My colleague from Halifax says that it is perverse.
As an example of that perversity let me mention one pharmaceutical company that was fined $50 million in September 1999 for a variety of conspiracy offences related to its sale of bulk vitamins and citric acid. This company was able to deduct no less than $10 million or 21% of that $50 million from its total taxable income. That is unbelievable. It is just one example of what the government has allowed to happen in the year 2004. Not only has this been totally unacceptable from a justice perspective but it adds to the already huge hole in our tax revenues caused by corporate tax loopholes.
Thank heavens we are finally dealing with this issue. However, why did it take so long? Perhaps the Parliamentary Secretary to the Minister of Finance can answer that question. Maybe he can tell us why it would take several years after this issue was brought to the attention of the government for it to finally close such a big loophole we could drive a huge diesel truck through.
Perhaps the Parliamentary Secretary to the Minister of Finance can give us some insight as to why there has been so little action since my colleague, the member for Winnipeg Centre, brought this matter before the House. In May 2002 my colleague from Winnipeg Centre stood up and said:
Mr. Speaker, I cannot deduct my traffic tickets from my income tax yet a recent court ruling says that businesses can deduct fines, penalties and levies as a legitimate business expense. I find this outrageous. Will the Minister of National Revenue agree that it undermines the deterrent value of a fine if a company can write it off as a tax deduction?
My colleague from Winnipeg Centre said again a little later in 2002:
Mr. Speaker, six months ago I asked the revenue minister to plug the tax loophole that allows businesses to deduct fines and penalties from their income tax as a business expense. Since when is breaking the law supposed to be tax deductible?
That is the question of the day. Since when was it possible for business fines to be tax deductible? Since when was it okay for corporations to break the law and then to make money off of that kind of breach of the laws of the land?
My colleague from Winnipeg Centre did not stop there. He continued to ask questions on numerous occasions, in 2002, 2003, and right up to 2004. In fact, other colleagues joined with him in raising specific issues. I want to reference something that my colleague from Halifax said on June 27, 2003:
Second, and equally absurd, is the reality that it continues to be available for corporations in some instances to write off as legitimate business expenses fines that have been imposed upon them for breaking the law. Whether it has to do with environmental issues, with environmental irresponsibility for which they have been convicted, or whether it has to do with labour practices that are completely unacceptable for which they are fined, such as violations of health and safety provisions, for example, or other forms of irresponsible, anti-social behaviour, it remains the law of the land, laws continuing to be supported by the government, that such offences can in some instances be written off by corporations.
Rewards were given for breaking the law. That is the issue that we are finally dealing with today. Finally, I want to reference my colleague, the member for Windsor--Tecumseh, who said in 2004:
It is time that the government gets serious with polluters and makes it illegal to write off fines for poisoning our environment.
I could go on in regard to that issue but I think the point is clear. We have had an abhorrent situation in our society. We have been raising the issue for years. It finally got addressed today; at least it is in the bill today. How long it will take for this to actually come into effect is the next question. When will it actually matter? When will corporations actually be fined and be unable to deduct this as a business expense?
That is one important part of this bill. Obviously we support this particular change.
The question is whether we can support the rest of the bill. That really depends on how one views the budget that this act flows from. Members will know that we had nothing but harsh criticism for the 2004 Liberal budget. We were very concerned with the fact that the government, once again in a very lucrative position with considerable surplus dollars available as a result of cuts that Canadians have had to deal with over the years, was suddenly able to take that surplus and put it toward more tax cuts and against the debt.
I know the member from Mississauga is going to ask me a question about what is so wrong about putting this money against the debt. I want to tell the member that there may not be anything wrong with putting some surplus against the debt, but I think he will agree with me when I suggest to him that this ought to be a matter for public discussion and parliamentary deliberations. It ought not to be something that happens after the fact, that is done in secret without the full benefit of having the facts available to Parliament.
Surely the member from Mississauga and all members on that side on the Liberal benches will agree with the importance of being transparent in this day and age, especially when one considers the difficulties that are happening on that front in other countries like Ukraine, or when one considers the difficulties that some of our big corporate entities are facing in terms of scandals and abuse of investors' money.
Surely if we can agree on one thing in this day and age, it is to be fully transparent, open and accountable in term of taxpayers' dollars that are here for our safekeeping and our careful deliberations.
We are not here to say that no money should ever go against the debt. We are going to point out that in fact what has happened over the last number of years by a process of deliberate miscalculation of the surplus is that the money available to Canadians for their priorities automatically goes against the debt. We have seen $86 billion just automatically go against the debt without consultation and deliberate decision making by this place. That is what is wrong.
We may disagree on how much money should go to the debt, to tax cuts and to program spending, but the fundamental problem here is the way in which the government has kept hidden the actual dollars available and would appear to have deliberately miscalculated so that in fact the money does automatically go against the debt. Because that in fact that is what the big corporations seem to want.
I was shocked when we learned about this year's actual surplus being $9.1 billion as opposed to $1.9 billion. I have been trying to discuss this with opinion leaders in our country today. In a public debate on a local Winnipeg radio station I heard from the head of the School of Business Administration at the University of Manitoba that it was okay for the government to do this, that it was okay to have this secretive approach because the money went against the debt. What was the big deal? I find that reprehensible and appalling coming from a leader in our community.
I think that has been the attitude of many large corporations and banks. They have been quite silent in their actual criticism of the government and certainly silent in terms of trying to ensure a more accurate forecast of the surplus. In fact, it is to their benefit or it serves their political agenda to have that money go against the debt.
As we have said on so many occasions, what is the point of putting all of our available surplus against the debt if that means people go hungry, employment stays high, people cannot access education and housing is crumbling around us? What is the point?
What is the point of ensuring that we have achieved the great target the Liberals keep setting of 25% debt to GDP ratio in 10 years' time if in fact we have a huge social deficit and a huge human deficit? What is the point? As I have said over and over again, what is the point of paying off the mortgage if at the end of it all the roof is leaking?
In this day and age, a family tries to balance the needs of the family with the mortgage payment. The government ought to do the same.
We are at a critical juncture as we head into the next budget. There has been considerable talk about more tax cuts. We have deep concerns about the Liberal agenda of a $200 billion cut, as has been rolled out by them over the last number of years. We would like to ensure that the available money is actually directed toward meeting the needs of Canadians and invested in this country so that we can grow the economy and deal with both the social deficit and the fiscal deficit together.
We want to achieve the same objective that the Liberals have in mind, but we want to add the human element. We want to add that element of caring and compassion that Liberals pride themselves upon. We would ask them to consider that in this upcoming budget.
The consultation process is over in terms of our official role as a finance committee. I am not so sure we actually have accomplished what many of us had hoped to do, which was to be an actual barometer of Canadians' feelings and to have that reflected in a report. We will see next Monday when it is finally tabled. We wanted to have the views of Canadians reflected in our report that is going to the Minister of Finance for inclusion in some measure in the next budget.
Members will understand and appreciate the fact that over the last number of years the consultation process has really become quite meaningless under this administration. Very little effort is made and very little attention is paid to the pre-budget consultation process put in place by the finance committee. Very little attention is given to the results of that process by the Minister of Finance.
I think it is fair to say that the real power is happening as we speak, in the minister's office, as he consults with opinion leaders in round tables day in and day out, and at this very moment. He is getting his advice, rightfully so, from a number of individuals, and I hope he is getting good advice, but I also think it is a shame that the 200 to 300 individuals and organizations that appear before our committee regularly do not get a chance to see their views reflected or mirrored in any way in terms of the budget.
Certainly the last budget did not reflect the wishes of Canadians. I hope that in the budget to be presented to Parliament and all Canadians on February 22, 2005, we will finally see some of the dreams and aspirations of Canadians reflected in that road map that will be presented to Parliament and to all Canadians.