Debates of April 30th, 2002

Excise Act, 2001

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, nobody knows why. We asked that same question in committee. The secretary of state and his handlers who are supposed to support him and provide him with answers were unable to come up with a satisfactory answer. Why? Because there is no answer.

The only answer we can think of is that the very powerful lobbyists for the big breweries put pressure on the government to ensure that beer would not be included in the bill.

How can we explain that? It does not make any sense. Why has the government suddenly decided to exclude beer from a bill dealing with the more global issue of excise tax, which applies to all these products? How can it be explained beside the fact that lobbyists must have said, “No, do not touch that. We want the microbreweries to stay the way they are. Some could even close their doors. If only one or two of them remain, we do not care. For every share of the market we get—and we already control 90% of the market—it brings in $17 million more.”

I cannot see anything else but power and money in this situation. What I find most unfortunate is that the government had promised good things to these microbreweries and their managers who, through their energy and their leadership, wanted to put a quality product on the market, but the government now wants to crush them. The Minister of International Trade, the Minister of Finance and the current Minister of Justice had made promises to them, such as the ones that are made during election campaigns. These promises were selling all kinds of things. However, once the government is in office, it reneges on its promises.

This is a serious situation. Many breweries have disappeared. There were 13 in Ontario. Five are left. Where are all the government members who were elected in Ontario, in ridings where there are small breweries belonging to brave men and women who get up every morning to make a quality product and who dream of being competitive on the international market? With globalization—there is talk about it every day—our businesses must be competitive. Today, these members, these yes men, stay in their seats in support of their government, which is helping the big breweries.

[Gilles-A. Perron, Bloc, Rivière-des-Mille-Îles, QC]

Madam Speaker, I wish to congratulate the hon. member for Drummond on her fine and interesting speech.

Since the beginning of the 1960s, there has been no substantive reform of the Canadian tax system. Does the hon. member think that, instead of a piecemeal approach to fiscal issues like we had with Bill C-28 and now with Bill C-47, it would be important to have substantial changes to the Canadian tax system?

[Pauline Picard, Bloc, Drummond, QC]

Madam Speaker, I thank my hon. colleague for his interesting question. I am in total agreement with him. Ever since our election, in 1993, we have asked the Minister of Finance to modernize and review substantially the tax system.

Our requests have been in vain. Like my colleague just said, they have always been met with half measures. We have been waiting since 1997 for changes to the Excise Tax Act, and we have now before us a bill in which something very important has been left out.

As I said earlier, this is a comprehensive bill. The excise tax applies to all products made in Quebec and Canada, like tobacco products, spirits, wine, and beer. These are products made in Canada on which the excise tax is levied.

Now, why should beer be excluded from the bill? We have been told that there will be further studies and other bills will be coming forward. We will have to wait another five years.

A moment ago, I was quoting a few figures. In Ontario, 13 microbreweries went under in the last five years. Over the same period, 11 went out of business in Quebec, two of them in Saint-Hyacinthe. We also had microbrewery closures in Saint-Eustache, Baie-Saint-Paul, Amos, Montreal and Cap-Chat. In British Columbia, seven had to close down. Where are the British Columbia members, when microbreweries need their support?

I am very surprised that my colleagues from the Canadian Alliance would support this bill and not defend entrepreneurship in their communities. It is our products that make us competitive. Again, nobody is doing anything to defend microbreweries. Five microbreweries had to shut down in Alberta, one in Manitoba and another one in Nova Scotia. Why are the members not defending microbreweries and the entrepreneurship of people in their communities? It is difficult to understand.

I would remind members that, in the finance minister's riding, the Brasal microbrewery had to shut down. Why? Because, in Lasalle—Émard, the finance minister's riding, that microbrewery had to compete with the powerful John Labatt company.

I fail to understand why the Minister of Finance himself was unable to defend these entrepreneurs in his own riding against a large brewery. I have nothing against large breweries. I think that they make enough profits to be able to support microbreweries and to be willing to do so. Microbreweries will never be a threat to large breweries such as John Labatt or Molson. But they should be given some room to breathe. That is what is important. We should be supporting them in their originality instead of crushing them.

We can imagine what happened when the Brasal microbrewery had to shut down. Can we not suppose that someone from John Labatt, a large brewery, went to the Minister of Finance and asked him—I prefer not to go too far on this subject—to exclude beer from the new excise tax bill?

[The Acting Speaker (Ms. Bakopanos)]

Just to remind hon. members, we are now debating the amendment proposed by the member for Drummond.

[Inky Mark, Canadian Alliance, Dauphin—Swan River, MB]

Madam Speaker, I am pleased to rise in debate at third reading of Bill C-47, an act respecting the taxation of spirits, wine and tobacco and the treatment of ships' stores.

Let me begin by saying that Canada continues to lead the G-8 when it comes to taxing its citizens. In fact, has the Liberal government ever seen a tax that it did not like? Canadians are very concerned about the high rate of tax they pay. Certainly working Canadians are concerned about the high rate of tax they pay: All they need to do is look at their pay slips.

The bill would further increase the taxes on tobacco sold in Canada, which would include tobacco sold in Canadian duty free stores. However, because of the special status of duty free stores this legislation will have a disproportionate effect on them. Canada probably would be the first country to impose a tax on products sold in duty free stores, thereby undermining their reason for existence. It does not make any sense that we would tax duty free stores on the spirits and tobacco they sell when in effect their reason for being is to avoid having customers pay tax.

This new tax undermines the fundamental principle on which duty free shops were established in Canada, namely, that customers could shop there free of taxes and customs duties. Once customers' perceptions change, traffic patterns are affected. All provinces have duty free stores for Canadians who leave this country to visit other countries. Sales of all other products would be hurt as a result as a result of this tax, which would undermine the viability of the outlets and their key role in the local economies.

The federal government created and promoted the duty free industry to support small business, job creation and the sale of Canadian made goods. The outlets also provide an essential service for travellers, making vacations in Canada more attractive. The duty free industry has been profitable, allowing it to generate local economic benefits like jobs, purchases from suppliers and rents in commercial buildings and at airports. Most people who leave and return to the country by air shop in these duty free stores.

However, the imposition of a new tax on tobacco products threatens to undermine these economic spinoffs. Imposing this tax on duty free outlets in order to benefit health is symbolic. Duty free stores account for only a very small portion of tobacco sales in Canada. Moreover, applying this tax to duty free tobacco outlets would more than likely shift sales to another retailer rather than stop sales outright, thus the disadvantages of the bill far outweigh the benefits.

I will speak briefly about the business tax policy. Increasing taxes is a Liberal habit that is as harmful to the economy as smoking is to someone's lungs. Business taxes in Canada need to be reduced to the average rate of the OECD countries so that Canadian businesses can be competitive. This would mean a combined provincial and federal tax rate of about 35%. Allowing for various provincial rates of taxation, this means that the federal portion would need to decline to a little over 20%.

We should also target capital taxes, high sales taxes on business inputs and high personal taxes on business owners and their workers. A more progressive step would be for the government to shift from investment and savings taxes to consumption based taxes. This would only be fair to all wage earners in this country. In other words, one's taxes would be based on how one spends.

Canada could adopt a personal expenditure tax and more taxes based on the user pay principle. This would reform business taxes by reducing rates and eliminating distortions that impede the business sector from taking full advantage of the best economic opportunities.

The PC Party is the only party that advocates the complete elimination of the capital gains tax, not only because its elimination would free up capital for investment and make a difference in our actual economic performance but also because it would be a bold and symbolic act that would capture the attention of and send a message to the people around the world who invest. As we know, our country depends on overseas investment.

The bottom line is that there is strong evidence that lower capital gains tax rates induce higher revenues in the longer run, largely as a result of increased economic growth and subsequent payment of more personal and corporate income taxes. A study in the United States demonstrated that completely eliminating the capital gains tax in that country would lead to a $300 billion increase in national output. That amounts to nearly one million new jobs and an addition $46 billion in tax revenue due to economic growth. In other words, the more money the government leaves in the wage earner's pocket, the further it will go. We all know that money needs to go around in cycles in order to make the economy grow.

The United Kingdom, Germany, Norway and Sweden have all adopted more aggressive tax cutting strategies than Canada has. Germany reduced its capital gains tax by 50% and Great Britain by 75%. Norway completely eliminated all forms of double taxation of capital income.

President John F. Kennedy spoke disparagingly about the capital gains tax as early as 1963. That is a long time ago. He stated:

The tax on capital gains directly affects investment decisions, the mobility and the flow of risk capital...the ease or difficulty experienced by new ventures in obtaining capital--

Capital gains tax also creates economic inefficiencies because it encourages a locking in effect, whereby owners of capital hold on to their investments and miss more profitable investment opportunities. The United States has a very accommodating capital gains rate of approximately 20%. Last year Canada reduced the capital gains inclusion rate to 50%, putting us closer to the United States levels, but that parity is fleeting. We will soon be lagging behind again.

A deeper look reveals that even after our tax cuts, the U.S. tax on costs for industries is about 14.2 percentage points below the Canadian tax regime. This means that rather than making us a haven for jobs and investment, we are still at a competitive disadvantage when compared to the United States. The United States is Canada's only significant competitor for investment capital and it is beating the pants off Canada. Despite admittedly impressive growth in venture capital in Canada, the United States enjoyed a 170% increase in 1998-99, from $32 billion to $87 billion. In the first half of 2000, Canadian venture capital was $2.3 billion compared to $80 billion in the United States. That is quite a disparity.

Let us look at that statistic in a different way. New United States venture capital disbursements were 19 times larger than those in Canada in 1998 and 32 times larger in 1999. Although this gap is now starting to reduce, more needs to be done.

In the old economy the purpose of taxes was to redistribute income. In the new economy high taxes redistribute people. Over the last few years we have heard of people moving to the United States to work because the American rate of income tax is lower. When Canada's tax policy dictates that workers earning $100,000 must pay 52% of their income in taxes those highly valued workers will look elsewhere. We know of people who have looked elsewhere and moved elsewhere. This is particularly risky for Canada in the digital economy where valuable intellectual property assets, expertise and energy depart with every professional who crosses the border.

In the United States the highest rate of taxation does not apply until income reaches $400,000. An American earning $100,000 pays a rate of only 26%. That is quite a difference from the Canadian rate of 52%. It takes a considerable act of patriotism to choose Canada. The people who are tempted to leave are those with fewer roots in the country and fewer attachments to our lifestyle advantages like health care. They are often young people the country needs to grow and prosper.

Taxing income discourages people from earning, saving and investing, all of which are crucial to economic growth. If the government took 52% of every dollar people earned many would ask why they should earn any more. According to Jack Mintz, a professor of taxation at the University of Toronto's J.L. Rotman School of Management, the costs in terms of lost output are $15 billion to $140 billion a year, or from $500 to $4,500 per person per year. Replacing income taxes with sales taxes would be a drastic but beneficial move.

As I have illustrated, taxation has many negative effects on the economy, investment and job creation. It would certainly have a negative effect on microbreweries and tax free shopping. There is no doubt the microbrewery in Winnipeg would be negatively impacted by Bill C-47. Besides the fact that it would attack the tobacco industry by increasing taxes, Bill C-47 is another example of the distortionary and harmful effects of myopic Liberal tax policies.

Has the Liberal government ever seen a tax it did not like?

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

Madam Speaker, I listened with great interest to my hon. colleague across the floor. What he left out of his remarks are the benefits we get from taxation.

In my community there is a world class high tech firm called Research in Motion. It has been highly successful. One of the principals of Research in Motion was asked if he would ever consider moving elsewhere. He responded that he, his family and his employees enjoyed living in Canada and enjoyed the quality of life in the Waterloo region. He said the taxes they pay go toward public health, police services and the many benefits enjoyed throughout the community.

When we look at people who choose to move elsewhere in the world to work we must also look at the people who choose Canada as a place of employment. Has my hon. colleague has ever taken into consideration what we do with taxes and the fact that there is a quality of life in Canada that people enjoy?

[Inky Mark, Canadian Alliance, Dauphin—Swan River, MB]

Madam Speaker, I thank the hon. member for her question.

Our tax rate for a person earning $100,000 is double what it is in the United States. Even on the public side with regard to health which is of crucial importance to Canadians, the American public health system spends more per capita than the Canadian health system.

I had a chance to meet an entrepreneur from Boston on an Air Canada flight to Toronto. He indicated to me that one of the advantages of doing business in the Ottawa high tech sector was the value of the Canadian dollar. It was not taxation on his employees. It was the dollar rate. The dollar rate gave him the advantage of doing business at a lower cost.

On the tax side, some people do not have attachments to Canada and do not have the same social attitude about what the government should or should not do for us as individuals. If such people gain 50% on their taxation rate, especially if they earn a six figure salary, they will seek employment outside the country.

[Jocelyne Girard-Bujold, Bloc, Jonquière, QC]

Madam Speaker, I would like to use the questions and comments period to ask the hon. member what he thinks of the motion brought forward by my hon. colleague from Drummond, that this bill be not now read a third time but that it be read a third time this day six months hence.

I believe the member is from Manitoba where a lot of microbreweries had to close down. I would like to hear what he has to say about what happened. We have been asking for a review of the excise tax legislation since 1997 in order to include beer. I know that microbreweries in Manitoba had to close their doors due to unfair competition from the larger beer companies like Labatt and Molson. I would like to hear what he has to say about this irritant and what has been left out of the bill.

[Inky Mark, Canadian Alliance, Dauphin—Swan River, MB]

Madam Speaker, I thank the hon. Bloc member for her question.

I support the amendment. Any time we have legislation which would increase taxation on Canadians and have a negative impact on entrepreneurs, travellers and even beer drinkers it is not a good thing. It does not make any sense to support Bill C-47.

I support the amendment to defer the bill until the government takes a close look at the impact it would have. I raised the point during debate that taxing duty free stores make absolutely no sense at all. If they are to be taxed the name will have to be changed. They could no longer be called duty free stores if the government started taxing them. I therefore support the amendment to the bill.

[Shawn Murphy, Liberal, Hillsborough, PE]

Mr. Speaker, like the other speakers I greatly appreciate the opportunity to speak to third reading of Bill C-47 which would introduce a modern legislative and administrative framework for the taxation of spirits, wine and tobacco products under the new excise act.

As a member of the finance committee I have followed Bill C-47 closely. It has gone through considerable review at committee. We have heard from witnesses. It is good legislation and should be adopted by the House. I urge all members on both sides to support it.

Bill C-47 deals with commodity taxes. As all speakers have indicated today, commodity taxes are an important and vital part of the Canadian taxation system. In the year 2000-01 duties and taxes on alcohol and tobacco products raised approximately $3.4 billion in federal revenues.

The Excise Tax Act is an antiquated piece of legislation. Many of its provisions date back to the 1800s. It cries out for reform. It is cumbersome and burdensome for manufacturers and wholesalers to fill out the forms and all the duplication that is required. That is the basis on which Bill C-47 came forward to the House.

Intertwined with this legislation we have had two wars going on at the same time. First, we have had the ongoing war on tobacco which is not only a federal issue. All provincial governments are engaged in it. A growing number of municipalities across the country including the city of Ottawa have come forward with strict regulations and bylaws on the sale, consumption and use of tobacco. I believe all members are in favour of this.

Second, there is the issue of the illegal importation, sale and distribution of spirits to avoid the Excise Tax Act. This issue is covered to a certain extent in Bill C-47.

Bill C-47 is an example of legislation that did not go through the House quickly. The discussion paper has a five year history in the House. There has been a lot of stakeholder consultation. Because of that the final product is good legislation. As other speakers have alluded to, the bill started with a draft discussion paper circulated by the Department of Finance in 1997. This was followed by draft legislation which was circulated in 1999 and followed by extensive public consultations mainly with the major stakeholders.

Bill C-47 proposes a modern, legislative and administrative framework which would generate stable and secure revenues while at the same time addressing contraband pressures. An important component of the bill is that it could be implemented without imposing unrealistic and unnecessary costs and administrative burdens on the industry.

There has been an issue at the finance committee and in the House with respect to microbreweries. Bill C-47 is not the legislation to deal with that issue. Having said that, I have heard a lot of arguments from members of the House about the excise tax paid by microbreweries. I agree with the arguments. The excise tax ought to be reduced.

The microbrewery industry throughout Canada is under stress and the excise tax should be reduced so that these breweries can become more competitive. It is interesting that the Brewers Association of Canada supports this and has indicated that in writing to the finance committee. I support it but this legislation is not the place to bring forward this initiative.

We have received assurances that the Department of Finance will study the issue, and I hope it will follow through with this. I hope the study is done sooner rather than later and that the Department of Finance will see the competitive pressures that the microbrewery industry is under. I hope the government will see fit to lower the excise tax on beer brewed by microbreweries.

It is interesting that the Brewers Association of Canada, which I assume is controlled to a certain extent by the major brewers, supports the reduction of the excise tax for microbreweries. At the same time, it clearly has indicated to the finance committee, the government and the House that the act is not the place in which to deal with the issue.

The act also deals with the issue of penalties for persons and companies convicted of illegally importing, possessing, distributing and selling spirits which is an important part of the act and which should be dealt with sooner rather than later.

Under the new excise framework, the current excise duty and tax on tobacco products, other than cigars, will be merged into one production levy. According to my reading of the act and to the evidence I heard, this will be very beneficial from the industry point of view because it will reduce compliance costs for the industry.

This is an important part of the whole government strategy on tobacco use. It levels the tax right across Canada. This is not the answer to the problem but it is one additional issue that has to be dealt with and it will help in our ongoing war against tobacco use.

Yesterday I heard the excellent speech on this whole issue by the member for Esquimalt--Juan de Fuca, a medical doctor. He concentrated his talk on the legislation to deal with the whole issue of tobacco use. It was an excellent presentation, and I agree wholeheartedly with what he said.

The act introduces modern collection tools and helps address the government's ongoing concern about the smuggling and possession of alcohol and tobacco use.

I will summarize the benefits. First, it provides a simpler and more certain taxation structure. Second, it provides equal treatment for all parties. Third, it improves and lowers the administrative costs for industry. Fourth, it provides business greater flexibility and enhances the protection of excise revenues. Those are some of the benefits in addition to the whole issue of illegal contraband spirits and the ongoing war on tobacco.

I urge everyone on both sides of the House to give full support to the bill. The new excise tax act introduces a modern administrative framework for the taxation of spirits, wine and tobacco products and addresses a longstanding need of both the industry and the government.

[The Acting Speaker (Ms. Bakopanos)]

Before going to questions and comments, I want to clear up any possible misunderstanding. The debate is on the amendment which means, of course, that members have 10 minutes for their speeches. The previous speaker had some time left on the main motion and he used his 10 minutes on the amendment.

[Gilles-A. Perron, Bloc, Rivière-des-Mille-Îles, QC]

Madam Speaker, I rise to speak on Bill C-47 with some degree of regret and bitterness.

Why so? Because the bill deals with excise tax, which by its very definition, gives the full significance of beer, what a beer is, what a brewery is, what a microbrewery is. Whether unwittingly or otherwise, the people over there have neglected to legislate on beer. This is a major omission, particularly where the microbreweries are concerned, when these are virtually all in the process of having to shut down.

I would like to draw my colleagues' attention to a very important point, the taxation of the small breweries, the tiny ones, commonly called microbreweries. When the representatives of the Brewers Association of Canada came before the Standing Committee on Finance last October, they told us about the difficult situation the microbrewery sector is currently going through. They presented solid arguments for the reduction of excise tax for the microbreweries.

In the context of globalization, these small companies have to compete with foreign companies that are less heavily taxed than in Canada. In a market that is becoming increasingly open, the competition does not necessarily come from within the country, but rather from other countries. The foreign competition often benefits from beneficial tax treatment, which allows them to provide a product at a price that is more than competitive. The Canadian parliament must not ignore this situation when passing legislation.

At present, Madam Speaker, France, Germany, Belgium and, most particularly, our U.S. neighbour to the south charge their microbreweries less excise tax. Canada is the only industrialized country that has refused to grant its microbreweries this privilege, or equity, or parity, as far as excise taxes go.

Take, for example, the case of a microbrewery from my region, Les Brasseurs du Nord, which brews the wonderful Boréale, naturally, and its competitor in the United States. Here a brewery producing 6.5 million litres pays a federal excise tax of 28 cents per litre, which comes to $1.8 million.

In the United States, in Boston—and speaking of Boston, I would like to take a moment to congratulate our glorious Canadiens for their win against Boston—the same business would pay $585,000, or 9 cents a litre. The figures speak for themselves. For the same production, there is a $1.2 million difference in taxes.

This is why the Brewers Association of Canada is calling upon the Government of Canada to reduce the excise tax by 60% on the first 75,000 hectolitres produced by Canadian breweries that produce a maximum of 300,000 hectolitres annually. This proposal has received support from the four largest Canadian breweries belonging to the association.

It should be noted that between them, the 53 breweries that pay excise taxes shell out $19 million a year. A 1995 study of Ontario breweries showed that the excise tax is nine times greater than profits in the sector, which are estimated to be $2.1 million.

Microbreweries can be found in just about every region. They are small businesses set up in small communities, which contribute a great deal to their development. They are tourist attractions, which generates employment, and consequently, more financial resources. Unfortunately, this unfair and untenable situation that the industry is up against constitutes a very real threat.

Only three months ago, there were 19 craft style breweries in Quebec. Now there are six, including one in my riding, Broue-Monde in Saint-Eustache, which has disappeared.

The situation demands to be rectified. The government must now make decisions that will help these small entrepreneurs. The question is: given the current state of affairs, why should microbrewers continue to invest in Canada, when there are incredible benefits to setting up shop in the United States? The excise tax represents a very heavy burden for these small Canadian businesses. It is therefore urgent that the excise tax program be amended.

In other sectors of activity, small businesses investing $1 million in land, equipment and facilities are successful. They hire fifteen or so people and have sales of $1.5 million to $2 million. They make a profit and shareholders take a profit. They are successful.

However, for microbreweries, it is a completely different scenario. With sales of $1.5 million to $2 million, they barely break even; no clear profit, but a requirement to pay a little over $200,000 in excise taxes to the federal government. The excise taxes are unrelenting. Let us be clear: in the case of microbreweries, excise taxes are higher than labour costs.

The government must recognize that small breweries are distinct and should be taxed accordingly. Unfortunately, it is the only party that still does not recognize this.

The amendment being requested is minimal compared to the revenues generated by the general tax. The proposed tax break would represent only 2% of what the government collects in excise taxes. Let us be clear that this concerns a small sector which is highly labour-intensive, manufacturing-intensive, requiring major investment, a sector that plays a vital role in small communities in their provinces.

The current taxation system will have to undergo a comprehensive review, something which has not been done since 1964, with the Carter commission.

[Lorne Nystrom, NDP, Regina—Qu'Appelle, SK]

Madam Speaker, I want to say a few words on the bill before the House today as well. Bill C-47 is basically a technical bill that applies to duties regarding wine, spirits and tobacco products.

It is a bill we support. It is not a bill of great significance in terms of a lot of change. We support the amendments from the finance committee regarding microbreweries. My friend from the Bloc Quebecois just mentioned the problems of microbreweries and I agree with him wholeheartedly as well.

While we are talking about this important tax bill I want to say that we need a debate about a fair taxation policy that would be fair and just for the ordinary citizens of Canada. It has been a while since we have had that kind of debate. The last time we talked about taxation was during the 2000 election campaign when the Liberal Party made a commitment to a $100 billion tax cut over five years. We had that debate during the campaign but there has been very little in parliament itself in terms of a debate about a taxation policy that might be of benefit to Canadians.

When I think of the bill before us and our taxation system we must look at two or three different changes. I remember talking to people in my riding on the weekend in Indian Head, Saskatchewan. People were talking about three priorities: the need for more investment in the public health care system, the need for greater investment in public education, and the need for an investment to deal with the farm crisis that is extremely dire now right across the prairies and indeed right across the country.

Not many people realize this but according to statistics, 2001 was the driest year in the history of the province of Saskatchewan. The 1930s were very dry years. In particular 1936 and 1937 were extremely dry years. They were the years of the great drought and the great depression across the prairies. However last year was the driest year in recorded history.

These are the priorities of the government. We must talk about a taxation system that is fair enough to meet the public's agenda and priorities and do what is best for the common good. In addition to this we have concerns about the lack of infrastructure in the big cities including rural Canada, the national highways policy, environmental cleanup and ensuring that we have a safe water supply.

These are all issues that require a great deal of public investment, which in the last number of years has been curtailed radically by the federal government. We have to talk about a taxation system that is both fair and provides enough money to ensure we have public investment for the good of all Canadians.

When we look at these we think of the projections the Minister of Finance has made time and time again. Every year he has made projections and underestimated the revenue available to the Government of Canada. We now have surpluses that go strictly into the national debt.

Last year, at the end of the year, the federal government had a surplus of $17 billion. That was applied to the national debt automatically, except for the $101 million the Prime Minister decided to spend on Challenger airplanes on the last day of the fiscal year. The money went entirely to the national debt.

I am suggesting we give ourselves as parliamentarians some flexibility to decide where we spend these unexpected, non-anticipated surpluses that are not budgeted for. In Saskatchewan, and in some other provinces, we have a fiscal stabilization fund. It is a fund that governments pay into during good times and draw money out of in difficult times to balance the budget, to meet public expenditures, public expectations, and to meet a crisis like the farm crisis and so on.

If we were to have a fiscal stabilization fund that the $17 billion would have gone into instead of being applied automatically to the national debt, this parliament could have had a debate as to what to do with the $17 billion surplus. We may have decided to spend it in four or five different ways. Perhaps some of that surplus would have been spent on paying down the national debt.

I am sure in all likelihood the majority of that surplus would have gone into investment, public health care, public education, environmental cleanup, infrastructure, housing and the farm crisis, and other issues that are facing Canadians. After all every parliamentarian that goes back to his or her riding gets people lobbying on behalf of those very important causes. However, today, because we do not have a fiscal stabilization fund, parliament is not just handcuffed it is absolutely impotent in terms of deciding where to spend this unexpected, non-anticipated service.

I appeal to the House that we look at ways and means that will allow parliament to make the decision over the expenditure of taxpayers' money after debate in the House of Commons instead of allowing all of that money to go to the national debt by default. That is what has happened and it will happen again.

Two months ago, the Minister of Finance projected in his budget a $1.5 billion surplus for the fiscal year 2001-2002.

More recent projections by the finance department put the surplus at somewhere between $7 billion and $10 billion. Many members, including Bloc Quebecois members, have said in the House that, if a bill is not passed, all of the surplus will be used to pay down the national debt.

We are not against paying down debts. In fact, the debt to GDP ratio in Canada was much too high in the mid-1990s when the debt represented 70% of our GDP. We were the second highest indebted country in the G-7 next to Italy. Now the debt to GDP ratio is down to about 50%. That is considerable progress. We are roughly in the middle now of the G-7 nations.

Instead of automatically applying all of that money year after year of unexpected surpluses to the national debt, let us set up a mechanism in the House where we can have a debate in parliament to decide where that money will go. This is not a partisan issue as I look across at my friends on the Liberal side of the House.

What role does parliament have that is more important than scrutinizing taxpayers' money and deciding what is best to do with taxpayers' money? There are three things we can do with taxation revenue: first, is to pay down the national debt, second, is to reduce taxes in the case of a surplus, and lastly, is to put more money in terms of public expenditures on issues of concern like health and education.

What has suffered in the last few years since the 1995 budget of the Minister of Finance? Less and less money has been proportionately going toward investment into programs for people.

I have seen many frustrated Liberal backbenchers over the last few months who have expressed a concern, because of the rules of parliament, that the government is now being run by the Prime Minister's Office, a few bureaucrats across the way in the Langevin Block, and the Minister of Finance and some of his people without any input from the ordinary member of parliament. They are so right when they say that.

This is something that parties in the House should unite on and ensure we have a mechanism in parliament such as a fiscal stabilization fund. When we have that unexpected surplus the money would go into the fund and parliament would have a debate as to how the money is to be spent.

Is it a radical idea to call for a public democratic debate and call for transparency in terms of how we spend taxpayers' money? That is my plea in this debate, that we in parliament have a debate over where that surplus would be going for this fiscal year. We should have had a debate over where the surplus went in the last fiscal year when $17 billion was applied to the national debt. These are some of the things that should be done.

During the minute I have left to conclude, I would like to talk about the report the auditor general made public three or four weeks ago.

The auditor general stated in her report that we have $7.1 billion now invested in six or seven different foundations and none of them are subject to an audit by the auditor general. Once again this is an issue of accountability and transparency over how the public's money is spent. The auditor general must have the right to audit all these foundations. I hope the House will agree with me and help me make these representations to the Minister of Finance and others.

[Pierre Paquette, Bloc, Joliette, QC]

Madam Speaker, I would like to comment on the amendment standing in the name of the hon. member for Drummond. It represents an adequate response to the problem the Bloc Quebecois raised yesterday, actually, several weeks ago, concerning Bill C-47. This amendment is a six month hoist. We are moving this amendment to give us the time to correct unfair provisions in Bill C-47.

The legislation on excise tax and excise is comprehensive. It deals with wine, spirits, tobacco products, and beer. What is beyond comprehension is that Bill C-47 deals with all these products, except beer. It does not deal with beer, and it does not deal with the excise tax microbreweries have to pay.

How is it that this bill, which improves a general act that dealt with beer, does not mention it now? Even according to the brewers association, the situation is urgent. As I said yesterday, the president of the Brewers Association of Canada pointed out in a letter dated April 12, 2002:

We fully support a reduction in the excise tax for small brewers. It is a priority of the BAC and we want to point out that small brewers in Canada urgently need such reduction. We will support any measure aimed at attaining this objective.

Everyone agrees that it is urgent, for the beer industry and microbreweries, to have measures that would reduce the excise tax. Strangely enough, the only sector where it is urgent to make a decision is the one that has been excluded from Bill C-47.

With the amendment, we would have the opportunity to solve this problem for good within six months. This is urgent, and if we want to have a reasonable solution, it seems to me that the deadline that has been mentioned is really a maximum. I believe this is the spirit of the amendment, that is, to solve the problem as soon as possible, within six months at the latest.

Why must it be solved? This has been said before, but I think we must remind the House because the government side does not seem to be listening. In Canada, brewers, whether they are small, medium or large, pay an excise tax of 28 cents a litre. In the United States, large breweries pay 28 cents a litre and microbreweries pay 9 cents a litre. We immediately see the difference, which is huge. The American authorities collect three times less tax.

Of course, if we add to this the fact that, in Canada, a microbrewery is defined as a brewery that produces less that 300,000 hectolitres annually, while in the United States it is one million hectolitres, we realize that there are businesses three times as large as our Canadian and Quebec microbreweries that also benefit from tax reductions that are three times as great. This explains the catastrophic situation in the microbrewery sector, 38 of which have disappeared in recent years. There are only 48 left, including 19 in Quebec.

To illustrate what the loss of these microbreweries means, it is important to name some of them. I am convinced they will remind our listeners and most members of some brands they have seen or might even have tasted.

There is for instance Brasserie Massawipi, which was quite well known throughout Quebec, Brasserie Portneuvoise, Brasseurs Maskoutains, Beauce-Broue, Brasseurs de la Capitale, Brasse-Monde, microbreweries in the lower St. Lawrence and the Gaspe peninsula, Brasal, a German microbrewery, which was located, I believe, in the finance minister's riding, Aux-quatre-temps and Broue-Chope. These are a few of the microbreweries that have disappeared because of the government's inaction. The Brewers Association of Canada has said it, this is an urgent situation.

As I mentioned earlier, the only thing missing in Bill C-47 is the issue of microbreweries and the whole beer industry. Why? Because the big breweries do not want to talk about it. They decided to oppose it because they want to increase their share of the market. I mentioned it earlier, some microbreweries have disappeared over the last few years, but the others have seen their market share drop by 1.5% to 2%. So the disappearance of these 38 microbreweries benefited either foreign microbreweries or traditional breweries.

But this is not all. Not only are the big breweries hoping to increase their market share, but all of them are distributors for U.S. microbreweries. So they indirectly benefit from a higher excise tax on the production of Canadian microbreweries. They are taking advantage of the disappearance of the microbreweries to take over their share of the market. As we know, things are getting much more complicated in terms of consumption. With their American products, they are taking over the microbreweries' share of the market at the expense of our Canadian and Quebec products.

Despite what the letter sent by the president of the Brewers Association of Canada says, it is not in the interests of the major breweries to solve this problem. The government is helping the larger breweries to get rid of the smaller ones. This is unacceptable.

The microbrewery sector is extremely important in terms of regional development and cultural identity, especially in Quebec. What we drink and what we eat are part of our culture. Our microbreweries make us unique. And we are always delighted to taste products from other countries.

However, if the microbreweries were to disappear, no one would have the opportunity to taste these distinctive beers, for which we are well known all around the world. So, it is extremely important for regional development as well as cultural diversity, which is a clearly stated objective of the federal government as well as of the Government of Quebec and the Bloc Quebecois. The lack of provisions in Bill C-47 to promote the development and survival of Quebec and Canadian microbreweries undermines our cultural diversity. It also goes against the positions of the Liberal government.

Microbreweries are the victims of the collusion between the Liberal government and the major brewers. How did the government manage to avoid any discussion on this matter?

First of all, Bill C-47 just pretends to ignore the problem of beer and microbreweries. It does not address it, but it includes a definition of beer. Therefore, they initially had intended to deal with the problem.

When the government rejected the amendments proposed in committee by the Bloc Quebecois, and in particular by the member for Saint-Hyacinthe--Bagot, it met the expectations of the large breweries. I think many of us suspect that the government was mainly concerned with the Liberal Party fund when it made that decision. It is sad to say.

Yesterday, someone on the government side said that we were no longer interested in public funding. It is not true. The Bloc Quebecois does receive contributions from private businesses, but up to a maximum of $5,000. On the government side, it is like an open bar. In fact, the ethics counsellor had to ask the finance minister to return a $25,000 cheque given to him for his party leadership campaign. We are not talking about funding the party's activities or its election arrangements. We are only talking about a leadership campaign. Astronomical amounts are involved here, which have nothing to do with the kind of money received by the Bloc Quebecois from businesses. Unlike this government, we are truly at arm's length with the lobbies.

Discussions must resume, in the interest of the microbreweries, the regions and cultural diversity. That is why the amendment must be passed, so that the government can rectify the situation and do justice to microbreweries and the regions of Quebec.

[Jocelyne Girard-Bujold, Bloc, Jonquière, QC]

Mr. Speaker, I am pleased to speak again today on Bill C-47, more particularly on the amendment of my colleague from Drummond.

I would like to commend my colleague for her amendment. She has been insightful. Thus, she is allowing the government to get out of a mess that the committee chair put it in, and that it agreed to.

We know that, in the Standing Committee on Finance, government members suffer from the fish school syndrome. When someone on their side says something, they do not try to know what is happening; they follow, they follow the fish school approach.

I would like to read the amendment to the motion at third reading stage of Bill C-47, which my colleague from Drummond has moved:

That the motion be amended by deleting all the words after the word “That” and substituting the following:

“Bill C-47, An Act respecting the taxation of spirits, wine and tobacco and the treatment of ships' stores, be not now read a third time but that it be read a third time this day six months hence.”

This is working seriously: working to solve problems that have been created since 1997. Those who acted in good faith did not expect this. As the Alliance member said earlier, the excise tax is a major source of revenue for the government. The Excise Tax Act mentions wine, spirits, tobacco, and beer as well. Since 1997, there have been talks about modernizing the excise tax. The Bloc Quebecois was in favour.

My colleague from Drummond said that in clause 2, on line 15 of page 2, beer is mentioned. However, we realized during the debate in committee that beer was not mentioned anywhere else in Bill C-47.

Yesterday, the Parliamentary Secretary to the Minister of Finance told me that this would be discussed later on, that it was not necessary to discuss it now. When a bill deals with a particular issue, we must talk about it. Why take a small part of an act and put it elsewhere saying that it is going to be discussed later? We never know what later means. To reassure everyone, we must do a complete study of everything that is included in a particular piece of legislation.

That is not what the Liberal Party is doing, nor is it what the finance committee and its chair did. As my colleague from Joliette, whom I congratulate on his remarks, was saying earlier, the issue of microbreweries is a regional concern.

In my region—I said it yesterday and I will say it again today because it is very important—we have a microbrewery called Brasserie de l'Anse, which is located in the small community of Anse-Saint-Jean. This small community needs small businesses to survive and to retain its identity. The Brasserie de l'Anse enables that community to do that. It is located in the riding of the member for Chicoutimi.

He rose in the House yesterday. I said to myself “He is finally going to say something to defend the interests of his constituents”. But I was very disappointed. He talked about public funding, about members of the Bloc Quebecois who are lingering in Ottawa and who are not doing anything. I never thought that I was not doing anything here. If he is only a liaison officer for the Liberal Party, then it is not surprising that he should behave this way.

I can say that we are here and that we are working very hard to defend the interests of our constituents. As a member of the Bloc Quebecois from the Saguenay—Lac-Saint-Jean region and as chair of the caucus of Bloc Quebecois members, I look after the riding of Chicoutimi—Le Fjord.

I am very pleased to support the brewers in L'Anse-Saint-Jean, and I take their interests to heart. That is why I support the amendment moved by my colleague. The government should pause and reflect. It has left out of this bill an important part, and it affects the interests of workers and communities as a whole in the regions. It should do its homework once again, and undertake a new examination of this bill.

We are not asking for anything special. We are not asking for something that did not exist before. We simply want to abide by the Excise Tax Act. That is all.

I am very happy that my colleague moved this amendment. If the government is serious, it will rise to the occasion, and we will have a real debate on the microbreweries issue.

Microbreweries are found not only in Quebec, but throughout Canada. Our communities are proud of them. As my colleague from Joliette said earlier, I am very proud of my sense of belonging, and I am very proud of my own identity inside Quebec. I am very proud to say I am from the Saguenay region. A microbrewery is in touch with the identity that has developed within a specific area.

Mr. Speaker, you come from another region. You have another sense of belonging and other tastes, and you are proud to express them. Microbreweries are small or medium size businesses that represent a region and they also play that role.

I want them to keep on doing that. I want the government to remove its blinkers and say “Yes, we will look at the bill again. We will look into this excise tax business, which concerns everything we wanted to deal with at the beginning”. The government should review the matter seriously.

As we were saying, we agreed with Bill C-47 before our colleague from Saint-Hyacinthe--Bagot realized what had happened. We could not let this go through as it stands; it was too important. The Bloc Quebecois members are here to defend their respective communities. This affects my province and other communities throughout Canada.

I am a sovereignist from Quebec, but I have always respected everybody else's sovereignty and identity. We want each and every element to have its proper place in this bill. We want to ensure that each person and each company concerned, whether by the beer or by the tobacco issue, and each association be taken into consideration. We want a serious review of this bill.

Let the government members remove their blinkers, recognize reality and say “Yes, we will do our homework”. The Excise Tax Act has not been reviewed for a long time. Let us update it. There will not be another review for a long time. We have to do our homework carefully. It is true that this is an important source of financing for the government. It is also true that small communities and the microbreweries, which are important in their area, need some help.

The ball is in the government's camp. It is up to the government to do something. I hope that all the members will support the amendment moved by my colleague from Drummond.

[Bernard Bigras, Bloc, Rosemont—Petite-Patrie, QC]

Mr. Speaker, I thank my hon. colleague for practically turning the floor over to me in this debate. It is with great pleasure that I speak to, among other topics, the amendment put forward by the member for Drummond concerning Bill C-47, which reads as follows:

That the motion be amended by deleting all the words after the word “That” and substituting the following:

“Bill C-47, An Act respecting the taxation of spirits, wine and tobacco and the treatment of ships' stores, be not now read a third time but that it be read a third time this day six months hence.”

The reason I am speaking to the bill today is that, in my opinion, it is seriously detrimental to businesses in Quebec, which have always done very well economically and which offer Quebecers a product which meets their expectations and which, to a certain degree, deserves the full attention of this government, with a view to providing the necessary tax incentives to enable Canada's and Quebec's microbreweries to continue to market their products.

Generally speaking, Bill C-47 amends and, of course, introduces a number of technical improvements to the Excise Act. Here is a sampling:

the continued imposition of a production levy on spirits, tobacco products and raw leaf tobacco and the replacement of the existing excise levy on sales of wine with a production levy at an equivalent rate;

the replacement of the excise duty and excise tax on tobacco products other than cigars with a single excise duty;

more comprehensive licensing requirements and new registration requirements for persons carrying on activities in relation to goods subject to duty;

explicit recognition of limited exemptions for certain goods produced by individuals for their personal use;

tight new controls on the possession and distribution of goods on which duty has not been paid;

updated administrative provisions, including new remittance, assessment and appeal provisions that are similar to those under the Goods and Services Tax/Harmonized Sales Tax legislation;

updated enforcement provisions, including new offence, penalty and collection provisions;

Basically, we find it regrettable that the bill contains no provisions to reduce the excise tax on beer and microbreweries. We thought that the bill should naturally include beer and reflect the situation in which the microbrewers of Quebec and Canada find themselves.

I would remind the House that a number of Quebec and Canadian microbreweries are in dire straits. I would also remind the House that several of them have gone bankrupt and have had to close down because in Canada there is a preferential tax rate, clearly enshrined in the legislation, favouring the big breweries. Finally, I will remind the House that 38 out of the 86 microbreweries in Canada have had to close down. These small businesses do not represent a significant part of the Canadian beer market--only 4% to 5%--while the big breweries account for 90% of the market.

It is a growing industry. These dynamic small businesses are offering a product that meets consumers' expectations. It also meets the expectations of people in the regions.

Such a small sector as that of the microbreweries, which accounts for only 4% of the market and is steadily growing, should not be faced with tax measures or a tax system that puts them at disadvantage compared to the big breweries, which already have a huge share of the market.

I say it quite frankly because when we look at the situation in the United States, we realize that the American tax system is quite different from to the one we have here in Canada. For instance, 28 cents a litre is levied on Canadian products while only 9 ¢ a litre is levied on microbrewery products in the United States. Thus, in the United States, the government is collecting 9 cents a litre for beer produced by a microbrewery as compared to 28 cents a litre in Canada on beer produced here.

There is also the whole issue of the definition of microbreweries. In the United States, a microbrewery is a brewery producing less than 1 million hectolitres per year. In Canada, a microbrewery is defined as a brewery producing 300,000 hectolitres of beer. Therefore, in the United States a brewery producing less than 1 million hectolitres is by definition a microbrewery and, as such, is entitled to a more preferential tax rate, 9 cents, whereas in Canada, the threshold and the definition are, to a certain extent, a disadvantage for microbreweries.

Let me give the House a very real example: for every 24 bottle case of microbrewery beer produced in Canada, the federal government gets $4.09 when this beer is sold at a grocery store and $6.12 when it is sold in a bar. In the U.S., the tax on 24 bottles of microbrewery beer produced in the States is $1.12.

What does this all mean? It gives a clear competitive and tax advantage to microbrewery beer produced in the U.S. and sold in Canada, which, in turn, has led to the demise these last few years of a number of microbreweries; 38 out of 86 microbreweries had to close their doors, including seven in British Columbia. That expertise was developed not only in Quebec, but also in British Columbia. Thirteen microbreweries went out of business in Ontario, 11 in Quebec. In regions like Saint-Hyacinthe, Amos, Saint-Eustache, Baie-Saint-Paul, Montreal and Cap-Chat, small local businesses had to close down. Microbrewers themselves blame the tax system for placing them at a severe competitive disadvantage compared to the major brewers.

If the government opposite wants to make regional development one of its priorities, it should realize that its current tax policies have hurt smaller businesses that only have a 4% share of the market. Since the government keeps picking on small businesses, it is not surprising that jobs are being lost and that some of the businesses that had become a symbol for a whole region are no longer able to provide Quebecers and Canadians with top quality beer and even cottage brewery beer.

[Joe Jordan, Liberal, Parliamentary Secretary to the Prime Minister]

Mr. Speaker, in an attempt to ward off a firestorm I want to say that I have three cases of beer in my basement so I may be accused of being in a conflict of interest with the bill. Last time I checked, they were worth more than my Nortel stock.

I will do something a little different, and that is I will talk about the bill. I listened to the hon. member's speech. I am not saying that the microbrewing industry is not an important sector in Canada. He talked about using the microbrewery taxation process as an instrument for regional development. I would certainly suggest to him that the brewing industry has been used in the past for regional development. Coors brewery in Golden, Colorado can produce enough beer in one week, independent of taste, to satisfy the Canadian consumption for a year. Our country has regional breweries which have been very successful. The microbrewing industry is coming into vogue. Independent of all that, that is not what the bill deals with.

We referred this legislation to the committee at second reading, which meant that the House gave agreement in principle to the contents of the bill.To somehow suggest that we could add to the scope and scale of the bill something that was not in it intentionally is a clear violation of the House.

If the Bloc has an issue, it is a procedural one. I do not think it will get far with it . If it is really concerned about the country's microbrewing industry, I do not think this particular strategy will be very successful. Members of the Bloc may want to pick up the phone and talk to the microbreweries because I do not think they would find support even in the sector. It is an interesting strategy that is unfolding but it is not particularly helpful on any front that I can see.

I want to talk about the bill and specifically about the taxation on cigarettes. Mr. Speaker, you would be as interested in this as I am because you are close to the issue as an MP in a border community.

I can remember years ago when the smuggling of cigarettes was an epidemic. It was not only the issue of smuggling but it was a lot of the actions that surround the smuggling. It was an extremely lucrative business. There are a number of actions which seem to surround illegal businesses that are lucrative. Certainly in my area the St. Lawrence was a very dangerous place for a boater to be.

I can remember previous debates on this bill. The member for Elk Island tried to paint the picture that the government did not know what it was doing on cigarette taxes; that it put them up, put them down and put them up again. If he were to examine the situation we were faced with, he would have seen that New York, Michigan and other border states did not tax cigarettes to the same level we did.

The other thing we have to concern ourselves with is that taxation on cigarettes is not solely federal jurisdiction. The federal government cannot act unilaterally. We have to act in concert and in agreement with the provinces. We are balancing a number of interests here.

At the time, with the Canadian dollar where it was and the level of taxation on Canadian cigarettes when they were exported to New York, Vermont and Michigan, the government wanted to do the prudent thing. We had two choices. We could drastically increase expenditures into policing the activity or attack it at the source, which is the economics, and reduce the economic incentive to smuggle cigarettes. That involved a reduction in the taxation. We said at the time that it was a temporary measure.

We now have a situation where the Canadian dollar does not lend itself to getting involved in smuggling cigarettes. Also in some cases the tobacco taxes in New York, Michigan and Vermont are higher than they are in Canada. I think that issue has been put to bed temporarily.

The other advantage to cigarette taxation is an attempt to put in place a disincentive for young people to buy cigarettes. The more expensive cigarettes are, the harder it is for someone to smoke that first cigarette or begin to smoke cigarettes. There is a lot of competition for young people's dollars these days. If we can take cigarettes off the table and not get people started smoking, we are doing society a great benefit.

We cannot simply rely on the economics alone. If we look at research into youth smoking we see a number of reasons that young people take up the habit. One group of young people smoke because they are trying to look adult. Another group smoke because they want to give the image that they are rebelling. Another group is simply highly susceptible to peer pressure. The fourth group, which is quite disturbing, consists of young women who are under the impression that tobacco is an appetite suppressant. Faced with a bombardment of media that tries to portray a certain body type, they take up smoking in an attempt to control their weight.

Government has to realize that we cannot send the same message to all four groups. We cannot come out with an advertising strategy that says smoking is bad because that is exactly why the group doing it to rebel takes up smoking. We are reinforcing the wrong behaviours.

We must take a step back. We have moved on the cost of cigarettes, and that is a positive step. We must also move on very targeted campaigns aimed at the specific reasons that young people smoke. We must put the dollars on the table, which the government is certainly committed to doing, to undertake campaigns that will back up and support the tax policy, which is clearly designed as a disincentive, with positive marketing that addresses the root causes of young people taking up smoking. It will pay dividends down the road in decreased health costs.

With the Romanow commission in full flight, we are certainly looking at the sustainability and the costs of the health care system. Anything we can do to prevent rising health costs down the road is something we need to take a very serious look at.

I think the bill has wide support, including from the brewing industry. It seems to be a bit of a tempest in a teapot to focus on that industry. I think this is a very logical framework for the taxation of these controlled substances in the country. I will have absolutely no problem supporting the government on the legislation. It is a good step forward.

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, first of all I would like to address what my colleague, the Parliamentary Secretary to the Prime Minister, just said. I would also like to congratulate my colleague, the member for Saint-Hyacinthe--Bagot, for his good work.

I have no doubt that the microbreweries in Quebec and elsewhere support the present position of the Bloc Quebecois. The proof is that, last week during question period, my colleague was accompanied here by many microbrewery representatives from Quebec. What we are trying to explain to people is that there is no difference between the microbreweries of Quebec, those of British Columbia and those of Ontario. They are all in agreement with the position adopted by the Bloc Quebecois. It is easy enough to understand.

I think that large breweries have found a Machiavellian scheme to put an end to all microbrewery activities not only in Quebec, but also in Ontario, in British Columbia and everywhere else. Here is how this will happen.

We are not against the idea of bringing the Excise Tax Act up to date. We think it is important. This legislation has an impact on various industries. At first, the breweries had said, “If there is a reform of the excise tax and we can pay less, we want to be part of that”. However, the large breweries, John Labatt and Molson among others, realized that each time the microbreweries lost 1% of the market, they had a return of $17 million in dividends. That is probably much more profitable than a reduction of the excise tax.

So the large breweries cooked up a scheme that can only be described as diabolical. It is very simple. At this time, microbreweries and large breweries both pay 28 ¢ a litre in excise tax. They know that in Europe and in the United States, the amount is much less. That means the American and European microbreweries can offer their products on the Quebec and Canadian markets at a much lower price than our own microbreweries. Naturally that puts pressure on our own microbreweries. So the American microbreweries are gradually taking over the market. This has caused the shutdown or the bankruptcy of 38 microbreweries out of 86 in Canada.

On that subject, I must say that, unlike the Liberal Party, the Bloc Quebecois does not defend large businesses only. We believe that there must be equity within the Canadian, Quebec and North American economy. When inequity becomes a means for large businesses to increase their profits, I am tempted to use the expression used my colleague from Saint-Hyacinthe—Bagot, who calls this economic predation. That is just what it is.

The large breweries said “We have always wanted to support that because we wanted to benefit from a reduction in the excise tax. Now we realize that it could be more profitable to exclude the whole brewery and microbrewery sector from the process. By having the whole sector excluded from the process and asking the government to do that, we realize that our profits will increase by $17 million for every 1% of the market lost by microbreweries”.

Microbreweries had up to 5.5% of the market at one point. It has now gone down to 4%. This means that Canadian breweries have probably seen their annual dividends increase by $28 million so far.

The rationale was very simple. These large breweries thought that, if they asked the government to exclude them, microbreweries would also be excluded, which means that they would also have to continue to pay 28 ¢ per litre in excise tax. Knowing that microbreweries are unable to pay such a tax in the long term because of the strong competition on the Quebec and Canadian market, large breweries will end up with the whole market share that microbreweries had, because they will all have shut down. It is absolutely shameful, and we have the figures to support what we are saying.

At present, for a case of 24 sold in a store, microbreweries pay $4.09 in excise tax, and it goes up to $6.10 if it is sold in a bar.

In the U.S., the tax on a case of 24 is $1.12. It is readily understood that we are not able to withstand the unfair competition by the American microbreweries. This is, of course, a government decision in favour of the large breweries.

It is disconcerting to see how this has happened. Very disconcerting. Perhaps we are sorry to have to come back to it, but this must be said: when the major breweries saw it coming, they said “We will create a taxation committee”. The husband of the hon. member for London West just happens to be a member of that committee. Not only does the hon. member for London West share her life with the chair of the major breweries' committee on taxation, but she also shares his philosophy about the big breweries. It is totally deplorable in a democracy for a member of parliament to totally adopt the position of her spouse because he works for the large breweries.

At the very least, people can see that this is a problem of conflict of interest. It gives a very bad impression. It is not unlike other situations. Even the Prime Minister is concerned that MPs and politicians in general rank lowest in public popularity and confidence. This is not unfounded. People have examples such as these in front of them.

As for the 2,000 remaining microbrewery employees, they are wondering “Why do people want to see us disappear?” They read the same reports the rest of us do. They conclude “There seems to be some degree of collusion here”. I would be curious to know how much of the Liberal Party's funding comes from Labatt and Molson as compared to what comes from the microbreweries. And what about conflict of interest, not just in connection with the member for London West, but the candidates for the leadership? I would be curious as to how much Labatt and Molson have contributed to that. Whom can they count on?

This may be evident from a reading of the letter from Mr. Morrison, CEO of John Labatt. There are numerous passages in that letter that refer to how urgent it is to be able to benefit from the new excise tax structure. He says, however, that no decision has been made and it would be preferable to wait. They want to be left out.

It is peppered with contradictions. It is urgent, it is important, but we must not do anything right away. This letter also refers to an agreement that exists with the government. “We met with your government. We met with the Minister of Finance. We met with his officials”. What is the nature of this agreement? They are asking to be excluded and to simply let the microbreweries go belly up. We will lose another 2,000 jobs in addition to the 1,500 jobs that have already been lost. The large breweries will take over this market and their shareholders will be very happy.

This is the philosophy of this Liberal government. Give it all to the biggest fish. For those who get in the way, do what we can to get them out of there. This is what is happening right now with microbreweries. This is but one sector. This does not include the many other sectors. The real issue is often election coffers, Liberal party coffers. This is what often happens.

We find this deplorable. This is not the position of the Bloc Quebecois. The Bloc Quebecois believes that it is important to distribute to some extent the wealth of the economy. This does not violate the rules of the WTO. Even the United States, the mecca of capitalism, believes that it is important to provide some respite for microbreweries, because they realize that they are not able to compete against the large breweries.

It is deplorable that in this House, we are witnessing the Liberal party engage in conflicts of interest and defending big business and big money, at the expense of the little guy. This gets us nowhere. In fact, this also demonstrates that it is small and medium-size businesses that create jobs and that are the most productive for society. It is not by starving them and allowing others to rake in even greater profits through economies of scale that we can create a fair and just society.

This is why the Bloc Quebecois introduced amendments and why we are opposed to this bill. Beer must now be included with the other sectors in the excise tax reforms. Both breweries and microbreweries must be included.

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

Mr. Speaker, I thank my colleagues for their tireless support, especially on an issue which is not one of the easiest ones we have had to deal with since our arrival in the House of Commons.

It is always troubling that Liberal members confuse human feeling and sexism with cases of corruption and utter dishonesty. We have demonstrated this over the past few days. One cannot be both judge and jury in a position as important as that of committee chair.

Had the member for London West been a man, this would have changed nothing. We would still have tried to get to the bottom of the process whereby a bill such as Bill C-47 gets passed.

The amendment we put forward earlier allows us to voice our criticism of the unfairness and irregular proceedings in the Standing Committee on Finance and in the Department of Finance since this review of the Excise Act first began.

We are moving that adoption of this bill at third reading be postponed for six months so that we can get to the bottom of this process, which is unworthy of an institution such as the House of Commons, unworthy of us as MPs and, a fortiori, of anyone holding the position of committee chair.

This is not how Bill C-47 now before us should have looked. Why? Because Bill C-47 amends the Excise Act, a comprehensive measure. We have been studying the Excise Act since 1997. Since becoming a member of the Standing Committee on Finance in 1994 I have followed all the committee's deliberations, despite what a Liberal member may have said earlier. We have been looking at this review since 1997. We cannot have a general excise tax whose provisions cover a range of products including wine, spirits and tobacco, and leave out one of these products without something looking suspicious.

In the case of Bill C-47, that is what has been done. The government has introduced a review of the Excise Tax provisions for all products except beer. Why? Because an amendment to the Excise Act was in order with respect to beer and the way microbreweries were dealt with.

Earlier, I was listening to the parliamentary secretary to the Prime Minister. He does not know a thing about this issue. The only problem that confronts microbreweries is an excise tax that is too high compared to what their American and European competitors have to pay. That is the only problem. Eliminate this problem, ensure adequate, proper and fair competition—does the notion of fairness exist in the heads of Liberal members opposite?—and microbreweries no longer have a problem. From then on, the competition would be based on the quality of the products. Quebec and Canada are not afraid to see the various products of their microbreweries compete with beers from all over the world, because we have good products, good brewers and good workers in that industry. However, the government must provide a level playing field to ensure fair competition.

This is what we are asking of the Canadian government. This is what was supposed to be included in the new bill and in the proposed amendment to the Excise Act. But we are dealing with hypocrites in the brewery sector. Officials from John Labatt and Molson, who are members of the Brewers Association of Canada and who have been saying since 1997 that they want to help microbreweries correct this injustice, shot them in the back and stabbed them during the legislative process. This is what has happened since 1997.

Recently, we learned that there has been an agreement since 1997 between large Canadian breweries, namely John Labatt and Molson, and the Department of Finance not to include beer in the review of the Excise Act. The only product that is not included and that John Labatt and Molson asked not to be included is beer produced by microbreweries. The president of the Brewers Association of Canada, Mr. Morrison, sent a seemingly innocuous letter in which he tells the Chair of the Standing Committee on Finance that reducing the excise tax must be a priority, that it is a matter of survival for Canadian microbreweries.

It is urgent, but at the same time they do not want the excise tax to go down. What a brilliant lobbyist this president of the Brewers Association of Canada is. That was the wake-up call for microbrewers. And the secretary of state had the gall to argue that we do not have the support of microbreweries. I have to be careful here and not use unparliamentary terms.

There is now an association representing Canadian microbreweries on this issue. It is the only one. It is called the Canadian Council of Regional Brewers. We have the support of this organization, since it asked us to move, before the finance committee, the amendments that were rejected for some frivolous reasons by the member for London West, whose husband is one of the seven directors of Labatt Breweries and also the chair of the taxation committee of the Brewers Association of Canada, which urged us not to reduce the excise tax. The president of the council is Bob King, who also happens to be the CEO of a microbrewery in Alberta.

I just have one little message for my Alliance colleagues who supported our amendments on the first day but later changed their minds. They should realize that we are standing up for their own constituents. If the pressure from Labatt and Molson is getting too much, they should transfer their calls to us. We are not afraid to talk to the directors of Labatt and Molson. We were also subjected to pressure from Labatt, but we held firm. They should do the same to defend their own people. When Bob King has to write to us to extend his support, it means that he does not have the support of the Alliance, and that is too bad.

Stop being being pressured by John Labatt, join with us and stand up for your constituents who work in microbreweries, especially as the president of the brewers association is a fellow from Alberta. Bob King is from Alberta. He is not from Quebec, he is not a separatist. However, he has a social conscience. He knows that if there is no microbrewery left in Canada, the big breweries will take over their share of the market and it will result in a smaller number of products, which will be to the detriment of consumers and industry workers.

Why jeopardize the future of breweries in Quebec and Canada by maintaining an unfair tax treatment as compared to the competition? Because of a big brewery, John Labatt, which is lobbying, acting like a cowboy thinking this is the Far West and it can whip us into submission.

We will stand up to John Labatt and Molson and stand up for our own people. We will stand up for microbreweries. I am asking Alliance members to do the same and to stop acting as John Labatt's lap dogs.

Earlier, in his wisdom, the secretary of state said--I hope the Prime Minister will replace him because he is pitiful--“Listen, we cannot help microbreweries through taxation. It is not good. This is not good regional development policy”. But he knows nothing about this issue.

We are not asking to help regional development through microbreweries, they are already competitive, they put out fantastic products. All we are asking of the government is to put them on an equal footing with the foreign microbreweries that are invading our market and competing unfairly because they benefit from a preferential tax system.

We are also asking the government to open its eyes. Mr. Speaker, could you tell your Liberal colleagues to open their eyes wide open. It is not the Holy Spirit who is flooding the Canadian market with beer from U.S. microbreweries, it is the big breweries, John Labatt and Molson. They are buying exclusive distribution rights to distribute and selling beer from American and European microbreweries on the Canadian market to sink Canadian microbreweries, all the while saying that they are standing up for them.

I am asking my Liberal colleagues to stop letting people walk all over them and to open their eyes. They call themselves great Canadian nationalists. My eye! One cannot be a Canadian nationalist and work solely for big businesses at the expense of Quebecers and Canadians who want to feed their families and develop a quality product, and to do so on an equal footing with their foreign competition.

Give us the same fiscal tools. Give microbreweries the same fiscal tools and the same chances. You will see that we can beat foreign microbreweries on the Quebec and the Canadian market. Do you know why we will beat them? Because we have the best product. We have the best variety of products. We have the best tasting beers in the world. And I am not afraid to say so. We also have the best prices. However, we have to live in a fiscally competitive world and the government has to wake up and stop groveling before John Labatt, Mr. Morrison and John Barnes who, by the way, is the boss of the latest lobbyist for John Labatt who lobbied the Standing Committee on Finance and the finance department so that the excise tax would not be reduced.

I did not make this up. On the Internet, under lobbyist, you can find the name Geoffrey Trussman. His reference and boss at John Labatt's is John Barnes, the spouse of the member for London West who is also chair of the Standing Committee on Finance.

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

Mr. Speaker, representatives of the Bloc again do not seem to get it. They do not seem to understand what the bill contains. Some misrepresentations were obviously made in the House today by the hon. member. There is no question that we are talking about legislative and administrative changes to the bill.

The member opposite clearly has failed again to understand that these are legislative and administrative changes. The member again has failed to understand that beer is not part of the bill. The rationale was very clear that the issues were very different.

Bill C-47 deals with spirits, wine, tobacco and ships' stores. This has been the case from the beginning when the bill was tabled in December 2001.

The comments made by the member with regard to the chair have already been addressed. We will not go into that. It is utter nonsense and he knows it. Obviously I am not sure what the motivation is on the other side. Clearly the issue at hand is that we as a government are interested in bringing in a new excise act to deal with the taxation of spirits, wine and tobacco products.

It was clear in the 1997 report that we engaged the industry, the provinces and all stakeholders and they gave us very clear messages about moving forward. That is in fact what we have been doing. It is somewhat distressing to hear the sideshow comments which have absolutely nothing to do with the bill at hand which deflect from the fact that the member cannot talk about other aspects of the bill which he obviously must support.

There is no question that we are talking about the issue of ensuring that young people do not engage in smoking by way of increasing taxes. I do not think the member has a problem with that. Clearly, we are talking about making the regime, particularly for the vintners, more realistic in terms of the 21st century, instead of having them mired as they were in the 19th century. This makes ample sense.

It is important that we keep an eye on issues such as smuggling, the illegal production of alcohol, which again the industry asked us to respond, warehousing regimes and deferring the payment of duty. The bill deals with these issues. These are the real issues, not the nonsense that we continually hear from across the way on an issue which has no basis in fact.

I suggest we deal with the real issues and the content of the bill. The bill has the support, has been articulated and is now here before the House. The bill clearly addresses the kind of issues that we want to see as Canadians. Fines for alcohol related offences will be increased substantially. Serious alcohol offences will now be subject to the proceeds of crime provision. These are very important.

Therefore, I hope that a majority of members on both sides of the House will deal with the real issues. The issue of improving the administration and reducing compliance costs for the industries are very important. These are the real issues today. These are the issues we need to talk about and on which we need to focus.

I hope that when the time comes to vote on the legislation we will send a clear message of support to the industry that this needs to move forward. We need to be more effective and efficient, and that is what the bill addresses.

As members know, there are many benefits and I have outlined these in my comments before. Very quickly, a simple and more certain taxation structure, equal treatment for all parties and improved administration and lower compliance costs are important. There has to be greater flexibility for a business to organize its commercial affairs and enhanced protection for excise revenues. These are important. This will bring an act that is mired in the 19th century fully up to date.

We have heard comments and we have responded. Bill C-47 addresses the key issues of the day. It is a strong bill. When it comes to issues such as beer, the Department of Finance is reviewing the proposals that have been put forth and we will respond in an effective and timely manner.

However that is outside the purview of the bill. Talking about beer is like talking about jet fighters. They have about as much relevance to Bill C-47 as beer does. I challenge the hon. member on the other side to stick to the issues rather than trying to debase the House with needless comments. If the hon. member has nothing to say he should do what his mother probably told him and not say anything. In this case he would be better off to stick to the facts and the issues.

At the end of the day we seek to bring forth a modern legislative and administrative framework which would be important for the industry. It would be important for the people involved with spirits, wine and tobacco. It would be important for all concerned. It is important to stick to the issues at hand. We must make sure we address what we have heard from the provinces and the industry so we can adopt legislation that would benefit everyone concerned.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Speaker, it seems the Bloc is the only party not supporting the legislation. It was carrying on a bit of a filibuster but now government members are getting involved in the filibuster. I think the reason has nothing to do with the bill and its content. The reason is that there are only two serious pieces of legislation before the House. First, there is Bill C-5 the species at risk bill. The government is so split over the bill that there is a huge problem in its caucus about it. It does not want to face the bill again. It put it off yesterday.

Second, Bill C-15B is the next bill scheduled to come before the House. It is both an extremely important piece of legislation and a bad piece of legislation. It has caused an urban rural split in the government caucus with which it does not want to deal.

The government is filibustering its own legislation because there is such a split in its caucus it does not want to deal with the two important pieces of legislation before the House.

I have not seen before in the House of Commons any government with such a thin soup agenda. It has so little of substance to talk about that it is filibustering its own legislation. Government members talk about the bill because they do not want to let things die and admit they have nothing to say or offer the country when it comes to legislation. This is a surprise and it is quite shocking.

We need a government on that side that has issues of substance to deal with on behalf of Canadians. It certainly is not coming from the Liberal government.

[Michel Guimond, Bloc, Beauport—Montmorency—Côte-De- Beaupré—Île-D'Orléans, QC]

Mr. Speaker, I am pleased to speak to this bill, particularly because we must say at the outset that, when we talk about a problem of fairness that might affect microbreweries mainly, small breweries that are almost cottage-type, we are talking about regional economy.

As everyone knows, I come from the Saguenay—Lac-Saint-Jean region, even though I represent and live in a Quebec City area riding. Being from Saguenay—Lac-Saint-Jean, I know very well the impact of microbreweries in very small Quebec communities.

I could talk, among others, of the community of L'Anse-Saint-Jean, in the riding of Chicoutimi—Le Fjord. I am disappointed and surprised to see that the member for Chicoutimi—Le Fjord prefers to go after my colleague from Jonquière who is doing her best to defend the issue of highway 175, that he prefers to play petty politics, to use demagogy, instead of defending the microbrewery in the small village of L'Anse-Saint-Jean.

L'Anse-Saint-Jean is located on the Saguenay, in the fjord of the Saguenay, where the view is magnificent. It attracts many tourists, mainly in the summer, although its infrastructures are quite limited. The microbrewery in L'Anse-Saint-Jean provides jobs. This is what we mean when we say that we must develop fairness between the big breweries, Molson and Labatt for instance, and microbreweries.

In this regard, certain people took exception to the fact when the Bloc Quebecois pointed out the connection between the chair of the Standing Committee on Finance and her husband, Mr. Barnes, who, incidentally, is chair of the taxation committee of the Brewers Association of Canada and also a Labatt executive. This is not to say that a wife must defer to her husband or that she must parrot her husband's opinions. If the case had been exactly the opposite, the situation would not have been any more acceptable.

I could mention, as an example, the Minister of Transport and his wife, Penny Collenette, who holds an important position at Loblaws, a company that owns Weston and who also has a significant interest in the Quebec-based company Provigo. If the Minister of Transport used his position the same way the chair of the finance committee used hers to judge the amendments put forward by my colleagues from Saint-Hyacinthe—Bagot and from Drummond, which were aimed at ensuring a fair deal for microbreweries, it would be unacceptable. She used her position and that is why we are criticizing her.

I will go on with my example. The Minister of Transport, whose wife, Mrs. Penny Collenette, holds an important position at Loblaws, cannot make decisions favouring that particular company knowing that he has privileged information regarding that company. It is also a matter of apparent conflict of interest.

We have here a letter dated April 12 addressed to the chair of the House of Commons Standing Committee on Finance and signed by Mr. Sandy Morrison, Chairman and Chief Executive Officer of the Brewers Association of Canada. Incidentally, Mr. Morrison is a former Air Canada executive, which I know for having met him when he was with that company.

I think it would be relevant to read one particular paragraph from the letter sent by Mr. Morrison to the chair of the finance committee:

Our position remains unchanged: we fully support a reduction in the excise tax for small brewers.

This is what is called wishful thinking. Nobody is against virtue. It is just great. If the letter ended there, we could say that small brewers would have nothing to worry about.

So the Brewers Association of Canada, a large association, says this:

Our position remains unchanged: we fully support a reduction in the excise tax for small brewers. It is a priority of the BAC and we want to point out that small brewers in Canada urgently need such a reduction.

Even though the Brewers Association of Canada recognizes that fact, the government refuses to recognize it. What is happening with regard to the relationship between the chair of the finance committee and the senior officer of the Brewers Association of Canada?

The paragraph does not end there. Here is what the Brewers Association of Canada goes on to say:

We will support any measure aimed at attaining this objective, but in light of our prior agreement with the government, we cannot support amendments which would include beer in Bill C-47.

What does that mean, “in light of our prior agreement with the government”? We can imagine the collusion, secrecy, dealings, secret agreements and sweet deals behind closed doors. We are left to wonder what the real motives of the government are.

We could dig out some information on the contributions of Labatt and Molson to the Liberal election fund, and we would have a nice illustration of what returning a favour means. You scratch my back, and I will scratch yours.

The goal of the Brewers Association of Canada is to eliminate the microbreweries. Microbreweries have taken a fair share of the market. Given the beer consumption in Canada, which is measured in hectolitres, I believe, a tiny 1% increase in the market share represents profits of $17 million.

Even if the word beer is defined in Bill C-47, the government suggests that our amendment to include beer in the bill is out of order. They refuse to accept the amendment moved by the Bloc Quebecois. Our learned colleagues opposite remark that there is nothing in the bill about beer. If that is true, why is the word beer included in the definitions in Bill C-47?

We could go on and on, but I want the Liberal Party to know that the Bloc Quebecois will keep fighting. I hope that those in Quebec who believe in the development and the future of microbreweries will remember where the Liberal government stood on this issue.

[Michel Bellehumeur, Bloc, Berthier—Montcalm, QC]

Mr. Speaker, I want to thank you for the opportunity to speak to this bill.

This bill may seem to have little to do with the issue I usually deal with, which is justice. However, when we look at what happened to Bill C-47 in committee and the impact it can have in our respective ridings, we come to realize that everyone in this House should take a particular interest in this bill because of its economic impact and because of the way the opposition, which was calling for changes, was handled or gagged.

The Bloc Quebecois is a sovereignist party, and we do engage in politics. However, when a good bill is before the House, we very often support the government.

At first glance, Bill C-47 seemed like a piece of legislation that we could support. In fact, our finance critic, the member for Saint-Hyacinthe--Bagot, and our assistant critic, the member for Drummond, worked with the government to improve the bill and correct some oversights. We wanted to improve upon it. The negotiations went very well. We even supported the government at second reading. It was at committee that things turned ugly.

One of the roles of the opposition, whether it is the official opposition or a third party like the Bloc Quebecois, which represents a large number of Quebecers, is to voice their concerns, and that is what the Bloc members have done. We stood up for a very important industry in Quebec, the microbrewery industry, which could expand even more if it could be heard.

It was at committee that things turned ugly, when the Bloc Quebecois members wanted to point out a flaw in the bill, because the government forgot—at the beginning we believed it was an oversight—to include beer in the bill on excise tax. We realized that it was no oversight, given the appearance of conflict of interest that everyone is aware of, involving the committee chair and a lobbyist, a very important person who works for the big beer company, Labatt. Because of the links that existed, we realized that it was not an oversight.

This all started—and this comes from the microbreweries—because initially even the big breweries said they supported the microbreweries and lowering the tax. When compared to the U.S. tax, the Canadian excise tax is very high. In the end, we realized that the big breweries were not defending the microbreweries.

For this reason, the Bloc Quebecois tried to have beer included in the bill on excise, so that microbreweries would be treated fairly.

The bill contains just about everything. Nothing is left out. It contains provisions on spirits, wine, cigarettes, everything that can be purchased in Canada, with the exception of beer. This alone raises questions.

I do not understand why the Liberal members are not raising questions. Why are we treating microbreweries differently? Why should beer be different from any other product? I understand that they may presume to be acting in good faith, but once the issue is raised, the members of the government who represent their constituents in their ridings, which probably have microbreweries in them, these members must stand up and tell the government, the Minister of Finance, the Minister of Revenue and those who are responsible for this issues, that they are on the wrong track.

How ironic that only the Bloc Quebecois would stand up to denounce the government's ways. At first, the Canadian Alliance appeared to waiver, but in the end, they will likely support the bill.

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

They do not support the microbreweries anymore either.

[Michel Bellehumeur, Bloc, Berthier—Montcalm, QC]

They do not support the microbreweries anymore either.

The government and the official opposition have, in a way, abandoned the microbreweries. Not us. We intend to battle this out, because it is important.

From 1993 to 1997 in Berthier--Montcalm—my riding had a name change along the way—the entire Maskinongé area was part of my riding. There are major buckwheat producers in that area. We wondered how we could promote buckwheat. I will in passing greet “Mr. Buckwheat, le père Sarrasin”, who will know whom I mean. We went off to Belgium to promote the region and the Louiseville buckwheat flat cake festival. Afterward, Belgian businessmen came to Louiseville. They had a technology for brewing beer from a cereal much like buckwheat. Today in Saint-Paulin, there is a microbrewery that produces three buckwheat beers. These are very different, really excellent, and are exported.

However, with a bill like the one now before us, its exports will certainly be limited. It cannot be competitive. Even the U.S. has a tax of about 9 cents per hectolitre, while ours is 28 cents. This favours the big breweries at the expense of the microbreweries. This microbrewery, with its three beers—the Belgians apparently are crazy about them—could step up its production and increase job creation in the region. Saint-Paulin is not a major centre. So, this would be very important for the region. This technology did not exist in the Maskinongé area prior to 1997 or 1998.

Saint-Paulin is, if I am not mistaken, now in the riding of the Prime Minister. What is the Prime Minister doing to defend the microbrewery properly? I am certain that it is in the PM's riding. The people around me seem to be questioning that, but I am sure it is. He is doing nothing, whereas he should be standing up in defence of his constituents.

In the region of Lanaudière, more specifically in Joliette, Broue-Pub L'Alchimiste also produces five or six beers. This microbrewery is also affected by the excise tax, by the bill that the government introduced, and particularly by the favoritism shown to major breweries. This is in the region of Lanaudière. My riding is close to two regions where microbreweries are found. If we look around, we realize that there are such microbreweries everywhere in Quebec.

But there are some in Ontario as well. I do not understand why members from Ontario—perhaps it is because they take Ontario for granted—are not doing anything and are letting their constituents down when it comes to microbreweries by not protecting them properly.

It is the same thing in western Canada. The Canadian Alliance should rise and fight for microbreweries, but it does not. Yet, because of the policy of the government opposite, 13 Ontario microbreweries have shut down in the past five years. In Quebec, 11 have shut down for the same reasons since the Liberals came to office. There were some in Saint-Hyacinthe, Saint-Eustache, Baie-Saint-Paul, Amos, Montreal, Cap-Chat and Lanaudière. There were some everywhere. Because of the policy of the Liberal government opposite, which favours the big companies—probably because of their big contributions to the Liberal Party—microbreweries and regions were gradually affected. The Canadian Alliance is no better in this respect. The Liberals and the Canadian Alliance get along very well on issues like this one.

However, the Bloc Quebecois is here for these people. We will continue to protect them. This House has not heard the last of the Bloc on this most important issue for the regions of Quebec.