Madam Speaker, I am pleased to speak on behalf of the people of Cariboo--Chilcotin as we address Bill C-47, a bill amending the Excise Tax Act.
The Canadian Alliance is dedicated to reducing the size and scope of the federal government in order to deliver meaningful tax relief to hardworking Canadians.
Canadians face many difficulties inherent in complying with regulations and remittance schedules, often without keeping in mind the peace, order and prosperity of our citizens. Yet millions of Canadian small and medium size businesses prosper in spite of the federal government's insatiable appetite for tax revenues. We are severely overtaxed so I welcome the opportunity to participate in the debate today.
The official opposition supports the legislation. It has been endorsed by industry stakeholders. It modernizes the framework of excise taxation in wine, spirits and beer. This support is rare for the Canadian Alliance as we are opposed to the government's intervention into Canadians' freedom of choice by enforcing such a heavy burden of taxation. However, these proposals aim to replace existing old and antiquated administrative and enforcement structures governing alcohol and tobacco products with a modern regime reflecting current practice.
The bill does not address tax rate and base matters other than to ensure equitable treatment between domestic and imported products.
We have been talking about the various benefits of wine, beer and spirits. I appreciate what the hon. member had to say about the benefit of a glass of wine and perhaps the same can be said for beer.
I remember reading an article not too long ago in a magazine or a newspaper, I am not sure which, in which it stated that moderate drinkers have a higher income than abstainers or non-drinkers and immoderate drinkers have even higher incomes than moderate drinkers. I am not sure if that was an indication that people are not drinking enough. However, I do have to say that I worked on the streets of east Vancouver in my younger days and I saw some very heavy drinkers who were extremely poor. Therefore I am not sure of the benefits of alcohol consumption except as perhaps a doctor would prescribe.
The proposed act shifts compliance and point of taxation from sales levy to production levy for the production of wine, and this is already the case for distillers.
The changes introduced for spirits and wine are regulatory in nature and tax neutral. The prime purpose of these changes is to modernize how these products are taxed in order to allow distillers and vintners the greatest flexibility in their production practices and to ensure an internationally competitive tax regime .
From an industry perspective, the proposed legislation also provides for an appeal and assessment process. Previously industry had no recourse against government impositions if they felt unjustly treated.
The motion also contains significant enforcement tools to crack down on contraband products. This is a major feature of the proposed legislation and is welcomed by the industry.
Changes in the act make it easier to enforce existing laws and provide stiffer penalties for conviction. For example, under the proposed legislation the maximum fine for producing contraband alcohol would be fines up to $1 million and up to five years in jail for indictable offences. These are industry led changes and it is proposed there would be no losers because of the legislation, with the exception of those who produce contraband products.
Considering tobacco, the second aspect of Bill C-47 does have problems. The bill seeks to increase federal excise taxes on tobacco products and to re-establish a uniform federal excise tax for cigarettes across the country of $6.85 per carton. The stated purpose of this tax increase is to improve the health of Canadians by discouraging tobacco consumption.
The government proposes that the federal excise taxes on cigarettes will increase $2 a carton in Quebec, $1.60 a carton in Ontario and $1.50 a carton in the rest of Canada. This would bring the total federal excise burden on cigarettes to $12.35 a carton.
Never to leave itself out whenever there is the remotest possibility of collecting further taxes, federal revenues will increase by approximately $240 million a year through the tax hike. Just a few minutes ago my colleague whipped out his calculator and averaged this out to a $657,000 per day increase in revenue for the government.
What about reducing smoking? This apparently is the reason for the tax hikes. Like everyone else, I want Canadians to live a healthier lifestyle. I want this especially for our youth who really do not know what they are doing when they get involved with smoking.
Reducing teenage smoking is a worthwhile goal. I am pleased when I see a government ad on television once in awhile encouraging young people not to smoke. Some of those ads look pretty effective to me but I am not sure they have had much influence on the decisions of young people to smoke or not to smoke.
I believe that the increase in revenues should be more dedicated to the decreasing of smoking in a way that would be more effective than simply raising the taxes. The past decade has proven that high levels of excise tax on cigarettes do not reduce consumption. What it does do is create an underground economy.
A better role for the government would be to provide information for consumers to ensure that citizens have an informed choice and to offer generous assistance to those struggling to break this cruel but legal addiction. We hope the government spreads the word about the life threatening aspects of tobacco use and does whatever a government institution can do to encourage, persuade and limit the use of tobacco products that are so harmful, not only to youth but to everyone, even to those who do not use tobacco products who are perhaps allergic to tobacco smoke, as I am, and find it not only offensive but hurtful physically.
Time and again we have seen the increases in the prices of cigarettes not working for the purpose of reducing the number of Canadians who smoke. It is interesting that while the bill is heralded by the government as trying to decrease tobacco consumption by issuing a tax grab on smokers, it does not attempt to influence alcohol consumption through tax policy.
The problem with this aspect of the bill is that the government, by increasing these tax levels, is simply increasing its revenues. This cold-hearted government will do anything to increase its revenues. Increasing taxes on alcohol and cigarettes is probably the last great vista of politically correct tax increases still at its disposal.
We know the finance minister has never encountered a tax he could not raise. Canadians know that excise taxes are not dedicated to specific spending. They are not dedicated taxes, to use the jargon.
For example, the government does not use gasoline taxes to fix our highways. Aircraft fuel taxes are no longer applied to navigation services as they were intended when first applied. Pilots now pay navigation fees to Nav Canada, but with no reduction in the Nav fuel taxes that they pay when they put the fuel in their aircraft. Neither are tax revenues on cigarettes and alcohol spent on health care, at least in the amounts that would be effective in controlling, reducing and helping those who do smoke.
The funds raised by taxes are sent to the general revenue fund and used for bigger and bigger government paid for with higher and higher taxes. These cigarette taxes are just the latest tax increase. If anyone wants to bet that this is the last tax increase, I might just take that bet even though I am not much of a gambling man.
These tax dollars buy a fountain in the Prime Minister's riding, or are given to Wal-Mart to set up a store in Ontario, or buy jets from Bombardier for the Prime Minister and his cabinet. Just last week we learned that billions of dollars are spent on foundations without the approval of the House.
There is no way to scrutinize how this money is spent. Yet while federal excise revenues have increased, transfers to the provinces for health care have decreased. They have been reduced.
The Liberal government is not telling us the plans it has for using the new revenues the bill will raise. The Liberals are using this legislation, supported by the stakeholders in the industry affected by the bill, to raise more money but for still undetermined purposes. It is no wonder the Canadian dollar is sinking out of sight with such poor management. It is no wonder even while we talk about the wonderful standard of living in Canada we are watching a standard of living that has been declining.
With Bill C-47 the government is hiking taxes under the guise of tax fairness. It leaves no stone unturned in the search for more money. Everything, even increasing fairness in the way we are taxed, can be and is turned into another way to gouge the taxpayer.
Once again I acknowledge that we will support this legislation, but only because it does some small bit to afford some equality in the markets of the affected businesses.