Mr. Speaker, I appreciate the opportunity to say a few words this afternoon on this excise tax act in front of us, Bill C-47. Sitting in the House and listening to the debate, I have heard a fair bit of discussion about microbreweries, about the competitiveness of microbreweries with respect to our U.S. counterparts, and also about the need for amendment in this piece of legislation so that we can address our concerns for and with the microbreweries. It should be pointed out that Bill C-47 is not an appropriate vehicle for implementing these types of reductions in the excise duty on beer. The bill does not deal with any of the taxation issues for beer.
That being said, though, I think it is fair for members in the House to have this discussion and put forward their perspectives with respect to microbreweries. It is fair to state, and I think it is a statement that all members of parliament would make, that in no way should we as a government or as opposition members or as members of parliament be putting forward taxation policies to try to prevent the growth of industry or industry sectors or of small business. Certainly the objective of being in parliament is to try to assist, to ensure that small businesses continue to prosper, to ensure that in fact those small businesses become larger businesses and that we are able to attract multinationals to this country so we can provide opportunities for young Canadians to stay and continue to contribute.
I wanted to make that point at the outset because I know that the discussion this afternoon really focused on the issue of microbreweries. I personally do not have a problem with what is being said with respect to microbreweries, but I think the emphasis is misplaced. It certainly should not be an emphasis of Bill C-47.
As I am sure members of parliament are aware, and I know that the Parliamentary Secretary to the Minister of Finance mentioned this last Friday, I think it was, when this debate began, it should also be known that Department of Finance officials are in fact reviewing proposals put forward by the beer industry to address concerns. It is not that this issue is not being given any weight. It is not that the government is not aware that there are some issues that need to be addressed with respect to this sector. It is just that Bill C-47 is not the vehicle whereby we can put forward an amendment and deal with it, since it really is a work in progress. There is obviously a commitment that once the analysis and the consultation are completed we can decide whether excise duty and excise tax reductions are warranted.
However, I think the case needs to be made. I am sure that on both sides of the House we will find both support and, I dare say, some opposition to what is being asked for. That is the purpose of having debate. That is the purpose of conducting these consultations. It is the purpose of completing an analysis.
I would suggest to my hon. colleagues across the way that there is an openness on behalf of the government to deal with this issue, but the analysis and the consultations need to be completed. Then we can certainly have that debate, which I would certainly welcome. I look forward to hearing from my colleagues from the Bloc as they put forward their perspective on this. It is one that we need to certainly take note of as this debate continues. Members from both sides of this House certainly have something to say on this issue.
It is also important to note that Bill C-47 is a direct result of a discussion paper on the Excise Act review, which the Department of Finance and CCRA released back in 1997. In coming from 1997 to where we are today, obviously numerous discussions took place with various sectors that were to be affected. It is also important to mention that the beer industry indicated to the government, as I have been told, to continue with Bill C-47 and set aside its own industry perspective for the moment with assurances that we would be dealing with issues pertinent to the beer industry. Therefore the bill went forward and in fact the report has been provided to the finance department and that consultation and analysis are now being completed. That is my understanding.
Hon. members across the way are calling for an amendment because we need to deal with this right away. I do believe that there is an urgency to this matter, but I think it is unfair to say that the matter is not being considered or not being dealt with through the proper channels. Whether or not it is moving fast enough is always an issue for debate and is probably an issue that we will not resolve here today.
With respect to the beer sector, I think it is important to ensure that those points are made. The concerns of the brewers really centre on issues relating to point of imposition, warehousing, licensing requirements, loss allowances and controls on beer exports. These are complicated issues and before any progress in discussions between the government and the brewing industry can be achieved, I think it is fair to say that we need to do the analysis and that further work is required to assess the impact of these proposals. This type of work would not be readily completed within the timeframe originally contemplated by the Excise Act review. I wanted to make those points because we did hear quite often during the debate about the issue surrounding the brewers' association or the brewers themselves.
In recent years, it became quite obvious to both industry and government that the Excise Act, the excise framework, needed to be modernized. That is why the consultations began back in 1997. Industry certainly has introduced new technology, product marketing, and various distribution initiatives that the existing Excise Act was not equipped to accommodate. This is probably an example of where the government machinery was once again trying to catch up to the innovations in the private sector. It is fair to say, as my hon. colleague from across the way said earlier, that there are good aspects to the bill and there are reasons to support this type of legislation.
It is also important when we talk about the competitiveness of sectors and companies to pay attention to the compliance costs associated with that industry. It is certainly fair to say that pervasive controls in the act impose high compliance costs on the industry and impair the competitiveness of Canadian producers. That is the broader issue of dealing with the command and control structures of regulation versus the best practices approach to regulation. The act moves toward improving the issue of competitiveness of Canadian producers.
Given the increase in foreign competition in Canadian markets for beverage and non-beverage alcohol, the government, through consultation, found that the problem needed to be addressed. As I said earlier, Bill C-47 is a result of the discussion paper on the Excise Act review which was released back in 1997. It was in fact out of that review that we found three guiding principles, three goals that essentially guided the configuration of this piece of legislation.
The modern legislative and administrative framework introduced in the bill will generate stable and secure revenues needed to address the contraband pressures that are certainly out there. It was found that this can be achieved without imposing unrealistic or unnecessary costs and administrative burdens on industry. That needs to be the objective of any piece of legislation that comes forward in the House. We must always consider the costs associated with implementing legislation and try to balance the benefits of legislation with costs associated with it when it comes to issues like excise tax.
This piece of legislation certainly seems to strike that type of balance, whereby we do not in fact impose unrealistic and unnecessary costs or administrative burdens. It also helps to address the ongoing concern over the smuggling and illegal production of alcohol. The intent is to certainly ensure that the spirits industry, to name one, is no longer hindered by outdated or onerous controls over premises and equipment and that with these controls removed businesses will have the greater flexibility they require to organize their commercial affairs to respond more quickly to market changes. We all know that in an increasingly globalized economy those pressures to change certainly come faster, companies themselves must have flexibility and government should not encumber that type of flexibility through regulatory burden.
If I can just speak for one moment with respect to distillers, there is certainly an issue that I want to get on record. I want to take the opportunity to thank the Parliamentary Secretary to the Minister of Finance who helped resolve this issue with respect to the concerns of distillers. Now I urge the government to follow through on the commitment and proceed as agreed so that we do not in any way encumber this sector through regulation.
My hon. colleagues have talked about small business and the importance of supporting small business. With respect to vintners, it is also important to mention that the bill does in fact deal with the fact that all vintners must be licensed. It also stipulates that those with sales under $50,000 in the previous 12 months do and will continue to qualify for the small manufacturer's tax exemption. Therefore, for a very small vintner's operation the bill does in fact maintain that exemption.
The bill is really an administrative bill. I think it is important to emphasize that. It is not a bill dealing with tax measures. It is important to mention that the bill does introduce modern collection tools to help address the government's ongoing concerns regarding a number of issues, certainly one of them being the smuggling of alcohol. It certainly enables CCRA to improve its level of service to clients and its overall administration of the excise framework for both alcohol and tobacco.
To go back to that whole debate about regulatory burden, I certainly believe that in today's era of innovation and an innovation agenda, it is incumbent on the government to ensure that the regulatory burden, the making of regulations, is an important part of that innovation agenda. We really need to be able to create a framework whereby our companies are able to innovate, not to be regulated from a command and control perspective but rather one whereby they are able to innovate from a best practices or an evidence based approach to meet standards and requirements that we as a country and certainly as a government would have.
Bill C-47 would move toward reducing the regulatory burden and compliance costs. It is important to mention that. It is also important to mention that under the bill CCRA would improve its overall administration and level of service to its clients.
To sum up, the new excise framework would ensure excise duties on alcohol and tobacco were collected in a more effective and efficient manner, something we always strive for. It would provide for an array of modern administrative and enforcement tools which are important to ensure compliance with the new act.
The new framework for the taxation of spirits, wine and tobacco products would provide greater flexibility for businesses to respond to the challenge of organizing their commercial affairs. This goes back to the pressures companies feel in promoting and creating new markets and the pressures they feel due to globalization and the competitive nature of the industry.
Bill C-47 would provide for enhanced protection of excise revenues. It would provide for improved administration and lower compliance costs. Again, this goes back to the whole regulatory issue. The bill would provide for a more simple and certain taxation structure, something we should all be striving for not only in excise taxes but in personal and corporate tax. I am sure that going forward there will be many an opportunity to debate the issue with members of the House.
I have addressed a number of issues I wanted to put on record with respect to the administrative nature of the legislation. I made the point about brewers because the issue is important. I do not for one moment want to leave Canadians with the impression that brewers would not be dealt with or considered in the larger context of their issues. From 1997 to today there has been an engagement with the brewers who felt their issues could not be dealt with in the timeframe that was set out.
A proposal has been put forward with respect to the sector. The finance department is looking at the issues outlined in the proposal and will provide the analysis. We can then have a debate and discussion about how we might best deal with the issues put forward by the brewers.