Debates of March 30th, 2009

Automotive Industry

[Tony Clement, Conservative, Minister of Industry]

Mr. Speaker, in fact, we are coordinated with the Americans because this is an integrated auto sector. We have been working with American officials and the Prime Minister has been working with the U.S. President to make sure that the Americans are aware this is integrated and that is why our response today was indeed integrated.

The hon. member stands in his place and talks about failed Liberal policies of previous governments and then in British Columbia on the weekend says he does not want to support the auto sector. So which is the real Leader of the Opposition?

[Michael Ignatieff, Liberal, Leader of the Opposition]

Mr. Speaker, the minister's capacity for misquotation never fails to astonish me.

Last week, GM testified to the auto subcommittee that it had committed all of its worldwide assets, including its assets in Canada, as collateral for U.S. loans to keep its American operations alive. That may mean that this government's loans to GM Canada are going to be unsecured and Canadian taxpayers are going to be on the hook.

The government was not at the table. It did not stand up for taxpayers. It did not stand up for Canadian workers. Why not?

[Tony Clement, Conservative, Minister of Industry]

Mr. Speaker, the logical extension of the Leader of the Opposition's remarks is that he does not want to be there, he wants to have an unstructured bankruptcy where hundreds of thousands of jobs are lost, not only at GM or Chrysler but with the auto parts sector and the dealerships across this country. If that is the hon. member's solution, it is a solution that Canadians do not want.

[Michael Ignatieff, Liberal, Leader of the Opposition]

Mr. Speaker, I take this to be no, the loans are unsecured and I await contradiction.

The auto industry is not an Ontario industry; it is a Canadian industry. In Quebec, 125 auto parts manufacturers are in jeopardy and 11,000 jobs are at risk. In Quebec, a $3 billion a year industry could be lost.

Why did this government leave it up to Washington to save a Canadian industry?

[Tony Clement, Conservative, Minister of Industry]

Mr. Speaker, that is completely false. Of course, in partnership with the Americans, we are trying to find a North American solution. It is important to have the same action plan throughout the continent. It is a North American problem, not just a Canadian problem. It is a problem involving American buyers.

[Frank Valeriote, Liberal, Guelph, ON]

Mr. Speaker, the government has failed Canada's auto industry. The minister failed to provide leadership for a real plan for the auto crisis when it began long before November 2008.

Today, President Obama announced that auto warranties in the United States will be backed by the United States government to avoid a crash in new car sales. If the government were at the table every step of the way as it claims, why is it only beginning to look at backing General Motors and Chrysler warranties now?

[Tony Clement, Conservative, Minister of Industry]

Mr. Speaker, I thank the hon. member, the ex-auto critic's intervention on this file, but the fact of the matter is these plans are progressing.

Obviously, the U.S. President has some new ideas and we are willing to take a look at those. Here in Canada we have been, as a result of this budget, on the side of the Canadian consumer, on the side of increasing credit and financing, and on the side of our auto sector. That is our record and we are proud of it.

[Frank Valeriote, Liberal, Guelph, ON]

Mr. Speaker, it would have been nice if he were at the table with them.

The Canada secured credit facility was announced by the government in December 2008, something necessary to make credit available to consumers through loans and leases. Conservatives keep referring to it but it will not be available until May.

Today the Minister of Industry said that we are very close to the fork in the road. We have been at this fork in the road since December. Why is the credit facility not available now? They have had four months.

[Jim Flaherty, Conservative, Minister of Finance]

Mr. Speaker, the credit facility is part of the extraordinary financing framework that was announced in the budget on January 27. It is very important in terms of acquiring the commercial paper that is supported by loans with respect to vehicles and equipment. Unlike the opposition, we have actually consulted to create a plan that will work for Canadians and the plan will be implemented shortly.

Goods and Services Tax

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, in 1991, Quebec was the first province to harmonize its sales tax with the GST. Ontario, which just harmonized its own sales tax, will receive $4.3 billion in compensation over the next two years. The maritime provinces got more than $1 billion in 1997. To date, Quebec has still received nothing, despite repeated requests.

How can the Minister of Finance agree to compensate all the provinces that have harmonized their sales tax with the GST, except Quebec? He should give us one good reason.

[Christian Paradis, Conservative, Minister of Public Works and Government Services]

Mr. Speaker, the situations in Quebec and Ontario are completely different. Ontario is going to adopt a federal harmonization act. Quebec did not. Quebec chose to keep two separate taxes, the TVQ and the GST.

Yes, an agreement was signed in the 1990s by two other governments about this situation. Quebec has full control over administering its tax and also administers its own sales tax system and the federal GST system. And that is why Quebec has received $1.77 billion in compensation to date.

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, it takes a token Quebecker to distort reality. Quebec receives $130 million a year to administer the GST because it does so for the federal government. The other provinces pay the federal government to administer their tax. That has nothing to do with harmonization.

I therefore call on the Minister of Finance or the token minister from Quebec to justify that to Quebec.

[Christian Paradis, Conservative, Minister of Public Works and Government Services]

Mr. Speaker, at a given point, unlike Ontario, Quebec did not pass the federal harmonized sales tax legislation. That is the point. We need to stop clouding the issue. Quebec also did not sign a comprehensive integrated tax coordination agreement. That is a fact.

Quebec's sales tax and the GST are still separate, and Quebec has chosen to administer them. That is why there are compensation payments. The member should stop deliberately muddying the waters to create division.

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

Mr. Speaker, what the minister just said is totally false. There are just as many exceptions in Ontario.

The federal government has always refused to compensate Quebec on the pretext that provinces would only be compensated when harmonization cost them more than 5% of their sales tax revenues. According to Ontario’s budget, the change to a harmonized tax will actually increase Ontario’s revenues by 3.5% annually.

Can the minister tell us why he unilaterally changed the compensation formula if not for strictly partisan electoral reasons?

[Christian Paradis, Conservative, Minister of Public Works and Government Services]

Mr. Speaker, there is nothing partisan about it. We are talking about two different agreements. There are two distinct taxes in Quebec, the QST and the GST, which the province administers with reimbursement from the federal government.

Things will be different in Ontario. It has decided to harmonize and the federal government will collect the tax. That is something else entirely.

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

Mr. Speaker, that was the government’s tame Quebecker speaking. We want to ask him another question. Once again, the federal government is trampling the interests of Quebec. The Liberal government compensated the Maritime provinces with Quebeckers’ money in 1997. Twelve years later, the Conservatives are digging into our pockets to compensate Ontario. In all, Quebeckers will have spent more than $1.3 billion to finance tax reform in the rest of Canada.

Does the minister realize that, regardless of the party in power, there is a double standard toward Quebec?

[Christian Paradis, Conservative, Minister of Public Works and Government Services]

Mr. Speaker, Quebec made a political choice, which was to keep two distinct taxes, the QST and the GST. My colleagues are trying to compare that to harmonization with the federal tax, but it is not the same thing. What will be done in Ontario is not at all like the situation in Quebec. Quebec decided to administer both the QST and the GST and so far has been paid $1.77 billion to do so.

Automotive Industry

[Jack Layton, NDP, Toronto—Danforth, ON]

Mr. Speaker, the crisis the in the auto industry persists. Once again today, the Conservative government is piggybacking on American initiatives. The federal government is showing no leadership. For instance, two weeks ago, I proposed that the Prime Minister hold a Canadian automotive summit, to bring together all the major players, the unions and governments, in one place at the same time, in order to come up with some solutions.

Has the government had time to consider that proposal? Will it hold a summit on the crisis in the auto industry, yes or no?

[Tony Clement, Conservative, Minister of Industry]

Mr. Speaker, our current challenge is to take action with the Americans for a North American industry. So far, there has been no viable, long-term action plan, but such a plan is possible in the future. That announcement was made today. We have not had the opportunity to hold a summit, but an action plan is needed.

[Jack Layton, NDP, Toronto—Danforth, ON]

Mr. Speaker, the failed policies of the government are aggravating the problems in the auto sector in Canada. That is why more investment of the Detroit three now goes to Michigan rather than to Canada. Where are the made in Canada solutions that we should have? Where is the green car strategy for Canada so we can start building the vehicles that Canadians want, that pollute less and cost less?

Will the government at least name a director of recovery for the automobile sector to work with the person named by the Obama administration, so we do not have to rely on the minister to get the job done? He is not doing it.

[Tony Clement, Conservative, Minister of Industry]

Mr. Speaker, as I said, we are working in concert with American officials. This is a North American auto sector. That is why our announcements in both Washington and Ottawa occurred today.

The hon. member has a track record, as well. When we was a Toronto city councillor, his plan for the auto sector was to ban automobiles from the city of Toronto. I guess we would all be riding bicycles or taking other forms of transportation. How does he explain that to the Canadian auto workers?

[Jack Layton, NDP, Toronto—Danforth, ON]

Mr. Speaker, yesterday on Fox News, Sunday, the Prime Minister was asked whether Canada was open to renegotiating the environmental and labour elements of the NAFTA agreement. To that, the Prime Minister said, “We're not closed to that”.

Could the government inform the House as to why the Prime Minister would make such a significant policy announcement and reversal on Fox News and not in the Parliament of Canada? What steps will the government take to make this needed change happen? Will it move on this idea finally?

[Stockwell Day, Conservative, Minister of International Trade and Minister for the Asia-Pacific Gateway]

Mr. Speaker, we have been encouraged by a number of things that have been said. Coming out of the United States. President Obama, following our Prime Minister's lead, has made a clear statement, for instance, with the buy American act to ensure that everything done on that act complies with its trade obligations.

When it comes to NAFTA, the indication has been very clear that there is not an intention to have serious changes made to it. President Obama has indicated his interest in the labour and the environmental accords that are associated with that. The Prime Minister has indicated those accords are strong. We intend to talk to him about that.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, let us try this again. My question for the Minister of Industry is very simple and I trust crystal clear. Could he tell us whether any loans that may be made to GM Canada by the federal government will be backed by any GM assets? In other words, will the Conservatives require GM Canada to put up any collateral for any loans made to it? If so, what is that collateral?

[Tony Clement, Conservative, Minister of Industry]

Mr. Speaker, this chamber would like to know that we have not made any loans to GM Canada to date. We have some strict criteria worked out with the Government of Ontario as well to ensure that Canada's interests are protected as much as possible. This includes the conduct of the executives. It includes ensuring there is as viable long-term plan. We continue to work with GM on those matters.