Debates of Oct. 25th, 2010

Haute-Gaspésie—La Mitis—Matane—Matapédia

[The Speaker, Liberal, Peter Milliken]

It is my duty to inform the House that a vacancy has occurred in the representation, namely: Jean-Yves Roy, member for the electoral district of Haute-Gaspésie—La Mitis—Matane—Matapédia, by resignation effective October 22, 2010.

Pursuant to subsections 25(1)(b) and 26(1) of the Parliament of Canada Act, a warrant has been addressed to the Chief Electoral Officer for the issue of a writ for the election of a member to fill this vacancy.

It being 11:02 the House will now proceed to the consideration of private members' business as listed on today's order paper.

The House resumed from May 31 consideration of the motion.

The Economy

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I am pleased to stand in the House this morning to participate in the debate on Motion No. 518, which reads:

That, in the opinion of the House, the government should: (a) recognize that improved competitiveness will continue to stimulate economic growth and create jobs for Canadians; and (b) continue to diversify and expand markets for Canadian goods and services by encouraging investment in Canada through lower corporate tax rates, maintaining a stable economy and the signing of free trade agreements.

I cannot imagine a better opportunity for debating the very different vision that we in the NDP have for the economy, for jobs and for fair taxation in our country.

Given the motion that is before us today and the successive government budgets and trade agreements that have been brought before this House by the Conservatives, it is abundantly clear that the NDP vision for the economy is very different from the government's vision.

In our view, the primary focus ought to be the creation of jobs, decent jobs with decent family-sustaining wages. We need to focus on creating and building a strong domestic economy. We need to develop an industrial strategy that will build a sustainable economy for the future; an economy that fuels growth by investing in green technology, green jobs and renewable energy; an economy that is built on a commitment to the principle of fair trade, not free trade; and an economy that is built on a fair and just distribution of the wealth of our nation.

Clearly, that is not a vision shared by either the Conservative or Liberal Parties in the House but it is a vision that is increasingly shared by Canadians as they struggle to survive this recession. And, make no mistake, we are still in this recession.

The Prime Minister points to soaring bank profits and takes that as proof that the recession is over. For him, if his banking friends are out of trouble, everyone is out of trouble. However, Canadians see it differently. One and a half million Canadians are still out of work. Six out of every ten Canadians live paycheque to paycheque. Household debt is at record highs and life is more expensive than ever. Unlike the Conservative government, New Democrats will not declare this recession over until middle-class families are back on their feet. A true recovery must not leave anyone behind.

That is why we are working so hard to protect well-paying jobs, to make life more affordable for families and to maintain Canada's stimulus funding commitments so that cities like my hometown of Hamilton get the support they need and to ensure the protection of pensions and retirement savings.

Canadians are counting on us in this House to take bold and strategic steps and they are looking to us to have courage in the face of adversity. However, nothing that the Conservative government has brought forward to date matches the urgency or the depth required to protect working families in this economy. Let me be clear: our number one job is to protect Canadians during this economic crisis.

I have heard members speak about the need to stimulate the economy. Others have rightly pointed out that we do not just need to stimulate the economy but that we need to stabilize the economy. The difference is more than mere semantics.

However, the bottom line is that the economy and the market are not some supra-natural phenomena, neither were they created by divine law. They are man-made constructs and, as such, they are relationships that are governed by rules that we created. These rules create a framework for determining winners and losers and that makes it incumbent upon all of us to recognize that the economy is a moral issue. As Tommy Douglas used to say, “The economy is made for man, not the man for economy”.

We have built economic structures that serve powerful global forces acting in their own interest, presenting profit as the chief spur to economic progress, free competition as the guiding norm of economics and private ownership of the means of production as an absolute right. The sky was the limit and there seemed to be no concomitant social obligations.

We are all led to believe that governments are the problem and the market is the solution, and that is exactly what the motion before us today wants us to believe. However, if the current economic crisis has proven nothing else, it is that markets cannot do it alone. Yes, markets can bring prosperity but governments not only have a role to play but they have a responsibility to act.

Clearly, Conservatives see things differently. That is why they believe in shifting taxes from corporations to individuals and families and that is why they have continued the Liberal corporate tax cuts that began in the 1990s.

In the last budget, $6 billion was allocated to further tax cuts for the wealthiest corporations. It is outrageous. The big banks just reported their profits for the first three-quarters of this fiscal year at $15 billion. Did they really need an additional $645 million in tax cuts?

What about Canada's top CEOs? The Conservatives would rather bail them out again than help hard-working Canadians and their families. Corporate profits may have been down last year, but shed no tear for their top executives. The average paycheque among Canada's top 100 CEOs was $7.3 million, or 174 times what the average Canadian makes, which is $42,305. By 1:06 p.m. on January 4, the average top 100 CEOs had already pocketed what takes the average Canadian all year to earn.

Anger over executive pay is brewing the world over. The British have upped taxes on bankers' bonuses. U.S. President Obama has capped pay for executives receiving stimulus funding, but our Prime Minister is protecting loopholes that let CEOs duck taxes by accepting pay as stock options, and that is on top of his corporate tax giveaway. That is what this motion is asking us to continue. Let us remember what it says. It says that we need even lower corporate tax rates to stimulate investment. It really is outrageous.

However, that is not all. The Conservatives gave an additional $6 billion to the Governments of Ontario and British Columbia to bribe them into implementing the HST. That tax has resulted in a huge tax shift from corporations to individual Canadians who are already paying the majority of the costs of federal government programs. And, despite the rhetoric, it is important to point out that the HST certainly is not helping all businesses.

It would be good for members to remind themselves that the real engine of Canada's economy is not the wealthy corporations, but rather its small businesses. Therefore, let us look at this through the eyes of someone who runs a restaurant, drives a taxi or does home renovations. For them, the HST means asking customers to shell out more tax for their basic goods and services.

Their products used to be PST-exempt. For them, harmonizing the PST and GST is not about reducing paperwork. For them, it adds a major new tax on everything from food to funerals. The HST has added more tax to hundreds of products and services that are disproportionately delivered by small businesses. That is neither smart nor fair.

Instead of helping small businesses drive our economic recovery, the HST pits them against consumers who are already struggling. In the middle of a recession, it asks them to look these customers in the eye and say, “You have to pay more”. The notion that small businesses were clamouring for the HST is simply false. It certainly is not what I was hearing in my riding of Hamilton Mountain.

I have risen in this House on numerous occasions to talk about building an economy that works for Canadians. We have talked about our plan to create jobs and build an economy that allows us to emerge from this recession by ensuring every Canadian who wants to contribute can have a well-paying, productive job. The economy is built on employment.

I have talked about our plan to build a green economy. I have talked about our plan to support and foster an educated, skilled workforce, which, I might add, enhances our competitiveness much more than corporate tax cuts or ill-conceived free trade agreements, such as the ones I have spoken to in this House on so many occasions in the past few weeks.

If we really want to be competitive, we need to ensure that every child, teenager and young adult has access to an affordable education so that we can build a country that can succeed in the knowledge-based economy of the 21st century. That is how to build a modern economy in the world of today.

I also believe in an economy where no one is left behind. That is why my NDP colleagues and I always analyze every economic proposal by evaluating how it will affect the most vulnerable among us: seniors, children and the disabled. We know that the strongest chain is built by ensuring that we take care of the weakest link.

I wish I had more time to address each of these points in more detail. There are literally dozens and dozens of examples where the Conservative government has implemented policies based upon the principles outlined in the motion that is before us today, only to exacerbate the already growing gap between the rich and the rest of us.

For far too long now, our economy has failed to serve the needs and aspirations of the Canadian people. It is time to change course. It is time to build an economy where no one is left behind.

[Chris Warkentin, Conservative, Peace River, AB]

Mr. Speaker, I stand in the House today to support the motion. I would like to highlight a number of things the government has already done in making our country more competitive and innovative in order to have an economy that will lead to jobs today and tomorrow.

As set out in “Advantage Canada” and supported by Canada's economic action plan, in budget 2010, the government is committed to improving Canada's competitiveness and creating the economy of tomorrow. We have focused on building a long-term advantage based on competitive taxes, renewed infrastructure and skills, a tariff advantage, reduced red tape, openness in international trade and our strength as a global financial sector leader.

Even before the global recession, the government was making progress toward these goals and through our efforts we are emerging from the recession with a stronger economic advantage than before. Indeed, our plan is yielding results. Canada has returned to economic growth. Canada is leading our G7 peers in the recovery in the first quarter of 2010, and the growth is approximately 6%. The impressive job growth of 285,000 jobs since July 2009 truly is impressive.

In promoting competitiveness and innovation, we are advancing several objectives, including fostering an innovating and knowledge-based economy, improving and modernizing our marketplace framework policies and refining our approach in working with businesses to boost global competitiveness. Through these efforts, Canada will be even better positioned to compete globally.

A competitive business environment is a key to economic growth. As demonstrated by the government's commitment to improving competitiveness, last year we implemented key recommendations of the competition policy review panel. These reforms modernized the Competition Act and Investment Canada Act and reduced foreign investment restrictions on the air transport sector in order to increase our international competitiveness.

As part of a broader strategy to make the Canadian economy more competitive, we also announced the removal of existing restrictions on foreign ownerships of the Canada satellite system, allowing firms to access foreign capital and know-how and invest in long-term and new advanced technologies. This will allow Canadian firms to develop strategic global relationships that will enable them to participate fully in the foreign markets.

Our government also strongly reinforced the importance of small businesses and entrepreneurship in the Canadian economy. Given the role of small businesses as the engine of job creation and economic growth, the government has strengthened its support for this key sector. For example, budget 2010 provided $10 million in new funding for the Canadian Youth Business Foundation. This builds on our past record of supporting success. Since 1996, the CYBF has invested in more than 3,500 young entrepreneurs who have created over 16,900 new jobs. This funding will help launch more than 500 businesses over the next 12 months, generating an estimated 2,500 new jobs in the coming year.

Beyond the competitiveness of our business environment, our government is active in improving the innovativeness of our economy. Science, technology and innovation are instrumental in forging Canada's competitive advantage in the international marketplace. Our government recognizes that research and development are key drivers of long-term economic growth. We know that the driver of this economic growth will come when we have discoveries stemming from research that help improve the quality of life for every Canadians.

Canadian talent in science and engineering is one of the most important resources. Our university researchers and students are second to none and our public sector research capacity is among the strongest in the world. Among the G7 Canada ranks at the highest in terms of expenditures on research and development in the higher education sector as a share of our economy.

Recently our government announced a $350 million investment in natural science and engineering research council's discovery grant program. These grants support the ongoing work of more than 10,000 researchers based at universities across our country. In addition, $122 million was announced for scholarships that would be awarded this year through the NSERC post-graduate scholarship and post-doctoral fellowship programs and through NSERC's share of the Canada graduate scholarship program.

However, funding scientists and engineers is only half of the equation. We also need leading-edge facilities in which to work. Budget 2009 committed over $2 billion over two years to repair and renew the R and D and training infrastructure of our Canadian universities and colleges.

Our government recognized that, in addition to academic research, increasing business investment in research and development would be critical for our long-term competitiveness. Accordingly Canada's economic action plan provided of over $1.1 billion over two years to commercialize technologies advancements and encourage local businesses to invest in innovation. This included enhanced funding for the industrial research assistance program and funding to support clean energy and technologies research and the development of these technologies.

Government investments constitute one part of the equation. However, the real responsibility lies with the private sector to adopt and adapt these innovative technologies as strategies that can help advance their own business interests. Budget 2010 builds on the existing federal investments with over $260 million in new funding to encourage Canadian businesses to invest in research and development and to commercialize these innovations into new products and services. New funding will be used to foster regional networks innovation across the country, through the National Research Council technology cluster initiative program.

On advancing innovation and driving competitiveness, one area that holds particular promise is the digital economy. Fostering the digital economy is a key component of our economic strategy moving forward and will underpin our competitiveness for decades to come. Canada can and should be the leader in the digital economy.

As we announced recently at the launch of our digital economy consultation process, in developing our digital economy strategy, the government will focus on enabling the ICT sector to create new products and services, accelerate the adoption of digital technologies and contribute to increased cybersecurity. Pursuing the strategy means fostering a culture of innovation in Canada supported by all sectors of the economy. This will require the concerted efforts of government, academia and business all working together.

In addition, our government is committed to ensuring the necessary digital infrastructure is available in remote and rural areas with the broadband Canada connecting rural Canadians program. It was recently announced that the first 52 projects conditionally approved under the funding of the broadband Canada program had been identified. These projects will bring the power of broadband Internet access, for the first time, to approximately 168,868 households located in nine provinces and territories.

Further, we have committed to modernizing copyright and intellectual property laws in order to encourage new ideas and to protect rights of Canadians whose research, development and artistic creativity contribute to Canada's prosperity.

We are attempting to create a climate to encourage business innovation and productivity. This type of climate is one that will allow us to innovate, to move up the global value chain and to compete globally. These measures will continue to fuel our recovery from the global recession, forge a competitive advantage, support growth and prosperity and help to create an economy of tomorrow.

Through this record of successes, we are making Canada's economy stronger, more vibrant, more innovative and more competitive.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, I am pleased to speak to Motion No. 518 as brought forward by the member for Calgary Centre.

I would like to address the first part of the motion. I believe every member of the House recognizes the importance of strengthened competitiveness, the importance in terms of stimulating economic growth and of creating both the jobs of today and the jobs of tomorrow. This debate is not on whether we should work toward greater competitiveness for the Canadian economy, but rather how best this can be achieved during a time of fiscal restraint and deficit.

Motion No. 518 proposes that the Government of Canada continue to lower corporate tax rates and to diversify and expand Canada's trading relations.

First, I take issue with the notion that the government, “continue to diversify and expand markets for Canadian goods and services”. My contention is with the word “continue”. If we look at the Conservative record of government, we see that Canadian trade has become less diversified since the election of the government and the Prime Minister. They have steered Canada into trade deficits for the first time in 30 years. This is not a record we want to continue in any way. I will have more on that later.

The desire for lower corporate tax rates and more diversified trade relations is a desire that, in general, the Liberal Party of Canada supports. In fact, the Liberal Party has a proud record of both lowering corporate tax rates and diversifying, expanding, and deepening Canadian trade relations with some of the fastest growing economies in the world. We implemented the largest reduction of Canadian corporate tax rates in history, reducing the corporate tax rate from 28% to 21%.

The difference between now and then was we were in a surplus. It was not on borrowed money. Today we are in deficit and we contend that this creates a very different calculation economically. The Liberal Party supported, believed in and implemented corporate tax cuts when in surplus. We do not believe that right now it makes sense to increase the federal deficit and deepen the federal debt to provide corporate tax cuts on borrowed money.

I will provide some context by contrasting the Liberal record, one of a thoughtful and prudent economic approach, with the record of reckless measures that have been put forward by this borrow and spend Conservative government.

As I mentioned before, the previous Liberal government implemented the largest corporate tax rate cuts in Canadian history, when we reduced the corporate tax rate from 28% to 21%. We did this while providing Canadians with 10 consecutive balanced budgets. We did this by maintaining prudent fiscal measures, including the $3 billion annual contingency reserve.

In fact, the Conservatives inherited a $13 billion surplus from the Liberal government, but by pursuing reckless fiscal policies, gutting our contingency measures and increasing spending by 18% in the first three years of its government, the Conservative government actually put Canada into deficit even before the economic downturn.

This is the biggest borrowing, biggest spending finance minister in Canadian history. He has missed every fiscal projection he has ever set. Now with the $56 billion deficit, he has given Canada its largest deficit in our history. To suggest that Canada should continue with this kind of reckless policy and stay in deficit, in fact, deepen our deficit by cutting corporate tax cuts on borrowed money right now, is misguided at best. The fact is we need to return to balanced budgets.

Canadians get it when they look at their family budget. They know they are struggling to make ends meet. They want help with the rising cost of home care and education. They are worried about how they will save for retirement. They wonder what they will get for this record $56 billion deficit.

Canadians see these borrow and spend Conservatives wasting their tax dollars with $1.3 billion for a 72-hour G20 photo op and on $10 billion to $13 billion on American-style mega prisons to lock up unreported criminals as the crime rate actually declines.

They are concerned about spending $16 billion on a bad deal and an untendered deal for stealth fighters. They are worried about a record $130 million spent by the Conservatives on shameless self-promoting advertising for the Conservative government. They are worried about billions of dollars more for corporate tax cuts that we cannot afford right now.

Canadians want this reckless management and waste to stop. They deserve a government that will act responsibly with their hard-earned tax dollars.

These borrow and spend Conservatives must stop trying to delude themselves into believing that corporate tax cuts on borrowed money will somehow make Canada more competitive in the long run. Canadians get it. They know the difference between cutting corporate taxes while in surplus, which is defendable, versus cutting corporate taxes on borrowed money leading to deeper deficit and deeper debt, which is economically untenable right now.

Deficits are simply deferred taxes with interest. So by providing a corporate tax cut today on borrowed money, we will be forcing corporations and citizens in the future to pay higher taxes. That is morally and economically questionable.

The proposed corporate tax cuts do not come for free. We will be paying for them down the line as Canadians pay higher taxes. With Canadian debt levels dangerously high, we need to focus on eliminating the deficit and paying down the debt once again.

When we consider total government debt in Canada, our debt to GDP ratio is not the best in the G7, as the government likes to pretend. In fact when we consider the debt of all levels of government and compare it internationally, our debt to GDP ratio in 2009 was 81.6%. That is actually worse than Germany, France and the U.K. Now is not the time to be reckless and continue with billions of dollars of tax cuts we simply cannot afford right now.

On the issue of international trade, the Conservative record has been troubling. Last year the Conservatives oversaw a trade deficit of $4.5 billion. That was the largest trade deficit in Canadian history and Canada's first annual trade deficit since 1975. This is an ominous sign for a country like Canada, a small open economy that depends disproportionately on exports to create jobs and prosperity.

So far in 2010 Canada has a trade deficit of $4.9 billion. That puts us on pace for an even larger trade deficit than the record trade deficit we saw last year. Not only are we seeing trade deficits but our trade is actually growing less diverse. We are becoming in fact more dependent on the U.S. economy, and we know the dangers of that, given what has happened the last couple of years with the U.S. economy and the decline of the U.S. economy and the rise of protectionism in the U.S. These are dangerous and ominous trends for Canada.

The fact is that the government spent its first three years with the Prime Minister being churlish with China and ignorant of India. The government has had four trade ministers in four years, denying any of them any opportunity to really build important sustainable relations with other ministers in other countries, trade relations, foreign relations or simply relations between people. Changing trade ministers almost every year is not good policy for defending Canadian interests abroad.

The fact is that a Liberal government would take a different approach. We would focus on global network strategy. A Liberal government would work in partnership with business, universities, civil society and private citizens in order to better leverage Canadian relations with the world.

We would harness our multicultural communities as natural bridges to the fastest growing economies in the world. We would return to the very successful team Canada missions focused on sectoral areas where we have a comparative advantage, like education and including clean technology and clean energy technology.

A Liberal government would clean up the fiscal mess that these borrow and spend Conservatives are going to leave. We would, once again, reduce corporate tax rates once the books are balanced and once we can afford it, but we have to balance our books first and get Canada into the black before we do that.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I am pleased to rise to speak to Motion No. 518, a motion from the member for Calgary Centre, taking up his private member's opportunity with a motion that basically tries to debate the continuing direction the Conservative Government of Canada is taking with its economic policy.

For one who, after five years in the House, is only getting his first private member's bill in front of the House for debate, I find it was a very large sacrifice on the part of the member for Calgary Centre to put forward a motion like this when he could have been doing something much more useful for his constituents.

Having said that, of course I am very pleased to have the opportunity to debate the issues within that motion. I note that our previous speaker from the Liberal Party did not dwell overlong on the corporate tax cuts in the history of the Liberal Party. Quite clearly the New Democratic Party has believed and continues to believe that the corporate tax cuts that were initiated in the 1990s and carried through to this day have fundamentally altered the tax system of Canada to a point where it is no longer recognizable.

The burden has fallen directly upon average Canadians, who when they do make a profit on their income, so to speak, would invest this in Canada. Certainly average Canadians take their dollars and put them directly into the Canadian economy. That is the case, and what is happening since we have moved the tax burden over to the individual is that is those individuals do not have the same capacity.

What has happened within the system for businesses? The very best businesses do very well in Canada. Canada still has, if we look at it, a resource-based economy. Where businesses are doing well is in selling the natural resources, taking the natural resources out of the ground here in Canada and selling them to customers who require these resources in order to conduct their business in this country as well as in other countries.

We have an economy that is robust in its sale of natural resources. Those resources, of course, are finite and will eventually be extracted and be no longer part of the Canadian economic equation. That is a deficit that we are building within our natural resources sector.

Profitable companies and Canadian resources go hand in hand. Those are two things that go hand in hand in this country. So when we talk about reducing corporate income tax, we are talking about reducing the value to Canadians of the exploitation of their resources, to a large degree.

Whether it is in the financial sector where much of this money is made or whether it is directly in the resource companies, it is coming from virtually the same source.

Since the advent of free trade, we have seen a huge decline in our manufacturing sector. That will not come back with free trade because, of course, free trade encourages the movement of manufacturing to the lowest cost labour situation. That is exactly what has happened now.

We see that free trade has caused an imbalance in the world's economy, with huge surpluses of capital in those countries that were most successful at harnessing their low-cost labour and applying it to products. So we see that China and India are very strong right now with their ability to influence the world economy and to do well in that. All the much better for them.

Getting back to corporate income taxes, what can we do in Canada to promote what we are doing better? Let us take a look at the Mackenzie Valley gas project. It is one that has gone through environmental assessment. It has gone through a process and has now come to a point where we in the north can support this project, because we have identified what has to happen with it and what can make it go well.

I had the opportunity to read more about this in the last few days, and one of the things that is clear is that we will not see the development of the Mackenzie gas project without investment by Canada. Where is the investment going to come from at a time when we have billions of dollars of deficit in our fiscal situation? Where is that money going to come from to do the things we need to do? Should it come from the average Canadian, to invest in an opportunity for a large corporation to move ahead with the further exploitation of our resources? No, I would say it probably should come from corporations, which will benefit in the end from those investments.

When we look at the investment there, we see quite clearly that we need infrastructure. The cost of the Mackenzie Valley pipeline is extremely high, yet it could be reduced to a huge extent by the building of the Mackenzie highway prior to the development of the pipeline. That would not take a very large investment on the part of government, whether it be our government in the Northwest Territories, which is still suffering from a borrowing limit lower than that of our major city in that territory, or it could come from the federal government if it chooses not to cut $6 billion out of the budget through corporate tax cuts every year. Then we would have some money that we could see invested in things like the Mackenzie Valley highway, which would create the opportunity for the Mackenzie Valley pipeline to be built at an economical rate, much as we are competing with the Alaska pipeline project that is to be built along the Alaska highway.

We are in a situation in the Northwest Territories where we are trying to compete with a project that has better infrastructure than we do. So we need investment that will make corporations more money and they will be able to pay more taxes. It is a good situation. We are agreeing to the exploitation of the resources, but we need investment by the federal government in this type of activity.

Will the federal government have the fiscal capacity to put that into the Mackenzie Valley pipeline if the Conservatives continue with their rather poor policy of reducing the corporate taxes benefiting those that are in place already, that are wealthy already and are in a good position to exploit Canadian resources and to take profit from that?

No, we need the investment of government in order to make that possible. Right around the world, we are the one single country left that is an energy exporting country that does not have a national presence in the energy business. Where are we in Canada? Why are we taking this path rather than the path that every other energy exporting country around the world is taking? Why are we doing that? Why are we continuing to look at our economy in a fashion that rewards the very best and does not help out those who really need help?

The NDP in the last while has proposed that we look at the potential for reducing taxes on small businesses, which employ many Canadians, which give opportunities to Canadians to expand their local industry to work in their communities. That is where tax reduction will give the biggest benefit. So what we have is a situation where the government continues to favour the very large corporations and does not look at the economy in a holistic sense, does not look at how we can invest to ensure the best return to all Canadians. It thinks that by giving it to the corporations we are somehow going to get it back in a better fashion, and that just does not make sense.

[Ed Holder, Conservative, London West, ON]

Mr. Speaker, I rise with pleasure this morning to support Motion No. 518 by the member for Calgary Centre. I speak as a proud Londoner and a member of a government committed to doing what is necessary to bring opportunities to Canadians.

The Government of Canada has been capitalizing on every opportunity to tell the world about these and our many other competitive advantages. From natural resources and energy to digital media, life sciences and advanced manufacturing, the government is working closely with its partners, the provinces and the territories, to reach out to business leaders and investment decision makers around the world. We are proud to highlight Canada's competitive offering and eager to welcome them to look at growth and investment opportunities in Canada.

Last year, Canada's trade commissioners in 150 cities and markets around the world reached out to thousands of investment decision makers and influencers. They met with hundreds of high-potential investors and helped prepare solid business cases for making investments in Canada. These efforts by our trade commissioners abroad helped to attract more than 100 new greenfield and expansion investments in Canada last year, and created more than 3,500 high-value jobs across Canada. Our efforts also helped to generate a great deal of positive media coverage of Canada in the international press.

I commend my colleagues, the Minister of Finance and the Minister of Industry, for their efforts to make Canada more competitive and attractive as a business destination.

In budgets 2009 and 2010, the government responded to recommendations of the Competition Policy Review Panel, reduced foreign investment restrictions in the air transport sector, introduced measures to make Canada's investment review process less restrictive and more transparent and to remove restrictions on foreign ownership of Canadian satellites, in uranium mining and to open the door to foreign venture capital. Investors took note.

Wherever we meet with global investors, we are proud to have such a great and compelling story to tell about Canada's advantages as a destination for business and investment. We are proud to tell them about our top-performing economy, about our excellent business conditions, about Canada's tax advantage, our world-class transportation, education and research infrastructure, and about the many leading-edge companies and industries in Canada.

That is a great story to tell, but even more rewarding is what we are hearing more and more from global business leaders. Many say they are most impressed with Canada's people advantage. Increasingly they see Canada as a great place to find capable, creative, loyal and supportive workers, so essential to innovation and to gaining competitive advantage in today's economy.

Canada's high quality of life is another advantage that is not lost on these business leaders. They see Canada's safe, family-friendly cities, beautiful natural environment and world-leading research and education institutions as providing a wonderful backdrop against which the best and most creative workers in the world can thrive.

In my own city of London, we have an exceptional workforce. The University of Western Ontario is a world-leading research institution, and along with Fanshawe College, we train a very sophisticated workforce.

No wonder the Economist Intelligence Unit ranks Canada as the best place to do business in the G7 over the next five years. KPMG has also confirmed that among industrialized countries, Canada leads in terms of business cost competitiveness. We enjoy a cost advantage over our American partners and offer the lowest research and development costs in the G7, in fact 12.9% lower than in the United States.

It is no wonder that people look to Canada first. Quite simply, Canada is a great place for foreign business and investors looking for a foothold in the North American market. Why would they not choose Canada? Why should they not choose Canada?

There is a lot of interest from around the world in Canada's offering: our economic stability, our commitment to innovation, our position in the North American marketplace, and certainly the excellence of our private sector and our superb workforce.

Since before the onset of the global economic crisis, and as reiterated again in budget 2010, the Government of Canada's economic action plan for Canada has been quite clear. Lasting economic recovery requires more trade and more investment, not less. For Canada and indeed the rest of the world, jobs, prosperity and opportunities are created when we keep the doors open to trade and investment.

Canadians have every reason to be optimistic and confident in the future. As a nation, we were well prepared for the global downturn, as challenging as that was around the world and for Canadians as well. However, the government acted quickly to respond to the crisis and today, our performance is world leading and we stand poised to emerge from the global downturn stronger than ever.

The Government of Canada is committed to giving Canadians every opportunity to succeed and prosper. This motion speaks to the heart of what defines us as a nation. I urge all members of the House to support Motion No. 518.

I would like to share with the House one more time what this motion says:

That, in the opinion of the House, the government should (a) recognize that improved competitiveness will continue to stimulate economic growth and create jobs for Canadians;--

Can anyone in the House disagree with that? I think not. The motion continues:

--and (b) continue to diversify and expand markets for Canadian goods and services by encouraging investment in Canada through lower corporate tax rates, maintaining a stable economy and the signing of free trade agreements.

Can anyone in the House disagree with that? Many may, but as someone with 32 years of experience in business and understanding what it means to make this country succeed and our economy prosper, I say we must support the spirt of this motion. We must support this motion.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, it is a pleasure to join the debate this morning, in some small part to correct some of the government's statistics that we have been hearing.

It should be news to the Governor of the Bank of Canada, because earlier today a Conservative member rose in the House and tripled Canada's performance this year as compared to what the bank itself predicts for our growth, which is somewhere just north of 2%. The government believes it is somewhere north of 6%, which is remarkable news for the people on Bay Street. They should really get on this. The government must have access to new data that nobody else has, which puts it into some level of suspicion.

This motion is interesting to me and many of my New Democratic colleagues. It speaks not only to the current circumstances in this country in the midst of a recession, and the very serious threat of a double-dip recession, as the Canadian housing market has completely cooled off and is not pulling our economy back out of its flatline growth, but also, it is a great comment on the government's ideological underpinnings, its basic philosophy. The government continues to make decisions that seem to poorly fit with the ideas of Canadians and what this country actually needs, which is true investment and true development.

The government's philosophy speaks to a basic sentiment that we can cut our way to prosperity. As any sound businessperson would tell us, if a corporation is in any kind of trouble, one of the temptations is to cut its way to such a small, lean point that prosperity will return. However, the evidence in the corporate cycle shows us that is not true, that true investment is the way to attain, or re-attain in some cases, wealth generation prosperity.

The government has never met any kind of tax cut it does not like, except when it raises taxes, which is another fond, yet strange, element. I represent a riding in British Columbia, one of the hardest hit ridings in this country with respect to the economy. In the midst of our darkest days, this government working in cahoots with the Campbell government in Victoria, British Columbia, decided--and follow the logic if you can, Mr. Speaker, because it is a perverse one--to borrow money from future generations to bribe the province of British Columbia to raise taxes on those same taxpayers, to borrow money from taxpayers to bribe another level of government and then to raise taxes on the province. That is exactly what the harmonized sales tax does.

We are running the largest debt in Canadian history. I would like the Minister of Canadian Heritage to correct me on that one. Are we running the largest debt in Canadian history?

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

No, not even close.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

We are, Mr. Speaker. Second, the money borrowed for the HST is going to the Campbell government to bribe that government to raise taxes through the HST. Taxes will be higher for British Columbia residents. Perhaps the hon. member would like to counter that point. That somehow taxes will be lowered for British Columbians under the HST simply is not true. Taxes go up. It is an undeniable fact.

I know the government likes to portray itself as the slayer of taxes, but in this case, and in the case of EI premiums, it has in fact raised taxes on people. The government has raised taxes through the EI premiums on employers and employees. To suggest that is not true is a falsehood, and the minister knows that because he is a smart guy. When the government raises taxes on businesses, as the Conservatives have done, the effects are that businesses hire fewer people.

The ideology that we see underpinning everything else that the Conservatives do has been proven a falsehood. Canada just came through a generation of tax cuts which the Liberals made previously to the largest corporations. Companies only get to take advantage of these tax cuts if they are making profits. The companies that are actually suffering, the ones that are laying off employees, will tell us that a tax cut to a suffering company does nothing. If a company is writing off losses, it is not paying taxes, so an 18 point rate decreased to a 17 point rate means nothing. Real investment in education and infrastructure and all those other things that our competitors have done is really where the investments need to be for those struggling parts of our economy.

We have seen CEOs in the corporate banking sector take some of the largest windfall profits ever and at the same time also receive tax cuts from the government, as if that somehow would have made them more competitive.

I remind the Conservatives in the House that it was their party that fought for the mergers of banks, that fought to allow banks to sell insurance at the bank wicket. I can remember the current Prime Minister actually using the example of AIG in the United States, which is one of the largest banks in the world, saying that Canada needed an AIG.

We saw what happened to AIG. We saw what happens when we try to make things so big that they cannot fail. They become a destabilizing factor in the economy. Eventually, they start to fail, as they did in England and the United States. The secure Canadian banking sector, which was conservative in its planning, even though it wanted to merge, faced resistance in the House of Commons, particularly from New Democrats, who said the merger would make neither the Canadian banking economy nor the national economy more competitive. New Democrats resisted this.

At the time, the Conservatives favoured the merger. They wanted to let them get so big they could not fail. There is no such thing. These types of economic philosophies and policies have proven to be a failure.

If the corporate tax rate really triggered productivity, we would be more productive than our counterparts in the U.S. or the European Union. But we are not. Canada is not more productive than either of those places, even though we run far lower corporate tax regimes.

When one looks for evidence to support this lower-is-better philosophy, other than a knee-jerk response, it seems that we are asking the average citizen to pick up the tab that was previously paid for by corporations.

Good corporate citizens understand their role and do not mind paying for the benefits and services they receive: the road to their plant, the trained workers, the abundant energy resources, many of which came from public investment.

Many companies tell us they locate in B.C. to take advantage of the low energy rates, which resulted from public investment in the fifties, sixties, and seventies. They have better access to cheap renewable power. In Alberta, where energy was deregulated, it is a disincentive to investment. It pushes businesses away. When Alberta deregulated its energy sector, which was supposed to make it more competitive, better for business, power rates across the province went up $750 million.

What did the genius Alberta government do? It cut a cheque for $750 million and sent that around to individuals and businesses. They were happy to receive the money, because they were hard up. It was their own money. The government was cutting them cheques for their own money.

Mixing politics with economics leads to failure. It has proven to be a failure time and time again. A fair taxation rate requires corporations to pay their fair share.

The other day, I asked a corporate accountant how low a rate he wanted, and he told me zero. I asked him if he felt a duty to share responsibilities, to pay for all the great things we receive as Canadians, like health care and public education. He said he would be happy to leave that privilege to the employees. How generous of the corporate sector, to leave the privilege of paying taxes to the employees. That is wrong.

This way of thinking will do nothing to build this country, to give it a fabric we can be proud of. The way we manage our natural resources makes a difference. We see this in Skeena—Bulkley Valley in the northwest of B.C. We are deindustrializing right now, as we have been doing for the last 10 years. We lost 400,000 manufacturing jobs in the recession. The government claims a certain number of jobs are back. Most of them are not in the industrial sector, and most of them are not in the value-added sector. Most of them are not well-paying jobs that one can raise a family on. These are more temporary jobs, lower-paying jobs without benefits.

That is not a recovery, but the government is going to flash out the number, try to pull the wool over our eyes, and tell us we are just the same as we were before the recession started. We are not. We have fundamentally changed.

Motions meant to enshrine this type of ideology into government policy are idiotic. Members have to take a calm breath and realize that to build this nation we must gather together and make up our minds to impose fair taxation rates on both corporations and citizens, rates that will help restore this country to its previous glory.

[The Acting Speaker, Conservative, Barry Devolin]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, Conservative, Barry Devolin]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Conservative, Barry Devolin]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Conservative, Barry Devolin]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker, Conservative, Barry Devolin]

In my opinion the yeas have it.

And five or more members having risen:

Pursuant to Standing Order 93, the division stands deferred until Wednesday, October 27, immediately before the time provided for private members' business.

The House resumed from October 6 consideration of the motion that Bill S-9, An Act to amend the Criminal Code (auto theft and trafficking in property obtained by crime), be read the second time and referred to a committee.

Tackling Auto Theft and Property Crime Act

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Mr. Speaker, I am very pleased to participate in this debate on Bill S-9. As we already know, this bill is called An Act to amend the Criminal Code (auto theft and trafficking in property obtained by crime), or the tackling auto theft and property crime act. The Minister of Justice and Attorney General of Canada moved second reading of this bill, which we have already started debating.

This bill would create offences in connection with the alteration, removal or obliteration of a vehicle identification number and would also create the offences of knowingly selling, giving, transferring, transporting, sending or delivering property that was obtained by crime. The term “knowingly” is very important, because it shows that the individual who sold, transferred or gave property—a vehicle—must know that it was obtained by crime. Lastly, the bill would create the offence of knowingly being in the possession of property that was obtained by crime, for the purpose of trafficking. The Crown would have the burden of proving that the person in possession of the vehicle knew that it had been obtained by crime for the purpose of trafficking.

This bill creates a separate offence for motor vehicle theft, proposes a mandatory minimum prison sentence of six months for a third or subsequent offence and gives the Canada Border Services Agency the authority to identify stolen goods and keep them from leaving the country.

We, the Liberals, are in favour of this bill. We want it to be sent to the Standing Committee on Justice and Human Rights so that we can hear from witnesses and stakeholders who have thoughts and expertise on the goal of this bill, which we agree with.

We feel that this is a good beginning, even though it is not a comprehensive solution. We believe that some witnesses will also say that it is a step in the right direction and a good start but that it is not a cure-all and it will not fix all of the issues related to vehicle theft and trafficking.

The Liberal Party has always supported legislation that aims to effectively reduce crime and make communities safer. The fact is that vehicle theft rates are going down. The Liberals did not make this up. However, vehicle theft is still a major problem in cities like Montreal and Winnipeg. I am from Montreal, and I have colleagues and family in Winnipeg. So I know what I am talking about. I also had the opportunity, as justice critic in the official-opposition Liberal caucus in 2007-08, to speak with Manitoba's justice minister about this issue as well as youth criminal justice. The minister showed me studies indicating that Winnipeg was close to becoming the vehicle-theft capital of Canada. He told me that this was a serious problem, one that led youth down a criminal path.

Bill S-9 is not perfect, but it is a good start because it updates the Criminal Code, which shows that the government is taking this issue seriously.

That being said, we will see significant reductions in crime rates only if the government invests substantial resources in evidence-based crime prevention programs.

Our party does not play political games with the Criminal Code. Unlike the Conservatives, the Liberals strongly believe that we must fight crime with good laws, not with crude slogans and petty political manoeuvring.

If the government really intended to tackle auto theft and property crimes, the Prime Minister never would have killed Bill C-53, which it did by violating its own fixed election date law in 2008, nor would it have torpedoed Bill C-26 by proroguing Parliament last winter.

This is the third time the Conservative government has introduced the same bill. After the Prime Minister prorogued Parliament in December 2009, it took the government five months to reintroduce exactly the same bill. The Liberals tried to speed it through the House before, and they will do so again this time.

As I said, we are pleased that the government, which torpedoed its own Bill C-26, has introduced Bill S-9, which is an exact replica of its predecessor. We are disappointed that it took the government so long—five months—to reintroduce it. There is no excuse for that.

We are pleased to see that the wording in this bill is harsher than Bill C-53, the first incarnation of this bill. The government has finally decided to add a separate offence for auto theft to the Criminal Code.

As I said, the first auto theft bill introduced by the Conservative government in 2008 did not create a new, separate offence for auto theft. At the time, Liberals, police officers, police corps and provincial governments—the Conservative government's counterparts—criticized this approach. They criticized the government for failing to create a separate Criminal Code offence for auto theft. The government has finally done so in this bill, and we are pleased that it has finally fallen into step with law enforcement in Canada.

Thus, with Bill C-26, the government created a separate offence for theft of a motor vehicle, and this offence is also included in Bill S-9. The mandatory minimum sentence for this offence is six months' incarceration for a third offence or in the case of an indictable offence.

This is important because all studies show that motor vehicle theft in certain cities is quite well organized. The evidence from various police forces, including municipal and provincial forces and our national police force, the RCMP, has clearly indicated that to be the case. When someone is on their third such offence, it becomes quite serious. The criminal justice system must therefore send a clear message that this kind of criminal behaviour is unacceptable.

The new offences provide for a broad definition of trafficking. This would cover selling, giving, transferring, transporting, importing, exporting, sending or delivering property obtained by crime or offering to do any of those things.

Thus, the new legislative provisions would target all the middlemen involved in moving stolen property, from the initial criminal act through to the ultimate consumer. That is very important. Of course it happens in other cities, but we know that in Montreal and Winnipeg in particular, most motor vehicle thefts are committed by organized crime groups. This means there is a network of individuals whose only goal and mission is to steal cars. The orders often come from outside Canada, with requests for x number of certain models, for instance, Lexus vehicles from a given year, Chevrolets from a given year, specific models and colours of BMWs from another year, and so on. The crime of motor vehicle theft is driven by the network.

So, with these offences and this definition, if the proposed Criminal Code amendment successfully passes in both houses of Parliament, this would allow our police forces to pursue not only the person who committed the actual theft, but also all the middlemen who were knowingly involved in the transaction and allowed the sale, transfer or gift of property or a stolen vehicle, when that individual knew the property or vehicle was stolen.

Let us look at the two proposed offences. Both offences carry heavier penalties than the existing offence of possession of property obtained by crime. If the value of the item trafficked exceeds $5,000, anyone convicted of this offence could face up to a maximum of 14 years in prison. If the value does not exceed $5,000, there would be what is called a hybrid offence, which would carry a maximum prison sentence of five years on indictment or six months on summary conviction.

The bill also introduces a prohibition against the importation or exportation of property obtained by crime that would trigger the administrative enforcement powers of the Canada Border Services Agency, allowing the agency to bar the cross-border movement of stolen goods. In the case of auto theft, CBSA officers would be able to investigate, identify and detain imported vehicles or vehicles about to be exported and search databases to determine whether or not the vehicles are stolen.

I would like to add a few words on the statistics and data that we have on stolen vehicles in Canada. According to Statistics Canada, the number of stolen vehicles has decreased almost every year since 1996, by 20% according to 2006 data. Auto theft has major repercussions on car owners, on other victims, on law enforcement and on the insurance industry. According to the Insurance Bureau of Canada, auto theft costs insurance companies and the general public almost $1 billion a year. That is big bucks.

I do not own a car, but some of my friends and family have been victims of auto theft. I can say that this can be quite disruptive to a person's life by the time they settle things with the insurance company, get a new car and so on.

In 2006, approximately 160, 000 cases of auto theft were reported to the police, or about 438 per day. There tend to be fewer thefts in eastern Canada than in western Canada. According to data from Statistics Canada, Prince Edward Island has the lowest incidence of auto theft, while Manitoba has the highest. The incidence of car theft in Manitoba is almost three times the national average. Montreal, however, was the Canadian city with the highest incidence of auto theft and the lowest number of recovered stolen vehicles in 2007.

I am from Montreal and although I do not own a vehicle, I do know many people who do. Some of them have had their cars stolen. There are criminal networks in Montreal that steal cars for export, filling specific orders. Such car theft is a made-to-measure business.

Here is how a number of stakeholders have responded. The Manitoba Minister of Justice, Dave Chomiak, the mayor of Winnipeg, Sam Katz, and the Winnipeg police, all of whom I have met with, are in favour of this bill. The Insurance Bureau of Canada also supports it.

Mr. Rick Linden, a professor at the University of Manitoba noted that the bill was a good step, but that significant reductions in crime would only occur if we also invest significant resources in evidence-based crime prevention programs.

The Canadian Council of Criminal Defence Lawyers is against the bill because it believes it will restrict judicial discretion. The Canadian Association of Crown Counsel is also against it because it believes it will increase the workload of an already overburdened justice system. And yet, the government has failed to announce any new money for its implementation. This is a crucial point. The new offences created by this bill have long been awaited by the Liberals. We are in favour of the bill and its desired outcome. However, we realize that once these offences are passed and come into effect and the desired outcome is achieved, the government will have to allocate additional resources and funding to support the initiatives. The measures will ensure that the police and various stakeholders in our justice system can adequately deal in a court of law with those accused of having committed auto theft. Unfortunately, we have not heard the minister state clearly that the government intends to earmark new money in its next budget to cover these additional costs.

I will conclude my speech by saying that this is a good start and a step in the right direction but not the whole solution. We would like to see the government set aside more resources in order to ensure that our law enforcement system can handle these new offences and that our justice system, courts and prosecutors have the means at their disposal to deal with them.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Mr. Speaker, I would like to thank the hon. member for Hochelaga for his encouragement.

I am very pleased to take part in this debate on Bill S-9, An Act to amend the Criminal Code (auto theft and trafficking in property obtained by crime). As suggested in the short title, it will amend the Criminal Code to give it more teeth. Auto theft and trafficking in property obtained by crime are often related to gangs and organized crime.

Gangs in large Canadian cities such as Montreal and Toronto often make illegal, totally reprehensible profits from stolen vehicles and especially auto parts that are much sought after on illicit markets.

This bill is needed even though Statistics Canada data show that there has been a clear decline since 1996 in the number of vehicles stolen per 100,000 population. I printed out the 2006 Statistics Canada data by province on motor vehicle thefts per 100,000. There has been quite a large reduction since 1999.

The figures show that in 1999, there were 531 vehicle thefts per 100,000 population. In 2006, there were 487 thefts in Canada per 100,000. That is a major reduction. There were some regional disparities, of course. The extent of this illegal activity varies depending on the part of Canada. In Quebec, for example, there were 507 vehicle thefts per 100,000 population, while in Manitoba, there were 1,376. The regional disparity is obvious. This is related to the reasons why malicious people steal vehicles. The reasons are not the same in Montreal as in Ontario and Alberta. Some people steal cars for the money, while others want to go for joyrides, as the literature shows.

First, this bill includes targeted measures to improve the Criminal Code. It will help us get a better picture of all these illegal activities and the black market, whether in regard to exports and imports of stolen or illegally obtained goods or trafficking in them. It also imposes longer sentences. Minimum sentences are introduced in this bill, but I will get back to that later.

The Bloc Québécois will support Bill C-9. However, we should not focus simply on punishment but look at the source of the problem as well. We need to realize that the societies where crime is the lowest are often those that deal seriously with major social ills, such as poverty and inequality. Our provinces, municipalities and police forces should look at prevention as well. We need legislation and penalties, of course, but what we need most of all are preventive measures aimed at reducing inequality and poverty.

The new measures to reduce car theft have been debated in Parliament before, in 2005. At that time, the Liberal government had introduced Bill C-64 providing that altering the identification number would be an offence. The vehicle identification number, referred to as the VIN, is used to identify vehicles and their parts. It provides each vehicle with a unique identifier. I will come back to this a little later.

The purpose of Bill S-9 is to extend the reach of the Criminal Code by tackling trafficking in, exporting and importing any property obtained by crime. It also clarifies and extends the reach of the Criminal Code. It provides minimum sentences after an individual has been convicted of motor vehicle theft for the third time. So harsher punishments have been provided for these illegal activities.

Section 354 of the Criminal Code already provided punishments for possession of property obtained by crime, but Bill S-9 clarifies those crimes. It creates an offence for trafficking in property obtained by crime, but it also provides a maximum sentence of 14 years. So this adds to the sentences available for these criminal activities.

But it must be understood that the reasons why individuals steal vehicles are not all the same, from one place to another and one province to another. There are regional disparities in the reasons why an individual steals a vehicle belonging to someone in Quebec or someone in Alberta. In Alberta, Manitoba and Saskatchewan, the reasons for theft are described as “joyriding”. A vehicle is stolen there for amusement, while the situation is different in Ontario, Quebec and British Columbia. Quebec and Ontario, in particular, have become criminal hubs for stolen vehicles, because people want to profit from property obtained by crime in these cases.

We have seen organized rings becoming real hubs of organized crime. The indicator that enables us to identify these various types of theft is what is called the stolen vehicle recovery rate. The ability of the authorities to locate stolen vehicles varies enormously from one province to another. For example, the stolen vehicle recovery rate in Toronto is 75%.

When we come to cities like Montreal, part of which I represent in the House of Commons, we see that the stolen vehicle recovery rate is 56%. Obviously, the authorities are clearly having trouble locating stolen vehicles in Montreal, as compared to Toronto. The reasons are different. Why is it harder? Quite simply because these cities have in fact become organized crime hubs, as I was saying. These stolen vehicles are used for trafficking and exporting. We can see that there are various ways these individuals, acting with malice aforethought, decide to steal vehicles that belong to members of the public.

First, what does the thief do? They start by identifying the vehicle, based on where it is, whether in a private or public parking lot. Then, they steal the vehicle in a very short timeframe. The statistics tell us that the thief manages to steal the vehicle in 30 seconds to three minutes, depending on whether the vehicle has an auto start system and some kind of protection, whether an alarm or something else.

In a trafficking scheme with crime hubs, where does the vehicle go? There are three activities that organized crime groups do to get rid of a vehicle and make huge profits. The first is that the vehicle is chopped, or stripped for parts. Much as a butcher would do, these organized crime groups dismantle the vehicle to take the most important parts. These parts are identified. They know exactly which parts to take from certain vehicles. They know which parts are worth a lot on the market, and this is determined by supply and demand. So, they strip the vehicle for the most important parts. Next, they immediately export the parts after stripping them, because the vehicle is often sent to underground shops, where mechanics strip the vehicles and identify the valuable parts. Then, the vehicles are exported.

Why are the recovery rates lower in areas like Montreal? Simply because Montreal and Toronto are prime strategic locations for organized crime groups that traffic in vehicles or vehicle parts, for two reasons. First, Montreal and Toronto, and particularly Montreal, are right on the border. As a result, it is a strategic location for organized crime groups to export stolen vehicle parts to the United States. In addition, Montreal and Toronto are near waterways. Second, in terms of strategy, as I said earlier, unlike in Alberta, Manitoba and Saskatchewan, it is clear that cars stolen in Montreal and Toronto are not stolen for the purposes of joyriding; they are stolen to be resold.

The second way organized crime groups move a vehicle is to export it to where there is a clearly targeted market. Where are these markets, according to the Insurance Bureau of Canada? Essentially, these markets are in Eastern Europe, Russia, the Middle East, South America and Africa.

Resellers export car parts that are in very high demand to these markets by ocean freight. It is estimated that the sale of a Jeep Cherokee can directly generate $97,000 for organized crime. For some organized groups, it pays to sell stolen vehicles. That has to be taken into consideration.

It is often thought that luxury vehicles are in demand in these markets. However, that is not the case. Quite often, the vehicles or parts in demand are not high-end but have a high resale value. In 2006, the 10 most stolen cars in Canada were the 1999 Honda Civic SiR two-door, the 2000 Honda Civic SiR two-door, Subarus, Acuras, Dodge Caravans, Dodge Grand Caravans, Audis and Dodge Shadows. Luxury vehicles are not necessarily the most frequently stolen. The two most stolen automobiles are plain Honda Civics because their parts have a resale value on the black market.

There are three types of operations: chopping for parts, exporting, and changing identification numbers of parts and vehicles. In addition, parts and vehicles are cloned. How is the identification changed? Organized groups find vehicles involved in accidents, obtain their vehicle identification number or VIN, and copy it onto a stolen vehicle. The identification is changed in the third step in the process, which is also when cloning takes place, once again using the VIN. For example, thieves will go to a shopping centre parking lot, obtain a VIN, and copy it onto a stolen vehicle.

That is how organized crime works and why the VIN is important and central to Bill S-9. We cannot simply create an offence for the possession of property obtained by crime, which has been covered so far by section 354 of the Criminal Code. We have to have provisions covering the VIN. When the vehicle identification number has been altered, there must be better regulation and offences with minimum sentences. That is why we are supporting Bill S-9.

Cars are stolen for two reasons. The first is that there is a black market with well-targeted operations. The Criminal Code must have more teeth and prohibit tampering with the VIN. This would be one measure among others to reduce auto theft and fight this problem.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I want to thank my colleague for his speech. In the spirit of that, I just want to go to one particular item and see how he feels about it, and that is the mandatory minimum sentence for a third offence on automobile theft. Does the member think this part of the bill is really necessary?

Certainly, as he is pointing out, when we differentiate the type of theft taking place, such as a joyriding offence, it may have some extenuating circumstances. It may be that in the crowd of people that young people are sometimes in, these offences could be taken a bit differently.

When the judge is looking at an offender who has stolen a vehicle for the third time for profit, would we not expect that the judicial system could come up with a decent sentence for that person?

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Mr. Speaker, that is an excellent question. In fact, I considered that issue before giving my speech in the House. As everyone knows, the Bloc has always been opposed to minimum sentences. We have always opposed them on principle.

The bill includes minimum sentences, but only after a third offence, not a first or second offence. At a certain point in time, we have to realize what is going on. There is a difference between stealing a car to go joyriding and stealing a car for other illegal purposes. If this bill included minimum sentences for a first or second offence, the Bloc would not support it. Because minimum sentences will apply only to a third offence, the Bloc can support this bill.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I want to acknowledge some of the points that the member brought up, but I am going to raise a particular provincial issue.

The former member for Winnipeg North, Judy Wasylycia-Leis, consistently raised issues in the House around the impact of federal legislation on provinces. In the province of Manitoba, the issue of auto theft was raised as a result of the good work of Judy Wasylycia-Leis. Winnipeg, at one time, was the leading car theft capital of Canada. In 2007, about 1,700 auto thefts occurred there. Manitoba did not wait for the federal government to act. It put a plan in place that has substantially reduced the number of auto thefts in the province.

One of the big challenges for many provinces is federal legislation that impacts provincial governments. There is little consultation with provincial governments, nor are there resources for them to implement some of the legislation, such as police officers, prisons and what not.

I wonder if the member would like to comment on what he sees as a potential impact on provincial governments with this kind of legislation.