Debates of May 10th, 2007

Government Response to Petitions

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, pursuant to Standing Order 36(8) I have the honour to table, in both official languages, the government's response to one petition.

Summer Career Placement Program

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. Speaker, I would like to table in this House a petition with around 200 names. This is in addition to the petition signed by about 1,000 people from my riding Saint-Maurice—Champlain.

This petition once again criticizes the cancellation of the summer career placement program. More than 1,200 of my constituents denounce this cancellation.

Once again, it is unfortunate that the Conservative government is refusing to reinstate this program. These petitions show that the public is very disappointed.

Questions on the Order Paper

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, the following question will be answered today: No. 191.

Question No. 191

[Dennis Bevington, NDP, Western Arctic, NT]

With regard to the cancellation of the flight information centre in Yellowknife, what was the rationale for deciding to cancel the establishment of this centre and how will aviators in northern Canada receive reliable flight information from a centre in North Bay, Ontario?

[Lawrence Cannon, Conservative, Minister of Transport]

Mr. Speaker, Nav Canada is responsible for the operation of air navigation services, ANS, in Canada. Transport Canada is responsible for the safety as well as regulatory oversight of the provision of ANS. Oversight activities include but are not limited to regular inspections and audits of Nav Canada operations and an ongoing monitoring of all ANS activities. A flight information centre, FIC, is a centralized air traffic service unit that provides flight information services to pilots, including weather briefings, flight planning and remote and enroute radio communications.

The rationale to offer FIC services to the Yellowknife area from the North Bay FIC was a Nav Canada decision. North Bay employs highly skilled flight service specialists, providing what Transport Canada assesses to be a safe and reliable service. In addition, Yellowknife continues to have a flight service station which is an on-site air traffic service unit, which provides aerodrome advisory services and aviation weather observations. Transport Canada conducted an audit both of the Yellowknife flight service station, in September 2006, and North Bay FIC, in December 2006, where it was determined that both units are providing a safe and adequate service to the users.

Questions on the Order Paper

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

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

[The Speaker, Liberal, Peter Milliken]

Is that agreed?

[Some hon. members]

Agreed.

Procedure and House Affairs

[The Speaker, Liberal, Peter Milliken]

On May 9, 2007, the Standing Committee on Procedure and House Affairs tabled its 50th report.

The committee's report recommended that Motion M-322, standing in the name of the hon. member for Saint-Laurent—Cartierville, be designated non-votable.

The hon. member for Saint-Laurent—Cartierville informed me that he will not put forward a motion to appeal the decision in the committee's report. Consequently, pursuant to Standing Order 92(4), the 50th report of the Standing Committee on Procedure and House Affairs is deemed adopted, and Motion M-322 remains a non-votable motion on the order paper.

Standing Committee on Transport, Infrastructure and Communities—Speaker's Ruling

[The Speaker, Liberal, Peter Milliken]

I am now prepared to rule on the question of privilege raised on May 1, 2007 by the hon. member for Argenteuil-Papineau-Mirabel concerning the intimidation of committee witnesses.

I would like to thank the hon. member for having drawn this important matter to the attention of the House as well the hon. Government House Leader and Minister for Democratic Reform for his comments on the question.

In his presentation the hon. member for Argenteuil-Papineau-Mirabel stated that in an appearance before the Standing Committee on Transport, Infrastructure and Communities on February 21, 2007, the chair of the Canadian Federal Pilots Association, Mr. Greg Holbrook, had alleged that the Director General of Civil Aviation, Transport Canada, Mr. Merlin Preuss, had attempted to intimidate potential witnesses before the committee.

In support of that allegation, the chair of the Canadian Federal Pilots Association tabled with the committee an affidavit from the Association’s executive assistant, Ms. Kathy Marquis, detailing a telephone conversation between herself and Mr. Preuss.

In further support of his claim that this attempted intimidation was not an isolated event, the hon. member for Argenteuil-Papineau-Mirabel provided the Speaker with further documents which he claimed displayed similar behaviour.

In his remarks made on May 3, 2007, the hon. Leader of the Government in the House of Commons and Minister for Democratic Reform presented arguments relating to two points. First, he claimed that the information presented to the Chair did not support the existence of a prima facie breach of privilege.

Secondly, he pointed out that our procedures ordinarily require that a report from a committee be presented to the House before questions of privilege or points of order are raised dealing with the committee's proceedings.

The Chair views the matter raised by the hon. member for Argenteuil-Papineau-Mirabel as one of considerable importance and has made a close examination of the case. House of Commons Procedure and Practice states at p. 89:

The protection of witnesses is a fundamental aspect of the privilege that extends to parliamentary proceedings and those persons who participate in them. It is well established in the Parliament of Canada, as in the British Parliament, that witnesses before committees share the same privileges of freedom of speech as do Members.… The protection of witnesses extends to threats made against them or intimidation with respect to their presentations before any parliamentary committee.

The House and its committees cannot carry out their duties unless they can rely upon the testimony of witnesses who are able to speak freely without any outside interference or fear of reprisal.

Members will know that it is not usual for the Speaker to comment or rule on procedural issues arising in committee until a report from the committee has been presented in the House. It may be helpful to members if I repeat the citation from page 128 of House of Commons Procedure and Practice referred to by the government House leader:

Speakers have consistently ruled that, except in the most extreme situations, they will only hear questions of privilege arising from committee proceedings upon presentation of a report from the committee which directly deals with the matter and not as a question of privilege raised by an individual Member.

Nevertheless, circumstances do exist in which the importance of a question may require intervention by the Chair. On December 4, 1992, Mr. Speaker Fraser ruled on a case concerning threats made to a witness who had appeared before a subcommittee of the Standing Committee on Justice and the Solicitor General. The ruling, found at p. 14631 of the Debates, points out that there are occasions on which it is not appropriate to wait for a report from the committee before dealing with a serious breach of privilege. In that case, Mr. Speaker Fraser was faced with the fact that it might well be a period of several months before the subcommittee could meet to deal with the matter. The case before us today strikes me as being significantly different in that regard.

The Standing Committee on Transport, Infrastructure and Communities met on March 28, 2007 for the express purpose of examining the remarks attributed to Mr. Preuss. He was present as a witness at that meeting and was vigorously questioned by committee members. At a subsequent meeting on April 23, 2007, the matter was addressed a second time, again with Mr. Preuss present as a witness.

Under these circumstances, it would be highly inappropriate for the Speaker to break with our past practice and pre-empt any decision the committee may choose to make. The committee is seized of the issue and if a report is presented I will of course deal with any procedural questions which may be raised as a result. Until such a report is presented however, I must leave the matter in the hands of the committee.

I would like to thank the hon. member for Argenteuil-Papineau-Mirabel for having raised for the benefit of all members this very important question relating to the protection of witnesses.

Opposition Motion—Finance

[Stéphane Dion, Liberal, Leader of the Opposition]

moved:

That, in the opinion of the House, the government's mistaken policies with respect to interest non-deductibility 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 and entering into meaningful public consultations on appropriate measures to combat tax abuses, 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.

Mr. Speaker, I will share my time with the hon. member for Markham—Unionville.

I rise in the House today on behalf of all Canadian families and workers who want to know when this Conservative government will stop endangering Canadian jobs with its harmful, poorly designed policies.

The world economy is caught up in a frenzy of corporate takeovers. Canadian companies are being swallowed whole, and when head offices leave Canada, good jobs disappear along with them.

What is the government doing to protect these jobs? What is the government doing to ensure that the most highly trained and best educated Canadians can continue to work in our country and for our country?

What is our government doing to protect the next generation of Canadian professionals, the next generation of lawyers, accountants, managers, sales directors, advertising executives, business consultants, and the hundreds of thousands of service jobs that depend on the wealth that those professionals generate? What is the current government doing?

Under the current government, the sorry answer is nothing at all.

In fact, the government is doing worse than nothing. Doing nothing at all would be a substantial improvement for this government. Instead of helping, the government is making things worse.

First, the government broke its promise not to tax income trusts. Instead, it imposed a punitive tax of 31.5%. Canadian shareholders and pensioners paid the price and Canadian companies were weakened.

Not content to stop there, the government decided to follow one bad idea with another, by reversing Canada's policy on interest deductibility. That misguided decision is another blow to Canadian companies eager to compete on the world stage.

That this policy is a mistake is beyond question. Tax experts and business leaders have dismissed this policy as wrong-headed.

Tax expert Allan Lanthier calls the decision “the single most misguided policy I've seen out of Ottawa in 35 years”.

Nancy Hughes Anthony, president of the Canadian Chamber of Commerce, calls it “a real step in the wrong direction”.

The chief executive of the Ontario Teachers' Pension Plan says, “I can't believe any sensible person would do this”.

This policy makes it harder for Canadian companies to keep up with their competitors in other countries. Companies in the United States, Europe and Japan can all benefit from interest deductibility when they want to take over Canadian companies.

Why is the Prime Minister giving a green light to foreign takeovers in Canada and a red light to Canadian expansion abroad? Why? Does the Prime Minister not care that by hurting Canadian companies he is also hurting Canadian families, Canadian jobs and Canadian workers?

Instead of admitting that their policy is wrong-headed, the Prime Minister and his Minister of Finance are trying to fudge the issue.

The Minister of Finance, after weeks of ignoring the criticism of every expert, is now suggesting that he may extend the transition period for Canadian companies to adjust to his wrong-headed policy on interest deductibility.

What a ridiculous compromise. Executing a bad policy more slowly is not a solution.

Canada's companies should not be forced to compete with their hands tied behind their backs, and the issue is not how slowly or quickly we tie their hands. We should not be tying their hands at all.

Instead, we should be arming our companies with every available policy to help them compete. That is what a good government does and that is what Canadians expect.

Judging by this government's disastrous policies on income trusts and interest deductibility, Canadians have every right to ask themselves what is coming next.

What can we expect from a government that raised income tax? What can we expect from a government that cut new spending on research and education? What can we expect from a government that hurt Canadian exporters by closing consulates and cancelling trade missions? What can we expect from a government that, by design and by incompetence, is refusing to implement the most basic economic policies in order to serve Canadians' interests?

It is high time the Prime Minister put reason before ideology. I call on the Prime Minister to reverse his irresponsible decision and restore the previous policy on interest deductibility.

I call on the government to shelve its interest deductibility plan and create a task force to review Canada's international tax policy to ensure that it is addressing the competitiveness agenda while at the same time tightening up the system. The task force would review Canada's some 90 international tax treaties with a view to ensuring the treaty partners are living up to the original policy expectations.

I call on the Prime Minister to withdraw his proposal to tax income trusts and replace it with the Liberal plan, which would replace the Conservatives' 31.5% tax with a 10% tax refundable to Canadian investors.

I call on the Prime Minister to develop a comprehensive plan so that Canada comes out on top in the current frenzy of corporate takeovers and to present that plan to the House of Commons.

Canadians deserve a visionary government with an ambitious goal for our country, a government that seeks to make the most of our enormous potential instead of eroding it, a government that strengthens and energizes Canadian businesses and protects Canadian jobs instead of putting up obstacles to business. A Liberal government will implement policies to stimulate Canada's economy, just as the Liberal governments of Jean Chrétien and Paul Martin did.

While the Conservatives have slashed funding for research and education, we will invest in these crucial areas. While the Conservatives have cut ties with our trade partners, we will strengthen those ties. While the Conservatives have cut programs that encouraged companies to invest in clean energy, we will restore them to make Canada a green superpower. And while the Conservatives have hurt the competitiveness of Canadian businesses, we will help those businesses excel and prosper.

Until that time, we are left with the present government and the Prime Minister to whom, it seems, all we can ask, for the sake of working Canadians everywhere, is that he please stop making things worse.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, that was quite a speech. In fact, it emphasized what the--

[Some hon. members]

Hear, hear!

[Dean Del Mastro, Conservative, Peterborough, ON]

I am encouraged, Mr. Speaker, to see that they have all lumped themselves in with the same group. That is great because last week the headline in the Toronto Star indicated “Dion wrong on trusts”. However, that is not all--

[The Deputy Speaker, NDP, Bill Blaikie]

Order, please. The hon. member knows better than that.

[Dean Del Mastro, Conservative, Peterborough, ON]

I apologize. However, that is not all the Liberal Party has been wrong on this week. Let us highlight for the voters the Liberal Party's stand this week.

They voted against mandatory minimum sentences for serious gun crimes. They argued against giving Canadians a say on the Senate. Another good one is that they argued in favour of extending big money influence in politics yesterday. Today they are standing up to argue against tax fairness in Canada. That is the party that presided over the largest widening of the gap between rich and poor in Canada and its members are standing here today to argue against tax fairness.

Canadians in my riding demand tax fairness. They demand that all Canadians pay their fair share of tax, and the hon. Leader of the Opposition should understand that. Why does he not stand for tax fairness in this House?

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Mr. Speaker, the best way for Canada to help everyone is to have a strong economy and in order to have a strong economy we need to have strong policies, not policies that destroy the capacity of our companies to win abroad.

I am very sad that the hon. member is not taking this issue seriously. What is at stake is a sentence in the budget. I will read it because it seems that the hon. member may not have read the budget very carefully. It says, “Budget 2007 proposes to eliminate the deductibility of interest income to invest in business operations”.

Eliminating the deductibility of interest is what is at stake. It is a wrong policy. It is wrong for Canadian families, wrong for Canadian jobs and wrong for Canadian workers.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I am certainly disappointed in the Liberal position in the speech by the leader of the Liberal Party who I thought was interested in fairness for Canadians, although I am not surprised given the finance critic's connections to Bay Street.

However, I find it curious that the Liberals did not have a position on income trusts until the leader himself went to Bay Street about three weeks ago and now suddenly there is a position.

I was curious as to why this position exists so I did a little digging in terms of a Canadian association that sponsors all these libellous ads. I found it very curious that over the last 13 years the Liberals received about $282,000 from the Canadian Association of Income Trust Investors. In the leadership race they delivered about $39,000 to Bob Rae in his leadership bid and $6,000 to the Leader of the Opposition. Did that money influence the member's decision today?

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Mr. Speaker, I am sorry to hear the line of attack that the hon. member is developing. I think this 31.5% punitive tax will hurt Canadians. It is $25 billion that left right away, which has hurt a lot of Canadians, many of them being seniors. They need justice and fairness.

I invite the hon. member to read what the experts said at committee on this trust theory. We have said that this 10% refundable tax proposed for Canadian investors would help these Canadians to recover two-thirds of their savings and would restore equity in the tax system. We could avoid these income trusts being bought by the Americans. When they are bought they do not pay taxes any more to Canada.

These are good policies. Why is she trying to diminish and unfairly attack her colleagues in this House instead of working for Canadian taxpayers, Canadian workers and Canadian families? The deductibility is the same thing--

[The Deputy Speaker, NDP, Bill Blaikie]

Order, please. The hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I would like to ask the Leader of the Opposition the following question. Of course, the non-deductibility of interest is a very important and worrisome issue.

On that matter, the Minister of Finance said he would be open to doing things differently. We can read in this morning's newspapers the statement made yesterday by the hon. member for Markham—Unionville to the effect that one solution could involve referring the matter to an expert panel.

The budget implementation bill has not yet been introduced.

As parliamentarians, should we not have a responsible attitude, taking into account the fact that the Liberal motion was already prepared a few days ago, and agree to consider such a proposal? Thus, when the matter is examined more closely, all emotionalism will be gone and we will therefore be able to reach a decision that is good for the economy of Canada and Quebec—a decision that, at the same time, will no longer allow tax avoidance.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Mr. Speaker, I much prefer the comments made by my hon. colleague over what I have heard from the government and the NDP. In fact, that is precisely what we must try to do. The government is bringing in an atomic bomb, when all that is needed is a little surgery. That is what we want to work on.

Our problem is what is written in the budget. We are working with what the budget says. The minister was not obligated to write that. Here is the sentence:

Budget 2007 will eliminate the deductibility of interest on debt incurred by corporations to finance foreign affiliates.

This has to do with the entire deductibility. This would mean that our companies could no longer do business in the global economy with the same tools as the Americans, Japanese and Europeans. We must tell the government—

[The Deputy Speaker, NDP, Bill Blaikie]

Order, please. I would say to the Leader of the Opposition what I have said to many members. It helps, from time to time, if members look at the Chair so they can get an idea of what is going on.

[Karen Redman, Liberal, Kitchener Centre, ON]

Mr. Speaker, discussions have taken place among all parties and I believe you would find consent for the following motion. I move:

That at the conclusion of today's debate on the opposition motion in the name of the member for Saint-Laurent—Cartierville, all questions necessary to dispose of this motion be deemed put, a recorded division deemed requested and deferred to 5:30 p.m. on Tuesday, May 15, 2007.

[The Deputy Speaker, NDP, Bill Blaikie]

The House has heard the terms of the motion. Is there unanimous consent for the member to put the motion?