gains tax. It acts in many ways as a cancer on the types of investment that would lead to the productivity and growth the Canadian economy so sorely needs. Our low Canadian dollar reflects the very opposite of such growth. One of the reasons we have a low dollar is that productivity rates have lagged since 1993 relative to our trading partners, particularly the U.S.

There are many areas of weakness in the government's general fiscal direction. The lack of enough vision to see the need for broad based tax reform focused on productivity, growth and opportunity is probably the biggest leadership deficit Canadians face. The government may be in surplus but there is a leadership deficit across the way.

Canadians are paying a big price for the government's failure to grasp opportunities and challenges. Our low dollar is probably the price tag we have paid for a government that has been on cruise control for eight years. I am afraid this great country of ours will cruise control into a ditch unless the government starts seizing opportunities as opposed to dodging the challenges facing the country at this critical time.

[The Acting Speaker (Mr. Bélair)]

It being 6.45 p.m., pursuant to order made earlier today, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the report stage of the bill now before the House.

The question is on Motion No. 1. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mr. Bélair)]

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

[Some hon. members]

Yea.

[The Acting Speaker (Mr. Bélair)]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Mr. Bélair)]

In my opinion the nays have it.

And more than five members having risen:

[The Acting Speaker (Mr. Bélair)]

The recorded division on Motion No. 1 stands deferred.

[The Acting Speaker (Mr. Bélair)]

The next question is on Motion No. 2. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mr. Bélair)]

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

[Some hon. members]

Yea.

[The Acting Speaker (Mr. Bélair)]

All those opposed will please say nay.