Debates of April 26th, 2002

Interparliamentary Delegations

[Some hon. members]

Agreed.

[Some hon. members]

No.

Old Age Security Act

[Marcel Gagnon, Bloc, Champlain, QC]

moved for leave to introduce Bill C-449, an act to amend the Old Age Security Act.

Madam Speaker, the purpose of this bill is to correct a significant inequity in the treatment of the poorest seniors, first by making accessibility to the guaranteed income supplement more automatic and, second, by making the government meet the same conditions when it owes money to the poorest members of society as when it is owed money, which is by applying full retroactivity.

(Motions deemed adopted, bill read the first time and printed)

Species at Risk Act

[Ralph Goodale, Liberal, Leader of the Government in the House of Commons]

Madam Speaker, I regret to report to the House that an agreement could not be reached under the provisions of Standing Orders 78(1) or 78(2) with respect to the report stage and the third reading stage of Bill C-5, an act respecting the protection of wildlife species at risk in Canada.

Accordingly, under the provisions of Standing Order 78(3), I give notice that a minister of the crown will propose, at the next sitting of the House, a motion to allot a specific number of days or hours for the consideration and disposal of proceedings at the said stages of that bill.

Petitions

[Val Meredith, Canadian Alliance, South Surrey—White Rock—Langley, BC]

Madam Speaker, it is my pleasure to present on behalf of constituents two petitions amounting to almost 600 signatures representing a concern in my constituency that the incidence of explicit sex, pornography, violence, rape, murder and unacceptable language, swearing on television, have become extremely frequent with little regard to the time of day or the viewing audience.

The petitioners are very concerned about the effect and the exposure to our children of violence and sex on television during daylight hours. They humbly request that the House of Commons legislate the CRTC to reduce the sexual and violent content contained in the basic cable and satellite packages.

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

Madam Speaker, it is with pleasure today that I rise to present the following petition on behalf of my constituents, particularly the citizens who live along the Hants Shore in my riding, along the shore of the Minas Basin. The petition reads:

We, the undersigned residents of Canada, residing on or about Highway 215 East in Hant's Co. Nova Scotia, draw the attention of the house to the following:

The clam beds in this area were allowed to be depleted by diggers outside the area.

The clam worms are being allowed to be depleted by diggers from outside the area.

The diggers from two different areas are fighting over who the worms belong to.

Violence has erupted from the conflict, including a hospitalization on August 28, 2001.

The petition continues:

We the undersigned protest the commercial harvesting of the clam (blood) worms. The clams are gone, soon the worms will be gone, and with them the fish will be gone since they no longer have food, resulting in a collapsed fishery in this area.

The Hants Shore, along the coast of the Minas Basin, is a very unique ecosystem. With the highest tides in the world, it is a very precious ecosystem. I urge the House to consider very strongly protection of this ecosystem because we do not want another cod--

[The Acting Speaker (Ms. Bakopanos)]

Questions on the order paper.

Questions on the Order Paper

[Karen Redman, Liberal, Parliamentary Secretary to the Minister of the Environment]

Madam Speaker, I ask that all questions be allowed to stand.

[The Acting Speaker (Ms. Bakopanos)]

Is that agreed?

[Some hon. members]

Agreed.

The House resumed consideration of the motion that Bill C-47, an act respecting the taxation of spirits, wine and tobacco and the treatment of ships' stores, be read the third time and passed.

Excise Act, 2001

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

Madam Speaker, the spirits industry will no longer be hindered by outdated and onerous controls over premises and equipment. With these controls removed, businesses will have greater flexibility to organize their commercial affairs to respond more quickly to market changes.

The bill would require anyone producing or packaging spirits or wine to have an alcohol licence. While all vintners must be licensed, those with sales under $50,000 in the previous 12 months will continue to qualify for the small manufacturers' tax exemption. Individuals producing wine for personal use will continue to be exempt from having to be licensed and pay duty.

The new warehousing regime introduced in the bill for deferring the payment of duty on packaged alcohol will place domestic and imported packaged alcohol on an equal footing. This measure is also designed to accommodate the privatization initiatives of some provinces for the warehousing of alcohol.

There will also be comprehensive controls on the non-beverage use of spirits and wine to ensure the protection of federal excise revenues derived from beverage alcohol. These controls include the licensing or registration of users of non-beverage alcohol, the approval of product formulations for which spirits and wine may be used without payment of duty, and the specification of denaturing standards.

The bill would eliminate the current nominal rates of duty on certain non-beverage uses of spirits such as spirits used in pharmaceutical products. These nominal duties are inconsistent and onerous in application and disadvantage domestic products manufactured with spirits vis-à-vis similar foreign products entering Canada.

New rules for imported industrial alcohol, such as requiring the alcohol to be sampled and tested to ensure it meets Canadian denaturing standards, will ensure the integrity of the domestic alcohol market and protect federal revenues.

Finally, fines for alcohol related offences will be increased substantially and serious alcohol offences will now be subject to proceeds of crime provisions.

I will now turn to some of the tobacco provisions under Bill C-47. Under the new excise framework, the current excise duty and excise tax on tobacco products, other than cigars, will be merged into a single production levy. This will mean improved administration and reduced compliance costs for the industry.

While these new measures will provide a more streamlined framework for the taxation of tobacco, the fundamental controls over tobacco under the existing excise framework, such as the stamping and marking requirements for tobacco products, will be maintained.

The legislation also includes the current offence provisions relating to the illegal production, possession or sale of contraband tobacco, which have proven to be effective.

At the same time, the new excise framework incorporates the revised tobacco tax structure that parliament passed last spring.

As I mentioned a moment ago, the bill introduces modern collection tools and helps to address the government's ongoing concern over the smuggling of alcohol.

New administrative measures will enable the CCRA to improve its level of service to clients and its overall administration of the excise framework for alcohol and tobacco products.

These measures include a duty remittance and return structure harmonized with commercial accounting periods and the goods and services tax/harmonized sales tax; new assessment and appeal provisions; and a range of modern collection mechanisms, such as certificates of default, garnishment, seizure and sale of goods and directors' liability.

Further, persons dealing with exciseable goods who fail to comply with the act will be subject to a range of administrative penalties.

The new excise 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 new act.

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

Before closing, there are three additional measures in the bill that I want to mention to hon. colleagues. The first concern deals with changes to the ships' stores provisions under the customs and excise legislation that grant relief from duties and taxes for goods used aboard ships and aircraft in international service.

These changes respond to a recent decision of the Federal Court of Appeal that the ships' stores regulations went beyond the scope of their enabling legislation. Bill C-47 rectifies this situation by providing the proper legislative authority for these regulations.

Another measure relates to certain ships travelling on the Great Lakes and the St. Lawrence River that are not engaged in international trade and which no longer qualify for ships' stores relief after May 31, 2002. These ships will now be entitled to a temporary fuel tax rebate on fuel produced between June 1, 2002 and December 31, 2004. This rebate will provide the affected operators with adequate time to make the transition to the new ships' stores rules.

The final measure implements the federal tax increases on tobacco products that were announced in November which re-established a uniform federal tax rate for cigarettes across the country. These increases are co-ordinated with provincial tobacco tax increases and are one more step in the process of restoring tobacco tax rates to pre-1994 levels in ways that will minimize the risk of renewed contraband activity. They are also part of the government's comprehensive strategy to reduce tobacco consumption.

I urge my hon. colleagues to give their full support to the bill. As I indicated at the beginning of my remarks, the new excise act introduces a modern, legislative and administrative framework for the taxation of spirits, wine and tobacco products, thereby addressing a longstanding need of both the industry and the government.

With respect to the remaining measures in the bill, it makes sense to rationalize the ships' stores provisions and to approve the tobacco tax increases for reducing tobacco consumption.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Madam Speaker, I am pleased to speak in defence of Canadian taxpayers. Bill C-47 is another one of those infamous tax bills. I do not know how the Liberal government has in its head that it simply cannot find enough sources of taxes. It taxes everything two, three, four and five times. One of the things we are addressing in the bill is an increase in the amount of taxation.

As the parliamentary secretary has said, the bill addresses a number of different areas of taxation. One of them is the taxation of cigarettes. I have said this before in the House and I do not know how often I must repeat it until somebody actually hears and understands what I am saying.

Every dollar that is taken by government out of the hands of the people who earn it is a drain on our economy. I have often said as have others in my party, and in fact our founding leader of the Reform Party stated it as one of his themes, that every dollar left in the hands of a taxpayer, an investor or an entrepreneur does way more to help our economy than that same dollar sent into the centrifuge of taxation, the bottomless pit in Ottawa.

When governments take money out of the economy and redistribute it, they do not do anything directly for the people of Canada in terms of improving their ability to get jobs and look after themselves. In most instances it is detrimental. We cannot seem to get this into the head of the Liberal government opposite. In this particular case we have a government tax grab for people who happen to be addicted to smoking. The government wants to increase the taxes that it is applying to that.

We need to look at this very carefully. It is quite interesting that the government has been able, with respect to smoking, to pass legislation that says we cannot advertise it. That is intriguing. Being a person who feels that the rules of society ought to be applied equally, it seems to me that as long as cigarettes are a legal substance then those who manufacture and sell them should not be forbidden to talk about them.

I am one who is vociferously against smoking. I have told stories in the House before about how one time I smoked a part of a cigarette and decided at that time that I would not do this. It was an intellectual decision. Why would one spend money, which in my youth was difficult to come by, in order to buy things that one simply burns up? Add to that the fact that as we burn them, we take them through our lungs which damages them. That does not make sense.

Furthermore it has long term health consequences. I know several people who have died an early death because of their use of tobacco products. Let not anyone say that since I am opposed to increasing taxes on cigarettes that I am somehow willing to promote the use of cigarettes, especially by youth. The answer to that is a resounding no, I am not in favour of that.

I wonder about a government that takes it upon itself to use tax policy to substantially affect social outcomes. I will go out on a limb but personally I would have liked the government to have declared long ago that tobacco ingested into the body either through chewing or through cigarettes was a dangerous substance. This is not party policy so I do not want to be misquoted. Tobacco, for example, is no less dangerous than the small amount of ill effects we get from certain chemicals used to control weeds on our lawns. The government is willing to declare those dangerous substances.

Sir Walter Raleigh said to wrap a bunch of weeds in a piece of paper, put it in one's mouth, set it on fire, and then suck in the results of that burning. I believe that is a dangerous use of a dangerous substance. If the government were to do that, then it would have the moral authority to ban advertising and its use could not be promoted among young people and so on. However the government has not done that.

Tobacco is not only a legal substance but also a substance supported in its growth and development by various agencies of government. We are sending a mixed message to Canadians with respect to whether or not they should be smoking.

Millions of dollars are spent on government ads telling people of the bad effects of smoking and urging them not to do it. At the same time millions of dollars are spent promoting tobacco farmers and helping them ply their trade. This does not make any sense to me. This is like hooking a horse to the front of a wagon and hooking another horse to the back of the wagon and having them pull in opposite directions. The government ought to start thinking about how it is conducting its affairs. We should all be pulling in the same direction.

Bill C-47 would increase the amount of taxes young people and others would be required to pay when they smoke cigarettes. The price would be increased by $2 per carton in Quebec, $1.60 per carton in Ontario and $1.50 per carton in the rest of Canada. The justification the government gives for this is that in order to stop the smuggling of illegal cigarettes some years ago taxes were increased substantially in Ontario and Quebec, the provinces with the largest problem, and less substantially in other provinces. This would bring prices down so taxes would be equal across the country, which I agree with in principle. We ought not to tax one province more heavily than another because of its geographical location.

To say that increasing taxes is a way of reducing consumption is a little disingenuous on the part of the government since it is generating a large amount of income for itself. What will the government do with that income? Who knows what kind of new hotels it will finance with this money. Maybe it will finance some new musical fountains. Perhaps it will think of some other wonderful ways of spending taxpayers' money. We will not know until it happens and then the government will deny it. All attempts to get the facts will be stymied by the government which ran on a platform of openness and accountability. Unfortunately we do not see a great deal of that.

Incredibly, the tax hike on cigarettes would give the government approximately $250 million per year. I am not good at math in my head on a Friday afternoon so I must do a little calculation here.

The government would get an increased revenue of some $657,000 a day. It would be taken from people who are addicted to cigarettes. Maybe some of them will quit; many of them will not. Many people who are addicted to cigarettes are not well off partially because they must expend a great amount of their income in order to feed their habit. Here we have the government taking money from people who are generally poor at the rate of $657,000 every day.

The government thinks that is the right thing to do. I guess it will go ahead and do it. I hope this increased tax would persuade some young people from not taking up the habit. I hope there would be some who would say that it is an optional tax that they do not have to pay.

I encourage Canadians right across the country not to smoke. I know there are up to three people right now watching CPAC and paying close attention to this. Here is an optional tax that one does not have to pay. I know it will be tough. It is difficult to break one of the most addictive substance uses and that is cigarettes. I know this from observing a number of my friends who have gone through the throes of quitting the habit. It is very difficult. Here is a chance for all the people out there in CPAC land to say to the finance minister that here is some money he will not get. We will keep it. We will not pay this tax. In that sense I am mildly in favour of the outcome, however I do not know whether I am in favour of the way this is being done.

I would also like to point out another thing about cigarette smoking. I know we cannot talk about this without sounding as though we are moralizing. We are told we cannot impose our morals on others. Absolutely. There was a saying “a man convinced against his will is of the same opinion still”. No, we cannot impose a morality on a person. I guess I am not trying to do that. However, I said that I smoked a part of a cigarette one time when I was young. I found a pack that was not totally used up and smoked a part of a cigarette and decided that it was not for me.

People should be encouraged to not start something that ends up controlling them. I recall one speaker on this topic say a reason why he had never taken up the habit of smoking was that he had never in his life had a person over the age of 30 who had smoked for more than five years recommend to him that he start. That is a powerful testimonial.

I would say the same thing. I have a number of friends who smoke and, frankly, some of them say they cannot quit because they need it, they like it, or they enjoy it. They all have various reasons and justifications. Yet I have never had one of them say to me that I am getting on in years and I am missing one of the joys of life and that I take up smoking. I have not had a single one do that. If no one who smokes is ready to recommend smoking, then we ought to listen to that. That is a powerful argument.

We are talking about Bill C-47, a tax bill. I have talked about the increase in taxes to the government. I would briefly like to talk about the change in prices in the use of alcohol. Here again I feel unqualified to speak on this topic from a personal point of view. I have avoided paying the alcohol taxes in this country. I grew up in a home where alcohol was not part of the furniture. We did not use it. For my parents I believe it was partially a religious belief thing.

I did not espouse my parents' beliefs when I was young, but I also made a conscious intellectual decision that I would not use alcoholic beverages. I did this based on the observation of some of my friends who claimed they were having a great time but unfortunately did not know they were having it. I always thought it did not make any sense to take part of one's nervous system and shut it down by whatever means. Most of us can use all the intellectual capacity we can manage to muster up, so as a very young person I made that decision.

I should perhaps not tell the House this because people will say I am a weird guy. Maybe I am. However we were very poor when I was young and my source of income, believe it or not, was to go up and down the ditches out in the country, pick up cast away beer bottles and sell them. If I remember correctly I received 20¢ a dozen for them which was big money. All I had to do was get five dozen of them and I had a dollar, and a dollar was big money to a young kid my age at the time. That is how I made some money.

Frankly, one of the reasons I never took up drinking was because I could not stand the smell of the stuff. Later one of my friends explained to me that there was a huge difference between a nice cold beer out of the fridge and a beer that has been sitting in the hot sun in a Saskatchewan prairie ditch for a week or so. I guess I did not have a fair sample of the product, but I decided I was not interested in it and would not use it. Over the years I have avoided paying a whole bunch of taxes on liquor products.

I have not suffered. I have not put other people at risk on the road, which is one of the hazards. It is a huge hazard. Many people get injured and killed every year because of drunkenness on the road. I know we are not talking specifically about that. However like many other things, drinking alcoholic beverages when taken to excess becomes an evil instead of a good.

I have no problem with people who like to have a nice wine with a meal and so on even though I personally do not. I say let them if they want to. Let them pay the taxes. It is a voluntary tax. I say let them pay the taxes to the government, as Bill C-47 provides for, and enjoy it with their meals if they wish.

However I have also said I do not believe in drunkenness. I do not care if people drink but I think drunkenness is wrong. The only way a person can avoid drunkenness is by saying no to a drink. Being a person who is somewhat weak I decided it was easier to say no to the first one than to any subsequent ones. That is how I came to that conclusion.

I will say something about the whole issue of taxation on alcoholic beverages and cigarettes. One of the reasons we have taxes on these products is because we think we can somehow reduce overconsumption of them. It is to achieve a social outcome. We would probably be surprised if we thought about this and its long term ramifications.

I read not long ago that approximately 100 people every day in Canada lose their lives due to the effects of smoking cigarettes. I am talking about heart disease and lung cancer that is directly attributable to the use of cigarettes. Around 35,000 to 40,000 people a year in Canada lose their lives prematurely because of the use of that product.

I have often thought of it this way. We members from the west are required to get on an airplane pretty well every week to head out to our ridings. Most of the time the airplanes have about 100 people on them. If one of those airplanes were to go down every day I would be going by train. I would decide the probability was not in my favour. If 100 people in Canada every day were losing their lives on a particular kind of airplane I would not go on that kind of airplane. I would find another means.

Yet people across the country are quite willing to smoke cigarettes recognizing that 100 people every day in Canada lose their lives because of that choice. It is a strange thing. The same is true for the overuse of alcoholic beverages. Every year literally thousands of people are injured and killed because of the abuse of alcohol.

This is an appropriate time for us to say to Canadians that there is no excuse for drinking and driving. It should be an automatic that if one drinks one should make other arrangements for transportation. It is not right to risk other people's lives, health, safety and property.

I will get back to the taxation issue. We have had a bit of controversy with respect to taxation of alcoholic beverages. I did a few calculations which are rather interesting. Bill C-47 would continue to tax breweries in Canada according to a formula. I am not sure whether it would increase or reduce the amount for small breweries. However in the notes someone gave me it says there are speciality brewers in the United States who get a 60% reduction on a certain amount of production every year to account for those who are small operators.

We recognize and use that principal in Canada when it comes to personal income taxes. People here are quite willing to say persons with low incomes will earn a certain amount of income before they pay any tax at all, persons at the next level will be taxed at a low rate, and persons past a certain threshold will pay an increased rate. We have what is called a progressive tax system. I will not diverge today into the merits of a tax system where the rates are closer together, but we accept this system for individuals yet we do not want to accept it when it comes to small businesses.

The numbers are quite astounding. It says in my notes that small brewers produce less than 300,000 hectolitres per year. I do not know whether many Canadians are yet into the hectolitre form of measurement. I did a little calculation to bring it down to where we can recognize it. I found that 300,000 hectolitres per year works out to roughly 82,000 litres per day. A small operator is one whose production accounts for less than 82,000 litres per day. There are people who think it would be justifiable to give those in the small business bracket a lower rate of taxation or even a total exemption.

We should go beyond simply being competitive with our American neighbours in this regard. We should make sure industry and all sectors have an advantage by being in Canada. We should be better than our big American trading neighbours. People should be eager to do business in Canada and stay here. They should not want to go afield and take their business out of the country to the United States, Mexico or wherever else.

The Liberals have shown they not only push and pull at the same time with respect to the tobacco tax. They also seem to be all over the place from time to time. In 1994 they were busy increasing the tax. In 1995 they cut the tax. Here we are again increasing the tax. Maybe it is a grand experiment and we do not know we are part of it. The Liberals love playing with taxes and changing them.

We ought to recognize the fact that the government has an insatiable appetite to reach into the pockets of Canadians be they rich or poor and take as much money as it can. The Liberal government has a bleak record in terms of recognizing and respecting the collective wealth of people in the average or below average income brackets. They are taxed to death.

We can add to that the horror of watching the government take billions of dollars away from the thousands of workers who contribute to the EI program, as they call it, and roll it into general revenue. I do not know if members are aware of this, but the total amount the government has applied to the debt reduction it likes to crow about is no more than the amount it has taken out of the EI fund. The government has said to poor people and members of the working class who must pay into EI that they are the ones who will pay down the debt.

[An hon. member]

It has stolen from them.

[Ken Epp, Canadian Alliance, Elk Island, AB]

As my hon. colleague says, the government has stolen the money from them. There is no recourse. People in insurable employment must pay whether they like it or not. The government seems to take great delight in doing this. It has overcharged in premiums and cut benefits. It ought to hang its head in shame.

The government has reached into the pockets of federal civil servants and taken $30 billion out of their pension fund. Total assets in the fund had grown beyond expectation and it is not unreasonable to say the moneys should be taken back by the employer. However it should only have been the portion the employer paid in. The government totally ignored the fact that the pension fund surplus was a combination of the contributions of employees and employers who are the taxpayers of Canada via the government.

Yes, taxpayers are entitled to get some of the money back. I do not argue with that. However the government took it all. Federal civil servants who contributed to their pension fund had their money taken away from them by a government in a majority vote with no regard to what it was doing. Over and over we have seen the government's insatiable appetite for separating Canadians from their hard earned dollars. This must end.

While I support Bill C-47 in broad principle I do so reluctantly. I do not buy into the philosophy that says the end justifies the means. I have considerable hesitation in supporting a bill that would presume to reduce smoking by increasing taxes. The outcome, as good as it may be, should not be used to justify increasing the taxes of Canadian citizens.

In conclusion, I appreciate the opportunity to again speak to Bill C-47. The government will probably continue its policy of tax grabs and wild, unaccountable spending. I would rather exert my efforts in replacing them on that side of the House. Let us get rid of the Liberals and put into their place a responsible government that treats the taxpayer with a careful and fully accountable trust.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, I thank you for this opportunity to speak to Bill C-47.

We have a situation that has almost never arisen in the ten years I have been a parliamentarian. We have, on occasion, supported or rejected government bills. The situation was clear at the outset and equally clear at the conclusion.

But with Bill C-47, the situation became complicated during consideration in committee, when we suggested that the Bloc Quebecois could support the bill. When a mockery was made of the committee consideration process all the way to report stage at third reading, we backed off, because the bill before us is not the bill that should have made it to this stage.

The bill that should have been before us was a bill for which votable amendments to include the issue of beers and the reduction of the excise tax on microbrewery beers would have been allowed.

Let me summarize briefly the background of Bill C-47. “It re-enacts existing provisions in the Excise Act and the Excise Tax Act relating to the excise levies on these products, together with technical improvements, and incorporates a range of new provisions”.

What is a bit unseemly and could even look bizarre at first glance is the fact that the Excise Act is general legislation of broad application affecting all products mentioned in Bill C-47, as well as beer.

In other words, the only part that was omitted in Bill C-47 is the part on beer. When we speak to legal drafting people from here and elsewhere, they all find it unseemly that we modernize the Excise Act with Bill C-47 and that we find ourselves in a position where all products and all provisions of the previous act, allegedly to be replaced by Bill C-47, are all in the new bill, except one.

In the current Excise Act, before it is replaced by Bill C-47, wine, spirits, beer, tobacco and distillery products are all mentioned. There is reference to breweries and tobacco products. The act deals with everything, every single product touched by excise. There are provisions on licensing, rights of accession, offences, collection, record, accounts, required documents, warehousing and remission of duties or what they call drawbacks in international trade. It touches on absolutely every point. Bill C-47, which is supposed to bring that Excise Act up to date, also deals with absolutely everything, except beer. That is the bizarre aspect of this bill.

Let me explain what happened since 1997 for us to be presented with the proposal for the amendment and modernization of the Excise Act contained in Bill C-47.

Since 1997, there have been discussions between the Department of Finance and various stakeholders with a view to modernizing the excise system to reflect the new realities that were covered by the current Excise Act, for example ship's stores on vessels travelling from Canadian ports to foreign ones. Part of these stores are used to provide the crew with food and drink, whereas the rest needs to be considered export products or products on which there are transactions.

Then there is the tax system, which did not take into account modern warehousing methods. Now the excise tax that was to be charged on sales is charged at the time of production, with consideration of prior revenue. In short, a number of aspects had to be modernized.

Since 1997, many people have been involved in drafting the new excise scheme, particularly the Brewers Association of Canada. The majority of Canadian breweries are members of this association, but it is dominated by the two major breweries, John Labatt and Molson.

Since 1997, the Brewers Association of Canada has been saying “It is a good idea to change the excise régime in the general Excise Act, which Bill C-47 claims to replace, in order to reflect the fact that the small breweries, with a production of less than 300,000 hectolitres annually, may benefit from the same excise scheme as their American and European competitors”. The difference is not insignificant, when we compare the excise tax the Canadian government charges Canadian breweries and what is done in the U.S. and in Europe. I will give a few figures.

Whereas, generally speaking, there is a charge of 28 cents Canadian per litre of beer for all Canadian beers, the rate in the U.S. is about the same for the major breweries, the counterparts of Molson or Labatt but, in that kingdom of capitalism, the charge is only 9 cents per litre for microbreweries. The United States definition of a microbrewery is one producing less than one million hectolitres annually. This is far higher than the Canadian figure of 300,000 hectolitres.

If you are an American microbrewery, or in other words produce under one million hectolitres of beer a year, you benefit from a preferential excise charge that comes to around 9 cents a litre.

For our microbreweries, defined as breweries producing up to 300,000 hectolitres, there is no preferential rate, because they pay exactly the same excise tax, as set out in the Excise Act, as the big breweries. Which means that microbrewery beers from the U.S. that enter on the Canadian market have an unfair competitive advantage, because they have a lower excise tax than our Canadian and Quebec microbrewery beers.

It is the same thing with Europe. They have the exact same preferential tax rate, which is accepted under the WTO rules. These rules make exceptions in specific cases—for example in cases related to the need to diversify the economy, or for the purpose of regional development or for originality to counter the standardization that comes with globalization—where there can be preferential excise tax measures for small businesses, which is the subject of Bill C-47.

Allow me to provide a few examples with figures. For 24 bottles of microbrewery beer produced in Canada, the federal government gets $4.09, when this beer is sold at a grocery store. When it is sold in an establishment such as a bar, the government gets $6.12 per 24 case of microbrewery beer. Are members aware of what the excise tax paid in the United States is? Bill C-47 includes a review of the excise tax, a review from which the microbreweries were excluded. In the U.S., the excise tax on 24 bottles is $1.12. Compare that to the $4.09 and $6.12 charged in Canada.

How do we expect the microbreweries in Quebec, Ontario, western Canada, British Columbia and the maritimes to compete with these beers? It makes no sense.

That is why the Brewers Association of Canada has claimed to be defending the microbreweries since 1997. Publicly, they have said, “There needs to be a lower excise tax rate for microbreweries. We, the big breweries, like Molson and John Labatt, we can afford the full excise tax. We are strong enough to pay it. And the WTO would not accept it with us, as they would for microbreweries”.

This was done for microbreweries in the United States and in Europe. It is accepted, generally accepted, but not for the big breweries.

From 1997 until very recently, we thought the Brewers Association of Canada was standing up for microbreweries. That is until Bill C-47 came up. Then we realized that even though it was a bill aimed at reviewing the whole excise system, the Brewers Association of Canada was recommending that the finance department not include in Bill C-47 the beer produced by microbreweries and an excise tax reduction.

They were proposing to exclude them. It was not because that was not in accordance with the system we wanted to amend. Quite the contrary, as I showed earlier. The current Excise Act affects all products, including beer; all products are subject to Bill C-47, except beer. The finance department bought the arguments by John Labatt and Molson. It agreed with their arguments. Through the review that started in 1997, it took out from the current act, which includes the brewery industry, the microbrewery sector and possibility of reducing the excise tax.

Therefore, there is collusion, which is normally reprehensible under the Competition Act. If we were in the United States, I am not sure things would be working as nicely as they have been since 1997, with the cronyism existing between the government and the big national breweries as well as the cronyism and the collusion between Labatt and Molson against the microbreweries to kill them.

Since 1997, we thought that the big breweries were advocating a preferential rate for microbreweries, with regard to excise tax. That was until Sandy Morrison, Chairman and Chief Executive Officer of the Brewers Association of Canada, with a majority representation from John Labatt and Molson, sent a letter to the hon. member for London West who also chairs the Standing Committee on Finance.

I would like to quote some excerpts from this letter on Bill C-47 and show the point of view of the Brewers Association of Canada. Mr. Morrison said:

On behalf of its 28 members, big and small—

He insists a lot on “small” throughout his letter.

—the brewers association has pressed for a reduction of the excise tax as an essential measure for the immediate and future health of this sector of our industry—

He was referring to microbreweries.

We explained our views during meetings with the Minister of Finance, senior officials from his department, the finance committee and hon. members. However, the industry does not agree that such a change should be done through an amendment to Bill C-47.

I would like to point out something. One wonders why beer should be excluded from a general review of the excise act, which currently applies to beer, wine, spirits and tobacco. If representations that take into account the particular needs of microbreweries and ask for a reduction of the excise tax should be welcomed with regard to such a bill, we wonder why those who claim to protect microbreweries, and who say that a reduction of the excise tax is essential to their survival, would not take an opportunity such as the general excise review under Bill C-47 to immediately demand a reduction of the excise tax.

I continue with the letter:

However, the industry does not agree that such a change should be done through an amendment to Bill C-47, which is currently before the House and which proposes a new excise framework for producers of spirits and wine in Canada. Following extensive consultations on the proposed changes to the Excise Act, brewers concluded, with the Minister of Finance, that there is a lot to do to develop an appropriate program for the beer industry.

Again, I want to point out something. The letter says that there is a lot to do. Either these people are lazy or else they lack imagination when they make such a comment. All it takes is three paragraphs. One that defines microbreweries, one that talks about the excise tax on beer, and one that ensures that Canadian and Quebec microbreweries benefit from a 60% reduction of the excise tax. This is all it takes.

I cannot believe that, from 1997 to 2002, they found it complicated to include beer. Yet, everything is in Bill C-47. Any product found in the current Excise Act is still there, except the beer produced by microbreweries. This is rather surprising.

Mr. Morrison, of the Brewers Association of Canada, goes on as follows:

Instead of delaying matters of interest to the other sectors, it was decided to exclude brewers from this legislative measure and to deal with the industry separately once parliament has passed the amendments concerning the other sectors. This measure has the approval of members of our association, big and small alike.

Small keeps coming up. He has a thing about small.

I have a small piece of news for them. We learned that the Brewers Association of Canada, dominated by John Labatt and Molson, were not defending the microbrewers. It was being hypocritical for, although it said it supported them, when it came time to take action, it said, “No, now is not the time. We would rather see the other sectors benefit, not us”.

These are major lobbyists. They defend their members' interests. It is time to amend the excise regime, it is time for a reduction in the excise tax for microbreweries, and the representatives who say they are defending the microbreweries with the Brewers Association of Canada say, “No, no, do it for the others; we are altruistic; we want things to go well for the others, but not for us. We will wait till a little bit later”.

Do you know what the major Canadian brewers are waiting for? Since 1997, almost half of the Canadian microbreweries have disappeared from the map. If the member for Rimouski-Neigette-et-la Mitis were here, she would say, “Pouf”.

Since 1997, 38 Canadian microbreweries have disappeared from the map. Why? Because of the excise regime which should have been amended by Bill C-47, because it is part of the general amendments to the Excise Act the government is seeking. Thirty-eight of 86 microbreweries have disappeared. They have disappeared everywhere, not just in Quebec. Do not think that because the Bloc Quebecois defends Quebec in particular we are not able to walk and chew gum at the same time, to defend Canada as well, when our interests are the same.

In this case, we must fight against the big breweries, which are hypocritically claiming to defend the microbreweries and regional development. We must make sure that the microbreweries of Quebec and of Canada receive the same fair treatment as those in the United States and Europe. This is something the Bloc Quebecois is fighting for, and it is a cause that all members of this parliament should take up.

These brewers enjoy 90% of the market and they are still not happy. They have adopted predatory practices, and hypocritical ones at that.

Thirteen microbreweries have disappeared in Ontario in the last five years. Eleven have closed in Quebec, in various areas including Quebec City and LaSalle, in the Minister of Finance's own riding. I imagine that he was happy to see the Brasal microbrewery disappear, because it was beginning to compete with John Labatt, which is also located the minister's riding.

In Saint-Hyacinthe, two microbreweries have disappeared since 1997. Others have closed in Saint-Eustache, Baie-Saint-Paul, Amos, Montreal et Cap-Chat. The regional development of microbreweries, the diversity, the wealth, the originality of a product, all that counts too. Seven microbreweries have disappeared in British Columbia, five in Alberta, one in Manitoba and one in Nova Scotia, for a total of 38. There are about 40 left; I unfortunately do not have the exact figures.

This is what the major Canadian brewers are expecting. This is what Mr. Morrison's letter means. It says “Do not include this in the Bill C-47, even though it is a general review of the excise system. Do not include it now. Wait one year, two years, three years, four years, five years”.

According to my numbers, if we were able to make 38 microbreweries disappeared in five years, we will probably be able to make the other 40 or so disappear in six years. So let us wait. Some people will say “ If they already have 90% of the market, this must not be important. Microbreweries currently have 4% of the market”. They had almost 5.5% of the market five years ago. However, because the excise system has been maintained, as it is today, they have disappeared. This is the main reason for their disappearance.

Every time the major Canadians brewers recover 1% of the market left by bankrupt microbreweries, this 1% represents dividends to shareholders of $17 million in net profits, $17 million for each slice of 1%. Killing the microbreweries is therefore a good idea.

This is why, a few years ago, microbrewers, smart people like you and me, decided to create, for this particular issue, the Canadian Council of Regional Brewers, which really represents microbrewers.

The president is Bob King, the President of Big Rock Brewery, an Alberta beer producer. The vice-president is André Dion, of Unibroue, in Quebec. The general manager, who was criticized by Mr. Morrison in his letter as representing no one, is Pierre Paquin, who is doing excellent work. With Mr. King and Mr. Dion, he is really fighting for the interests of microbreweries not only of Quebec, but of the rest of Canada. They are real fighters.

They created the Canadian Council of Regional Brewers, and they have had it with the collusion between the big Canadian breweries and the Department of Finance. They have had it with the collusion and the conspiracy organized them by the big brewers such as John Labatt and Molson, against the microbrewers, with the complicity of the Liberal government. They have had enough. That is the message they conveyed to the Standing Committee of Finance, two weeks ago, when they appeared before it. That is the message they expressed again these last few days, particularly with what happened in the Standing Committee on Finance, when the amendments moved by the Bloc Quebecois were discussed.

To complete the description of Canada's microbreweries sector, I will say that, since 1997, we know that the microbreweries have lost between 1.2 and 1.5% of the market. And this is because of the disappearance of 38 microbreweries, which, of course, was caused by the continued existence of an excise system that makes no sense at all, that is totally unjust and unfair and that, on a commercial point of view, tolerates, on the part of this government, unfair competition by American and European microbrewers on our own market. These great Canadian nationalists cannot even put in place an excise system that is competitive with its main competitors. These competitors are hurting our microbrewers, who are losing their share of the market. And this is being done in collusion with our big brewers. What a mess.

It is not surprising that 70% of the people believe that politicians are corrupt. When we see this sort of thing, that is collusion between the two big Canadian breweries and the federal government, particularly the finance minister, I am not surprised to see that so many people believe that politicians are corrupt.

Not only are we not changing the excise system to help the microbreweries but the Canadian major brewers get beer supply contracts for imported beer from microbreweries. They then sell the microbrewery products and specialty beers on the Canadian market.

Not only do the American and European microbreweries themselves supply the market, the major brewers take exclusive contracts to supply the Canadian market with microbreweries products and specialty beers. That is the case with Corona, Sol and others.

These contracts have already increased 175% since 1997. This increase benefits the major brewers, which also claimed to support the microbreweries in Canada and in Quebec and to agree with a lower excise tax. The cat is out of the bag now that the general excise system is changed by Bill C-47.

As I said, each 1% slice of the market allows the major brewers to get $17 million in net profits for their shareholders. This is what happens each time they gain 1 of the market at the expense of the microbreweries. That is a lot of money.

That means that if they killed all the microbreweries, in today's dollars, taking into account the actual consumption and sale structure, they would pocket $68 million in net profits. And then they say, “We stand for the microbreweries”. We can understand these big companies. Sixty-eight billion dollars for their shareholders, that is a lot of money. The exclusive contracts they have with the foreign microbreweries whose products they sell on our markets are also profitable. There has been an increase of 175% since 1997.

There is a lot of money involved. There is a lot of money to be made. There is also a lot of hypocrisy and collusion. As I was saying earlier, the competition legislation in the United States is very strict. Even Bill Gates had a taste of it. He was forced to divide his operations in two because one operation could not look at the other without compromising consumer interests.

Here we have a situation where not only there is collusion between Labatt and Molson to prevent a reduction in the excise tax—that alone would be unacceptable in the United States; I would be curious to see that—but there is complicity on the part of the government.

Even Mr. Morrison says in his letter “Our position remains unchanged”. When I read that, I was touched. The letter goes on to say:

Our position remains unchanged: we fully support a reduction in the excise tax for small brewers. It is a priority of the BAC—

If it were a priority, it seems to me that they would have wanted it to be done immediately; when we say that something is a priority, we do it right away; for them, it does not matter if it happens four or five years from now.

And he adds:

—and we want to point out that small brewers in Canada urgently need such reduction.

I am trying to understand. Words are pretty powerful things. A priority is something that must be done right away, and urgency is even stronger than that. It is worse than a priority. A priority is an administrative thing; an urgency, an emergency, is about self-preservation. If it is an administrative priority, and if it is about self-preservation as well, than it is a matter of urgency, so how could the letter continue in this vein?

We will support any measure aimed at attaining this objective, but in light of our prior agreement with the government—

Here we have another strong word, an agreement, “our agreement”. This is a way of saying that “with a gentleman's handshake, we are going to do them in, those microbreweries. They are going to get it in the neck, no excise tax reduction for them.” That is what the reference to an agreement means. Continuing with the letter:

—in light of our prior agreement with the government, we cannot support amendments which would include beer in Bill C-47.

The Brewers Association of Canada is a powerful lobby. It exists to defend the interests of all its members, big and small. But when the time comes to do so, they say, “We cannot support amendments which would include beer in Bill C-47.”

If I were a member of the Brewers Association of Canada, I would have left it ages ago. There would only be the two giants left. At least things would be clear. John Labatt and Molson do not want to see the small companies survive. But this way, it is not so clear. It is a good thing that the Canadian and Quebec microbreweries have reacted by forming their own association.

This is not the end of the matter. If it were, the situation would be bad enough, but it does not stop here. When we moved the amendments to Bill C-47, to bring it back to the spirit of the original excise legislation, which they claim to wish to amend and indeed totally rework, we told ourselves that beer had to be included in it.

In the present Excise Act, there is not only wine, spirits, tobacco and ship's stores, as is the case for Bill C-47, but also the beer the Brewers Association of Canada wanted to see excluded, even if this is the appropriate time and place for a reform of the excise tax on beer.

I then said, “Let us move amendments with the support of small brewers”. The amendments were moved, and refused because they were out of order.

Since Government Motion M-2 was moved, a committee chair is very powerful and has the right to refuse or accept amendments. The process ends there, because we cannot bring forward amendments to Bill C-47 at report and third reading stages. This is different from what we were accustomed to in the past.

A committee chair is now the holder of a powerful public office. That person wields more power than a secretary of state or a parliamentary secretary. At times, he or she even wields more power than a minister. Even a minister cannot refuse amendments like this. If those amendments were moved here, the minister would have to rely on the members' votes to have them rejected.

However, the chair can now refuse amendments just like that, and nothing can be done about it. We have no recourse, no appeal procedure that would give us a chance to express our point of view. This is tremendous power.

As I said, the Brewers Association of Canada sent a letter to the member for London-West and chair of the Standing Committee on Finance, indicating that the excise tax on beer should not be included in Bill C-47. It is not because it could not be there, it is rather because they did not want it there.

The Brewers Association of Canada, an organization dominated by John Labatt and Molson, has a committee known as the taxation committee. After analyzing Bill C-47, its recommendation was that beer be excluded. The President of the Brewers Association of Canada taxation committee is the husband of the member for London-West, John Barnes.

Now back to Bill C-47. It should have included everything in the current Excise Act to amend the provisions. The Brewers Association of Canada said, “Yes, include everything, and it is not in violation of the previous Excise Act, except for beer”. This main recommendation comes from the taxation committee, which is chaired by one of the seven directors of John Labatt, who is also the husband of the chair of the Standing Committee on Finance.

We were told that since the chair of the Standing Committee on Finance was not a minister or a parliamentary secretary, she was not subject to the code of conduct. This is a serious admission. As I mentioned, since Motion M-2 moved by the government committee chairs have tremendous powers in the legislative process. They can accept or reject amendments that are proposed. In a tie vote between opposition and government members, chairs can rule, in other words, vote either way, and do not have to say why they voted for or against the amendment. These are considerable powers.

Even here in the House, ministers must commit, they must explain themselves. Even here, ministers could not rise and say, “This is not admissible as an amendment”. They would not be able to say this if we could still introduce them in the House of Commons. There should be a vote in the House on opposition amendments, with members from all political parties.

Under the code of conduct, the responsibility of the chairperson of the Standing Committee on Finance is not that of a public office. However, I recall the case of Sinclair Stevens in 1986. Mr. Justice Parker, who presided over Mr. Stevens' case when he was accused of 14 counts of conflict of interest, said the following:

The code of conduct must be strengthened. It must become law.

Information regarding spouses and dependent children must also be made public for all those in public office.

In 1994 there was a review of the code of conduct. It was not expanded, but the Liberal party said that in cases where there is an issue of conflict of interest, such as the current situation with the chair of the Standing Committee on Finance, the occupation and all of the information regarding spouses and dependent children became relevant.

This has no teeth. The code of conduct is so weak. It was really stupid on the part of the ethics counsellor to present such a thing. However, there is an indication that information on the spouse and dependent children of a member of parliament who holds public office becomes relevant in the case of a conflict of interest analysis.

The hon. member for London West could have been a man. It would have made no difference if she had been a man and John Barns were her brother, father or son. The code of conduct of the government is so weak that the situation of the spouse would be considered as important.

We have a situation where there is at least an apparent conflict of interest. I will now come back to the summary of Bill C-47.

It re-enacts existing provisions in the Excise Act and the Excise Tax Act relating to the excise levies on those products, together with technical improvements—

At present, the general excise legislation contains provisions on wine, spirits and tobacco and numerous provisions on permits, licenses, etc., but also various provisions about the brewing industry and beer.

It would be absolutely incongruous to exclude such an item at the request of the Brewers Association of Canada, since that request was based on an analysis by the taxation committee of the association, whose president is John Barnes, the spouse of the chair of the Standing Committee on Finance.

I repeat, since Motion M-2 put forward by the government, a committee chair has extraordinary power in the legislative process. We no longer have any right of appeal or recourse once amendments put forward by opposition members or a government member are rejected by the committee chair. This is now an incredibly powerful public office in the democratic process.

Even though, under the existing code of ethics, which is very flexible to say the least, a holder of public office includes a minister, a deputy minister, senior officials, secretaries of state and parliamentary secretaries, it should include a committee chair whose responsibilities were increased by Motion M-2.

Conflict of interest, and the appearance of conflict of interest, is not just a matter of a code, and certainly not a flexible one. This is how she can present us with any old legal opinion. It is a matter of judgment, of honesty, of integrity, of transparency, and of intelligence.

Never, anywhere, has the chair of the Standing Committee on Finance told us, since consideration of Bill C-47 first began, that she was related to one of the seven directors of John Labatt, to a director of the Brewers Association of Canada and, to top it all, to the chair of the taxation committee for that same Brewers Association of Canada, which was not favourably disposed to an excise tax reduction for microbreweries. Never has this been mentioned.

And when did she flash her famous legal opinion? When I caught her red-handed rejecting my amendments and told her: “You are no longer entitled to make any decisions about Bill C-47 because you are clearly in conflict of interest, because your husband is the chair of the taxation committee of the Brewers Association of Canada, which recommended that the microbreweries be killed off over the next few years, having already killed off 38 of them”.

If that is not a conflict of interest that the government wanted to give a different spin to yesterday by dragging a legitimate debate on the place of women in society into a debate about integrity, about conspiracies against the microbreweries, about influence peddling, complicity and collusion, we have quite a problem.

The Minister of Finance got caught in the act recently, and the Minister of Canadian Heritage too, with contracts being given left and right to the organizers of their leadership campaign. After such a blatant case, is it so surprising that 70% of the population is fed up with politics and thinks politicians are corrupt?

Had the hon. member for London West been a man, with his brother chairing the taxation committee, it would have been the same thing. They are distorting this debate.

What kind of doormat members do we have opposite, that they should allow such an establishment, and the collusion to go on between this government, which is standing up for the interests of the majority, of the big breweries, at the expense of the microbreweries?

There is one way to turn things around. The government should immediately begin drafting a bill it would introduce before the end of this session, in order to do justice to the microbreweries.

It is imperative that the microbreweries, with their 2,000 jobs, can survive and prosper. We should put an end to this collusion between the big breweries, the government, and the chairperson of the finance committee, who happens to be the wife of the chairman of the taxation committee of the Brewers Association of Canada.

That is what we are asking the government. Because of this hypocrisy, collusion, conspiracy and lack of honesty, we will oppose Bill C-47. It certainly contains good provisions, but—

[The Acting Speaker (Ms. Bakopanos)]

I am sorry to interrupt the hon. member, but his time has expired. The hon. member for Palliser.

[Dick Proctor, NDP, Palliser, SK]

Madam Speaker, I too am pleased to discuss Bill C-47, an excise tax act. This is a technical bill as has been pointed out by all of the previous speakers. It would impose a levy on spirits, wines and tobacco products but not on beer as the member for Saint--Hyacinthe--Bagot has so eloquently concluded in his lengthy speech. It would defer payment of duties on spirits and wines to the wholesale level, place domestic and imported products on an equal footing, impose tight controls on possession of non duty paid products, et cetera. It is a technical bill, as I say, that would implement some tax changes.

We are talking about changes with respect to spirits, wines, tobacco and ships' stores. In part we are talking about how the government prosecutes and collects taxes on illegal products, contraband tobacco and spirits and how we impact on the smuggling of alcohol when it is ferreted out. The government says the CCRA will improve the service and we certainly hope so. We know the taxpayers at large have concerns. We hope that the improvements to the service will not just be on the government side of things but will impact those who pay the taxes as well because we often do not see that in our constituency work.

We are told that administrative penalties and excise duties will be collected more effectively and efficiently. There is a new framework, added measures and changes to ships' stores. Because of a recent court of appeal decision the ships on the Great Lakes will be eligible for a fuel tax rebate beginning this summer and extending into 2004, which amounts to a transition period. There will be a uniform tax on cigarettes, which I will come back to in a moment, in co-ordination with the provinces and territories, and is restored to the pre-1994 level. Obviously one of the goals, among others, is to reduce tobacco consumption. We are told it is a new, modern legislative framework that addresses the concerns of industry and government.

On the issue of the tobacco tax we know what happened. Earlier the member for Elk Island talked about the taxes going up in 1994, coming down in 1995 and they are now going back up again in this area. There was a reason for it and I think the member would acknowledge that.

At that time there was a major problem in western Canada with contraband tobacco. There was a difference in the price of tobacco products. They were higher in western Canada and lower in Quebec and Ontario. As a result, there was a lucrative market for people who were willing to smuggle products from province to province.

There was a significant problem with the tax levels in western Canada. As a result the excise tax was reduced in 1995 after having been raised in 1994. The problem seems to have abated in recent years and we are now at a uniform tax level. That is commendable.

The member for Elk Island also talked about taxes being a drain on our economy, that the money should be kept in the hands of entrepreneurs and that redistribution does not help and in most cases is detrimental. Our country has a pretty high standard of living, a fairly good quality of life that is recognized, with some exceptions, by the United Nations. It is because of the redistributive effect in Canada. In the past we have tried to make things more equal to make sure there is a basic standard of living that is relatively fair to people in all parts of Canada wherever they may reside and work. It does not work as well as some of us would like to see it work, but over the years it has proved to be successful.

I certainly would disassociate myself from the remarks of the member for Elk Island. However I will not disassociate myself with him when he talks about the use of tobacco and its effects because I think he is spot on there. Although I would note that we restrict advertising on the use of tobacco products, unlike some other jurisdictions. We certainly have a very active program in terms of curtailing youth from taking up smoking. Frankly, raising the price of tobacco products is one way to reducing that and trying to stamp it out.

On the tax level itself, we seem to have in recent decades a preponderance of taxes that are aimed at the personal income tax level. When I was much younger, the money collected annually on corporate taxes amounted to about half of all the money the government collected and spent in a year and the other 50% came from personal income tax. That has shifted very dramatically. Now somewhere in the neighbourhood of 85% of all revenues collected by the federal government comes from the personal income tax and only 15% comes from the corporate tax.

If we had a fairer tax system, some of these increases that we have come to know, expect, anticipate and that hit out in the sin taxes, wine, spirits and tobacco, would not have to be raised to the level they have been. However they are required because a good enough job has not done in ensuring that corporations pay their fair share of taxes as well.

I very much enjoyed the lengthy dissertation from the member for Saint-Hyacinthe--Bagot. As a member of the finance committee, he understands and has followed this issue extremely closely, particularly the fact that beer is the only product in this spirit and alcohol portion of Bill C-47 that is not covered. He went through that in meticulous detail and explained exactly what had transpired.

We saw that being played out in the debate in the House this week. It is regrettable that the chair of the finance committee did not indicate the position she was in, not only the connection in terms of her spouse and where he is employed, but the fact that she has received a fairly generous political donation from the company her husband is employed with in London, namely the John Labatt breweries. That would have been the right and honourable thing for the member for London West to have done, and it is unfortunate that that did not transpire in this instance.

Although we indicated our caucus would be supporting the changes to the bill, we may very well want to reconsider our position in light of what has transpired over the last and recent days.

I do not intend to take very much time this afternoon, but in some of the cases such as tobacco it is important we have that high level of taxation to discourage children and young people from taking up a habit that is costing lives and billions of dollars to our health care system. We need to encourage healthier, happier lifestyles. We would all be better off, smokers and non-smokers alike, if there were far fewer smokers puffing on a regular basis

We will be reconsidering and thinking through our position on the bill very carefully in light of what has transpired and what has come to light in recent days.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Madam Speaker, the member who just spoke invoked my name on a couple of occasions. He took some exception to the fact that I proposed that businesses, industry, entrepreneurs, investors and private individuals should be able to keep more of their money in their pockets and that the government should take less.

I would like to correct the misconception that he may have about that. I believe there is a proper role for the federal government, as there is for provincial and municipal governments. The fact is governments at all levels, but particular evident at the federal level, tax us to death and then seem to have no regard for the money that they have taken out of our pockets in the way they spend it.

The most recent example was on the last day of the fiscal year the Liberals bought a couple of new jets. They were not in the estimates. The Department of National Defence did not indicate that they were required. There was no justification for it as far as we knew. It just came out of the blue that the Liberals had a hundred million dollars to spend.

A hundred million dollars is an awful lot of money extracted from poor working Canadians who on every paycheque are required to forgo in some instances up to half their income in provincial and federal taxes. That is precisely what I am talking about. Instead of increasing the number of people who are totally dependent upon the government for their livelihood, if we left that money in the hands of businesses, entrepreneurs and individuals, our economy would be much better and everyone would be much better off than they are now.

That is my thesis and I stand by it.

[Dick Proctor, NDP, Palliser, SK]

Madam Speaker, what I thought I very clearly heard the member say was that all taxes were bad and if we could keep them in the hands of entrepreneurs and others, the world and especially this country would be a better place.

I do not disagree at all with what the member said in terms of the questionable expenditures on the two jets, particularly when our helicopters are so antiquated and in need of replacement.

A perfect example of what he is talking about is the employment insurance grab. In that case all the surpluses in recent years were as a result of the windfall which occurred in the EI fund. The fact is benefits have been reduced but the money which has rolled in has paid down the deficit and continues to be the bulk, if not all, of the surplus.

I think this gets to the heart of the point that I was endeavouring to make which was we do not have a terribly fair tax system. If we look at unemployment insurance in itself, it is paid into by students who have no intention or no ability to collect it in the coming year because they are returning to school. It impacts on seasonal agricultural workers who come into this country from Mexico, Jamaica and other places to work on our farms and in our agricultural processing industry. They pay unemployment insurance and they do not have a prayer in terms of collecting any of that money.

These are some of the things that the government needs to take into account. As I understand it, they do not actually come under Bill C-47, the excise tax, but it does get to the heart of some things that are wrong with our tax system at the moment.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Madam Speaker, I am glad the hon. member brought up the question of EI and the fact people are required to pay into it who do not have any hope at all of collecting it.

Way back in the 1950s when I was a student at university I remember writing a letter to what at that time was the unemployment insurance commission. I said I did not want to pay that premium because I was going back to school. I was ineligible to collect and that for me to be required to pay into a fund from which I could not possibly collect was a form of theft and I objected. I remember getting a nice letter back from the department saying that it was required by law and that it was my employer who was subject to penalty and who would go to jail if he or she failed to deduct it from me and remit it. I went to my boss and he said that for $2.40 a week he was not going to jail and that was the end of the matter. I remember being incensed at that time.

This gives me an opportunity to mention that I have never ever been drawn for private member's bills but one of my private member's bills addresses exactly this question. It would ensure that if individuals at the end of the year were to show ineligibility for employment insurance because they were returning to school, or for any other reason, then they would be able to get a refund of the premiums. That is one of the private member's bills I am working on. I have not yet submitted it to the House but it is in the works. I would like to say that every once in a while we agree with those guys at our far left when there are a few common sense things.

[Dick Proctor, NDP, Palliser, SK]

Madam Speaker, I hope the member for Elk Island completes his private member's bill quickly and hope it is drawn at the next occasion.

[Marcel Gagnon, Bloc, Champlain, QC]

Madam Speaker, I do not know if I will be able to express my thoughts in three minutes, but I think the hon. member will get my drift.

The longer a member sits in this House, the more he or she realizes that, for justice to be done, one has to be big, strong and in collusion with the government. We see the case of microbreweries, which the hon. member for Saint-Hyacinthe—Bagot has explained; in my opinion, this is scandalous.

The hon. member talks about employment insurance. I think of the $3 billion the government saved at the expense of the least well off in society, that is the elderly who were eligible to the guaranteed income supplement; this money will to used to pay the debt of the rich. I find this outrageous.

Does the member agree with me, or will be contradict me on this point?

[Dick Proctor, NDP, Palliser, SK]

Madam Speaker, I agree with the member's view. I endeavoured to say in my remarks that we have a growing gap of inequality in our taxation system. We are reversing the Robin Hood principle and taking far too much from people at the lower end while the people at the higher end seem to be enjoying more of the benefits. This is one of the things that the Bloc Quebecois and the New Democratic Party of Canada agree on. We need a radical change in our taxation policies to bring them into line to ensure that people are paying a fair rate of tax. We need a basic rate of tax for the large and powerful corporations as well as the large and powerful CEOs.

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

Madam Speaker, it is a pleasure to speak to Bill C-47.

I do not think anybody in the House would disagree with the general notion that we ought to do as much as we can in this place and in the provincial legislatures to reduce the incidence of smoking in Canada and particularly smoking by young people.

I commend my colleagues in the provincial government in Nova Scotia who today introduced some of the toughest anti-smoking legislation that any province has ever introduced in the past. It is focused on reducing the incidence of smoking by young people. My province of Nova Scotia has a very high incidence of smoking.