Debates of April 30th, 2002

Excise Act, 2001

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Mr. Speaker, for a second there, I thought I had slipped your mind, but fortunately you caught yourself.

It gives me great pleasure to speak to a bill and take part in a debate which is of great concern to us as parliamentarians, as I will demonstrate. At stake are principles of fairness and respect for the work of parliamentarians.

First, I wish to pay tribute to the member for Saint-Hyacinthe--Bagot. He deserves the thanks of all parliamentarians for his vigilance. It would have been easy to keep quiet, to go along with the bill, and to give it our support as though nothing were the matter.

But this he did not do because, since being elected to the House, the member for Saint-Hyacinthe--Bagot has always made a point of being vigilant. Do you know something, Mr. Speaker? I think that the member for Saint-Hyacinthe--Bagot is a marvellous reminder to us that we were right to vote for the Bloc Quebecois, so that we would have a party in the House that is resolutely vigilant when it comes to defending the interests of Quebec.

That having been said, the bill before us today is a rather explosive combination of ethics or, should I say, lack of ethics, and taxation. I understand from the comments made by the member for Saint-Hyacinthe--Bagot that, in principle, the entire Excise Tax Act is under review. We are in favour of this.

We understand that, in the economic world, there are amendments concerning the conditions of circulation and flow of capital, and that storage and production conditions have changed. We are in favour of a corresponding review of the Excise Tax Act. We know that a particular feature of the Excise Tax Act is that it has to do with consumer products.

But for this bill, one of the principal features of the Excise Tax Act is that it is paid for by the consumer. There is an excise tax on cigarettes, wine, spirits, and various consumer products.

A professor of economics who taught me in the early eighties used to say, in his brilliant performance before an audience increasingly enthralled from class to class, that excise tax is sort of like a tax on sin, because it applies to products such as wine, tobacco and spirits. Guess who was this professor who taught me these notions? It was the hon. member for Joliette. He taught me in the early eighties, when I was 18 or 20, at that age when we are ambitious and aggressive. The hon. member for Joliette was already my teacher. He explained very clearly to his students the difference between direct and indirect tax as well as between excise tax and tax on consumer goods. I point out that I got a very good grade for this class and that, in my opinion, the exam was perfectly fair.

That having been said, let us get back to the essence of the subject matter. We agree with a review of the principles of the Excise Tax Act as it applies to consumer goods. However, we do not understand why this review applies to most products, but not to beer.

We cannot understand how, in a relatively monopolistic or at least oligopolistic market, with two or three major brewers controlling the market, the brewers—this is what I gather from the correspondence between their representatives and the Minister of Finance, finance officials and various spokespersons for the department—could be in favour of being included in this review mechanism.

We can surely ask ourselves why the bill, as it appears before the House, does not include revised provisions for such an important product as beer. To answer that question, we will have to look to ethics.

Let us start at the beginning. All members in this House will agree with me that, as parliamentarians and members of the House, we are all solicited at times by various groups. In my case, as health critic, every week I meet people representing pharmaceutical companies, nurses and professional associations. If we were to look at all the issues brought before this House involving all the critics, I am sure we would see that our work as elected representatives—which is legitimate and accepted, which makes a contribution and adds value—to help develop better bills is important. I am sure we would see that each of us, in our respective areas, handles that representational aspect of his or her job.

However, it becomes a bit less acceptable, and we have to show a yellow card or even a red card like in soccer games, in the case of the finance committee chair, who is otherwise a very charming and agreeable lady, absolutely above reproach on a personal level. We differentiate between the personal life of people and their professional life. We do not doubt that she wants to serve this parliament and represent her constituents well. However, we cannot understand why she put herself in such a clear situation of influence peddling.

I want to explain in carefully weighed words. The hon. member for London West is the finance committee chairperson. Some in this House think the finance committee is the House of Commons most important committee, given the volume of bills going through it and, of course, all the arbitrations this entails. So, we are in agreement as far as the finance committee is concerned.

I know that our fellow citizens who are watching us know that our mechanism for passing legislation is as follows: one rises in the House as a minister of the crown or as a private member to introduce a bill; it is adopted, debated at second reading and deferred to a committee; then, it is reported back to the House and passed at third reading. So the work of the committee, which usually takes place between the second and third reading is a very important process, as it allows us to amend a bill and, as members, to realize our full potential in parliamentary committee.

This member of the government majority who was elected by her peers—this is a characteristic of our system: all the committee chairs come from the government majority—is married to a man who sits on the board of one of the largest brewers in Canada, and he made representations to her so that the beer industry would be excluded from this Excise Tax Act review process.

Just about anyone, any ordinary citizen from Hochelaga--Maisonneuve, Kingston and the Islands, Drummond, Lévis-et-Chutes-de-la-Chaudière or any other riding, using good common sense and implacable logic, would have realized that it would have been better for the chair of the finance committee not to get involved in any decision making on this issue, but also to publicly acknowledge that she was in a conflict of interest situation, and I would go as far as to say that she was in an influence peddling situation.

The Chair is signalling me to wrap up, but I could have gone on for another 20 or 25 minutes on this very complex issue that I am so familiar with.

I will conclude by urging the House—as I am sure all my colleagues would do—to withdraw this bill or, at least, to vote for the amendment put forward by the Bloc Quebecois, that the bill not now be read a third time but be referred back to the parliamentary committee, that the beer industry be included in the bill and that we be shielded from any influence peddling that could reflect badly on all politicians.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Mr. Speaker, first I would like to thank my colleague from Saint-Hyacinthe—Bagot for giving me the opportunity to discuss Bill C-47, particularly because we have a microbrewery in my riding, Boréale, which serves people from part of North Montreal.

Its employees and its president are doing an excellent job but, because of difficulties with the excise tax, they cannot make a breakthrough with the quality product that they offer.

When we, in the Bloc Quebecois, were told about Bill C-47, I agreed with my colleagues that we could probably support it. However, in the last months, the situation with the bill has worsened.

I remember that I had the opportunity, about a year ago, to replace my colleague from Saint-Hyacinthe—Bagot on the Standing Committee on Finance and to hear about the problems experienced by Canadian and Quebec microbrewers.

I thought that, this time, the government would have had the decency to meet their demands, so they could operate under the same conditions as microbrewers in the United States or in Europe. However, I am very disappointed that the these microbreweries have to pay a lot, 28 ¢ in Canadian currency. This is a lot for a microbrewery that has to compete with other microbreweries. For example, American microbreweries only pay 9 ¢ a litre. How can they be expected to find a place on a market they are entitled to have access to, just like aany other Canadian brewery?

I find it somewhat deplorable that Canadian microbreweries are being forced to be minor players on this market which, as a matter of principle, should be open. I think that everybody should have an opportunity. Unfortunately, these microbreweries and their employees are victims of a tax policy that, by the way, seems more and more to have been dictated by the big brewers, which are good buddies of the current government.

What I also find disappointing is all this collusion between the wealthy and the federal government. Clearly, considering the composition of the committee and the fact that its chair is the hon. member for London West, who happens to be the wife of one the executives of those big breweries, there is something fishy. People are not crazy. I think Canadians realize what is going on.

Two thousand employees depend on the microbreweries, two thousand people who, in order to survive and progress, absolutely need the help of the government. The Canadian brewers who are quite rich do not care about the survival of these microbreweries and their employees.

If these microbreweries disappears at an annual rate of 1%, large brewers earn $17 million more a year. If that money went to microbrewers, regional and local economies could continue to function. I think this situation is shameful and horrible.

There is a conflict of interests on this issue. There obviously is collusion to eliminate Canadian microbreweries. Large Canadian breweries are predators. Molson and John Labatt are predators who are actually preventing our people from making a living.

When we look at the history of Canada and even of Quebec, these are the very people who founded these huge breweries, going against historical trends in Quebec in the process. There is a very large number of microbreweries in Quebec, and I believe that there is a clear intent to take away part of the power that Quebecers have through microbreweries.

In Bill C-47, wine, spirits, tobacco and distillery products are all mentioned. We are asking that beer be included. Why should it not be included? It would be normal and logical.

It is clear that the federal government and the members of the committee are in collusion to do nothing. I understand why only 11% of Canadians trust their politicians. In a situation such as this, I think it is absolutely normal that someone who makes a decent living in microbreweries believes that they want to get rid of it. People do not trust this government nor those who are making the decisions and passing the laws. I think it is absolutely understandable.

We have to modernize our parliamentary system and our laws. ITo do that, we have to dare to condemn what is going on. This is what the Bloc Quebecois is doing, and I believe that it is standing firm in its opposition to this bill.

We say to the population of Quebec that it is inadmissible and unacceptable that the federal government is acting in collusion with large companies, which are making money at the expense of Canadians and Quebecers. I invite the people in my riding, where we have Boréale beer, to remember this at the next election.

[Bob Speller, Liberal, Haldimand—Norfolk—Brant, ON]

Mr. Speaker, I want to thank members for giving me the opportunity today to talk about this legislation and its impact on my riding of Haldimand--Norfolk--Brant.

I come from a small rural riding in southwestern Ontario, located on the north shore of Lake Erie. My riding is unique because it represents about 80% of the tobacco growers in Canada. These are farmers with small tobacco farms averaging about 100 acres each.

The 1,200 or so tobacco farmers in my area, along with rural communities such as Delhi, Tillsonburg and throughout Norfolk and Brant counties, employ some 17,000 full time and part time people. High school students, university students and others from across the country come to work and help pick tobacco on these farms. The jobs help students get through high school, university and college thereby helping them further their education. These types of jobs also help our small communities, the local general stores and hardware stores thereby producing an economy for the area.

I mention that because the legislation sets out the ways governments will deal with tobacco, particularly with regard to taxation of tobacco.

When we first came in as government, we faced the tobacco smuggling situation which was taking place across the country. It seemed that tobacco smugglers were receiving more income than the Government of Canada, and in particular the province of Ontario because of its taxation measures. We took steps at that time to ensure the tobacco smuggling operations were stopped. We did that at the request of the tobacco industry and tobacco farmers.

I represent a riding which includes the six nations reserve, the largest native reserve in the country and Mississaugas of the New Credit. People told me they did not like what the smuggling operations were doing to the community. I took their representations forward as did a number of members. The government brought in legislation to deal with that, not only in terms of taxation by dropping the tax, but also at the criminal level. We ensured that more policing was available to look after that area. It was fairly successful in dealing with the problem of smuggling, and I know people talk about it today.

Now smugglers not only smuggle from the United States, they also smuggle goods from the islands to the south of us or from a number of different parts of the world. They bring in tobacco and cigarettes which almost match the cigarettes we have in Canada. Smuggling has been a challenge over the last number of years and smugglers have become a bit better at it.

This is not only a question of whether or not the taxation level is lower in Canada or the United States. We now have to look at the whole operation of smuggling to see what is happening. The Government of Canada has given its commitment to do that. I hope the resources from government will be there to ensure the smuggling is stopped

I bring up the whole question of taxation because it has a direct impact on what the farmers in my constituency have received for their product. High levels of taxation on tobacco products obviously encourage smokers to quit. If they do not quit, at least they cut down somewhat. As a result it has a direct impact on what the companies make and therefore on what farmers earn from the companies because the companies themselves do not decide one day that they will take this hit. They look at their costs. There have been challenges within the tobacco growing areas by companies asking for less tobacco and wanting to pay less money for the tobacco they do buy.

There have been other challenges in the area. Companies have told growers that they must change their kilns and the way they grow their tobacco to reduce a substance called nitrosamine. The farmers have taken up that challenge and have tried to work with government and the companies to ensure they produce a safer product. If it is recognized that there are substances in tobacco that need to be removed, the farmers themselves have collectively agreed to work on that because they recognize the nature of the industry and the nature of the product with which they deal.

Remember that governments in the past encouraged farmers to grow tobacco. Farmers came from countries around the world such as Hungary, Poland, Germany and Belgium, set up communities within the tobacco growing regions and produced a product. They are proud of the work they have done.

Members have said that they could do something else and that maybe they should get out of tobacco and try another product. It is not that easy. They have all their capital assets to consider. Also, it is not as easy to grow something else, particularly in the type of soil that is predominant throughout that area, which is a sandy soil. In fact they have tried in the past to adjust. They have tried to move forward into other types of crops. They have been somewhat successful in a number of them, but there are not a lot of alternatives to tobacco. If they go into another commodity, it is a challenge throughout the agricultural communities in the production of other crops to get a fair return for their labour and investment.

I wanted to point out these issues because governments increase taxes. Our taxes have not gone back to the levels they were in 1994 when we first dropped the taxes because of the concern about smuggling. I would encourage the Government of Canada to look at the whole issue of offshore smuggling, not just from the United States of America, but from other islands in the Atlantic and other areas from which they are shipping these products. That directly impacts what the farmers in my area receive.

I would also encourage the government to continue to work closely with the tobacco growers themselves. They understand the nature of the industry and want to co-operate. They want to work with government to move forward and ensure that rural communities such as mine in southwestern Ontario are protected and nurtured by government as they should be.

Tobacco is still a legal product to grow and smoke in this country. Farmers in my area are saying that if Canadians were to continue to smoke they should have the choice to grow a Canadian grown tobacco.

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

Mr. Speaker, I was a bit surprised that the Liberal member who spoke before me completely sidestepped the real issue being discussed in the House today. What we have been discussing since this morning and the subject of this great controversy is the fact that breweries have been left out of the excise tax review.

Throughout his remarks, the hon. member talked about the need to review the taxes on tobacco. Everybody agrees on that. The real problem, the question that begs an answer, is why beer was left out, if not to protect the big breweries.

I know my friend opposite, the hon. member for Mississauga West, is not overly concerned by this debate, because he loves fine scotch whisky. I had the opportunity to travel with him and he invited me to sample some marvelous whiskies, especially at the bar Véronica. It was a great experience.

On a more serious note, I am sure he is also aware that the important problem we are debating is a terrible blow for many microbreweries in Ontario, western Canada and also in Quebec. The attitude of some Liberal members from Quebec is surprising. When they were elected, they said, “We will influence decisions from within the party instead of speaking from the opposition benches against the decisions the government makes all the time. We will wield influence from within, and ensure that Quebec's interests are very well looked after”.

We realize that, once again, Liberal members from Quebec are silent. They seem to be completely unaware of this controversy, they are not participating in the debate, and they will support a bill that will be terribly detrimental to microbreweries in Quebec.

I call upon the members from Quebec who have seen microbreweries in their riding driven out of business by economic problems. More microbreweries will have to close down because of economic difficulties, and this bill will help big breweries gain an advantage over the microbreweries.

Is the member for Portneuf, who claimed to be the great defender of Quebec's interests when he ran there during the election, aware of the fact that Brasserie Portneuvoise is now closed? Why does he not stand up to talk about the problems of microbreweries and defend the interests of the people of Portneuf? Instead, he is silent.

I would also call on the member for Beauce, who is now the Secretary of State for the Economic Development Agency of Canada. In his riding, Beauce-Broue has closed. There were financial problems. Why does he not stand, especially since he claims to wield influence from within, as part of the executive, in this debate that is such a critical issue for Quebec? He could also stand up for Ontario's microbreweries, because they are also experiencing difficulties, but mostly it is in Quebec. He said, “I refuse to run for the Bloc Quebecois; I will work within the Liberal Party, I will be a strong voice for Quebec”.

Yet, all of the Liberals from Quebec remain silent. Perhaps they should think about changing the party name. The Quebec wing of the Liberal Party should be called the Muffler Party, the party that muffles debate. I think this is what we will call them from now on, given that they have been so muffled.

[Some hon. members]

Oh, oh.

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

The member for Mississauga West will recall a good story I told him about mufflers.

But the fact remains. These Liberal members from Quebec have remained muffled on this critical debate. They did the same thing during the debate on the Young Offenders Act and on marine parks.

Each and every time an important debate is held in the House of Commons, what do they do? They remain silent. It is well known that the Liberal members from Quebec have always remained silent.

It must be pointed out that, in 1982, when the Constitution was patriated, there were 74 Liberal members out of 75 in Quebec and they constituted half of the Liberal caucus, which included 162 members at the time. They let the Constitution be patriated even if all the parties in the Quebec National Assembly were opposed. They still voted with the government and remained silent throughout the debate.

Even though this measure excluded one of the founding peoples, they still preferred to dance with the Queen of England in front of the Parliament Buildings when this document legally excluding Quebec from the Constitution was signed.

Today, the Liberal members are behaving in much the same way in such an important debate, which deals with the survival of microbreweries and of 2,000 jobs. No. They stay put, say nothing and claim to be representing Quebec.

In the next election, we will remind them that they have chosen to serve their party and to serve the best interests of others rather than those of their homeland, the interests of the Quebec they were so keen on defending when they were looking to be elected.

This morning, at the beginning of this debate, my colleague from Saint-Hyacinthe--Bagot clearly showed what was at stake. Until second reading, we never thought the Liberals would be so despicable as to say, in an almost hypocritical way—I will dare say it, if I may—to exclude beer from this review—

[Some hon. members]

Oh, oh.

[Louis Plamondon, Bloc, Bas-Richelieu—Nicolet—Bécancour, QC]

The word was previously allowed by the Chair, and the situation is serious enough to warrant its use.

As, I was saying, they said they would exclude beer from the debate on this long awaited review of the Excise Tax Act, that dozens of witnesses and members have examined since 1997. All of a sudden, because of mysterious interests, beer is no longer included in the excise tax review.

Thus, parliament will sanction the monopoly held by Labatt and Molson, disregarding the fact that sound competition, in this case from a small group of microbreweries sharing only 5% of the whole beer market, always serves the best public interests. The government would rather crush them like a fly than help them breathe, as it would any for any other company.

Is it normal that a company as big as Labatt can buy a microbrewery in the U.S. or in Europe and pay 9 ¢ a litre in taxes, while a microbrewery in Quebec or in the rest of Canada has to pay more than 28 ¢ a litre in taxes?

The large brewery takes over the supermarkets' shelves. It stacks them with its microbrewery's beer on which it pays 9¢ per litre, while the Quebec or Canadian microbrewery puts in its beer on which it pays a tax of 28¢ per litre, so that the tax it pays the government is higher than the profit that is left to expand a little, to advertise a little and to stand out in the market.

This situation is intolerable. The Bloc Quebecois is vehemently opposed to it and its critic, the hon. member for Saint-Hyacinthe—Bagot, said it well this morning: we will fight this bill. We were raise awareness in all Quebec ridings. We will condemn all Liberal members from Quebec who dared to remain silent, and it seems they will remain silent until the end.

I ask them one last time: have some dignity, some pride, some respect for microbrewery workers. Stand up and tell your government that it is unacceptable to give greater importance to the interests of the husband of the committee chair and large breweries.

This is an unacceptable conflict of interest and it compromises the very credibility of the democratic action that we must take here, in the House of Commons, which is to defend the interests of our fellow citizens, without any conflict of interest.

[Antoine Dubé, Bloc, Lévis-Et-Chutes-De-La-Chaudière, QC]

Mr. Speaker, it is my turn to speak in this debate. When we ran in the last three elections as Bloc Quebecois MPs, we made a commitment to defend the interests of Quebec. The interests of Quebec sometimes coincide with those of Canada. This is the case for the microbreweries, because there are some outside Quebec. My concern today is to defend the interests of Quebec's microbreweries.

When we travel to other countries, we always want to try products that are typical of the country we are visiting. We do not necessarily want to have things we could get here. The same thing goes, I imagine, for people from elsewhere when they come to a province, to Quebec, or a specific region of Quebec. They want to taste something typical.

I remember my days as executive assistant to Jean Garon, Minister of Agriculture at the time. He was interested in regional cuisine. For me, beer is sort of linked to regional cuisine, because there are beers that are typical of a region as well. People want to experience the differences, want to see a variety of products, want to choose and encourage local products, first of all for their own pleasure but also to encourage the microbreweries.

As Quebecers, whether we are from one region or another, when we tour various regions, as many of my colleagues do, we always try to see what is specific to a given region in Quebec.

Five years ago, there were 21 microbreweries. We can say that in nearly every region in Quebec except maybe downtown Montreal and downtown Quebec City, there was a microbrewery, a beer produced by a microbrewer we could drink and appreciate.

At the same time, there is no need to go somewhere else. You can consume a product without having to go somewhere, and appreciate its regional flavour and the flavour of the region.

This industry could have flourished, but in view of the current situation made to stay by this bill overlooking, neglecting this sector, even those who felt like starting a microbrewery are giving up today. They are giving up because of the deplorable action of this government who is ignoring this sector.

I want to congratulate and thank the member for Saint-Hyacinthe—Bagot and also the member for Drummond who did such a fantastic job in the Standing Committee on Finance and the caucus over the past few weeks, especially after what happened recently at the Standing Committee on Finance. They brought the matter to our attention because they followed the work of this committee closely, in this instance we could say the lack of work of certain members of the committee since the chair of the committee decided unilaterally that it would not be dealt with.

I want to congratulate both my colleagues because they really brought the matter to the attention of the Bloc Quebecois caucus as a whole so that we could study it. We saw the impact it could have. Since then, we all have heard from people who told us about their concerns and the consequences this could have.

There is something I would like to stress in particular, namely parliamentary democracy. Last week, I heard my colleagues ask questions in the House nearly on a daily basis.

I took the constant repetitions as purely insulting. Some said: “Well, there is no problem, there is no conflict of interest, there is not even an apparent conflict of interest given that neither microbreweries, breweries, or beer will be affected”. What a misleading way to answer, when we asked for and are still asking for beer to be included. The answer is still: “No, no, there is no conflict of interest. It is not in the bill”.

Well, I heard my colleagues, the hon. members for Saint-Hyacinthe--Bagot and for Drummond, at second reading. They were both in agreement. The Bloc Quebecois agreed to a modernized Excise Tax Act. This was discussed a long time ago. We then said to ourselves: “At last, here is positive legislation. Something will be done”. The bill was agreed to in principle at second reading. But, through some twisted procedure at committee, we learned that beer was excluded.

There is another aspect. Microbreweries in Canada and in Quebec—because they are both in the same situation—will not be treated the same as foreign microbreweries which have been bought up by big breweries in Canada and Quebec. We all want what is fair. This is patently unfair. Elsewhere in the world—we could name various countries—, in the United States for instance, the tax is 9¢ a hectolitre instead of 28¢.

Under the present rules, the United States, as well as WTO, recognize that an exception can be made for microbreweries. That is how it works in Europe. However, in the case of our neighbour to the south, with which we do the most trade, we realize that they are finding a way around this and we see microbreweries shutting down every month, so that now only about a dozen are still operating, according the hon. members for Saint-Hyacinthe--Bagot and for Drummond.

We are today sounding the alarm in order to save those microbreweries. Members of the Bloc Quebecois are therefore expressing their solidarity with those owners, the people working at that level. We do not necessarily have something against big breweries, but we must speak up against the unfair treatment given to microbreweries. We are standing up today in solidarity with the nine or ten remaining microbreweries, even if there is no such brewery in my immediate area, Chaudière-Appalaches.

There was one in Beauce, but it is now closed. We have not heard the member for Beauce on that subject in the House. Like my colleague, the member for Bas-Richelieu—Nicolet—Bécancour, I am puzzled by the silence of the Quebec Liberal members who, normally, should also defend Quebec's interests, although in this particular instance, they have not uttered a single word.

However, members from other provinces of Canada are also not defending their region, are not speaking up in the House. I have not heard a single one today. I am not talking about those who are absent. I am talking about those who made statements.

Right now, only Bloc Quebecois members are defending the interests of microbreweries. It clearly shows that the Bloc Quebecois is committed to the interests of Quebec.

Some people criticize us because we talk about sovereignty. We did not talk about sovereignty today. We talked about important Quebec interests that could be settled through federal legislation. Sadly, we note that Liberal members and, up to a point, the other parties who should follow on our example and defend the interests of small businesses like microbreweries, are not doing that. It is sad.

[Some hon. members]

It is because they do not like beer.

[Antoine Dubé, Bloc, Lévis-Et-Chutes-De-La-Chaudière, QC]

In closing, it does not matter if you like beer or not. The microbrewery industry is an integral part of the Quebec, Canadian and regional culture in other provinces and it absolutely must be protected. That is what I wanted to do, like others.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, first I want to congratulate my colleague from Saint-Hyacinthe—Bagot, as well as my colleague from Drummond, a riding that is very close to mine.

Today's debate is intoxicating in many respects. The microbrewery industry is quite important for Quebec and there is fair number of jobs at stake. Regarding Bill C-47 and the Excise Tax Act, the purpose of that act is to enable a government to levy taxes and to collect rather large sums of money. It is also used to manage and give direction to our economy.

In this case, we can see that it is the first element that guided Liberal members on the finance committee, including the chair. First, when we talk about modernizing the Excise Tax Act, which covers a multitude of products, we want to see to it that the economy and the industries related to these various products are as thriving as can be.

In this case, when 28¢ a litre of beer are charged to microbreweries, and we know what their situation is, while American microbrewery beers are taxed only 9¢ a litre, there are questions to be asked since we know that Labatt and Molson, the big Canadian breweries, basically control the distribution of imported beers.

When we examine the situation a bit more closely, we find that there is some collusion where, it must be said, the two main breweries control more than 90% of the beer market, and that includes of course imported beers that are taxed only 9¢ a litre. We realize at this point that there is a big problem in that regard. However, the government does not seem interested in helping microbreweries save their 2,000 jobs.

People must fight at every level. As for distribution, products must be of good quality. More and more, we find that microbreweries operating in Quebec and Canada have developed a quality product comparable to the best products in the world. Indeed, our microbreweries win more and more international prizes.

We find that the government is not there to support the microbrewery industry's development but rather to support mainly two big companies, Labatt and Molson. We cannot help thinking that there appears to be a conflict of interest here. It is crystal clear. It is not surprising that the ratings given by Quebecers and Canadians in public opinion polls to people in power for credibility and honesty are so low. When we see situations such as this, we cannot help but think like that.

Therefore big companies like Labatt and Molson are given preference. Globally, the objective of modernizing the excise tax act has not been reached. In fact, we are going in the opposite direction.

A number of issues could be mentioned, but one is of particular interest. What do Liberal members do when they have microbreweries in their ridings?

I have a microbrewery in my riding, in Lennoxville to be more precise. It is a small brewery called the Lion d'Or. It does not produce 300,000 hectolitres a year; it is really quite small, but it is extremely important and it is located in Lennoxville. Besides that microbrewery, I also have the Liberal member for Compton--Stanstead in my riding. So, he is one of my fellow citizens.

[An hon. member]

He is the former mayor.

[Serge Cardin, Bloc, Sherbrooke, QC]

He is the former mayor and also a former Conservative member. He is known for changing his mind quite often.

When he was mayor, he protected the interests of that microbrewery located in his community. He worked hard to protect it, to get the licences it needed, to ensure it could expand, because the microbrewery was located right next to his pub. So distribution was not a problem. The beer was sent directly to the pub next door.

The Liberal member for Compton—Stanstead is not rising to protect the interests of a microbrewery located in his riding. What is he doing? I think he is a fellow citizen of mine. If he had problems, I would probably come to his aid. Yet, if the microbrewery located in his riding has problems, he does not care. He relies on the Bloc Quebecois member for the riding of Sherbrooke to protect the interests of the microbrewery that is located in his town, even though he is the member representing that riding.

So, this is a person who can change his mind. We saw it, he changes his mind about parties and about values. He will probably also change his mind about the beer that he drinks and switch from the beer produced by that microbrewery to beer produced by Labatt or Molson probably.

I believe it is essential that Liberal members take a stand. A number of them have microbreweries in their riding. They must take a stand, because this is the thing to do. Of course, the Excise Act brings in large amounts of money for the government, but the primary objective should be to help the industry. We must help industry develop. It should be the government's duty to do so, instead of working against it to ensure that only two large breweries reap all the benefits.

The beer produced by microbreweries is a quality product in my opinion. The people who work in the sector are competitive and they work hard. I will repeat what I mentioned earlier, when I said that distribution is very difficult. The microbreweries have to compete with the big breweries, which import beer with very low excise taxes. So it is not an even playing field.

One of the objectives of the Excise Tax Act is to manage industry, whether it be microbreweries or another sector, such as wineries. However, I think it is important that the government review its position and ensure that Bill C-47 includes beer and microbreweries.

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, it is my turn to speak to Bill C-47, which is a missed opportunity for the government to introduce measures to help microbreweries in this bill.

Like several of my colleagues, there is in my region a microbrewery that sells a commercial beer under the appellation 8. The administrative region of Abitibi--Témiscamingue being region 08, that is the name the investors gave their beer.

These investors came from Belgium are now well established in our community and in our region and they chose—which is not always easy—to invest in a product that appeared to be very promising, with an image of the region that could perhaps be sold everywhere in Quebec, of course, but also outside Quebec, and which would at the same time be an instrument of commercial development for them and of regional development for us, to promote our region.

However, there are a lot of barriers to lower to enter on this market. Obviously, everybody knows the power of the big brewers; I am speak only of their competitiveness for the time being. I am not speaking of their lobbying power; I will come back to that later.

It is therefore not easy because of course when only small quantities are produced, it is a real challenge to keep prices competitive when distributing a product. Businesses have to find niches in various ways. It is obvious that the distribution costs are much higher when small quantities are produced and the product is not sold in large stores.

This also raised the whole issue of the capacity to produce small quantities, at the beginning, while maintaining the quality of the product, because consumers demand quality, and rightly so. This is a real challenge. These people have successfully dealt with it for a long time, but they have had problems. There were some temporary work stoppages, during which they had to close down.

This is why every little bit counts. In this sense, I remember that a few years ago already, other microbreweries that had united had come here to Ottawa. I met them with my colleague from Saint-Hyacinthe--Bagot. There is nothing new here. These concerns have been known for a long time. We all know that the taxation system penalizes them in many ways and that it impedes their development.

In a very simple way, it would not have been complicated to include in a bill like this one some changes to the tax system that could have given a bit of a boost to these microbreweries. I have mentioned the been known as 8 in my area, but there are others, in some other very well known areas, that have succeeded in breaking into the market and filling a need among customers interested in this type of beer. We have the choice between helping our own businesses or letting imported beers take over the whole market in that niche. For some other countries have chosen to support their microbreweries.

Earlier, I was reading in one of my colleagues' speech that in the United States, for example, the size of a microbrewery's production is defined as one million hectolitres. In the U.S., under the tax system microbreweries are subjected to, the sale of 24 bottles yields $1.12 in taxes whereas here the tax amounts to $4.09 and even more when the beer is sold in a licensed beverage establishment such as a bar; in this case, the tax can amount to $6.12.

As we can see, the tax ratio imposed on our products is four to one and even six to one, compared with what is done in the U.S. which has chosen to support this industry.

There are plenty of interesting statistics in the previous speech. It was clearly demonstrated, however, that our taxation system does not suit the present situation.

Yet, it appears that, on the other side of the House there is considerable silence. I am pretty surprised today to see the hon. member for Abitibi--Baie-James--Nunavuk silent. Surprised because the brewery I referred to, which produces La 8 beer, is in that riding, not in the riding of Témiscamingue. It is, nevertheless, a pleasure for me to stand up for the entire region. The brewery is, to be specific, located in Amos.

I would have liked to hear from the hon. member, or at least for him to show some interest at other stages, but I never heard a peep from him, either in the region or here in the House of Commons, or in committee, to bring forth the point of view of the people who work there and would appreciate some support.

Where are the other members from Quebec? I remember a few years back—at political conventions, one can sit in as an observer—I went with one of my Bloc Quebecois colleagues to a convention of the Liberal Party of Canada. In an effort to promote the products, the delegation had organized a tasting of Quebec beers from microbreweries. That is all very fine and well, but when they are here in parliament, where they have been sent by their constituents and where they have the power to do something, where are they all of a sudden? There is more involved than just organizing tasting sessions. They must also support these people if they want to be able to organize more such sessions in the future, because the product still exists and will have been able to develop. It is all very fine and well to make nice gestures, but they now have an opportunity to do something tangible.

It is too easy to say “No, that was not the initial purpose of Bill C-47”. If it was not that, what else is there on the table? Why is there no other government initiative on the table? The Minister of Finance tells us that they are taking this seriously. He is taking it so seriously that no other legislative measure has been indicated. He did not even indicate anywhere that he was prepared to hold a debate.

[An hon. member]

It has been a year and a half since he last met with them.

[Pierre Brien, Bloc, Témiscamingue, QC]

In addition, I am told that for a year and a half, the finance minister has refused to even meet with them. Clearly the big breweries seem to be worried by the arrival of new players in the market. However, we should not be fooled, essentially Molson and Labatt are the ones holding huge shares of the market.

Our role is not to represent only these major businesses who have their own interests. I can understand why they would be lobbying. However, the government has to stand up to them. Small businesses are trying to develop and could become extremely interesting players. They could create jobs.

In the past few years, big breweries have experienced some problems. Time and again in Montreal, there were closures and job cuts. This was to be expected with more foreign competition. However while local players are struggling to develop, the government does not help them, claiming it has to support the major players that are left. This makes no sense.

It should send a clear message. At the very least, the government could have acknowledged that we are right, and promised a new bill before the summer recess. We could co-operate, and the bill could go through very quickly. There is no problem if the government wants to rapidly pass a bill to help microbreweries. But that was not to be. They will pass Bill C-47, and that will be the end of it.

In committee, when the Bloc raised the issue, its amendments were ruled out of order. This raises major questions about the ability of the committee to work properly. Moreover, we have an extremely important ethical problem here because the chair of the committee is the spouse of a man who is involved in lobbying for Labatt. It is beyond me.

The chair of the committee is hiding behind the fact that she had an opinion telling her that everything was fine, but she kept it to herself during all the committee proceedings. She never told the committee from the outset that if the microbreweries were discussed, she might be in a conflict of interest. Had she done so, the committee could have decided what was to be done.

What kind of message does this send to people watching this? They say to themselves “Things were rigged from the start. The large breweries had lobbied. They had done whatever was necessary to ensure the debate would not go any further, that the tax for microbreweries would not be included in the bill and that nobody could add it afterwards”.

Now the end of the session is near. We will soon be leaving for the summer and next fall we will work on something else. However, these people from the microbrewery industry need support right now.

At one point, when they came here a few years ago, I was under the impression that the government would automatically listen. What was being asked was only common sense compared to what was being done elsewhere. Now, a few years later, we have not moved forward a single bit.

Hopefully the members on the other side will show some sense in the last hours of this debate and bring forward amendments to this bill. It is not difficult. We only need to pass an amendment or table a new bill that says, “Here, we will amend the regime”. We would be pleased to co-operate on such an initiative. In any event, the legislative agenda is not exactly overloaded. We have the capacity to do it. So let us do it and the committee will have all the time to perform its work correctly if it has to hold a few hearings on the subject. Ultimately, I think we could even dispense with that stage.

We now have to decide if we are going to help the microbreweries or not and, judging by their silence, I think the Liberals have already made up their minds. They will favour the large breweries over the microbreweries. We will not, however, be able to support the government in this instance.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

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

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

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

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.