Madam Speaker, as I was preparing to speak on Bill C-48, I wondered where such a bill might have come from. In the journal of the Chartered Accountants of Canada, in an article by Neil Smith, who is a senior tax manager, core tax practice, with Ernst & Young LLP in Calgary, we read:
The release came on the heels of a significant lobbying effort by the resource sector for federal corporate tax rate reductions—
We might wonder whether the resource companies really were winners in this respect. For example, it is interesting to read extracts from oil company annual reports regarding their semi-annual performance. For example, on page 1 of Petro-Canada's second quarter report to shareholders, we read:
Petro-Canada announced today second quarter earnings from operations of $455 million, which include a positive adjustment of $96 million for Canadian income tax rate changes.
Therefore, these measures have already netted Petro-Canada $96 million in tax savings.
The shareholders' report issued by Shell Canada Limited for the second quarter states:
Shell Canada Limited announced July 23,2003, second-quarter earnings of $178 million... Earnings included a one-time benefit of $54 million from a future income tax revaluation following announced income tax changes.
Petro-Canada apparently paid $96 million less in taxes, over the first few months of the year, which is a very short period. In the case of Shell Canada, that figure is $54 million. The same goes for Esso Imperial, which reported the following:
During the second quarter of 2003, tax rate reductions enacted by the Federal government and the provincial government of Alberta and settlement of various tax matters benefited results, mainly in the resources segment, by $109 million.
So, the three largest oil companies have declared additional future profits of $250 million. This is a direct consequence of the federal government's decision to lower the taxes applicable to oil and gas companies. They are not the companies suffering the most; they are companies that made astronomical profits in early 2003 and that introduced quite significant price hikes.
In the meantime, the federal government continues to collect 1.5 cents in excise tax per litre of gas. This tax is to pay down a deficit that has not existed since 1998. So, in a few short months, the oil and gas companies have pocketed hundreds of millions of dollars. It is not clear why they need this advantage.
Meanwhile, the federal government continues to pocket money because of a tax designed to pay down a deficit that no longer exists. We are talking about $2.8 billion in five years. No wonder taxpayers think this is ridiculous. Indeed, according to chartered accountants, the bill came “on the heels of a significant lobbying effort by the resource sector for federal corporate tax rate reductions.”
In other words, this government, which prides itself on helping the less fortunate and ensuring a better distribution of wealth, is granting $250 million in tax cuts to oil companies, and at the same time telling us it cannot give the provinces the $3 billion it owes them for health. This is a big problem. It shows an unacceptable lack of professional and political ethics. We cannot allow a bill to create this kind of situation.