House of Commons Hansard #12 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was c-7.
Stephen Harper ConservativePrime Minister
Mr. Speaker, the leader of the Liberal Party should admit that he would tax income trusts. That is the Liberal Party policy.
I think we have to put this in context. Income trusts have not paid any taxes. They will not pay taxes for years.
In the meantime, there are generous rules to allow those income trusts to grow, tax free. When they are finally taxed they will pay the same low corporate taxes as everyone--
Stéphane Dion LiberalLeader of the Opposition
Mr. Speaker, in the last election, the Prime Minister told Canadians that “there is no greater fraud than a promise not kept”, but since being elected he has broken his word on income trusts, on the Atlantic accord, on accountability with his in-and-out scheme, and on so many others.
How can Canadians now believe anything he says?
Stephen Harper ConservativePrime Minister
Mr. Speaker, that is quite an incredible question from the king of abstentions, who on Monday drew a line in his sandbox. The line was that he would never tolerate a decrease in the GST and today he is going to let one pass. Imagine lectures from a guy like that.
Michael Ignatieff Liberal Etobicoke—Lakeshore, ON
Mr. Speaker, a year ago the Conservative government destroyed the retirement savings of more than a million Canadians. It also destroyed an investment vehicle that raised capital for the energy sector. Income trusts were left as sitting ducks, ripe for foreign takeovers, 32 in all.
As Americans take over income trusts, the tax leakage problem the minister wanted to fix only gets worse. Why does the Prime Minister refuse obvious remedies? Why is he doing nothing and what is he going to say to those who lost their savings? Tough luck?
Jim Flaherty ConservativeMinister of Finance
Mr. Speaker, yesterday, the Liberals brought to Parliament Hill an American couple who wanted to complain about Canadian tax policies. That is what they want to defend.
More than half the energy trusts were owned by Americans. Do members know what they were paying? They were only paying a 15%--
The Speaker Liberal Peter Milliken
Order, please. I urge all hon. members to exercise more judicious control. We cannot hear the answers or even the comments that are being made there are so many at one time. The hon. Minister of Finance has the floor. We will have some order, please.
Jim Flaherty Conservative Whitby—Oshawa, ON
Mr. Speaker, the point is that we on this side of the House are levelling the playing field for all Canadian taxpayers, not defending special treatment of a 15% tax rate for American investors.
Michael Ignatieff Liberal Etobicoke—Lakeshore, ON
Mr. Speaker, what is the level playing field here: 31.5% for income trusts and 15% for other corporations? There is no level playing field at all.
Today the government still has not offered anything to Canadians who were punished by this government's incompetence regarding income trusts.
What is the government going to say to Canadians who lost their retirement savings? Tough luck?
Jim Flaherty ConservativeMinister of Finance
Mr. Speaker, the taxation of income trusts does not begin for several years. That is to give it time to adjust. At that time, it will be a level playing field. Regardless of the way Canadians choose to organize a corporate structure, the rate of tax will be the same.
That is what a level playing field is and, in fact, the level will be way down. Because of the announcement yesterday in the economic statement, we are reducing taxes for all Canadian businesses dramatically. It is a new era in Canadian taxation.
Gilles Duceppe Bloc Laurier—Sainte-Marie, QC
Mr. Speaker, on page 30 of the economic statement, a chart on the manufacturing industry speaks for itself. All the manufacturing sectors have had negative GDP growth since 2005 except one, and, surprise, it is the oil sector.
Can the Prime Minister confirm that the manufacturing industry has been going through a major crisis, if not a recession, since 2005?
Stephen Harper ConservativePrime Minister
Mr. Speaker, this sector is clearly in crisis. That is why we addressed this problem in the throne speech, which the Bloc Québécois voted against. The fact is that this government made a commitment to lower taxes for all Canadians, and this government kept its word.
Gilles Duceppe Bloc Laurier—Sainte-Marie, QC
Mr. Speaker, we voted against the throne speech because although it states that there is a manufacturing crisis, the government is not doing anything about it.
The economic statement says that there has been a 3% decline and that 130,000 jobs have been lost, yet the government is doing nothing. It is lowering taxes. Most manufacturing companies are not turning a profit and therefore pay no tax. The fact is that the tax cuts are a big gift to the oil companies, which are making huge profits and will get huge deductions, not to the companies that are making no profit and are in crisis.
Stephen Harper ConservativePrime Minister
Mr. Speaker, this government is going to reduce taxes for all companies, for all individuals and for all families in Canada and Quebec. The real reason why the Bloc is voting against benefits for people is that the Bloc has never accomplished anything for any sector in Quebec. The Bloc will never do anything for any sector.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, the Bloc members have always served Quebeckers. That is why they have been re-elected five times in a row.
The Minister of Finance is hoping that lowering the GST will boost consumption. I should point out that people with low incomes who spend 70% of their resources on food and housing do not pay GST on those items.
Does the Prime Minister realize that reducing the GST will not help these people make ends meet, that his lack of compassion will have a major impact on them and that there are two classes of citizens in this budget?
Jim Flaherty ConservativeMinister of Finance
Mr. Speaker, the tax reductions yesterday for individuals and families in Canada are very substantial. In fact, they are about $45 billion for this year and the next five years.
Not only that, but the income tax reductions for individuals and families are retroactive to January 1 of this year. As soon as we get into the new year and Canadians start receiving their T-4 slips, they can file their income tax returns and get the big rebate cheques.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, people who receive the GST credit will not be getting the same kinds of benefits that others—such as oil companies with their millions of dollars in tax cuts—will get.
The minister has not offered anything to help the ailing manufacturing sector, specifically small and medium-sized Quebec exporters. Reducing the GST does nothing to make Quebec's manufacturing sector more competitive compared to other players, such as China.
Can the Minister of Finance explain why his economic update ignored the Government of Quebec's requests for real help for Quebec's struggling manufacturing sector?
Jim Flaherty ConservativeMinister of Finance
Mr. Speaker, yesterday was an economic statement. In the spring we had the budget.
As the member opposite knows, there is a major accelerated capital cost allowance in budget 2007 permitting manufacturers to write off new machinery and equipment over the course of two years. It is a 100% reduction.
If the member opposite wants to see how that is working, he should look at the graph on page 29 of yesterday's economic statement. He will see the increased spending on machinery and equipment. It is a tremendous upward effort. This is good for Canadian manufacturing.
Jack Layton NDP Toronto—Danforth, ON
Mr. Speaker, the Conservative government was already headed rapidly in the wrong direction with this country but now that the Liberals have rolled over and joined with the Prime Minister in coalition, what we see is Canada going in the wrong direction even faster.
With this mini budget, the government has gutted its financial capacity by $190 billion, fully one-fifth of the entire budget. At this rate there will be no Canada as we know it in five years.
Why did the Prime Minister decide to cut $14 billion from the big profitable corporations and not invest in people in communities?
Stephen Harper ConservativePrime Minister
Mr. Speaker, I think it is significant that the NDP calls nearly $200 billion a tax reduction, not just for companies but for individuals and families, as gutting Canada. That is the view that the NDP says out loud and stands beside, that the Liberals abstain on and hide behind, but that is the real view of both the Liberals and the NDP. They believe high taxes are good for the country but we believe low taxes are good for the country.
Jack Layton NDP Toronto—Danforth, ON
Mr. Speaker, the Prime Minister should be kinder to the one who has given him a virtual majority in this House.
Banks are raking in profits to the tune of $19 billion, and oil companies are pocketing $21 billion. Thanks to the support of the Liberals, the government is giving over $14 billion to big business in Canada.
Why is the government not investing in the services that people and communities need right now?
