Debates of May 13th, 2009

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Madam Speaker, about a month and a half ago I raised concerns that I and members of my caucus had with respect to the new merger between Petro-Canada and Suncor. While we have accepted and heralded the impact this will have certainly in terms of crude development, known as the upstream, our concerns have been confined to the effect this will have on the downstream.

To understand this industry, we have to understand a little bit about retailing, a little bit about refining, and of course the concerns in Canada about potential shortages, particularly as it relates to diesel in the Prairies and gasoline in places like Ontario.

Madam Speaker, I do not think it is lost on you or others that should the merger take place, and this has been recognized indeed by the chairman of Suncor, that in fact in many communities across Canada, and I will not list them all, there will be a fewer number of players in that the threshold of 35% which constitutes a dominance will certainly take hold. In fact, if the new entity of Suncor Petro-Can Pioneer UPI is indeed given an opportunity, communities like Ajax, Pickering, Barrie, Belleville, Bolton, Brampton, Brockville, Burlington, Cambridge, Chatham, Toronto, Cobourg, Etobicoke, Fort Erie, Georgetown, and so on, will be affected. We have to be concerned. There needs to be an understanding about the market.

Sunoco in the past has been a fairly strong user of refined product and giving this to independents. It has an upgrader on the diesel side in Fort McMurray, Alberta. As well, Petro-Canada has its own refinery which produces diesel in Edmonton.

If the two entities come together and decide for efficiency reasons, as is often the case in a merged entity, to shut one or the other facility down, it means an acute situation for critical supply of diesel in that part of the country will be further affected. That cannot be good certainly in terms of access to product, but most important, for the wholesale market for diesel in western Canada.

We, as Liberals, are very concerned about the prospect that we have seen in periods of shortage where there have been disruptions by other means in the United States and elsewhere. We also know that diesel in Alberta for instance follows the crude price. Particularly because it is seasonal, as less rigs are opened up or worked on during the winter months, it means that diesel prices go up.

On the gasoline side, we know that in my province of Ontario there is an absolute shortage of gasoline. The effect of not ensuring there is a proper divestiture order by the Competition Bureau to ensure there is adequate supply and that the divestiture order is rendered to new refinery entities to continue maintaining the network that is there will only have the unintended consequences of making a bad situation a lot worse.

To that end, I call upon the Government of Canada to work very closely and to understand the facts of this industry to ensure that there is no rubber stamp to something that I think will not only substantially lessen competition, but also will bring harm to the competitive process, not to mention at a time that we are seeing rising fuel prices at this time of the year without any due regard to supply and demand. This shortage that we are experiencing in some parts of the country at various intermittent times must not be aggravated or enhanced by a decision to simply give a quick regard to this particular merger.

I say this in the context as well that the light has been shone on this issue by members of this party in terms of ensuring that Canadians have adequate supply. The extent to which this merger proceeds without proper, vigorous oversight without recognizing the markets will only make the situation a lot worse for all of us as Canadians.

[Mike Lake, Conservative, Parliamentary Secretary to the Minister of Industry]

Madam Speaker, I note that was more of a statement than a question, but it relates to a question that was asked earlier in regard to this merger.

I am told that the Competition Bureau is currently taking the steps necessary to review this proposed merger in a timely fashion in order to determine whether it would likely result in a substantial lessening or prevention of competition.

As the hon. member is well aware, the Competition Bureau conducts its merger reviews independently and confidentially, and it is not my place to comment on the status of Suncor's takeover of Petro-Canada. It would be inappropriate for the government to interfere in the processes of the Competition Bureau. I am confident that the Competition Bureau will perform due diligence in its review. Yet at the same time, my colleague is right to raise the broader issue of competitiveness in Canada. Obviously, competitiveness is of concern to all Canadians and to all members of the House.

As we all know, the current financial crisis and the general credit crunch are putting severe stress on the world economy, and economic activity in many countries is now contracting. This is negatively affecting Canada.

Our government was quick to react in order to improve Canada's competitiveness. We recognize that access to foreign markets is essential for a healthy economy. We are aggressively working to open markets abroad for Canadian goods, services and investment through the conclusion of ongoing trade negotiations. We are fighting protectionist sentiments among our trading partners and we intend to pursue new initiatives with the European Union.

The economic action plan released with budget 2009 addresses both the short-term downturn and financial constraints that are affecting consumers and businesses alike, as well as investing in Canada's long-term productivity.

The plan provides over $20 billion in new tax relief over 2008-09 and the following five fiscal years, and launched the Canada skills and transition strategy to help Canadians weather the economic storm and provide them with the necessary training to prosper in a changing economy.

Looking beyond the current market turmoil, our focus will be on improving our productivity, as it is the fundamental determinant of our quality of life and our competitiveness.

The Government of Canada is strongly committed to fostering a competitive business environment by putting in place strategic support that encourages innovation and entrepreneurship and rewards investment.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Madam Speaker, I am pleased to see the member brushed on some of the issue that I raised as a statement.

I am hoping that the Conservative Party will take upon itself the obligation of its first responsibility, which is to protect the interests of Canadians particularly as they relate to concentrated markets.

To avoid the concentration, several steps are going to have to be taken. Suncor should divest of all of its retail gasoline assets. This should be done in a city by city approach. Transfer of the pipelines which it runs through the TransCanada northern pipeline should also be considered to allow for a common carrier for other players to access. Terminal ports at Montreal run by Petro-Canada should be opened up.

It is extremely important that we not allow any more refineries in this country to shut down. The entire concern of the nation as it relates to the ability to provide energy adequately and to ensure adequate supply is at stake.

I urge the government to look at this far more intensely. I have seen the bureau give rubber stamps in the past as it did in the Superior propane case. I am hoping the government will not do it again here.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Madam Speaker, I cannot comment on the ongoing work being done by the Competition Bureau, but what I can do is read a few quotes from outside sources that talk about Canada's approach to the global financial crisis.

I have a quote from Newsweek, which talks about the banking system. Canada's banking system is ranked number one in the world. Newsweek said:

If President Obama is looking for smart government, there is much he, and all of us, could learn from our...neighbour to the north.

The London Daily Telegraph commented regarding G8 leadership:

Some will regard it as alarming that, in current times, world leadership should rest with Canada. But the Canadian Tories are a model of how to behave during a downturn.

They have kept spending and checking to reduce taxes.

The IMF recently stated:

--Canada is better placed than many countries to weather the global financial turbulence and worldwide recession.... [T]he authorities responded proactively to the crisis. The IMF supports the strong fiscal package announced in January, which was large, timely, and well-targeted--

[Judy Foote, Liberal, Random—Burin—St. George's, NL]

Madam Speaker, on March 10 in this House I asked a question to deal with the 850 fishers of Newfoundland and Labrador and Quebec who have been taxed unfairly on the buyout of their fishing licences. They voluntarily participated in a program offered by the federal government in 1998. With the collapse of the ground fishery there was an opportunity for them to actually get out of the fishery and several hundred of them took advantage of this program.

What has transpired since is nothing short of a shame on the government because of the way these fishers have been treated. They knew they would have to pay capital gains tax on the buyout of their licences. That is not the issue. The issue is that for some of those fishers they were actually charged 25% tax on the capital gains while the other 850 were charged 100% tax on their capital gains. So the question is, why were they treated differently?

What they have been trying to do ever since is to get the government to acknowledge that there was an error made and the error was made when Revenue Canada informed the Department of Fisheries and Oceans that these fishers would indeed be taxed at 100% of their capital gains. Later it was learned that was not the case. DFO had only passed along the information that had been provided to it by Revenue Canada.

Upon learning that some of their colleagues, some of their fellow fishers, were in fact only taxed 25% on the capital gains, then of course these fishers came looking for money that was owed to them, money that had been collected by the government in this situation unfairly.

We have been trying for all of this time, going on 10 years now, to get the government to acknowledge that this is a mistake. It is a mistake it can fix quite easily if it wants to. We all know that governments can do things when they realize an egregious error has been made and in this case that is certainly what has happened. So we are trying again to make the government understand the situation.

It would appear from a response that I received to a petition that I presented on the very same issue, that somehow Revenue Canada seems to think that these fishers do not want to pay capital gains on the buyout of their licences and that is not the case.

It says in the response from TCC that the payments were taxable under the provisions of the act. They are not quarrelling with that. Of course they expect to pay tax. That is not the question. The issue is that they have been taxed unfairly. How anyone could look at the situation and not see that about 200 fishers were taxed 25% on the sale of their fishing licences and the remaining 850 were taxed at 100%. There is a problem here; an error was made.

We are asking the government to acknowledge this error, and forget the fact that it is before the courts because that is always used as an excuse of course when people do not want to deal with an issue, and in this case the government. It is a smokescreen. We are asking it to acknowledge there has been a mistake made and let us fix this once and for all and treat the fishers fairly like they are being asked of their government.

[Jacques Gourde, Conservative, Parliamentary Secretary to the Minister of Public Works and Government Services and to the Minister of National Revenue]

Madam Speaker, as parliamentary secretary to the Minister of National Revenue, I would like to take this opportunity to thank the member for Random—Burin—St. George's and the fishers for sharing their concerns about the taxation of fishers who gave up their fishing licence under the Atlantic groundfish licence retirement program.

I want to point out that the Canada Revenue Agency is the custodian of very sensitive and confidential information provided to it by all taxpayers and benefit recipients.

We must handle this information very carefully, in accordance with the confidentiality provisions of the Income Tax Act.

In view of those provisions, which protect the information provided to us, we cannot publicly discuss the details of an individual taxpayer's case.

That said, I can appreciate that the fishers and their families have questions and feel frustrated about what can sometimes be a difficult process.

These men and women have said that income tax was incorrectly or unfairly applied to the payments they received from the Department of Fisheries and Oceans.

I must point out that this situation has been carefully examined by the Canada Revenue Agency since the late 1990s, and following the creation of the Atlantic groundfish licence retirement program.

Moreover, under due process of the law, the taxation issue was taken before the Tax Court of Canada, which announced its ruling on November 21, 2007.

The Tax Court of Canada confirmed that the payments received by the fishers under the Atlantic groundfish licence retirement program represented proceeds of the disposition of capital property and thus were taxable.

It is true that we do not always appreciate taxation rulings and sometimes challenge them.

Nevertheless, the fairness and integrity of Canada's tax system is based on uniform application of the law.

It applies to all of us in the same way, impartially, and is not subject to individual interpretation.

This is the only way to protect the integrity and the world-class standards of the Canada Revenue Agency. It is also the only way to protect all Canadians in order to ensure taxation equality.

It is important to note that the Income Tax Act includes objection and appeal rights for taxpayers who do not agree with their assessment.

Along the same lines, as per the legislation that guides our actions, the right to appeal must be exercised in a particular way and by a prescribed deadline.

The legislation also sets out the circumstances allowing extensions and the duration of extensions.

The Canada Revenue Agency does not have the discretionary power to grant objection and appeal rights beyond those set out in the Act.

Acting against the Income Tax Act would not only be illegal, but also undermine the system that ensures fair and equal treatment for millions of Canadian taxpayers.

[Judy Foote, Liberal, Random—Burin—St. George's, NL]

Madam Speaker, the parliamentary secretary has just reinforced the issue that there does not seem to be an understanding that this has nothing to do with paying the tax. Fishers know they have to pay capital gains on the buyout of their fishing licences. The issue is that they have been treated unfairly. One group paid 25%, the other group paid 100%. We are asking for the government to acknowledge that this was wrong.

Clearly, when we talk about uniform application, let us be uniform in applying the tax to all fishers and treat them the same. I know it is before the courts and fishers know it is before the courts.

We all know that when a mistake has been made, our government can in fact do the right thing. It can acknowledge that a mistake has been and that fishers have been treated unfairly. It can come to their aid and reimburse them the money that was taken from them--

[The Acting Speaker, NDP, Denise Savoie]

Order. I will have to interrupt the hon. member for a response from the parliamentary secretary.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Madam Speaker, there are many provisions in the Income Tax Act to help taxpayers comply with their obligation to pay taxes. Ignorance of the law is certainly not one of them.

Once again, I would like to take this opportunity to thank those who have shared their concerns with me.

We will continue to work with these people and with all Canadians to ensure that they always receive the best possible professional services. That is how we have earned Canada's trust.

[The Acting Speaker, NDP, Denise Savoie]

The motion to adjourn the House is now deemed to have been adopted. The House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 7:38 p.m.)