Mr. Speaker, I am pleased to take part in the debate today on the budget implementation act, Bill C-28. There are a lot of things we would like to see in the act but they are not in place. We would certainly like a vote of confidence from the Canadian public to give us the opportunity to see some meaningful tax relief in the country. Unfortunately we have to put up with what is in the act today. We see a lot of shortcomings in it, but I want to deal specifically with a few things covered by the motions introduced by the various members today, which have been grouped together.
I would like to start with the GST issue, specifically the GST on school buses which was brought to our attention by the Bloc through its amendment. We see a lot of things wrong with the GST, a GST that was going to be scrapped by the government when it came to power in 1993. At that time, it was generating about $15 billion of revenue for the government. Ten years later it was generating $25 billion. In this current year it looks like it is going to exceed $30 billion. It has become quite a cash cow for government. Over $4 billion dollars per percentage point is what it is generating for government.
The concern introduced in the amendment lies in the unfairness of the GST issue in terms of rebates for school boards. We are concerned that there is a problem. There is a problem in treating the private sector the same as municipalities or government; we think there should be a fairness there. The difficulty with this particular amendment, though, is that when this issue was taken over through the GST from the old manufacturers' sales tax, it meant that the school boards would have the equivalent effect of the manufacturers' sales tax when that was in effect for the purchase of school buses and all of the costs for having school bus service for schoolchildren. That equivalent at the time came to 68% of the GST.
Some school boards have found ways around this by contracting out their school bus service and therefore have asked for 100% of that contracted service to be rebated. The court found that this should be the case, but we believe that it is really up to Parliament to decide what the issue is here. Essentially what the court decision does is put the boards on a different footing depending on whether they contract out the service or provide it themselves. School boards tell me that if this court ruling were to stand they would have to move to a contracting system themselves because they would gain a considerable amount of money.
The government, through Bill C-28, has moved to close off this abrogation of what was happening to put it back to its original intent of essentially 68%. We support that, but we do see a lot of things wrong with the GST. We think it needs a general overhaul. In fact we would start by reducing the amount that the GST takes in per year for the government, partly because we think that the government does not need this extra income. As I said, it is raising $15 billion more now than it raised in 1990 when it first came into effect.
If it were just that the government needed the income, that might be a good argument for keeping it as such and not having to reduce the rate, but we see the government wasting a lot of taxpayers' money day in and day out in the House. My colleague from St. Albert had the waste report out the other day and gave a lot of examples of how that has happened. We think that giving business subsidies to huge corporations in Canada should not be what the Government of Canada is all about. In fact, if individual Canadians want to invest in Bombardier or Pratt & Whitney or General Electric, Canadians have the opportunity to buy stocks. They have that opportunity through their mutual funds. Why should the Government of Canada do it for them? The government is giving hundreds of millions and in fact billions of dollars to those corporations every year and mismanaging or wasting a tremendous amount of money.
Therefore, we think there does need to be an overhaul of the GST. We would start by reducing the amount that is brought into the government. One per cent equates to about $4.5 billion.
A couple of other issues have been identified in the amendments. I notice that the NDP would like to delete any changes to the capital tax. We want to get rid of the capital tax altogether, but the NDP sees it as another source of revenue for government.
When we travelled across the country with the finance committee we were told repeatedly that the capital tax was one of the most damaging taxes in order to attract investment to Canada. The reason is that it is a tax on a business. I would compare it in some ways to a property tax. Essentially, that tax is there whether the business makes any profit or not.
That does not make any sense to me. Canada has lagged behind pretty badly in investment. We have fallen off as a source of direct foreign investment for others to invest in Canada as a percentage of world investment over 30 years. That is a discussion for another day. Suffice it to say that public policy, largely by this Liberal government, accomplished all that in about 30 years. However we think the capital tax should be reduced and we would like to reduce it over two years, not over five years, as the government has suggested.
There are couple of other things we are dealing with today in the amendments that are before us. There are a couple of amendments on the disability tax credit for those people who have disabilities. We certainly have received a lot of mail on this issue. The government seemed to be sort of the grinch who stole Christmas in the way it treated people with disabilities. I notice that the Liberals have responded to some of that pressure and will be changing the wording to try to deal with that issue.
We support easing the definition of disability from “feeding and dressing oneself” to “feeding or dressing oneself”, which could make a considerable amount of difference for those who qualify. We would also support that the government stop harassing disabled people who have been receiving disability tax credits for a number of years only to find themselves reassessed and no longer receiving them.
I made the case in the House on previous occasions about a constituent who contacted me. He has lost a leg and has to wear a prosthesis to get around. He is a proud individual. He works in the oil patch. It is a problem for him to have to use a prosthesis in a very tough environment. However he wants to work and does not want to be sitting there on welfare. The disability tax credit allows him a little measure of comfort in being able to claim some of the extra costs involved to rig his van so he can drive and so on. The government took that away from him, as it did from many other Canadians.
I hope the government has learned its lesson and that some of the changes made to the tax act today will address that.
The other area the amendments deal with is the RRSP. I see the NDP would also like to cancel changes to the RRSP limit. We believe it is important for Canadians to have the ability to save for themselves and raising the RRSP limit is a measure that we would support. We would support it because it looks like Canadians will have to rely more and more on themselves for their own retirement income. They will not be able to rely on government, especially the Canada pension plan which has seen some fairly substantial losses in the investment sector over the last year. Be that as it may, we think the plan continues to be in trouble, partly because the former finance minister, the member for LaSalle—Émard, would not listen to the chief actuary of the Canada pension plan when he said that rates would have to be even higher than the 9.9% that it has risen to in the last couple of years. He also said that It was not sustainable. As the Canadian birth rate continues to decline, unless something changes, there will be a small amount of people working to support the system down the road.
While we agree with a lot of the measures being implemented in the act, in most cases they are half measures, such as the capital tax only going part way. We see no personal tax relief. Canada is falling generally well behind the United States in corporate tax rates again as a $600 billion tax package is working its way through congress at the moment.
Our productivity and our competitiveness will be affected once again and, with the rising dollar, I suggest that a lot of these chickens will be coming home to roost pretty quickly because the government has not made the changes on the side of reducing taxes in order to compensate for the rising dollar. This will continue to be a bigger issue well into the future.