moved:
That, in the opinion of the House, in relation to the proposed tax on distributions from publicly traded income trusts or publicly traded partnerships, other than those that only hold passive real estate investments, the government should repeal its planned 31.5 per cent tax regime and replace it with an immediate 10 per cent tax to be paid by such entities with the revenue to be shared equitably with provincial governments provided that the tax would be refundable to investors who are Canadian residents in order to: (a) minimize the loss of savings to Canadians who invested in income trusts; (b) preserve the strengths of the income trust sector; (c) create tax fairness by eliminating any tax leakage caused by the income trust sector; and (d) create neutrality by eliminating any incentive to convert from a corporation to an income trust purely for tax purposes.
Mr. Speaker, as each one of us in this hon. chamber stands to debate this motion, I hope that we do not try to distort what the motion is really saying.
As the leader of the Liberal Party, the member for Saint-Laurent—Cartierville, indicated in his presentation last week, there are two segments to this initiative on behalf of the Liberal Party. When the idiotic and not thought out initiative was suggested by the Minister of Finance, the member for Markham—Unionville immediately commented. As has been said by many people who are not politicians, the member for Markham--Unionville is a recognized economist, a person who in his private life worked in the financial sector, and he could best understand this issue.
All of us have made every effort to understand it. As it is unravelling, not only we as parliamentarians recognize the faults in the finance minister's initiative and the new Conservative government, but average Canadians from coast to coast to coast have picked up on it. I thank the media, because the media have done an admirable job in bringing the facts forward.
People within the industry, representatives of various organizations that I will refer to in a moment, not just within Canada but outside Canada as well, are saying that we are often described as a member of the global community. We are international partners in our responsibility to create a safe society for people to live in both here and abroad. One example is the important mission in Afghanistan which our men and women in the Canadian Forces are undertaking. We have to ensure that the finances of nations are stabilized in order to create the level playing field that we have been encouraging.
Just last week when the Minister of Finance was asked a question he replied that the government wants to create fairness and a level playing field. On the interest deductibility issue, it seemed really odd to us how he was going to create a level playing field when other countries had the same provision for their corporate sectors, and yet it was being taken away from Canadians thus creating an unbalanced playing field for us to work on.
It is not just in this Parliament that this issue has come before us. There was a discussion and an inquiry on this issue in the last Parliament when there was also a minority government. There was talk about looking at what we could do, whether we should change it or leave it alone, et cetera. The member for Scarborough—Guildwood, who formerly was the parliamentary secretary to the minister of finance, provided his input. I also applaud the member for Halton who has been on top of this issue right from day one. He has been very forthcoming with respect to his comments and his information gathering.
I will talk about the last Parliament for a moment. In all fairness, Canadians who are watching us today should be reminded of what happened so they can appreciate what is happening here today.
When this initiative was undertaken in the last Parliament, the Liberal government of the day was looking at it, there is no question. Inevitably it was decided that we would not do anything with the income trust file. That was publicly known. Canadians were concerned at that time, and I do not blame them. They said, “They said they were going to do it and now they are saying they are not going to do it”. Canadians felt a bit uncomfortable and rightfully so.
The leader of the opposition at that time, the right hon. Prime Minister today, made a commitment that should the Conservatives be successful in securing government, they would not do anything. They would leave it as it is. In the Prime Minister's own words which I quoted last week, he said, “We guarantee you we will not touch this file”, to the seniors especially, whom I talked about last week, and to corporate Canada, which I do not like to refer to as such because it is not what I believe it is; I would refer to it as working Canada, to employed Canada, because it affects people's jobs as well. Based on that commitment during the campaign, Canadians felt comfortable that they had a firm commitment. That is campaigning.
We fast forward a little and the Conservatives assume the role of the new Conservative minority government and lo and behold, to our surprise the Minister of Finance, the former minister of finance for Ontario, and we all know the devastation of Ontario under the finance minister, came up with this bright idea out of the blue. The important thing for me, on behalf of my constituents and the seniors with whom I have been speaking, that the Conservatives in essence reneged on a firm campaign commitment.
I am pleased today, after the initiatives of the Liberal Party, that the interest deductibility issue has been addressed, bringing us back again to a level playing field. Finally the finance minister, the Prime Minister, the new Conservative Party as a whole saw the light that it was indeed wrong, that it would hurt Canadian companies and that it would not permit them to compete fairly as other countries and their organizations would have been able to do. I am pleased that they saw the light. It just goes to show that the will of the people and their message does get through in this Parliament.
I would like to quote some distinguished people on how they felt about the government's initiatives on income trusts. Allan Lanthier, a retired senior partner of Ernst and Young and the immediate past chairman of the Canadian Tax Foundation said it is “the single most misguided proposal I have out of Ottawa in 35 years”.
We have stood in the House many times applauding and congratulating various organizations, our firefighters, our military, our police and the teaching profession as well. Today, as young as we get, we always remember our teachers. I recently had the opportunity to celebrate the 100th anniversary of the high school I attended, Riverdale Collegiate Institute in Toronto. The first thing I did was to thank all those teachers for the years they taught us well.
Claude Lamoureux of the Ontario Teachers' Pension Plan board, said the following:
This is unbelievable. I do not know who in finance looked at this. I cannot believe any sensible person would do this.
Another individual who always comments post-budget is Mr. Thomas d'Aquino, president and chief executive of the Canadian Council of Chief Executives. Somebody like him is getting input from corporate Canada, or business Canada, whatever one calls it. This is what he had to say:
--we are worried that the change announced in the budget may seriously undermine the competitiveness of Canada's homegrown champions--the companies that are most active and most successful in building global businesses from head offices in Canadian communities. It may also damage Canada's standing as an international centre for financial services.
We can imagine the kind of effects that this policy would have had not just on Canada's competitiveness but right down to the families, to the households, to people's inability to educate their children, to pay their mortgages, to seniors.