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House of Commons Hansard #69 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was surplus.

Topics

Budget Implementation Act, 2006, No. 2Government Orders

4:10 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

Mr. Speaker, I listened with interest to the hon. member and I thank him for his comments, particularly about Liberals balancing budgets. They sure did. I had the unusual privilege of being a Minister of Finance in the second largest government in this country, in Ontario, and we had to try to operate a health care system with the federal government balancing its books by cutting back health transfers to the provinces.

We lived through that and the deterioration of the health care system, which was done by the previous government and which it created simply by saying, “We are going to balance our books. Here is how we are going to do it. We are going to cut our health transfers willy-nilly, across the board, to every province in this country”.

It was a cynical act, but that is how the Liberals thought they should balance the books in Canada. It is not how we see balancing the books.

In fact, we are engaged now in what I hope will be quite fruitful and constructive discussions with our colleagues in the provinces and territories. We are not talking about cutting health care. In fact, we will maintain health care funding. We are committed to that, with a 6% escalator built into the base.

We are also talking about substantial transfer payments with respect to infrastructure and post-secondary education. It is just the kind of progressive legislation and progressive approach that ought to have been taken on by the previous government, but no, what the Liberals did instead was just cut health care transfers willy-nilly and tell the provinces and the people of the provinces that they had to figure it out.

Budget Implementation Act, 2006, No. 2Government Orders

4:10 p.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

Mr. Speaker, I appreciate the minister's zeal and I would like to know if that zeal is matched by any sort of analysis that went into the budget.

In particular, he mentioned the transit passes. Just recently, I was on the Toronto transit system and when I looked up, lo and behold there was an ad from the Canadian government with a lot of words. I leaned over to the transit rider beside me who had a monthly pass and tried to find out if she understood it. She had absolutely no understanding of this issue at all.

The government claims to use prudence and sound advice, but on the transit pass issue, we have managers of the major transit systems in this country saying that if we want to invest in transit, we should get more riders into the system. We do not do it the way the government has shown. Managers in Toronto, Montreal, Calgary and Ottawa have all said that if we really want to affect the number of people using the transit system, we should go after infrastructure.

The government also claims that this is a measure to fight the climate change issue. Whereas, we know that this is one of the most expensive forms of reducing carbon available to the government. It is one of the most expensive ways to reduce the pollution that is emitted.

I am seeking some sort of clarity on the analysis that the minister and his department used in applying these measures: first, to increase ridership when the people in charge of the system say it is not the way to do it; and second, to help the environment out when it is the most expensive ways to reduce CO2. that we know of.

Budget Implementation Act, 2006, No. 2Government Orders

4:10 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

Mr. Speaker, if people were to leave their cars at the commuter stations, subway stations, bus stations, and did not drive their cars, they would actually produce fewer emissions. We know that. Studies show that if we incent that kind of behaviour, then more people will leave their cars at the stations or at their homes and take public transit. That is good for the environment.

I take the GO Train often when I am in the greater Toronto area, so do many people in my riding of Whitby—Oshawa and all throughout the greater Toronto area. We know about the traffic congestion there. I say to the member, come to the greater Toronto area and see the benefit of a transit pass. The affordability factor gives people two months free public transit per year for those who commute, that is, for those who take the monthly passes or passes that are longer.

I know there is some discussion now about cards that will be used between the various transit systems and some of our regional transit networks, not only in Montreal, Ottawa, Toronto, Vancouver and other places. That is something we will have to work on to ensure that we integrate this benefit, so that people who are commuting on a regular basis get the tax credit.

Budget Implementation Act, 2006, No. 2Government Orders

4:15 p.m.

Liberal

Brent St. Denis Liberal Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, I listened with great interest to the minister's speech. I had a chance a few years ago to play an exhibition hockey game between the House of Commons and Queen's Park. He was a very good hockey player and probably still is. He is a very good skater.

I will ask the minister a question which is so straightforward that I do not think he would be able to skate around it. With respect to the 1% GST cut, it is really not delivering the goods to average Canadians as declared by the government.

If a well-to-do family on one side is able to buy a $100,000 luxury boat and on the other side a modest income family can afford a couple of hundred dollars for an inflatable boat, which of the two families will save more on the GST?

Budget Implementation Act, 2006, No. 2Government Orders

4:15 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

Mr. Speaker, the hon. member omits the basic point of our tax system in Canada. We have a progress tax system, so that a wealthier family will pay a great deal more income tax and that is the fundamental basis of our tax system in Canada.

I thank the hon. member for his comments about hockey. I think the score was, I am trying to remember, was it eight to one? I know we won in those days, but the quality of the hockey team here now will have improved because of the members who come from Ontario. I am kidding. That was in the old Maple Leaf Gardens, as I recall, near the end of the life of the old Maple Leaf Gardens, and some of us felt that way near the end of that game.

Talking about the progressive tax system, some economists will say that the reduction of consumption taxes is not the best way to go. I certainly would not do it in isolation, nor did we do it in isolation in the budget. We reduced taxes of all kinds that the Government of Canada takes from Canadians, including excise taxes, small business taxes, consumption taxes, large business taxes and capital taxes. It is a fulsome program of tax reduction.

Budget Implementation Act, 2006, No. 2Government Orders

4:15 p.m.

Bloc

Raynald Blais Bloc Gaspésie—Îles-de-la-Madeleine, QC

Mr. Speaker, I would like to take this opportunity to ask a direct question of the Minister of Finance pertaining to a file of great importance for my region.

Under the former government there was a wind power incentive program. Now that the Department of Finance is reviewing just about every government expenditure that can be reviewed, there is a $105 million project.

There is some concern about this project, which aims to build 54 wind turbines that will supply three megawatts of power. This was supposed to occur in Murdochville, right in the heart of Gaspésie. It is one of the projects related to generating green energy, wind energy.

I imagine that the minister is aware of renewable energy and this whole concept. I therefore beg him to give us an answer concerning the fact that, within the current context of program review, there is a great deal of uncertainty about various projects. This is one that seems to be have been put on hold and that would be a shame. I think it is important and worthwhile for the minister to lift the veil on this matter.

Budget Implementation Act, 2006, No. 2Government Orders

4:15 p.m.

Conservative

Jim Flaherty Conservative Whitby—Oshawa, ON

Mr. Speaker, it is not a specific program that I have at my fingertips. I do know that under the clean air act which my colleague, the Minister of the Environment, introduced recently we are looking at sources of renewable energy including wind power. That will have to be a part of the design as we go forward which I am sure would include the type of initiatives that my colleague refers to in the Gaspé.

Budget Implementation Act, 2006, No. 2Government Orders

4:20 p.m.

Liberal

Brent St. Denis Liberal Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, it is an honour to participate in the debate on Bill C-28, especially for me today as this is my anniversary and the anniversary of quite a few other members of the official opposition who were elected to this place back on October 25, 1993. I would like to commend members on both sides of the House who were elected 13 years ago. Lucky 13 I would say.

This anniversary brings me back to the fact that I was a member of the finance committee in my first Parliament from 1993 to 1997. It was the time period when the then prime minister mandated us as a finance committee to assist the government and the House of Commons to find ways to deal with the terrible deficit that we inherited from the previous Conservative administration. It was not just the efforts of members of Parliament, particularly government members, but members on all sides who helped us turn the government books around in a short two year period. This was also done with the assistance of Canadians from coast to coast.

I would like to point out that the finance minister mentioned, in a response to a question by the member for Miramichi, that during the time as the finance minister in Ontario, he had complained about the fact that the federal government was not achieving its goals. His predecessor, minister Eves in the Mike Harris government, actually lauded the then prime minister and finance minister for their efforts in bringing the books of this country under control. The IMF had basically given a stern warning to Canada about the deficit we had inherited from the previous Conservative administration.

That is why we want to be careful as we go forward. This country does not want to get back into a deficit position. Canadians do not want that. In fact, one of the biggest mandates from Canadians in 1993 was for us to deal with the mess that the books were in. The debt was climbing precipitously.

At that time we had to deal with the financial picture of the country. At the same time, while we were making an effort to get to a surplus position, we could not forget the vulnerable. We had to ensure that we continued to make investments in the social safety net of this country, in economic development, and in incentives for small business. We had to be ever-mindful of the most vulnerable among us and start paying down the debt.

Significantly, the ratio of debt to GDP in this country over the last 13 years up until late January dropped from around 70% to around 40%. We made fantastic progress.

This brings me to the present financial paradigm in which we find ourselves as a nation. My colleague from Miramichi also mentioned that the last time a Conservative government reported a surplus was in 1912. I would like to add to his comment by saying that the finance minister at that time inherited a surplus from the previous Laurier government. We have yet to see any Conservative government actually produce a surplus on its own feet. I like to be a positive person along with my colleague from Miramichi, so let us hope that the government can keep us on track as a nation and keep us in a surplus position.

At the same time, it is with grave concern that I remind members of this House, my constituents of Algoma—Manitoulin—Kapuskasing in northern Ontario, and all Canadians, that the $13 billion surplus that the Conservative government inherited, which was reported as part of the budget package last spring, should not have in its entirety been used to pay down the debt.

Over the previous 10 or 11 years, we have put a significant portion of each year's surplus toward the debt. Imagine parents saying to their kids, “We are not going to feed you because we are going to put every spare nickel we have on the mortgage”. No, parents continue to pay down their house mortgage while continuing to feed and clothe their families. There is a balance between the ongoing requirements of a family as there is for a government. There is a requirement that governments be mindful of maintaining programs that in particular the most vulnerable need from their federal government.

I think that was a serious error in judgment on the part of the government. No doubt the finance minister, with whom I have no grief personally, had tremendous pressure from the reform elements in his party. It is the reform element that has this belief of every person for themselves. It is an ideological approach to government that really forgets that we are responsible for others. We are our brothers' and sisters' keepers, and that is the place and the role of government. While managing the state for everybody, ensure that we do not leave people behind. Even the best governments and best countries always have those who cannot keep up, and it is our responsibility to do the best we can to help them keep up.

If I could rewind the tape back to last spring and to some weeks ago when we heard about the cuts, I would hope that a replay of that would see the government maybe use half, even a bit more if it felt it were affordable but no less than half, as we were doing, toward debt reduction and the rest toward investments in the social safety net and economic development. Why instead did we see cuts of $1 billion, and I think $2 billion over two years?

It did not strike me as much as it did on a recent visit to the communities of Chapleau and Wawa in my riding a few days ago. I knew that the cuts were going to have an impact on Canadians, but imagine in two communities, three different groups and individuals came forward to tell me about the impact of the cuts on their groups or on them individually. In 13 years, I do not recall ever having that experience. In the space of six hours, between Chapleau, office hours, travelling to Wawa and office hours there, three different groups and individuals came forward to say that this really hurts, not them personally, and I will explain in a moment, but the groups that they work with which serve others.

One was a group in Chapleau that is involved with the francophone women's association, headquartered in Ottawa. It is an Ontario-wide organization that helps francophone women's groups with their advocacy efforts on behalf of francophone women. I have, in my large northern Ontario riding of 110,000 square kilometres, a large and vibrant francophone community.

I was really touched by the delegation's impassioned plea that some way be found to reverse the impact of cuts to women's programs that ultimately impacted their ability to help each other in Chapleau. I know this is also the case in Kapuskasing, and I could go around the riding and find other women's groups, francophone or not, equally impacted.

Imagine in the same tour, to continue, in Wawa, a delegation of small lodge owners came to see me. They were really concerned about the cut to the GST rebate for visitors. To the uninformed, to the uninitiated, it might seem that this is simply a matter of giving money to tourists who go back after their holidays to the U.S. or to Europe, let us say mostly the U.S. in the case of tourist operators in the northern Ontario, and lodge owners for fishing, hunting, camping and outdoor recreation.

The reality is that tourism is an export industry. I know my colleague, the member for Miramichi, has a large tourist industry in his part of New Brunswick. Tourism is an export industry. When tourists buy something at a store, keep their receipt, at least up until now, cross the border to go back to the U.S. if they are American, they are exporting that item and, as for all exports, the GST is removed. Why are we in fact picking on those who export to the U.S. or elsewhere as tourists?

There was a particular concern to these operators. Since the inception of the GST, which is known as a value added tax in Europe, visitors to Canada could claim the GST on their rooms while they are in Canada.

The lodge business in northern Ontario or the Toronto convention bureau or the Montreal convention bureau or the Vancouver convention bureau know that convention organizers depend on those percentage points of advantage they have to compete against other large cities for international convention business. So, now we have lost a few percentage points in competition with European convention destinations.

This happened to be a delegation made up of all women lodge operators. I was very impressed by the arguments they made and the concern they had for how would they make up, I think it was an average of 3% difference, in the net income to their businesses that they would have to cover because their customers could not get that 3% back at the border. They have lost the ability to promote that aspect in their tour of the trade tourism shows throughout mostly the northern U.S. I would ask the government to reconsider the GST rebate for visitors, as it should reconsider the support of women's programs.

Let me continue to the third example of an entrepreneur in my riding in Wawa. I will keep the confidentiality of his name. He has tremendous expertise in the tree nursery sector, not just knowledge but technology capacity as well. He has worked diligently to make business agreements in several Central American countries. When we talk about the importance of tree planting, reforestation is part of a larger strategy to deal with climate change. He has the potential in an important niche when it comes to greenhouse gas or climate change abatement technologies.

Up until recently, Canada's government believed in the Kyoto protocol and believed that climate change was a reality. Imperfections aside, and I will not say that our government was perfect in its pursuit of finding better ways to deal with climate change, at least we were looking forward, we acknowledged, and we knew better efforts had to be made to deal with climate change. We did not turn our backs on the importance of climate change and the Kyoto protocol. This entrepreneur has now lost some advantage in his ability to export his expertise and technology in terms of reforestation to parts of the world that indeed need this kind of help.

In a period of six hours there were three groups or individuals impacted by these cuts. I know that cuts are separate from the budget, but the foundation of the cuts is in the budget of last spring.

There is a notion that there is a plethora, a whole bunch of tax credits contained in the minister's budget which on the face of it look interesting, but when people find out that a $500 tax credit for the physical fitness tax credit is worth about $70 or $80 to the average family, then it really is not what it appears to be. It would have been clearer for Canadians had the government acknowledged that these tax credits which are $500 in this box on tax returns really meant about $75 or $80 at the end.

I think sports programs are very important. I look forward to the minister tabling his report from his expert panel. Not every family has a child that is capable, either physically or by inclination, to be involved on a hockey team, a basketball team or whatever. Some children are musically inclined and some are artistic. Some children in wheelchairs cannot play hockey. They have other pursuits that they would no doubt be interested in.

I really hope that the minister, who is a bit of an athlete himself, will be persuaded that the view of that tax credit, as modest as it is, should include a large array of artistic, cultural and physical pursuits for children and families. I want to make that very important point.

In my question earlier on to the Minister of Finance I asked about the difference between a wealthy family buying a $100,000 luxury motorboat or sailboat versus a modest family buying a $200 inflatable raft and which of the two families would receive the bigger GST benefit? The minister did not answer the question. He actually did not even skate around it. He did not even carry the puck across the red line in response to my question.

I will answer the question for the minister. If a person were buying a $100,000 boat, the saving would be about $1,000; I think a 1% cut would be $1,000. With that $1,000 cut the family could buy five inflatable boats that the modest income family could only get for $200. The $200 inflatable boat will realize a savings of $20 or is it $2? No, I think it is $20.

Budget Implementation Act, 2006, No. 2Government Orders

4:35 p.m.

Borys Wrzesnewskyj

Insignificant.

Budget Implementation Act, 2006, No. 2Government Orders

4:35 p.m.

Liberal

Brent St. Denis Liberal Algoma—Manitoulin—Kapuskasing, ON

Actually, it is $2. It is insignificant. Thanks for the arithmetic help from my colleagues.

The point is that the GST saving for the well-to-do family is $1,000. In my example the saving for the low income family is $2. Tell me what the fairness is there? It is not there.

I am not sure there was one reputable economist that argued in favour of a GST cut. The better thing going forward and the better thing last spring would have been to continue the personal income tax cut that we brought in during the previous year. Then, if the government felt it had resources, it go further with personal income tax cuts.

There is a great debate over whether cuts in consumption taxes are better than cuts in personal income tax. I would argue the latter, that cuts to personal income taxes are a lot more effective, a lot more fair, and on a sliding scale they impact everyone the same proportionally.

We go from a big picture in 1993 where the imperative at the time was to get the books of the country in order. The previous government did that. It took two years and with the help of Canadians it was done. The country had a series of surpluses that have never been matched before in Canadian history.

We now have a government that is very ideological. Canada is a democracy and there is nothing wrong with being ideological. However, if the government is going to be ideological, it had better put a little bit of water in its wine once in a while and consider that there are things that happen between the ideologies that really can help or hurt people.

I would ask the government to reconsider its overall program. Next spring, if it does come up with a surplus, I hope it will deal with the wait times because we are regressing on wait times and there is little, if any, mention by the government of the wait times initiative that it mentioned in the election.

I hope next spring the government will be a little wiser with any surplus that it might accrue.

Budget Implementation Act, 2006, No. 2Government Orders

4:40 p.m.

Conservative

Pierre Lemieux Conservative Glengarry—Prescott—Russell, ON

Mr. Speaker, I listened with great interest to my colleague's comments and I would like to address his comment on the GST visitors' rebate. I would remind the member that our new government has promised to be fiscally prudent with Canadian taxpayer money and Canadians elected this government to be good fiscal managers, which is exactly what we are doing.

The fact is that on the GST visitors' rebate, more than 97% of the 35 million foreign visitors to Canada do not collect the rebate. That is almost 34 million out of 35 million tourists who come to Canada every year do not use this rebate.

This was said by the Premier of Nova Scotia, Rodney MacDonald:

I don’t think that visitors make their decision based on that rebate. They come to Nova Scotia for the scenery, the people, the experience of what Nova Scotia’s all about.

This was said by the Nova Scotia tourism minister:

Somebody coming from New York, are they coming to Halifax or are they going to stop their plan because they are not going to be getting a rebate on their GST? I don’t think so.

Don Drummond, chief economist at the TD Bank Financial Group, said:

--evidence mounts that certain programs aren't very effective....A good example is the rebate program for tourists who pay the GST. Despite considerable expenditures to make tourists aware they can claim the rebate, fewer than 3 per cent do so. The government's decision to scrap the program will save $78-million.

This last comment was said by a small businessman:

I don't think anyone won't come here because of it. It's just a pleasant surprise and they usually spend the money here.

We have a premier, a tourism minister, a chief economist at the TD Bank Financial Group and a business owner all saying that scrapping the GST visitors' rebate will not harm tourism and it is a fiscally responsible move. How do you comment on that?

Budget Implementation Act, 2006, No. 2Government Orders

4:40 p.m.

NDP

The Deputy Speaker NDP Bill Blaikie

Order. How does he comment on that.

Budget Implementation Act, 2006, No. 2Government Orders

4:40 p.m.

Conservative

Pierre Lemieux Conservative Glengarry—Prescott—Russell, ON

How does he comment?

Budget Implementation Act, 2006, No. 2Government Orders

4:40 p.m.

NDP

The Deputy Speaker NDP Bill Blaikie

Now he can comment.

Budget Implementation Act, 2006, No. 2Government Orders

4:40 p.m.

Liberal

Brent St. Denis Liberal Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, that is like one of these softball homerun questions because he has received a letter from the Canadian Hotel Association which, no doubt, has members in Nova Scotia. It therefore does not surprise me that the Conservative premier of a province would do his best to support his cousins in Ottawa through thick and thin. This is a case where he is defending the indefensible.

The fact remains that for those who take advantage of the GST visitor rebate, and that program, unless the member knows something I do not know is a program that is also available to visitors to Europe who have the value added tax, that the people in my riding, the tourist lodge owners, the people who run conventions in Toronto, Halifax, Montreal, Vancouver, Winnipeg or elsewhere, it is to their advantage to promote their convention city or their lodge to visitors, either American, European or from elsewhere.

I think the government was fooled into thinking that because the uptake might not have been as much as was expected because if someone buys something for $5 to take out of the country, they do not bother on a $5--

Budget Implementation Act, 2006, No. 2Government Orders

4:40 p.m.

An hon. member

There was $78 million.

Budget Implementation Act, 2006, No. 2Government Orders

4:40 p.m.

Liberal

Brent St. Denis Liberal Algoma—Manitoulin—Kapuskasing, ON

That is right, $78 million was refunded so some activity certainly took place but how much of that $78 million was the rooms for conventions, lodge owners, hotels, et cetera?

The member really is inviting the question about the government's ability to analyze data for its value because the real truth is that these conventions, hotels and lodge owners need that ability for their visitors to have a rebate.

Budget Implementation Act, 2006, No. 2Government Orders

4:45 p.m.

Blackstrap Saskatchewan

Conservative

Lynne Yelich ConservativeParliamentary Secretary to the Minister of Human Resources and Social Development

Mr. Speaker, I heard a contradiction when the member spoke about the GST. He said that people could not apply for it and take it out of the country. After that he talked about how measly the amount is and how poorer people will not benefit from the GST decrease. I find that remark contradictory.

He talked about families not being advantaged by this decrease in GST. I take issue with that because I know a lot of poorer people who were quite pleased that we lowered the GST. I am thinking more of children. My nieces and nephews, who are 7, 8, 9 and 10 years old, know it is nice when there is not much tax on items they buy.

The reason a lot of people go to Alberta to shop is that they like no tax, but some people will shop even if there is a decrease in a tax.

I find it contradictory that he first says that the decrease is hardly anything unless a person is really rich and now he says that it is so important to give the rebate. I think he cited 3%. We are giving 2¢ off of each dollar in the upcoming GST policy. I want to know what he thinks about that.

Budget Implementation Act, 2006, No. 2Government Orders

4:45 p.m.

Liberal

Brent St. Denis Liberal Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, with great respect, I think the member has mixed things up.

First, let me deal with the GST visitors' rebate. I think the government plans to save $78 million but for those sectors, such as convention centres, tourist lodges and hotels, the $78 million, which helps them attract customers, were extremely important. It is like taking $10 away from a poor person or $10 away from a rich person. The $10 is important to the poor person.

Those sectors I talked about need visitors. Tourism is not at a high peak right now and they have other challenges. We have fuel prices, exchange rates and the security issues in the United States which are preventing people from visiting Canada. We also have the issue of future passports. When I say that program is not large compared to the $1 billion, that is fairly self-evident, but to those people in that sector it is very important.

Let me talk about young people and the 1% GST. I do not even know if there would be a reduction on a 25¢ piece of candy. Would stores charge 24.2¢ for a piece of candy? I do not think so. Statistics Canada said in its report that the GST cut was essentially absorbed. I do not recall many people, if any, who told me that the GST refund was a really great thing. I think it was invisible.

Budget Implementation Act, 2006, No. 2Government Orders

4:45 p.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

Mr. Speaker, Prince George is a fine city. I live in Skeena and visit Prince George as often as I can.

The question I have for the member is twofold and the first part concerns the United States. Within the U.S. congressional district there is a separate accounting office which was established to prevent what we have seen the Canadian government do, which is to collect more revenues than it was expecting in order to play with the numbers. I am sure his government, when it was in office, perfected the ability to stretch and extrapolate. At the end of every budget cycle, lo and behold, his government would run out to the truck, throw a bunch of cash in it and drive around the country dumping it as quickly as it could.

Would he support having an arm's length accounting office in this country and, at long last, removing the politics over the numbers and just allow the debate to exist over where the priorities need to be?

I also could not help but hear the finance minister talk about the $80 a year benefit to university students. Would the member comment on how his party was able to, year in and year out for 11 years in a row, have students leaving university with an average increase of $1,000 a year in debt. Students in Canada under his government's regime were having an extra $1,000 of debt tacked on every year. The government is purporting to change that trend but it is in fact just supporting it.

Budget Implementation Act, 2006, No. 2Government Orders

4:50 p.m.

Liberal

Brent St. Denis Liberal Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, it was our government that reinstated the position of comptroller general. However, I am not certain if the current government has actually funded such an office or whether it has proceeded. It was the previous Mulroney government, prior to 1993, that had cancelled the position of comptroller general and we reinstated it. I think that addresses the member's concern about having an independent oversight, outside of the Auditor General, on how surpluses and spending can be managed. I think that was a very good move on the part of the previous government.

As to the textbook credit, if the NDP--

Budget Implementation Act, 2006, No. 2Government Orders

4:50 p.m.

NDP

The Deputy Speaker NDP Bill Blaikie

Order, please. I am sorry but the time has expired.

Resumption of debate. The hon. member for Saint-Hyacinthe—Bagot.

Budget Implementation Act, 2006, No. 2Government Orders

October 25th, 2006 / 4:50 p.m.

Bloc

Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Mr. Speaker, I am happy to speak to this part of the Conservatives’ last budget. As you know, my party, the Bloc Québécois, supported the budget. It did so, not because the members of the Bloc liked the Conservatives—after 10 months, we like them less than we liked them at the time—but because at that time there were some sensible things in the budget. At least that is what we thought.

The fiscal imbalance file in particular is a fundamental file for Quebec, a file for which the Bloc Québécois has worked with all the vigour and rigour for which it has been known for years. We were even the first ones to talk about the concept of fiscal imbalance in the House of Commons several years ago. It was even before the Séguin Commission began its work in Quebec with a mandate from then Premier Bernard Landry to find some solutions to the fiscal imbalance, which leads to the underfunding of basic service programs for citizens by Quebec and the Canadian provinces.

Appended to the budget was a document, a very well prepared one, I might add. It said that the government was making a commitment to fix the fiscal imbalance, that this fall—the fall is advancing and the winter is fast approaching now—the Prime Minister would call a conference with the premiers of Quebec and the provinces to deal with the fiscal imbalance. Dealing with the fiscal imbalance does not mean fixing part of it. It means that Canada would transfer $12 billion in tax resources to the governments of Quebec and the provinces. It means, for Quebec alone, a transfer of $3.9 billion, including equalization.

We were stunned when, a few weeks ago, the Prime Minister began to minimize the amounts that were supposed to be transferred to the Government of Quebec and the provinces. He also dropped the idea of holding a first ministers conference, saying that it would take a consensus of the provinces for him to act. Since when, when a government wants to correct something within its jurisdiction, that is, federal tax resources, does it wait for a consensus of the provinces before acting? That is one way to pass the buck.

The fiscal imbalance was the most important issue when the budget was passed. Now, though, we do not know what has happened to the government’s promise. We do not know whether the Prime Minister will keep his word. If he does not, he was misleading us. At the time of the last election in Quebec, the Conservative Party accidentally won a few seats because it had made a solemn promise to fix the fiscal imbalance. We are dealing now with some bills to implement parts of the budget. Still there is no mention of the fiscal imbalance. The government seems to be wriggling away and it looks as if it will not keep its promise in the next budget.

That was the grand gesture that prompted the Bloc Québécois to support the government, give it a chance, and speak about a budget of transition until the next one. We believed it at the time in light of the promise the government had made to deal with the fiscal imbalance. We will see what happens. We will still give the government a chance, but we remind it that it is on its final laps and does not have much time to race to the finish and keep its promise. There will not be any second chances, like the one we gave it in the last budget.

The fiscal imbalance is only one of the issues. There are many others about which we have expressed our dissatisfaction day after day for 10 months, including the environment, Quebec’s representation at UNESCO, and so forth. The government should not fool around with us too much in this way because when the time comes to make decisions, we will be very rigorous and determined, as we have always been for 13 years. If the government has to be defeated over the next budget, we will do so.

I would like, though, to say a few words about some particular provisions in the budget that were somewhat overshadowed by the fiscal imbalance. There were some things we were very proud about. Let me tell the House why. It was 13 years ago today that we elected the first contingent of Bloc members. At the time, there were 54 of us. We formed the official opposition of Her Loyal Majesty, Queen Elizabeth II. From that time until today, the Bloc Québécois has always defended the interests of Quebec and the interests of the people, our fellow citizens.

My Bloc colleagues get up every morning wondering how they can contribute to the advancement of their fellow citizens, work and fight for the common good, and improve the lives of the most disadvantaged in society, and how they can block a government.

This government and the previous one seem to be clones of each other. We keep asking ourselves how to do battle with a government with no compassion, which does not offer any hope in terms of improving the lives of the most disadvantaged in society or ensuring that middle income families can benefit from a favourable tax environment that adds to their well-being.

That is what we in the Bloc Québécois have always done. That is what all my colleagues have been doing in every riding, one election after another.

I am proud to have been associated for the past 13 years with a team as outstanding as that of the Bloc Québécois, one that has been standing up for more than just the interests of Quebec. Whenever the interests of the rest of Canada coincided with those of Quebec, we gladly defended them. Since 1993, we have made friends all over Canada, and particularly among the workers. Why? Because our only motivation is the common good. And when the common good of Quebec meets that of Canada, we do not hesitate to work relentlessly and even to travel across Canada to meet with workers who have lost their jobs or seniors who are being mistreated.

The Liberals mistreated older persons by ignoring their needs, by abolishing, in 1997, the POWA program and by refusing to replace it with another program. The Conservatives are doing the same after promising to implement a program to help workers 55 and older who are victims of mass layoffs. They should receive support until their retirement because a number of them cannot be retrained to work in another sector of the economy either because there is no other company around when the only company in the region has closed and there is nowhere for them to relocate to or because after 30 or 35 years, these workers who thought they had a secure job until their retirement get the short end of the stick and have to liquidate any wealth they have accumulated over the years before they can get their pension. This obviously means loss of dignity, necessary liquidating of assets and possibly going on welfare.

Let us come back to specific measures in the budget. I said I am proud to have been associated with the Bloc Québécois team for the past 13 years. The Bloc team did not just oppose government measures; it proposed alternatives for the common good. I was going over the budget and I thought these issues were discussed a few years ago, issues such as the tax credit for public transportation. My colleague from Jonquière presented this in the Standing Committee on Finance. The Liberals and the Conservatives were skeptical. Only the NDP joined us in defending the tax credit for public transportation. My colleague from Longueuil—Pierre-Boucher introduced a new bill and defended it with a view to having a tax credit for public transportation. We debated these issues and we came up with these measures. When our adversaries ask what the purpose of the Bloc Québécois is, it is because they have nothing to say. They recognize our value, our rigour and our originality. We present things to improve the lot of our fellow citizens. Now they know the purpose of the Bloc Québécois. We are described as originals who have the strength and conviction to defend the measures we strongly believe in.

For years we have been saying that a tax credit for public transportation could contribute in a small way to reducing greenhouse gas emissions. This could encourage people to take public transportation instead of driving their cars with just one or two occupants. Public transportation causes much less pollution. We have been fighting for this for years.

I was looking at the tax deduction for toolkits. My colleague from Beauport, who is also the Bloc Québécois whip, introduced that measure nine years ago. He recognized the need, especially among young tradespeople, for tax deductions for toolkits, which can cost thousands of dollars.

We were allowing lawyers and other professionals to write off their professional expenses, but we were not letting young plumbers, mechanics, and so on, do so. This measure has now been adopted, but how long did the Bloc Québécois have to fight for it? The idea made its way through the system, and we never gave up. We pushed until the government included such measures in its budget. Perhaps it did so for electoral reasons, but that does not matter because the point is that it is going through.

Since 1996, the Bloc Québécois has fought tooth and nail for microbreweries in Quebec and the rest of Canada—at least, for those that are still around. Government inertia delayed the adoption of such a measure—a measure revisited by the Conservatives—and hundreds of microbreweries across Canada and around Quebec went bankrupt, including in isolated regions where they had developed niche markets. There are still some microbreweries around in Canada and Quebec. Thank goodness such a measure exists because their competitors are being offered even more generous fiscal treatment than what the government has put forward in its budget.

This kind of tax measure would enable the microbreweries in Quebec and the rest of Canada to meet the American and European competition. I do not know if you know, Mr. Speaker, but foreign microbreweries are competing with ours. Their licences are bought by the major Canadian breweries. In this way, thanks to a licence from an American or European microbrewery, the major Canadian brewers can become Canadian and Quebec microbreweries.

This tax measure is an additional way of ensuring that the uniqueness of a product is preserved. In Quebec, the Unibroue microbrewery was one of the victims of the lack of tax measures to facilitate competition with foreign microbrewers. Unibroue made some incredible beer before Sleeman bought it, withdrew and, as an example, reduced the wide array of high quality “strong beer one lees” varieties similar to some imported European beers whose traditional production goes back several centuries.

Unibroue had been successful, without any government assistance, by fighting. I remember the president of Unibroue coming here several times. At the time, he was the president of the microbrewers of Quebec and Canada. We fought alongside him, made a common front, not to gain an unrealistic advantage but so that microbrewers in Quebec and the rest of Canada could have the same advantages as American and European microbrewers.

I can recall—there are always memories—that the major Canadian brewers did something totally disgusting. They went through the back door to push the finance and national revenue departments, saying that this kind of measure should not be brought forward. Meanwhile, they were telling the microbrewers that they agreed with them on the need for such a measure and for a reduction of the tax rate on microbreweries producing less than 75 million litres. At the same time, the major brewers were meeting with public servants and telling them that this measure should not pass and things were fine. It was unbelievable, until the microbrewers decided to take things into their own hands and not rely on the major brewers who were body checking them as hard as they could.

So that, too, was some of the long-term work of the Bloc Québécois. When I hear the hon. member for Beauce, who is responsible for economic development, say, “You will never be in power”, I think it is the height of stupidity.

What then is the purpose of a Parliament? Is it just to have a government and not an opposition? That would be a dictatorship. If those are the democratic feelings of the member for Beauce, he is not in the right place. A good government requires a good parliament, that is a government and an opposition to put it in its place, to enhance legislation, to present ideas from the representatives of the majority of the population. We should not forget that, although they are arrogant, the Conservatives are in the minority. Those of us in the opposition represent the majority of the population of Quebec and of Canada, and that has been the case in the last two Parliaments. We speak on behalf of the citizens. The member for Beauce speaks for himself. In his mind, the power is his and federal money is his money. That is not the case.

Federal money is the money of the people; it belongs to our citizens. We are here to ensure that it is spent as wisely as possible. That money does not belong to the Prime Minister, nor to the member for Beauce, nor to the Minister of Finance— it belongs to the citizens. We stand up for citizens when they ask us to represent them and to obtain action on public transit and microbreweries, because they create a great deal of employment in the regions. We also stand up for plumbers and mechanics asking for a tax credit. We are their voice.

All the opposition parties represent the majority. The arrogance of the Conservatives will only last a while.

I find that we have been very patient these last 10 months, and we will be patient for a few more. However, we have heard enough about the Bloc Québécois being good for nothing. The Bloc is here to do its job, and its job is to represent the citizens that have voted for us, by a majority, since 1993, election after election, giving us a strong majority in Quebec. If this meant nothing, if we were good for nothing, Quebeckers would not have elected us.

My colleague should be more careful about what he says, because this is very serious. He is saying that a large majority of Quebeckers—his own fellow citizens—have been wrong every time since 1993, that they are not smart enough to make decisions, decisions involving power. But what power? Does he mean the power of his citizens?

He was not even able to defend the businesses in his riding. He talked about how proud he is to be in government and to have decision-making powers. But to decide for whom? Decide for what? He could not even be bothered to defend the softwood producers or manufacturers of bicycles, clothing and textiles in his riding. And God knows, in Beauce, those are important industries, particularly the carpet industry.

We are saying we support these measures. Of course, we support them. It would be difficult to do the opposite of what we have been doing for years. We are pleased that the other parties have taken up our ideas. We hope they take them up even more. We hope they take up our idea of loan guarantees for the forest industry.

That is what Parliament is for. It is for the fermentation of ideas. It is not intended to have a few people who pretend to be something they're not—I will refrain from using a popular Quebec expression, because it would be unparliamentary—and who speak only for themselves whenever they speak. The purpose of Parliament is to ensure that the best ideas emerge, so that we have the best possible government. A minority government is usually a better government because it has greater opposition, which represents the majority of citizens. That opposition pushes the government, and pushes it as hard as it can, to ensure that the government makes the best possible decisions based on the ideas, convictions and values of the majority represented in this Parliament by the opposition parties.

I would like to talk about business taxation for the next few minutes.

Since 1994, we have consistently been ardent advocates of reducing the tax burden for businesses and individuals. It is not a question of foolishly cutting taxes to pay businesses, rather to ensure that these businesses reinvest, especially in the high-tech sector, particularly in state-of-the-art production equipment, in order to tackle globalization and emerging competitors such as China, Brazil, India and Pakistan.

For roughly nine years now, companies have received tax cuts year after year. Nevertheless, I have always lamented to the presidents of the Chamber of Commerce of Canada—from Quebec City, Toronto, Montreal and everywhere in between—that, despite these nine consecutive tax cuts, companies have not made any structural investments to cope with the competitiveness of the emerging countries.

For years we have coasted on the value of the Canadian dollar to export, and export more, and never looked past the end of our noses.

I hope that, after everything we have seen in the past few years, we will ensure that further tax cuts in the budget will be used by business leaders for taking charge and making investments because the competitiveness—the productivity—of a company is not just about the employees. Make no mistake. It is a matter, above all, of equipment, of constant investment in high technology to compete with the best in the world. And that has not been done.

Businesses have not shouldered their responsibilities.

In my opinion, there needs to be a threefold strategy: require entrepreneurs to invest in new technology and modern equipment; support victims of rationalization—I am talking about older workers and POWA, among other things; and fight unfair competition.

Often the competition from our trading partners is unfair. However, Canada does nothing to fight this unfair competition the way other, European countries are fighting it so feverishly.

Budget Implementation Act, 2006, No. 2Government Orders

5:10 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, recently the Auditor General completed her work on the financial report of the Government of Canada for the year ended March 31, 2006 and a surplus of $13.2 billion was reported. The learned member has spent a lot of time on the finance committee and he would know that because that fiscal period has ended, the moneys automatically must be applied against the debt. Notwithstanding the paydown of that amount of debt, it does result in an ongoing savings on an annual basis of some $600 million. That represents the true savings to Canadians by paying down debt.

I raise that because the latest report is that there appears to be a surplus of some $4 billion for the partial current fiscal year reported on now.

The member will know that the existence of a surplus does not necessarily mean the surplus will exist by the end of the fiscal year, and that again, the only amount that could be available for ongoing expenditures by additional programs would be the savings on interest.

I am wondering if the member is asking that the amount of the reported surplus in excess of the surplus reported for the prior year in the same period should be invested in further program spending. Would that not represent responsible government?

Budget Implementation Act, 2006, No. 2Government Orders

5:10 p.m.

Bloc

Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Mr. Speaker, I thank my Liberal colleague for his question.

For several months we have known that the surplus would be close to $13 billion. Furthermore the Bloc Québécois, since 1997 or 1998, or since the first federal government surplus, came very close, even a year ahead, to the surplus forecasts year after year. We succeeded in making surplus forecasts with a margin of error of 2% or 3%. It was predictable.

I would like to take up a point that my colleague made earlier. He said that, at the end of the year, the unexpected surplus must be applied against the debt.

The Liberal Minister of Finance predicted the surplus. He knew that there would be a surplus. We were able to do it with the help of a calculator. So with his array of public servants he was able to do the same thing as us.

It is inaccurate to say that at the year-end any unexpected surplus has to be applied automatically against the debt. Within a few months of the fiscal year-end, it is possible to know that there will be a large surplus. It is possible to know, before year-end that this surplus will be of a certain order of magnitude.

There is something I blame the Liberals, the former Minister of Finance and also the former prime minister, for not doing. A few months before the fiscal year-end, we could have created a trust, as has already been done in Quebec—I think it was Ms. Marois who was Minister of Finance at the time—and made a legislative commitment that any unexpected surpluses would be deposited to this trust for allocation to some fundamental missions such as transfers for health, post-secondary education and so on.

Already, before the year-end, we could have planned a use for these funds and put them in a trust. We could have done so. We could have been more balanced than the imbalance presented since 1997-98. The current Minister of Finance presented the whole thing with great pride, the big cheque in the background, saying that $13 billion was being paid towards the debt when everything was falling apart all over the place. We need only think of softwood lumber, the textile and clothing sector, and older workers. There would have been a way to be a little more balanced than what has been managed so far.