House of Commons Hansard #127 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was organized.


The House resumed from May 31 consideration of the motion that Bill C-306, An Act to amend the Income Tax Act (public transportation costs), be read the second time and referred to a committee.

Income Tax ActPrivate Members' Business

September 28th, 2005 / 6:35 p.m.

Scarborough—Guildwood Ontario


John McKay LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, I understand that I have about six minutes left, so if I may I will just go back over this a little. The bill proposes that there be transit pass credits issued for those who are using transit systems, providing they provide supporting vouchers. This does raise some complex and difficult issues.

The first has to do with whether in fact this is a cost effective way to increase ridership. The second issue is whether this is a fair proposal. The third is that such proposals should be, in general terms, relatively simple for tax authorities to administer.

If I may, I will take a little closer look at what I would say is a good-spirited and thoughtful proposal from the member opposite, but which, when we look at it a little bit more carefully, raises some difficulties that become problematic.

Accessibility is a factor when assessing the cost effectiveness of a proposal. On the evidence we have thus far, it appears that accessibility to public transit is in fact the determinant of whether one uses public transit. Obviously if we are close to subways or buses and they are convenient, we are going to use them. If we are not close, we probably will not. On the other hand, many individuals drive to work not because it is cheaper but for other reasons altogether. They may need to travel at off peak hours or something of that nature.

These are the issues that come up and which mix into personal preference, so the studies seem to show that tax incentives and costs are relatively insensitive to the use of transit. In light of these factors, it is unlikely that a tax credit would lead to a large increase in the number of people using public transit.

As I said previously, there is really no one in the House who does not want to increase the use of public transit, but it is our view that this in fact may not be what will be accomplished by what is a relatively expensive measure.

Currently, for example, there is a study going on with the national capital region. This project provides a 15% discount to government employees for using public transit. What it shows, spread over the 9,000 employees who could have accessed such a discount, is that 915 employees participated in the program and only 54 were new transit users. This represents one new transit user for every 16 existing users. It is equivalent to a ridership increase of 6%. In other words, 94% of the benefit went to existing users.

The results of this program illustrate that the impact on the transit ridership of a federal tax credit for public transportation costs would be relatively very small, and it is clear that this would be a relatively costly exercise. It would result in significant revenue losses to the government, in the range of $240 million to $300 million per year.

The transit pass program has been extended to all federal departments in the national capital region and Transportation Canada will formally evaluate the program in the autumn of this year. Indeed, in the recent audit of the program, the Commissioner of the Environment and Sustainable Development noted the government needs to ensure that it is using the most cost effective tools to accomplish its objectives.

There is also a fairness issue that arises. The proposal would largely benefit people in urban centres where there are extensive public transportation systems. Therefore, people in non-urban centres, in small and rural communities, would not necessarily benefit from such a measure.

Generally speaking, the income tax system does not recognize personal expenses. If we were to go that route and use the general taxpayer, let us say, to subsidize personal expenses of other individuals, that would create a precedent. We do not know what that might actually lead to.

Our tax system provides a basic personal amount to all taxpayers. According to the budget tabled in the House for 2005, the government proposes to actually raise the personal exemption up to $10,000 by the year 2009. That therefore leaves $10,000 for individuals to spend as they see fit, including, if they wish, for the purchase of public transit passes.

Finally, the third issue is that we want a system that is relatively simple to enforce. The contemplation as put forward by the bill is that we would have to produce receipts in order to claim the credit. It is not clear that transit authorities are prepared or are in any position to issue receipts to users. Unless transit authorities are prepared to adjust their systems in order to do that, there will be a significant issue of proving the entitlement to the credit.

Therefore, we on the government side do not believe that this bill hits on those three criteria. It does not fill the criteria of effectiveness; it is very costly but not necessarily effective. It is not fair, and it has real issues around simplicity.

Income Tax ActPrivate Members' Business

6:40 p.m.


James Moore Conservative Port Moody—Westwood—Port Coquitlam, BC

Mr. Speaker, I rise to speak in favour of Bill C-306, an act to amend the Income Tax Act for public transportation costs.

For Canadians watching, this may well be a very interesting debate that is shaping up here. We have the Bloc Québécois, the Conservative Party and, I presume, the NDP in favour of a private member's bill that has budgetary implications, but I think it is past time that the House stop talking about people who are interested in having more access to public transit and actually move forward to helping that happen.

As the member for Longueuil—Pierre-Boucher said when presenting her private member's bill, Bill C-306, in the House on May 31, her intent is to provide taxpayers with a deduction for the cost of their bus or train passes in order to further encourage them to make greater use of the various modes of public transportation.

This is an idea whose time has come.

In the past, governments have offered Canadians tax deductions for retirement savings, charitable donations, and training and education. In each case the idea has been that by providing the tax deductions to Canadians, the government could encourage them to embrace certain initiatives, such as self-improvement or providing for their retirement.

Just as various governments have taxed alcohol and cigarettes in an effort to discourage their consumption, those same governments have provided tax deductions to encourage Canadians to adopt other, more desirable behaviours. It has long been government practice to use the Income Tax Act in this type of stick and carrot approach.

Bill C-306 is no different. It proposes to modify the Income Tax Act to encourage greater use of the various modes of public transportation. In this way, it is 100% compatible with Transport Canada's “National Vision for Urban Transit to 2020”. Paragraph 14 of that document's urban transit policy goals recommends:

A level playing field from the standpoint of transit versus auto travel decisions based on consideration of real costs and affordability, including under-priced parking and rationalization of income tax regulations affecting allowable deductions and taxable benefits.

Thus, Bill C-306 springs directly from Transport Canada's own documents, yet the Liberal government opposes it. In his May 31 speech opposing Bill C-306, the Liberal for Saint-Léonard—Saint-Michel said that numerous studies suggest that tax assistance for transit passes is not the best method to promote an increased use of public transportation. Presumably he has not read Transport Canada's own recommendations.

He spoke in general terms of the promised federal money to municipalities for urban infrastructure and environmental purposes and about how some of these funds could be used to support urban transit. In addition, he spoke of specific federal commitments to urban transit projects in Toronto, Montreal and Vancouver, presumably aimed at attracting voters in those urban areas. He argued that these investments “will result in a significant improvement in public transit services across Canada”.

Essentially, the Liberals believe that in a pre-election period they can promise $1 billion to the urban transit authorities in our three biggest cities, encourage other cities to give transit authorities some of the money that would otherwise go into roads and sewers, and, in an instant, public transit will improve and people will abandon cars en masse and pay for public transit.

Unfortunately, it is not quite so simple. It is not enough for the federal government to promise funding for public transit. It has to go much further. MPs must become more familiar with municipal transit, not just in their ridings but right across the country.

A successful urban transit authority does not just offer transport to those who cannot afford cars. It has to encourage motorists to leave their cars at home. Just as the federal government should support urban transit, it should also take direct measures to encourage Canadian motorists to give buses a try.

Let us not overlook the fact that most people who today drive cars once were students and rode buses. Their memories of the transit systems of their student days may have nothing in common with today's transit systems, but unless they are given a real incentive to try urban transit, most will stay in their cars. That is the thinking behind Bill C-306. It proposes to give motorists a tangible incentive to try urban transit.

A background paper published by the Canadian Urban Transit Association states that when the U.S. government made employer-provided transit benefits tax exempt in 1984, transit ridership increased almost 25% among people who were offered the benefit. This confirms the thinking in Transport Canada's “National Vision for Urban Transit to 2020”, but then, the Liberals still have not read it.

However, the Conservatives have read it and on August 4 our leader, the leader of the official opposition, announced that the Conservative Party wants to allow commuters to “deduct the cost of their monthly transit passes from their income taxes as part of a Made-in-Canada clean-air policy that will promote increased transit ridership and result in reduced traffic congestion, smog and greenhouse gasses”.

Michael Roschlau, president of the Canadian Urban Transit Association, praised our initiative and was pleasantly surprised, in part because, in his words, “the government in power for the past 10 years has been resisting it”.

Our proposal is to institute a 16% federal tax credit for transit users which would apply to the purchase of any monthly pass for themselves and their dependants. It is a simple initiative, is very similar in spirit to Bill C-306, and is welcomed by the Canadian Urban Transit Association, Transport 2000 and Canadian members of the Sierra Club.

Bill C-306 is also similar to Bill 137 currently before the Legislative Assembly of Ontario. That bill, proposed by Durham Conservative MPP John O'Toole, was proposed on October 28, 2004, and would offer Ontario taxpayers non-refundable income tax credits equal to 50% of their public transit expenses. My office has been in contact with Mr. O'Toole's staff to support his worthy initiative in Ontario.

The bureaucrats understand the importance of promoting public transit. For more than a year, employees of Public Works and Government Services Canada working in the national capital region have been able to purchase discounted annual transit passes from OC Transpo, and the Société de transport de l'Outaouais for those who work and live in Gatineau, through monthly deductions. However, there is no federal assistance, no federal government participation.

The call on the Liberal government to use tax policy to encourage Canadians to use public transit is an old one. On November 4, 1998, Nelson Riis, the former NDP finance critic and member for Kamloops, Thompson and Highland Valleys, introduced Motion No. 360 calling on the government to “consider making employer provided transit passes an income tax exempt benefit”. During his speech in favour of the motion, Mr. Riis said:

It is interesting that both the Saskatoon Chamber of Commerce and the Toronto Board of Trade are now calling on the government to allow this tax exemption to proceed. Businesses are voicing their concern over the impact and high cost of congestion. This is viewed as an important demonstration of the government's commitment to achieving emission reduction targets.

At the same time, the current Parliamentary Secretary to the Minister of the Environment, the member for Richmond Hill, spoke in favour of this motion, saying:

The House of Commons Standing Committee on the Environment and Sustainable Development has stated that it is incumbent on the government to ensure that environmental policy is not hampered by fiscal policy. It is unfortunate that at the moment Canada has not joined other industrialized countries such as the United States and several countries in western Europe in making employee provided transit passes a non-taxable benefit.

His statement is still true today, but he has chosen to flip-flip and now oppose what he once supported. What is interesting, however, is that Mr. Riis' motion passed the House of Commons on a vote with the Liberals in support. It passed by a margin of 240 in favour to 25 opposed on April 13, 1999. As in so many other circumstances, the Liberals voted one way and did the opposite. Their massive support for making employer provided transit passes an income tax exempt benefit never resulted in any concrete action by the Liberals. Worse, we are now at a point where the Liberal chair of the finance committee, who just spoke, is dead set against the idea despite a Transport Canada report that supports it.

Nonetheless, there is no denying that this is an idea whose time has come. Gas prices are high, and the Minister of the Environment and his colleague the Minister of Natural Resources are both on record as saying that high oil prices are here to stay and that Canadians should drive less.

Civil servants and employees at large institutions are buying discounted monthly passes at their workplaces in various cities. The government of Ontario is considering creating a refundable tax credit for transit users. As well, the NDP and Conservative caucuses are 100% behind this policy.

Genuine federal encouragement of increased public transit use can be the boost that will permanently increase ridership and change commuter patterns in our big cities. I call on Parliament to support this motion and therefore the Leader of the Opposition's proposal for a healthier environment and support for public transit.

Income Tax ActPrivate Members' Business

6:50 p.m.


Nathan Cullen NDP Skeena—Bulkley Valley, BC

Mr. Speaker, I look forward to participating in this debate because, as has been often referenced by other members, there is a strong history and precedent in this chamber in support of such a motion. Frankly, I find it perplexing to watch the government stand in opposition to what has become a very sensible idea, an idea whose time has long since come.

Of course we are speaking in support of Bill C-306. Our transportation critic from Manitoba has spoken a number of times to this issue. As has been mentioned, in 1998 Nelson Riis introduced a motion which was very similar to this bill. His motion passed by a margin of 240 to 25. Clearly, all parties from all corners in the House demonstrated that this was a beneficial move, an intelligent way to organize the tax system within Canada to support Canadians who are making good choices in their travel decisions.

Yet, as we face growing congestion, increased smog and health related costs and frustrations from all sectors across Canada, we find a government strong on rhetoric but very weak on action. When a very sensible piece of legislation comes before the House, one which many of the government's own members who are still here supported when it first came forward, they now find themselves opposing it, saying that the tax system is not a tool that can be used, regardless of the fact that we have shown that the tax system in Canada has been a strong tool in supporting investment and trade, encouraging the diversity of our marketplaces. Other countries, particularly those in the OECD, have shown that sensible moderation of the tax system to encourage such things as the use of public transportation have been sound and wise investments.

The NDP has clearly stood behind such moves for many years. In seeing the successful passage of a private member's motion by such a wide margin, one can only be cynical when one sees a government still committed to inaction. Even when the House of Commons, to which we were sent to represent the views of Canadians across the country, expresses a very strong view and opinion to pass this legislation, the government still drags its feet.

I sit on the Standing Committee on the Environment and Sustainable Development. We heard testimony all through the Kyoto discussions and what this country needs to do about climate change. There is a need for serious consideration and action within the finance department, within the tax system, to support things that a broad range of stakeholders have supported, such as tax exemption for those who use public transit.

The Auditor General made recommendations a number of years ago that the finance department must take into consideration these changes. We heard testimony from that same finance department, and it was absolutely dismissive of the Auditor General's report. That department suggested that it did not need to act upon her recommendations and that it would continue on in a pattern dismissive of the calls and actions of Parliament and the officers of Parliament, and thus completely ignore the interests of Canadians who are seeking to have access to more affordable public transportation at the end of the day.

The government had a long awaited, much anticipated, and thoroughly underwhelming as it turns out, Kyoto plan. We are now less than two months away from the conference of the signatories to Kyoto in Montreal, which Canada is obviously hosting. My concern is that Canada will step on to the national stage, host leaders from around the world and be thoroughly embarrassed yet again. When we look at the cold hard numbers of the 28 countries in the OECD, Canada remains at the bottom of the list when it comes to sustainable development, when it comes to making the changes that we all agree need to be made.

While it is easy to stand in this House, as members of the governing party, for now, have done and talk about the benefits of sensible spending and positive taxation, when it comes time to actually vote on these same issues, the hypocrisy that runs up and down those benches is rampant. In the face of more than 100 smog days in Ontario and Quebec, increasing smog on the west coast, and Canadians calling for something to be done about the high cost of fuel and transporting themselves around their communities, the government is against a sensible measure. We have a measure which is both affordable and sensible, which would remove an enormous number of vehicles off the streets, which would lower congestion, traffic and smog, all the things we want to do in our cities to make them more liveable and the government finds its way to vote against it. The government supports very old traditional ways of thinking about our economy and the tax system.

Skeena—Bulkley Valley is an extremely rural riding and quite spread out. We have found that as the health care system has been gutted over the years that services have been concentrated in the cities and further away from my riding. A number of people, particularly those on a fixed income or a lower income, must rely more and more on public transit simply to access basic health care services. People in non-rural ridings do not find these services difficult to access because they are physically much closer.

Our communities in the northwest of British Columbia are trying to implement more and more public transit systems for people who are unable to pay for their own private transportation. Perhaps they are unable to provide their own transportation because they are suffering from some malady. This plan would offer some benefit to those people.

Former NDP MP Nelson Riis brought forward his motion in 1998. We have been looking at the government's inaction for almost seven years.

We are facing dire predictions of increased global warming. We are looking at communities that require a greater sense of cohesion and require greater options in their ability to move people around. We have seen gas prices spike over the last number of months. There are few predictions in the oil and energy sectors that talk about these prices really settling anywhere near where they were.

It will become increasingly expensive not only in the immediate cost of filling one's car and transporting oneself around, but there are long term costs and impacts on climate change. Members from all parties acknowledge the need for serious action, not false announcements, not repeated spending announcements which we hear from the government over and over again. We hear this as the numbers continue to worsen on the pollution front and on CO


emissions. The time for action is now.

We will be hosting the world in November. The government needs to stand proud in its actions. It needs to stand with this Parliament and remember the votes of the past that supported a progressive taxation policy. When we boil this down, that is exactly what this is.

The federal government and the provinces are faced with rising health care costs. The idea of preventive action and keeping people who are choking on the smog out of our hospitals is a strong, wise and sound investment.

There has been talk of the benefits of public transit. There has been much rhetoric from all sides in the past about what we need to do about our transit problems. The government vaguely talked about its contribution and its need to encourage public transit. Action only happened when we brokered the deal that saw significant funding go to the municipalities in support of their public transit. It was through the deal of the NDP which forced the government's hand to actually make some significant investments in public transit that Canadians saw action.

The transportation advocacy groups applauded our moves. We heard this also from the municipalities across the country. I heard in my riding what a positive move this was, to actually have the government seriously engage at the federal level with our municipalities in support of public transportation. Canadians saw that the NDP was interested in getting something done. Then in the midst of the chaos and the partisan fighting, with which Canadians quite frankly were disgusted, the NDP found a way to make positive action happen on this front.

The NDP introduced a motion in 1998. We are very happy to see Bill C-306. We applaud the member for Longueuil—Pierre-Boucher for taking this step. The spectrum of support is truly broad. The benefits that will be achieved through this bill are broader still. We look forward to the passing of Bill C-306.

Income Tax ActPrivate Members' Business

7 p.m.


Robert Carrier Bloc Alfred-Pellan, QC

Mr. Speaker, it is a pleasure for me to speak today on Bill C-306, an act to amend the Income Tax Act (public transportation costs). The aim of this bill is to amend the existing legislation in order to allow an individual to obtain a tax credit for public transportation costs.

I congratulate my colleague from Longueuil—Pierre-Boucher for having introduced this bill, which satisfies one of the commitments I had made in the last election campaign.

My riding of Alfred-Pellan includes the entire eastern portion of the city of Laval and is located just north of Montreal. My riding is, however, extremely large, because its urban areas skirt a vast network of farmland. This rich farmland is protected by Quebec legislation, and my constituents are proud of this resource.

My riding has a still active and dynamic population and significant communication needs, given the distances between things. The addition of highways and bridges connecting Laval to Montreal has failed, to date, to successfully resolve problems with traffic jams. People have to leave home increasingly early in the morning in order to avoid running into traffic. Existing highways are nothing more than endless parking lots.

There has been a proposal for a new freeway between the eastern part of my riding and Montreal for 30 years. So far, the enthusiasm of our governments for this project has been tempered by the exorbitant cost. The current government has suggested a new project, although it is proposing to cover the costs through user tolls. It is not even certain that the tolls would be sufficient to cover the construction, operation and maintenance costs.

This project has been questioned by municipal authorities in Montreal. They want four major public transportation projects to be completed instead because Montreal's road system could not absorb the additional traffic. Quebec's transportation department estimates that between 48,000 and 62,000 drivers would use the new bridge every day. The reasons for Montreal's hesitations are certainly clear.

The Conseil régional de l'environnement in Laval has concluded that it cannot support this project, despite the economic benefits, because of its negative impact on health and the environment. Instead it recommends the creation of a Montréal-Laval-Mascouche commuter train to serve the same area.

In view of the lack of ideas from our governments for improving transportation networks, most people support this bridge project all the same, hoping once again that it will improve traffic.

Like Montreal, all big cities are realizing how effective public transportation is. With the recent, although insufficient, injection of public funds announced by the government in June, a few projects have been proposed.

It is true that the development of each urban area is the responsibility of the cities and provinces, and the Bloc has always insisted on respecting the jurisdictions of other areas.

While complying with this principle, the government can encourage public transportation directly through a user incentive that would give users a tax credit for the costs they incur.

I would like to cite a few examples to this effect.

In Europe, in November 2002, the Observatory on Transport Policies and Strategies studied the public transportation situation in the countries of the European Community.

In Belgium, for example, the federal sustainable development plan is the major environmental approach. The various stakeholders and politicians have already taken a number of measures to encourage sustainable mobility, and these measures have been integrated into the tax reform.

These measures include, for example, increasing the opportunity to deduct the cost of transportation from one's home to one's work when using public transit as well as providing a total tax exemption for employers' contributions to the cost of public transit passes.

Nearly 20 years ago, the U.S. government made the costs of public transit tax-exempt, in order to encourage people to use it. Public transit companies and private enterprise responded by adopting a strategy in which everyone came out a winner.

In November 2000, Bill 137 was introduced in the Ontario Legislative Assembly. This is a bill to amend the Income Tax Act, and also includes a tax deduction for users of public transit.

In connection with that bill, the municipal council of the City of Ottawa issued a decree that read as follows, “Public transit is an important public good for Ontario, which must be promoted.”

They went on:

By encouraging people to use public transit, many benefits result. For instance, harmful greenhouse gas emissions are reduced and traffic congestion and gridlock are eased because fewer motorists will be on our province’s roads.

In order to encourage people to use public transit, it is important to give them incentives. One way to achieve this is to permit taxpayers to obtain a non-refundable income tax credit for expenses incurred for using public transit.

The utility of the tax deduction for public transit was also recognized by representatives of Quebec Transport. The department made the following recommendation:

Recognize for tax purposes, as an income deduction for employees using public transit, an amount equal to the real cost of a standard monthly pass issued by public transit companies. Invite the federal tax authorities to follow suit.

Moreover, the present Government of Quebec is contemplating a measure similar to the one adopted by the previous government.

Now, I would like to talk about the cost-effectiveness of public transit.

According to a Secor study published in December by the Board of Trade of Metropolitan Montreal, public transit generates double the economic benefits of private transport by car, by generating 70% more employment across Quebec and 2.5 times more added value on each dollar in expenditures.

In addition, collectively, Montreal households using public transit regularly save an estimated $570 million a year in travel expenses, because of the much lower cost of public transit as compared to transport by car.

According to the Secor study:

Paradoxically, the provincial and federal governments, which invest little in public transport, garnered more than $300 million in taxes and revenues from the activities of public transport companies, 70% of whose expenditures are employee wages.

There are up to 8 million daily trips in the region, with only $1.1 million provided by public transport, representing 16% of all daily trips.

Still, Quebeckers are among the greatest public transit users in North America, and soaring gas prices are encouraging them to use it more and more.

Last weekend, the Comité stratégique pour le train de l'est in Montreal planned a symbolic trip. A commuter train overflowing with passengers travelled from Repentigny to the Montreal central station in order to make elected officials aware of the need to provide service to eastern Montreal, which has no direct connection to downtown. Some 500 residents, business people and municipal politicians took the trip from Repentigny to Montreal on the train chartered for the occasion.

The time for speeches is over. We want action, now. We want to put a stop to bumper to bumper traffic in Montreal.

That is what the mayor said.

Judging by the success of some of the current commuter train lines, Quebeckers have shown that they are interested in this mode of transportation. The spike in gas prices can only further encourage them to use public transit.

The government has awesome responsibilities. The public expects it to make good decisions that affect their daily lives and that will ensure them a high-quality future.

In light of the deteriorating transportation situation and commitments to reduce greenhouse gases, the government must act immediately and send a clear message in support of public transit.

The measure proposed in this bill is not a cure-all, but it would provide an excellent incentive to promote the increased use of public transit.

I want to point out that authorities from the city of Montreal have said they are pleased with the bill presented by the Bloc Québécois.

I call on my colleagues from the Liberal Party, and my colleagues from the other opposition parties, to support this bill that is so important to the Bloc Québécois.

Income Tax ActPrivate Members' Business

7:10 p.m.

St. Catharines Ontario


Walt Lastewka LiberalParliamentary Secretary to the Minister of Public Works and Government Services

Mr. Speaker, I am pleased to have this opportunity to speak to private member's Bill C-306 which proposes to amend the Income Tax Act to provide an income tax credit for expenses incurred by individuals for public transportation.

As I understand the bill, eligible costs would include those incurred in travel by bus, subway, commuter train and light rail. To be eligible for a tax credit, individuals would need to submit supporting receipts indicating the amounts paid for use of an eligible public transportation system.

Let me start by emphasizing that the government supports encouraging more individuals to use public transportation systems to reduce greenhouse gas emissions. In fact, addressing the climate change challenge is one of the government's priorities and encouraging greater use of public transportation could certainly help us move toward this objective.

However, as stewards of the public purse, we, as members of Parliament, have a public responsibility to fulfill, the responsibility to ensure that the policies we put in place are in fact the best methods of achieving our goals. Although I agree with the intent of the bill, it is flawed. The consequences and the effects of the bill have not been considered and we should not be in the business of considering flawed legislation.

Regarding the specific option of a tax credit for public transportation costs, there are significant effectiveness and fairness considerations that need to be taken into full account before voting on the bill.

Let me take moment to explain some of the difficulties that the bill raises. As I stated, the bill is flawed and the thought process in presenting the bill has been insufficient.

Initial evidence has shown that a tax credit would have a limited impact on public transit usage. The federal government's transit pass pilot project has shown that only 10% of eligible participants actually took part and just over 5% of those participating were new to the system. Therefore, the pilot project attracted very few new users to the public transit system even with a financial incentive. This pilot project will be evaluated this fall and at the very least we should wait for the final analysis rather than drafting and passing legislation that is flawed.

We all know that the cost of public transit is one of many factors coming into play in an individual's transportation choice. Costs are weighed against other considerations such as accessibility, convenience, comfort and personal preference.

Ten thousand people leave the Niagara region and St. Catharines each and every day to work in the Hamilton and Toronto area. I would rather have infrastructure money to extend the GO Transit to Niagara Falls for the convenience of those people who would use and require such facilities. I am convinced that if there were $240 million to $300 million per year available, this would be a valuable thing to do.

In addition, for effectiveness we must also consider the fairness of introducing such a measure and the bill also fails on this ground. Indeed, the measure would mostly benefit individuals living in large urban centres with extensive public transit systems. Individuals living in small centres and rural Canada where accessible and convenient public transportation is not available would not benefit at all from this measure. Only three in ten of the communities in the Niagara region would benefit. What about the other seven?

The bill requires much more research. Nor would the measure benefit those Canadians who are already using more environmentally friendly modes of travel like walking and bicycling. For those people who have moved into an area and have the ability to walk or bicycle to work, would they get tax credits? These individuals also contribute to help achieve our environmental objectives and they would argue that they also deserve tax relief.

Modest income Canadians such as those receiving social assistance, the unemployed, seniors and students represent a good fraction of transit users, but would not fully benefit, if at all, from a tax credit as many of them do not pay income tax in the first place.

Moreover, there are other concerns about the bill as currently drafted. Let me elaborate. The bill appears designed to provide assistance for costs incurred for public transportation. However, the bill's definition of public transportation is very broad. It could potentially encompass costs incurred outside of Canada. I certainly hope that was not the member's intention.

Let me give some examples for illustration. For instance, based on the current wording, taxpayers could potentially claim a credit for vacation travel costs or travels by bus between cities. It could also cover the cost of local hop on and hop off tour buses. I know this was not the intention, but the bill needs a lot of work.

Imagine having taxpayers at large pay for others being able to claim their costs for having taken the London underground, for example, while on vacation. I know that was not the intent, but the legislation needs to be refined and worked over. Is it the hon. member's intention to cover these types of costs? I do not think so, but a lot of work needs to be done on the bill.

It is also important to remember that the government is pursuing a range of other initiatives which contribute toward better public transit and environmental goals. This includes initiatives such as infrastructure support, a new deal for cities and communities, and our climate change plan.

Since the mid-nineties, the federal government has invested $12 billion in infrastructure programs. A portion of this funding is going toward various transit projects. This includes funding for the Richmond airport; Vancouver rail transit lines; the GO Transit expansion to, hopefully, Niagara Falls some day; capital renewal at the Toronto Transit Commission; and light rail transit in Ottawa.

As well, the Minister of Finance announced in the 2005 budget a commitment of more than $5 billion over five years for environmentally sustainable municipal infrastructure, including public transit. This builds upon the federal government's commitment to deliver a full rebate of goods and services tax and the federal portion of the harmonized sales tax for municipalities. This will provide municipalities, including those seven that got left out in the Niagara region, with about $7 billion in new resources over the 10 years which they can use and they can choose to allocate toward transit priorities.

Last but not least, the federal government will be moving forward on climate change with a plan for honouring our Kyoto commitment which will guide the federal government's approach to reducing greenhouse gases. The 2005 budget targeted over $4 billion in investments over the next five years for key initiatives included in the plan. As a result, total federal spending in support of measures to address climate change has climbed to over $6 billion since 1997. The government is committed to do more as resources permit and as we learn from our investments in international experience.

I am sure all hon. members present today, like myself, would agree that increased use of public transportation systems can help reduce greenhouse gas emissions, but the question is whether providing tax relief for public transportation costs would be effective toward achieving this goal. To this question, I trust that hon. members will agree that the answer is a resounding no.

I want to thank the member who brought forward the debate tonight because it is debates like these which make the House productive.

Income Tax ActPrivate Members' Business

7:20 p.m.


Meili Faille Bloc Vaudreuil—Soulanges, QC

Mr. Speaker, I want to add my voice to that of my colleague from Alfred-Pellan, whose riding is not unlike mine.

It gives me great pleasure to speak today on Bill C-306, which was introduced by my colleague, the member for Longueuil—Pierre-Boucher. I salute her determination and perseverance with regard to this file.

In 2001, a similar bill, Bill C-209, reached first reading and was well received by numerous stakeholders, including the Canadian Urban Transit Association, CUTA. Unfortunately, the then Liberal government did not support this opposition bill. So now, four years later, we are experiencing serious problems related to infrastructure, pollution and, now, the spiralling costs of fuel.

My constituents in Vaudreuil-Soulanges have expressed their dissatisfaction to me, and they expect the federal government to take concrete action. My colleague told the House about innovative initiatives in his riding. The Festival des couleurs will be held in my riding on October 8 and 9. I invite the people of Montreal to use public transportation and the commuter train service. This solution put forward by the Bloc Québécois is simple, practical and effective. I am certain that everyone agrees.

Recently, the Société de transport de Montréal, or STM, indicated a great interest in this issue. For the past 10 years, the STM and a broad coalition of organizations have been unsuccessfully requesting that governments provide tax deductions for public transit users.

A tax credit compensating those who choose transportation habits more beneficial to the community and more responsible is but one option to encourage private vehicle users facing increasingly long traffic jams and urban problems such as parking shortages to jump on the band wagon.

In reaction to soaring gas prices, the Bloc Québécois recently proposed a series of measures, which included the tax credit for low income families and the tax credit for public transit users. By easing the burden of these families, we are also helping to prevent an economic downturn.

Monday night's emergency debate on the spike in gasoline prices was an opportunity for many of us to propose detailed solutions, such as a tax credit for public transit users.

Bill C-306 essentially provides Quebec and Canadian taxpayers with a tax deduction for the purchase of a pass in order to encourage them to make more use of the various modes of public transportation. The public must be encouraged to use modes of transportation that are far more economical and better for the environment, as well as contributing to reducing the traffic on our roads.

Such an initiative is long overdue. A number of countries are far ahead of Canada in their support of public transportation.

There have been a number of studies proving that it is very much in a community's interest to focus on the efficiency of its public transportation system for the sake of its competitiveness and prosperity. In order to gain full benefit from public transportation, moreover, the system must attract maximum ridership.

If people are encouraged to use public transportation, there is less pressure on urban infrastructure. The result is less investment in construction and repair, and improved traffic flow. This is good for both the economy and the environment.

The initiative proposed by Bill C-306 will attract new users. If the change can be made successfully, it will also help Canada achieve the Kyoto protocol objectives.

Earlier I was talking about the strategy to reduce pressure on transportation infrastructure. Allow me to give the example of the Université de Sherbrooke. Their innovative initiatives focus on the community choosing to make a firm commitment to use public transit. This fall, at the beginning of the new school year at the Université de Sherbrooke, roughly 5,000 students were given free passes to use the Société de transport de Sherbrooke, or STS, public transit. Instead of building more parking lots, the university recognized the long-term benefits of adopting a policy to encourage the use of public transit. In addition to stabilizing Sherbrooke's transportation network by increasing the student clientele from 16% to 20%, there is less congestion and more possibility for developing the university's property in the future.

A study by the Board of Trade of Metropolitan Montreal also found that congestion costs nearly $1 billion a year in the Montreal area alone and that public transit contributes directly to reducing losses incurred through congestion.

So, a 2% increase in the modal share of public transit means 19 million fewer car trips in the Montreal region. The economic benefits total more than $150 million annually. That is why it is important to promote the increased use of public transit. These are just a few, albeit very significant, examples.

However, there is one principle that we must keep in mind: the federal government must respect Quebec's jurisdictions.

There are many solutions to help public transit and reward users. The Bloc Québécois is proposing this tax measure, namely a tax credit that remains within federal jurisdiction.

I invite all members of this House to support Bill C-306. It has to with people's quality of life, environmental protection and economic vitality. Today's decisions will impact on the future.

Income Tax ActPrivate Members' Business

7:25 p.m.

The Deputy Speaker

Is the House ready for the question?

Income Tax ActPrivate Members' Business

7:25 p.m.

Some hon. members


Income Tax ActPrivate Members' Business

7:25 p.m.

The Deputy Speaker

The question is on the motion. Is it the pleasure of the House to adopt the motion?

Income Tax ActPrivate Members' Business

7:25 p.m.

Some hon. members


Income Tax ActPrivate Members' Business

7:25 p.m.

Some hon. members

On division.

Income Tax ActPrivate Members' Business

7:25 p.m.

The Deputy Speaker

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Finance.

(Motion agreed to, bill read a second time and referred to a committee)

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

Income Tax ActAdjournment Proceedings

7:25 p.m.


Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON

Mr. Speaker, it is unfortunate that it is necessary for me to rise in the House once again regarding the decision of the government to refuse to defend the Canada Health Act on behalf of the men and women who serve their country as members of our armed forces.

I am referring to the decision of the government to allow its provincial cousins in Ontario to charge and collect the illegal health care premium tax. I am pleased to confirm, for the benefit of all Canadians who may be aware of this tax, the facts.

After campaigning on a promise not to raise taxes, the Liberal government introduced a controversial new tax called the Ontario health premium with a claim that all contributions made by residents would be funnelled directly into the Ontario health insurance plan, OHIP.

This huge tax increase, which at last count bilked $2.4 billion from Ontarians, has been confirmed, as recently as yesterday, as a permanent tax increase on the people of Ontario. While I am pleased to confirm that the new Conservative leader at Queen's Park, Mr. John Tory, has confirmed that a Conservative government would eliminate the tax, soldiers in Ontario should not have to wait for the government to change in order to get their money back. Members of the Canadian Forces residing in Ontario are insured under the Canadian Forces health services plan and are specifically excluded by the Canada Health Act from the definition of insured persons.

The Canadian Forces health services plan pays $450 million into its health care system and the federal government identifies that money as a direct federal contribution to the total health care spending in Canada. In turn, the federal government uses this figure in health care negotiations to reduce the amount that it transfers to the provinces. As a result, Canadian soldiers living in Ontario are forced to pay twice for health care. That is wrong and it must stop.

The particulars of the case of the military couple that I raised in question period are as follows. Both husband and wife are members of the Canadian Forces. Their first child was born in May of this year. These are Canadian citizens, members of the Canadian military with their child being born in a hospital in Canada.

Up until the birth of the child, military coverage paid for the delivery. The problems arose after the delivery. Usually when a child is born the mother's coverage is extended to the child. An insurance application on behalf of the child that would be filled out in the hospital at the time of birth can only be completed with an OHIP number from one of the parents. In this case, since both parents are military, they do not have a provincial health insurance number so the application cannot be completed.

When the military couple took their sick baby to the hospital emergency department they were told to get out their chequebook before their child could receive treatment. They were also told to forget about their military coverage because it would not apply to their child.

As a couple they are paying upwards of almost $2,000 in health insurance premiums, thanks to the Ontario health premium tax, and they are still refused treatment for their baby unless they pay up front. Like many Canadians who have suffered from the health care cutbacks the Prime Minister used to accumulate a budget surplus when he was finance minister, this couple was forced to use a hospital emergency room in the absence of a family doctor.

The acute doctor shortage is even worse for military personnel. Military members are routinely at the bottom of any waiting list for a doctor because by the time they move up to the list to get a family doctor they have been posted to another base and have to start all over again. This has led to some military families keeping their family doctors in cities hundreds of kilometres away just so their families will not be without a doctor, or worse, they just go without a doctor and hope they do not get sick.

Until this couple contacted their member of Parliament they were told it could take upwards of six months to get health insurance coverage for their baby. They were told an OHIP application had to be completed in person, booked in advance by appointment in a city three hours away, thanks to the cutback services provided to Canadians who live in small towns or rural areas.

Income Tax ActAdjournment Proceedings

7:30 p.m.

Esquimalt—Juan de Fuca B.C.


Keith Martin LiberalParliamentary Secretary to the Minister of National Defence

Mr. Speaker, personally, it is great to see you in the chair.

On the question to which the member spoke, I will clarify a few things. First, it is the Ontario provincial government that introduces health taxes, as the member fully knows. The federal government has no basis in that.

The federal government is fully committed to supporting the members of our Canadian Forces. The health and well-being of the men and women who serve in our forces and their families is of primary importance to the government. We recognize the contributions and sacrifices that all of those people have made, are making and will be making in the future, and we honour them. Their quality of life is of the utmost importance to all Canadians and, in particular, to the government.

We are proud to report that since 1996 the basic pay of non-commissioned members has increased 49%. The average wage of the forces now is about $52,000 a year. Base pay improvements, together with the introduction of other benefits, such as tax relief provisions, new allowances and annual pay improvements, are a clear demonstration that our government intends to support members of our Canadian Forces fully. We want to ensure that their cost of living is relatively stable and predictable across Canada regardless of where they live.

The introduction of the Ontario health premium by the provincial Government of Ontario is inconsistent with this principle. The Minister of National Defence has made this point crystal clear to the Province of Ontario. We are appalled by this and the minister is doing all that he can to rectify the problem. He is working with the Ontario provincial government to resolve the issue as soon as possible. He has approached both the ministers of finance and health in Ontario to highlight the unfairness of personnel in the Canadian Forces being charged the health tax when they already receive, as the member correctly pointed out, moneys from the federal government for members of the Canadian Forces and moneys through the negotiations that took place by the Minister of Health earlier this year with all provinces last year amounting to $42 billion.

In addition, departmental officials from the federal government have been working and conducting a review of the post living differential policy framework in order to ensure that CF members in Ontario will have this issue addressed one way or the other. Either we will support and help them or this tax will be negotiated out and removed on the part of the provincial government.

I join with all my colleagues in the government and the Minister of National Defence in reassuring the CF members who are listening today and the member who asked the question that we will do all that we can to rectify the situation for CF members and their families who live in Ontario.

On the issue of medical personnel, the member also should know that the government is working with the provinces to greatly expand the numbers of people in medical school right now. The Minister of Health has put in $50 million to help integrate existing medical personnel from abroad who currently live in Canada so they can get their skills up to speed and be able to work and supplement our current complement within Canada.

Income Tax ActAdjournment Proceedings

7:35 p.m.


Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON

Mr. Speaker, luckily for this couple and their baby, the illness was non-life-threatening and it was not a severe financial hardship to pay up front for their daughter to be treated. While the father told me that he would have come up with the money no matter what to treat his baby, why should this family have been put into that position just because they chose to serve their country as members of the Canadian Forces?

I draw attention to this case to let the government know that well-meaning talk is not addressing the problem. In other countries military health coverage is extended to dependants. However, in the absence of such an obvious and practical solution to this problem, the government first needs to address the charging of the Ontario health premium tax on individuals who should not have to pay it.

While I appreciate the parliamentary secretary telling me that he agrees with me that the tax is totally unfair, military members want action and they certainly know this tax is unfair. They cannot understand why the Minister of Health thinks that health care premiums and extra billing is a good thing and why on behalf of the government he defends the practice.

The time has come to axe this tax on behalf of the men and women who serve in Canada's military.

Income Tax ActAdjournment Proceedings

7:35 p.m.


Keith Martin Liberal Esquimalt—Juan de Fuca, BC

Mr. Speaker, I wish life were that simple, that we as the federal government could simply axe a tax implemented by the Ontario provincial government, but the member knows fully well that we cannot.

What we can do and what the Minister of National Defence is doing is working very closely and putting a lot of pressure on the provincial government here in Ontario to axe this tax, to use her words, and relieve this pressure on our CF members. That is one way that we are working on it.

The other way, as I mentioned before, is to work through the post living differential that we have for our members within Ontario who are working here as part of the forces to ensure that we can use this particular benefit that we give, to ensure that CF members, regardless of where they live, will have their cost of living basically harmonized across the country through this post living differential, which is like a cost of living allowance.

We will use that if we have to in order to help our CF members in Ontario regardless. Their well-being, their income and their standard of living is of utmost importance to us. We are seized with trying to ensure that members who serve in Ontario are not penalized.

Income Tax ActAdjournment Proceedings

7:35 p.m.


Greg Thompson Conservative St. Croix—Belleisle, NB

Mr. Speaker, in June I asked the Government of Canada to conduct a public inquiry into the herbicidal spraying program at CFB Gagetown from 1956 to 1984. About 90% of that base is in the riding I represent. I said that the public inquiry should have the authority to make recommendations for compensation of all persons affected, both civilian and military.

In typical Liberal fashion, the government went out on a public relations campaign all summer, trying to defuse the issue. The member from Pembroke who just spoke is well aware of this. She has done a lot of work on this file herself and has been very helpful to me.

These people have been abused by the government. As I said, the government is into a public relations exercise, nothing more and nothing less. How has the government responded to this issue? The government will not have a public inquiry with the authority to actually compensate the victims.

In my hand I have a copy of a government press release of August 16. The headline states, “Government Announces Approach Regarding Use of Herbicides at CFB Gagetown”. In this press release, the government came out with what it called a “fact-finding outreach coordinator” who would go around to communities, including the base itself and the surrounding villages, and talk to the people who had been exposed to herbicide spray over the years.

The Ottawa Sun , in an article done by Greg Weston on September 25, really speaks as no one else can on this issue. The headline in that story says, “Agent Orange Victims Sick of Feds' Dithering”. That is exactly what the government is doing.

There is only one good thing I can tell members about the outreach coordinator. The Liberals were very smart because they picked a person who is very capable and is well liked by me and by many other New Brunswickers, a person by the name of Vaughn Blaney. Mr. Blaney is ill tonight and I want to express my best wishes to him. In fact, he had to cancel some of the public meetings.

But the Liberals have given him powers to do absolutely nothing, Mr. Speaker, and you think your job is tough. They have given him no power. He cannot even recommend to the government who should be compensated. Despite all of this spray program over the years and the millions of litres sprayed, only one person has been compensated. In fact, in this public relations exercise that the Liberal government is going through, not once does it use the word “compensation”. To the Liberal members, it is a foreign word. They do not understand the word “compensation”.

As evidence of this, today Veterans Affairs does not recognize the link between herbicidal spray and incidents of cancer caused by that spray. That department does not recognize it as a legitimate cause of cancer, whereas the United States veterans affairs department recognizes 37 diseases with a direct linkage between the spraying of herbicides and cancer.

We are asking the Government of Canada to compensate those victims, to come up with a plan that will work, and to have a public inquiry so that Canadians can see exactly what the Government of Canada should do, could do, and will do.

Income Tax ActAdjournment Proceedings

7:40 p.m.

Esquimalt—Juan de Fuca B.C.


Keith Martin LiberalParliamentary Secretary to the Minister of National Defence

Mr. Speaker, it is always wise, particularly given the sensitivity of this issue, to deal with the facts. We should remove politics from this for a moment and deal with the facts. I will attempt to do that right now because this is a very sensitive issue for a lot of people who are concerned and scared. They need to get the facts, so I will just deal with that for a moment because this is very important.

I was there from the beginning and I can tell members that the department moved very quickly on this issue. I know that the assistant deputy minister involved went immediately to the area and listened to the people's concerns on the ground. This was televised, so that all Canadians knew what was going on at that particular time. We were determined to uncover the facts regarding herbicide spraying, not from 1956 but from 1952, to address the problem. As I said, we have to deal with the facts.

We have developed a comprehensive plan to deal with this, and as the hon. member mentioned, we did appoint an individual to act as an inquirer. We also send our sympathies to him and his family, and we hope that he gets well very quickly.

Our strategy includes three points. The first is to identify the CF members and the employees who were there at the time and present when the herbicides were being sprayed. The second is to collect data on the use, disposal and management of those herbicides that were used. The third is to ascertain the relationship between herbicides and illness.

It is not a simple thing to say that herbicides cause cancer and others do not. There are dose-related responses that have to be dealt with. It is not a simple thing at all, but we want to get to the bottom of it. That is why we are conducting this contracted, external analysis of what has gone on because we want to get the answers. We are not going to rush to unsubstantiated conclusions which will compromise this entire process.

We are reporting on something that happened 50 years ago. We must have a very clear picture and we need to gather all the information. That is why a fact finding analysis, rigorous and scientifically based, will enable us to get the answers, and assuage the concerns of those people on the ground who may have been subjected to these herbicides. They need the answers and the facts. We are deeply committed to finding the right solution.

I might also say that there were reasons why herbicides were sprayed. They were sprayed to remove brush in Gagetown. If brush were not removed, there could be a fire hazard and a fire hazard could kill people. There are CF members who work and engage in activities in Gagetown. If that brush is simply allowed to stay there, it poses a health risk for them. We know people who get injured and they can get killed under those circumstances.

We are performing this analysis. Those three areas are going to be looked at. The findings will be released publicly and we will have answers, most importantly for the people who are affected.

Income Tax ActAdjournment Proceedings

7:45 p.m.


Greg Thompson Conservative St. Croix—Belleisle, NB

Mr. Speaker, the government is engaged in a public relations exercise. It is as simple as that. The medical evidence is out there in terms of the linkage between herbicide spray and exposure to that spray. That has been proven and the government of the United States recognizes that. It has compensated literally thousands of victims exposed to that type of herbicidal spray. Canada has not. We have compensated one soldier.

The government has been hiding on this issue. Pure and simple, this is a public relations exercise to get it through to the next election with doing nothing. That is what it is all about. It did the same thing on the hepatitis C file if members remember. The parliamentary secretary was on this side of the House at the time and drove that battle to the government. Now he is on that side defending the government on something that is completely indefensible. The government's position cannot be defended.

Income Tax ActAdjournment Proceedings

7:45 p.m.


Keith Martin Liberal Esquimalt—Juan de Fuca, BC

Mr. Speaker, I can assure the hon. member, and most importantly the people from Gagetown who may be affected by this, that the bottom line is we want answers. We are committed to finding those answers, so we can deal with the problem.

For the member's information, herbicides are used all over Canada. There are certain herbicides that were used a long time ago that pose a danger. We do not know what herbicides were being used in Gagetown or how much. It is important for us to find out what types were used, how much and who was affected. That is what we are trying to do.

We will only be able to serve the people who may have been affected by this by dealing with the facts and ensuring that whatever they need will be provided, but we have to do that based on the facts.

Income Tax ActAdjournment Proceedings

7:45 p.m.

The Deputy Speaker

The motion to adjourn the House is now deemed to have been adopted. Accordingly, the House stands adjourned until tomorrow at 10 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 7:49 p.m.)