House of Commons Hansard #151 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was companies.
The Deputy Speaker NDP Bill Blaikie
I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed a certain bill.
The House resumed consideration of the motion
Robert Thibault Liberal West Nova, NS
Mr. Speaker, it is a pleasure to speak to the motion, a little earlier than anticipated but never too early.
This is another example of the Conservatives not having a plan to govern. We see this budget not as a plan for Canadians, nothing to aspire to, as the title would say, but as an interim document, a regroupment of sound bytes bringing us to an election.
The Minister of Finance had no intention of putting in place this elimination of the deductibility of interest for foreign investments. He did not know how to do it. He had no interest. It was a quick sound byte. It was tax fairness. He knew there would be some opposition to it and he would talk about tax fairness. In 20 seconds he can explain his side very well. However, now he has had months and all we hear are reversals where he is saying, no, not the elimination of interest necessarily but the double deduction of interest. Next week it will be something else.
I understand that on Monday he will be making a statement on this. I hope somebody is writing this one for him. I hope he has talked to people within the department. I hope he has talked to experts. I hope he is talking to the business community. I hope he is looking at what is happening in the international community, what we are competing against, what the people who are providing jobs must face day in and day out in that global business environment, and that he comes out with something that has a bit of logic.
We have seen a lot of this. We have seen during the campaign and the years before the campaign in my riding where they said that they would fix the problem of the Port of Digby. During the campaign, finally, we got the arbitrator's report on the Port of Digby. An arbitrator had been called in after serious allegations had been made by a member of the Conservative Party, questions that deserved to be looked at, I agree 100%, when the member from Colchester raised them, but the arbitrator came out and said that it was not the operators of the port who made the mistake, but that it was the federal government in the transfer.
It is true that the Liberals were in power at the time of that transfer. It was a mistake made by Transport Canada. It was previous to my being elected but it was a mistake by our government.
Now the Conservatives have the power. They have made the promise that they would fix it. Is has been 16 months and we have seen no action. The same lines are being furnished by that department.
Then we look at income trusts. They made the promise during the campaign that it would not tax income trusts. What happens? The first thing they do is tax income trusts: $25 billion to $35 billion of savings, primarily of seniors, lost, which is an unimaginably huge amount.
However, also important is the question of the hollowing out of Canada's corporate assets. These entities do not cease to exist. The ownership changes hands. If there is no vehicle to have that ownership within Canada, the ownership ends up in other countries, which is what we are seeing. We are seeing these valuable resources go to other countries.
There were problems with the income trusts in the way in which they were going but rather than surgically looking at the problems and fixing them, kapow, they dropped a nuclear bomb and wiped out the whole thing, except for real estate, which some of his friends must have understood because he agreed that it was a good vehicle for real estate investments and left the REITs, but they took out the other ones.
When the governor of the bank was before committee he said that there was a problem with income trusts and a problem with governance but that for certain investments, for certain sectors it was the proper investment. Energy was named as one of them.
I would like to advise the Chair that I will be sharing my time with the member for Scarborough Centre.
That was a fiasco with income trusts. Then we come to this famous question where we look at interest deductibily.
I will give an example of a company that is in manufacturing in Canada, that is in the transformation of products, raw materials, to manufactured goods. Let us look, for example, at the aluminum sector. To produce aluminum there needs to be energy and raw materials. One of them is bauxite. Sometimes, as a corporation competing on the market with international corporations, subsidiaries in other countries have to be bought. Mining operations have to be opened to get the bauxite. The way to do that is to borrow money, either domestically or internationally, and that has a cost, operate those facilities, and get the product, guarantee the resources, and guarantee to be able to continue to operate.
If the Minister of Finance's budget had put this in place, and the member just mentioned it, Canadian companies would no longer be competitive. No longer could companies compete with Spanish companies, American companies and European companies. They would be out of that market.
What is the only choice then? Sell the head office to a country where they can use that interest deductibility. There is no choice whatsoever.
I will give another example of the hollowing out. In military purchasing the Conservatives decided that to speed things up and give their chosen contractors all the work, that they would go with original equipment manufacturers, not only for the equipment, not only for the planes for example or the helicopters, but also for the in service support.
That in service support is very important because that is where Canadian companies have potential. That is where we can build. That is where we can develop and that is where we can compete.
I pay particular attention to I.M.P. out of Halifax, a home grown company. An immigrant came to our country and saw the potential, contracts with the military to work on Auroras, helicopters, Sea Kings, and 50% of his work is with the Canadian military. That gives him the capacity to compete internationally.
Out of Halifax and Quebec there are about 5,000 employees competing and selling in over seven or eight countries. He is providing about 5,000 jobs. There are a lot of people that I know who are retired military technicians. They go on to very gainful employment working for that company, creating value within Canada, competing with multinationals.
Now what is the situation? We have the contract, we hear, that Boeing is going to spend dollar for dollar on this contract in Canada. What the minister does not tell us is that Boeing gets to choose who it uses.
Imagine if I am a contractor and all of a sudden I have to go and beg rather than compete for my work with somebody who already has all the government work. He is guaranteed it. I have to go and beg for a little slice of that.
I would imagine that if that contractor is bidding against me in international markets that he is going to tell me that if I am going to get that work then do not bid against him on the international market. If I bid then I will be squeezed out of the Canadian market.
What is the result of that? Compound that with the ITAR rules that tells this employer who he can hire, what information he can have, and what data he can have. Then what happens to this company? There is no choice but to sell outside of Canada, to sell to another company. This is another example of hollowing out our Canadian assets.
I am not one of those economic nationalists who will say that we have to have all sorts of rules to make sure that nobody can compete to own Canadian companies. I believe that, given the right set of circumstances and a level playing field, our Canadian companies can compete in the world. We can buyout in other nations. We can compete with everybody.
But if we look at income trusts and if we look at OEM and ISS, and if we look now at interest deductibility, we are tilting the playing field away from Canadian companies. We are removing their competitiveness and all of a sudden they have no choice but to sell.
How can we ask these Canadian companies and shareholders within Canadian companies, to risk all the capital, the pensions, the future pensions of these shareholders who are the workers in our communities, and to risk everything to compete in a market where they are disadvantaged? I certainly hope that on Monday when the Minister of Finance does another flip-flop that he falls on the proper side this time.
Ed Fast Conservative Abbotsford, BC
Mr. Speaker, my colleague is a well-respected member of the House, but the problem is that the more time one spends away from one's community, from one's riding, the greater the tendency to forget what hard-working Canadians actually go through trying to build and protect their families and make a life for themselves.
It is evident in the member's comments that this has happened to him because when hard-working Canadians are asked whether billion dollar corporations should be paying tax or be entitled to put their money offshore in trusts, or should be able to double-dip in terms of deductibility of their investment, they will say, no, they are working hard enough as it is. They do not want billion dollar corporations to get extra benefits and pass that burden on to hard-working Canadians who are trying to raise families to be respectable.
I had to ask myself, why is it that the Liberals in the House oppose tax fairness and then I remembered. It is that party that over 13 years had the sponsorship scandal, the HRSDC boondoggle of billions of dollars, the $1 billion gun registry boondoggle, and special favours for friends and insiders. And it suddenly made sense. They have been doing it for 13 long years and they still do not get it.
Why does the member oppose tax fairness for ordinary, hard-working Canadian families?
Robert Thibault Liberal West Nova, NS
Mr. Speaker, the member raises a lot of accusations as to our former government, but he cannot even find in his bag of tricks over 13 years anything equivalent to $17 billion of untendered contracts given out within the week that we have seen by this government.
Our party supports tax fairness. We do not want to see people abuse offshore havens. If there are loopholes that need to be closed, we should close them.
What we do not agree with is tax stupidity. We do not agree with the minister standing in the House and trying to get on the news one day by putting forward an unplanned, unadvised, ill-advised little 20 second blurb that scared the whole corporate world.
People in my riding work hard at places like I.M.P. and Michelin North America. If they do not work in large industries like that, or Michelin Tires, they have pension plans invested in Canada's corporate sector and they need that corporate sector to have a level playing field. They need job growth in Canada, so that the Government of Canada can get revenues from corporations and from individuals to provide the necessary programs.
We cannot tilt the playing field away from our companies and expect that they are going to compete in the global environment in this very difficult business world. They were doing it well during our term as Liberal government.
The Deputy Speaker NDP Bill Blaikie
Further questions and comments. The hon. member for Timmins—James Bay.
Charlie Angus NDP Timmins—James Bay, ON
Mr. Speaker, I am surprised that I am hearing today the Liberals talking about the hollowing out of corporate Canada when the real hollowing out happened under the income trusts. Strong corporations have a duty of course to pay out to their investors but also a duty to reinvest and to build the corporation to create more income, more jobs, and then of course part of that obligation is to pay taxes.
We were seeing more and more companies becoming basically a tax haven and then being eaten out from within in dividend payouts. I support all the people who invested in them because certainly they wanted a return, but the fact was that the Bank of Canada said that these were inappropriate business structures. We heard that they were often overvalued by some 40% in some cases.
There was $200 billion in moneys that was no longer taxable and was becoming part of the tax haven. The hollowing out happened under the whole income trusts that was supported by the former finance minister when he said he would do no such thing to deal with this massive tax loophole that was created and the Liberal Party ran on that record.
The real hollowing out happened when the Liberal government was in power. It is not happening now. We are in a different situation now, but he has to--
The Deputy Speaker NDP Bill Blaikie
Order. I am going to try to give the hon. member at least 30 seconds to respond.
Robert Thibault Liberal West Nova, NS
Mr. Speaker, I agree with the governor of the bank who said that there were problems within governance, within the income trust sector, but I also agree with him when he said it is the right vehicle for certain types of corporate investments in Canada.
Rather than fix the problem we took a nuclear bomb and wiped out the whole sector. That is like burning a forest because there are a few diseased trees. In my neck of the woods, we do silviculture for problem trees. We do not burn the forest.
John Cannis Liberal Scarborough Centre, ON
Mr. Speaker, I looked forward to participating in this debate only because following the debate throughout the day, I cannot help but start off by saying that there were certain comments made by the government benches, the NDP and the Bloc that were really, in my view, and I do not want to use the word “misleading”, sending the wrong kind of signals to Canadians as to what this motion, brought forward by the leader of the Liberal Party, the hon. member for Saint-Laurent—Cartierville, is all about.
For the record, I want to read the motion before I make my comments, so that Canadians out there understand what this Liberal team is trying to do. The opposition motion states:
That, in the opinion of the House, the government's mistaken policies with respect to interest non-deductibility--
And I underline that.
--and income trusts are making it increasingly difficult for Canadian businesses to succeed internationally, while making Canadian businesses increasingly vulnerable to foreign takeovers, thus putting Canadian jobs, head offices and investment at risk and contributing to a hollowing out of Canadian enterprise;
and this House calls upon the Prime Minister to instruct his Minister of Finance to resolve these dangers by withdrawing his interest non-deductibility proposal--
That is what it is all about.
--and entering into meaningful public consultations on appropriate measures to combat tax abuses,--
This is what the Conservatives are talking about, which is what they want, which was what was just mentioned by my colleague, the former speaker. It goes on:
--and by withdrawing his proposal to tax income trusts and replacing it with the Liberal alternative as summarized in the 14th Report of the Standing Committee on Finance, presented on February 28, 2007.
That is what we are debating today. We are not debating the HRDC boondoggle that was mentioned a minute ago, which sadly, those innuendoes of that day moved the government forward to create an inquiry that cost us millions of dollars to prove what, Mr. Speaker, and I know you remember this very well?
The result that came out was that $64,000 could not be allocated, but continuously, until this very day, attempts are made to mislead and camouflage that whole issue and mislead Canadians by calling it the $1 billion boondoggle. There was never a billion dollars lost.
I will not talk about that. I want to focus on this issue. What is puzzling here is this. Prior to the last election and during the campaign of the last election, the current Prime Minister, the then leader of the opposition, stood up and made all these wonderful promises because, yes, there was an initiative at that time.
There were comments from the Liberal government of the day to look at income trusts. We just did not react to it. We did not wake up one day and say that we would make these changes, especially when we addressed this area, which has an impact not only on corporate Canada but on the lives of many people, and more specifically, seniors who wisely invested so that they could have a better future in their golden years.
Seniors took confidence and accepted the word of the then leader of the opposition, the current Prime Minister of this so-called new Conservative government, and they felt comfortable.
There were many people I know who, on that issue and that issue alone, decided to cast their vote, and rightfully so. That is democracy. That was the most important issue for a certain segment of our society and they decided to vote because the Conservatives made a firm commitment that they would not tax income trusts.
It is all very well documented here, not innuendoes, and as I said earlier today in my questions and comments period, as did the member for Kings—Hants and other members, “Do not listen to what we have to say, here are comments from third parties, third party endorsements”.
They quoted Diane Francis, who is not necessarily a Liberal. They quoted Premier Danny Williams of Newfoundland and Labrador and the Premier of Nova Scotia, who today are saying, without any hesitation, that the government misled Canadians. It made a promise in terms of the Kelowna accord and today it reneged on it.
A similar commitment on the Conservative campaign was made with respect to income trusts. The current Prime Minister, for example, talked about fairness and protection. He stated:
The commitment...was not that we would have no taxes for Telus. It was not that we would have no taxes for BCE. It was not that we would have no taxes for foreign investors, or no taxes for major corporations. It was a commitment to protect the income of seniors.
I have had emails, letters and phone calls from seniors, who quote a $30,000 impact. One senior says that he has been impacted to that specific figure. The Prime Minister broke his commitment to the widow of a veteran. In writing he said that the moment the Conservatives assumed government, they would address the VIP program. He has gone back on the income trust commitment.
Think of it this way. Once that message was sent out, people are influenced, invest their savings and feel confident. All of sudden they have the rug pulled from under their feet. All of a sudden seniors are sending emails. As I said, I prefer not to make my own comments, but pass on the comments of other people.
Ton and Ethna Anderson say:
A broken promise is a broken promise. The current government broke its promise not to tax income trusts. These actions have seriously lessened our confidence in the government's ability to govern with honesty and integrity. Our investments and the investments of thousands of Canadians, especially seniors like us, have suffered greatly. We reject the government's claim that destroying existing trusts was necessary to prevent further conversions. We urge you to do whatever you can to get rid of the [Prime Minister] and the [Minister of Finance and to hold them accountable].
Here is another one. The Secretary of State (Multiculturalism and Canadian Identity) had a meeting in his constituency. Bill Fisher sent this and stated as follows:
We worked hard to elect a Conservative government, and we were rewarded with betrayal. [The Prime Minister] promised one thing and did another. That's a lie. A 35 billion-dollar lie. Calling manure a rose doesn't change the smell. [The Secretary of State (Multiculturalism and Canadian Identity)] spoke a lot of rose at the meeting, but few were fooled. He and [the Prime Minister] need to listen to Ralph Klein and recant, repent, and reimburse investors and seniors. You can't reward lying politicians by voting for them.
I assume Bill Fisher is from the minister's riding.
I have another one from the Martinson family. The letter states:
[The Prime Minister] conned people into thinking it was OK to invest in trusts then pulled the rug out from under us.
The government has successfully made it SOUND like it was NO TAX MONEY from businesses involved in the Income Trust structure and people seem to be buying this. I feel it is important that it be made clear to the Canadian public that Governments get lots of tax money due to Income Trusts.
It goes on and on.
I will close with another one from Elmer Sather from Surrey, B.C. He stated:
I am speechless, and in shock over how fast these Income Trusts are being taken over by foreigners.
I quoted this one last, though there are many others, only because the motion really deals with that.
It really has to do with a level playing field, of which the Minister of Finance said yesterday. This does not create a level playing field. Canada should not be the Boy Scouts of the world. If everybody out there internationally wishes to implement the same rules, what is good for the geese should be good for the gander and we must not, we should not weaken corporate Canada. After all, they create the jobs to create the revenue for a prosperous Canada.
Rick Dykstra Conservative St. Catharines, ON
Mr. Speaker, if this were the old wild, wild west and the member for Scarborough Centre were a gunslinger, I would not belly up to any saloon and have a drink with him because of the way he shot around and spoke about the breaking of commitments.
It is not too difficult for the member to turn around and look back at the record of his government for 13 years, of broken commitments, starting with the GST in 1993. I guess I could take up a whole lot of time to talk about it, but I want to get at a couple of questions.
The first is on employment insurance and small business. The member spoke about the importance of and the need to deliver for business in our country. At the same time, there is private member's bill after private member's bill from that party supporting an increase on small business of the cost of employment insurance, without regard for anything more than trying to ensure that these small businesses can employ folks. I would love to get his comments on why he supports those private members' bills.
Also, I want to remind the remember that as a member of the Standing Committee on Finance, we travelled all across the country with respect to consultation. In fact, there were 450 presentations from every sector, from business, from the private sector, from individuals, from non-governmental organizations.
Members of his party participated on the finance committee. How can he stand in his place and say that consultations did not take place?
John Cannis Liberal Scarborough Centre, ON
Mr. Speaker, before I answer the member, I will put a challenge to him on the GST. I am prepared to resign my seat, put my seat up against his, if that is what was said in the red book. I challenge him on that. Either he resigns or I resign. That is the challenge I put to him so we can clarify the issue of the GST.
The member from Hamilton said she would get rid of the GST or she would resign, and she did. Then she was re-elected. If the member wishes to take me up on that challenge, I put it publicly on the record.
Tom Lukiwski Conservative Regina—Lumsden—Lake Centre, SK
Are you going to make a campaign promise, John?
John Cannis Liberal Scarborough Centre, ON
I put the challenge, and if I have anything to worry about, he can let his colleague take up the challenge. By all means, it is on the floor, and I made this public.
When this party came as the Reform Party, then the Alliance, then whatever, it keeps changing names every year, it said that it came to Parliament to represent the people. Over 91% of the people answered various questions, which I do not have time to list. On average of 80% do not agree. If the Conservatives believe that they are here to speak on behalf of their constituents, they should put their money where their mouths are and listen to the people.
Alexa McDonough NDP Halifax, NS
Mr. Speaker, I have listened very carefully to the comments by the member for Scarborough Centre. I do not disagree for a moment that many Canadians were very upset with the reversal of the Conservative position set out during the election with respect to income trusts. It has to be regretted that many people were harmed by that.
In fact, some of the biggest and wealthiest of the corporate elite in Canada tell us that there will be massive financial implications for them in the double-cross of the Conservatives. However, it is also appropriate for us to note that modest income people, in some instances, particularly seniors, have been hurt by that.
Without any hesitation, the New Democratic Party, which has had a long-standing position on this issue, absolutely and clearly committed to a phasing out, in a responsible way, income trusts. It is a position that I and my party stand behind. The rationale for that position was not only set out very well by the NDP finance critic, the member for Winnipeg North, but also by witness after witness before the finance committee.
How can the hon. member for Scarborough Centre and his party completely ignore all of that accumulated evidence? Why does his party not recognize that there is a massive, well-funded lobby being conducted now by the corporate elite around this issue because of their own immediate interests, not the long term financial interests of either Canadian corporations or the Canadian economy at the heart of their position?
John Cannis Liberal Scarborough Centre, ON
Mr. Speaker, if the member noticed my comments were focused primarily on the impact on the lives of our seniors.
I said earlier today that we are talking about a segment of our society who are no longer income generators. They are dependent on what they have saved, what they have managed through proper channels so they could have a better life. For example, the Metcalfe family, which had been counting on $1,200 a month, is financially wiped out.
I agree with the member. I believe over a period of time we could have looked at ways and means of addressing this in the proper way so corporate Canada could also be in a position to sustain and adapt and protecting jobs.
Opposition Motion--FinanceBusiness of SupplyGovernment Orders
Regina—Lumsden—Lake Centre Saskatchewan
Conservative
Tom Lukiwski ConservativeParliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform
Mr. Speaker, I will be splitting my time with the hon. member for St. Catharines.
I will start off my comments by saying I find it almost amusing to hear some of the comments coming from the members opposite, particularly the member for Scarborough Centre, who just finished speaking. He made many comments quoting campaign commitments that this party and this government made in the last campaign with respect to income trusts.
He is quite right. We said that we would not tax income trusts. We ended up doing just that. The Prime Minister has stated publicly for the record that it was the toughest decision he ever had to make, but he also explained the reasons why. We were rapidly moving into an income trust society with the announcements from BCE and Telus that they were planning to move into income trusts.
What the member for Scarborough Centre continued to say, and the example he tried to present, that once we make a commitment, we cannot, come hell or high water, go back on that commitment. He used example after example.
I am confused. I remember back prior to the 2006 election when the former finance minister, the hon. member for Wascana, mused out loud whether the government at the time, the former Liberal government, would want to tax income trusts.
We all know the story. The markets went crazy. Insiders on Bay Street seemed to profit from his announcement. He finally came back and, in my opinion, due to a lack of political courage, made the statement, “We will not tax income trusts”. It was a commitment. Yet now, in the motion before the House, the official opposition is talking about a 10% tax on income trusts, not the 31.5% tax that we had said, which would level the playing field between trusts and other corporations. The Liberals are saying that they would tax it 10%.
The member may not be in a position to answer this question. How do we square that circle? On the one hand he is accusing the government of breaking a commitment that he says should be firm and cast in stone, not to tax income trusts. Yet the Liberals made the same commitment, but now they are saying that they will tax it at 10% only.
Are the Liberals breaking a commitment by degree? Are they suggesting that perhaps on the one hand the government of the day, because the Liberals happen to be in political opposition, cannot break a commitment, but they can, that it is okay as long as it is less than the taxation system the Conservatives want? It does not make any sense. He is saying a commitment is a commitment, yet with the Liberals apparently a commitment is not a commitment.
We have seen this act before. I have seen this movie many times before, flip-flop after flip-flop. We see it continually in the House every time we seem to have a controversial vote. The opinions and the position that the Liberals took when they were in government is contrary to the position they are now taking as the official opposition.
A case in point is the recent Bloc Québécois private member's bill, Bill C-257,, which dealt with replacement worker legislation. This type of private member's bill, this initiative, has been before the House over the past number of years at least 11 times. When the Liberal party was in power, when it was the government of the day, every time that private member's bill, or that suggestion came forward to ban replacement workers, that party opposed it, vehemently, vigorously and without question.
However, now that the Liberals are in opposition, they support it. In fact, even though Bill C-257, was defeated, a Liberal backbencher is now introducing yet another private member's bill calling on the ban of replacement workers.
For anyone on the Liberal side of the House to suggest that this government has a problem honouring its commitments, I suggest they take a good hard look in the mirror.
It is not just Bill C-257. We have seen time and time again the Leader of the Opposition, since he has been elected leader of the Liberal Party, continually change his opinion on very important matters. This speaks to the lack of credibility that I think most Canadians have with the Liberal Party these days.
Let me give members a few examples. First, let us talk about what seems to be the favourite subject of the Leader of the Opposition, which is Kyoto. There was a time not too long ago, and of course we have all the quotes if the members opposite would care to listen to them once again, when the leader of the official opposition party said that--
Roy Cullen Liberal Etobicoke North, ON
Excuse me, Mr. Speaker, but I will say for the member for Regina—Lumsden—Lake Centre that I am not sure how the references to Kyoto and other matters are tied into the discussion of the motion before us today. I think he is wandering. I would like him to come back to the topic at hand.
The Deputy Speaker NDP Bill Blaikie
He is wandering, but he was staying close enough to the post. The leash is still attached. If he breaks away, I will be sure to call him to order.
Tom Lukiwski Conservative Regina—Lumsden—Lake Centre, SK
Thank you for your wisdom in that ruling, Mr. Speaker.
Of course, the point, as the hon. member knows quite well, is that I am trying to establish the lack of credibility that the party opposite has on any motion it brings before this House. I think we have established that. Of course the members opposite do not want to hear this and I do not blame them for not wanting to hear it. If I were in their position, I would not want to hear this story again either, but Canadians do want to hear it, so let me go back to the point I was attempting to make.
The Leader of the Opposition is flip-flopping on positions. The point I am making is that if he flip-flops in the examples I am about to give, how can we count on him to be sincere in the motion the Liberals have brought before the House today? Clearly we cannot.
On Kyoto, we do have the quotes. The leader of the official opposition has stated that we cannot make our Kyoto targets. He is on the record as stating that. He was the environment minister in the previous Liberal government and he has stated on the record that we cannot meet our Kyoto targets.
What do we hear today? Time and time again, criticisms are leveled at this government for what the opposition leader says is a failure to meet the Kyoto targets, the very targets the Leader of the Opposition said he could not make. He could not meet those targets by 2012. How can we believe anything the Leader of the Opposition says?
Let us turn to economic matters. That may be a little closer to the heart of this issue that we are debating today. There is still a credibility gap when it comes to members of the opposition. Again, we can point first and foremost to the leader of the official opposition, who has stated on more than one occasion that he did not believe there was anything such as a fiscal imbalance. He did not believe, for example, that there was anything called a fiscal imbalance, yet when we introduced measures in the last budget to fix the fiscal imbalance between the federal government and the provinces, all we heard was criticism from members opposite.
We can talk about things like the equalization formula, on which the Liberal leader has stated that, first, he believes in a fiscal cap. He believes sincerely that no province that receives equalization payments should end up in a fiscal position with a fiscal capacity higher than that of a province that pays into the equalization formula.
That is exactly what we did: we put a cap on to prevent that very thing from happening. Yet what do we hear from members of the opposition? Criticism. They say this is a betrayal of our position. There is no betrayal. We are doing what is fair, what is just, and what is in the best interests of all Canadians, yet members opposite criticize it.
We also have examples in regard to my colleague, the member for Wascana, who, when he was minister of finance in the former Liberal government, stated, he did not believe that there was any fiscal imbalance in this country. He also stated that he was not in a position to remove non-renewable natural resources from the equalization formula, nor would he agree to. In fact, for 13 years, the last three in which he was minister of finance for this country, the Liberals did nothing to deal with the equalization formula.
True, they gave, and again, it is about credibility: the Liberals say one thing when they are in government and another when they are in opposition. How can we believe anything they say now? How can Canadians believe anything they say now? That is why for any motion this government brings, whether it be on income trusts, fiscal caps or the environment, how can one believe anything the Liberals say because of the fact they have changed their position so many times in the past?
Let me conclude by saying that what we have done with our position on tax havens and double-dipping is to ensure that there is a level of tax fairness for all Canadians. Once again, this goes back to the flip-flop and members opposite, such as the member for Markham—Unionville, who has stated he believes there should be no double-dipping. He believes there should be a crackdown on tax havens. Yet day after day in this House in question period, the same member stands up and criticizes the Minister of Finance for doing the very thing which he advocated.
That party has no credibility on any issues and particularly on this motion, and that is why I will be voting against it.
Roy Cullen Liberal Etobicoke North, ON
Mr. Speaker, clearly the member for Regina—Lumsden—Lake Centre has not read the motion or he would know that our motion asks the government to respond in a certain way. Reliability does not come into the equation, nor do all the other issues that he talked about.
Nonetheless, I share the concern of my colleague from Scarborough Centre. Many people in my riding relied on the word of the Conservative government when the Conservatives said they were not going to tax income trusts. People made investments based on that and have been hurt significantly.
We know that we had to do something with income trusts. In fact, the member for Wascana brought in some measures to reduce the taxes on corporations. With the benefit of hindsight, that may not have been enough, but the finance minister is bringing in an elephant to kill a mouse. He is probably trying to be decisive, which is the latest catchword around here, but one does not bring in measures and throw the baby out with the bathwater.
We know that income trusts were working for the energy sector and for real estate. The government could have done much more in terms of grandfathering. Even if it had to bring in measures, it could have done something on grandfathering so that at least those people who made those investments would not have been injured.
I share the concern that my colleague from Scarborough Centre expressed earlier. That is why our motion says that the Minister of Finance needs some good advice on this question of the non-deductibility of interest. Let us bring in the experts.
The minister is in a bit over his head. He left Ontario with huge budgetary deficits. Is this the kind of person we want dealing with complex issues around tax avoidance and tax evasion? There are some issues there, but again, we do not throw out the baby with the bathwater. We deal with those issues. There are complex issues around the taxation of dividends from affiliates and questions of tax havens. Let us ring-fence that and let us--
The Deputy Speaker NDP Bill Blaikie
The hon. parliamentary secretary to the government House leader.
Tom Lukiwski Conservative Regina—Lumsden—Lake Centre, SK
Mr. Speaker, there are two issues that my hon. colleague brought forward. Let me deal with them both.
First, he talks about income trusts. I will go back to the example I used during my initial presentation. On the one hand the hon. member is saying that all Canadians should be critical of the Conservative government because the Conservatives said during the campaign that they would not tax income trusts and now they have.
Yet after the former minister of finance said, “I will not tax income trusts”, the Liberals are coming forward with a proposal to tax them. How do we square that circle? How can they be critical of a government because it decided to tax income trusts when they themselves are saying that very thing?
With respect to the second question my hon. colleague had on tax havens and double-dipping, what the Minister of Finance has said and continues to say daily is very clear. He wants to be in a position to offer tax fairness to all Canadians. To do that, he has to ensure, and I think all Canadians would agree with him, that everyone, including corporations, is on a level playing field when it comes to paying taxes.
He is talking merely about eliminating double-dipping and eliminating tax havens, a position which the former revenue minister in the Liberal government agrees with.
How can those members be against tax fairness? How can anyone disagree with a position that makes sure all corporations pay their fair share of taxes? Their position makes no sense.
Alexa McDonough NDP Halifax, NS
Mr. Speaker, I followed closely the comments by the member from, I believe, Edmonton—Strathcona.
Before I put a question to the member, I want to acknowledge, if I am not ruled out of order for doing so, that one of the really vocal and articulate critics of the flawed decision of a previous Liberal government to gut the Foreign Investment Review Agency was in fact our current Deputy Speaker, the member for Elmwood—Transcona, who of course was previously the member from Winnipeg--Birds Hill.
I think what we have here is a serious difference of opinion in this debate about the causes of what is incontestable in our current economy and the causes of what has been happening over a period of years in terms of substantial job losses, and particularly the transformation of good quality jobs, well paid jobs and more secure jobs, into bad jobs.
Also, there are the numbers of Canadian businesses that are indeed increasingly vulnerable to foreign takeover. It is not just that they are vulnerable, because we already have had 11,000 such takeovers presided over by the Liberals doing absolutely nothing about it.
The Conservative member on the government side has been rejecting the central proposition of the motion before us, which is that the increasing vulnerability of Canadian businesses to foreign takeovers is a result of the income trust tax decision. I want to ask the member if he could share with the House his view of what it is, therefore, that is putting Canadian enterprises at risk and making them more vulnerable. What is--