Debates of May 28th, 2003

Parliamentary Employment and Staff Relations Act

[The Deputy Speaker]

It being 6:42 p.m., the time provided for the debate has expired. Pursuant to order made earlier today, the question is deemed put and the recorded division is deemed requested and deferred until Tuesday, June 3 at the expiry of the time provided for oral questions.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Gurmant Grewal, Canadian Alliance, Surrey Central, BC]

Mr. Speaker, on behalf of the constituents of Surrey Central, once during question period I asked the government when it would begin a serious review of Canada's regulatory system with an eye toward reducing the red tape. The hon. government House leader chose to respond but he failed to give an answer to my question.

After I raised the issue of regulatory reform in the House and had round tables with stakeholders in the industry, the Liberals listened to me, and in September's throne speech promised to reduce the administrative burden, also called red tape, on businesses. The industry minister is on record promising regulatory reforms some time in the year 2010. It is an unacceptable long term calendar.

The External Advisory Committee on Smart Regulation is now touted as the fulfilment of this promise. It has a chair, Mr. Hugh MacDairmid, and a $4 million two year budget. Who knows, maybe in another few days it may even have some committee members. However will it reduce the regulatory red tape in Canada? That is my key question.

According to the committee's mandate, as stated in the press release of the Prime Minister's Office and in the executive director's press release, it will not. The committee will “provide an external perspective and expert advice to the Government of Canada on regulatory issues spanning economic and social policy objectives”.

The government should reconsider its regulatory approach and it must clearly act in a reduction in red tape rather than some hanky-panky stuff. Canada's regulatory system is slow, costly, overlaps and is inefficient. The red tape imposed by government is strangling productivity and hurting economic growth in Canada.

The provinces have already reached this conclusion. We know the province of Ontario is light years ahead of the federal government in regulatory reforms. Provinces like Alberta, British Columbia, Nova Scotia and even some territories have also done a remarkable job in their work toward regulatory reforms.

Canada has hundreds of thousands of regulations with more being added every day; 16 a day on average. The cost to businesses and to Canadians is over $100 billion.

It is time for the government to follow the lead of the provinces and act to review the many thousands of existing overlapping, ill-considered and outdated regulations.

In the last quarter century, Canadians have witnessed unprecedented growth in red tape. Therefore the government needs to move from red tape to smart tape and from smart tape to smart government. All of Canada will benefit from this exercise, so I demand an answer to my question. When will regulatory reform take place in Canada?

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I am pleased to have the opportunity to discuss Canada's capacity to produce high quality regulation. There have been some comments and I appreciate the member raising this issue.

The regulatory regime in Canada is very competitive with other jurisdictions and regulatory activity has contributed positively to Canada's quality of life and business environment.

The hon. member has referred to a number of statistics, essentially from the Fraser Institute publication, on the cost of regulation in Canada that covers all levels of government. This is one view of Canada's regulatory environment and it is based on some questionable methodology.

Another view comes from the OECD, which has recognized the Government of Canada as not just a worldwide “regulatory reform pioneer” but a “consistent leader and a vigorous innovator”.

Recent independent publications can attest to Canada's record of regulatory excellence. For example, the 2002 OECD report, entitled “Canada: Maintaining Leadership Through Innovation”, praised the Government of Canada's regulatory performance in providing businesses the freedom to prosper, which I know is a very legitimate concern of the member across the way.

In particular, the OECD report acknowledged that Canada appears to have been:

--unusually successful...in pursuing one of the major objectives of successful regulatory policies, being [able] to control overall regulatory burdens, or the trend of 'regulatory inflation' as experienced in most OECD countries.

An assessment of regulatory impact should not rely solely on statistics, but should focus on the fundamentals of regulatory reform. In particular, the Government of Canada's regulatory regime is designed to support our high quality of life and bolster our international competitive economy, both things I know the member across the way is very concerned about.

Evidence of this positive impact of regulatory reform on standard of living and economic performance can be seen in several international comparative studies which assess the business climate in this country, and we score well in these studies.

A study by The Economist magazine's intelligence unit ranked Canada as the fourth best country in the world in which to do business for 2001 to 2005. Recent research by OECD also concluded that Canada has one of the lowest levels of administrative burden among the OECD countries, after the United Kingdom and the United States.

Clearly, Canada has a strong system of regulatory governance but the world is changing. Markets are increasingly integrated, more companies are becoming global, knowledge increases and science advances at a faster pace than ever, and citizens have access to better and more information and are more demanding of government.

In response, Canada is redesigning its regulatory approach to create and maintain a Canadian advantage. The member referred to the 2002 Speech from the Throne, which I will hopefully elaborate on afterward, but it basically says “to accelerate reforms in key areas to promote health and sustainability, to contribute to innovation and economic growth, and to reduce the administrative burden on businesses“, on which both of us I know can agree.

I want to speak a little about smart regulation. Smart regulation will ensure Canada has a regulatory framework that contributes to the innovation environment for the social and economic benefits of Canada at the same time it protects our health and safety, preserves the environment and reduces the administrative burden on business.

[Gurmant Grewal, Canadian Alliance, Surrey Central, BC]

Mr. Speaker, in the short time that I have let me say that I rely on facts.

There are regulations still on the books, for example, for checking the canvas on the wings of airplanes when the wings are now made of metallic. Drivers still have to keep an axe in their bus.

I am sure the member has spoken to the Chamber of Commerce members, manufacturers, exporters, importers and so on, and will agree that there is a need to harmonize regulations in Canada among the provinces, the federal government and various other bodies and departments. We need to standardize the regulations with provincial, national and international standards; a regulatory impact analysis has to be studied and done; a cost benefit analysis has to be done; a disallowance procedure has to be in place; and so on.

In conclusion, I would urge the member not to do window dressing by quoting some of the reports from various sources but to look into the facts. Regulations and red tape are impediments to investors and to growth of businesses, particularly small businesses.

Therefore I urge the member to convey a message to the government that it needs to follow the example of the provinces and move from red tape to smart tape, to smart government, which is what other provinces have done. This I what I demanded. I need an answer as to when the government will do that.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, I will elaborate a little bit here. As announced in the 2002 Speech from the Throne, the external advisory committee on smart regulation, the EACSR, will provide expert advice. Over the next 12 to 15 months the EACSR will develop recommendations on modern regulatory strategy to support Canada's objectives as a trading nation that is committed to offering a high quality of life for its citizens.

Smart regulation is about preparing Canada for the future and ensuring that we have a modern regulatory framework designed for the 21st century to maintain a Canadian advantage.

In the next 12 to 15 months we will see movement on that. Working with the hon. member, with his interest in this, will be very important. Again, together I think we can advance an agenda on which we both very much agree.

[Greg Thompson, Progressive Conservative, New Brunswick Southwest, NB]

Mr. Speaker, I asked the Minister of Finance a question a few weeks ago regarding the former minister of finance, the member for LaSalle—Émard, who was the owner of Canada Steamship Lines and who, by all reports, at least on the Liberal side of the House, will be the next Prime Minister of Canada.

I suggest there is a conflict of interest in the ownership of that line in regard to what the hon. member did when he was finance minister. I just want to review what he did.

As the owner of the Canada Steamship Lines, the member for LaSalle—Émard, the next Prime Minister of Canada if the Liberal Party is correct in what it is saying, when he was the minister of finance he effectively created a loophole in the Income Tax Act to escape paying taxes in Canada. I find it unbelievable that a future Prime Minister of Canada and a former finance minister would manipulate the Income Tax Act to suit himself personally. He knew that the loophole was there and he refused to close it.

This is not just my opinion as a member of Parliament. This is also the opinion of the Auditor General. In her annual report of 2002 she acknowledged that.

What the member for LaSalle—Émard successfully did was he avoided paying taxes. The following is an example of what happens to Canada Steamship Lines with the effective tax break that it created in Barbados for itself. It avoids paying corporate tax in Canada. Corporate tax in Canada is about 28%.

Instead, because the member for LaSalle—Émard allowed that loophole to exist in the Income Tax Act, an act which he controlled as finance minister, Canada Steamship Lines now pays taxes in the range of 1% to 2.5% in Barbados.

The ships that are owned by the former finance minister also operate under what we call flags of convenience. Canada Steamship Lines may be based in Canada but it operates under flags of convenience, including under the flags of countries like Barbados, which I mentioned, Bermuda, China and Singapore, to name a few. It allows that company today as we speak to pay lower wages. The employees on those boats do not have the same benefits as do employees working on a ship registered in Canada.

I find it wrong when a finance minister of Canada can create his own rules to operate his own company and still remain in cabinet. That is the question I put to the Minister of Finance but I do not think he accurately responded to that question. There is a big concern, at least on this side of the House, and, generally speaking, on the part of the public itself in terms of how a minister of the crown could be allowed to do that. My question is, why?

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

First, Mr. Speaker, I am somewhat disappointed in the hon. member's comments and some of his tone, because he is alluding to some comments here with regard to a fine, outstanding parliamentarian, the former minister of finance.

I think the issue he wants to talk about, which he really did not get to, is the issue of taxes and that I think is a legitimate question. I would like to focus on that rather than on what I would consider to be gossip, rumour-mongering and things that really have no place in this House.

Canada taxes not only the income of our Canadian resident corporations, whether they earn it in this country or abroad, but also in other situations the income of foreign subsidies, which is what I would like to talk about.

Canada's rules must therefore take into account the fact that those companies' incomes could be subject to foreign tax as well. There are two basic ways that countries around the world deal with foreign taxes in these circumstances. One way is to have the taxpayer claim a foreign tax credit, which reduces their home country tax by the foreign amount. The second way, as I am sure the hon. member knows, is simply to exempt the foreign source income from the home country tax.

Our Canadian tax system combines these two methods. A Canadian corporation's direct foreign source income and certain of the income of its foreign subsidies is eligible for foreign tax credits to reduce the Canadian tax on that income.

At the same time, Canada exempts certain kinds of foreign income of foreign subsidiaries from Canadian tax. The rules are complex, but essentially the exemption we are speaking of is given for the active business income of a foreign subsidiary that is resident in the country with which Canada has a tax treaty, provided the income is earned in such a country.

I believe the hon. member's question boils down to this. Why, when the government revised certain aspects of these rules several years ago, was the exemption left in place for a particular kind of subsidiary resident in Barbados that does not pay a substantial tax rate? The answer has several elements.

First, it is not clear that abruptly curtailing that exemption would have benefited Canada. In a world of tax planning opportunities, there is no assurance that corporate groups would not simply move the functions performed by, in this case, a Barbados subsidiary to another jurisdiction where similar results could be obtained. In fact, the corporations would not pay any more Canadian tax.

Indeed, forcing businesses out of Barbados could actually be counterproductive. As a tax treaty partner, Barbados gives Canada's tax authorities far more information and assistance than many other jurisdictions do.

Second, Canadian business is understandably interested in maintaining its international competitiveness. In this case, decisions that disrupt the operations of Canadian corporations abroad can have repercussions on their competitiveness. I am sure I will be able to expand a little more on that after the hon. member has a chance to comment.

[Greg Thompson, Progressive Conservative, New Brunswick Southwest, NB]

Mr. Speaker, it is an insult to the House to suggest that my question is based on innuendo and not logic or fact. The fact is that every national newspaper in the country has reported on this, as well as the CBC program Disclosure .

There is no question that the finance minister at the time, the owner of Canada Steamship Lines, the member of Parliament for LaSalle—Émard, the next prime minister of Canada according to the Liberal Party, in fact used a tax loophole, one that he could have closed himself as finance minister. He kept that loophole open to suit his own needs, or in other words, to make his company more profitable. He exercised that loophole. It is a direct conflict of interest. He should not have been allowed to do that, nor should he be allowed to sail under what we call flags of convenience to avoid Canadian taxation and Canadian labour rules.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, I think the simple solution is if the hon. member believes that what he has read in the newspapers is in fact the case he can say it outside, put it outside, and deal with the implications of that. I think it is unfair, it is unwarranted and it is unnecessary to besmirch the reputation of an honourable gentleman in this House without evidence. If the member does not have it, that is one thing. If he has it, he should say it outside where he is not immune.

I thought the issue here was taxes. It is not about a particular member. It is about an issue. Let us try to enlighten the House a little bit. Canadian businesses understandably want to be competitive. What is important here is that as a fellow Commonwealth state, with which we have deep ties, a tax treaty formed the basis, in this case, of giving an exemption to these Barbados corporations that have been in place since 1980. The choice to leave in place the long-standing exemption for income from these Barbados corporations was an entirely reasonable one.

I want to point out to the member that this does not mean we are standing still. For the benefit of the member, we are currently reviewing both our tax treaty with Barbados and the relevant income tax regulations to make sure they fit our tax policy goals.

Changes, the hon. member may like to know, may be considered, but let us be clear: Any changes will have to result in a careful and thorough analysis and we are going to look at that not by political motivation but by real facts.

[Svend Robinson, NDP, Burnaby—Douglas, BC]

Mr. Speaker, every day in communities across Canada, that we have the honour of representing, men and women in the Canadian fire service, Canadian firefighters, put their lives on the line. They do so for the citizens in my community of Burnaby, the citizens in Cornwall, Montreal, and in communities across this land.

Today I want to once again urge the Liberal government to listen to the strong appeal from Canada's firefighters to establish a national hazardous materials and weapons of mass destruction training program for Canada's first responders. As the parliamentary secretary, who will be responding on behalf of the government, well knows Canada's firefighters have been seeking funding in the amount of $500,000 to establish this program in Canada for some time now.

It is a program which is already in place in the United States. In fact, because the program's curriculum and administration are already in place and well established in the United States, virtually all of the funding for this program in Canada would go toward actual instruction.

Most Canadian cities and towns do not have dedicated HAZMAT teams or specialized CBRN response training. That means the majority of Canadians are not adequately protected from the aftermath of a terrorist attack.

There was a situation near the University of Guelph where firefighters in that community were forced to consult their guidebooks after a van carrying radioactive material overturned. They did not have the kind of comprehensive training in that instance that they should have had and that all firefighters across this country should have.

I introduced a motion last year in the House calling on the Government of Canada to provide additional funding to Canadian firefighters which would enable them to participate in the International Association of Fire Fighters hazardous materials training for first responders program, thereby providing them with the skills necessary to respond effectively in the aftermath of chemical or biological attacks. This is one of the three key recommendations that Canadian firefighters have brought before the Parliament of Canada.

It is essential that as Canadians we recognize that we have a responsibility to listen to these concerns. Firefighters have talked about the importance of funding this program. They have called for changes to the Criminal Code of Canada that would increase the severity of punishment for criminal acts that kill or injure firefighters.

Recently, for example, a firefighter from my community of Burnaby, John McQuade, was in a grow-op situation in which his life was at risk. He said that we must come down much tougher in circumstances like that, and I agree. Firefighters have also called for a national public safety officer compensation fund in Canada.

It is long overdue for the government to recognize that out of the $7.7 billion allocated for national security after September 11, surely it can come up with $500,000 to fund this important program. It is not the military but firefighters who are the first on the scene in the event of a terrorist attack. I call upon the government to finally act on this. Let us not have any more excuses for delay. The time to act is now.

[Marlene Jennings, Liberal, Parliamentary Secretary to the Solicitor General of Canada]

Mr. Speaker, I wish thank the member for Burnaby--Douglas for raising the issue of government funding to train Canadian firefighters to respond effectively to acts of terrorism on Canadian soil.

I am happy to inform him that the government does indeed recognize the critical role of firefighters in responding to terrorism, particularly acts of chemical, biological, radiological, and nuclear terrorism, otherwise known as CBRN terrorism.

In a terrorist incident firefighters, together with the police, emergency medical services and hospitals, are on the frontlines working to ensure public safety and security. Our government agrees with the member for Burnaby--Douglas that in order for these first responders, including firefighters, to do their job effectively they need adequate training.

Before the 2001 budget was brought down, the federal government held consultations with almost all the provinces to discuss how we could combine our efforts to strengthen the ability of our country to fight terrorism. Many people attended these meetings, including a large number of firefighters.

The results of these consultations were fed directly into the preparatory work that went into the 2001 budget which, and I ask the member for Burnaby—Douglas to listen carefully, allocated $513 million over five years to strengthen national response capability for CBRN terrorism, chemical, biological, radiological and nuclear terrorism. This included funding for equipment and training for first responders, including firefighters.

As well, the Office of Critical Infrastructure Protection and Emergency Preparedness, OCIPEP, has responsibility for overseeing the allocation of the funding and has in place a federal-provincial program to cost share the purchase of CBRN related equipment. To date firefighters have received $5 million over the past two years to purchase CBRN related counterterrorism equipment.

OCIPEP was also given the responsibility for developing a national training strategy in collaboration with other departments. The training program, which is being developed in close consultation with experts from the participating federal departments as well as first responder subject matter experts, will include four levels: introductory, basic, intermediate and advanced.

Pilot presentations of both the introductory and basic courses have already been held, with the intermediate courses to follow. Feedback from first responders on the pilot courses has been extremely positive.

Training will be harmonized in order to ensure the effectiveness of the programs, including interoperability and avoiding overlaps.

When the training program was being developed, an in-depth review was done of the current chemical, biological, radiological and nuclear terrorism training programs in Canada and the United States. I can also assure the hon. member for Burnaby—Douglas that firefighter training needs were taken into consideration in the development of the course.

[Svend Robinson, NDP, Burnaby—Douglas, BC]

Mr. Speaker, the bottom line is that the Liberal government has completely ignored the request of Canada's firefighters for half a million dollars in funding for this very important hazardous training program.

The parliamentary secretary said that there was $500 million there and there is more money here, but why is it that the firefighters are still not being allocated the funding that was promised to them?

On March 27 of this year in the House, the Solicitor General said in answer to a specific request by this member that “the government, at an appropriate time, will respond to that question”.

Then on May 15 at the justice committee when I asked the question again, the Solicitor General said that they were looking into it and would respond at an appropriate time.

On April 29, the Minister of National Defence, in response to a question from my colleague, the member for Palliser, the labour critic, said, “...the government certainly supports this initiative”.

Why on earth, if the government supports this worthy initiative, will it not listen to firefighters, put the funding in place through the OCIPEP program and make sure that firefighters are in a position to respond effectively to these CBRN situations?

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Mr. Speaker, I would like to inform the member that when I talked about the $513 million which was allocated in the 2001 budget, the government in that amount committed $59 million in chemical, biological, radiological and nuclear training for first responders over six years as well as $12 million ongoing. In addition, the government committed $10 million for the purchase of equipment that first responders need in order to deal with chemical, biological, radiological and nuclear emergencies. As I mentioned, over the past two years firefighters have received $5 million to purchase that kind of counterterrorism related equipment.

As well, I mentioned that the government is working with the provinces to develop a long term chemical, biological, radiological and nuclear training program for first responders based on the training needs and priorities first responders themselves have identified at the local level, and the first pilot project of training has actually taken place.

[The Deputy Speaker]

The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 7:12 p.m.)