House of Commons Hansard #179 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was microbreweries.
Geoff Regan LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, pursuant to Standing Order 36(8) I have the honour to table, in both official languages, the government's response to two petitions.
John Williams Canadian Alliance St. Albert, AB
Mr. Speaker, I have the honour to present, in both official languages, the 19th report of the Standing Committee on Public Accounts with regard to vote 20 under finance in the main estimates for the fiscal year ending March 31, 2003.
Brian Pallister Canadian Alliance Portage—Lisgar, MB
Mr. Speaker, I have the honour this morning to present a petition from the riding of Portage--Lisgar signed by 154 of the finest Canadians you will ever meet.
The petitioners express concern about Bill C-15B, the cruelty to animals legislation. They have concerns that the bill goes far beyond the government's stated intentions and that it may endanger farmers, ranchers and others who use animals for legitimate and lawful purposes.
The petitioners request that parliament amend the bill in support of fair and co-operative legislation that will not punish those who use livestock in sustaining the Canadian economy.
Leon Benoit Canadian Alliance Lakeland, AB
Mr. Speaker, this is the fifth petition from constituents and others regarding the death of Dana Fair who was beaten to death by three men with wooden boards September 1, 2001, in Lloydminster, Saskatchewan.
There were many eyewitnesses to Dana's death. Three men, Raymond Cannepotatoe, Michael Harper and Cody Littlewolf, have been charged with second degree murder. Cannepotatoe has been released on $2,000 bail. He had offended in a serious way before.
The petitioners are asking that no bail be granted for all accused murderers caught in the act of committing their crimes and that only maximum sentences be given to those convicted.
John M. Cummins Canadian Alliance Delta—South Richmond, BC
Mr. Speaker, it is my pleasure this morning to present a petition on behalf of folks primarily from Nelson and Vancouver, British Columbia.
The petitioners note that the federal fisheries minister has a constitutional obligation to protect wild fish in their habitat and that the auditor general has issued a report stating that the minister is not fulfilling his obligation. They call upon parliament to request that the minister fulfill his obligation to protect wild fish in their habitat.
Geoff Regan LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, the following questions will be answered today: Nos. 125, 126, 127 and 130.
Ted White Canadian Alliance North Vancouver, BC
With respect to the seizure of registered retirement savings plans, RRSP, by Canada Customs and Revenue Agency as part of collections activity, could the government itemize, by province, for the years 1990-91 through 2000-01: ( a ) the number of RRSPs seized; ( b ) the dollar value of the RRSPs seized; ( c ) the amounts of additional taxes resulting from the collapse of RRSPs in excess of the amount required to satisfy collections requirements, and ( d ) the date when the first seizure of an RRSP for collections purposes took place?
Elinor Caplan LiberalMinister of National Revenue
In general, on the question of seizing registered retirement savings plans, RRSPs, the policy of the Canada Customs Revenue Agency, CCRA, is that RRSPs are a collection avenue of last resort, in that actions to attempt to seize funds in a RRSP would normally only be taken when other avenues of collection have been exhausted.
The CCRA does not keep any statistics with respect to the collection activities relating to the seizing of RRSPs and is unable to provide a response to questions (a), (b), (c). As information specifically relating to RRSPs has not been kept in any form, unfortunately the CCRA is also unable to provide a response to question (d).
However, with respect to question (c), on the amount of additional taxes resulting from the collapse of RRSPs in excess of the amount required to satisfy the crown’s debt, the following is offered:
The policy of the CCRA in this regard is to only attach to amounts that are equal to those that are due and payable. Unfortunately, on occasion this results in the collapse of a plan containing funds in excess of the amount owed to the crown. This, however, is as a result of the conditions contained in the covering plan and is not caused by any inappropriate actions taken by the CCRA.
In such cases, the alternative would be for the CCRA to forgo pursuing collection of the debt, which is contrary to its mandate as well as its fiduciary duty. In those situations where such action is deemed to be necessary, and which regrettably results in the collapse of a plan containing funds in excess of the amount required to satisfy the debt, there will be tax consequences on the whole amount of the funds contained in the collapsed plan.
When collapsing RRSPs, the financial institutions are required to withhold tax based on the dollar value of the RRSP that is being collapsed. Should there be any further tax consequences as a result of such collapse, there are numerous alternatives available to the tax debtor, some of which would include: holding any extra funds resulting from the collapse in order to pay off the anticipated tax debt; using those extra funds to purchase other RRSPs in order to reduce any future tax consequences; making an arrangement with the CCRA to pay installments to cover the anticipated debt; and, making arrangements with the CCRA to pay off the debt, once it has been established.
Judy Wasylycia-Leis NDP Winnipeg North Centre, MB
With regard to the reporting of adverse reactions to drugs in Canada, and for each drug that an adverse reaction has been reported, can the government indicate: ( a ) the date of market release in Canada; ( b ) the date of each subsequent adverse reaction report received; and ( c ) the type and date of action taken in response?
Anne McLellan LiberalMinister of Health
Since the beginning of the Canadian adverse drug reaction monitoring program, CADRMP, in 1965, 155,000 domestic suspected adverse reaction reports have been received and entered into one of several databases used over this period of time.
There are more than 20,000 drug products approved and marketed in Canada. Product and company information, including the date of market notification, for these drugs is contained in Health Canada’s drug product database. Some of the information in the database is available through the Health Canada website.
The date of receipt of adverse reaction reports is included in the adverse reaction database maintained by Health Canada. Due to the volume of suspected adverse reaction and medication incident reports, the database does not link to actions in response to each report of suspected reaction. Moreover, actions in response to suspected adverse reaction reports usually follow detection and confirmation of a new signal or trend concerning a safety issue associated with a marketed drug or other health product as discovered by creating a series of case reports. In other words, a market intervention or action is taken once a sufficient level of scientific evidence from case reports of suspected adverse reactions or medication incidents has been received.
Adverse reaction reports to marketed health products are considered to be suspicious, as a definite causal association often cannot be determined. In some cases the reported clinical data may be incomplete, or the given reaction may be due to the underlying disease or to another coincidental factor. Signals may be identified through the systematic review of adverse reaction reports and any other additional information on product safety.
Potential signals need expert evaluation before more actions are undertaken. Actions must be based on scientific analysis of case series and this implies an evaluation of the signal and the appropriate benefit-risk review of the information available. Actions may vary depending on the nature, the seriousness and the frequency of the reaction, as well as on the intended use of the health product, the benefit obtained from its use versus the risks and the availability of alternative therapies.
Information concerning regulatory actions taken in response to submitted suspected adverse reactions and medication incidents is available on the Health Canada website. Health Canada posts advisories, Dear Health Care Professional letters, summary fact sheets and “It’s Your Health” issues on the Health Canada website. Health care professionals and consumers can subscribe to the Health_Prod_ Info electronic mailing list to receive timely safety information and notification of regulatory actions.
Since 1991, the Canadian adverse reaction newsletter has also summarized case reports of suspected adverse reactions and medication incidents and provides additional information regarding regulatory actions. For example, in the period from June 2001 to February 2002, 32 advisories for health professionals and consumers concerning drugs and health products have been posted on the Health Canada website.
Judy Wasylycia-Leis NDP Winnipeg North Centre, MB
With regard to the first ministers’ meeting in September 2000 and the federal government’s funding commitments to the provincial and territorial governments: ( a ) can the government provide a full accounting of the spending to date in each of the following areas, namely (i) transfers to the provinces and territories for new medical equipment, (ii) the acquisition of necessary diagnostic and treatment equipment, (iii) the renewed Health Transition Fund to support innovation and reform in primary care, (iv) the investment in an independent corporation mandated to accelerate the development and adoption of modern systems of information technology; and ( b ) can the government indicate, for items (i) and (ii), what is the final disposition of funds by the recipient government to the full extent to which the federal government is aware?
Geoff Regan LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
I am informed by the Departments of Finance and Health as follows:
(a)(i) To support the September 2000 first ministers’ agreements on health renewal and early childhood development the Government of Canada provided $23.4 billion in transfers and targeted funding. The Canada health and social transfer, CHST, received an additional $21.1 billion over five years, including $2.2 billion for early childhood development initiatives.
The Government of Canada also provided $2.3 billion in targeted support: $1 billion to provinces and territories for the purchase of medical equipment, $800 million for primary health care and $500 million for information and communications technologies. CHST funding is also available to assist provinces in purchasing medical equipment and investing in new technologies as priorities outlined in the agreement on health renewal.
The fund has been available to provinces and territories since October 23, 2000, through a third party trust arrangement. All jurisdictions have now received their full allocation of the fund which expired on March 31, 2002.
(ii) In September 2000, the Government of Canada established a $1 billion medical equipment fund to assist provinces and territories to immediately purchase and install medical equipment according to the priorities of their own health systems. Such equipment could include MRIs, CT scanners, dialysis machines, and other needed equipment, such as lifting devices, to improve the overall quality of health care and the working conditions for health care personnel.
(iii) In response the to first ministers’ agreement to accelerate primary health care renewal, the Government of Canada announced the $800 million primary health care transition fund to bring about systemic, long-term reform. It will support provinces and territories in their efforts, over the next four years, to improve the delivery of primary health care by supporting transitional costs of large scale, primary health care initiatives.
The fund has several envelopes: 70% of the funding (or $560 million) is be allocated to provinces and territories on a per capita basis to assist them in reforming their primary health care systems; 30% of the funding (or $240 million) will support: national initiatives which support renewal efforts; initiatives to advance primary health care reform for aboriginal communities; initiatives to advance primary health care reform for official language minority communities; and multi-jurisdictional initiatives in which two or more provinces and/or territories are collaborating to advance primary health care renewal.
Primary health care renewal is a major endeavour and planning for renewal takes time. Requests for funds under the PHCTF will need to be based on jurisdictions’ long term renewal plans. Accordingly, the upfront planning and preparations are important. It took several months of discussion before F/P/T governments agreed on parameters of the PHCTF that provided sufficient accountability while still offering sufficient flexibility for provincial and territorial governments to manage the system.
Provincial and territorial governments are at various stages in the planning of primary health care renewal. Many of the provinces and territories have applied for proposal development funding under the PHCTF. Full provincial and territorial proposals are expected to be submitted throughout the spring and summer of 2002. Although a final accounting of expenditures for the 2001-02 fiscal year has not yet been made, total spending is expected to be about $1.3 million under the provincial/territorial per capita component of the PHCTF.
(iv) The Government of Canada provided $500 million to an independent corporation, Canada Health Infoway Inc., Infoway, in March 2001 following the signing of a memorandum of understanding, MOU, between Infoway and the Minister of Health. The mandate of Infoway is to accelerate the development and adoption of modern systems of health information and communications technologies and to define and promote standards governing shared data to ensure the compatibility of health information networks. Public annual financial statements should be available in June 2002. Infoway’s website at www.canadahealthinfoway.ca can be referred to for further information on the corporation and its activities.
(b) CHST cash payments are $3.6 billion higher in 2002-03 than in 2000-01. CHST cash is now at an all time high of $19.1 billion this year. Together with the growing tax transfer component, CHST entitlements will reach $35.6 billion this year. Provinces can allocate CHST funding among health, post-secondary education, social assistance programs, including early childhood development, according to their priorities.
The medical equipment trust expired on March 31, 2002, and any funds remaining in the trust were dispersed accordingly to provinces and territories. Under the September 2000 agreements, premiers agreed to report to their respective populations rather than the federal government on the use of such funds. The Minister of Health is working with her provincial and territorial colleagues.
Gerald Keddy Progressive Conservative South Shore, NS
Can the Departments of Public Works, Fisheries and Oceans, and Transport, or any other department, provide the amount of revenue the federal government receives from leases of wharves and related infrastructure to ferry service operators, including: ( a ) how the amount compares to amounts received in 2000, 1999, and 1998; ( b ) the amount of this revenue that comes from leases in Nova Scotia; and ( c ) the formulas on which these leases are based?
Geoff Regan LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
I am informed as follows: Fisheries and Oceans, DFO: DFO does not receive any revenue from leases of infrastructure to ferry service operators.
Although there are ferry services operating at harbours included in Schedule I of the fishing and recreational harbours regulations, all of these harbours are leased to and operated by harbour authorities. Any revenues generated through operations of these harbours are therefore retained by the harbour authorities to defray the costs of harbour operation and minor repairs.
Public Works and Government Services Canada, PWGSC: PWGSC is the custodian of 66 smaller wharves distributed throughout the country but does not lease wharves and related infrastructure to ferry service operators and, consequently, we do not have any revenues related to such actions.
Transport Canada: Transport Canada leases three ferry terminals to Bay Ferries Ltd. for the provision of ferry services. These ferry terminals are located at Yarmouth, Nova Scotia, Digby, Nova Scotia, and Saint John, New Brunswick. The federal government has leased these facilities for $500 per annum since 1997, when the sites were leased to Bay Ferries Ltd. as part of the commercialization program carried out under the Canada Marine Act.
(a) 2001 = $1,500
2000 = $1,500
1999 = $1,500
1998 = $1,500
(b) Revenue from leases for Nova Scotia sites is $1,000.
(c) Nominal amount as established by commercialization process.
Geoff Regan Liberal Halifax West, NS
Mr. Speaker, I ask that the remaining questions be allowed to stand.
Question No. 130Routine Proceedings
The Speaker
The questions enumerated by the hon. parliamentary secretary have been answered. Is it agreed that the remaining questions be allowed to stand?
The House resumed from April 29 consideration of the motion that Bill C-47, An Act respecting the taxation of spirits, wine and tobacco and the treatment of ship's stores, be read the third time and agreed to.
Robert Lanctôt Bloc Châteauguay, QC
Mr. Speaker, I thank you for giving me the opportunity to speak to Bill C-47.
On the face of it, the Bloc Quebecois believes that the provisions in this bill were really acceptable and even necessary. We know the government is looking at changing the Excise Act and the Excise Tax Act. I believe the time had finally come to look at this change.
There is something rather incongruous however. The government claims that this bill is replacing almost entirely a good part of the Excise Act and the Excise Tax Act. The strange thing is that all the elements already provided for in these acts are in Bill C-47, except for a very important one, that is beer.
The problem is with microbreweries. In this case, the story began during a meeting of the Standing Committee on Finance, when it was asked, following requests from the Canadian council, that a tax reduction be included, which I will explain later.
Because of this nonsense, microbreweries here in Canada are currently paying 28 cents per litre of beer in tax, while in a country such as the United States and even in Europe, the microbrewery industry is protected with a tax of 9 cents a liter.
So it is very strange to see how the government could let this bill be introduced, which says nothing about the beer produced by microbreweries. We got to the Standing Committee on Finance and, through my colleague from Saint-Hyacinthe—Bagot, we asked that this bill be complemented by an amendment to reduce the excise tax, particularly for microbreweries.
Yesterday, government members talked about various conflict of interest problems that could arise and they said that there could be no conflict of interest. Further on, I will refer to what happened with the chair of the Standing Committee on Finance, the member for London West. For the government, there is no conflict of interest because beer and microbreweries are not mentioned anywhere in the bill. There is absolutely no mention of beer whatsoever. Thus the amendment that my colleague from Saint-Hyacinthe--Bagot wanted to submit was rejected by the chair.
Clause 2 of the bill, which takes up several provisions of the Excise Act and Excise Tax Act, includes a definition of beer. However, there is no provision in the bill about beer. Is it an involuntary omission or worse, should the bill have addressed the issue of beer?
Under pressure from major breweries, they perhaps forgot to remove the definition of beer. Why would the legislator talk about something if he does not intend to go any further? Why include a definition of beer if no provision of the bill deals with beer?
More incredible still is the fact that my colleague and the Canadian Council of Regional Brewers are saying that the time has come to act. People have been asking the government to change the Excise Act and Excise Tax Act since 1997. We have been asking for this change for five years and, yesterday, we were told that results, more figures were needed before a decision could be made whether to go ahead or not. It is just unbelievable.
Five years ago, in 1997, there were 89 microbreweries in Canada. Over the last five years, 38 microbreweries have had to close down and many did so because of that huge excise tax. I mentioned 28¢ a litre. Foreign competitors, from the United States and Europe, pay 9¢ a litre, as I said earlier.
At last, this government has the opportunity to move instead of saying: “Yes we will review the issue; we will look at it; we are waiting for figures”. The government has been looking at those figures since 1997! Microbreweries are asking the government to include an amendment so that the Standing Committee on Finance can look at how to lower those taxes. As chance would have it we are not dealing with it. It is easy to understand now why the committee, chaired by the hon. member for London West, is not dealing with it.
That member was been appointed as chair of that committee a short time ago and we wonder why considering what happened. Her spouse, Mr. Barnes, is a member of the Brewers Association of Canada taxation committee. He is also a director of a multinational or a large national brewery.
Those large breweries say that excise taxes have to be lowered in general, but all the more so for microbreweries. However, I find it strange that the committee chair got a letter from the Brewers Association of Canada saying they do not agree, when we know that the chair's spouse not only sits on its taxation committee but is also its chairman.
The Brewers Association of Canada, of which the committee chair's spouse is a member, says it is in favour of a tax reduction, even more so in the case of microbreweries, but sends the committee chair a letter asking that beer not be included in the bill and tax reductions—indirectly—not be included either in the bill. Yet the association says it is in favour of that reduction. It is important to act immediately, but this association is now telling us not to do it.
Between you and me, when the president received such a letter, knowing that her husband is the director of a large national brewery, that he chairs the taxation committee for the Brewers Association of Canada and that she is the president of a House committee, it seems to me she should have said, and should still say, “I think there is an apparent conflict of interest, if not an actual one. I think it would be a good thing to tell each and every member of the committee that I will not be participating in any discussions on those amendments because, not only is my husband, John Barnes, a member of the association, but he is the chair of the taxation committee of that association”.
I think she should at least have told the members of the committee about that situation, but she did not. She only read the letter and played the game of the big Canadian breweries to harm the microbreweries.
Motion No. 2 gives excessive authority to a committee president. We voted against this motion at the beginning of the 37th parliament. It is already being misused, as we are told that the rules on conflicts of interests apply to ministers, to the Prime Minister, to secretaries of state and parliamentary secretaries, but not to a committee president.
Just imagine, the conflict of interest rules not applying to a committee president, and her actually having more authority than a minister. A minister would not even have the power to do what she did. She took upon herself to refuse to accept the amendments. These were not only amendments from the Bloc Quebecois. We are used to our amendments being constantly rejected at committee.
They are always rejected, and we get calls at our offices from people who say they are Liberals. Here is an example. With respect to Bill C-15B, people who support the bill concerning cruelty to animals and the protection of the latter call me at my office. They are aware of the amendments that were presented. I now send my speeches to all the people who write to me. They can then read the amendments proposed by the Bloc. The people who are in favour of the protection of animals tell us that the right position was to accept the amendments to Bill C-15B proposed by the Bloc. They even say “We will change party because of that”. These are people in the animal industry.
I simply wish to send the following message: through its committees, the government rejects all amendments, not only those from the Bloc Quebecois, but also those from any opposition party. It rejects those from the Bloc in particular because they come from Quebecers and are put forward by the Bloc Quebecois. What the Liberals are doing is incredible.
But there is worse still. Coming back to Bill C-47, how can the members of this House accept such important powers that allow a person to reject amendments coming not just from a political party, but from people affected by these rules, the existing taxation rules?
I will give figures. I said earlier that in 1997, when we started to examine this aspect of the taxation and excise duties, there were 89 microbreweries. Five years later, 38 of these have closed down. There are only 46 left. This is serious. Nearly 40% of the microbreweries have closed down. This has affected the diversity, the people and the jobs that are created in the regions.
The big breweries want to see the microbreweries disappear. There are reasons for that. In 1997, the microbreweries had 5.5% of the market. Today, they have only 4% of the Canadian market. This is 1.5% less. Let us look at what this 1% drop in net profits for microbreweries—a drop caused by shutdowns and by the inability to sell the beer—means for the big breweries. It is a net amount. That is a lot of money for the shareholders.
As we know, one of the big breweries, Labatt, just happens to be established in the finance minister's riding of Lasalle-Émard. It is a bit odd, but this is what is happening once again. This was better, because the big breweries make donations to the Liberal Party. The big breweries, whether Molson or Labatt, give a lot of money to the Liberal Party.
We know why. It is even part of the riding of the Minister of Finance. It is bizarre that the Brewers Association of Canada has written us to say: “Yes, we want a tax cut, but we do not want the amendment to be presented. We do not want any reference to beer, do not want any tax reduction on beer”. Nothing complicated about this; a 1% tax reduction gives them $17 million net in their pockets. Now it is at 1.5%. If you do the calculation, you will see how much money the shareholders are making now, simply by doing away with the possibility of including beer and the tex on beer.
This is not only happening in Quebec. For this reason, when the Bloc Quebecois makes its frequent representations to protect the interests of Quebecers, the interests of other breweries in Canada will also be protected.
Out of the 38 that have closed, 11 were in Quebec, 13 in Ontario and seven in B.C. As well, there were five in Alberta, one in Nova Scotia and one in Manitoba.
The government has told us already in its speeches during the debate: “Yes, they are the ones who asked us to wait before looking at the figures”. Five years is not enough. They still need longer. The calculations are not that difficult. In five years, 38 of 89 breweries have disappeared. In another five years, how many microbreweries will be left? How long will it take for this government to react and protect the microbrewery industry, not just in Quebec but everywhere in Canada, in their own interests? It is in the best interest of their party.
Democracy means respecting the will of the House of Commons. What the government wants is to line its pockets in order to get re-elected. Its interest is precisely this, to protect the big national breweries at the expense of the others, because this is in their best interest financially. Not in the best interests of the public, of society, and even less so of the House of Commons. How can we accept such a situation?
I am somewhat disappointed by the Canadian Alliance's position, which accepts a bill such as this. I agree, and the Bloc Quebecois agrees with what the bill contains. What is put down in black and white is good. Yes, the provisions regarding tobacco are good. We also believe that the changes are good. However, the problem that was raised is much more serious.
The member for Esquimalt--Juan de Fuca reacted last week by raising the Mace to demonstrate the government's lack of democracy in the House. He forcefully expressed to Canadians what is happening here. There is another opportunity to demonstrate what has happened, how the chair of the Standing Committee on Finance and member for London West could act in this manner.
We must stop saying that there is no conflict of interest because the word beer is not included in the bill. I already mentioned that is was supposed to be included, even in the definition. Why then is there no provision regarding beer in this bill? This bill contains nothing on beer because of the government. It did not want to accept the amendment introduced by my Bloc Quebecois colleague from Saint-Hyacinthe--Bagot. It is rhetoric to say that there is no conflict of interest simply because the word beer is not written in the bill. The government prevented it from being written and it prevented us from studying this amendment, they prevented us from lowering the tax. It is unbelievable. This is their only argument of defence, to say that there is no appearance of conflict of interest.
To close, let me say that it is time that the code of ethics that applies to ministers, to the Prime Minister and to secretaries of state should also apply to chairs of standing committees.
This is important for democracy and out of respect for the opinions of Canadians.
Larry Bagnell Liberal Yukon, YT
Madam Speaker, I will begin by saying that the bill does not cover beer because it is not about beer. It is embarrassing that the legislators from one party are debating the wrong thing. They are constantly talking about something that is not even in the bill. However, if the opposition can talk about beer, I will talk about beer too, even though it is not in the bill.
Everyone in the House agrees, even though this is not in the bill that we are debating, that microbreweries need a break in excise tax. All parties are on side and working on that. The parliamentary secretary has already said there would be a solution soon. The position and tactic that the Bloc is taking by attacking everyone is actually hurting microbreweries. It is slowing down a solution to the problem. When everyone is in agreement, what good does it do to attack a solution which is on its way? Why would the Bloc attack brewing companies and brewing associations? Why would it attack members of parliament when everyone is on side? What better way to slow down a productive solution?
We have a microbrewery in Yukon and we have the same sentiments that everyone else has expressed from all parties. The president of our microbrewery, Bob Baxter, has given me a lot of details that are similar to the ones that have been presented today. The Yukon Brewing Company is a great company. As my friend from the Alliance says, we love to talk about beer. It has three great beers: Yukon Gold, Arctic Red and Chilkoot. I recommend that everyone in the House and all the distributors watching on TV try these tremendous beers made from clean Yukon water. For everyone who does drink these are tremendous beers.
The U.S. small brewers pay about 50% less in excise tax of what the big brewers pay in the United States. There are about 3,500 jobs in the small brewery sector and approximately 53 microbreweries in Canada. They only achieve $2.1 million in profits and they pay $19 million in excise tax. Certainly they are just on the verge of profitability and they could certainly use a break. Our particular brewery is competing with a brewery next door in Alaska that once again pays about half the amount of excise tax.
We are definitely on side with this. What is disappointing about the debate is so are the big brewers. The proposal that is on the table to reduce excise tax to 60% on the first 75,000 hectolitres is supported by all the brewers in Canada, the big ones as well. Why would we cast aspersions on the big brewers that have been supportive of the microbreweries? They have actually helped them out with the lack of buying power they had on bottles.
I support the position that we should have this reduction to help microbreweries in Canada. The brewing associations, the big and small brewers, and all parties in the House agree. As the parliamentary secretary has said, it is coming soon. Let us all agree, support it and get on with it in a positive environment to make this positive change. That is the reason parliament is here.
Pauline Picard Bloc Drummond, QC
Madam Speaker, I am pleased to rise again to speak to Bill C-47, which seems to be very controversial.
Yesterday and this morning, my colleagues explained the origin of the conflict that exists with regard to this bill and that puts several small breweries in jeopardy both in Quebec and elsewhere in Canada.
As regards this bill, there seems to be some kind of collusion between the government and large Canadian brewers, who negotiated and put enough pressure on the government to bring it to exclude beer in a most unacceptable way, by ignoring certain provisions of its own legislation.
Clause 2, the interpretation clause of the bill, proposes a series of definitions. A definition of beer, meaning beer or malt liquor as defined in section 4 of the Excise Act, can be found on page 2, line 14. The problem is that beer has been excluded from Bill C-47. Everybody wonders why. Why would beer be excluded from this bill when the Excise Act is a general act that covers all sorts of things? It is wide in scope and covers all the products that are included in Bill C-47, as well as beer.
In other words, the only product that was not included in Bill C-47 is beer. We talked to people who draft legislation here and elsewhere, and they find it rather strange that Bill C-47, introduced by the government to modernize the Excise Act, covers all the products that were included in the Excise Act, which it is supposed to replace, except beer.
Before this new bill, the legislation included wine, spirits, beer, tobacco and distillery products. The existing act makes reference to breweries and tobacco products. It deals with everything, every single product touched by excise. There are provisions on licensing, rights of accession, offences, collection, record, accounts, required documents, warehousing and remission of duties, or what they call drawbacks in international trade. Bill C-47, which is supposed to bring that Excise Act up to date, also deals with everything, except beer.
How do we explain the fact that beer is not included in this bill? Is it an oversight? I asked that question in committee to the hon. member for Oak Ridges, because I wanted to know what would happen if we had forgotten to include beer in the legislation. After all, it is possible to amend a bill. I did not get any answer. Just a blunt rebuttal. We did not get any advice from the people who surround and support members of parliament in their work in committee, including the parliamentary secretary and public officials. We did not get any interesting advice. I was a little taken aback by the answers that I was given. Things did not make sense.
I had to come to the conclusion that something was going on. This is an act that the government has wanted to modernize since 1997 and everyone agreed—they even made promises to microbreweries—including the Minister for International Trade, the Minister of Finance, secretaries of state who have now become ministers, ministers who live in Quebec, including in Montreal, and they expressed their support to microbreweries. This is because they have one in their region.
Pauline Picard Bloc Drummond, QC
I am told that it is the current Minister of Justice. So, they supported microbreweries and they generated hope by saying “Indeed, it does not make sense. You cannot be competitive under such circumstances, considering the excise tax rate imposed on you. Therefore, we promise you that we will update the legislation. You will get what you want”.
Microbreweries are currently experiencing serious problems. They are paying more excise tax than they make profits. They were given reasons to hope. This act comes from the Standing Committee on Finance. It comes from the Department of Finance and it is the Minister of Finance himself, who is currently engaged in the leadership race, who promised to change things, to modernize the act, but instead he is crushing microbreweries with this legislation.
Beer has been deliberately excluded from the bill. The law has not been modernized. Promises have not been kept. Clause 2, line 14 on page 2 of the bill—the interpretation of the Excise Tax Act—provides the following, “'beer' means beer or malt liquor as defined in section 4 of the Excise Act.” They hushed this up thinking that we would let it go.
Resorting to such tactics is an insult to our intelligence and an insult to small brewers who have put their skill, energy, and hard work into building up their businesses. They want to compete on the market. Here is the answer we received in committee, “Wait. Other measures are in the works”.
These promises were made in 1997. We were told, “We will see about this in five years. We must wait another five years, because the act will not be reviewed until then”. This means that in the next five years, if the act is not amended or if no other measures are taken rapidly, there will not be many microbreweries left in Quebec and in Canada.
I cannot understand why my colleagues, whether they are from Ontario or Alberta, or whether they represent constituents who, through their entrepreneurship, have built up their microbreweries in order to sell their products, quality products, would not rise in the House. These members, who were elected to represent the interests of their fellow citizens, remain seated and hang their heads at such terrible legislation for microbreweries. This is a disgrace and I am ashamed for them.
The Canadian government talks a lot about how our businesses must be competitive. We agree. There is much talk about globalization. The government uses the taxes it collects from Quebecers and Canadians to set up programs to support businesses in Quebec and in Canada. That is the right thing to do. That is what our tax money should be used for. But the thing with the microbreweries is that they are not being allowed to compete. They are being squeezed out. Right now, our taxes are being used to support the big breweries.
How is that? Because in Canada, the tax on all beer producers, large and small, is 28 ¢ a litre. In the United States and in Europe, microbreweries pay only nine cents a litre. In Canada, both large and small companies pay 28 ¢ a litre. Large companies agree with paying 28 ¢ a litre. They were also in agreement with the government lowering the excise tax for microbreweries to the same rate as in the United States and Europe so that they could be competitive.
American owners of microbreweries producing so-called regional beer who want to import their products into Canada pay only nine cents a litre. How can our breweries compete on the U.S. market when they are paying 28 cents a litre? There is a huge difference. Either the microbreweries literally get swallowed up by outside markets, such as the United States and Europe, or we allow them to try to compete elsewhere. Everyone also knows that the methods we are using here are just as good as, if not better than those being used elsewhere. Our beer market is recognized world wide. Why not allow the microbreweries access to the international market?
The truth is out. We have here a letter the chair of the Standing Committee of Finance received from the president and CEO of the Brewers Association of Canada. I find it hard to understand that it was only after we put forward our amendments in committee that we found out that the chair of the Standing Committee of Finance, for whom I have a great deal of respect, was the wife of Mr. Barnes, the very one who deals with tax issues and one of the shareholders in John Labatt Ltd., a major brewery.
It seems to me that something here is not entirely transparent. Could there be the appearance of a conflict of interests. Ethically, someone who chairs a committee should act like a judge and remain neutral.
Such a person should not take sides but make decisions based on the rules and authority given to the committee by parliament. We have here a situation where our judgment can be skewed, as an opposition party has moved amendments that would include the beer industry in Bill C-47, a situation that makes no sense, according to some legislators. When we modernize an act, we have to modernize it completely. Why deliberately exclude beer?
This was done deliberately. The committee chair received a letter from the Brewers Association of Canada, which states:
—we fully support a reduction in the excise tax for small brewers... we strongly support a reduction of the excise tax for small breweries... We will support any measure aimed at attaining this objective, but in light of our prior agreement with the government—
I am thinking of Quebecers and Canadians who are listening today. When we hear “we fully support a reduction in the excise tax for small brewers, but in light of our prior agreement with the government”, could this actually mean that a very powerful lobby is saying to legislators “We do not willingly accept a reduction of the excise tax on beer because each time we gain a 1% share of the market, it is $17 million more in our pockets”? This is why beer and microbreweries are excluded from the bill.
At this point, I wish to show what is actually happening in the microbreweries sector. The big brewers like John Labatt and Molson currently control 90% of the market. As I pointed out earlier, each time the big brewers get 1% of the market, they make $17 million in net profits. It is easy to understand why the big brewers are so interested in seeing microbreweries disappear.
This is all fine and well. The big brewers say, “We support you”, and then they stab you in the back, saying, “We do not support you”. Each time they take over 90% of the market, they in fact grab 91% of the market, that is, $17 million more. They support the microbreweries, because it makes them look good, then they lobby the government saying, “No, not yet, we are not ready. We may need 98% of the market. There will perhaps remain a couple of microbreweries in Quebec and in Canada. This will please us”. This does not make any sense whatsoever.
My time is up but I would like to move an amendment to the motion at third reading stage of Bill C-47. I move:
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.”
Excise Act, 2001Government Orders
The Acting Speaker (Ms. Bakopanos)
The amendment is in order.
The hon. member for Joliette.
Pierre Paquette Bloc Joliette, QC
Madam Speaker, first, I would like to congratulate my hon. colleague from Drummond for her excellent speech.
Does she have an explanation as to why beer is defined in the bill but no mention is made of the beer industry or the excise tax for microbreweries?