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House of Commons Hansard #117 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was federal.

Topics

SupplyGovernment Orders

3:35 p.m.

Oak Ridges Ontario

Liberal

Bryon Wilfert LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, gasoline prices are the purvey of the provinces not the federal government. The federal government is responsible for the issue of competition through the Competition Bureau. If the member is unhappy about prices, he can talk to the Government of British Columbia. We know that in fact that is a provincial responsibility and if it wants to freeze prices, it can.

Often there are other problems with the issue of taxes. The Government of New Brunswick learned this a few years ago when it decided to reduce the provincial tax on gasoline by 2%, it was immediately eaten up by the oil companies which raised prices.

The fundamental problem with the member's argument across the way is that his party wants to dedicate a portion of the tax. We know that municipal governments are corporations. They are created by the provinces. Hence, any revenue sharing program between the Government of Canada and municipalities would be subject to provincial control over municipalities.

This is something, at least on this side of the House, that we do not support. In fact, Quebec has legislation which prohibits municipal governments in the Province of Quebec from entering directly into fiscal relations with the Government of Canada. And again, they need provincial approval.

Clearly, we also have concerns. We have seen other cases with tripartite arrangements, however in this arrangement it would not be tripartite. This is simply an arrangement where the hon. member is asking us to turn over moneys to the provinces and hopefully they would dedicate and direct them for municipal purposes, particularly infrastructure.

I would like to ask the member, how does he reconcile this mechanics problem? There is clearly a difficulty here to deliver something which constitutionally would be very difficult.

SupplyGovernment Orders

3:35 p.m.

Canadian Alliance

Gurmant Grewal Canadian Alliance Surrey Central, BC

Mr. Speaker, I will the hon. member where the difficulty is.

Wherever the hon. member for LaSalle—Émard goes and on whatever issue, he promises everything to everyone, but he does not know what his record is. When he was finance minister for nine year, he increased gasoline taxes from 8.5¢ to 10¢ and called it a deficit financing tax. But now, there is no deficit, so why is there a deficit financing tax? Why did he not eliminate it at the same time the deficit was eliminated? That is where the difficulty lies.

Another difficulty is that the government is greedy for taxes. It charges taxes on taxes. It charges GST, the most hated tax in Canadian history, on taxes. Those taxes, whether provincial or federal, are neither goods nor services. That is what GST is supposed to be, but it is being charged on taxes. Can members think of any country in the world where the government is charging taxes on taxes?

The weak Liberal government takes in $4.7 billion in fuel taxes and on top of that it collects $2.25 billion taxes in GST. Out of all this money, how much does it spend on infrastructure development? That is what the gas tax is for. It is to be spent on roads, bridges and infrastructure development. Do members know how much it spends? Just 1.7% of the money. Where does the remaining money go that is collected from gasoline taxes and GST? It goes to that big black hole. The Liberal government is mismanaging taxpayers' money.

If the hon. member really wants to find out where the difficulty is, it is with the government's mismanagement, greediness and arrogance.

The parliamentary secretary has said that it is a provincial problem. That is what the government always does on any federal issue, it transfers the responsibility to the provinces. Even in the case of mad cow disease, SARS and anything else, it will transfer the problem to the provinces.

In this case, with the facts and figures I have quoted, I will tell the hon. member to look into the facts and not simply transfer the responsibility but do something on that side. The government takes so much money away from the provinces, but it gives the provinces only 1.7%. That is where the difficulty is.

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3:40 p.m.

Liberal

John Bryden Liberal Ancaster—Dundas—Flamborough—Aldershot, ON

Mr. Speaker, oddly enough this debate, this motion, brings me back to why I ran for Parliament in the first place. It was just such a motion in principle, or a move in principle, that the government of the day, the previous government, the Mulroney government, was attempting to bring in as the Charlottetown accord that prompted me to set aside what was at that time a very interesting career as a writer and on impulse to put my name in for the nomination locally, and after that to become a member of Parliament.

I was very fortunate, Mr. Speaker. I was reacting to the Charlottetown accord negatively. I went in and put my name in for the nomination, in the sort of sense that I wanted to become a politician, and a Liberal politician to make sure that the Liberals never supported something like the Charlottetown accord ever again.

The reason, Mr. Speaker, and why it relates to the motion, is that what the Charlottetown accord did is it transferred all kinds of federal powers to the provinces, and in so doing, also undertook to strike agreements with the provinces in these areas of jurisdiction whereby there would be a transfer of tax points and there would be cash subsidies to the provinces.

If you remember, Mr. Speaker, in the Charlottetown accord it proposed to transfer exclusive jurisdiction to the provinces in mining, in forestry, in housing, and in several other areas, tourism was another, recreation, and municipal and urban affairs. The reason why I was upset by that proposal--and I was one of the many, many Canadians who voted against the Charlottetown accord--is I felt that that proposal, had it passed, would have fatally damaged the ability of the central government, the government here in Ottawa, to maintain a sufficiently significant role in Canadian political life that Canada could stay together. I believe then and I believe now that the Charlottetown accord would have devolved so much power to the provinces that 11 years later we would not have a country.

My problem with this motion is it does precisely the same thing as the Charlottetown accord proposed to do with these various sectors that I mentioned. What it proposes to do is to take federal tax revenue in the form of GST and excise taxes on gasoline, and transfer that revenue, that tax collecting privilege shall we say, to the provinces. So instead of the federal government collecting $4.8 billion in excise taxes plus I think it is $1.1 billion in GST, it would allow tax room for the provinces to collect that same tax and then to spend it, along with the municipalities, on municipal infrastructure.

Now, Mr. Speaker, that is not just the thin edge of the wedge. That is giving away the ability of Canada to function, because we have all seen time and time again and have experienced in the last 10 years certainly with very, shall we say, right-wing governments in some key provinces, and rich provinces like Alberta and Ontario, where the governments of the day, in order to exercise an ideology based on tax cuts for personal spending, have taken advantage of the money that was transferred by the Mulroney government, primarily in the form of health care transfers but a lot of money. Instead of investing in health care themselves, they have relied on the federal funding, complained that it is not enough, and used the money that should have been used by the provinces on health care in order to cut personal income taxes. That is precisely the phenomenon that has occurred in Ontario. We get this thing happening all the time, Mr. Speaker.

When the federal government does not control and stipulate how transfers of federal money are to be spent by the provinces, the provinces usually rely either entirely on the federal transfer and back off and use the money that they should be putting in the program in some other way and what happens is the Ottawa government winds up losing control of how federal tax money will be spent. It ceases to have an effective voice in national programs across the country. We see that very much in the phenomenon that occurred in health care where, because so much was transferred in the ability of the provinces to raise their own money to finance health care, we get situations where the quality of health care in the provinces has deteriorated enormously.

Now on the case of roads and municipal infrastructure, this is entirely a provincial jurisdiction. Under the Constitution the provinces are required to spend themselves on roads and municipal infrastructure. What the Charlottetown accord would have done, however, it would have elaborated on the agreements so that there would have been an increased use of federal taxes to be acquired. The right to collect those federal taxes would have been acquired by the provinces to spend how they would.

A country cannot be run like that. A country the size of Canada cannot be run like that. Mr. Speaker, do you know what would happen if this motion were to go forward and the federal tax collected of $5.6 billion were transferred to the provinces to use how they would on roads and municipal infrastructure? I can tell you what would happen. I can tell you what would happen as it occurs right now in Quebec.

The Trans-Canada Highway is a road that was a national project that involved spending in provincial jurisdiction because the provinces are obligated to spend on the roads. But in order to have a single highway that crossed from one end of the land to the other, the federal government of the day put up the money to enable the provinces to build the Trans-Canada Highway.

Mr. Speaker, if you take the Trans-Canada Highway from New Brunswick to Montreal in Quebec, what you will find is that road is in a permanent state of incredible disrepair. I suggest to you, Mr. Speaker, that the reason why it is in a permanent state of disrepair is that the province of Quebec is confident, because it is the Trans-Canada Highway, a federal, national project, that it can count on the federal government to come in and give the province the money to maintain that road.

We hear the Canadian Alliance from time to time in question period, we hear the same theme repeated, where a section of the Trans-Canada Highway in British Columbia--I think it is on the British Columbia side of the border--is narrow and dangerous and a member opposite has repeatedly called upon the federal government to pay for its expansion. The reality is even though it is called the Trans-Canada Highway, it is a provincial road and theoretically the provinces who maintain the care and maintenance of that road should pay for its expansion.

I am not against the federal government investing money in something like the Trans-Canada Highway because it is a national project. It is an important national project because the Trans-Canada Highway not only unites us culturally, it unites us economically. The problem is if the federal government gives away the revenues to the provinces that it would normally spend on the provinces, the $5 billion it has in the kitty as the result of the excise and GST taxes on gasoline, well then the provinces might not invest in a national project like the Trans-Canada Highway. They might consider it more important to pave the streets of Lethbridge or develop country roads.

Those are all important projects but it would be at the sacrifice of a national transportation responsibility that the federal government sees in the interests of all Canadians, because the Trans-Canada Highway crosses borders. It crosses provincial borders and it is one of those things, like the railways, that holds us together.

So I have to reject the motion, Mr. Speaker, because, and this is fundamental with me, I confess to be a Trudeau Liberal in that I believe that the only way we can keep this country together is to have a strong central government. If that strong central government does not have any money because it has passed its tax collecting power off to the provinces, it cannot keep this country together. To me, this motion strikes to the very heart of what we are as a nation.

I have sat here for 10 years in this chamber and I have heard repeatedly the arguments from the Canadian Alliance Party, formerly the Reform Party, and repeatedly from the Bloc Quebecois, who have constantly harped on the idea that more spending power should be directly in the control of the provinces. That is the theme of the Canadian Alliance and the Bloc Quebecois, and it is not a theme that is conducive to national unity. It goes the other way, Mr. Speaker, and marches in the direction of breaking this country up.

We cannot support a motion like this and I point out that Canadians cannot support it either, because this was actually put to the test with the Charlottetown accord in October of 1992. The previous government, the Mulroney government in my view fell over itself to try to give as much as it could to the provinces, and had it been in office for another term and had the Charlottetown accord passed, Mr. Speaker, I think the provinces would have been so powerful that the central government here in Ottawa would have been completely meaningless.

We cannot fool the people. We can have all the rhetoric in the world and say all these things about provincial rights, but in the end Canadians in every province know that it is in their interests to have a strong central government. One never knows when there might be a provincial government that is so foolish in its spending habits and its spending practices that it actually drives that province down economically, and that province may have to come to the federal government for rescue. I cite British Columbia, Mr. Speaker, where we had a New Democratic government for a number of years that managed to drive one of the richest provinces in the country onto its economic knees in a few short years, in a period of economic prosperity for the country.

I do not lay that blame with the Canadian Alliance, they are federal politicians, but I think Canadians want and need a federal government that has sufficient financial resources that when required can reach out to whatever province it is and help them in their hour of need. I cite mad cow disease. I cite SARS. I cite the crisis in agriculture that has occurred. I cite the problems in the Maritimes. All these problems have to do with the need of a particular area or region of the country for cash input. They need to be rescued with money. The problem is, Mr. Speaker, that the more a federal government gives away its ability to raise money to the provinces, the less it has the ability to come to the rescue of those regions and provinces that are in need.

Mr. Speaker, I reject this motion absolutely. I do not think it is a motion that is acceptable to Canadians. I do concede that it is a motion that is very much in keeping with Canadian Alliance philosophy, and that is fine, Mr. Speaker, because of course this is a place where we have differences of opinions. The one thing that I have come to know about the Canadian Alliance and the Bloc Quebecois is that both parties are parties that look more to their provincial responsibilities than their overall federal responsibilities. That, I suggest to you, Mr. Speaker, is the reason why the Canadian Alliance is in one region of the country, the Bloc Quebecois is in another region of the country, and why in effect we only have three national parties, parties that actually look to the full interests of the country, that look all the way across the country and are concerned about every part of the country.

One of the three parties is the NDP. The NDP especially are very, very aware that we have to have the money in the kitty in the federal government if we are going to bring in social programs that would be the standard across the country.

I would say the Conservatives, sometimes I despair of them because they begin to sound as though they favour provincial rights. There is a disturbing echo of the ideology of both the Bloc Quebecois and the Canadian Alliance in some of the things the Conservatives say, but I still believe they are a national party. However the true national party is this party. The party I represent on this side of the House is the majority, so obviously Canadians feel it is the national party of the land.

In a final note, if I really had my druthers, if I were Prime Minister, which is extremely unlikely and not a possibility at all, and I see there is a certain amount of accord on the opposite side, I would be so tempted to take those tax points back from the provinces, those that were given away under Mulroney, and increase the decision making ability of the federal government, particularly in health care, because it is simply a tragedy, the loss of control that has resulted from giving the tax points that we once had to the provinces.

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3:55 p.m.

Canadian Alliance

Brian Fitzpatrick Canadian Alliance Prince Albert, SK

Mr. Speaker, I listened very carefully to the member's speech. I am in serious disagreement with one point. Provincial governments are democratically elected. Most people, whether the hon. member agrees with it, look primarily to the provincial government as the government that delivers the programs and services that mean something to them.

The other thing he implied in his speech is that the federal government does a better job of managing things. Let us take some exclusive areas of federal jurisdiction, such as the fisheries. We almost have more people involved in the fisheries today than we have fishers, and the fisheries are almost dead. Let as look at aboriginal policy, national defence, Air Canada and the air transportation system across the country. Let us look at our national parks. The roads are terrible. The drinking water on our reserves is pathetic. These are areas of exclusive jurisdiction of the federal government.

Why does the member and his party always knock the democratically elected provincial governments, with which most people feel far more comfortable than this four year elected dictatorship under the Liberal regime?

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3:55 p.m.

Liberal

John Bryden Liberal Ancaster—Dundas—Flamborough—Aldershot, ON

Mr. Speaker, I am not knocking the democratic process whatsoever but the reality is the municipalities look after their very local interests and provinces look after the regional interests. The difficulty is we have to have somebody with the money who will look after the national interests and come to the rescue when provinces or regions are in trouble.

I submit to the member a classic example that the roads are in dreadful shape in Saskatchewan. It is a crisis in Saskatchewan and the Saskatchewan government cannot afford to repair them. It is just a desperate situation.

I would submit to the member, if we followed the motion and gave the money to the provinces, on a provincially divided basis, does he think Alberta would come to the rescue of Saskatchewan and its roads? Does he think Ontario would spend in Saskatchewan to save the roads?

It is the same thing down in Nova Scotia. There are severe highway problems in Nova Scotia and recently, in the last few years I have been in the House, federal money went to improve highways in the corridor between Nova Scotia and New Brunswick. This was federal money. Because these are poorer provinces, they could not afford it.

What it all boils down to is we have a national government that does not only look at the national interests, and I talked about the Trans-Canada Highway, but that also can plunge in there and attend to the very local interests where those regions of the country cannot afford to look after themselves.

I am sorry, but the record of municipal and provincial governments is that there is always an element, and I do not say this disparagingly, of fiscal selfishness. In my own region, my own city of Hamilton looks to getting the cash to look after itself and it is not looking beyond its borders. That is the case.

Others have mentioned the fact that with this motion there would probably be internal civil war between the cities in the various provinces taking this money at the expense of the rural municipalities. As I say, if there is a poor region in the country that cannot afford or does not have enough cash to attend to an essential infrastructure, it would be helpless.

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4 p.m.

Canadian Alliance

Jim Gouk Canadian Alliance Kootenay—Boundary—Okanagan, BC

Mr. Speaker, the hon. member who spoke said that he thought the federal government should not give away the ability or the right to tax. However, I would point to section 91 of the Canadian Constitution which states:

It shall be lawful for the Queen, by and with the Advice and Consent of the Senate, the House of Commons, to make Laws for the Peace, Order, and good Government of Canada, in relation to all Matters not coming within the Classes of Subjects by this Act assigned...to the Legislatures of Provinces.

Section 92 states:

In each Province the Legislature may [make certain] Laws in relation to Matters coming within Classes of Subjects next hereinafter enumerated.

Item 2 states:

Direct Taxation within the Province in order to raise money for a Revenue for Provincial Purposes.

The courts have provided that what this means is the provinces have the exclusive right to impose direct taxation to raise revenues for provincial purposes.

This has been challenged in the courts and upheld. The federal government is actually taxing the use of provincial jurisdiction. It is quite possibly an illegal tax. The government is coming in to individual provinces, like British Columbia, taxing the use of our highways, which is a provincial jurisdiction, and putting back a pittance.

Therefore why do we want the money left to the provinces to tax because: (a) it is their right; and (b) we would not mind if the federal government did it if it put some of the money back. Out of $5 billion, it puts $300 million for the whole country. It is shameful. It is criminal. Something should be done about it and that is what we are trying to do.

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4 p.m.

Liberal

John Bryden Liberal Ancaster—Dundas—Flamborough—Aldershot, ON

Mr. Speaker, the gasoline taxes we are talking about are federal taxes, the excise tax and the GST. If the member feels that a province ought to raise the provincial tax it charges on gasoline, it should do it: double it, triple it. It does not matter.

However do not ask the federal government to surrender a federal tax that we need in order to run the country, to guarantee the fuel supply. This argument that gasoline tax should be only used for roads ignores the fact that the money the federal government collects through excise tax is used to fund the military, to guarantee the supply of oil from the Middle East, to guarantee that we have the ability to create trade across the border.

The federal government has all kinds of obligations that indirectly impinge on where that oil comes from, how it is turned into gasoline and how it fuels the country. To suggest that the federal tax collected on gasoline should only be used for road infrastructure or infrastructure is that we can make the same argument that the provincial tax collected on gasoline should be used to subsidize the military. We need helicopters, we need all this kind of thing. Why is the provincial government not doing that? It is just crazy.

I will not go on any further. With all respect to my colleague, I do not think the answer merits any greater exposition.

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4 p.m.

Bloc

Jocelyne Girard-Bujold Bloc Jonquière, QC

Mr. Speaker, I am surprised, shocked and upset by what the member across the way said. It was like a step back to the 1930s. It was all about federal supremacy and the servitude of the provinces. That is even lower than what Trudeau used to say.

That is not what we are talking about today. We are talking about an Alliance motion that seeks to remove the 1.5¢ that was levied in 1995 to cover the deficit. In 1998, the former Minister of Finance said that the objective had been reached. There is no reason for this tax still to exist.

We would agree if they stopped there. However, they are saying that it is conditional on the provinces allowing their jurisdictions to be trampled on and there being additional taxes.

From Quebec alone, the federal government collects $4.7 billion in excise tax. What does it do with this money? Nothing. We do not know what it does with this money. It is a tax grab.

There have been negotiations in the past on infrastructure. There have been two agreements. Quebec was prepared to renew the agreement, but the government thought it did not have to do anything with the money it takes out of the taxpayers' pockets.

Is the hon. member from the Liberal party going to sit down with people and discuss facts or is he going to make things up?

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4:05 p.m.

Liberal

John Bryden Liberal Ancaster—Dundas—Flamborough—Aldershot, ON

Mr. Speaker, my reaction is simply this. I think the federal government, if it is ever going to see the Trans-Canada Highway repaired in Quebec, it will never be able to rely on the provincial government in Quebec because it will not do it simply because it has a little sign beside the road as one goes on the Trans-Canada Highway from New Brunswick. It is a little maple leaf, Trans-Canada Highway. I submit that if were it not for the fact that the federal government reserves the ability to fund infrastructure in the provinces, to make the decisions, the road would never be fixed.

I would also like to point out to the member who just spoke that in the Charlottetown accord one of the provisions in the accord was to devolve in the provinces labour market training. While the Charlottetown accord never passed, this government did devolve on Quebec labour market training, the exclusive jurisdiction on labour market training. What happened? After a couple of years under the provincial jurisdiction and it was a total mess. The member has to acknowledge that the province failed when it took the responsibility.

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4:05 p.m.

The Acting Speaker (Mr. Bélair)

We are somewhat straying away from the subject. Resuming debate, the hon. member for Nanaimo—Cowichan.

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4:05 p.m.

Canadian Alliance

Reed Elley Canadian Alliance Nanaimo—Cowichan, BC

Mr. Speaker, I will be sharing my time with the member for Kootenay--Boundary--Okanagan.

It gives me a great deal of pleasure to join in today's debate on the official opposition supply day motion. I believe that the motion is a pertinent one for people living in all parts of Canada, whether they are located on one of our coasts, on the Prairies, or here in central Canada itself.

Every Canadian wants value for their money, whether it is the purchase of a new product or the use of their tax dollars. Although most Canadians would be surprised to come to this realization, the Liberals have not been investing federal gas tax dollars in our country's roads.

I find it ironic that the past finance minister and now the alleged prime minister in waiting, the member for LaSalle--Émard, could have implemented gas tax reforms long ago; unfortunately he only let Canadians down and did not bring in these changes when he could have.

How much money are we actually talking about? What is the real financial impact of the motion? According to the Canadian Taxpayers Federation, in the year 2001-02 Canadian motorists paid $6.95 billion in gas taxes and GST on gas. The federal gas tax combined with the GST cost the average Canadian $220.66 last year. This equates to 35% to 45% of a consumer's total at the pump. Conversely, U.S. gas taxes in total are roughly 25% of pump price.

Of all the gasoline taxes the federal government collects, only 2.51% is invested back into roads, roads that the businesses of my riding and every other riding in this country depend on. Roads affect us all, every business, every tourist and every commuter, and yet for all the wear and tear that is borne by the road system the federal government chooses to rip off the consumer and ignore this depleting resource.

I believe that a larger portion of the collected gas tax should be used to support this kind of infrastructure. While Ottawa spends a mere pittance of the gasoline taxes that it collects on road infrastructure, 91.6% of all provincially collected fuel taxes is invested into transport related infrastructure projects. In comparison to our neighbours to the south, 84% of the U.S. federal fuel taxes is earmarked for specific highway improvements.

I want to spend a couple of minutes talking about what my constituents of Nanaimo--Cowichan have clearly told me on this issue. Their concern over the feeling of being ripped off by paying too much in gas taxes and seeing little or no return into the infrastructure is becoming almost too much to bear.

Let me explain this a bit further. During the month of April, I noted the range of gas prices across Canada and specifically on Vancouver Island. I had heard from many of my constituents from Nanaimo--Cowichan who were as baffled as I was over the wide range of gas prices all across this country, this during a time when some of the big oil companies were posting record-setting profits for the first quarter of 2003 and the federal and provincial governments were reaping enormous tax windfalls. All hon. members need to remember who is paying for these corporate profits and the government windfall. All of these moneys are coming from the same pocket, the pockets of the consumers, our constituents.

Gas prices all across Canada vary a great deal. Although there is a wide range in each province, during April when I was specifically following this issue consumers in Ontario were paying as little as 60.7¢ per litre, in Alberta they were paying as low a price as 61.2¢, and on the B.C. lower mainland 65.7¢. This is the average price. Members may be surprised to learn that my constituents, the people living on Vancouver Island, in that time period were forced to pay from 77.9¢ to over $1 per litre.

Given all the excuses for this price range that consumers have heard in the past, none of the reasons really ring true. I believe there is a very serious price discrepancy that is affecting each one of us every time we fill up our gas tank.

This government has been boasting about the Kyoto protocol. I note that the Minister of the Environment still has not produced a comprehensive plan for all Canadians to review, and this is several months after the signing of that protocol.

While the government is taking the vast majority of gas taxes and using it for virtually everything but infrastructure, I note that most people on Vancouver Island do not have easy access to convenient transit and rely heavily on their vehicles. In spite of this, they are paying among the highest prices in Canada for fuel and therefore paying an extraordinary amount in taxes, yet they are being forced to drive their vehicles on a deteriorating infrastructure. Something is not right here.

I have taken the time to write to all of the CEOs of the major petroleum companies in Canada. I have asked them to explain and justify from their perspective their company's position specific to the gas prices that my constituents have been forced to endure through no fault of their own. I believe that these CEOs need to explain the rationale of why the prices in one region of the country are so disproportionate to prices in another. I must say that, after months, to date I have not yet had the pleasure of one reply from any CEO.

In turn, I feel that the same question I have asked is equally applicable to the federal government. The federal government must account for its share of the price of gasoline through its taxes.

Frankly, my constituents are very upset about this matter. It is easy for the government to talk about transparency and accountability, but to date we have not really seen it. It would be nice to see the government walk the talk once in a while.

My colleagues from the Canadian Alliance, as well as members from other opposition parties, have noted many different facts in their presentations here today on this opposition supply day motion. Here are just a few that I would like to add to the debate.

Fact number one: Ottawa spends only a very small portion of its shared gas tax revenues on Canada's roads. Fact number two: in the last 10 years, and in spite of the influence that the prime minister in waiting has had over the federal budget, the federal excise tax on fuel has increased by 33%. Fact number three: Canadian gas taxes are twice the rate of the U.S. gas taxes.

These and many other facts are indisputable. It is undeniable that while huge sums of money have been raised from federal gas taxes, little goes toward the upkeep and maintenance of these roads. It has been estimated that Canada's roads require $17 billion in infrastructure repairs.

Canadian Alliance policy states:

We will ensure that taxes which are imposed for a specific purpose should be used for that purpose alone, should be removed once no longer required, and not be allowed to be put toward general revenue.

Mr. Speaker, does that not make simple common sense to you?

In keeping with this policy, there is a Canadian Alliance solution. The Leader of the Official Opposition recently stated:

What we are proposing instead is that the federal government permanently vacate a portion of the federal gas tax--say three to five cents a litre--and allow provinces the option of collecting that revenue. In order to ensure that this money is not used for other purposes, the transfer of these revenues to provinces and on to municipalities would be conditional on signed agreements that these resources would be used for infrastructure.

Some of our colleagues, indeed my last colleague from the Liberal Party who spoke, indicated that somehow this policy would be divisive across the country, that it would not be conducive to bringing the country together, that somehow the Canadian Alliance was a regional party that has no interest in the whole country. May I suggest that he is totally wrong and that he needs a little lesson in history? Unlike the Bloc Québécois, which came to the House with the idea of tearing the country apart, the slogan of the Reform Party, the predecessor of this party, was “the west wants in” and it wants in to this country to make it better. We believe that the sharing of revenues across the country from a tax that should be dedicated from gasoline taxes to repair infrastructure across the highways of the country is a way of keeping the country together and not tearing it apart.

Canadians are paying too much for gas, largely because of the excessive federal taxes the government has imposed on all consumers. The solution is simple: reduce gasoline taxes and strike an agreement with the provinces for the creation of a fund to be used by provincial and municipal jurisdictions for infrastructure and the repairing of the roads across our country.

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4:15 p.m.

Oak Ridges Ontario

Liberal

Bryon Wilfert LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, I wish it were as easy as the hon. member suggests in terms of being able to do a reduction of a tax and hope that the provinces will in fact buy into it. The problem again is that municipalities--

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4:15 p.m.

An hon. member

A signed agreement.

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4:15 p.m.

Liberal

Bryon Wilfert Liberal Oak Ridges, ON

The hon. member obviously already knows the answer.

The problem is that municipalities are corporations that are creatures of the provinces. I do not particularly like that term but that is the term they use. The fact is that any revenue sharing program between the federal government and municipalities would be subject to provincial control of municipalities. Again there is no guarantee the moneys are going to go where we want. In Quebec, for example, legislation prevents municipalities from entering into any direct relationship with Ottawa.

We have no assurance that revenues transferred would in fact go to municipalities, even in agreements. I would point out to the hon. member that we have agreements where we transfer moneys in health care. The difficulty is that the moneys do not necessarily go to regions within provinces where needed.

My own community would be a good example. It is the fastest growing community in Ontario and probably one of the fastest growing in the country and again it is not getting the dollars it needs because when the funds are transferred it is up to the provincial governments and they seem to know best.

I think what the member does want to say, or has said, is that the west wants in. Yes, that is why the government dedicated $65 million to improvements on the Trans-Canada in Saskatchewan and $202 million to Vancouver through the strategic infrastructure fund. I think those are the kinds of programs that get to cities.

Under the strategic infrastructure and national infrastructure programs we know they are municipally generated programs and they get to those cities. How can the member guarantee that they will get to the municipalities under the Alliance proposal?

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4:15 p.m.

Canadian Alliance

Reed Elley Canadian Alliance Nanaimo—Cowichan, BC

Mr. Speaker, again I want to follow up on what my hon. colleague from Ancaster—Dundas—Flamborough—Aldershot said, and now the member who has just spoken, about the need to have a government that truly listens to all the interests across the country.

I want to suggest that the government has done more to divide the country across the nation in the last 10 years than it has to bring it together.

Why would we have in this Parliament such a regionally divided House of Commons if the government has the ability to sit down and strike deals and agreements with the regional interests of the country to actually keep it together? If the government wants to truly be seen as a conciliatory kind of government that unites the country from coast to coast, it has to work very hard at sitting down with the provinces, with the municipalities and with the regional interests of the country to truly make something like this work.

There is no reason why it could not work, but unfortunately the government has created such a culture of distrust across the country between the provinces and the federal government that it is almost impossible to do something like this.

We need a government that will truly bring the country together, not one that continues to divide it.

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4:20 p.m.

Liberal

Bryon Wilfert Liberal Oak Ridges, ON

Mr. Speaker, I have to take exception to the last comment made by the hon. member. The national infrastructure program is signed between the federal government and each individual province. I would ask the hon. member, if in fact we such distrust why since 1994 have we had three very successful national infrastructure programs in which we have come to agreements with each and every province?

The only difficulty, I would point out to the member, is that of course in each province the program may vary to a degree based on whatever that province wants, not necessarily what the cities in those provinces want. I can give examples in places like Saskatchewan, and in British Columbia back in the early 1990s under the NDP they had buses showing up in their cities that they had never ordered. I would ask the hon. member if that is not a good example of cooperation in terms of having to sign individual agreements.

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4:20 p.m.

Canadian Alliance

Reed Elley Canadian Alliance Nanaimo—Cowichan, BC

Mr. Speaker, I would agree that there has been a great deal of difficulty with the federal infrastructure program in terms of actually delivering the money to the provinces and then to the municipalities for the kinds of projects that municipalities really want.

I would certainly agree that when the NDP was the government in British Columbia there was a huge problem with this. I recall quite vividly that example that the parliamentary secretary used.

When I sat down with my local councils, one of their big concerns with the infrastructure program as it was being devolved from the federal government down to the provincial government to the municipal governments was that there was not any kind of agreement hammered out between the federal and provincial governments to streamline the actual requests so that municipalities got what they needed and did not get buses for Vancouver.

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4:20 p.m.

Canadian Alliance

Jim Gouk Canadian Alliance Kootenay—Boundary—Okanagan, BC

Mr. Speaker, I am pleased to speak to the supply motion today and perhaps point something out to the Liberal members across the way. In November of this year there will be a coronation. The Liberal Party will be crowning a new king and, unless something very unexpected happens, it will be the former finance minister, the member for LaSalle—Émard.

What I would like to read to the House today is a portion of a transcript from the transport committee on December 4, 1996. The conversation was between myself, as a member of that committee, and the former minister of finance, the member for LaSalle—Émard, who will soon be the Prime Minister. Liberal members across the way might do well to listen and understand the position that was stated by the soon to be prime minister. We were talking about the concept of dedicated revenues with the gas fuel tax, the very thing we are talking about here again today. I addressed the former minister and said:

You yourself said today that the federal government spends about $300 million a year on highway infrastructure, but from my province of British Columbia alone you take almost three times that in federal fuel taxes. The provincial governments have a role to play in that, but the role we have to look at is ours.

Now, I believe what you said is correct. We can't just suddenly say sorry, we're going to dump that, about $5 billion altogether, into a dedicated fund. But we have to start. I think it is the right way to go. If the economy were better, then I would say yes, we have to transition fast. You're correct, the economy is very fragile, so we have to transition slow, but I still think it's the right way to go and we should try to start something along that line.

Would you agree we should at least examine the possibilities of starting something on that concept, even if out of the 10¢ it's 1¢ or 2¢?

The following is the response from the former minister, soon to be prime minister:

I must say I have probably a lot more difficulty with the concept of dedicated taxes having been the Minister of Finance for three years than I did when I was in opposition, because there is no doubt a certain warping of the mind occurs when you get this job.

My response was:

I always wondered what happened.

The former finance minister then went on to say:

Nonetheless, I think your question is a very valid one, and the way you put it is very good. The fact is it is really not something we could contemplate doing now, simply because I think the most important thing, and I know you agree, is to solve our fundamental financial problem and we really should not limit our flexibility at this time.

Now, you're suggesting that what we might do, given that problem, is to start very small and build on it, if I understand what you have just said.

I guess my answer to you...would be that you put the question well. there will come a time when we will have more flexibility and your suggestion is one we could perhaps consider. But I must say we would have to be generating, from my point of view, reasonably substantial surpluses before I would want to entertain the concept. Let me be very clear to you, because I think you've put the question in the proper tone, and that's the way in which I would want to respond.

I then said to him:

One of the things we've looked at, and it's been brought up by witnesses and we've examined it ourselves, is cause and effect. If you spend the dollar now, even though it's pretty hard to find that dollar out of all the commitments we have for our money, we might save an amount that is in excess of that dollar plus interest, as it impacts on our overall financial picture, by doing a relatively minor repair to something that will require major replacement. This is a very clear message that we have got from a lot of people.

I know you need every dollar you can get. I understand that. But by the same token, if $1 collected causes $3 worth of trouble, maybe we should be re-examining those things in all of these contexts, the dedicated funding for highways and a possible reduction to fuel taxes for the rail system.

The soon to be prime minister responded by saying:

The reason my original answer to your question was that we might be in a position - we're not in a position to examine it now, but we might be in a position - to examine it at a time when we're generating substantial surpluses is simply that you're not wrong when you say, look, if you spend a dollar now you might well save yourself $5 down the road. It's not that you're wrong in that at all.

What I would really say to you, however--and I think this is going to be very important--is that there is going to be second stage of the financial debate in this country when we go beyond the deficit to start talking about the debt-to-GDP ratio, the debt as a percentage of our gross domestic product. At that point the argument you're bringing forth is going to become very important.

I'm sorry to take so long, Chairman, but I think [the member's] questions are very good. I guess it's a function of timing.

That was said on December 4, 1996. We are now in the year 2003. The deficit is gone. The fund for the fuel tax, a tax which was put on in order to help fight the deficit, is still there. We did not say then and we are not saying now that all that money should be turned over.

As I said earlier to the member who spoke from the Liberal side, there is a possibility that it is not even legal for the federal government to collect taxes on something that is a provincial jurisdiction. Section 92 of the charter states:

Direct Taxation within the Province in order to the raising of a Revenue for Provincial Purposes.

The courts have interpreted that several times to mean that the provinces have the exclusive right to impose direct taxation to raise revenue for provincial purposes. In other words, the federal government retains exclusive right to oppose direct taxation to raise revenues for federal purposes.

If the government is raising taxation to create highways inside the national parks, which was the question raised in question period today with regard to Banff National Park, then there may be some justification for something in proportion to that amount of highway that is on federal property and for which it is responsible, but all the rest is the responsibility of the provincial jurisdiction and, as such, taxes imposed on those who are using that provincial infrastructure should not go to the federal government.

I will stop with that. There have been many points of view expressed here today. However the government is cash crazy. It seems to want money from every source. It has never seen a tax it did not like. Once it starts one, no matter how temporary it was intended to be, it never gives it up. If it just simply gave up the amount that it has said in the past was put on specifically to deal with the deficit, the deficit which we no longer have, that would be a very good start.

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4:30 p.m.

Oak Ridges Ontario

Liberal

Bryon Wilfert LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, I certainly would like to make a comment. With regard to the fact that this government is tax crazy, according to the hon. member, this is the government that brought in a $100 billion tax cut over five years. This is the government that is eliminating the capital tax. This is the government that continues to pay down the national debt, the only G-7 state to do so, and eliminate the national deficit of $42.5 billion.

On the question about what we do with tax dollars, we have made major investments in health care. In terms of infrastructure, even the member would be able to recognize that when we started the national infrastructure program, and now have come up with a 10 year program, and, in fact, brought in the strategic infrastructure program, we clearly have used tax dollars in conjunction with the priorities of the cities, towns and villages in Canada. They are the ones that direct what is going to be done, not the federal government and not the provinces.

The concern I have is that the member would turn that over to the provinces when it should be the cities, towns and villages that are the ones to do it.

The problem constitutionally is how to get a mechanism. I have not been able to get a mechanism established from any of the hon. members of the Canadian Alliance as to how they would do this given the fact that municipalities are corporations created by the provinces.

Therefore, with regard to any revenue sharing programs, we would almost have to go in and get them to come up with some kind of formula for some tax ability at the local level. If the member wants to really do this and empower the cities, the easiest way would be for the provinces, which have the ability, to give the municipalities more taxation power. I agree with that.

I do not understand why members of a party who believe in accountability on taxation, or at least they tell me they do, would rather have one order of government take money that it raised and have somebody else spend it with no accountability. I would like the member to respond to that.

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4:30 p.m.

Canadian Alliance

Jim Gouk Canadian Alliance Kootenay—Boundary—Okanagan, BC

Mr. Speaker, I am happy to respond to some of the drivel that came out of the hon. member on questions and comments.

I cannot believe the unmitigated gall and arrogance of the federal Liberal Party to suggest that it knows everything, that it has all the right answers and that my province of British Columbia cannot make a sound financial decision. I do not accept that at all and I can tell the member that the people of British Columbia do not accept it. I am sure the people of the other provinces would be equally insulted with those unrealistic remarks.

The member talked about how the government dealt with the debt and the deficit. It has dealt with the debt and the deficit. We have had 67 tax increases under the government.

The government has bragged about how it has dropped the EI premiums by 11¢ but it does not talk about how at the same time that it lowered EI premiums it raised CPP premiums by 65¢. This is Liberal math. It is absolutely unbelievable.

The government says that we should at the provincial level give tax points to the municipal governments and yet the member says that it is absolutely wrong that we ask exactly the same thing from this level of government back to the provinces at a time when this government is gouging those provinces.

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4:30 p.m.

The Acting Speaker (Mr. Bélair)

Please tie up debating taxes with infrastructure.

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4:30 p.m.

Canadian Alliance

Brian Fitzpatrick Canadian Alliance Prince Albert, SK

Mr. Speaker, that was an excellent speech by my Canadian Alliance colleague from British Columbia who is an excellent MP.

The government has this 10 year infrastructure program. I come from Saskatchewan and, generally speaking, it seems to me that the federal government is invisible in that province with its programs. The government seems to fly right over the province.

My concern with the 10 year project that the government is talking about is whether there will be some equitable distribution of funding to the provinces from coast to coast with the program. Would my colleague comment on whether he has any knowledge about how this program will be administered? Will it be fair and equitable to all the regions and all the provinces of the country?

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4:35 p.m.

Canadian Alliance

Jim Gouk Canadian Alliance Kootenay—Boundary—Okanagan, BC

Mr. Speaker, I am not about to stand up and suggest for one moment that any program brought out by the Liberal government will be fair and equitable. The intention may be to start that way.

I am sure when the government passed Bill C-68, the firearms registry bill, it thought it would be fair and equitable. It was going to cost $2 million but it has cost $1 billion.

I shudder every time the government comes up with some new program. The program will run over the amount budgeted. It will not work the way the government says it will. It will go for patronage type, pork barrel projects where the government thinks it can buy a vote. In fact, that is usually what the government does with tax money. It does not look at it and ask where the infrastructure needs to be fixed. It looks at it and asks where that money can be used to buy a vote.

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4:35 p.m.

Liberal

Karen Redman Liberal Kitchener Centre, ON

Mr. Speaker, I will be splitting my time with my hon. colleague from Ottawa—Orléans. I am extremely pleased personally to add some detail to the extent to which the government is helping municipalities develop infrastructure investment.

The government's track record in this area is something of which we all can be very proud. The Government of Canada has long recognized that investment in infrastructure is vital to the quality of life of Canadians. It is vital to our economic growth and to our competitiveness as a nation.

All of this helps make the case with regard to cities and municipalities across Canada. One of the first steps the government did when it took office in 1993 was to put in place a $2 billion municipal infrastructure program, the Canadian infrastructure works program. This was our largest new spending initiative as a government and we did this in a time of very severe fiscal constraints.

In 1997 the government extended a very successful program by providing an additional $425 million. These resources helped involve partners, mainly the provinces and municipalities, in the Canada infrastructure works program. This program stimulated $8.3 billion in infrastructure investment in over 17,000 local infrastructure projects. These communities spread right across Canada and they created jobs during a period of very slow economic growth.

The next federal investment and commitment to municipal infrastructure was made in budget 2000. That is when we introduced $2.05 billion in the infrastructure Canada program. This is consistent with the priorities of Canadians. The program focussed on green municipal infrastructure, projects such as water and waste water treatment, solid waste management and it also went to improve the quality of our environment as well as contributing to our national goals of clean air and clean water.

Federal investments totalling $1.1 billion have been announced providing funding for 1,500 green projects, again mostly water and waste water systems and to almost 900 projects to improve cultural, tourism, recreation and urban facilities. Local transportation has been invested in as well as social housing. These are particular issues in my community.

With resources from provincial and municipal partners, 2,400 projects which are worth more than $4.4 billion are being undertaken. While there is no doubt that the infrastructure Canada program is having a very positive impact on municipal infrastructure, it has become increasingly apparent that this program may not be the best instrument when responding to very large scale strategic infrastructure needs across the country. This includes those located in Canada's major urban centres or answering the increasing trade pressure that is happening at key border crossings.

To deal with these large scale projects of regional and national significance, in 2001 the government introduced the Canadian strategic infrastructure fund with an initial $2 billion investment in funding. In August of last year the government announced the key parameters in order to roll out this fund. Since that time the government has made firm commitments to a number of projects in cities, most notably new sewage treatment facilities in Halifax and St. John's and the expansion of the Vancouver Convention Centre. Money has gone to support urban transit in the city of Toronto. It has helped invest in ring roads around Edmonton and Calgary and it has added to the expansion of the Winnipeg floodway. There are more announcements to come in the coming months.

In the last Speech from the Throne, the Government of Canada committed to an additional 10 year involvement in public infrastructure. Budget 2003 confirmed this commitment and provided a down payment by way of an investment of $3 billion to continue to address strategic and municipal infrastructure needs right across Canada.

In the budget allocation that just passed, the $2 billion committed will go to the Canadian strategic infrastructure fund and will address the large scale infrastructure needs, including those located in Canada's major urban centres. The further $1 billion committed will help meet smaller scale municipal needs.

I know that these investments will continue to make differences in cities, in municipalities, in rural and remote communities right across this country. We have a strong partnership with provinces, territories, municipalities and the private sector. We understand the different needs and priorities across the country. We understand that municipalities need to upgrade their basic infrastructure. That is why we are supporting Yellowknife in replacing sewer pipes and Trois-Rivières in repairing sewer systems and Ritchot by improving the drinking water treatment plant.

Cities and municipalities are places of constant evolution. The needs of those places evolve as populations grow. That is why we are helping Innisfail, Alberta upgrade its water system five years earlier than originally planned. This will allow its infrastructure to keep pace with the growth of the town. It is also why we are helping the residents of Cornwall, P.E.I. to improve their recreational facilities. This is to accommodate the changing needs in the surrounding area. This contributes to the quality of life and helps make those good places great places to live and to work.

We are also funding projects such as GO Transit in the Golden Horseshoe, Highway 30 in Quebec, and the Vancouver Convention Centre in B.C. In these projects we see a federal response to cities' needs to support environmental objectives in mass transit or the national trade corridor--and this applies directly to my riding, even though we are several hours drive from the border--and to support the tourism sector. These are key components of Canada's economy.

Our border infrastructure fund with $600 million in funding is being used to help cities and municipalities respond to their evolving role in the Canadian economy. The importance of our trading relationship with the United States in a post-September 11 world has demanded new responses. We have to ensure that the key trade corridors work efficiently. When those corridors pass through border cities, we have to ensure that they do not imperil the safety of the residents of those cities. That is why we are supporting border infrastructure improvements in Windsor and Niagara Falls.

The government's commitment to infrastructure is firm and longstanding. Through its numerous investments in municipal and strategic infrastructure, the government has shown a strong commitment to cities. This was a position and a commitment that the minister responsible for infrastructure reiterated late last month before hundreds of mayors and municipal officials in a meeting in Winnipeg.

Since 1993 the government has provided over $12 billion in investments in the nation's infrastructure to address local and regional needs and to meet our national economic, social and environmental objectives.

Partnerships with provincial, territorial and municipal governments as well as with the private sector in these programs have reached over $30 billion of investment in infrastructure right across the country. These partnerships are crucial, as we need to invest not only in light of our national priorities, but always with a view to local, regional and provincial priorities as well. I speak of this as a former regional and municipal councillor.

It is the kind of partnership that we have formed that has allowed investments in things like the Waterloo Research and Technology Park. It has allowed for a bridge to be repaired in Wellesley, the redevelopment of the Cambridge Riverside Silk Mills and the construction of a new Kitchener market. These are local priorities that were identified locally and we have helped make them happen through participation and through partnership by the federal government. We understand and we have a mechanism that responds to what municipalities and provinces tell us they need.

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4:45 p.m.

Canadian Alliance

Charlie Penson Canadian Alliance Peace River, AB

Mr. Speaker, I listened to the member for Kitchener Centre talk about the infrastructure program that was introduced by the Liberal government in 1994. I know there are a lot of Liberals applauding across the country because they are the ones who seem to benefit the most from it.

In fact it was very interesting. The member talked about how good the infrastructure program is. Most people think of infrastructure as being things like roads, streets, airports, water and sewers, but there seem to be a lot of bocce courts that were funded under the Liberal government. In fact the fairness aspect seemed to be sorely lacking. I recall that the member from Winnipeg, Lloyd Axworthy who was a minister at the time, seemed to get about three times as much money in his riding as I did in my riding of Peace River, and there was no shortage of applications.

Would it not be better to move to a system that did away with the political interference with infrastructure programs that are paid out on a political basis? Would it not be better to give some structure to the municipalities so that they could count on a constant source of revenue such as the gas tax coming from the provinces and given up by the federal government? Would that not be a far better program to implement rather than the politically based infrastructure program we have seen in the past?