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House of Commons Hansard #162 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was excise.

Topics

Canadian International Trade Tribunal ActGovernment Orders

12:25 p.m.

Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Mr. Speaker, I would like to challenge the member on one statement and that is with respect to poverty. Undoubtedly there are people around the world, including people in China, whose incomes are substantially less than our incomes in Canada. I would agree that we in our global community should do everything we can to reduce and eliminate such poverty. However the fact of the matter is that when one gets into trade agreements with countries like China, it increases economic activity. Generally that means there is an increase in demand, which means that there are more jobs for workers and the ability to produce more would normally increase the workers wages.

That would not always be the case. It depends on the kind of wage agreement. We know that members of parliament for example have a fixed wage regardless of whether they work 12 or 18 hours a day. Teachers are often paid exactly the same, regardless of how many hours they work. We have to take that into account as well.

Does the member not at least generally concede that these international trade agreements tend to improve the lot of both countries involved in the agreement?

Canadian International Trade Tribunal ActGovernment Orders

12:25 p.m.

NDP

Dick Proctor NDP Palliser, SK

Mr. Speaker, no, I would not agree with the statement although in theory that is what they are supposed to do. In response to the member for Elk Island, it depends very much on the agreement itself. If we look seriously at the agreement that exists in the European Union where there are labour standards and environmental standards, then yes, there are opportunities for people at the bottom end of the income scale to advance.

Under the North American Free Trade Agreement, the free trade agreement and the WTO, there are no such stipulations when it comes to environmental rights or labour rights. If we look at the maquiladoras stretched along the Mexican-United States border, we would look hard and in vain to find very many people, except perhaps the upper echelon in an organization, who have advanced. We would find that workers have generally not advanced. We would perhaps also find that a great many of them have suffered many environmental problems as a result of the fact that they do not have adequate environmental standards. That has become a cesspool as we know over the last 10 or 15 years.

Ideally, world trade should lift up all boats, as the saying goes, but it has not. It is fair to say that we have always had globalization, but over the last 15 years we have seen a more intense degree of globalization, yet all of the standards indicate that the levels between the top and the bottom are not shrinking. The rich are getting richer and the poor are indeed getting poorer.

Canadian International Trade Tribunal ActGovernment Orders

12:25 p.m.

Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Mr. Speaker, I presume the member would like included in these trade agreements with different countries, especially third world countries and China, clauses that would require them to meet certain minimum environmental standards and certain employment standards.

In the event during negotiations a country said that it was a matter of sovereign right and that Canada did not have the right to change the way things were done in that country, then the trade agreement would not proceed and subsequently the increased economic activity and even the smallest potential of bettering the lot of the poor would be removed. Could the member respond to the dilemma faced in these negotiations?

Canadian International Trade Tribunal ActGovernment Orders

12:30 p.m.

NDP

Dick Proctor NDP Palliser, SK

Mr. Speaker, there may be a dilemma, but I cling very strongly to the fact that we do need international rights and obligations in the area of trade and environmental and human rights. Poverty in China is a major concern, particularly in rural areas where reportedly upward of 30 million Chinese people, as many people as we have living in Canada, live in absolute poverty.

With respect to the Chinese automotive industry, reduced tariffs under the WTO will mean exports will quickly flood the Chinese market resulting in a tremendous strain on workers. The International Confederation of Free Trade Unions, the ICFTU, reports that 10 million Chinese auto workers are forecasted to lose their jobs as a result of China's entry into the WTO.

China stands out internationally for its flagrant disregard for human rights. The WTO does not seek to enforce human rights standards, but is concerned only with the facilitation of international trade.

Workers in Chinese industries will be negatively impacted by increased trade. They have no recourse to collective organization. China has ratified the international covenant on economic, social and cultural rights, but filed a reservation to prevent workers from freely forming trade unions. The freedom to association and collective bargaining is recognized under the ILO, but it is ignored by China. China also has an abysmal record on workplace safety. In 2000 more than 47,000 industrial accidents were reported in China.

Yes, in theory free trade should work. It should help lift up people at the bottom end of the economic scale but it does need some safeguards. Those safeguards would include human rights, environmental rights and labour standards.

Canadian International Trade Tribunal ActGovernment Orders

12:30 p.m.

Progressive Conservative

Rick Borotsik Progressive Conservative Brandon—Souris, MB

Mr. Speaker, I will be brief in my comments, but I think it is the responsibility of my party in particular, the Progressive Conservative Party now in co-operation with the DRC, to stand and speak about free trade. We are and have been the free traders of the House and were instrumental in the negotiations of the free trade agreement, the NAFTA, put into place by the previous government. At the time it was suggested that it would not be supported by this government. Once elected, even the Liberals in their exuberance recognized that the only way in which this country would grow and expand would be to expand our markets and base those markets on rules based trade. In saying that, we are supportive of the accession of the People's Republic of China to the WTO family.

I have a lot of respect for the previous speaker from the NDP party, the member for Palliser. Although we do agree on some issues, we will agree to disagree on these issues with respect to the accession of China into WTO, free trade and how it is dealt with nationally and globally. One cannot put one's head in the sand. One must look at the possibility of bringing China into the free trade age and certainly into the global family.

My hon. colleague suggests that China has some difficulties and I would agree with him. In the past it has been seen as having some human rights issues, workplace safety issues and certainly some issues with respect to organized labour. However, one does not turn one's back on China and simply hope that the problems go away. What one does is incorporate China into globalized trade, which we know and realize so well is necessary for countries to be involved in if they are to expand their own economies.

China is a marketplace that is absolutely phenomenal, well in excess of 1.1 billion people who have a huge demand for goods and services being produced throughout the world. Equally, the world has a huge demand for the goods and services that can be produced within the People's Republic of China. It is important for China to have the opportunity to develop that economy.

Recently I had the opportunity of meeting with some of the political lawmakers of China at the Asia-Pacific parliamentary forum. I can assure the member for Palliser that these individuals are very excited about joining the ranks of the WTO. They are very excited about becoming better as a nation. They are very excited about being able to expand their now narrow focus into a global focus. This makes me very proud that Canada was a partner to China's accession to the WTO.

I believe very strongly that given the proper guidance, the proper opportunities and the proper abilities, the People's Republic of China too will become a very good partner in this world of global trade.

Regardless of what the hon. member from the NDP says, we recognize there are those issues. We recognize that allowing China to come into global trade will hopefully help with those problems. The Progressive Conservative/DRC Party will be supporting Bill C-50. We welcome China and thank its people for the opportunity to open up their wonderful market to Canadian goods and services.

Canadian International Trade Tribunal ActGovernment Orders

12:35 p.m.

The Deputy Speaker

Is the House ready for the question?

Canadian International Trade Tribunal ActGovernment Orders

12:35 p.m.

Some hon. members

Question.

Canadian International Trade Tribunal ActGovernment Orders

12:35 p.m.

The Deputy Speaker

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

Canadian International Trade Tribunal ActGovernment Orders

12:35 p.m.

Some hon. members

Agreed.

Canadian International Trade Tribunal ActGovernment Orders

12:35 p.m.

Some hon. members

No.

Canadian International Trade Tribunal ActGovernment Orders

12:35 p.m.

The Deputy Speaker

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

Canadian International Trade Tribunal ActGovernment Orders

12:35 p.m.

Some hon. members

Yea.

Canadian International Trade Tribunal ActGovernment Orders

12:35 p.m.

The Deputy Speaker

All those opposed will please say nay.

Canadian International Trade Tribunal ActGovernment Orders

12:35 p.m.

Some hon. members

On division.

Canadian International Trade Tribunal ActGovernment Orders

12:35 p.m.

The Deputy Speaker

I declare the motion carried. Accordingly the bill stands referred to the Standing Committee on Foreign Affairs and International Trade.

(Motion agreed to, bill read the second time and referred to a committee)

Excise Act, 2001Government Orders

12:35 p.m.

Saint-Laurent—Cartierville Québec

Liberal

Stéphane Dion Liberalfor the Minister of National Revenue

moved that Bill C-47, an act respecting the taxation of spirits, wine and tobacco and the treatment of ships' stores, be read the second time and referred to a committee.

Excise Act, 2001Government Orders

12:35 p.m.

Oak Ridges Ontario

Liberal

Bryon Wilfert LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, I appreciate the opportunity to present Bill C-47, an act respecting the taxation of spirits, wine and tobacco and the treatment of ships' stores, for second reading today.

Bill C-47 introduces a modern, legislative and administrative framework for the taxation of spirits, wine and tobacco products under a new Excise Act. This new framework does not address substantive tax rate or base matters for alcohol and tobacco products. Bill C-47 also implements other excise measures, specifically the changes to ships' stores provisions that were announced on September 27, 2001, and the tobacco tax increases announced on November 1, 2001.

Before elaborating on the details of the new Excise Act, I want to take a moment and provide hon. members with some background that will help put these new measures in context. The Excise Act is the foundation of the federal commodity taxation system for alcohol and tobacco products. It imposes excise duties on spirits, beer and tobacco products manufactured in Canada. It includes extensive control provisions relating to the production and the distribution of these products. Duties equivalent to the excise duties on domestically produced goods are levied on imported spirits, beer and tobacco products under the customs tariff. As well, excise taxes are imposed on domestic and imported wine and tobacco products under the Excise Tax Act.

Historically, commodity taxes on specific goods have been an important element of Canada's federal tax system. In the first half of the 1900s they accounted for as much as 25% of federal revenues. While their relative importance has declined in recent years, these levies are still significant. In 2000-01, duties on alcohol and tobacco products raised about $3.4 billion in federal revenues.

Why, then, is this bill needed? Quite simply because the current Excise Act is archaic. It is one of the oldest taxing statutes in Canada, existing in previous configurations before Confederation with parts of the present act flowing from the consolidated inland revenue act enacted in the 1800s. While periodically amendments have dealt with specific issues, the Excise Act has never before been the subject of an indepth review and revision.

Let me provide a few illustrations of the archaic provisions in the existing Excise Act. The existing act allows excise officers to enter premises at any time and break up or remove parts of the premises such as the walls, ceilings and doors. Taxpayers who suffer losses as a result of the actions of excise officers are only entitled to damages of 20¢. Any person found guilty of possessing or selling alcohol in contravention of the Excise Act could face up to 12 months of hard labour.

Licensed producers are prohibited from operating at night without prior authorization from the Canada Customs and Revenue Agency, CCRA, and must comply with the requirement to have an excise officer present at the licensee's expense. Licensees who intend to make any alterations to their premises are required to provide the CCRA with a detailed description of the proposed alterations and, following the completion of the work, with plans of the work. Pipes that are used in a distillery to convey spirits are required to be coloured blue and those used for beer are to be coloured green. Licensed producers are prohibited from erasing any words or figures from their books and records. The only way changes to a licensee's books may be made is by crossing out words or figures with ink in such a way as to ensure that they remain legible.

These are but a few examples of how outdated the current Excise Act is.

In recent years, both industry and government became increasingly aware of the need for a substantive review and modernization of the excise framework. In particular, industry has undertaken significant development with respect to new technology, product marketing and distribution initiatives which the existing Excise Act does not accommodate adequately.

Other factors also pointed to the need for review of the framework. For example, there is now greater foreign competition in the Canadian markets for beverage and non-beverage alcohol. However, the pervasive controls mandated by the Excise Act impose high compliance costs on industry and impair the competitiveness of Canadian producers. The Excise Act also has become increasingly difficult to administer and impedes CCRA's ability to fully adopt modern administrative practices. In addition, there was a need to address recent wine contraband pressures that have arisen in part because wine, which currently is taxed under the Excise Tax Act, has no substantive controls placed over its production and possession.

Finally, there are complexities and inefficiencies to both government and industry because tobacco manufactured in Canada currently is taxed under both the Excise Act and the Excise Tax Act. As a result, the government recognized that a revised excise framework was in everyone's best interests. A modern framework would generate stable and secure revenues and also address contraband pressures. Moreover, this could be achieved without imposing unrealistic or unnecessary costs and administrative burdens on industry participants.

Prompted by the need to update the Excise Act, the Department of Finance and the Canada Customs and Revenue Agency jointly released a discussion paper on the Excise Act review in 1997. This paper outlined a proposal for a revised legislative and administrative federal framework for the taxation of alcohol and tobacco products.

The review was guided by the following three objectives: first, to promote a modern legislative framework for a simpler and more certain administrative system that recognizes current industry practices; second, to facilitate greater efficiency and fairness for all parties, leading to an improved administration and reduced compliance cost; and third, to ensure the continued protection of federal excise revenues.

Building on this discussion paper proposal, the government followed up in 1999 with the release of draft legislation and regulations. Public consultations, an important element in any federal policy initiative of this kind, formed an integral part of the review. With the discussion paper and the draft legislation regulations as a basis, extensive consultations were conducted with affected industry groups and businesses, provincial governments, liquor boards, various federal departments, the Royal Canadian Mounted Police and other enforcement agencies. Refinements were made to the original review proposals with the result that Bill C-47 has been given broad support among the spirits, wine and tobacco sectors, the provincial liquor boards and the law enforcement agencies.

Before discussing the new legislative framework, I should mention that the bill does not address beer, which, with the concurrence of the brewing industry, will remain under the existing Excise Act for the time being.

While time unfortunately precludes me from reviewing all the measures in Bill C-47, I would like to provide the House with a brief overview of some of the key components. Bill C-47 introduces core elements of the framework outlined in the discussion paper issued by the government in 1997, including: maintaining the imposition of duty at the time of production for spirits; the replacement of an excise levy at the time of sale for wine with a production levy at an equivalent rate; the deferral of the payment of duties for spirits and wine to the wholesale level; and the introduction of modern collection tools. At the same time, Bill C-47 helps to address the government's ongoing concern about the smuggling of alcohol.

Let me be more specific. A key element of the framework is the maintenance of the production levy, which as I mentioned, is extended to wine in the bill. The production levy incorporates strict controls on the production, importation, possession and use of non duty paid alcohol and significant penalties for breaking the law.

At the same time the bill removes the current outdated and onerous controls on premises and equipment which have hindered the spirits industry operating under the Excise Act. This means that businesses will now have greater flexibility to organize their commercial affairs to respond more quickly to market changes. Anyone producing or packaging spirits or wine will be required to have a spirits or wine licence.

Although vintners must be licensed under the new framework, the current small manufacturers tax exemption will be maintained for wine produced by very small vintners, especially vintners with sales of wine not exceeding $50,000 in the previous 12 months. As well, individuals who produce wine for their personal use will continue to be exempt from having to be licensed and pay duty.

Bill C-47 also proposes a new warehousing regime for deferring duty on packaged alcohol that will place domestic and imported packaged alcohol on an equal footing. As well it will accommodate the privatization initiatives of some provinces for the warehousing of liquor.

As under the existing Excise Act, comprehensive controls will exist on non-beverage uses of spirits and wine to protect federal excise revenues derived from beverage alcohol. These controls include the licensing or registration of users, the approval of product formulations for which spirits and wine may be used without the payment of duty, and the specification of denaturing standards.

The bill also eliminates the current nominal rates of duty that apply to certain non-beverage uses of spirits, such as spirits used in the manufacture of pharmaceutical goods. These nominal duties are inconsistent and erroneous in application and disadvantage domestic products manufactured with spirits vis-à-vis similar foreign products entering Canada.

While the fundamental controls over non-beverage alcohol remain unchanged from the existing excise framework, Bill C-47 contains new measures on imported industrial alcohol to ensure the integrity of the domestic alcohol market and the production of federal revenues. In particular there will be a requirement for imported denatured industrial alcohol to be sampled and tested to ensure it meets Canadian denaturing standards.

The comprehensive controls on the possession, distribution and use of non duty paid spirits and wine will also significantly improve the offence structure and enforcement function in regard to alcohol.

Finally, fines for alcohol related offences will be substantially increased. Proceeds of crime provisions will now cover serious alcohol offences.

Turning now to some of the tobacco provisions in the bill, the new legislative framework in Bill C-47 merges the current excise duty and excise tax on tobacco products, other than cigars, in a single production levy. This will result in improved administration and reduced compliance costs for the industry.

The new legislative framework incorporates the revised tobacco tax structure introduced in April 2001 and previously enacted, which formed part of the government's comprehensive strategy to reduce tobacco consumption.

My hon. colleagues will recall that the tobacco tax structure now includes: an excise tax on imported manufactured tobacco sold in duty free shops; a customs duty on manufactured tobacco imported by returning residents under the terms of the travellers allowance; and a revised excise tax and duty structure for exported domestic manufactured tobacco.

While the measures in Bill C-47 will provide a more streamlined framework for the taxation of tobacco, I want to assure the House that the fundamental controls over tobacco under the existing excise framework will be maintained. In particular, the current stamping and marketing requirements for tobacco products will continue to apply and will play a key role in the enforcement of tobacco provisions in the bill.

In addition, the legislation incorporates the current offence provisions relating to the illegal production, possession or sale of contraband tobacco which have proven to be effective.

The new excise framework also contains a number of administrative measures that will enable the Canada Customs and Revenue Agency to improve its level of service to clients and its overall administration of the excise framework for alcohol and tobacco products.

These measures, which are consistent with CCRA's integrated accounting initiative, include: a duty remittance and return structure harmonized with commercial accounting periods and the goods and services tax and harmonized sales tax, GST/HST, legislation; new assessment and appeal provisions similar to those under the GST/HST legislation; and a range of modern collection mechanisms, such as certificates of default, garnishment, seizure and the sale of goods and director liability.

In addition, the bill provides for a range of administrative penalties that will be imposed on licensees, registrants and others dealing with excisable goods who fail to comply with particular requirements under the law.

The new legislative framework will ensure that the excise duties on alcohol and tobacco are collected in a more effective and efficient manner. As well, it provides an array of modern administrative and enforcement tools for ensuring compliance with the proposed statute.

In summary, the new legislative and administrative framework for taxation of spirits, wine and tobacco products will provide: a simple and more certain taxation structure; equal treatment for all parties; improved administration and lower compliance costs; greater flexibility for businesses to organize their commercial affairs; and enhanced protection of excise revenues.

In the few remaining minutes, I will briefly discuss three additional measures in Bill C-47.

The first concerns changes to the ships' stores provisions under the customs and excise legislation. As my hon. colleagues know, ships' stores provisions grant relief from duties and taxes for goods used on board ships and aircraft in international service.

These changes, which were announced on September 27, 2001, respond to a recent Federal Court of Appeal decision that ships' stores regulations went beyond the scope of their enabling legislation. Bill C-47 provides the proper legislative authority for these regulations. The changes will take effect on the date the provisions identified by the court were incorporated into the regulations.

A second measure implements a temporary fuel tax rebate program for certain ships that will no longer qualify for ships' stores relief as a result of the proposed amendments to ships' stores regulations effective June 1, 2002.

Ships that would be entitled to this rebate are commercial tugs, ferries and passenger ships travelling on the Great Lakes and the lower St. Lawrence River that are not engaged in international trade. This rebate will apply on fuel purchased between June 1, 2002 and December 31, 2004. It is intended to provide affected operators with adequate time to make the transition to the new ships' stores rules.

The third measure implements the federal tax increases on tobacco products that were announced on November 1, 2001. Like the April 2001 measures I referred to earlier, this tobacco tax increase is part of the government's comprehensive strategy to improve the health of Canadians by discouraging tobacco consumption.

These increases re-establish a uniform federal tax rate for cigarettes across the country and amount to $2 per carton of cigarettes for sale in Quebec, $1.60 in Ontario and $1.50 in the rest of Canada. The increases are co-ordinated with provincial tobacco tax increases.

The government has always said that it would continue to work toward restoring tobacco taxes to pre-1994 levels as quickly as possible. The measures in Bill C-47 are one more step in the process of restoring tobacco tax rates in ways that will minimize the risk of renewed contraband activity.

In closing, let me say that the three elements of the bill all deserve to be passed without delay. It makes sense to implement a new Excise Act for addressing a longstanding need of both industry and government to rationalize the ships' stores provisions and to approve the tobacco tax increases for reducing tobacco consumption.

I urge all hon. members to support the passage of the legislation without delay.

Excise Act, 2001Government Orders

1 p.m.

Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Mr. Speaker, I think you look very good in the chair. Perhaps you aspire to making that a permanent position down the road. Learn your French and you will be okay.

I would like to address Bill C-47, an act which has to do with taxation. If members ever listen to any of my speeches they would know that taxes and I do not mix. I recognize and acknowledge that for our different levels of government to do their work a certain amount of taxation is required.

However, let us stop to think about how heavily we are taxed, whether we purchase gasoline, wine and spirits, cigarettes or food in the form of restaurant meals, vehicles, furniture, clothing or even when we give money away.

As a leader in my community, I get, as I am sure all members of parliament do, a fair number of solicitations to contribute to fundraisers. I was solicited not long ago by a group trying to get hockey tickets for a number of young people who did not have both parents. It asked me to contribute to some hockey tickets so that these young people could enjoy the Edmonton Oilers beating someone else hockey game.

I told the group I would contribute and I pledged $50 which I think provided two tickets for these young people. Members can imagine my surprise when I received a statement from the group showing the $50 I had pledged but also showing a charge of $3.50 for GST. I was being billed a tax on my charitable donation.

The federal government, even when its citizens are giving their money away to help others, wants a cut of it. It seems to have an insatiable appetite to take away the earnings of Canadians.

Over and over again we see taxes increase. Once in a while we get a little announcement of a temporary decrease. Even now we hear much crowing from the Liberal side about the reduction in taxes. However when I spoke to people who had received their cheques in January and February, they said that their take home pay did not seem to be that much different. They wanted to know what happened to all the tax cuts they were supposed to get?

We also must remember that our taxes, when it comes to the kind of taxes we are talking about in Bill C-47, the excise taxes and the GST, those taxes are all being paid with money that has already been taxed.

I was thinking about something the other day. Given that governments need some money to run their operations, where can they get the money from? First, they can do something to earn it and, in some cases, they do that.

I worked in the mathematics department at the Northern Alberta Institute of Technology. The institute had three major divisions: the technology division where I worked as a mathematics instructor, the business division and the so-called industrial division. The industrial division, among other things, trained mechanics, carpenters and many others in the hand skill trades which are so necessary in our society.

One of the things the institute did in order for their students to have hands on experience was invite citizens to bring in their vehicles. They would only be charged for the parts because the labour was provided by the students under the supervision of their instructors. I used to bring my own vehicles in there from time to time, although in those years I did most of the mechanical work on my vehicles myself.

I remember going to the institute's barber school which trained people to be hair dressers and barbers. One could go there and get a haircut for 50¢. It was a nominal charge but at least they got some revenue and the students learned how to cut hair.

Governments could raise revenues by doing things that would actually bring in money. Occasionally governments will build roads and then charge tolls on them. In a sense that is also a way of bringing in revenue. There are many other ways but I will not give an exhaustive list of how it can actually earn money directly.

The other way governments could earn money would be through taxation, that is, by separating the citizens from part of their earnings. As I see it there are basically three main classifications. They can tax people as a proportion of what they own. The municipalities do that with property tax. If one owns a house worth $100,000 the tax assessment every year would be $2,000 to $3,000.

I have not done my calculations recently but, having lived in the same house for over 25 years, I think I have paid more in property taxes than I paid for the house. In other words, the money I paid the government in property tax is greater than the money I paid to the guys who built the house. It is absolutely crazy.

Meanwhile I paid all those taxes with money on which I had already paid income tax. Most of that money was at the marginal rate of around 50%. I earned $6,000 of which $3,000 went to the province and feds and $3,000 went to the municipal government. That means that every year when I write my local municipality a cheque for my property taxes, if I write the cheque for $3,000, there goes $6,000 of my earnings. It was $6,000 of my earnings in taxes and yet all it shows is that I paid $3,000 in municipal taxes.

All hon. members here will be very pleased to know that I have introduced a private member's bill that would at least take the first step toward providing an exemption from taxable income for money that people earn to pay their property taxes. My principle is that Canadians should not have to pay taxes on money they earn for the sole purpose of paying taxes.

I am very unlucky because my private member's bill has never been drawn. My bill has been languishing in the bottom of the barrel. I would just love to have it debated and made votable. I would love to hear the members on the other side say that was a huge injustice.

If I included the amount of money I paid in property taxes with the amount of income tax I paid in order to make the money to pay those property taxes, I would have paid twice as much in taxes as I paid for the house. Of course we still have the house but it is very decrepit because I cannot afford to do upkeep due to all the taxes I have paid.

I am talking about Bill C-47, a bill that would change some tax rules. What the parliamentary secretary was very careful to keep a secret was that it would also increase taxes. I listened carefully to his entire speech and I do not remember hearing him say that as a result of these changes we will be able to suck out of Canadian taxpayers another quarter of a billion dollars, because that is what it is.

Our estimate is that this measure will result in increased tax revenues to the federal government of around $250 million. That is $250 million that will not be available to homeowners. It will not be available to moms and dads who are trying to provide for their families. It will not be available to good Canadian citizens who would love to give to charity but cannot because after they their tax bills most families hardly have enough money left to allow them to be truly charitable.

As an aside, the Liberals have a flawed reasoning when it comes to their taxation system. They claim they are justified in taxing people and then giving back to others who need it, people who make films, people who build airplanes, people who hire factory workers in Mexico to build buses that go to Kentucky and things like that. Liberals think they are justified in taking money away from all of us because we are inherently a generous people. There is a flaw in that argument.

I grew up in a family where that was practised. I have tried to be generous myself and I have tried to teach my children to be generous and charitable. If the Liberals really believed it and if the socialists really believed it, then they would not need to tax the dickens out of us because as generous people we would in fact help those people in need. We always did that.

I grew up in Saskatchewan in the rough years. Neighbours were always helping one another. It did not matter if it meant half a day of one's time. Sometimes someone would give a neighbour a ride to visit somebody who was ill in the hospital because that neighbour's vehicle did not work. My dad would pick people up and take them to the hospital. Things like that were always done.

Lo and behold, along come the socialists, the Liberals, who do not really think Canadians are generous. They take our money, whether we want to give it or not, and redistribute it. Meanwhile, they manage it in such a way so as to provide enough good slush funds in different areas to get re-elected in those ridings. I find that very offensive and so do most Canadians when they stop to think about it.

One form of taxation is property taxes. This involves taking every year from citizens a portion of what they own. In the business field there is the capital tax. That tax affects businesses, corporations and banks. Every year they have to pay into the public coffers a proportion of their capital inventory. No wonder businesses want to move to Mexico to build buses. No wonder they want to move to Ireland to invest there.

In Canada, businesses pay like crazy through the nose. Even when they buy equipment and once it is owned, they still have to pay the federal government an annual capital tax on it. That tax is in addition to any machinery tax that the provincial government may want. It is in addition to any tax that a municipality may level based on property value.

We have all these taxes that very frankly are a tremendous drain on our economy. They are a tremendous disincentive both to individuals and to businesses. We should be looking at ways to reduce that tax burden. Would it not be wonderful if Canadians could keep 90% of their earnings. If they earned $1 they would get to keep 90¢ of it. That would be great.

Before I got into politics, I was an ordinary person on a professional income. With my two degrees, I worked as an instructor. My wife and I made the decision that she would be a full time mom when our kids were small. We were struggling continuously to balance the budget.

I found it very distressing that I could not make ends meet. One day I figured out why. I earned $10,000 approximately five or six years into my career. The federal and provincial governments took about half of it, which left me with $5,000. We were told that we should put approximately 10% of our earnings away for future retirement.

My wife was not gainfully employed. She did not get paid for her labour although she worked in many instances as hard or harder than I did. She was not able to contribute to any pension plans or anything like that so I put some money away for our retirement. If we take the 10% away it reduces the $5,000 to $4,000.

I have always believed in charitable organizations and charitable contributions. For many years I used the rule of thumb of donating at least 10%. I would do that as an obligation.

It struck me one day that the reason we were having trouble making ends meet was that we were trying to live on 30% of my income. Some 50% was taken by different levels of government and the remaining part was taken through choice. We need to ease the tax burden on Canadians.

I have made allusion to other ways in which governments separate taxpayers from their money. Either they are taxed on a proportion of what they own, taxed on their income, or taxed on what they spend. Incredibly the federal, provincial and municipal governments are in collusion to make sure that all of us are burdened, stooped under a load of excessive taxes. We are taxed at all three locations. They tax us when we earn our money. They make us pay taxes on our properties. Business owners pay capital taxes. Then when we spend money to buy our kids some new clothes, we pay the GST and in most cases a provincial sales tax.

No wonder our families have problems. I read in a book that the greatest stress on marriage is inevitably financial. That is most often what leads to conflict and stress among married couples. With our taxation level and regime it is amazing that any of our families are surviving.

I was elected in 1993. Among other things my mandate was to work for lower taxes, and it still is. I believe very strongly that as individual members of parliament we need to do everything we can to reduce the tax load to leave more of the earnings in the pockets of the people who earned it so they can provide for themselves and their families. That is very important.

I want to say something specifically about the measures before us. I appreciated the speech given by the parliamentary secretary. He did a reasonably good job of going through the details of the bill and outlining its various measures. I will not bother repeating the details but I would like to bring a few issues to our attention.

It is interesting that work is being done to streamline the production of wines and spirits, the work of the vintners and distillers who produce alcoholic beverages. They want to make it more efficient. I have to applaud that. We know that our standard of living is inextricably linked to productivity in our country. Our productivity is greatly held down by all the administrative and regulatory regimes and taxes of the governments. I used the word in plural there because it is true at all three levels.

It is an admirable goal to streamline all these measures and bring them together. Presently there is an Excise Act and the Excise Tax Act. This is the first step, as I understand it, to bring those measures into one act which will be called the Excise Act, 2001. It happens to be 2002 but so be it. That will be its label.

I agree with some of the regulatory measures that are being taken. The parliamentary secretary mentioned the need for distillers to have at their expense government inspectors on site all the time. That is a regulatory expense which possibly should be changed to make us all more efficient.

As for colouring pipes certain colours I think they do this in most chemical operations. In a way producing alcoholic beverages is a chemical operation. I think it is a biochemical operation. We should let them do it if they want to do it, but we should not require by government that their pipes have to be a certain colour. That needs to be fixed. It needs to be modernized by all means.

When it comes to these taxes on alcoholic beverages, wines and tobacco I follow my father's footsteps in one regard. When a tax is levied we have a choice. We can choose not to pay it.

My father and mother taught us that drinking alcoholic beverages was not necessary and had inherent dangers if taken to excess. Neither of my parents ever drank or smoked and for some reason I picked that up as being a pretty smart thing to do.

I sometimes look back now still amazed at how insightful I was as a teenager when many of my friends were succumbing to group pressure. Some of them have since died because of either their addiction to alcohol, in some cases due to accidents caused by alcohol, or due to cancer caused by smoking cigarettes.

I have other problems. However my parents said this was a tax they would not have to pay so they did not bother buying that stuff. They not only saved the expense of the original purchase but also the taxes on it.

My dad did the same when the Mulroney government brought in the much hated GST. It is remarkable that sales tax, the GST, still resonates with people. A couple of weeks ago I saw an ad in the newspaper indicating no GST. The ad could just as easily have said 7% off everything, but they get way more attention because people say they hate the GST and will go to that store on the weekend to buy something if they do not have to pay the GST. I could use a word that would be unparliamentary which I normally do not use anyway, but other people sometimes use it when they talk about the GST.

When the GST came into effect my dad who used to trade in his car every three or four years said that was one tax he would not have to pay. He kept his car. I wonder how much that was replicated across the country when people made a decision not to make a purchase because the tax was a disincentive. We need to recognize that those taxes are a great disincentive.

Throughout our lives my family and I have not really become directly involved in the taxes we are talking about today because we buy neither alcoholic beverages nor cigarettes. However it does apply to many Canadians.

We should be aware of the fact that in this case the government will be increasing the taxes on cigarettes. As I mentioned earlier, the tax measures in the bill are to provide the government with an additional $240 million to $250 million.

Cigarette taxes in Quebec are to go up by $2 per carton, $1.60 in Ontario and $1.50 in the rest of the rest of the country. One may say that it does not seem to be fair and that the government is picking on Quebec. Why is it increasing the taxes in Quebec so much more? It is simply bringing Quebec into line because members will recall that back in 1994 or 1995 there was a big push to try to reduce smuggling. The government of the day decided it would reduce the smuggling of cigarettes by reducing taxes. If it reduced the taxes it would be able to--

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Liberal

Paul Szabo Liberal Mississauga South, ON

Is that a question?

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Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

There are no questions in my speech. The government reduced the taxes to reduce smuggling, the assumption being that if people who wanted cigarettes could buy them commercially at a competitive price instead of buying them from criminals, they would buy them commercially and the criminals would be out of business.

I do not know whether the government has now computed that the criminals are all out of business and will not get back into business, but now it is increasing prices again.

The reason that Quebec's increase is greater is that back in 1994 or 1995 the tax decrease to that province was greater. The government was targeting the areas where most of the smuggling took place. The government is bringing the tax levels back up to where they were before and the differentiation between the different regions of the country is simply to re-establish that the costs will be equal across the country.

I do not have any firsthand knowledge of this point, but a researcher indicated that the cost of a carton of cigarettes would bring in $6.85 in federal excise tax and $5.50 in excise duty, making a total of $12.35 per carton in federal taxes. I think that is absolutely incredible. I wish people would be like me and avoid the tax entirely. Given that they will pay it, I would be very pleased if we would have a lower rate of taxation for them. Plain and simple, I think the government is not entitled to that much money because a person buys a carton of cigarettes. It is a very high rate of tax. I dare to speak out of both sides of my mouth, but maybe we should increase the price even more.

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Liberal

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

Mr. Speaker, I rise on a point of order. I apologize to the member opposite for interrupting him, but this is an opportunity that I would like to bring forward to seek unanimous consent to make my private member's bill, Bill C-391, votable.

The member who was speaking will appreciate that it is very difficult to make bills votable. This is a bill that would amend the oath of citizenship and bring in the principles of the charter of rights and liberties. I would seek that unanimous consent.

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The Deputy Speaker

Does the hon. member for Ancaster--Dundas--Flamborough--Aldershot have consent of the House to propose the motion?

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Some hon. members

Agreed.

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Some hon. members

No.

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Liberal

David Anderson Liberal Victoria, BC

Mr. Speaker, I rise on a point of order. I am just wondering if it is relevant at all to note that it was the government members who opposed the request.