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House of Commons Hansard #109 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was employees.

Topics

Public Service Modernization ActGovernment Orders

6:05 p.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

Mr. Speaker, I have three questions for the member for Halton. First, why were there no amendments about this matter introduced in committee or even in the House at report stage? There were ample opportunities for that to happen, yet it does not seem to have happened and one wonders why?

Second, I have been advised that in Great Britain public servants do not swear allegiance to the monarch but to the duly constituted government of Great Britain. I am also advised that in Australia, a Commonwealth country which had a referendum supporting the monarchy, public servants also do not swear allegiance to the monarch. If that information is not correct I would like to know. However, if it is correct, why should we have it if it is not the case in Great Britain?

Third, is the member aware that the President of the Treasury Board has indicated that the code would allow an employee to swear an oath of allegiance to the Queen. Therefore, it would be a matter of choice. If an employee wishes to swear allegiance to the Queen, he or she would be able to do so. What is wrong with that openness and way of doing business? I would like the member for Halton to answer those questions.

Public Service Modernization ActGovernment Orders

6:05 p.m.

Liberal

Julian Reed Liberal Halton, ON

Mr. Speaker, first, I do not believe that Canada is an optional country. Why should we have an option as to whether we swear allegiance or not?

Second, we are an independent country. We are not a conforming country, so why suggest that just because Britain does its thing and Australia does its thing that we should conform? Is that what we are here for? Are we conformists or are we an independent country prepared to take our own place in the world?

Why were there no amendments? I can only suggest that contact was made with the President of the Treasury Board when many of us were heavily involved in other committees, as the hon. member knows. I will bear responsibility for the fact that it escaped my attention but not without full contact on a continuing basis with the President of the Treasury Board.

Public Service Modernization ActGovernment Orders

6:05 p.m.

Canadian Alliance

Paul Forseth Canadian Alliance New Westminster—Coquitlam—Burnaby, BC

Mr. Speaker, I am looking on page 135 of the new version of the bill. In part 4 under employment, it says:

I...swear (or solemnly affirm) that I will faithfully and honestly fulfil the duties that devolve on me by reason of my employment in the public service of Canada and that I will not, without due authority, disclose or make known any matter that comes to my knowledge by reason of such employment. (Add, in the case where an oath is taken, “So help me God” (or name of deity).)

That is optional.

The issue here is that this is an oath of honesty, of diligence in work, not to take a bribe or improperly disclose information. I think the member is mistaken. I think he is confusing and transferring the oath from citizenship, which has absolutely nothing to do with being a public servant, into being a public employee. They are not parallel at all. It has nothing to do with the Queen for being a public service.

Then he talked about the MPs' oath at the political level in Parliament here, and again that is not relevant to being a public employee. In fact I would like for him to cite to me where previously the Queen was ever involved in such a matter. Just because it says “oath”, those are oaths for different matters at different issues, and it is not related to being a public servant. I just do not think that his complaint is valid.

Public Service Modernization ActGovernment Orders

6:05 p.m.

Liberal

Julian Reed Liberal Halton, ON

Mr. Speaker, I am sure my hon. friend will know that the public service, up until now, as well as members of Parliament have sworn allegiance to the head of state. They absolutely do. We swear allegiance to our head of state, which happens to be the Queen of Canada; likewise the public service.

If the member would look at the bills that were combined to make this new bill, he would see the oath to Her Majesty is missing.

Public Service Modernization ActGovernment Orders

6:10 p.m.

Bloc

Diane Bourgeois Bloc Terrebonne—Blainville, QC

Mr. Speaker, I wish to address a comment to my hon. colleague from the Liberal Party.

At present, public servants do have to pledge allegiance to Canada. The fact that this is an oath of confidentiality causes a lot of problems, in particular as far as denouncing wrongdoing and harassment are concerned.

I do not know if the member is aware of that, but in every case of harassment being investigated internally by Treasury Board, people hesitate to speak out because of the fear to lose their job.

I wonder if the member opposite knows that and if he has a substitute to this famous oath.

Public Service Modernization ActGovernment Orders

6:10 p.m.

Liberal

Julian Reed Liberal Halton, ON

Mr. Speaker, yes, I am indeed aware of it. I am not aware that an oath to the head of state in any way interferes with that process. I do not know how it does because the oath to a head of state is an oath to a head of state. What it does is acknowledge certain responsibilities in the heart and mind of the individual, and gives us all a focus on the governance of our country.

Public Service Modernization ActGovernment Orders

6:10 p.m.

Liberal

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

Mr. Speaker, I just wanted to read from the House of Lords Hansard , when Lord Laird on January 3, 2003, asked Her Majesty's government:

Whether any new appointees to the Civil Service in any part of the United Kingdom are required to take an oath of allegiance; if so, which parts of the Civil Service require this...

The minister for the cabinet office and chancellor of the Duchy of Lancaster, Lord Macdonald of Tradeston replied:

Under the terms of the Civil Service Code, members of the Home Civil Service owe their loyalty to the administration in which they serve.

No civil servant in the UK is required to take an oath of allegiance.

I also note there is no oath of citizenship in the United Kingdom to the Queen or anyone else. Why should Canadians be more monarchist than the British?

Public Service Modernization ActGovernment Orders

6:10 p.m.

Liberal

Julian Reed Liberal Halton, ON

Mr. Speaker, I get back to an answer I gave a couple of questions ago. Are we conformists or are we individuals? Are we a free country, able to make our own decisions or are we required to conform?

Public Service Modernization ActGovernment Orders

6:10 p.m.

Progressive Conservative

Rex Barnes Progressive Conservative Gander—Grand Falls, NL

Mr. Speaker, it is very interesting some days to come into the House, to sit and listen to some of the debate and to see from where people are coming.

The public service sector really does not care if they swear allegiance to the Queen, themselves, their mothers or their fathers. What they care about is ensuring that government leaves it up to the people to be hired in the proper form, in the proper manner and that friends, neighbours and political interference is gone so the public service can do the job they are required to do, and that is to serve the people of this country and make it is easier for them to get the job done. For one reason or another, we forget about that and we worry about to whom we will swear allegiance.

As parliamentarians we swear to the Queen because that is our job and we do it. The public service should swear to the people for whom they will do the work, and that is the taxpayers. Who cares if they swear an allegiance to other people.

I was not going to say that but I thought it was interesting to hear the debate.

By the government's own admission, over the past few decades the public service has remained structurally and functionally a top-down organization. It is somewhat stiff in its functioning, a lumbering giant that actually requires a department to go through a maze of several months of paperwork and meetings to hire an ordinary person.

If we were to get rid of the red tape, if we were to make it easier to get people into vacant jobs, we would not hear the outcry from the general public. People say that they cannot get any answers, or they cannot get a job done or there are delays. Every time there is a delay in the public service of getting an answer or getting the job done, it costs business people and ordinary citizens money.

Bill C-25 would provide for more flexibility in staffing and in managing people. Managers with certain limits would have more power over hiring and who they hire, just like in the real world. Applicants who felt they had been short-changed in the staff process would be given access to redress at a public service staffing tribunal.

The key should be that employers get the best qualified people to do the job, regardless of where they come from geographically. The key is we must get people in the public service who can do the job. If we limit it to certain areas and friends or friends of friends, it normally does not work. Any businessman or businesswoman will tell us that hiring friends or friends of friends normally does not work. If we had hired people because of their qualifications, we would not have had half the problems we now have.

The bill also stresses the need for a cooperative approach to labour management relations. The intent is to make employees part and parcel of the process of running the workplace. Nobody really knows how to do the job like those who do it every day. If the intent of the bill follows through, we should have a happier federal workplace.

When employees are happy campers, they do better jobs. If they come to work every day and are under pressure, they will not perform to full expectations, and the only people who lose are the employers. If staff members and employees are involved in decision making, we will have a happier staff.

The bill provides for an overhaul and consolidation of the staff training and development process of the federal public service.

Many of the changes are long overdue with regard to improvements to the nation's public service. If carried out properly, they could lead to a much happier, less strike prone and more productive public service.

I can just reflect back to the province of Newfoundland and Labrador. Right now we have two airport strikes on the go. If these airports had employees under the federal government's control, I would suggest there may not be strikes today. We got rid of some of our public servants because we got rid of our airports. If the airports had come under the umbrella of the federal government employees, I firmly believe there could have been an easier settlement, and we would not have the travelling public held at ransom because of these strikes.

If we are going to allow individuals and special interest groups to take over our airports then we should make sure we keep our employee base intact so they can provide the services the general public requires rather than contracting the services out to a new group. That could result in one strike after another and it could last a long period of time. It would be like what we are seeing in Newfoundland and Labrador right now. I am glad to hear that things may be working out but it has taken a long time.

Many public servants are about to retire. We have been told that 7,000 new people are needed every year just to keep pace with retirements. The hiring process can lumber on for months and we often see the best and brightest applicants being scooped up by the private sector. As I stated earlier, we must make the hiring process easier and get rid of the red tape so we do not lose some of our brightest to the private sector. People have a great future with the federal and provincial governments. We have to make it easier on the federal scene to make sure that application access and individual rights are easily looked at so the best possible person is hired regardless of geographics.

It is also important that managers have a greater say in the hiring process, after all, the people being hired are people they will have to work with every day. One of the things I would add to that is the importance of their justifying why they hired a person so that the fear and threat that they will hire a friend will be eliminated. Hiring has to be done on qualifications. If it is done on qualifications, then I firmly believe production in the workplace will be greater.

This extra power on the part of managers has been met with a strong grievance procedure. Managers must be required to account for their hiring decisions. Hiring people because of political pressure is forbidden. Hiring friends who do not meet the basic qualifications is not allowed. This is where we get ourselves in trouble. This is where we do not get the best bang for our buck. This is where we run into major problems later on down the road when we find out that the best qualified person was not the one hired or the person hired was not qualified in the first place.

The hon. member for Cumberland--Colchester has done a tremendous job asking questions and bringing up many concerns regarding the federal public service, the job situation and the hiring practices. Every time he raises the issue it seems like some people take it as a joke. It is a very serious thing when a line is drawn in the geographics of Canada where people can only apply for jobs in certain areas. As far as I am concerned this is discriminatory. This is Canada, and it should not be like that. If someone lives in Nova Scotia, it is discrimination if they cannot apply for a job in Quebec, Alberta, Newfoundland or the reverse. As long as someone fulfills the maximum qualifications for a job they should be the person with the utmost opportunity to get the job. If people are hired with minimum qualifications, they are getting in through the back door. If we are looking for a high standard we should stay with a high standard so people who are the most qualified will be hired.

I am sure the minister is aware that people in Atlantic Canada are faced with federal job advertisements that require applicants to be from certain geographical areas. In Newfoundland and Labrador, for example, a job opening in St. John's might be restricted to applicants from the Avalon Peninsula. People living in Gander or Labrador City could not apply. Many jobs in central Canada are only offered to applicants within restrictive geographical areas.

Shortly after being elected I had a phone call from a lady friend who said that she had applied for a job within the federal government but that she was outside the geographical area. She could not understand that and I told her that I could not understand it either. I thought that when someone lived in Canada they could apply anywhere in Canada if a job came up with the federal government. If they are the most qualified person then they should get the job. However it did not happen. Like everything else, we learn by some of these hidden rules.

In the January 30, 2001 Speech from the Throne, the government committed to needed reforms in the Public Service of Canada to attract and develop the talent needed to serve Canadians into the 21st century. It is now 2003, two years after that statement was made in the throne speech. What happened to the commitment over the last two years? Why, all of a sudden, is it being done now? It should have been done by now. A lot of opportunities have been missed for our young people. We have missed an opportunity to have great service, an even better service for Canada. I do not know what happened, but unfortunately the commitment to modernize the public service took a holiday as did the commitment to end child poverty.

In February the President of the Treasury Board said that the bill ensures the capacity of the public service to provide the best service to Canadians today and into the future. This is where the government has it wrong again. Bills do not ensure top quality service; people do; hard workers do; people who are proud to serve their country in any capacity.

Bills tabled in Parliament with the accompanying fanfare do not ensure anything. It is the people we hire who do. It all goes back to the employees. It all goes back to whom we hire and how they fit into the system. The only way they can fit into the system is if we hire the people who are qualified for the job.

Canadians will get top-notch service from the public service once the government does the same. Treating Canadians with respect and truly serving them begins with the government, not with a bill. Once the government gets its act in place, the public service will follow suit.

There are a lot of public servants in the federal government who provide an amazing service way beyond the call of duty, but the problem on a lot of occasions is the bureaucracy. When I speak to people all across the country, they tell me the only problem they have is trying to get the bureaucrats to understand the way things should be done. Employees do the work in a certain way because they have been instructed that is the way it is done.

As I said a few minutes ago, if we are to do the job right for the federal public servants, we have to make sure that we hire the right people. If we are serious about modernizing the act, let us modernize it for the future. We should get rid of all the red tape. We should open it up to all of Canada. We should forget to whom people will swear allegiance.

We should be making sure that confidentiality is important. We should make sure that people's business is not known out in the street. It is also important that if public servants find out about problems in the government, they have the right to tell politicians, so that we can make it a better place for everyone. If there are things going on that should not be going on, it adds stress to the federal government's purse.

It also adds stress for MPs because we get calls on certain things and we know there are problems, but we cannot fix them because people are afraid to come forward. When people are afraid to come forward, it is total craziness in the workplace and people get stressed out. Then people go on sick leave. They are not content because they sometimes know there are things going on that should not be going on.

Time is short and there is a lot that could be said, but I just wanted to stress some things I have observed while listening to the debate.

Public Service Modernization ActGovernment Orders

6:25 p.m.

Bloc

Diane Bourgeois Bloc Terrebonne—Blainville, QC

Mr. Speaker, I will be brief. My hon. colleague has just presented a long argument in favour of hiring according to competency. He seems to suggest that this new legislation could lead to the use of discriminatory hiring practices.

I would like to hear from him on hiring and employment equity as far as women, the disabled, aboriginals and visible minorities are concerned. I would like him to say a few words on that.

Public Service Modernization ActGovernment Orders

6:25 p.m.

Progressive Conservative

Rex Barnes Progressive Conservative Gander—Grand Falls, NL

Mr. Speaker, when a job becomes vacant it is open to everyone. It is very important that we look at people of different races and different cultures. It depends on what they are hired for. If they are hired for different sectors of the country, then it makes sense.

When people are hired to work up north, it is important that they relate to the people's needs. People should be hired from the area where the needs are the greatest and where people are looking to be hired. It does not make any difference if the person is male or female, Japanese or some other culture. It is important to hire from the culture when a person of that culture is required but it is also important to get the best qualified person for the job.

Public Service Modernization ActGovernment Orders

6:30 p.m.

The Acting Speaker (Mr. Bélair)

The hon. member for Gander--Grand Falls will have eight minutes remaining when the debate resumes on Bill C-25.

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

Public Service Modernization ActAdjournment Proceedings

6:30 p.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, it is my pleasure to rise today to follow up on a question that I asked with regard to the border security in Windsor, Ontario.

Specifically the question related to the fact that municipalities have had to pay the price when border security has been raised. When the United States goes on orange alert, which happened during the war with Iraq and it still is happening today, traffic backs up. When the traffic backs up, the municipal governments have to pay for the policing resources during that situation. It goes back to their knowing when the resources are required.

After the September 11 situation rigs in my community were idle for 24 hours or more. In this type of situation local governments need support. When international affairs affect local governments, it is up to this institution to provide some degree of support.

What seems to be compounding problems recently is that in the border announcement the federal government had an opportunity to increase the access point for those emergencies. The barge and truck ferry system is an area where the government could get something off the ground right now. It is actually precleared before going over to the Detroit side and even got a grant under the homeland security act but it was not even noted by the minister. Why? Because the Liberal government does not provide funds. Everyone else who had some type of support or connection got money but it did not.

It is a resource that has been heavily used by the community. It was used by the big three. It was used by other manufacturers during the time of 9/11. At a time when there is a crisis on the streets, my question focused on the fact that municipal governments are not getting the proper support to deal with the situation. I would like to hear the government's response.

Why do the municipalities have to foot the bill when the United States goes on an orange alert? It backs up the traffic in the city of Windsor which has to put policemen on the streets. The government fails to recognize that the U.S. is saying those trucks are a risk to the security of its nation. If they are a risk to the security of the United States, what is the government doing about that risk which is sitting on city streets next to homes and businesses?

Where is the RCMP to investigate that? When will the government provide the confidence that people need to know they are being protected? Is it a risk for the Americans? If that is not the case, the government needs to advocate to move those trucks. If it is a risk, then why do we not have the same type of support on our city streets?

Public Service Modernization ActAdjournment Proceedings

6:30 p.m.

York West Ontario

Liberal

Judy Sgro LiberalParliamentary Secretary to the Minister of Public Works and Government Services

Mr. Speaker, I am very pleased to respond to the hon. member's question. I am also pleased to applaud him for his interest in the urban issue and our municipalities and in helping us to move the urban agenda along. I certainly know that his interest is very sincere. It is very difficult for ministers and members of Parliament in particular whose ridings are close to the border. They are concerned, as we all are, that we continue to move the goods and people back and forth.

We have to appreciate that since 9/11 there have been a lot of issues. All parts of the border have to make sure that they are secure for everyone. We have to reassure people during this heightened sense of global concern that we are keeping our borders safe and we are working together.

The Canada Customs and Revenue Agency is balancing the need, which is not an easy thing to do, to increase security measures to protect Canadians and to ensure the free movement of legitimate travellers and trade. Security and the free flow of goods and travellers is the top priority for the government. I know the hon. member shares the same concern.

In talking about what money goes into ensuring the safety in and around border areas in his community in particular, there was $7.7 billion in security related initiatives in the 2001 budget alone. There has been $433 million allocated to CCRA as part of a five year security package to improve security measures. It has invested significant funds in technology, additional staff at airports and seaports and automated systems to support our front line staff.

Once we know that the travellers pose no threat to public security, we enable them to move quickly and easily.

There has been a variety of programs introduced in the last two to three years, such as Canpass-Air, which helps our vehicles and our trucks get preclearance, Nexus-Air and Nexus for individuals who go back and forth across the border. They get a preclearance card that is valid for five years. There is complete clearance with that card. When crossing the border the person simply shows the Nexus card which indicates that the person has been cleared and can cross the border.

People can call 1-800-O-Canada and ask what the waiting time is at any of our border crossings in Canada. People will be informed exactly what needs to be done and whether the wait is an hour or half an hour.

There was a recent announcement of $300 million by the Prime Minister. This recognized the importance of the Windsor gateway and making sure that we are taking care of the movement of goods and people.

We need to continue working on those issues together. I know the hon. member for Windsor West recognize more than anyone else just how much we need to continue cooperation to overcome those challenges at the border crossings.

The Government of Canada's share of the investment income recently was another $600 million for the border infrastructure fund in budget 2001.

The initiatives announced last week are significant. I think the member would agree with us that as a result of a successful collaboration among all of us, we are moving forward to ensure that we are helping the municipalities. We are making sure that it is a joint effort. The federal, provincial and municipal governments are coming to the table and identifying those priorities.

Public Service Modernization ActAdjournment Proceedings

6:35 p.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, the parliamentary secretary still has not addressed the issue of $7.7 billion, as claimed by the government, going to border security.

The city of Windsor has to pay for putting police on the streets because the government will not provide assistance. The U.S. is saying that our goods and services, and also its own, because the drivers are Americans and Canadians, are considered a security risk to the United States.

For that reason Church Road has become a parking lot. Trucks are sitting in front of the businesses and homes and the government has not paid a single cent to the municipality to pick up the safety costs. The government has not done anything to address the issue of the U.S. saying that they are security risks. The U.S. says that those people and the goods in their trucks are a danger to the U.S. We let them sit on our streets and in front of our businesses and homes and that is not being addressed. It is shameful and it has to end.

Public Service Modernization ActAdjournment Proceedings

6:35 p.m.

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, that is absolute rubbish. All of us are working together to ensure the security and safety of Canadians.

We are making sure that those trucks are safe and clear and that they can get fast passage across the border. Similarly, we expect the U.S. to make sure that trucks coming into our country are not putting our Canadians in danger.

The federal government continues to work together with the municipalities and the provinces to move this issue forward.

Public Service Modernization ActAdjournment Proceedings

6:35 p.m.

Progressive Conservative

Gerald Keddy Progressive Conservative South Shore, NS

Mr. Speaker, I would like to continue a question that I asked back on April 2, 2003. Just so the viewers out there understand exactly what that question was and to remind the parliamentary secretary, since no one ever answered the question, the question was:

Mr. Speaker, the 1994 budget boasted about taking measures to prevent Canadian based companies from using foreign owned affiliates to avoid paying Canadian taxes.

This is a very serious issue. The question continued:

These measures did not affect Barbados. The Auditor General estimates that Canadian direct investment in Barbados has swollen from $628 million in 1998 to $22.3 billion in 2001. She estimates this loophole has cost Canadian taxpayers hundreds of millions of dollars.

My question directly to the Minister of Finance was, “Who decided to keep Barbados open when it closed down Liberia?”, which was another foreign tax dive, so to speak.

The issue is simple. In 1994 the Department of Finance introduced a regulation that would close the Barbados tax loophole in the Income Tax Act. In the final draft, the member for LaSalle—Émard, the minister of finance at the time, added a clause that kept that loophole open. This allowed his company and others to move several companies to Barbados, avoiding hundreds of millions of dollars in Canadian tax.

The facts are simple. We had the finance minister at the time, the member for LaSalle—Émard, creating a tax loophole that allowed a gain for his own company that he moved to Barbados, knowing full well that he had just closed down the loophole in Liberia, knowing full well that the one in Barbados was left open, the whole time having a trust that was supposed to be at arm's length.

It gets worse. This regulation from the Department of Finance was introduced as a regulation in February 1994, which should have closed this loophole, closed Liberia, closed Barbados and closed other places around the world. When the minister of finance was speaking to Parliament and to the issue of the loophole, he said:

Certain Canadian corporations are not paying an appropriate level of tax...we are taking measures to prevent companies from using foreign affiliates to avoid paying Canadian taxes which are otherwise due. We are taking other decisive measures to close loopholes in the current corporate tax system.

This is unbelievable hypocrisy for a minister of the Crown, knowing full well that he had deliberately from his department created a loophole that he could take advantage of. It is a very difficult situation for a minister of the Crown to be in.

That was in the budget speech in 1995. Here is the reality. He then went on, having already amended the regulation in 1994 previous to the speech, to create a special exemption for foreign owned shell companies, so that is saying one thing and doing another. I really think the Canadian public deserves an answer.

Public Service Modernization ActAdjournment Proceedings

6:40 p.m.

Oak Ridges Ontario

Liberal

Bryon Wilfert LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, I have to say to my hon. colleague, for whom I have a great deal of respect, that I am somewhat disappointed. The issue that I know the member really wants to talk is the issue of taxes and multinational companies, but it disturbs me that the hon. member is more than suggesting that the former minister of finance deliberately created a tax loophole in 1995. This allegation by the member is unwarranted, of course. It is an attack on a very honourable parliamentarian. I would suggest to the hon. member that if in fact he believes that what he says is true and he believes these allegations have any substance, then he should take them outside this chamber and make them out there, where he will be outside parliamentary immunity. To me, to suggest that there was a deliberate action taken by the former minister of finance of course is outrageous.

But I would like to talk about the issue which I know the member really wants to talk about, I am sure, and that is the issue dealing with taxes.

First of all, with regard to Liberia it was taken off the list because no formal treaty was ever consummated with Liberia, so Liberia never signed on, it was never ratified and that is why Liberia was off the list. I want to point that out to the hon. member to start with.

I also want to point out that the issue of tax policy obviously makes a key contribution to business success. As members know, it has been part of Canada's tax policy not to subject to double taxation earnings of Canadian corporations and their subsidiaries in foreign countries. We do that in different ways, I would point out, by not subjecting to Canadian taxes the incentives, the active business earnings that a Canadian company's foreign subsidiaries earn in a country with which Canada has a tax treaty.

The member asked, and the question I think comes down to this: Why did the government revise 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 the exemption would have benefited Canada. In a world of tax planning opportunities, there is no assurance that corporate groups would not simply move their corporate functions performed by Barbados to another jurisdiction where similar results could be obtained. In that case, the corporations would not pay any more Canadian tax. Indeed, forcing businesses out of Barbados actually could be counterproductive. Why is that? Because as a tax treaty partner, Barbados gives Canada tax information and assistance, more than any other jurisdiction does. That is important, and I certainly will continue to elaborate on that after the member responds.

Public Service Modernization ActAdjournment Proceedings

6:45 p.m.

Progressive Conservative

Gerald Keddy Progressive Conservative South Shore, NS

Either inside the House or outside the House, and I have a couple of questions, Mr. Speaker. The questions are fairly simple.

The Department of Finance introduced regulation 5907(11.2) in February 1994, which supposedly would close the loophole for foreign tax breaks. This was said after the same minister already had amended that regulation in June 1994. It was amended to create a special exemption only for foreign owned shell companies, keeping the loophole open for those foreign owned shell companies.

So I have three questions. If the minister at the time knew the advantages that his amendment would create for his own company, how is it not a conflict of interest? If he wanted to close the loophole, he had nearly 10 years as finance minister to close it, yet it is still there. How much in Canadian taxes were saved that benefited him directly?

Public Service Modernization ActAdjournment Proceedings

6:45 p.m.

Liberal

Bryon Wilfert Liberal Oak Ridges, ON

Mr. Speaker, first of all, as I said last week to one of his colleagues in the Conservative Party, if in fact he believes that the allegations and the charges which the member is saying this evening are true, then he should say that outside the House. The member says that in fact he has no problem standing outside the House. I invite him to do so.

I think those kinds of allegations against an hon. member, against an outstanding parliamentarian and an outstanding finance minister, should in fact be made outside the House. If the Conservative Party wants to go on with this type of mud-slinging, let it do so. If the member wants to talk about taxes, that is a different story.

I think it is important when we talk about Barbados that we say the tax treaty which formed the basis for this exemption on Barbados has been in place since 1980, even before this government. The choice was quite clear. To leave the long-standing exemption for income from these Barbados corporations was entirely reasonable. Does that mean we are standing still? Of course we are always reviewing these things. I explained to the member why he was wrong on Liberia. I have explained some on Barbados tonight. No doubt the Tories will come back to the House again this week or even next week with the same question, and they are going to get the same answer.

Public Service Modernization ActAdjournment Proceedings

6:45 p.m.

The Acting Speaker (Mr. Bélair)

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 6:47 p.m.)