Mr. Speaker, I will say a few words about the bill before the House today as well.
Bill C-47 it is a technical bill. It is a bill we in the House support. It would impose a levy on spirits, wines and tobacco products. It would defer payment of duties on spirits and wines to the wholesale level, place domestic and imported products on equal footing, impose tight controls on possession of non-duty paid products and so on. It is a technical bill that would implement some tax changes. There has been a review of the bill. We in my party have no real problems with its technical proposals.
I will comment on a couple of things in the bill. One is the tax on tobacco. I agree that there should be a higher tax on tobacco products in Canada. The biggest health care expenditures we have in Canada are a result of smoking and all the ailments and health problems it causes.
There has been an unofficial agreement between the provinces to raise the tobacco tax. It has happened in Alberta. It happened in the Saskatchewan budget two weeks ago. I suspect the same thing will happen in Manitoba shortly and in other provinces across the country where the price of cigarettes is in roughly the $9 range. The revenues could be used to promote a non-smoking campaign to show the hazards of smoking, particularly for young people. In most cases high cigarette prices are a deterrent for young people to start smoking.
There is a problem on the other side of the issue. A lot of people who smoke are lower income people. When the price of cigarettes gets high it becomes a hardship on them because they are addicted to cigarettes and tobacco products. We get caught in a difficult situation. We are doing the right thing in terms of health and principle, yet at the same time we are catching people who are already addicted to tobacco.
It is a long term process. People need to be educated about the hazards of tobacco. We must make every effort to get people off cigarettes. This involves federal and provincial government campaigns through schools and the like. This is one of the things Bill C-47 talks about.
I will mention two or three things that are not in the bill but which are important when it comes to taxation policy. We have had a government over the last while that has decided to make lowering taxes a huge priority. Before the last election campaign in the fall of 2000 it brought in a budget that would lower taxes over five years by some $100 billion. That was an attractive thing for a lot of Canadian people.
On the other side of the ledger we have seen a tremendous rip-off of employers and employees through employment insurance premiums being much too high. We have seen increased restrictions on who qualifies for employment insurance benefits. The eligibility period has been reduced for those who do have benefits. We now have a surplus of about $43 billion in the EI program. The surplus is predicted to hit $50 billion sometime in the calendar year of 2003.
We are debating a tax bill today but at the same time we are turning a blind eye as a parliament to a great injustice. Workers are being taxed excessively for their employment. The $43 billion EI surplus goes into the Consolidated Revenue Fund. The surplus is there to provide a balanced budget for the Minister of Finance. It is there to provide money for other programs. It is there to pay down the national debt.
Last year $17 billion was put toward the national debt. The $17 billion came directly from workers because of the excessive payments they made into the employment insurance fund. That is very unfair and actually should be a national scandal. The insurance fund should be roughly balanced at all times. I do not mind seeing a surplus of a few billion dollars because at a time when unemployment is low, we can build up a bit of a surplus and when the unemployment rate increases, without increasing the premiums or increasing them only marginally, we can have a deficit running for a while and come out balanced over a five or ten year period.
That was the whole purpose behind EI in terms of funding. Today about two-thirds of the surplus in the employment insurance fund is being generated by low income Canadians not by Canadians who make a lot of money. We tax the poor and people of modest incomes. That is not fair or just.
Many people have lost access to the EI fund because of the tighter qualifying restrictions brought in by the federal government. About one million families have lost access to the fund since 1993 when the Liberal government took office. About 41% of the people who have lost access to the benefits make less than $15,000 a year. Another 23% who have lost access to EI benefits make between $15,000 and $20,000. That is 64% of the people who have lost access to these benefits make less than $20,000 a year. Although they have lost access to the benefits, they still pay into the EI fund. They have provided the federal government with almost a $43 billion surplus today and will provide $50 billion over the next calendar year. It is a very unfair tax from a government that calls itself liberal. That is of course something that is not referred to in the bill that we are debating today.
I want to talk now about the airport security tax which was debated in the House and went into effect on April 1. It was no April fool's joke. It is a tax that will not fly in this country. It is a flat tax of $24 on a return ticket. People will pay $24 tax whether they fly from Saskatchewan to Prince Albert, Regina to Saskatoon, Edmonton to Grande Prairie, Edmonton to Calgary or Toronto to Ottawa. The tax is the same if one flies from Regina to London, Paris or New Delhi. There is no relationship whatsoever to the price of the ticket.
The tax will hurt small communities and short haul flights. It will harm the small airlines such as Athabasca Air in Saskatchewan which has short haul flights between Regina and Saskatoon. The $24 on a $100 or $150 ticket is a huge percentage on a short haul flight. That is another example of a very unfair and unjust tax.
The tax will apply to everybody from the age of two and up. Infants up to the age of two who travelled with an adult could fly free and children between the ages of two and 12 received a large discount but not today. The $24 tax applies equally to every Canadian citizen from the age of two and up. I see that as an example of an unfair tax.
Another reason the tax is unfair is that it was supposed to be implemented to pay for enhanced security at airports. No one in the House would oppose the idea of increased security at airports after September 11 but the tax will collect $1 billion or $2 billion more than is needed to provide for security at airports. In some cases the tax will collect as much as it costs to run the airport. In Saskatoon the city and airport authorities who studied this security tax estimated that Saskatoon will raise some $5 million a year from passengers who fly through the Saskatoon airport. Meanwhile, it costs $5 million a year to run the entire airport, which includes the costs of heating, cleaning and everything else.
Regina will raise $4.5 million through the security tax paid by people leaving Regina. The cost of running the airport in Regina is about $4.8 million. The money coming in from the security tax is enough to run the entire airport but it is supposed to cover security. No wonder people get cynical of politicians and governments when we have this kind of a regime and this kind of tax.
The security tax was implemented without an economic impact study being tabled by the Minister of Finance or the Minister of Transport. The most fundamental thing we do in parliament is taxation. The whole philosophy of parliament is representation. We do not have taxation without representation. We have representation in the House of Commons from all the people of the country yet we have a bunch of puppets in the House of Commons who get up and say yeah to the Minister of Finance for implementing a new tax without tabling a study or a document in the House showing the impact it will have on the Canadian people.
It is like having a benevolent dictator sitting over there. Sometimes he is being very benevolent when he brings in the bill without a study.
What do we teach kids? Normally we teach them to do their research and their homework when they go to school. They need to have some data and facts on which to base an argument or write a term paper. However here in the House of Commons we bring in an airport security tax without an economic impact study. That does not make any sense. It would be like the member for Edmonton North going off and riding her motorcycle without learning how to ride a motorcycle.