Debates of June 4th, 2007

Budget Implementation Act, 2007

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I appreciate the opportunity to address the member's speech. He certainly has been very crafty in talking about issues that he wants to talk about but not talking about the benefits of the budget, certainly the benefits for the people of Nova Scotia and in fact for people in all parts of Canada. These benefits are significant. I know that ultimately the member supports them, but for partisan reasons he cannot.

I want to address one issue with the member. He talked about equalization. I want to ask him whether equalization inherently means equal, or whether equalization inherently means that some regions should be better off than others and supported in such a manner by the federal government.

Ultimately, here is what the Liberal Party is missing. When the Liberal Party was in government it always spoke about less being more. In fact, it would give less to the provinces but talk about how much more it was doing, which was impossible. In this budget this government is providing more money. It is providing more money to Nova Scotia and to every single province and territory, which means more capacity for all provinces and more money for health care and infrastructure. More is more.

Why is the member not supporting this? It is more money for Nova Scotia and Nova Scotians. It is more money for every Canadian, distributed in a fair fashion. The member should support it. Fair is fair.

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, the question here is about the Atlantic accord. The Atlantic accord was of great advantage to Nova Scotia. It said that the revenues from Nova Scotia's non-renewable resources will not be calculated against its money in equalization. Therefore, it would get that money to invest in the future of the province, because those are non-renewable resources.

Maybe that was better than fair. Maybe it was a disproportionate fair share. Maybe it was not completely equal with other provinces, but when the Conservatives were in opposition they supported it. As well, during the election campaign, the Prime Minister made the promise that he would not go back on the Atlantic accord.

That is what the question is here. It is a question of integrity. It is a question of how much people can trust the Prime Minister, and to that I say zero, zero on the Atlantic accord, zero on income trusts, and zero on ethics when we look at the way he dealt with Senator Fortier, to whom he gave the department with the biggest spending. Senator Fortier is not here to answer questions in question period, but the Prime Minister said during the election that he would not appoint cabinet ministers who were not elected.

These are the fundamental questions. Can we believe this person? Can Canadians believe the Conservative Prime Minister?

The Conservatives like to call themselves the new government, Mr. Speaker, but I show you the next opposition.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, the hon. member talked about the need for investment in tourism. One of the ways that cities can benefit is through investment in the arts.

We know that a lot of artists earn very little. Their earnings are below minimum wage and they live in poverty, yet they produce amazing and creative work that enlivens our cities and communities. It brings in tourists from all over the world. Yet there is very little investment in this budget for the Canada Arts Council, or to help filmmakers and documentary makers, or to help people involved in the arts, the playwrights and actors. They have to leave the country in order to find jobs. It is a very desperate situation.

Does the member think there should be more investment in the Canada Arts Council, in our film industry and in our artists so they can continue to create their very dynamic and vibrant materials for our country?

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, that is an excellent question. I do not know that we can have a socialized or state arts system, but what we can do, and what the government is refusing to do, is support the infrastructure that artists depend on, like Canadian television production within the rules, in drama, and we can fund festivals, which is where artists have a chance to sell their wares and be seen.

We can support the Canada Arts Council, regional economic development and summer students. Many summer students in my riding work in small, private or community galleries, which give artists a chance to show us their wares and skills.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to participate in the debate on the report stage of Bill C-52.

Earlier today the Speaker ruled on the admissibility of the report stage motions proposed by members. Motion No. 2 was not chosen for debate as it requires a royal recommendation. Motions Nos. 1, 3 and 4 were also not chosen because they had been dealt with and defeated at committee.

That left us with Motions Nos. 5 through 9. Those motions actually have to do with a subject matter that only the previous speaker spoke about. We are here debating changes to the bill that have been proposed on matters which have not been dealt with at committee or which have been brought forward by the government. In this case, they in fact are brought forward by the government so I would at least like to put on the record with regard to the five report stage motions that these all relate to the visitor rebate program.

Most of them are technical amendments. They have to do with a matter that came from and was suggested by the industry. There were some questions. The committee was not able to deal with it or was not aware of the matter. What they relate to in amendments Nos. 5 through 9 is that they actually make certain deletions to some of the clauses. Members will see it in the Order Paper and Notice Paper today. As well, they make some technical corrections to references to other pieces of legislation.

The effect of those changes is that non-resident persons and unregulated non-residential tour operators may apply for a rebate of the GST and the federal component of the HST paid on the supply of a tour package that includes short term accommodation or camping accommodations that will be used by the non-resident. The amendments also ensure that the rebate also applies to the provincial component of the HST.

Having taken the time this morning to review the amendments, I believe that these amendments are appropriate and reflect the fairness and intent of the House with regard to the visitors rebate program, so I am pleased that the necessary amendments to the bill have been proposed. I will take the opportunity to look at them in more detail as soon as I can get the legislation to which they relate to ensure that the language is in order, but subject to technically checking them, I believe that the report stage amendments should be supported.

That is a pretty short speech on the report stage motions, but I would like to comment further on the point of order raised by the finance critic for the Liberal Party with regard to amendments members attempted to raise at the committee stage of Bill C-52. They had to do with changes to the bill that would reflect what the Liberal Party believes to be a preferable approach to the so-called disparity or gap between the taxation of income trusts and dividend-paying corporations.

In the point of order that was raised, it was noted that a question raised in committee was ruled out of order by the chair. Certain reasons were given. Those are now being challenged. Hopefully the Speaker will have an opportunity to look at them.

I took the opportunity to review the basis of the proposed amendments that were submitted by Liberals at committee. They had to do with a commitment that the leader of the official opposition made.

The gist of it was that in relation to the proposed tax on distributions from publicly traded income trusts or publicly traded partnerships, other than those that hold passive real estate investments, the government should repeal the 31.5% tax regime and replace it with a 10% tax to be paid by such entities, with the revenue to be shared equitably with provincial governments. That is the first part.

Interestingly enough, the point raised in the point of order and the discussion about the propriety of the punitive tax on income trusts was whether or not a change from 31.5% to 10% was a matter which would require a royal recommendation or was out of order. Clearly, I think the argument showed with reference to precedent that the amount of a tax being imposed is certainly not beyond the scope of the committee's work to change.

The second part has to do with the revenue being shared equitably with the provincial governments provided that the tax would be refunded to investors who are Canadian residents in order to, first, minimize the loss of tax savings to Canadians who invested in income trusts; second, to preserve the strengths of the income trust sector; third, to create fairness by eliminating the tax leakage caused by the income trust sector; and fourth, to create neutrality or approach neutrality by eliminating any incentive to convert from a corporation to an income trust purely for income tax reasons.

Let us look at the elements. One is the amount of the tax and whether it is 31.5% or 10%. The second item has to do with a refundable tax credit, which basically means that should the Liberal proposal be adopted, the tax would be substantially less but would be applied immediately, rather than deferred for the five year period proposed by the government. As a result of it being refundable to Canadians, the burden of that tax would be paid only by non-residents, where the majority of the so-called tax leakage occurs. Timing, of course, is always a question.

I am sure that after a review of the transcript or the proceedings of the committee, the Speaker may very well find that the decision of the chair was based on incorrect information and that indeed the amendments proposed at committee maybe should have been in order. As a consequence, other amendments may also be in order.

It will be very interesting to see how this plays out, because clearly the idea is that we want to make sure we get it right. That is why we have a rigorous legislative process. That is why committee does its work. When the chair has to rule a matter out of order, we would hope that the understanding and the determination of fact brings a good decision. In this case, I am sure that it warrants review.

Finally, while most members seek to talk about the budget in general, I can tell members that with regard to the broken promise of the government on income trusts, the Prime Minister said that the greatest fraud “is a promise not kept”. He also said that he would never tax income trusts, but on October 31 of last year he turned around and did exactly that.

The consequences were that over two million Canadians lost about $25 billion of their hard-earned retirement nest eggs. That is very harmful. In fact, I have been told by some that four to five million Canadians have been directly or indirectly adversely affected by that broken promise.

Also, there were other consequences. We have been talking about tax leakage. Members well know that so far, because of the depressed value of income trusts, the taxes to be paid by these corporations are actually going to be less because of the significant takeovers. I believe there have been at least a dozen takeovers of these energy trusts, which means that their structures have been set up so that they are not going to pay any taxes.

The consequences of imposing that tax are far worse than the government ever dreamed.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, this is interesting. The Liberal government used to talk about things that mattered to Canadians, such as health care, infrastructure, post-secondary education and transfers to the provinces. Those are things that matter to Canadians, but the Liberals do not talk about them any more because this Conservative government has dealt with them and is doing a much better job than the previous Liberal government.

So what do those members talk about now? They talk about trying to win tax loopholes for their wealthy friends. They do not believe that corporations should pay tax. That is what those members are standing up and saying in the House today.

Our government believes in tax fairness. It is unfortunate that the member does not.

However, having said that, I would just love to hear him respond to what the governor of the Bank of Canada said, although I know he is going to dodge the question. Certainly he will bridge it and speak about something else, because he does not have the courage to answer the question.

The Governor of the Bank of Canada specifically said that the Liberal motion on income trusts would lead to less investment, less productivity and, indeed, less wealth for Canadians.

Why does this member want to stand for those things? Why does he not believe in prosperity for all Canadians?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, you may want to seek some guidance on this, but I think it has always been the case that to question a member's courage is inappropriate in Parliament. It really has no place here.

The member has often spoken on this subject. If we check the record, clearly, he always says that he does not want corporations to pay their fair share of taxes. But what he does not say, and shows that he really is ignorant about the facts, is that when we look at the tax implications to the Government of Canada, we have to look at the taxes paid by a corporation and the taxes paid by the taxpayer.

In the event that we have a dividend paying corporation, that corporation pays income tax on its corporate income and the person receiving the dividend also pays income tax on the dividends subject to a dividend tax credit.

With regard to the income trusts, they are established and have been established under the laws of Canada to provide that the income trust itself, the business entity, does not pay the taxes at the business level but in fact transfers it all to the shareholders. The shareholders are then responsible for paying the taxes on all of the amount, certainly a much greater amount than they would pay if the amounts were paid in dividends.

So, if the member is going to participate in debate on income trusts, he should inform himself on the taxation and the full loop, and the full impact on the Government of Canada's revenue, not just the corporate impact.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, I will give my hon. colleague credit for being courageously wrong. However, I would like to ask him a question.

Does the member disagree with every province that supported the move of this government on income trusts? Does he disagree with the Governor of the Bank of Canada who supported what this government did on income trusts? Will he agree, I suspect not, that those people who did not panic, who took good advice, who waited it out, are just as well off or better off today than they would have been had they not panicked? Or will he continue to be courageously disingenuous and misleading?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, he member for Peterborough also misled the House on other cases where he said the income trust sector is all recovered and is all there.

He should understand that the pricing of a security is based on the discounted value of its future yields and if people are going to be taxed at 31.5% on their future earnings starting five years hence, that is why the $25 billion was lost. That is not going to be recovered. It is a permanent impairment of the investment.

If the member wants to look at indices, he better be careful not to include the total indices. He has to back out a bit the impact of REITs, real estate investment trusts, which in fact are not taxed and have a significant impact on that.

He also has to take into account that there have been a very large number of income trusts that have in fact been bought out, are owned by foreigners, and are no longer reflected in the indices.

This member in his question made reference to people panicking. The fact of the matter is that people did panic--

[The Acting Speaker, Royal Galipeau]

The hon. member for Trinity—Spadina.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, tomorrow is national hunger awareness day. This budget could have done a lot to deal with child poverty, yet there is hardly any investment in it to reduce poverty.

In just over 15 years, there has been a 99.3% growth in food bank use by hungry Canadians, and yet we have the means to provide all Canadian adults and children with a fair share of food if we had the political will to do so.

The face of hunger will surprise all of us because it is the face of children. We need to recognize the reality and the depth of hunger that Canadian families face every day. Some 41% of them are children and 13.4% are people who have full time jobs, and 53% of households visiting food banks are families with children. Many of them of course are working several jobs, yet still cannot pay the rent and feed their kids. This is according to the hunger count of 2006.

In March 2006 more than 753,000 individuals in Canada used food banks because they were hungry. We know that there are many hungry people across Canada in our neighbourhoods and our communities, and that we all need to take action to make sure that all Canadians have their fair share of food and no one is going hungry.

To reduce the root causes of hunger in Canada, we absolutely have to invest in affordable housing and child care, and increase the minimum wage to at least $10 an hour.

I want to speak a bit about building affordable housing. Yesterday, hundreds of women in my riding in Toronto and their allies walked through the streets of Toronto and went to a building in the riding at 4 Howard Street. It is one of the hundreds of buildings in Toronto that has been allowed to sit empty and deteriorate until it either falls down or must be torn down.

These young women are saying that we need to build affordable housing because many of these women are victims of domestic abuse, and their kids are stuck in shelters, in unsafe housing. They have to move every two or three months, sometimes even sooner because they cannot find affordable housing. They do not go to the same schools. Their kids cannot form any kind of friendships because they do not have permanent housing.

Some even go back to their abusive relationships because they have no place to live and they are desperate. Homeless women face violence every day on the streets, whether they are in Toronto, Vancouver, Montreal or Halifax, in big cities or in small towns and communities.

These women yesterday said that we have to push the Canadian government to establish a decent affordable housing strategy and that there needs to be extra money in the federal budget to build affordable housing.

We know that the Canada Mortgage and Housing Corporation has a budget surplus of at least $5 billion in its reserve funds, and that while this money is sitting in the reserve funds, there are hundreds and hundreds of Canadians who are homeless. This really was a complete missed opportunity in the budget.

There are also people who live in affordable housing now but their buildings are falling apart. Just in Toronto alone, the Toronto Community Housing Corporation said that it is in need of at least $300 million to maintain these buildings because they are falling apart. The elevators do not work. Many of these building are heated by electricity, and a lot of the tenants end up paying a lot of money for heat or hydro. They have very little money left to buy food and pay for transportation. There is a huge backlog of maintenance and there is no money to support the existing affordable housing in this budget.

Even though the government announced a new program in the budget called ecoENERGY to help homeowners to renovate their homes to make them green and to retrofit their homes so that they can save energy and burn less energy, this new program does not cover affordable housing. The program does not cover condominiums, rental housing or high-rises.

In my riding, such as at 55 Prince Arthur, the condominium owners are saying that they would like to do a lot to fix their building. However, there is really no incentive and no funding to support their renovation needs. Whether they are condo owners or if they live in affordable housing in city homes in Toronto Community Housing Corporation's buildings, they do not have any funds to fix up their buildings.

The deterioration of affordable housing and the condition the housing is in sometimes create a terrible sense of alienation and despair among the people who live there. Recently, we heard of the shooting death of a young man named Jordan Manners in Toronto. In my riding, in Alexander Muir Park, last Friday I met with a mother whose only son was shot to death only two weeks ago. The despair in her eyes was phenomenal. She said that there is a need for decent programs for young people.

We know that after school or in the summertime young people when they do not have a lot to do they end up causing trouble. They end up joining the wrong crowd, joining gangs. We know that statistically the crime rate for young people spikes at around 3:30 p.m. or 4 p.m. when school is out.

If we are to reduce crime what we need to do is to invest in youth employment projects, child care, recreation activities, permanent funding for boys and girls clubs all across Canada, so that we do not end up having young people not having a whole lot to do, and feeling despair and joining the wrong crowd.

There is a cost benefit in investing in young people. Why? We know that putting a young person in jail costs at least $65,000 to $70,000 a year. Yet, creating decent and affordable recreation programs is a very small amount. Many of these programs help young people. They hire young people and some of them even rely on volunteers. It is really a good investment.

It was a missed opportunity by the budget in front of us. We should be investing in children and youth, in arts and housing, in the cities and our future. Unfortunately, this budget does not do so.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I am curious as to why this member from Ontario would not support this budget. This budget has brought a tremendous amount of fairness to all provinces. It has specifically been very helpful to Ontario.

The Ontario provincial government used some of the capacity provided to it with this budget to address child poverty, homelessness, and some of the difficulties that we know some lower income families are facing

There is the WITB initiative for low income individuals and $250 million in additional funding for child care, huge transfers for health care and especially to the province of Ontario. There is proportional funding for the environment. Ontario received almost $600 million for new eco-initiatives that will help the province clean up its act.

I cannot understand why this member would not support this budget. There are so many good things in it for the people of Ontario and especially low income individuals. This member should absolutely be supporting the budget.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, the budget actually does not help a single mother on welfare. For example, because she earns less than $20,000, this means that she does not qualify for the new child tax benefit. Because she is not working, since there is no child care for her, she does not qualify for the program that the hon. member talked about, the working tax credit. She loses out on both of these new programs. The parents of the poorest children are not able to benefit from this new budget.

Furthermore, on the investment that various governments have made on child care, and the hon. member talked about child care funding, in Ontario, for example, close to $1 billion has been transferred to Ontario and guess what? The provincial government has not invested this money, close to $1 billion from 2005, 2006 and 2007 in child care. Most of this money has gone somewhere, but we do not know where. The funding has not gone to the child care providers. It has not gone to create affordable child care. There is really no accountability on the funding that is transferred to provinces on child care. What good is it to transfer funding to provinces without any strings attached, with no standards whatsoever?

Many of the provinces, whether it is B.C. or Ontario, do not invest this money in providing affordable child care. Thousands of parents across the country are desperately waiting for child care and who knows what happened to the funding? Who knows what the Ontario government has done with that money?

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, on behalf of 93,000 Hamiltonians, many of them children, who live in poverty, I want to thank the member for Trinity—Spadina for reminding us of the failures of the government with this budget.

In fact, just yesterday I was at a walkathon, an annual charity fundraiser for Wesley Urban Ministries. The $85,000 that was raised is going to be applied to the needs of children in the east end of Hamilton.

It is very shameful from my perspective when so many people are hungry and are living on the streets of our country that the government would pay $15 billion down on a debt, but it could not spare $4 billion or $5 billion to address poverty in this country. To be quite clear, the Conservatives are just not getting this job done.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, I have been in correspondence with the uncle of Jordan Manners, the young man who was shot to death. His uncle said that we absolutely need to invest in our young people. That is why he has organized a march for change this coming Sunday, June 10 at 1 p.m., to say let us invest in our young people. If not, despair is going to come into different neighbourhoods.

[The Acting Speaker, Royal Galipeau]

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Windsor West, Gasoline prices; the hon. member for Cape Breton—Canso, Equalization; and the hon. member for Davenport, Wage Earner Protection Program Act.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I will be splitting my time with my esteemed colleague from St. John's.

I am not going to engage in a diatribe against the government on the failures in this budget. What I will do is point out what it did and then offer solutions as to what it could have done in a time of opportunity.

In a time of large surpluses of $14 billion, which is what the government enjoys today, the government had a great opportunity to put forth a number of initiatives that would help Canadians from coast to coast. We can be sure that the prosperity we are enjoying today will not last forever. There will come a time when our extractive energies will be depleted. We will know that we should have at least prepared for that day some time in the future, so that our country would have an economy that would be ready for that time in the 21st century and we would have a workforce that was able to compete not only domestically but also internationally.

When the government increased spending by three times the rate of inflation in this budget, it compromised the very ability of our country and the government to invest in the things that are required. I wonder why the government did not take an opportunity during this time of surplus to invest in those elements of a productive economy that we need to do right now. To be sure, the world is running ahead of us. China, India, other Asian countries, South America, eastern Europe and Russia are all surging forward. If we do not adapt to these changes, we will be left in their wake.

Why did the government not take the opportunity to invest more in education? Why did it not work with the provinces to lower tuition fees so that people could access post-secondary education not only in universities but also in trade schools. There is a huge deficit in the skilled trades area in our country. If we do not fill the deficit in the skilled trades, we will pay a price.

Why was there not a greater effort by the government to work with the provinces to reduce the barriers to trade? Folks watching this debate would find it extraordinary that there are more barriers to trade in our country east-west than there are north-south. My province of British Columbia has been working very diligently with the government of Alberta to reduce the trade barriers, to improve the east-west movement of goods, services and people. This will be an incredible benefit to the western provinces in their ability to compete. That ability should be provided across the country. The government has an opportunity to work with the provinces to reduce those barriers to trade.

In 2005 when the Liberals were in government, we started a smart regulations initiative. That initiative, instituted by the former prime minister, was done in an effort to reduce the rules and regulations that can constrain the government and the private sector. At the start of the process it was very effective but the new government has failed to proceed with this. There is no reason whatsoever that the government cannot continue with the smart regulations initiative that we started in the previous Parliament.

In the area of productivity, why did we not see greater investment in the ability of the federal government to listen to the provinces on infrastructure?

My colleagues have spoken about the cities agenda that the Liberals implemented. The cities are sitting at the sharp edge of investment into our communities. They need the resources to provide for the sewers, the roads, and other projects that are required to ensure that cities are able to function, are livable and that we can move goods, services and people forward in an effective way.

Without that infrastructure, cities do not function very well. We have heard examples from colleagues across the House of where this is not happening. Why on earth did the government not take the opportunity to reinvest in the cities agenda? It would have willing partners in all of the provinces.

Regarding the fiscal imbalance, it is not an imbalance between the feds and the provinces. The real fiscal imbalance is the imbalance between the rich and the poor, between those who have and those who have not. I am not for a moment advocating and I would firmly oppose any efforts that are meant to penalize those who have money for those who do not. However, the government could adopt initiatives to elevate the least fortunate in our society, to give them hope. We need to give them the tools to lift themselves up. For those who cannot lift themselves up for reasons that are beyond them, if they have a number of circumstances in their lives that make them unable to work, then we should at least give them the resources to live a comfortable life.

From coast to coast in our country in every one of our cities some people live in an an environment of dire poverty and quiet desperation. We do not hear about them. We will see them if we are looking for them, but they do not have a political voice. They suffer. It is the role of any humane government to work for those people. We are judged by and marked on our ability to help those who are least fortunate.

The finance minister could have implemented a Canadian low income supplement that would give $2,000 to every family that makes less than $20,000 a year. Notice that I did not say “working” because there are people who are retired who live lives of quiet desperation. They have medical bills and costs when they retire and they are unable to provide for themselves. The monies they receive through their pensions are simply not enough to live a reasonable life. If we were to walk into their homes, we would see conditions that would break our hearts.

I would argue that health care is actually the number one most important issue which affects people in their homes. Most of us have parents and some of us have grandparents who are still alive. They need health care. Some of us need health are. The problem that is happening is that the baby boomers are aging. In most provinces the number will actually increase by 120% over the next 10 years. That is going to put an enormous burden of chronic disease on our health care system. It will increase the cost 80% from what it is now. Imagine that, an 80% increase in the costs of our health care system.

It is not a matter of more money. The federal government has to work with the provinces to implement solutions to deal with a national medical manpower strategy, so that we have enough workers, the right type of workers in the right places in the future. We need to have the tools and the investment in a preventative way, not some oblique and obtuse concept, but specific solutions on prevention that work.

I will give one example. The headstart program for kids that strengthens the ability of parents to have good parenting skills is something that works. If we look at the Hawaii healthy start program or the Ypsilanti program in Michigan, $7 is saved for every $1 invested. Youth crime has dropped 60%. Teen pregnancies, poverty, all of those parameters have dropped considerably. It works very simply. The feds should work with the provinces to implement this as part of the early learning child care program that we implemented.

The early learning program would pull kids away from television screens and computer screens. It would get them out, get them active, get them playing. They would be healthier for it. As a result in the future the burden of chronic disease in our country would diminish.

On the issue of international development, I just came back from Berlin last night. We have an opportunity at the G-8 summit to make some intelligent interventions in the area of international development. I was specifically there on the HIV-AIDS pandemic.

Some 50% to 80% of the monies that we and other countries give for health care do not get to the people on the ground. It is incumbent on the government to ensure that those monies are targeted to things that will make a difference on the ground. We should not silo on a particular disease but make sure that the parameters of a primary health care system are there. There needs to be access to potable water, access to adequate nutrition, access to medications, access to health care workers. Those individuals and those workers in developing countries are dying, they are leaving or they are being poached.

We have an opportunity to implement effective solutions for those countries that have extraordinary and appalling health care circumstances. In order for people to lift themselves up and lift their countries up, they need to have an adequate primary health care system.

In closing, those are some of the solutions that I hope the government will consider. It should not simply spend willy-nilly in trying to get re-elected. It should do the right thing, put public policy first, put public service first and implement solutions that are in the interests of Canada and Canadians.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I listened with interest to the hon. member's speech and I have a number of questions.

I think he has forgotten some of the previous government's record on things like post-secondary education. As we know, one of the best things people can do to lift themselves from poverty is to invest in education. We know tuition fees doubled and even, in some cases, tripled under the federal Liberal government's rule.

I would like to point out a number of things that budget 2006 and 2007 did which the hon. member did not acknowledge. First, we believe that the best social program to help people out of poverty is a job and we are certainly seeing the lowest unemployment rates since December 1974.

We have removed 885,000 low income Canadians from the tax rolls and reduced the GST for the one-third of Canadians who pay no tax at all. We brought in a working income tax benefit, a working families tax plan, a registered disability savings plan and the list goes on and on. This government has worked very hard for low income Canadians.

What the hon. member did not talk about is how the former government presided over the largest widening of the gap between rich and poor and it did absolutely nothing to stand up for them. This finance minister has stood up for them and it is a privilege for me to stand behind him on that.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, the hon. member should look at his tax forms to see what his government did. It inexplicably raised taxes on the poor and actually lowered the basic personal exemption. I do not know how he can actually compute that in his own mind. His government actually increased the lowest tax rate from 15% to 15.5%.

I also need to remind the member that his government received the benefits of the fiscal probity of our government. We presided over the biggest change of moving from a massive deficit and debt situation that almost drove our country into a third world situation and where our bonds were actually going to be downgraded. We inherited that situation in 1993 when we formed government but, due to strong fiscal measures by the then finance minister, over a period of time the situation changed from a deficit into a surplus which the Conservatives are enjoying.

I do not know how the member can actually explain in his own heart how his government is spending at three times the rate of inflation, the largest rate of spending that any government has ever seen.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I find it quite astounding to listen to the government member talk about people in poverty being able to raise themselves up with education when they do not even have enough money to eat. It is hard to fathom. As I indicated before, there are 93,000 people in Hamilton living in poverty.

However, the member opposite talked about interprovincial trade barriers. I spoke against that in the 1980s and it is still there.

I agree with the early learning and child care. It is not often that I find myself agreeing with Liberals but on this occasion, as a former school board trustee, I was there when that program started and it was a vital program for our young people.

Would the member opposite agree that it is also time for a national drug program for Canadians throughout this country? When the government has $15 billion, why can it not do things like this?

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, that is a very prudent suggestion. Catastrophic drug coverage should be something that the federal government should work on with its provincial colleagues. Why on earth do we have silence from the government at a time when individuals, frequently seniors and those of limited incomes, are facing enormous costs for their drugs and medications?

I do not think it is necessarily possible to have a complete drug coverage policy across the country for everything but there is room for a catastrophic drug coverage program that the government should adopt and, in doing so, it would relieve a lot of suffering and insecurity among people.

I want to attach one other provision, which goes to the government member's comments previously. Not everybody who is poor is of a working age. A lot of seniors are poor. A lot of seniors live lives of quiet desperation because they have added costs at that time of life and they are on fixed incomes, which is why a Canadian low income supplement would help those seniors who are suffering today.

Speaker's Ruling

[The Speaker, Peter Milliken]

The period for questions and comments now being over, the Chair is now prepared to rule on the point of order raised by the hon. member for Markham—Unionville concerning an amendment ruled out of order during the deliberations of the Standing Committee on Finance on Bill C-52, the Budget Implementation Act, 2007.

The Chair would like to thank the member for Mississauga South and the Parliamentary Secretary to the Minister of Finance for their input, which was very useful.

As a starting point to this rather complex matter, I wish to review what happened in committee. During consideration of Bill C-52 in the Standing Committee of Finance on Wednesday, May 30, several amendments were proposed by the hon. member for Markham—Unionville dealing with SIFT or income trusts. In dealing with the amendments, the chair expressed some doubt as to their procedural admissibility but asked for guidance from the mover and the departmental official present as to what the amendments were attempting to accomplish. From the exchange that occurred, the chair concluded that Bill C-52 was creating a non- refundable dividend tax credit whereas the amendment was:

...putting in place a refundable credit that requires additional use of monies from the consolidated revenue fund, and therefore that particular amendment is not in order.

That ruling was challenged and sustained. The other amendments from the hon. member for Markham—Unionville were defeated.

Before considering the impact of Motion 2 at the report stage, which is identical to the amendment ruled out of order at the Standing Committee on Finance, the Chair would like to quickly review the basic rules that must be followed when the Crown exercises its financial initiative.

The first is that any increase in a charge to the public, that is, a new tax, an increase in an existing tax or the continuation of a tax which is to expire, would need to be preceded by the adoption of a ways and means motion. An alleviation of taxation, that is, a reduction in an existing tax, does not need to be preceded by the adoption of a ways and means motion.

The second is that any appropriation of public moneys, that is, the spending of moneys from the consolidated revenue fund, must be first recommended by the Crown before being approved by Parliament.

In this particular case, we have a unique situation. The amendment by the hon. member for Markham—Unionville appears to effect “a refund or credit against taxes otherwise payable”. Is this the alleviation of taxation or is this an authorization for a new and distinct program of spending? If it is the former, no ways and means motion is required. If it is the latter, a royal recommendation would need to accompany the amendment.

In reviewing the evidence of the Standing Committee on Finance, I am inclined to agree with the conclusion of the chair, that is, that the amendment proposes to create a new initiative, in this case, it is called a refundable tax credit, which results in the appropriation of moneys from the consolidated revenue fund for a distinct purpose.

Therefore, I would conclude that Motion No. 2 cannot be selected for report state as it requires a royal recommendation and that Motions Nos. 1, 3 and 4 ought not to be selected as they were defeated in committee.

I thank all hon. members for having raised this issue.

Resuming debate. The hon. member for Saint John.

Report stage

[Paul Zed, Liberal, Saint John, NB]

Mr. Speaker, since March 19, when the budget was first presented, the Liberal Party has been very clear with Canadians about why we oppose it.

We look at this mixture of electoral posturing and bad public policy and see Canadians left behind and entire regions of our country forgotten. For some reason, the Prime Minister thought that dividing Canadians would unite his ambition and political fortunes.

Over the last months, Canadians have told him and this party that they have other ideas. Just as troubling as the government's political approach to governing is its inability to coherently implement its agenda.

With all of the flip-flops and the disconnections between the Prime Minister and his front bench ministers, the so-called further clarifications, Canadians are right to be asking themselves whether the government has the ability to formulate a plan and to competently manage one of the largest and most complex economies in the world.

The most recent example of the government's naiveté on financial matters was the announcement by the Minister of Finance that the government had reversed its policy on income deductibility. For weeks and weeks the Liberal Party told the Prime Minister and the Minister of Finance that their decision to revoke interest deductibility for Canadian multinational corporations made our business leaders less able to compete. As a party, we repeatedly said that was simply not the way to manage our economy in the context of gruelling international competitive forces.

Though he failed to consult any stakeholders before bringing down his budget on this specific point, we are pleased to see that the Minister of Finance has listened to our position on this matter and for once chose reason over ideology.

I would hope that the minister will take our advice and also look at debt dumping. The double-dipping he has sought to curtail is still taking place as foreign companies, and with affiliates, are permitted to borrow Canadian dollars and invest them in their home countries and do so without paying Canadian corporate taxes.

A further question of competence arises with the issue where Canadians from coast to coast are concerned about the government's total flip-flop on income trusts. As he surely remembers, the Prime Minister campaigned in the last election as the defender of income trusts and investments of Canadians. He took advantage of trumped up gossip against the Liberal government and promised Canadians that his government would preserve their financial security. What a surprise we were all in for when the Conservatives abruptly altered their course and completely changed that position.

In one day, $25 billion of Canadians' investments were wiped out. Since then, the Liberal Party has proposed a reasonable 10% tax on income trusts as opposed to the punitive 31.5% tax levied by the government. This is fair-minded public policy and, frankly, would have avoided the financial disaster that was brought upon many Canadians who were moving into retirement years or were in fact retired. Canadians retired based on the Prime Minister's promise that he would not change his position on the income trusts and he broke that trust and that promise.

Canadian tax policy is just one area of financial policy that the Conservative government has been unable to effectively manage. The federal government's relationships with the cities is another black hole of public policy.

The Prime Minister's only announcement since he has been elected, which addresses the issue of cities, is the transit strategy, and that is perhaps the most blatant example of the Conservative government taking credit for successful Liberal programs and initiatives.

In March the Prime Minister announced funding for a variety of transit projects in the GTA totalling $927 million. However, this money was Liberal government money that was set aside as funding for infrastructure spending in 2006-07 and 2007-08 that until now had not been used by the Conservative government.

Furthermore, just last week the Prime Minister spoke to the Canadian Federation of Municipalities convention and called the government's investment in Canadian cities “historic”. What he failed to mention was that the programs he touted were put in place by the past Liberal government. When is the Conservative government going to show some leadership on this file? As Canada is fast becoming an urban country, what the assembled delegates in Calgary were waiting to hear from the Prime Minister was a plan to provide cities with stable, predictable and long term funding.

As part of our new deal for cities, the Liberal government made a five year, $5 billion commitment to directly fund cities, including $20 billion for 2010-11, but the government has been silent on whether it intends to make this annual contribution permanent.

Cities can no longer depend solely on property taxes for revenue generation. What they need is a commitment from the federal government. They can no longer be treated as creatures of the province. With their ever increasing range of responsibilities and services, cities require some indication that the federal government is interested in ensuring their success.

Clearly, the Conservatives are ignoring the plight of our Canadian cities and communities. How many desperate calls are going to have to be made from mayors across Canada before the government realizes that cities and communities are the drivers of our economy? When will the government wake up and see the need to deal with cities directly to address these issues?

Perhaps the strongest reason to oppose this budget and its implementation is the crassly political way the Conservative government has favoured one region of Canada over the other. The Prime Minister came to office advocating a new approach to federalism. The numbers speak for themselves. Quebec received a 29% increase, or $698 million in equalization. New Brunswick, my home province, received a mere meanspirited 1.8%. Atlantic Canada received only 4% of all new money spent on equalization. Newfoundland and Labrador and Nova Scotia received zero increases in payments.

For a second straight year, ACOA, Atlantic Canada Opportunities Agency, has failed to receive mention in the budget or the Speech from the Throne.

The Prime Minister memorably attributes a culture of defeat to the Maritime region. His budget seems designed to give his claims a ring of truth.

The sad reality is that when we listen to Saskatchewan Premier Lorne Calvert, or Progressive Conservative Atlantic Premier Rodney MacDonald, or Progressive Conservative Premier Danny Williams, we get the message loud and clear: Canadians who need the most support have been left out of this budget.

The Conservative government has simply shown that it does not have the right plan to run the country nor the competence to implement the meanspirited and narrow-minded policy proposals it has put forward. With this budget, the Prime Minister has failed to address the concerns of Canadian industry, sold out investors, picked winners in the equalization sweepstakes, ignored Canadian cities, and punished Canadians who need the most help.

The Liberal Party cannot support the passage—

[The Acting Speaker, Royal Galipeau]

It is with regret that I must interrupt the hon. member. I had given him a two minute signal and a one minute signal.

Questions and comments, the hon. Parliamentary Secretary to the Minister of Veterans Affairs.

[Betty Hinton, Conservative, Parliamentary Secretary to the Minister of Veterans Affairs]

Mr. Speaker, I do not have a question, but I do have a comment.

As I was listening to the opposite member speaking, most of what he was saying was complete and total nonsense, but some of it he may actually believe. However, the one thing he said that spelled it out extremely clearly and put it in a nutshell in terms of how the former Liberal government treated taxpayers' money was the phrase he used, “Liberal government money”.

The Liberal government, or any other government for that matter, has no money. The money belongs to the taxpayers of Canada, and perhaps the biggest difference between the Conservative government and the Liberal government is that the Conservative government recognizes that fact. We know where the funding comes from. We also realize that we are supposed to, as a government, use that money wisely and judiciously to help as many Canadians as possible, and that is what we have done.

The arrogance in the comment, “Liberal government money”, sticks in my craw, as I am sure it sticks in the craw of many people in this country. All Canadians contribute.

The other comment I would like to make is that, in case the member opposite is unaware of it, no government generates income. The only income we have is the taxation that we take from everyday Canadians who work very hard for that money and expect us to do the right thing with it.

We are doing the right thing with it, and if that bothers the member opposite, he has my sympathy; but that is it, just my sympathy.