Debates of Oct. 9th, 2003

Income Tax Act

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

Mr. Speaker, the most intelligent thing I have said was that the government historically has not been very successful in managing other portfolios. It has not been very successful in managing departments. The list is endless. There are too many other things that we could add to the list, but Bill C-48 is not one of them.

I stand on behalf of my colleague from Kings--Hants on this piece of legislation. The Progressive Conservative Party will be supporting Bill C-48 simply because of the equality that is necessary in the sectors.

It is absolutely vital that we continue exploration in the oil and gas industry. It is absolutely vital that we encourage that exploration to continue. Bill C-48 is a way of doing that.

It is absolutely vital that the revenues that are generated are part of Canada's economy, part of our GDP. Our quality of life depends on it. I know the NDP would like to nationalize just about everything that we have, but that is not philosophically the way we should be going in this country. Bill C-48 will make it more fair with the tax rates that will be put into place.

We in the Progressive Conservative Party will be supporting this piece of legislation.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, when we are discussing economic issues, it is frustrating to hear the example of China being brought forward. Many people have indicated that in order for Canada to compete with China, we should bring our quality of life down to its level, that we should have its pollution, its environment, and its wage level. That is the wrong thing to do. It is very difficult to accept that argument. Nobody wants that as the national goal for Canada. I was at a meeting where an auto manufacturer said that our objective should be to have the same wages and conditions as the workers in China. That is not acceptable. That is a complete reversal of the way we need to go to keep our quality of life.

If the industry can take care of itself, why does it need hundreds of millions of dollars in subsidies every year? In 1950 the fossil fuel and nuclear power industries received around $350 billion worth of subsidies from Canadian taxpayers. Should they pay that back now? If they can take care of themselves, if they can be in a free market economy, should they pay that back?

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

Mr. Speaker, this is another example of NDP industrialized fearmongering. I suspect if the member is talking about the subsidies, then perhaps all those industries should get paid all the royalties and taxes they paid and all the employee benefits they have paid over the last centuries. I do not think that would be the case.

As for China, there is a reality here. By the way, more fearmongering that we should be bringing our salary scales back down to those levels of China. As long as I have ever dealt with any industrial user, any manufacturer, any retailer, I have never heard anybody say such a foolish thing, that we should be bringing our salary levels down to those in China. That is absolutely ridiculous.

We have in Canada something in which we take a lot of pride, our quality of life. Our standard of living is dependent upon those things that we are talking about in the bill. We are dependent upon industry and upon jobs being created. We do not want to bring salaries down to Chinese levels. Actually, we want to bring them up to American levels. That is where we have been going all along.

We want to increase our standard of living and our quality of life. That does not mean less salaries, that means more. This in fact will allow that to happen. Less money going to governments, more money going into exploration and more money going into industrial investment will bring more jobs, more activity and more wealth to the workers of this world. That is what we are trying to achieve. No, we are not trying to bring it down to China levels. We are trying to bring it up.

As for subsidies, as for standing on one's own, taxation changes or a reduction in taxes does not mean that it is a subsidy. It means that these industries are paying less to governments, which, by the way, mismanages most of those dollars. I would rather see industries managing their dollars for the economy as opposed to having the government manage those dollars. That is where we are heading and I would like to see a reduction in those dollars paid to government.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, when we look at the situation in Oakville, this government will actually receive approximately $1.5 billion per year from this measure and, at the same time, it will put those workers out.

Does the hon. member believe that money should go to those workers to ensure they have a future and can provide for their families? Does he not believe that the government has a responsibility, and that it should be part of the bill, to ensure the workers will benefit on the ground floor? If the government really believes in the workers, should they not get that money?

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

Mr. Speaker, a long time ago, in another life, I learned that one should not get involved in labour negotiations. I believe that unionized labour has what is known as a collective agreement. In those collective agreements they have certain clauses, some of those clauses being separation and severance pay.

If the union has done its job properly, I suspect those separation and severance agreements have been well clarified and the workers of the Oakville plant have been taken care of. I have no doubt that their union looked after them. Therefore they should have those severance clauses in that agreement. I can assure everyone that I am not about to renegotiate a collective agreement.

[Joe Comartin, NDP, Windsor—St. Clair, ON]

Mr. Speaker, as I prepared some notes for my talk today, I could not help but feel like I was sort of in a surreal situation.

We have this bill before us which will give further tax breaks to the fossil fuel industry, the mining industry, the concern there being, particularly from my perspective, the coal mining industry. It would reduce the tax level and give a tax credit over a period of years. We have to juxtapose the bill before us for third reading today with what is going on in this country and in the world.

I come from an area of the country where we have major health problems, a great deal of which are directly related to the burning of fossil fuel, whether it be exhaust from cars or the coal-fired plants in Ontario and, more specifically, in the midwest of the United States that ends up being dumped into my area.

We also have to put it into the perspective of the Kyoto agreement, which the Canadian people finally pressured the government into ratifying at the end of last year, and, in the context of that, the overall natural environment of the country. We know from lots of studies, but most recently just in this last week from the Conference Board of Canada, how badly we stack up compared to other countries around the globe.

The Conference Board of Canada did an assessment of the 24 leading industrial countries in the world. Where do we stand on carbon dioxide, the direct result of the burning of fossil fuel? We stand 24th out of 24. We are dead last. We are also near the end in a whole bunch of other greenhouse gases. We are in the 21, 22 and 23 range in each one of those areas.

What we hear of course, and I think we heard it from one or two speakers on the government side, is that we have to keep doing this to keep the economy going. The Conference Board of Canada is not exactly a flaming environmentalist organization, but it makes the point, and I quote from the report that was issued this past week:

Environmental progress need not come at the expense of economic gains, as many believe....

The board goes on to say in a summary:

Many of the countries that lead the environment list also make the top 12 in the economy category.

What it is saying is that there are countries around the globe, in that 24 grouping of the top industrialized countries, that have a high performing economy, that do well for their people, that have high incomes and a corporate world that does well, and at the same time protect their environment. We do not have to play one off against the other. With good economic policy, with progressive, forward looking economic policy we can accomplish both. We can take care of our natural environment. We can take care of the physical health of our population, and at the same time run a vibrant, strong, healthy economy. The two are not mutually exclusive at all. That is the Conference Board of Canada talking.

Back to the context. We have Bill C-48 which would give more breaks to the fossil fuel industry, and we have it in that context of just how poorly we are doing as an industrialized country around the globe.

Let us look at the specifics of what we are doing. This week the Green Budget Coalition came forward and made a presentation, as it has every year for the last seven or eight years, to the finance committee and, in fact, indirectly to the finance department, on how we green our economy and, more specifically, how we green our budgetary process.

I will quote some of the statistics in its brief that it left with the committee where it talks about fossil fuels and takes a slice of the history. The brief states:

Cumulative direct Government of Canada spending on fossil fuels between 1970 and 1999 totalled $40.4 billion. In addition, $2.8 billion in federal loans to fossil fuel industries have been written off since 1970, over and above direct spending.

We are at $43.2 billion over the last 29 years and that has continued for the last four years, bringing us forward to the kind of incentives we are now increasing to that industry.

The brief juxtaposes it again to put it in some kind of context. It states:

For the period 1987 to 1998, total government support for energy investments totalled $4.3 billion for non-renewable energy and only $118 million for renewable energy.

That is a travesty when one looks at those results that we see all the time, the reason we needed to ratify Kyoto and the numbers that we see from the Conference Board of Canada.

I will repeat that: $4.3 billion over that 11 year period from 1987 to 1998 for non-renewable energy, all of it going to the fossil fuel industry and the nuclear industry, and only $118 million for renewable energy. Whether it be wind, solar, current, wave or even hydroelectric, it was only $118 million, which is just a little over $10 million a year. In the same period of time billions and billions went to the non-renewable energy sector.

In the brief there is a whole policy on to how to deal with budgetary matters, how to green the budget and how to green the economy from a tax, tax incentive, subsidy based, taking all those into account.

In spite of the previous reports the coalition has filed with that committee and with the finance department, as we heard from the parliamentary secretary today, I do not think he even understood the work it has done. I think that is a fair categorization of the response I received from him at that time.

Let us put into perspective how the fossil fuel industry has performed. It was interesting to listen to my colleague from the Conservative Party. I have no apologies to give as a member of the NDP on protecting jobs. Let us look at this industry. Since 1990 this industry has terminated the employment of some 80,000 people.

I know some members will jump up and say that we are just worried about union jobs. Very few of those were union jobs. The vast majority, about 60,000 or three-quarters of them, were as a result of the shutdowns of small companies, retailers in the oil and gas industry. The industry just put them out of work and took them over itself.

Those were small employers with five, ten or twenty employees, either full time or part time. Industry just wiped out 60,000 jobs in that sector, but what is being done? The government is continuing with a government policy to subsidize that industry.

Let us take a look at the consequences of these measures of reducing the effective tax rate from 28% to 21% and giving that 10% tax credit. Just three of the big oil companies, not all of them, but Petro-Canada, Shell and Esso, have already forecast that they will save $250 million a year. That is how much of a tax break the government is giving these companies. Over the five year period, it will be some $1.25 billion. That is how much the savings will be just for those companies.

These companies are already making profits. If we look at their profit for this year we will see that these companies are making profits. One company's profit is $100 million. One is up to $200 million. In fact, in some cases those are quarterly profits. We will see much higher ones over the course of this year, especially when we add on this subsidy.

What does all this get us? As consumers, have we seen rates go down at the gas pumps? It is almost a joke to raise the question given what has transpired through the summer and the early fall. We have seen the price of fuel go up dramatically at the pumps. For those who are on fixed incomes, the price of home fuel in particular has gone up by a tragically high amount.

We do not see those benefits passed on to the consumer. Do consumers benefit from these tax breaks? No. Does the environment benefit? Obviously not, given what is happening, nor does human health in this country. Are we somehow giving an advantage to the renewable energy sector? Again the answer is no.

Bill C-48 is being shoved through the House with the government and the official opposition supporting it in the face of that reality I have just detailed.

I will cover one more point which I heard again from the government side as some justification for this: that we have to be internationally competitive. Let us look at the result. Let us look at the effect of these tax breaks for this industry. In regard to our closest competitor, the United States of America, specifically the state of Texas, and the effective current rate of tax for the fossil fuel industry, right now our tax rates have us about 5% below the state of Texas. That is right now, before Bill C-48 is passed.

If Bill C-48 passes the industry would effectively be paying 41% in Alaska and 35% in Texas. In Canada we would be down to 30.1% across the country. This is effectively where it will end up.

Therefore, we cannot argue that this is a competitive advantage bill, that this policy somehow will make us more competitive, because we already are in that situation. Right now we are competitive with our major trading partner.

This would not help us with a competitive advantage internationally. It would not help consumers. It would not help the environment or our personal health, and it certainly would not enhance the production of energy from renewable energy sources.

It begs the question, why are we doing this? It was interesting to read the newspaper article by Susan Riley last week in the Ottawa Citizen . The headline was, “While you're not looking, Big Oil is set to get a big tax break”. As opposed to a number, the editorializing in that headline is pretty accurate.

In that article, a couple of members of Parliament are quoted as saying they were under tremendous pressure. One is from the government side and one from the official opposition and they say they have been under tremendous pressure since the year 2000 to get these breaks for the oil and gas industry.

That is really the answer to my question about why we are doing this. We are doing it because the industry asked for it and because, since the second world war, whenever big oil has asked for a break, it got a break.

That has resulted in the situation we have in my home community, where we have high rates of cancer and other high rates of illness and disease directly related to the consumption of fossil fuels. It has resulted in the international need for Kyoto to get those reductions we need in the emissions of carbon dioxide into our atmosphere. It has resulted in very high energy costs, whether for home heating fuel or to power our motor vehicles.

It is a policy that has failed from every aspect. What Bill C-48 is doing is perpetuating the economic system that is the underpinning for that industry.

It is time for this government and this House to take seriously our responsibilities under Kyoto and to take seriously what we are hearing from environmentalists and progressive economists about what we can do to reduce those subsidies to the fossil fuel industry, to phase them out. Because we have to do that. We do not have enough oil and gas to continue our consumption beyond somewhere between 2030 and 2050 at the rates at which we are consuming now. We simply cannot do it. The supplies are not there, anywhere in the world. We need to change that policy. We need to phase out that industry.

In order to do that, we must have a comprehensive policy initiative in the tax field. We cannot do this just by signing on to an international protocol like Kyoto. We do have to do that, but then we have to implement. That does not mean just starting a retrofit program, which we need to do in Canada, and not just doing a conservation program, which we also need to do. In addition, what is sorely lacking in the Kyoto plan, and we see that with the bill, is any concept from the government about understanding the need to reform our tax structure. We have to reduce the incentives provided to the fossil fuel industry, on a gradual, phased out basis, and replace them with incentives, tax breaks and subsidies for the renewable energy sector.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, I have a few questions to which I would like answers.

Last night we had votes in the House of Commons, as we often do on Tuesdays and Wednesdays. There was a vote last night on a bill proposing a small tax deduction for volunteer emergency workers. The bill proposed that they would be able to get a small tax deduction for volunteering their time and expertise in a number of different emergency situations, which costs them personally but provides so much value to communities because they get that confidence, they save money and they provide security for people in their homes, at their businesses and on their streets. That vote was lost. It was for a small tax deduction for emergency volunteers. There was not enough money for that.

My first question, and I have two more, is how does the member feel about that? I am disgusted. I find it hard to believe that the government cannot provide that tax deduction when at the same time it can provide major tax relief for businesses and companies. But it does not for individual Canadians. That is reprehensible.

Second, does the hon. member feel that this proposed tax relief would actually lower the price of gasoline for consumers? Would they actually get the benefit of this? We hear from a lot of different so-called economists in this House who say that to provide tax relief will create jobs. More workers will be hired, there will be more investment, it will stimulate the economy and it will also be reflected in the consumer pricing, which everybody can then enjoy. We do not see that. My belief is that we will see a very few people benefit from this, mostly shareholders, many of whom do not even reside in this country.

Third, we know that the Minister of the Environment has a plan for Kyoto. There is a series of things dealing with renewable energy sources. I want to hear the hon. member's perspective. My understanding is that a lot of the money for Kyoto will go to marketing the government's plan as opposed to providing the tools to get those renewable energy sources to consumers, to the people on the streets. My understanding is that significant resources will actually be spent on marketing the government's plan.

[Joe Comartin, NDP, Windsor—St. Clair, ON]

Madam Speaker, I wish to thank my colleague from Windsor West for his questions. I will try to deal with them as efficiently as I can.

The vote on Bill C-325 last night was a tragedy from the perspective that it lost by only three votes. It was 99 to 96. We were recommending income tax deductions for emergency workers and people who provide emergency services to protect us from fires. Most of them come from rural areas. The government opposed it. Overall there were a number, and I will give them credit for it, of members from the government side who voted in favour. It brought us really close but did not quite get us over.

It is a pittance compared to what we are talking about in Bill C-48. Our estimate is that probably over the first five years of these incentives it will be at least a billion and probably closer to a billion and a half dollars. In terms of those emergency workers, I do not know if we would have got up to a few million in terms of the break we were trying to give them and in effect saying to them that as a government, as a Parliament, as their elected leadership in the country, we prize what they were doing for us. The message they got yesterday was obviously that we do not.

We are going to hear if the Deputy Prime Minister and Minister of Finance says that he cannot afford the money that has been promised to the provinces for health care when he makes his financial statement in November.

We look at that and see that we cannot find that $2 billion, but we can find this for a very profitable industry. We then say to the minister that this industry is a polluter and that it should be paying its share. It should not be getting tax breaks. On the other hand, the government will say it cannot find money for health and will stick it to the provinces. They will have to find ways to deal with all the health problems that have been specifically created as the result of the burning of fossil fuels. It is terrible policy making on the part of the government.

As for the consumers getting the money, it is obvious they will not. There have been any number of other times when these tax breaks have been given and incentives provided, but did we see a reduction to our cost at the gas pump or the cost of home heating fuel? The obvious answer was, no. We did not get any of those breaks. The government stayed with the companies with their high-paid executives and money going to the shareholders.

On Kyoto and the marketing issue, I am really happy to hear that question because I have not had the opportunity to raise it in the House. We had the Kyoto announcement of spending about a billion dollars at a press conference attended by the Prime Minister, the Minister of Industry and the Minister of the Environment.

We have this retrofit program. The government has set aside $75 million. Everybody in the country who knows anything about it has told the government it is nowhere near enough. It also set aside $45 million to educate Canadians. That is an insult to Canadians.

Canadians led the fight dragging and kicking the government behind it to finally ratify Kyoto. We had people in the country in the ratio of 65% to 75% saying they were convinced that we had to ratify Kyoto and they finally got the government to do it. Now, is the government going to tell them what they have to do to implement around retrofit programs in their own homes and conservation? They do not need the education.

This is going to be another one of those boondoggles. It is going to be money going to the friends of the government to run absolutely useless education programs, promotional programs for conservation and doing retrofitting. It is not necessary. The dollars that need to be spent on that are probably a small percentage of the $45 million that has been set aside.

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Madam Speaker, I must say that I am a little surprised to hear the comments from my colleagues in the New Democratic Party caucus and to hear their expressions of virulent opposition to this bill.

I can assure hon. members that the hundreds of thousands of people who work in the resource sector, the working people, and the people the NDP always talk about, will benefit from this bill. They are employed and have good lifetime jobs because of the resource sector, including people who live in my constituency.

One of the reasons why the New Democratic Party has increasingly fallen out of favour with its traditional constituency, and one of the reasons it has half the support it did historically, is because when it comes to issues like this, it is constantly against the job creators who employ the working families on whose behalf it claims to speak.

I find it interesting that the NDP government in Saskatchewan, which yesterday called an election, strongly supports the equalization of taxation for the resource sector because the Saskatchewan treasury, economy, and working families depend on that industry. Tens of thousands of jobs in Saskatchewan are dependent on the oil and gas companies, these evil, profitable companies that take risks, invest capital, use technology and ingenuity to help extract resources in an environmentally friendly way, and create wealth in the process.

Why is it that the NDP here is stalling this bill, by voting against this bill, while the NDP in Saskatchewan, now facing an election, would like to see it passed in order to equalize tax treatment and not have two tier tax discrimination against the people who work in the resource sector and keep this economy going?

[Joe Comartin, NDP, Windsor—St. Clair, ON]

Madam Speaker, let me take a shot first at the Alliance in terms of where we are in the polls in our support in this country. We are certainly several percentage points higher than that party and it is going in the opposite direction.

I have no problem standing up in this House and saying that I will defend the workers. The member's party is not going to do that. This industry has already cost this country 80,000 jobs of which 20,000 were directly from this industry, high paying union jobs, however, 60,000 over the last decade and a half were in small employers who ran gas stations and did other things that were related to this industry.

The industry put those workers out on the street. These people did not get any of these tax breaks. They did not get any use out of these tax incentives. That is what is happening with this money. It is what will happen with this tax break that the industry is about to be given.

[Roy Cullen, Liberal, Etobicoke North, ON]

Madam Speaker, I will be sharing my time with the hon. member for Abitibi—Baie-James—Nunavik.

I am delighted to enter into this debate. Listening to the member for Windsor—St. Clair, the points that he put forward are about as enlightened as a tunnel in a coal mine. I look forward to the day when our former Liberal colleague will again represent the riding of Windsor—St. Clair in the House of Commons and will bring forward some good ideas.

Canada's economy is in transition. The part of the economy that is dominated by the natural resources economy is shrinking significantly. We have many other industries that are blossoming and that is an excellent sign that our government is properly encouraging the development of these industries: high tech sectors, telecommunications, the transportation sector, and information technology. These are all great developments, but we need to understand that our natural resource sector is still the bedrock of our economy, employing thousands and thousands of Canadians.

In fact, if we look at the mining industry, one in eight of our export dollars comes from metals and ores. This is employing people across Canada. We have Diavik Diamond Mines in Yellowknife that are developing now and employing 500 people. We have the Voisey's Bay development that will employ a significant number of people.

These mining companies are acting in a responsible way. They go through the process of due diligence with aboriginal peoples and the environmental issues. This is creating a huge amount of jobs and economic activity in Canada. In fact, our reserves are really under-exploited, so there will be a need to continue to support our mining sector.

This bill would equalize the tax treatment for the oil and gas and the mining sectors compared to the other segments of our economy. In budget 2000 the government reduced the corporate tax rate from 28% to 21% and it left out the mining and oil and gas industries because they had some special provisions. The government consulted and has brought back this bill to create the level playing field.

The intent, as I understood it, was to make it revenue neutral for the oil and gas and the mining sector or perhaps give it somewhat of a lift. The bill does that. It is good for the oil and gas industry. It is good for the potash industry in Saskatchewan. It is good for the junior mining companies, but there is a significant part of the mining industry that is not going to benefit from these provisions. In fact, they are going to be negatively impacted. The reason for that is twofold.

In reaching this accommodation to move the statutory rate from 28% to 21%, the government is phasing out the resource allowance and allowing for the deductibility of mining and oil and gas royalties. In the base metal sector of the mining economy, some of these resource allowances were in excess of the amounts that it was paying in royalties.

To compensate partly for that, the government introduced the 10% exploration mining tax credit. That, by the way, will create more exploration in Canada. That will create exploration jobs in Canada and ultimately that exploration will discover more commercial reserves which will generate even more future employment in Canada.

Even with the 10% mining tax credit, that does not do enough for the base metal sector of the mining industry. We had representations at the House of Commons finance committee from the Mining Association of Canada. It argued that there are eight or nine large companies across Canada that are not going to reap the benefit of these measures. In fact, they are going to be negatively impacted. There were amendments introduced to increase the exploration tax credit from 10% to 20%. Those amendments were defeated and so we are here at third reading.

I will certainly be supporting the bill in general because it is a much needed bill, but as a government we need to deal with this anomaly that has arisen for the base metal sector of the mining industry.

I am sure our government will be reviewing its particular circumstances over the next many months and, hopefully, there will be a way to deal with this unfair anomaly in the next budget. I certainly hope we can do that because this industry is very important to Canada.

We can talk about high tech, we can talk about information technology and all the sectors that are growing and taking a larger share of our economic pie, but we are still natural resource economy in transition and we need to ensure that our mining industry is healthy and that it can compete internationally. In fact at this precise moment the prices of ores and minerals are at a 15 year low. That is complicating those competitive factors for our mining industry.

There is a huge lead time with the mining industry from the time an exploration is started, to the time some discoveries or potential discoveries located, to time the mine is dug, the infrastructure is put in place and the metals are finally extracted. We need to understand that is a unique circumstance in which the mining industry finds itself. By increasing the exploration tax credit we will provide additional incentive for these companies to seek out new reserves and ultimately create more jobs for Canadians.

There is another challenge that I should point out. There is concern that by eliminating the resource allowance this will create some windfall gain situations for a number of provinces. I am sure the Minister of Finance will make his view known to the other provinces that they should reduce their tax burden accordingly. In other words, they should allocate that windfall gain back to the mining sector so it is on an even footing or it is revenue neutral in that sense.

However, we do not have any guarantees of that. If we look at the province of Ontario, we have a new premier who is on the record as saying that there will be no corporate tax reductions. We could end up in a situation where there is a windfall for the province of Ontario because a significant number of mining companies operate in northern Ontario predominantly. They would end up with an increased tax burden because provinces like Ontario would not deal with the windfall in the way it was intended.

The member for Windsor—St. Clair comes from an urban riding. I do not imagine there are many mines in operation in Windsor. There are not many in operation either in Etobicoke North, in my riding. However, we need to remember that this economic activity in our natural resource economy creates jobs in our urban centres as well. We sometimes easily forget that.

If we look at the city of Toronto, Bay Street does a lot of the financing. A lot goes on in Toronto, Montreal and Vancouver. There is a huge amount of economic activity in job creation in our urban centres. I should remind members of the House it is economic activity that is done in a responsible way. This work is being done in our rural parts of Canada in our natural resource sector.

In summary, I would encourage members to support the bill. We tried to get an amendment at committee, which did not pass. However, I hope the government takes it under advisement, meets with the members of the base metal industry, which will be negatively impacted, and comes forward with something in the budget.

I would also encourage our government, through the Minister of Finance, to get the message through to the provinces that any windfall gain experienced by them as a result of this bill, they should introduce measures to allocate that windfall gain to the mining sector so at least this part of the package is revenue neutral.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, we all know in the House, as well as in other provincial and municipal governments, decisions have to be made about what we want to focus on, how we want to progress, what we want to spend our resources and then set the conditions for the future.

I know the member for Etobicoke North is from Ontario like myself. We have the highest amount of smog days. Smog days kill people and cause respiratory diseases in people. In my community we have some of the highest birth defects and all kinds of different cancers because of environmental contaminants. There is not enough money available to remedy this.

My private member's motion, which was defeated this week, dealt with creating a trigger to investigate, with an open process, some of the problems we faced because of the use of these energy products. We have decided that we will use them and that is fine, but at the same time we have an almost hopeless situation of the resources that go back.

We know the passage of this legislation is going to cost of $1.25 billion over five years. Would the member rather see that money go to health care and to create clean, renewable energy sources so people in his constituency can breathe, or would he prefer to have a tax cut for oil and gas companies?

[Roy Cullen, Liberal, Etobicoke North, ON]

Madam Speaker, I appreciate the comments and the question from the member for Windsor West, but we are confusing the issues.

In Toronto many of my constituents are concerned about air quality, as am I. I hope the new premier in Ontario will accelerate the phase-out of these coal-fired burners. By the same token, we need to be concerned of course with alternative energy. In fact Canada's oil and gas companies are looking at renewable energy and we should be supporting and providing incentives for that type of behaviour, and we are, either at the consumer end or the producer end.

At the same time, we cannot turn our backs on our natural resource economy, which is creating and maintaining thousands of jobs in Canada. We can insist that they be environmentally responsible, and they are. However to just say that we should not support our mining, oil and gas sectors in Canada because we have these concerns about Kyoto and the environment does not add up, it does not make sense and it is not logical. It should not be supported by the Canadian public and I am sure it will not be in the House.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, this is not about not supporting those workers and industries. We can look at the closure of the Petro-Canada refining station in Oakville as one specific example. It has chosen not to upgrade the plant. Instead it has chosen to produce dirty gas until 2005, then import gas from Europe and brand it with its own company flag. That will throw people out of work in the Toronto area. Not upgrading that plant will subject them to poor environmental conditions until 2005.

The government, because it is a 20% shareholder in Petro-Canada, has done nothing about this. It will benefit by $1.5 million. Would the member agree that benefit should go to the workers or to make Petro-Canada upgrade its facility so people living around his area do not have to breathe in those pollutants because it refuses to upgrade its plant?

[Roy Cullen, Liberal, Etobicoke North, ON]

Madam Speaker, I am not aware of the specifics of that event in Oakville, but we could turn the argument around and say that maybe the reason they are closing the plant is because we have not had a tax policy environment in Canada that supports them. However, not being familiar with the case, I am not going to promote that argument too strongly.

We need to be careful in our thinking. We cannot penalize an industry or a company because of some actions they are taking and not be supportive and creative in the way we create a business environment where they can grow responsibly and create jobs and economic activity in Canada.

[Guy St-Julien, Liberal, Abitibi—Baie-James—Nunavik, QC]

Madam Speaker, I am honoured to speak on behalf of everyone in my riding, of the miners, mining companies and small mining businesses throughout the vast territory of Abitibi-Témiscamingue, Chapais-Chibougamau and James Bay, and on behalf of the James Bay Cree and the Inuit in Nunavik. The riding covers about 850,000 square kilometres in Quebec and is the biggest mining riding in Canada.

I listened to the Bloc Quebecois member who said that noboby had had spoken out. I find this passing strange, because I have documents from the finance minister dated February 2002. It is the answer of the hon. member for LaSalle—Émard to one of my letters. Back in 2002, I asked for a reduction in the general tax rate of mining companies.

We knew that the tax rate for small businesses was supposed to drop from 28% in 2000 to 21% in 2004. This goes to show that we are concerned about the same issues.

Coming back to the mining industry, a story by Juliane Pilon was published in La Dépêche , a paper belonging to Jacques Aylwin, under the title “Decline in the Abitibi-Témiscamingue mining industry”. It said that rates go up, then go down, and may well remain low. That is what we should be promoting.

The Mining Association of Canada wrote us to enlist our support for an amendment to Bill C-48. I note, however, that none of the proposed amendments has been adopted and the Bloc Quebecois did not get anywhere in committee. The Liberal member who spoke earlier has summarized the entire situation very well as far as what the mining association was calling for is concerned. The same thing is happening back home.

If, however, we examine the facts, we know that the federal government is proposing a new rate: 5%, then 7%,10%, 10% and 10% until 2007. The mining association asked us to support 20%.

I listened carefully to the Bloc Quebecois member for Joliette, who said that they too support the Mining Association of Canada. What I find strange is that this is not what they proposed in the standing committee. Their proposal was 10% the first year, followed by 14% the second, and 20% thereafter. I find it odd that the Bloc Quebecois did not call for 20% right off the bat, instead of going from 10% to 14% and finally to 20%.

[Some hon. members]

Oh, oh.

The people trying to interrupt me ought to ask themselves this: How much is it going to cost the taxpayer? We know that year one will cost about $100 million, and the others $35 million. It will come close to $1 billion, all told.

I understand that this is not firearms, or sponsorships, but money is important. We know that, if the government sits down with the Mining Association of Canada in the nest few years, it can come to the House of Commons with an order in council to improve it. This is a start, a half-measure compared to the Bloc Quebecois proposal, of 10% only the first year, not 20%.

This sets the facts straight, and it is important to do so, because no amendment has yet been proposed. I support the bill because we must not lose it. We must at least gain what the government is proposing. It is new, and important.

A careful examination of the record will show that we have always supported the Mining Association of Canada, the Quebec Mining Association, and the prospectors of Quebec. Bill C-48 will impact small mining operations and major mining companies differently.

The small mining companies are resource extraction industries that do not do any mining exploration. This is a grey area, as it were, because some small companies operating a mine could still be considered small mining companies. Five percent is a good start, even if we would have liked to get 20%. We are going to work in that direction with this Minister of Finance and with the next one.

As to the present situation in the mining sector, the fiscal aspect is not the only important thing to consider. I just received a report dated September 2003 concerning the mining industry in the Abitibi-Témiscamingue area. I hope that the Bloc members have a copy of it handy because it is the last document that we have received. It is a document written by Luc Blanchette, a well-known economist from the Abitibi-Témiscamingue region, explaining what is happening in that sector.

The fiscal angle is not everything. We know how important the mining industry is for the economy of Abitibi-Témiscamingue, of the whole northern region and of Nunavik. We also know the economic and environmental context in which it is operating.

Moreover, the low prices of metals have caused the temporary closure of some mines or the postponement of some mining projects. We all know what is happening now. Some mines are closing and others are opening. New projects are being developed. But what can we, together with the opposition members, do in the long term?

The revival and mineral exploration in northern Quebec, in Nunavik and in the Abitibi-Témiscamingue region will come about through better defined mining zones, mapping and the search for economical sites. The investments made in 2003 will no doubt depend on the price of the metals in demand and will certainly be influenced by the price of gold and, as we know, the diamond situation.

What matters most are the consequences of that politico-economical context, which have been apparent since 1988. They did not suddenly crop up today because of Bill C-48. The very first year, instead of accepting 10% or 14%, the Bloc Quebecois should have asked that we follow up on what the Mining Association of Canada had requested and that we go for 20%. They too accepted a halfway compromise. When this government came to power, the amount was already down to 5%.

Among the consequences that we have seen since 1988, there is a 46% decline in labour and a 44% decrease in the number of hours paid by the mining industry in Abitibi-Témiscamingue. We know that, in Quebec, although the impact on employment was still significant, it was not as great, with a 33% reduction in the number of hours paid and the number of employees.

Given that approximately 20% of all mining operations in Quebec take place in Abitibi-Témiscamingue, the decrease observed at the provincial level is probably due to the poor performance of the regional mining industry.

What do we do now? I will be supporting Bill C-48. I come from a mining area and I used to be a miner myself. It is good to have gained something. It is also something new. Reducing the tax rate applicable to corporations was not an issue before. But it is important, just as it is for the corporations to set up their headquarters in our region instead of Montreal or Toronto, where they are currently located.

We have to work with the current government and the governments to come to find solutions and improve the situation. We will see how things go in year one of the implementation of this bill, which provides for rates of 5%, 7% and 10% for the next five years. These rates could increase in every budget. In the next budget, the government might raise it to 10%, as the Bloc Quebecois asked for in committee. It could happen. We just have to wait and see.

What is important right now is to help our mining companies. Some companies are closing down in our region and more could do so in Abitibi-Témiscamingue in the months to come.

We need to go forward, work hard and work together. We cannot have our cake and eat it too, and the picture drawn by the renowned economist, Mr. Blanchette, reflects the real situation in the mining industry.

Members of Parliament do not create jobs. It is important also to think about the miners who work underground. The PQ government never agreed to set up a retirement plan for miners. If we can introduce tax credits for mineral exploration activities, then we should be able to help the miners who work underground. The PQ made that promise during the 1973 election campaign, but never kept it. The government should address this issue and think about setting up a pension plan for miners who need it when mines close down.

[Pauline Picard, Bloc, Drummond, QC]

Madam Speaker, Bill C-48 has been under review for a long time and witnesses have appeared before the committee, representatives from the mining industry, among others. The most frustrating thing about this bill is that it gives $250 million to the major oil companies.

When the mining associations appeared before the Standing Committee on Finance to talk about their problems and needs, I am sorry to say that the members for Abitibi—Baie-James—Nunavik and for Témiscamingue were not there. Today it is all well and good to—

[Guy St-Julien, Liberal, Abitibi—Baie-James—Nunavik, QC]

Madam Speaker, I rise on a point of order.

[The Acting Speaker (Ms. Bakopanos)]

Order, please. I believe the member has not—

[Guy St-Julien, Liberal, Abitibi—Baie-James—Nunavik, QC]

Oh, oh.

[The Acting Speaker (Ms. Bakopanos)]

Order, please. First, I have not yet given you the floor. Second, I imagine that the member for Drummond is going to ask her question. At that point, you will have time to answer.

The hon. member for Drummond.

[Pauline Picard, Bloc, Drummond, QC]

Madam Speaker, I wanted to mention that we have met with mining association representatives. They informed us of what they need. They also gave their recommendations for this bill. They are very worried because they are being discriminated against relative to the major oil companies, for instance. They proposed two amendments that we submitted to the standing committee, including the amendment that the member for Abitibi—Baie-James—Nunavik is talking about. This amendment had also been proposed by a Liberal member; these two amendments, that of the Bloc and that of the Liberal member, were rejected. That said, we cannot be accused of not having done our work.

I would like to know what he thinks; he still maintains that he is going to vote in favour of the bill, while the mining associations, in particular those in his area, are asking us to vote against it. I would like to hear what the member has to say about this.

[Guy St-Julien, Liberal, Abitibi—Baie-James—Nunavik, QC]

Madam Speaker, I wanted to raise a point of order on a matter of interpretation. The hon. member said we were not there, at committee. That is incorrect. We cannot be everywhere at once, and there are many committees of the House of Commons. Often, Bloc Quebecois members travel around the world and cannot attend committee. We do not mention it in the House. They are travelling. I am the only member not to have travelled abroad. I want to make that perfectly clear.

The hon. member mentioned the $250 million for oil companies. Well, let us talk about oil and this $250 million. There are two provinces in Canada with an energy authority These authorities set the floor price for oil. We cannot talk about oil without talking about the people who put regular gas in their vehicles. As we know, recently in Ottawa, gasoline has been selling for 66.4¢ per litre, while in the Abitibi, it is selling for 74.9¢; in Kuujjuaq, regular gas is selling for $1.22 per litre. Who established an energy authority for oil in Quebec? The PQ did, when it was in office. It should not have. It should have gone the way of the free market instead. Our gasoline price would be closer to Ontario's 66.4¢, instead of 74.9¢.

Let us look at the bill as it stands. The Bloc Quebecois contends that we did not adopt the amendments put forward. There are no amendments before the House at this time. Bill C-48 is. We all have respect for the Quebec Mining Association, the Mining Association of Canada and prospectors. We win some and we lose some; it is 50-50. But the hon. member mentioned rates. The Bloc said, “We support the mining association for 20%”. That is incorrect; what the Bloc proposed was 10%, then 14% and 20% thereafter. They should switch gears, because we are not debating amendments today.

I support the legislation in order to get at least 50%.

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

Madam Speaker, I will be very brief. I would like to ask a question to my colleague. For example, if the member for LaSalle—Émard, who owns a fleet of ships, paid his taxes in Canada instead of in the Bahamas, would this help the mining industry?