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House of Commons Hansard #47 of the 37th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was budget.

Topics

Government Response to PetitionsRoutine Proceedings

10 a.m.

Sarnia—Lambton Ontario

Liberal

Roger Gallaway LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, pursuant to Standing Order 36(8) I am pleased to table, in both official languages, the government's response to three petitions.

PetitionsRoutine Proceedings

10:05 a.m.

Canadian Alliance

Jay Hill Canadian Alliance Prince George—Peace River, BC

Mr. Speaker, it is indeed a pleasure for me to rise once again to present yet another petition concerning the deplorable living conditions that some of our men and women who serve in our military face on a daily basis. These petitions, as I noted a few days ago, are coming in increasingly to my office from bases and communities all across Canada. Even where some of the military personnel are reluctant to sign, individuals in the neighbouring communities who are supportive of their cause are signing the petitions and sending them in.

They note that the Canadian Forces Housing Agency on base serves a valuable purpose by allowing families to live in a military community and have access to services to address their specific needs. They further note that housing accommodation provided by the Canadian Forces Housing Agency is in too many instances substandard to acceptable living conditions. Therefore, they call upon Parliament to immediately suspend any future rent increases for accommodation provided by the Canadian Forces Housing Agency until such time as the Government of Canada makes substantive improvements to the living conditions in housing provided for military families. These petitioners are from Manitoba and from all across Ontario.

Questions on the Order PaperRoutine Proceedings

10:05 a.m.

Sarnia—Lambton Ontario

Liberal

Roger Gallaway LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, the following questions will be answered today: Nos. 74 and 77.

Question No. 74Routine Proceedings

10:05 a.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North Centre, MB

As of March 1, 2004, how many recipients of the canada pension plan disability pension were subject to garnishment arrangements under the Family Orders and Agreements Enforcement Assistance Act?

Question No. 74Routine Proceedings

10:05 a.m.

Verdun—Saint-Henri—Saint-Paul—Pointe Saint-Charles Québec

Liberal

Liza Frulla LiberalMinister of Social Development

Mr. Speaker, the Family Orders and Agreements Enforcement Assistance Act garnishment amount is established each month by Justice Canada and applied at “month end” when the old age security and Canada pension plan payments are issued. It is not a recurring withhold.

As a result, on March 1 there were no Canada pension plan disability accounts subject to Family Orders and Agreements Enforcement Assistance Act garnishment as the Family Orders and Agreements Enforcement Assistance Act withheld amount had not yet been determined for the March 2004 old age security and Canada pension plan payments.

However, when the February 2004 Canada pension plan disability accounts were distributed to clients on February 25, the payment due date for the February payments, we have confirmed 1,220 Canada pension plan disability benefit clients were subject to garnishment due to the Family Orders and Agreements Enforcement Assistance Act.

Question No. 77Routine Proceedings

10:05 a.m.

Progressive Conservative

Loyola Hearn Progressive Conservative St. John's West, NL

With regard to the Iltis military vehicle, if it is the government’s intention to keep this open-topped military vehicle in operation in Afghanistan: ( a ) why and in what capacity will it do so; and ( b ) if not, what plans does the government have for this vehicle?

Question No. 77Routine Proceedings

10:05 a.m.

Nepean—Carleton Ontario

Liberal

David Pratt LiberalMinister of National Defence

Mr. Speaker, the government has not made a decision on the future of the Iltis vehicles currently in Afghanistan. While National Defence does not intend to operationally employ the Iltis in theatre after Roto 1, scheduled to end in August 2004, the final decision with regard to their disposition will be based upon operational considerations.

Several options are being considered, including donating the Iltis fleet to the national Afghanistan Government, returning the Iltis fleet to Canada for disposal, and scrapping the Iltis fleet in theatre.

Questions Passed as Orders for ReturnsRoutine Proceedings

May 4th, 2004 / 10:05 a.m.

Sarnia—Lambton Ontario

Liberal

Roger Gallaway LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, if Question No. 75 could be made an order for return, the return would be tabled immediately.

Questions Passed as Orders for ReturnsRoutine Proceedings

10:05 a.m.

The Speaker

Is that agreed?

Questions Passed as Orders for ReturnsRoutine Proceedings

10:05 a.m.

Some hon. members

Agreed.

Question No. 75Routine Proceedings

10:05 a.m.

Progressive Conservative

Joe Clark Progressive Conservative Calgary Centre, AB

What public opinion polling has been commissioned by the Canada Deposit Insurance Corporation since December 31, 2000, and, in each case, specify: ( a ) the purpose of the poll; ( b ) the date of the poll; ( c ) the public opinion polling company involved; and ( d ) any other crown corporations involved?

(Return tabled).

Question No. 75Routine Proceedings

10:05 a.m.

Liberal

Roger Gallaway Liberal Sarnia—Lambton, ON

Mr. Speaker, I ask that all remaining questions be allowed to stand.

Question No. 75Routine Proceedings

10:05 a.m.

The Speaker

Is that agreed?

Question No. 75Routine Proceedings

10:05 a.m.

Some hon. members

Agreed.

PrivilegeRoutine Proceedings

10:05 a.m.

The Speaker

Before moving to government orders, I am now prepared to rule on the question of privilege raised on April 1, 2004 by the hon. member for Roberval concerning the release by the hon. member for Toronto—Danforth of in camera testimony given before the Standing Committee on Public Accounts.

I would like to thank the hon. member for Roberval for having raised this issue. I would also like to thank the hon. Deputy Leader of the Government in the House and the hon. members for West Vancouver—Sunshine Coast, Provencher, Winnipeg North Centre and Scarborough—Rouge River and Toronto-Danforth for their contributions to the discussion.

In raising his question of privilege, the hon. member for Roberval charged that the hon. member for Toronto—Danforth had released to the media in camera testimony given before the public accounts committee during the 1st Session of the Thirty-Seventh Parliament. He also charged that the hon. member for Toronto—Danforth had done this deliberately, in full knowledge of the fact that the committee had not yet taken the decision to make this testimony public.

He claimed further that permitting this action to go unchallenged would represent a de facto recognition that committee rules, particularly with respect to in camera proceedings, apply only to opposition members.

His concerns in this regard were echoed by the hon. members for West Vancouver--Sunshine Coast and Winnipeg North Centre.

The hon. Deputy Leader of the Government pointed out that the committee had in fact decided to make the testimony public, so that the point raised by the hon. member for Roberval was of only theoretical interest.

The hon. member for Provencher drew to the attention of the House that a draft report had been prepared for the committee concerning the actions of the hon. member for Toronto—Danforth, but that the draft report had been rejected by a majority of the members of the public accounts committee.

The hon. member for Scarborough—Rouge River indicated that the question of the hon. member for Toronto—Danforth's actions had been raised in the committee, as was proper, and that the committee had disposed of the matter as it saw fit. He maintained that the rejection of the draft report by majority vote in the public accounts committee settled the matter.

In his presentation, the member for Toronto--Danforth stated that the committee had received written acknowledgement from Mr. Guité's counsel that the testimony could be made public. He also noted that the remarks in which he had revealed parts of the testimony had been made during a media scrum. He concluded his presentation by apologizing to the House and the committee for any breach of privilege which might have occurred.

Before dealing with the procedural aspects of this question, I feel that it is my duty to share with the House the extent to which I have found this matter troubling. As members will recall, I had given a ruling concerning another complaint about proceedings in the public accounts committee earlier on the same day that the hon. member for Roberval raised this issue. It is of deep concern to me that, in conducting this inquiry, committee members found it necessary to raise procedural matters on the floor of the House. As hon. members know, the procedure for dealing with possible breaches of privilege in committee is clear. House of Commons Procedure and Practice states, p. 128:

Since the House has not given its committees the power to punish any misconduct, breach of privilege, or contempt directly, committees cannot decide such matters; they can only report them to the House. Only the House can decide if an offence has been committed. Speakers have consistently ruled that, except in the most extreme situations, they will only hear questions of privilege arising from committee proceedings upon presentation of a report from the committee which directly deals with the matter and not as a question of privilege raised by an individual member.

In discussing consideration of a report related to a privilege matter in committee, House of Commons Procedure and Practice , p. 130 states:

If the committee decides that the matter should be reported to the House, it will adopt the report which will be presented to the House at the appropriate time during the Daily Routine of Business.

It is clear from this passage that a committee may choose to report a possible breach of privilege to the House or it may decide not to. In the case raised by the hon. member for Roberval, the public accounts committee has decided not to refer the conduct of the hon. member for Toronto—Danforth to the House. As Speaker, I can see no procedural grounds on which to overturn the committee's decision, or indeed, to interfere in its proceedings on this matter in any way.

While previous Speakers, and I myself in earlier rulings, have indicated that a Speaker might, in extreme circumstances, take action with respect to irregularities in a committee's proceedings, there has always been considerable reluctance to intervene in any matter which the committee itself ought to decide.

Speaker Fraser put the point at issue quite clearly, and I refer to the debates of April 2, 1990, page 1076:

It would place the Speaker in the untenable position of standing in appeal to any decision of standing, special and legislative committees, particularly in cases of high controversy and vigorous political debate, like this one. This is not foreseen in our rules nor does our practice anywhere provide such a role for the Speaker.

The hon. member for Roberval has raised the concern that, although the House has in place rules and practices which protect members from what is often referred to as “the tyranny of the majority”, no such safeguards exist in committee.

I would like to remind hon. members that, although committees are given considerable liberty to organize their work, they are not free to adopt whatever procedures they choose. Marleau and Montpetit , p. 804, states:

Committees, as creations of the House of Commons, only possess the authority, structure and mandates that have been delegated to them by the House. …The House has specified that, in relationship to standing, special or legislative committees, “the Standing Orders shall apply so far as may be applicable, except the Standing Orders as to the election of a Speaker, seconding of motions, limiting the number of times of speaking and the length of speeches.”

With these exceptions, committees are bound to follow the procedures set out in the Standing Orders as well as any specific sessional or special orders that the House has issued to them.

While the House accords great latitude to committees, it is very far from simply turning a blind eye to how they conduct their business. As I mentioned in my earlier ruling on April 1, 2004, concerning proceedings in the public accounts committee, the House may, if it has concerns about how the committee is conducting its work, issue an instruction. This can be done by way of a motion of instruction moved during Private Members’ Business or, if unanimous consent was sought and obtained, such motion could be moved without notice under the rubric “Motions” during Routine Proceedings.

The hon. member for Roberval, in his capacity as House Leader, has much experience in the negotiations of such proceedings.

Finally, another possibility is for the House to order the recommittal of a committee report if it finds it unsatisfactory in some respect.

It is to be expected that, very often, not every member will be in complete agreement with decisions taken in committee. All members understand that the confrontation of opposing views is a central feature of our parliamentary system of government. This is true in committee as it is in the House itself.

If, however, it is felt that the disagreements in the public accounts committee arise from some structural or systemic deficiency, that is something that might be raised before the procedure and House affairs committee, which has the mandate to review the procedures and practices in committee.

Just as committees remain bound by the rules established for them by the House, so too is the Speaker obliged to rule based on our rules and practices.The particular issue raised by the hon. member for Roberval has in the present instance been dealt with in the committee in a procedurally acceptable manner.

I remind the House that it is incumbent on all members to ensure that committees, in carrying out the work delegated to them, function within the rules and procedures that are set down for them.

Budget Implementation Act, 2004Government Orders

10:20 a.m.

Moncton—Riverview—Dieppe New Brunswick

Liberal

Claudette Bradshaw Liberalfor the Minister of Finance

moved that Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on March 23, 2004, be read the third time and passed.

Budget Implementation Act, 2004Government Orders

10:20 a.m.

Scarborough East Ontario

Liberal

John McKay LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, it is an honour and a privilege to speak to the bill and hopefully try to persuade hon. members that this bill is worthy of their support.

I thought that I might start off my conversation about Bill C-30 with an incident from my pre-political life. When I was a lawyer practising law in the east end of Toronto and the Durham region area, from time to time I used to do some real estate work, particularly for companies that were moving executives from place to place but also for a variety of other real estate clients.

One of the persons who was recruited by the Canadian Cancer Society was a physician from I believe Denver. We went through our usual real estate transaction and then I fell into a conversation with him about what he was going to be doing in Toronto, what research he was going to be conducting, and things of that nature. He was specifically hired as a physician researcher to track demographic and other patterns with respect to cancer. The question I asked him at the time was what the greatest indicator of health was. His comment was “The size of your pocketbook will directly relate to how healthy you are”. I thought it was kind of a crude comment, to be perfectly honest, but he went on to indicate that, by and large, wealthier people live longer, live healthier lifestyles, are more satisfied, have better access to medical services and are more up on trends that would enhance and lengthen their lives. That story sort of stayed with me.

I would put it to members that a government that creates wealth, in absolute and in relative terms, will also have the happy coincidence of creating health in its population. Over the course of the last number of years, that is exactly what the government has done. In fact, the wealth of this nation has been enhanced and increased, and we are, as a result, a healthier population.

It is not merely the $37 billion that the government has infused into the health care system. That is important money and significant money and if the Prime Minister gets an opportunity to meet with the premiers in the next few months, we are committed to putting that on a fiscally sustainable path. Similarly, the $2 billion that was allocated in this budget for additional funds into health is important money but I do not know if it actually tells the full story.

My argument will be that over the term of the government, indeed going back to 1993 when the prime minister and the then minister of finance started the arduous task of turning this nation away from a precipitous decline into third world status to now running seven surplus budgets in a row, the wealth of this nation has, in absolute and relative terms, grown, and therefore the wealth and the health of Canadians has increased, especially over the last seven years where we have run surpluses.

In all candour, the record is not uniformly good but in my view the good outweighs the bad. Strangely enough, there is an almost exact parallel between when the government started to run surpluses and the indices of wealth actually beginning to turn around.

There are essentially two ways to create wealth: people either work harder or work smarter. The way in which we have done it lately has been in improved labour participation. One of the interesting facts, when we start to parcel out the employment numbers, is that Canadians have actually been participating in the labour force in record numbers. We have actually increased our participation in the labour force and as a consequence we have improved our productivity numbers. Productivity numbers can also be improved by actually getting more involved with technology and improving the way in which goods and services are produced.

It is a gross generalization, but by and large our increases in standard of living have come because of the former, namely labour participation rather than the latter, which is increases in productivity due to investments in machinery and equipment. We have started to work harder with more labour participation and more numbers of people working rather than necessarily working smarter.

From 1980 to 1996, which is a 16 year period in which this government had the last three years of that period of time but the Conservative government had the bulk of that period of time, we ranked dead last in productivity in the G-7. Then from 1997 to 2003 we shot up to third. We are essentially in a dead heat with France and Japan. Going from dead last to third, is it any coincidence that simultaneously the government is running budget surpluses?

I will not argue that the standard of living tells us everything. Neither will I argue that it says nothing. What charts do say, however, is that ever since the government started to run surpluses our standard of living has in factual terms increased. We are wealthier and therefore we are healthier.

When we break it out by labour force participation, that is, working harder, during the period of 1960 through to 1996 we were fourth in labour participation. However, from 1997 through to 2003 we exceeded everyone, the U.S. included, and now we rank first. The joke is that Americans live to work and Canadians work to live. In fact, we are number one in the last five or six years in the labour participation rates of all of the G-7 nations.

That is both good news and bad. It is great that our labour participation rate has been good, but it is not sustainable. Demographics tell us that our labour force is aging and therefore people will be withdrawing and not contributing to the GDP as they have in the past. Our growth in productivity, which has been largely sustained by a participation in the labour force, is not a sustainable pattern over time.

From 1980 through 1996 our standard of living growth was second last. In other words, from 1980 to 1996, again a similar period of time of 16 years, we were second last in the G-7 in terms of standard of living growth. However, from 1997 through to 2003 we were first with an annualized rate of 2.7%. Is it simply a coincidence that those years were the same years that the Government of Canada ran surpluses and introduced the largest tax reductions in the history of the nation?

The effect of that has moved us from seventh in the OECD in 1996 to fifth in the year 2003 and second in the G-7. We still lag behind the U.S. by a substantial margin. However, we have started to close the gap. We are still about 14.5% behind the Americans in terms of standard of living, but we have substantially improved that from 18%, which is where it was in 1996.

A standard of living is not a measure of everything, that is, quality of life and other things that people consider to be very important, but it does measure something. The something that it does measure is of considerable importance to most Canadians.

The real question is, can we sustain this growth? The short answer is that our increases in productivity need to be less focused in labour participation and refocused on increases in working smarter.

How do we get smarter? The most obvious way is to get an education or to improve the educational attainment of the nation. Education is what unlocks the productivity chain. Adding just one year to the average education attainment in our country will add 5% to the GDP per capita.

Canadians are a fairly well educated lot. We have the second highest post-secondary attainment of any G-7 nation. However, it is not just any education. It has to be specific education. Not to put too fine a point on it, we need more degrees in science and fewer in law.

Budget Implementation Act, 2004Government Orders

10:30 a.m.

Liberal

Peter Adams Liberal Peterborough, ON

Good idea.

Budget Implementation Act, 2004Government Orders

10:30 a.m.

Liberal

John McKay Liberal Scarborough East, ON

I knew I would get the endorsement from the hon. member for Peterborough.

Scientists grow the wealth pie; lawyers carve it up. We need more people to grow that pie, and I am the lawyer. The Government of Canada has invested billions in post-secondary research and put Canada's universities back in the game. It has a strategic focus. We can talk to any university president and they will talk about the exciting research going on in their campuses.

I had a conversation a few months back with Robert Birgeneau, president of the University of Toronto. He was telling me how his university along with Queen's, McGill and UBC. and others are really back in the game. They can now say to a young graduate with a Ph.D. in biometrics or something of that nature that the University of Toronto is the place to be. This is leading edge research.

The reason has to do with the foundation moneys and the research chairs that are available. Young researchers can pursue what they want to pursue and have a comparable situation to any other university in the world. I think that is a significant accomplishment on the part of the government.

The second way to unlock the productivity genie is in the investment of machinery and equipment. Here we are dead last. However, the good news is that in the late nineties our investment in machinery and equipment actually rose quite briskly.

The budget addressed a tax competitiveness issue implementing an accelerated depreciation of certain categories of high tech equipment to more realistically reflect their useful life. We heard this time and time again as the minister made his way across the country listening to representations of Canadians that the depreciation schedule, the capital cost allowance schedule in the Income Tax Act of Canada, made no sense vis-à-vis the actual useful life of, say, a computer or something of that nature. That issue was addressed in the budget.

The other cause for concern is that the government is doing its bit for research and development but business is not. There are all kinds of excuses why Canadian business does not proportionately share more in the research and development cost, but the simple statistical fact is that it does not. That is why, aside from all of the other Nortel disappointments, the Nortel story is really worse than merely just shareholders' losses and dubious accounting.

Nortel accounted for a very significant portion of Canada's research and development, in my recollection, somewhere in the order of about 25%. Research is what got Nortel through its lofty status as a world class company. Then the money boys, if you will, put it into a death spiral. The phrase is, I believe, unlocking shareholder value. We certainly did that.

The bad news is that a lot of the private research and development that was happening through Nortel is at least at risk. I do not know whether it will cease to happen, but it is certainly at risk and that is of concern to us all because that in turn leads to greater productivity, and the kind of productivity that we as a nation need in order to sustain our way of life.

The bad news is that the private sector is the laggard and the public sector is the leader in the G-7. We need a better mix if our productivity is to be maintained. If we were to get the right mix, then productivity gains would flow. There are limitations, however, on what a government can do, but it can be responsible for sound macro-economic policy.

I am assuming that the goal of any government of any political persuasion is to increase the health and wealth of its citizens. The major way in which it does that is by setting a macro-economic framework which will enable businesses and people to flourish within the larger nation. In financespeak it is called the fisc.

What does all this mean? When we talk about the fiscal framework, it is just fancy talk for what we expect in inflation, debt to GDP ratio, interest rates and so on. Sometimes this is a lot more alchemy than chemistry. Everything any government does has to fit within that fiscal framework or else the government descends into chaos and the nation with it.

Let us take a look at the fiscal framework, or the fisc, and see how we are doing. On inflation, the band has been extended for another couple of years of a 1% to 3% inflation target. If it were to get out of control and the government ends up printing too much money, then we would have bubble wealth. It is an illusion that we have money, but it is really paper money. Deflation can be equally worrisome.

Therefore, when a government is setting its budget target it has to be concerned about what is going to happen with inflation. For instance, a 1% decrease in inflation will cost the government $1.9 billion in lost revenues. That $1.9 billion is 1% of the government's revenue. That is a lot of money. However, expenses would be down by $500,000 million, for a net shrinkage of government resources of $1.4 billion. That is simply on a 1% mistake on inflation. The range expectation is somewhere between 1% and 3%, and as long as we stay within that range, the assumptions of the budget will work.

The other assumption is loan interest rates. Currently, the Bank of Canada's overnight rate is around 2%, which is in the realm of historical lows and it has a huge economic multiplier for those Canadians wishing to purchase homes, cars or things of that nature because they are within the ability of a lot more Canadians to purchase.

For instance, in my own community, I have a number of impoverished Canadians who live in low income housing, yet I noticed signs outside those places advertising space for rent. That is because a number of the people have left and bought homes, which they could only dream about before. This is a result of low interest rates. The vacancy rate in Toronto, and particularly in my riding, has shot up. It used to be that one could not get an apartment for love nor money. Now we are around a 3% vacancy rate.

A 100 basis point reduction in interest rates improves the government's revenues by $1.1 billion. Revenues go down by $400 million, but expenses also get reduced by $1.4 billion. So effectively, it works out to about a $1 billion or $1.1 billion increase in revenues, just on the basis of a 1% reduction in interest rates.

There is a logic in the government's approach to fiscal framework. The budget contains support for learning with the Canada learning bond, enhanced RRSPs, and the new $3,000 grant for low income families. The budget encourages research and development. There is another $900 million for the three granting councils. There is $60 million for Genome Canada. There is also the depreciation rate that I was mentioning that is more in line with the actual useful life of computer equipment.

We are in the final year of our $31 billion tax cut package. This year will be the year in which our corporate taxes actually dip below the American rates. Our efficient financial markets are quite critical and I encourage members to read the Wise Persons' report, which hopefully will set the framework for a national securities regulation. Our support for cities in the amount of $700 million this year and $7 billion over 10 years on the GST is again significant support on the part of the Government of Canada.

In closing, I want to recommend the budget to all members present. It is a sensible and logical budget and one which hopefully will increase the productivity of our nation, therefore, the wealth of our nation and health of our nation.

Budget Implementation Act, 2004Government Orders

10:40 a.m.

Canadian Alliance

Jay Hill Canadian Alliance Prince George—Peace River, BC

Madam Speaker, I have had the opportunity to do a couple of things here today. I have been writing cards of thanks to the volunteers who assisted me at a trade show in my riding for a couple of weekends in April. I also listened to the remarks of my hon. colleague from across about the budget. I thought about some of the remarks made to me by quite a number of constituents as they went by the trade show booth during those two weekends in Fort St. John and Dawson Creek.

One question was posed to me by my constituents, and I can truthfully say it was couched in considerable disappointment and anger, particularly as they were looking at sending in their tax returns and given the news concerning the waste of tax dollars by the government.

I note the member said that there were basically two ways to improve wealth: work harder or work smarter. Obviously, the Prime Minister, the hon. member's leader, has found a third way to improve wealth other than work harder or work smarter, and that is to avoid tax. This was brought home to me by a number of constituents who were struggling to pay their taxes, especially if they owed additional taxes. They posed this question to me. “Why should I pay my taxes when the Prime Minister's company, now turned over to his family, Canada Steamship Lines is registered offshore in order to avoid paying taxes?”

It put it to the member as a serious question posed to me in all seriousness by a number of people in my riding. In many cases they are considering their options. Why should they look at re-electing and trusting an individual who is doing everything he can and has in the past to avoid paying taxes but expects them to pay theirs?

Budget Implementation Act, 2004Government Orders

10:40 a.m.

Liberal

John McKay Liberal Scarborough East, ON

Madam Speaker, I hope in the conversations with his constituents, the hon. member mentioned that tax brackets were reduced and thresholds were increased. Canadians are paying, in absolute terms, fewer taxes than they have in the past. I am not absolutely persuaded that the hon. member would have tried to put that forward to his constituents. However, I hope he at least mentioned that the brackets were reduced to 22% and the threshold was increased to $35,000 for low income Canadians, which is 26%. Also, the threshold has been increased to $70,000 for middle income Canadians. The upper bracket is at 29% and the threshold is up to $113,000. However, I do not really have a huge expectation that he did that.

With respect to his specific question, there is no doubt that all governments of the G-7, in fact all governments of OECD, are concerned with the siting of corporations in jurisdictions that have tax advantages. Frankly, Canadian corporations are no different than American, Australian or British corporations, all which have to site themselves according to the tax jurisdiction that makes them the most competitive. If they do not, frankly they literally go underwater. There is no ability to do that.

Literally, hundreds if not thousands of Canadian corporations site themselves in jurisdictions where the tax treatment is somewhat more favourable. That is simply a survival tactic. There is not a government in the western world that is not concerned about this. In fact a commission has recently been struck among the Australians, the Americans, the British and ourselves to review this problem.

The problem is one cannot do anything by oneself. If Canada has a sudden attack of virginity, frankly all the corporations in Canada, which currently site themselves offshore, will simply remove themselves. We will lose head offices, those businesses and everything that corporations bring to the wealth of this nation.

I would like to have the problem solved so everybody pays a share of the tax that is appropriate. However, as long as those jurisdictions exist, a corporation does what it has to do to survive. If it does not take advantage of those kinds of tax jurisdictions, it will simply not survive.

If the hon. member has a realistic solution to this worldwide problem in which Canada can participate along with other nations at an exactly equal level, then I am in favour of listening to it.

Budget Implementation Act, 2004Government Orders

10:45 a.m.

NDP

Bev Desjarlais NDP Churchill, MB

Madam Speaker, I thought I had heard just about everything in the House. I thought the government and the Liberals had reached an all time low on a number of issues. However, with all due respect to my colleague from Scarborough East, to stand before us today and tell Canadians that somehow it is okay for corporations not to pay taxes and support the country providing them the resources or the business opportunities and to say that it is somehow okay that they go somewhere else because they will not survive and that the government cannot do anything about it is absolutely a crock of you know what, Madam Speaker.

The state of California has taken a position that it will not allow that any more. It is going to put in place legislation that will not allow those corporations to get state business if they go offshore and find tax loopholes, because they will not be supporting their local economies. Where would our country be if all Canadians took the position that they were not going to pay their fair share?

The government has said that it cannot do anything because the corporations will not survive. What it should say is that the corporations have a responsibility, that they are accountable to the Canadian people and have to pay their fair share. That is what should happen. The statement by that member proves that there is no way the government should be in for a day longer, let alone another week or month.

Budget Implementation Act, 2004Government Orders

10:45 a.m.

Liberal

John McKay Liberal Scarborough East, ON

Madam Speaker, I commend the hon. member on her charming naivety. The truth of the matter is that with the globalization of capital, literally hundreds of millions of dollars can leave any jurisdiction in a flash and site itself somewhere else.

The hon. member stands and says that we should not do that. Convince literally all those business in Canada that have to compete on a worldwide basis. Convince those corporations, which are world leaders and leading edge companies, that they should somehow or another pay a disproportionate tax burden to what their competition does. She is welcome to her charming naivety, but the reality is all those corporations and all that wealth will disappear in an instant.

Budget Implementation Act, 2004Government Orders

10:45 a.m.

Canadian Alliance

Myron Thompson Canadian Alliance Wild Rose, AB

Madam Speaker, since 1993, when we first arrived here, one of the biggest complaints from constituents has been that they are being penalized for staying at home with my children.

There is a dual system of taxing. If both parents work and have equal income, they receive tax breaks. However, if a family earns a single income because one parent chooses to stay at home, they pay a whole lot more. Over the 10 year period I have been here, they have questioned this unfair tax plot. They want to know when it will change. They want to know why it is never mentioned. They want to know if the government objects to people staying home to take care of their children. They want to know what the problem is.

Budget Implementation Act, 2004Government Orders

10:50 a.m.

Liberal

John McKay Liberal Scarborough East, ON

Madam Speaker, probably the largest social initiative on the part of this government has been the Canada child tax benefit which gives money to people below certain income thresholds. Whether they are below certain income thresholds because of two people in the family working or one person in the family working, the Government of Canada does not inquire. The Government of Canada is not interested in whether Canadians arrange their affairs so there are two people working in the house or one person working and another person staying home. It is an inquiry that the Government of Canada does not make. Upon filing of the income tax return, though, if one hits certain thresholds, then one would be entitled to a Canada tax benefit.

In addition, one gets the spousal exemption which brings one's threshold down as well. That has been deemed to be the better way in which to respond to the member's inquiry.