Debates of Dec. 14th, 2004

Budget Implementation Act, 2004, No. 2

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Mr. Speaker, I would like to broaden the overall theme that the hon. member for Medicine Hat has constructed for us.

He pointed out the essential difference between this side of the House and that side of the House. On this side, we believe in economic freedom, that it is individuals, not big government, who create wealth. It is entrepreneurism, not politicians, who create jobs.

That theme of overall individual freedom was further illustrated today in the House of Commons when numerous members of the House on this side had to stand up and defend charter provisions, which protect religious freedoms and the rights of individuals to exercise their own religious morality, against the position of cabinet ministers on that side of the House who oppose religious freedom and who want to impose their values on various different religious and cultural groups. People who come here from other countries to enjoy religious freedoms will have those freedoms impeded by a government that wants to force independent religious organizations to perform weddings that are against the religious values of those religious institutions.

Ironically, we saw the minister on democratic reform stand in the House repeatedly claiming that he believed in the charter, when in fact he stated on CPAC that those marriage commissioners who refused to carry out same-sex weddings should lose their jobs. Other ministers have said that churches that fail to perform same-sex weddings should lose their charitable tax status.

I bring it back to the ultimate question of individual freedom, and I ask my friend from Medicine Hat this. Is it not true that it is us on this side of the House of Commons who are defending the Canadian constitutional values of individual freedom, economically, religiously and in other facets of Canadian life?

[Monte Solberg, Conservative, Medicine Hat, AB]

Mr. Speaker, my friend is absolutely correct that the Conservative Party stands for the concept of individual freedom, that we believe ultimately that the best way to create wealth is to have government stand out of the way of business and entrepreneurs striving to do what they are born to do, which is to go out and build businesses, hire people to help them do that and create all kinds of wealth.

Unfortunately, the government has it the other way around. It does seem to think that if the government meddles and intervenes, that it is somehow helpful. Ultimately, we find that it is the source of every boondoggle and scandal that we have seen the government go through.

When it comes to the issue about the minister of democratic reform speaking out against the freedom of a marriage commissioner to say no to marrying a same-sex couple, it is like something out of 1984, something out of an Orwell novel. The minister of democratic reform is being smoked out on this issue. It is unbelievable that the government would state that it favours religious freedom. It is obviously the instinct of certain members on the other side that it should not be the case. They want to impose their views on them, and it tells us a lot about the Liberal Party.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, we even have friends among the Liberals, who believe that we do serious work, not only in terms of criticism, but also in terms of the suggestions that we make to the government. In fact, the ultimate goal of any opposition party is to make much better governments. I think that, since September, the opposition, whether we are talking about the Conservative Party, the Bloc Québécois or the New Democratic Party, has made this government govern somewhat better than it had over the previous 11 years.

I think that this bill includes measures that are a big step in the right direction, but they fall totally short. There are a lot of missed opportunities that the government could have seized to really improve things. Here is just one example. In Bill C-33, they talk about reducing the air traveller security charge. This is the airport tax that has been imposed since the September 2001 events in the United States.

Right from the start—and the government does not want to admit it—having an airport security tax is an extremely bad idea. Not that security is a bad idea, but funding security by taxing travellers, in various airports in Canada, compromises the competitiveness of this sector. Since this tax was introduced, all the representatives of the airline industry and related sectors, at various levels, have stated that repeatedly. It must be eliminated.

A reduction has been proposed, and this is a good step forward, but the tax must be eliminated. Small regional airports must collect this tax and follow extreme security measures. I think that this tax and security issue has been exaggerated, particularly in small airports in a number of rural regions in Quebec and Canada. This airport tax must be eliminated. I hope that, in the next budget, the Minister of Finance will see that good old common sense must prevail in his decisions, especially with regard to such a tax.

I want to take this opportunity to address another point. We have just finished pre-budgetary consultations. There was a consensus everywhere, be it in Quebec—the Bloc Québécois held its own pre-budgetary consultations across Quebec—or in the Standing Committee on Finance across Canada, where representatives came to see us in Ottawa. There is one tax needs to be reviewed and that is the fee immigrants must pay to enter Canada.

It is not normal for immigrants, who are experiencing socio-economic problems in their country of origin, to have to pay an entry fee that represents a fortune to them. The entry fees should be reduced; keep them but scale them according to the socio-economic situation in the country of origin.

It is not normal for a refugee, who is fleeing a country where civil liberties do not exist and where there is extreme poverty, to arrive in their new country and have to pay this fee. Immigration is essential. It is not a gift we are giving them. Given our declining population, we need immigrants and we need to welcome them. We should not impose a tax on them. I am taking this opportunity to stress this point.

Bill C-33 contains a hypocritical provision. It always looks good when, in the throne speech and the various budgets, persons with disabilities are mentioned. Is the government ever compassionate. It is great how it wears its heart on its sleeve.

There is a problem with how persons with disabilities are treated in Quebec and in Canada. The tax legislation passed in this place is not even enforced. I am talking about the disability tax credit. I notice my colleagues around me, the hon. member for Compton—Stanstead in particular, and all the new members who were sent here following the June 28 election.

My colleagues and I are all aware of the problems persons with disabilities are facing with respect to the disability tax credit they had been receiving for years. The year they visited us, the revenue agency had decided to audit them, asking that they provide pretty incredible proof of their disability. In some cases, these are totally degenerative diseases. They cannot get better, yet these people are asked to provide more documentation from the doctor proving that they still have a disability, when that is obvious.

We have heard horror stories. One person who was really disabled in every way, who could not walk, even the length of a short desk, was instructed to go back to her doctor's office to get papers filled again.

They even disputed money that had been paid in past years. It is total nonsense to hassle people whose lives are already difficult enough, often horrendously difficult.

Now we find ourselves with a proposal for a special deduction for products and services for the disabled. I am no different than anyone else here in my desire to improve things for the disabled, but we need to start by properly respecting the credits available under the federal Income Tax Act and properly applying its provisions.

We are still being treated to all the government's flowery speeches about the disabled, as we have been since 1993. When the lack of investment in the social housing sector is being discussed, they always forget that this issue includes the component of adapted housing for the disabled. There has not been one red cent for that since 1993. It is all very fine to talk about this measure or that, but the government's decisions never include what is really essential.

We hope that the government, in the person of the Minister of Finance, will be a bit more attuned to the situation of the disabled when he tables his next budget. A major surplus will be generated during the next fiscal year, regardless of all his creative calculations, all his fancy manoeuvres, up to and including a triple flip if he so desires. I think it would therefore be a good idea to keep the disabled in mind on an ongoing basis.

In connection with the disabled, according to a Finance Department study, for the fiscal year 2002-03, 148,000 of them were unable to benefit from the tax credit because they had no taxable income. It would be a good thing for this credit to be converted into a refundable tax credit for the disabled who have low incomes and therefore cannot benefit from it. SInce it is not refundable, the only way to benefit from this credit is to pay taxes to the federal government.

Another missed opportunity involves a review of personal income tax, especially income tax for low income earners. I am referring to low income families. The federal government has huge surpluses. I think the cumulative surplus over the past eight years is roughly $63 billion. Again this year, the surplus will be $9.1 billion when they estimated it would be $1.9 billion. Is it normal in such a budgetary context that the federal government does not even think about reviewing personal income tax, especially for low income families? Is it normal that among the G-7 nations, Canada most readily taxes the earnings of low income families?

They talk about a zero tax threshold, which seems to be a rather complicated phrase. It is the point at which taxpayers start to pay tax. For the federal government, the zero tax threshold here in Canada is $8,200. Unless I am mistaken, this is far below the poverty line or the low income cutoff. Experts go to great lengths to try to be more politically correct and use gentler terms than “poverty line”. That is too harsh, so they talk about “low income cutoff” instead.

The poverty line is well above the taxable income amount of $8,200, in terms of federal income tax. Among the G-7 nations, the Canadian government is the one that most readily taxes the earnings of personal and family incomes. The last budget—which was the premise for Bill C-33—was a good opportunity for the government to review personal income tax.

If memory serves me correctly, in 1996 the Bloc Québécois had presented a series of measures to make the personal income tax system more equitable. We had done this for businesses as well. I remember that the then Minister of Finance, the current Prime Minister, rose in this House to congratulate the Bloc Québécois for having conducted such a comprehensive study. However, since that time there has not been any true taxation reform in order to include some tax equity in the federal system.

Aberrations like a zero tax threshold of $8,200 for individuals and approximately $10,000 for families still exist. That makes no sense. Do hon. members know who the first victims of such inefficiency are? Single mothers with one or more dependent children. With $9 billion in surplus, possibly up to $10 billion or $12 billion for the current year ending on March 31, 2005, why is it so difficult for the government to see exactly what we are seeing and to take measures accordingly? It always comes up with half measures, producing alarming statistics. For example, since 1993, the number of children living in poverty in Canada has not decreased in real terms. We still have 1.2 million children living in poverty. And children live in poverty because their parents live in poverty. In this respect, taxation can do a lot. Taxation is a major determinant of the relative wealth or poverty of citizens.

Measures can be taken to improve the situation somewhat in terms of the management of the tax conventions signed between Canada and various countries considered by the OECD to be tax havens, that is, countries or regions which provide undue benefits with respect to taxation. In Barbados, for instance, the tax rate on corporate dividends is between 1.5% and 2.5%, while it is around 28% or 29% in Canada. So, we are talking about countries that do not have transparency as a watchword, be it concerning bank accounts, or banking and industrial activities of Canadian or other foreign subsidiaries established in Barbados or elsewhere, in Fiji, for example.

These are often countries where money is laundered, making them veritable laundry machines, which the OECD denounces every year. But, except for a handful of European countries, no one has really taken any drastic measures to put an end to the tax evasion made possible because tax havens exist.

At present, there are two measures in this bill that affect tax agreements. They are positive measures, but they do not tackle the heart of the problem. The heart of the problem stands on two feet: he was elected Prime Minister on June 28, 2004. We cannot set an example for businesses who invest in tax havens and send their billions every year to tax havens. We cannot set an example here, because our Prime Minister does not set an example.

I have mentioned the tax agreement with Barbados because it is the worst example of tax avoidance and the flight of capital to countries considered tax havens. Businesses are taxed at a ridiculously low level on their profits, and when they return their money here, they are exempt from taxes in Canada. Barbados is one of the worst tax havens identified by the OECD. The Prime Minister, the former finance minister, owns a family business called CSL International. It is an international marine shipping company that has an office—not called a head office or headquarters and I will explain that in a moment—in Barbados. He himself profits from the existence of a tax agreement.

When one looks at the tax agreement itself, it seems fine. But we have been analyzing it for a long time now, and denouncing it, too. It appears proper. There are even clauses stipulating that businesses paying only 1.5% or 2.5% as Barbadian income tax, when they return their profits to Canadian subsidiaries, will be taxed on the difference between normal Canadian tax they would pay if their business were in Canada and what they have paid in Barbados.

But a few years ago the government adopted tax regulations. Regulations do not go through the House of Commons, but are defined by the executive. We analyze the bills that become law, but there are regulations to go with the laws.

However, paragraph 5907(11.2)( c ) of the income tax regulations allows businesses such as CSL International, and the major Canadian banks—nearly two weeks ago, a study was made public by a university professor who said that the banks had benefited from this kind of tax evasion—to proceed in a way that, when they pay tax once in Barbados, they circumvent the provision in the tax treaty with Barbados that states that they still have to pay tax here.

Under a regulation adopted by this government, not this Parliament, an exception is made for companies that pay Barbados an initial tax of 1.5% or 2.5%, depending on the type of business. When these profits are repatriated, the federal regulation adopted by the government, by the governor in council, and not put before parliament, ensures that this company does not pay taxes twice.

So, they are taxed once at 1.5% or 2.5% of profits or dividends. When this money comes back here, it is not subject to the federal Income Tax Act. This is not normal. An exception was created by a regulation voted by the executive, and the Minister of Finance, the current Prime Minister, was there when this regulation was passed.

This is not normal. We must abolish this regulation to ensure that all businesses, be it CSL International, the Prime Minister's family business, or the major Canadian banks, pay their fair share of taxes. Billions of dollars are not going into federal and provincial coffers because of a regulation adopted by the governor in council, meaning the government, because the regulations are not subject to approval by parliament but are determined by the governor in council.

Worse still—members will say I am exaggerating, but I am not, because these are facts—I was here in 1998. The finance minister at the time, the current Prime Minister, introduced omnibus legislation containing various measures, a bit like Bill C-33. There were small and big measures, things that were clear and things that were not, because it was extremely technical at times.

However, there was a small paragraph at the end of the bill that said, “And we are amending the Income Tax Act for international shipping corporations”. This statement was followed by references to all sorts of things. Of course, that got my attention. I began reading this omnibus bill from the end of it and discovered that the Prime Minister had tabled, when he was the Minister of Finance, through Bill C-28, provisions that benefited his own company, which has since become a family business, since he supposedly gave it to his children.

What did Bill C-28 say? It added more things. Not only did we have regulations, so that companies would not have to pay taxes twice, even though tax rates were ridiculously low compared to the North American average and to those that apply to us, but there was also an additional exception that applied strictly to international shipping corporations. There are eight of those in Canada and he is involved in all of them.

What was contained in this somewhat technical provision with the incredible impact? It said that even dormant corporations, that is companies that are not directly involved in international shipping, but that are part of conglomerates, can benefit from the tax provisions found in the regulations to avoid double taxation, even if the first tax rate is very low.

In other words, the then Minister of Finance and current Prime Minister introduced an act that was custom made for his own company to avoid having to pay deferred tax here, and to ensure that his type of corporation could benefit from the tax provision, even though it does not qualify.

Worse still—and some might think I am exaggerating, but I am not—in order to benefit from a tax convention, a Canadian corporation that has a subsidiary abroad, such as in Barbados for example, must be a business whose mind and management are located in that country. In other words, all the managerial and administrative decisions must be made in that country.

A CBC broadcast aired several months ago indicated that a reporter had tried to get answers about CSL International in Barbados, but was referred to CSL in Montreal. This means that the management and planning of CSL International is not even located in Barbados, but in Montreal.

So, the first condition is not met to be able to benefit from such a tax treatment, according to the federal income legislation for corporations. This is serious. These are missed opportunities, but now we know why.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I do not have a lot to offer him other than to ask for his opinion on the issue of taxation of the poorest in our society. He talked about low income Canadians and it is an issue that we have wrestled with for many years on the finance committee. It has been an annual subject of how to deal with this.

There are about 14 million Canadians who pay income taxes. If we were to deliver $100 into the pockets of each and every taxpayer, the price tag would be $1.4 billion. It demonstrates that across the board tax cuts are a very expensive proposition. It would be much better to focus the $1.4 billion on those who really need it.

However, the member will also know that in the Income Tax Act even the highest income earners pay the lowest rate of tax on the first $30,000. Therefore, if we were to make any adjustments at the first range of tax levels, it would also benefit all Canadians.

Would the member give consideration to the following proposal? Instead of amending the rates, there would be a special adjustment at the end of the return, so that if one's income was below a certain level and the amount of taxes otherwise owing was less than say $500, the amount payable would have no tax?

It is a way to sense those in our society whose incomes are low for reasons beyond their control. Notwithstanding the tax act, which provides for income even at low levels, it would be appropriate to basically make a blanket exemption for low income earners who do owe taxes.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I thank my colleague for his question. I want to extend him my best wishes for 2005. We have known each other since 1993 and he does excellent work. His only fault is that he is a Liberal, but no one is perfect. He is an outstanding colleague. We also went on interesting missions together in foreign countries. There are nice stories to tell about that.

My colleague is right. It is difficult to change personal income taxation. We tried to have different proposals. Since 1993, I cannot say that the Standing Committee on Finance has examined the issue very seriously, because somehow there is no political will to do so. He is right. When we reduce tax rates on the first income bracket, this also affects other brackets. Thus, not only low income earners, but also very high income earners, can benefit.

There must be a way. Perhaps he showed us the way earlier when he talked about a differential tax rate for some income levels. This is done elsewhere. We could look at some European countries. I often refer to Scandinavian countries. They are ahead of us with respect to personal income taxation.

They created low income categories, and the tax rate varies according to those categories. They do not use universal tax brackets, where the first slice of income is taxed at one rate and the second slice at a higher rate. The change on the first slice of income ends up in the pockets of taxpayers, even those who earn $150,000.

The hon. member for Miramichi feels strongly about this issue, as do we in the Bloc Québécois. In committee, he came up with a proposal that we took into consideration. The problem is that, if there is a lower tax rate for people with an income below $10,000, then we need to provide these people with a tax credit to give them back the income tax they have paid. For instance, a taxpayer with an income of $9,999.99 would get a tax credit of $372 to compensate for the income tax he or she has paid, whereas a taxpayer earning $10,000 will have to pay Ottawa $372, which is an incredible difference just for an extra penny in income. So, we need to look into that matter.

We started to sort out the problems in 1996, but we must take it a step further. And to do so, there must be political will. As my hon. colleague who sat on the Standing Committee on Finance knows, we have been trying for years now to put this issue on the agenda. Maybe we should think about it now that we have huge surpluses. It would help low income families.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, here we are again speaking on the legislation to implement the budget of last year. We have a chance to reflect on the past and make connections to the present process involving prebudget consultations for the next budget. I think the timing is good. It is time to reflect on the past and look to the future.

I want to address one very important issue in Bill C-33. There are many issues to touch on. If one looks at the overall summary of this bill, we are dealing with a couple of dozen specific changes to the Income Tax Act, the First Nations Goods and Services Tax Act, the Air Travellers Security Charge Act, and other statutes as indicated.

There is one recommendation in this package that must be singled out. It is a symbol of an obvious glaring loophole, of a wrong that is in our system today. It took an enormous amount of pressure on the part of members in the House to have corrected. There is one line in Bill C-33 under the summary that says “eliminate the deductibility of fines and penalties”. The words say it all, do they not?

Finally, the government is recognizing the importance of eliminating the fact that one can deduct fines charged against a person from his or her income tax. It is hard to believe in this day and age, is it not? It is hard to believe that up until this very moment it was possible to deduct fines and penalties accrued for wrongdoing because to do so there was a tax benefit from that kind of wrongdoing.

Indeed, we might not even be here today addressing this issue or even debating this bill except for the determination of New Democrats. People will know that many New Democrats have pursued this issue in Parliament in different ways from different vantage points and on numerous occasions.

I want to reference the work of my colleague, the member for Windsor West, who out of concern to finally put an end to the rewarding of corporate corruption with tax deductions initiated the following motion at the Standing Committee for Industry, Natural Resources, Science and Technology. His motion stated:

That this Committee suspend hearings of Bill C-19 until the Government introduces its proposed amendments to the Income Tax Act Section 18 (1) (a) allowing the deduction of fines as a business expense into the House of Commons and Second Reading is completed on the proposed amendments.

Members will know that Bill C-19, which is an act to amend the Competition Act, includes changes to the fines levied against corporations for a wide variety of anti-competitive offences. My colleague from Windsor West felt that dealing with those changes before an outstanding question of deductibility of fines was settled once and for all was putting the legislative cart before the horse. Interestingly, the committee agreed.

Miraculously, here we are debating this long overdue budget implementation issue today instead of some time in the new year. I think it is worth acknowledging the hard work of my colleague from Windsor West and congratulating him for this initiative.

As I said, we have been pressing the government to address this issue for some time. We have been pushing hard to convince this Liberal administration to stop allowing the deduction for corporate fines and penalties. Naturally, we have been appalled, as most Canadians have been, as corporations guilty of any number of offences walk away with a backhanded sort of reward for their wrongdoing.

[Alexa McDonough, NDP, Halifax, NS]

It is perverse.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

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.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I really did not have a question but then I was prompted by the member. We have had a good joust. I very much respect the member.

The hon. member finished her comments with regard to the consultation process. I think I have to disagree with her. Having been on the finance committee for about four years, I very much enjoy meeting Canadians right across the country and travelling to their communities as well as having some come and give their views here. The member will know very well that if all of the inputs from all of the people who came forward were costed out, we would be talking about $50 billion or more. Clearly we could not do everything that everybody wants.

Notwithstanding that, the process is meaningful simply from the standpoint that Canadians do have an opportunity and governments do have to make choices and each budget is not a budget wherein all things must be dealt with. Budgets have to be dealt with in the context of prior budgets and all the things that change.

Let us look at what has happened over time, over the last decade. We have balance in terms of $100 billion in tax cuts, balance in terms of $50 billion of debt repayment, and savings of $3 billion a year. Then there is balance in terms of a massive injection into health care, child care and the cities agenda. There are some very good things that go on. I just raise it with the member. Maybe she would at least concede that Canadians still should be heard. We can always do better.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I appreciate the question and I want to say at the outset that under no circumstances should my comments be interpreted to suggest that I have less than full respect and admiration for the hundreds and hundreds of Canadians who participate regularly in the pre-budget consultation process.

My concern rests completely and solely with the federal Liberals who, on a regular basis, refuse to consider the deliberations and advice of Canadians. If that were the case, if it had been considered, we would not have seen in 2004 a privatization budget that moved and advanced the whole area of health care and other areas of public sector responsibility into the realm of private, for profit delivery. We would not have seen a budget that was so focused on tax cuts and so focused on debt reduction.

We would have seen a budget that tried to balance out spending on issues of importance to Canadians' health and well-being, coupled with some targeted, selective tax cuts that pertain to low income and middle income earners, with some planned allocation of resources toward the debt.

We would not have seen $9.1 billion in surplus from that budget go automatically against the debt. That is appalling. That is what Canadians object to.

I want the member for Mississauga South to take heed of some advice from the words of some experts who observe our committee and Parliament. Dobell and Ulrich, in their 2002 Policy Matters piece entitled “Parliament's Performance in the Budget Process: A Case Study”, observed:

The broad lines of the government's intentions were reasonably apparent in advance and there is no automatic connection between what a committee hears and what it recommends.

That was the case back in 2001. It is certainly still the case today.

[Rob Anders, Conservative, Calgary West, AB]

Mr. Speaker, the hon. member in her speech talked about the Income Tax Act, competition, corporate fines and penalties, tax loopholes, making money off breaking the law, rewards for breaking the law, fines on polluters and the idea there should be transparency, accountability and an end to secrecy. She talked about people serving their own political agenda, meeting the needs of Canadians, the human element of some of these decisions and caring and compassion. On that note, I would like to get the member's thoughts on the following.

Noranda is posed to sell some of its Sudbury assets, its nickel basin. We have an offer on the table by China Minmetals, which is owned by the government of China. That company has an egregious record of using slave labour with regard to its mining operations. It has the worst safety record in the world in terms of the operation of its mines.

Supposedly, this will be reviewed by the Foreign Investment Review Agency. However, the track record is that out of 11,000 potential reviews over the past number of decades, not a single one has ever been overturned.

I would like the member to postulate, if she can, on why she thinks our government and Prime Minister is so set on going ahead and selling this strategic and valuable natural resource to a company that has used slave labour and is part and parcel of one of the worst human rights records in the world.

My theory, as best as I can figure it out, is that the Prime Minister and Canada Steamship Lines has some of their ships built in China, and as a result of that, turns a blind eye to some of these things. We all know tax avoidance strategies are practised by that corporation and what not. I would like the member to talk about the fact that the government is turning an absolute blind eye to these human rights violations and, in a sense, is giving over a valuable Canadian asset, preparing a rubber stamp and overriding any concerns on foreign investment review.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I appreciate the question from my hon. colleague from the Conservative Party. It is a very important issue that we are very concerned about as well.

First, for the last decade or more, we have felt that the Foreign Investment Review Agency is a toothless tiger. It has not proven to have been effective on any front and is certainly now not likely to provide the kind of careful deliberations around any prospects of a country like China buying up Noranda in Canada.

The member will know that the New Democratic Party has rejected for years and has spoken out furiously over the whole way in which we are selling off our economy to foreign corporations. We are just as concerned now with the thought of a country like China, with a very questionable record on human rights and workers protections, to have that kind of holus-bolus control over our economy. That is a sellout of the worst kind.

There has to be a deliberate new mechanism for dealing with this new situation. I would hope the government does not leave it to the normal procedures under the Foreign Investment Review Agency, but sees this as an unique development that has to have a certain change in approach.

I would hope, especially given the member's comments about CSL, that the government is particularly diligent about doing so. I would not be surprised, as the member said, that Canada Steamship Lines ships are being built in China. I look at the list now. In terms of the flag registry, Liberia, Bahamas, Vanuatu, Germany, Singapore, and the list goes on, of the flags that are flown by Canada Steamship Lines. We know there are some intricate holdings involving many countries, and many questionable interests. I applaud the member for raising the question and I look forward to working with him on this.

[Don Bell, Liberal, North Vancouver, BC]

Mr. Speaker, I listened carefully to the comments of the hon. member for Winnipeg North. I sit on the finance committee with her. I have respect for her and welcome her point of view.

I hope the member would recognize the willingness of members of government to listen to people and to get their input for the budget. I hope she would acknowledge that the Liberals on that committee are just as attentive as the other members to the over 250 groups we have interviewed so far in the process this fall.

With respect to the issue of the surplus, the comment I would throw back to the hon. member is this. I presume she is aware that when this government took over from the previous Conservative government, we were in a situation where about 39¢ of every dollar went to the national debt. It is now around 19¢ of each dollar and the goal is to go to 12¢, which would represent 25% debt to GNP ratio. This will coincide with the time baby boomers start to achieve retirement age and will enable the government to deal with the increased costs associated with an aging population.

There is no suggestion that all the surplus should go there, but enough of it should go to do that. An error in the 1% projection either way in terms of both expenses and revenue projections will result in approximately a $4 billion shift. The $9 billion--

[The Deputy Speaker]

The hon. member for Winnipeg North.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I wish this were the case. He says that the money invested in the surplus has produced savings in other areas, but it has not. We have tried the debt reduction tax cut route for the last number of years. There has been no boom for our economy. There has been no boost in productivity. There has been no lifting of people out of poverty.

What has happened is that money has gone into a deep, dark hole and has not allowed for us to have the double benefit of investing in Canadians and still bringing down the debt.

I hope the member will take heed of those economists who have empirical evidence showing that putting these available surplus dollars in terms of spending and investing in Canada will bring us to the same debt to GDP ratio, which his government wants, at the same time, maybe one year later.

Will he choose to put all that money against the debt or will he start to put some of that money toward housing, education, health care and all of the other needs in society?

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

Mr. Speaker, I am very pleased to rise on our last day of 2004 and speak to the budget implementation act. I want to talk about a few of the things that are absent from the bill.

This is my third term in the House. Ironically, year after year when we talk about prebudget consultations and when we look at budget implementation bills, it always strikes me how the government can forget about some of the most important things about which we should talk.

Let me begin with the JDS Uniphase employees. This is a file with which the government should have dealt. It is a finance item. It is a phantom tax that the government is proposing to collect of hundreds of thousands of dollars from hard- working Canadians who have never earned a dime of that money.

The irony is that I brought this matter to the attention of the current Prime Minister when he was the minister of finance. That will be four years ago this February. We had numerous meetings then. We spoke about it at great length. I met with his officials. Obviously, they acknowledged that this was not right and something needed to be done. They said that they had to look at it.

Four years later, I am still asking questions in the House of Commons. We have gone through three ministers. I am now dealing with the Minister of National Revenue. I actually believe we are likely getting closer to a solution. Today the talk began about giving credit to who solved this, and they looked at other members. Aside from that, the most important thing is we need to help these people. These people should not be dragged through the wringer for four years. They deserve help.

We talk about how we spend taxpayer dollars. It boggles the mind that the most obvious things that should be addressed are not.

Let us talk about the gun registry. At its infancy, Parliament was led to believe by the government that the total cost would be $85 million, but it would collect revenues. The net cost to the taxpayer would be exactly $2 million. The government forgot a few zeroes. It is actually close to $1.4 billion and climbing. I think the government is spending another $120 million for it.

I know there was great interest by members of the Conservative Party to cut the funding for the gun registry. I want to emphasize here that no one wants people running around on our streets with guns. However, we believe the money could be spent so much more effectively.

What have we actually received for this money? We have two million completely innocent federally licensed gun owners having to report their change of address. If people have licensed their firearms under the gun registry and then they have moved, they have 30 days to report their change of address or they could go to jail for 30 days.

Guess who does not have to report their change of address? This is all very relevant on how we spend money in the budget implementation act. There are 176,000 convicted criminals who have been prohibited from owning firearms. They do not have to report their change of address.

A person has to wonder about the government's priorities.

I look at the things that are not in the budget implementation act. There is silence. Silence is consent. When the government refuses to deal with things, we have to question why it blatantly leaves things out.

Let me also talk about a few sore spots. We hear all kinds of talk on these files, lots of pledges from the government, such as the mad cow crisis, the BSE file. The people in western Canada and across Canada are still struggling with this matter. We hear the commitments. We hear the government talk about it. Why are the hard-working owners not seeing that help?

We have the softwood lumber issue in British Columbia, from where I come. This government might as well be non-existent. According to the Liberals, the country ends at the Rocky Mountains. The government thinks the Pacific Ocean is on the other side of the mountain range and it does not know another part of Canada exists there.

Let me talk about a current matter, one since I was elected in 1997. We have heard in the House for months and months about the actions of the immigration minister. One questions how she is still in that office.

Why are we not spending resources to clean this up? Right now something like 25,000 people are making claims for refugee status in this country. We need more immigrants in this country than ever before. People from various countries are waiting in queues. They have great qualifications and want to come to this country. For those who come into our country and claim refugee status, it can take years and years to process them. Why are we not changing the laws? There are bills that could clean up this mess, but the resources are not being put into that.

I have huge problems in this area. People are coming from the United States and claiming refugee status. That is absurd. It is ridiculous. They show up in Canada and we spend millions and millions of Canadians' hard-earned dollars on systems that are obviously broken. I have not seen the immigration minister table any legislation to deal with any of these issues. It goes on year after year after year.

The refugee system was established to bring to Canada people who live under oppressive regimes or who face persecution. We as a caring and compassionate nation need to bring those people to Canada. The problem is that the government's policies, and I emphasize the word “policies”, have allowed the system to be abused so badly that when people arrive, they know they can make a claim and drag it out from two to five years. It is time the government looked at priorities and decided where we need to spend some money.

The hon. members across the aisle say they are very proud of the fact that they have eliminated the deficit. Let me say something I have advocated for a long time. I want to acknowledge a former member of Parliament, Mr. Preston Manning. He was the leader of my party when I was first elected. He talked about getting rid of the deficit long before it was popular to do so. He brought that issue to the floor in 1993. He drove the government to do it.

Unfortunately, the government has done it on the backs of hard-working Canadians. It has cut billions and billions of dollars in transfers to the provinces. We have seen taxes go up and up. We do not have a federal deficit but we have massive surpluses. In the government's own forecasting once again this year we see a $9 billion surplus. This is absolutely unacceptable. We predicted this before the election.

The government said that the Conservative Party numbers had no credibility, that we could not live up to the numbers. It turns out that our numbers were right.

The Liberals have overtaxed Canadians. Nine billion dollars is a fair chunk of change. They tax the backs of hard-working Canadians. They continue to slash money that is supposed to be transferred to the provinces. To top it all off, the Liberals go on massive spending binges to look after their friends and their own patronage programs.

Over the years we have seen the sponsorship scandal, Shawinigate, $1 billion lost at HRDC, and hundreds of millions of dollars wasted on cancellation fees on defence contracts. The Department of Public Works and Government Services is a place where there has been no accountability, as well as the Department of Indian Affairs and Northern Development where, with no accountability, billions and billions of dollars have been lost.

Why are we still talking about this today? Why are we not making progress in these areas? Why are there still new revelations? We are still reading headlines in the newspapers. The government claimed a year ago it wanted to come clean on these files, that it wanted to put all the information out there. We now learn through the Justice Gomery inquiry that in fact it provided very little information. The Liberals hived this off to an inquiry so it could get into an election. Now some of the facts are being revealed, far more serious than anyone had ever possibly anticipated. Documents have gone missing. Blank documents have been submitted. It is not okay.

It is time the government started looking at its priorities. It is time the government took heed of Canadians' interest on how it spends their hard-earned tax dollars. It is absolutely disgraceful when there was an opportunity to cut the funding for the firearms registry that the government said no. It is going to pour another $120 million into the firearms registry. It is incredible. The Liberals even tell us that the registry will not be fully implemented I think until 2008. It is outrageous that anybody could try to defend those types of spending programs.

The Liberals wonder why the Canadian people cringe, why at tax time they protest. We hear it all the time, “We pay our taxes but let us have some accountability on how it is spent”.

What are the Liberals doing in this budget implementation act? They are going to lower the air security tax. Imagine that. This is the other thing that they do. This is right out of this budget. They are going to lower the airport security tax.

They take a dollar from Canadians and give back a dime, and then they ask for thanks. It is an amazing concept. They come along to the taxpayers, rob them blind, give them back a little bit, and ask for a pat on the back for giving back 10¢ on the dollar. It is absolutely mind-boggling how they can get away with it.

I see some of them shaking their heads. I would be shaking my head too if I were on that side of the House. I absolutely would. We have seen it time after time. They will announce a tax cut. I have seen it in the House, and I call it the paycheque stub test. They will stand and say they are lowering taxes, yet when I talk to hard-working Canadians and they show me their paycheque stubs, they have less take home pay than the year before. They actually did not get a tax cut.

The Liberals might tinker with one tax and lower it a little, but then they will raise taxes on a number of other things. At the end of the day there is only one taxpayer, only one paycheque, and Canadians are left with less money than before the government started these programs. That is what I am talking about when I say the Liberals take a dollar and give back a dime, and then they want Canadians to thank them.

I will talk about a couple of other areas now that we are on the issue of airports.

[Wayne Easter, Liberal, Malpeque, PE]

Talk about the surplus.

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

I would be happy to talk about the surplus. Nine billion dollars is absolute robbery. That is overtaxation. Anyone who has any competence at all in forecasting numbers could do a better job than that. It is something like $30 billion or $35 billion that the Liberals have had in surpluses, year after year, $9 billion, $10 billion, $11 billion of surplus, and that is absolute robbery.

What they should do, and I have always argued this, is have a line item in the budget of how much they are going to pay down on the debt, how much there will be for the debt repayment plan, and then collect that much in taxes.

If they put the money back in the pockets of low and middle income Canadians, if they gave hard-working Canadians a little more disposable income, gave them some freedom and choices as to how to spend that money, the economy would rise, Canadians would be better off, there would be jobs for people. Unfortunately the government thinks that it knows best, that it wants to take every thin dime it can get out of the taxpayer, and that it should decide how to spend it.

Another sore spot for people in western Canada is airport rent. Some airport authorities, like the one in my riding in Victoria, are paying outrageous amounts to the federal government in airport rent. Some could say they signed an agreement. They are paying almost $1 million a year. Airports of virtually the same size, like the one in St. John's, are not paying a dime, not one thin dime. Members opposite know it.

Vancouver, Victoria, Edmonton, and Calgary airports are paying outrageous amounts of airport rent to the federal government. I have been told that some of the airport rents, Calgary for example, could almost double. The rent could go up to almost $40 million a year from around $20 million right now. Yet other airports in the country have cooked up some kind of special sweetheart deal with the government where they are paying nothing. Where is the equity in that? It is incredible. These things need to be addressed so there is equity and fairness and people right across the country are treated fairly.

The Liberals wonder why they have very few members of Parliament from places like British Columbia and Alberta. It is because Liberals do not normally give those provinces the time of day. They almost treat them like they do not exist. The facts speak for themselves. British Columbia and Alberta are not treated equitably like every other place in the country.

Hopefully at some point in time through the budget process we will see genuine reductions in taxes for low and middle income families. The Conservative Party of Canada put forward an amendment to the throne speech. The government needs to implement it so there is meaningful change.

[Wayne Easter, Liberal, Malpeque, PE]

We already did that. That was the biggest tax cut in Canadian history. You guys voted against it.

[Gary Lunn, Conservative, Saanich—Gulf Islands, BC]

The member opposite said we have had the biggest tax cut in Canadian history, Mr. Speaker, but what he did not tell us was that the government raised fees and a number of other taxes so there was a net loss to the taxpayer.

Canadians are not better off. Their disposable income, their buying power, is less today than what it was five years ago. It is less today than it was 10 years ago when the Liberal government took office. Canadians do not have the same amount of buying power for their dollar as they did when the Liberals took office.

It is important that we start making real progress in some of these areas. The government needs to take heed of some of this stuff. It actually voted in favour of this. Hopefully when we see the full implementation of the budget, we will see tangible tax cuts that will make a difference, that will be measurable, that will not be swallowed up in other fees.

Another Conservative Party amendment to the throne speech was that the government tell the truth in its budget forecasting. I urge the government to look at some of the amendments to the throne speech. Tell the truth in government budget forecasting. Let us reduce taxes for low and modest income families. Let us ensure that employment insurance funds are only used to benefit workers. All these things need to be implemented.

The government supported the amendments to the throne speech put forward by the Conservative Party of Canada. Liberals supported it in the House. Hopefully they will finally show us that their vote in this place is meaningful and we will see true implementation of these numbers.

[Rob Anders, Conservative, Calgary West, AB]

Mr. Speaker, my hon. colleague mentioned the gun registry and the lack of priorities and misplaced priorities of the government.

When we run the numbers for the $2 billion that the government has spent on the gun registry, I think of all the repeat offenders, the rapists and the murderers who could have been kept in jail longer and should not have been allowed early parole. I think of the extra police officers who could have been put on the street. I think of the ways we could have stopped drugs from being pushed on our kids. I think of all the great things that type of money could have gone to in our justice system, but it did not.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, on a point of order, the member used the figure of $2 billion and he knows it is $1.1 billion.

[Rob Anders, Conservative, Calgary West, AB]

Mr. Speaker, if that hon. member wants to draw attention to the fact that the government said it would only be $2.2 million and he is admitting $1.1 billion and there are a lot of other estimates that put it up to $2 billion, that is his fault, not the fault of anyone on this side. He is the one who should be ashamed for having wasted that much money.

I would like the hon. member who just gave his speech, as opposed to the interrupter on the other side who cannot get his numbers straight, to respond to the idea that the $2 billion could have been used to prevent real crime instead of going after duck hunters and people who had firearms as holdovers from the war in Korea or World War II and forcing them to go through all the loopholes to register their guns or be penalized.

I know people who have been waiting for years to qualify because they have not received proper service through that registry.

I would like the hon. member to address what could have been the case had that money been spent wisely.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I rise on a point of order, and I apologize to my distinguished colleague. There have been discussions among House leaders concerning a report that was tabled by the procedure and House affairs committee a little earlier this day and if you were to seek it, I believe you would find consent for concurrence in the 20th report of the Standing Committee on Procedure and House Affairs.

[The Acting Speaker (Mr. Marcel Proulx)]

Is there unanimous consent?