Debates of Nov. 1st, 2012

Safe Drinking Water for First Nations Act

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I want to go back to the drinking water advisory notices. When we have a situation on a reserve where the quality of the water is questioned, these drinking advisories go out. Members might be surprised to know that back in September 2012 well over 100 of those advisories were issued for on-reserve quality of water related issues.

That is one of the reasons why I believe this chamber needs to give more attention to the issue of good quality drinking, running water for all Canadians.

Would the member comment on the serious nature every year when so many communities are given these drinking water advisory notices because of inadequate or water of poor quality?

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, I appreciate the member's comments with respect to the advisories. It is truly a sad day, and there have been a lot of sad days, when we see so many advisories going out.

However, it is not just about the advisories. In April 2011, and let us just look at that piece because those are the specifics I have right now but I know this continues on, 1,880 first nations homes reported no water services and 1,777 reported no waste water services. We can see that the infrastructure within our first nations has been lacking for quite some time. I would have to remind the member that the Liberals had 12 years to do something about and they did not.

I did also want to add a couple of things. I mentioned Constance Lake First Nation, which is one of the first nations in my community. It has had serious issues with its water. I spoke about mercury poisoning last night during my late show. That continues on. Health Canada indicated that it was not a problem. Even the Minister of Health said that there was no issue for them to drink its water.

This is what Constance Lake First Nation have in one of its newsletters right now. It said that Health Canada had said the water was good to drink, that it was safe. The newsletter adds that this is still not believed because tea is still black in colour on top of pots and kettles. It says that the high levels of manganese and iron in its new water are causing these visual changes in tea. The first nation has questioned whether that water is still good to drink.

[Greg Rickford, Conservative, Parliamentary Secretary to the Minister of Aboriginal Affairs and Northern Development]

Mr. Speaker, I appreciate this opportunity and I appreciate the work this member does with us on the committee. I want to raise two things as briefly as I need to be.

First, this whole notion of a lack of consultation is just foolish. Even before I was elected, in my capacity in two different professions, which were almost totally invested in first nations communities, I have never seen a government so thoroughly walk lock-step with first nations leadership across the country from coast to coast to coast since 2006 with the AFN, with community leadership.

I was working with community members to help draft reports for this national consultation. Frankly, there has not been legislation so thoroughly consulted with its constituents.

Further to that, with respect to the aboriginal treaty rights the hon. member raised in her speech, I remind her that Bill S-8 addresses the relationship between legislation and aboriginal treaty rights under section 35 of the Constitution Act and it will not infringe on aboriginal and treaty rights, other than to the extent necessary to take health and safety measures to protect the source of drinking water.

I hope she can grasp the technical dimensions of that and the important and prevailing help—

[The Acting Speaker, Conservative, Bruce Stanton]

We will give the hon. member for Algoma—Manitoulin—Kapuskasing some time.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, we have to question with respect to consultation. We are getting emails, we are talking to the chiefs and they are telling us the same thing, that they are not being consulted.

When the government says that it is consulting, it is specifically picking on who it wants to consult with to get the point of view for which it is looking.

Just on this note, I could turn around and ask the questions. If the hon. member wants to make a speech, he is more than welcome to make it. Why is the government refusing to invest in safe drinking water for aboriginal communities, despite the recommendations of a government-commissioned study and the recommendations of its own expert panel? This is the question that needs to be answered by the government.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, I would like to inform you that I will be sharing my time with my colleague, the member for Rivière-des-Mille-Îles.

I will start by quoting Shakespeare, who said, "Much ado about nothing". Clearly, with regard to drinking water, we have a collective obligation to achieve a result. It is not enough just to talk about it; we actually have to do something about it.

We have before us a bill that comes from the Senate, which in theory embodies wisdom and experience. However, this Senate is asleep at the wheel. They only wake up at about the same time as my colleagues in the Liberal Party. The Liberals were in power for 12 years, and now that they are in the opposition, they realize there is a problem with drinking water. It is sad to say, but it is astonishing to see how some people are concerned about problems not when they are in a position to solve them, but only once people have withdrawn their support. The current Conservative government policy is based on the policy that was developed by our colleagues in the Liberal Party.

There are people who do not deliver on their mandate, and who never deliver on their mandate. They only want to talk about these problems once they are in opposition. For example, the 2% increase on spending on higher education was introduced by the Liberal Party. It would be interesting if, one day, the Liberal Party actually put their money where their mouth is. They should stop saying one thing and doing another. That would solve a lot of problems.

Unfortunately, Canada as a whole is affected by this record of failure, and this is the main problem. There is an old proverb that says, “Charity begins at home”. In the future, Liberal policies will have to be distinct from Conservative policies, once they are in power. The record on the whole range of aboriginal issues is a disaster on every point right down the line, and drinking water is only one problem among many.

Infrastructure is not tailored to suit the needs of the aboriginal communities. It is deteriorating while the first nations population is experiencing its highest growth rate ever. This is not a problem that will diminish, but one that will intensify over the years. People on reserves are living in third world conditions. They are living in third world conditions here, in Canada. In a country that claims to be rich and developed, we allow a part of our population to live in conditions that are comparable with those in the third world. This situation is the result of a long-standing lack of political will.

Support for education is very low. We talked about it again this fall. The government talks about it, but perhaps it should stop introducing Senate bills and private members' motions and actually decide to take action on education.

I would like to bring up a particularly important point and say that education is probably the best way for people to lift themselves out of poverty and to participate fully in the prosperity of this country. This is important to note.

Access to health care is difficult and sometimes there are no health care services. Aboriginal communities have the highest rate of suicide in Canada. More attention must be given to health care and prevention. All this results in an extremely high unemployment rate and grinding poverty, and leads to exclusion. It makes me wonder whether so much negligence is perhaps not race-related.

If there were no drinking water for a week in a neighbourhood in my riding, there would be a riot, and the whole of Parliament would support me in finding a solution to the problem. In this example, I am talking about a drinking water shortage that lasts just a few weeks, but in aboriginal communities it is a problem that has gone on for years and years.

It is obvious that Parliament is still at the discussion and research stage. That is where the problem lies.

We are dealing with a government that invites white supremacists to speak before the Standing Committee on Citizenship and Immigration. We can only imagine what it will do with petitions from aboriginal peoples. They are the government’s lowest priority, and it shows.

I invite everyone here to observe the reaction of the Conservatives when aboriginal communities appear before the Standing Committee on Finance. They ignore them, barely listen to them, are paternalistic and behave in a haughty manner towards them. The problem with fine speeches is that “words are wasted on a hungry man”. We suggest that the government “deliver the goods”. Once it does that, we might be able to listen to its proposals a little more attentively. Credibility is something that has to be built.

Since 1911, there has been a long string of reports, including one on aboriginal communities and their right to a water and sewer system. The report stated clearly that a substantial financial commitment would be necessary for the development of infrastructure and that it would cost $4.7 billion over 10 years to meet the needs of the community. An amount and an objective are clearly stated: it will cost this much for drinking water and for sewer systems.

In response to the urgent need to invest $1.2 billion, the government committed to paying $330 million over two years, in 2010, and nothing in 2011. It simply threw in the towel. It is all very well to talk about projects, but promises must be kept. The funds need to be available, but they are not. It has been claimed that efforts were made in the past, but they were clearly inadequate and did not continue.

This leads us to ask an important question. Are the Conservatives really in power to serve Canadians? Providing drinking water to Canadians ought to be a government priority, because the government should care for its citizens. But no, they do not see the urgency of the situation.

I can guarantee that if there were ever a shortage of drinking water somewhere in a Conservative riding, the Conservatives would not talk about it for six years before taking action. Things would move more quickly. Studies carried out over a 10-year period have shown that first nations communities do not have access to drinking water. This is not exactly news.

The bill includes the following words:

[...] to the extent necessary to ensure the safety of drinking water on first nations lands.

It was a United Nations priority. The problem is that the current government pays about as much attention to the United Nations priorities for aboriginal peoples as it does to aboriginal peoples themselves.

The results have been disastrous. Let us not forgot that the government, in fact all parliamentarians and the people of Canada, have an indisputable moral obligation as human beings to provide assistance to anyone who is in danger. It is even mentioned in the Criminal Code. Unfortunately, when aboriginal people are involved, this moral obligation disappears.

As a people, If we deny assistance to others in need, we become accomplices to genocide. It is morally unacceptable and amounts to throwing in the towel. The NDP refuses to do so, and to be a party to the inaction of far too many previous successive governments.

It is a debate that we, the NDP members, will engage in once we are in power. We will deliver the goods.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is interesting that the New Democratic members choose to throw stones in glass houses. I would refer to a report of the Assembly of Manitoba Chiefs related to the flooding of massive amounts of water. On April 3, 2012, a class action was commenced against the government of Manitoba—that being NDP of course—for damages suffered by members of the first nation residing on several different reserves that the flood cut through.

It says that the members of the first nation allege that the government of Manitoba breached their treaty rights to use and occupy the reserve lands and that they are in a position that, once they were evacuated by the government of Manitoba, Manitoba breached its fiduciary duty to provide them with adequate accommodations, medical care, schooling for their children and dietary needs. This is the NDP government in the province of Manitoba.

When the member tries to say the Liberals could have done something, we are trying to address the issues of today. Will the member not acknowledge that today there is a very serious issue regarding water quality and attempts to ensure there is running water in all of our communities across Canada? In fact the leader of the Liberal Party brought in a motion to that effect, which all members of the House supported. All political parties need to pick up and do what they can to deal with this issue as opposed to trying to politicize—

[The Acting Speaker, Conservative, Bruce Stanton]

Order, please. We must allow time for the answer.

The hon. member for Marc-Aurèle-Fortin.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, I will say it again: governments must put their money where their mouth is. Governments have never delivered the goods. There comes a time when we must produce results. There is more to results than just talk. It takes more than just scribbling on a piece of paper from the Senate and calling it legislation. We must deliver the goods.

Unfortunately, whether the issue is drinking water, housing, access to education, access to economic prosperity or anything else, Canada as a country has never delivered the goods, and that responsibility falls to all politicians.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Speaker, I would like to thank my colleague from Marc-Aurèle-Fortin for his excellent speech. I share his outrage at this government's highly paternalistic attitude toward first nations.

As the hon. member mentioned, the lack of infrastructure is a major problem.

Could he comment on the shortfall regarding how much this government has invested in infrastructure for first nations reserves?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, there used to be an agreement between first nations and the Government of Canada: the Kelowna accord, which provided for a $1 billion investment every year. Had we had that money, we could have started solving the problem long ago. Funding is severely lacking now.

Moreover, reports from experts—including the government's own experts—show that we need an additional $4.7 billion for infrastructure, including water systems and drinking water. That is significant.

On top of that, this government has the unfortunate habit, when criticized by a band council, to put that band in trusteeship. We saw a sad demonstration of that approach to the housing situation in Attawapiskat. We can hardly speak of negotiating infrastructure issues when one party acts as judge, jury and executioner.

[The Acting Speaker, Conservative, Bruce Stanton]

Before I recognize the honourable member for Rivière-des-Mille-Îles, I must inform her that I will have to interrupt her at approximately 5:30 p.m. at the end of the time provided for government business.

The hon. member for Rivière-des-Mille-Îles.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Speaker, I am pleased to rise today on Bill S-8 concerning the safety of drinking water on first nation lands.

Essentially, the bill provides for the development of federal regulations governing the supply of drinking water, water quality standards and the elimination of wastewater in first nations communities.

It also stipulates that these regulations may incorporate, by reference, provincial regulations concerning drinking water and wastewater in first nations communities. Access to drinking water is crucial to the health and safety of all Canadians, including the 500,000 people spread out among approximately 560 first nations.

Access to drinking water is also closely tied to the economic viability of various communities. For the past 10 years or more, studies have shown that many first nations communities do not have adequate access to safe drinking water. On September 30, 2012, 116 first nations communities across Canada were subject to an advisory regarding the quality of their drinking water.

In April 2011, the Minister of Aboriginal Affairs and Northern Development estimated that 1,880 aboriginal households did not have running water and that 1,777 households did not have sewage services. In total, 807 water systems serve 560 first nations. It is estimated that a quarter of the water systems in first nations communities present a potential risk for the health and safety of the consumers.

I would like to speak briefly about the sharing of responsibilities in the area of water management. On first nations reserves south of the 60th parallel, the responsibility to guarantee the safety of drinking water is shared among first nations communities and the federal government. The chief and council are responsible for the planning and development of facilities that meet the needs of the community, especially in the supply of drinking water.

Aboriginal Affairs and Northern Development Canada provides funding for the supply of water and its associated infrastructure, in particular for the construction, modernization, operation and maintenance of water treatment facilities on reserve. The department also provides financial support for training purposes and for the issuance of facility operator certificates.

In this debate, it is important to stress that the crux of the problem has to do with under-investment by the federal government. According to a 2011 independent evaluation on water and sewage systems in first nations communities, $1.08 billion would be required to bring existing water and sewage systems in compliance with federal guidelines and protocols, and provincial standards and regulations.

It will also be necessary to put about $79.8 million into work that is not related to construction, such as training operators and preparing plans for protecting water sources and emergency response plans. In total, it will cost $4.7 billion over 10 years to guarantee that the first nations communities’ water and wastewater system needs are met. That one-time investment of $4.7 billion is in addition to the regular operating and maintenance budget, estimated at $420 million a year.

When we consider the extent of the need, it is easy to understand that the Conservative government’s recent investments amount to only a drop in the ocean. We also have to understand that access to drinking water involves investing in infrastructure, but also funding the science and the regulation.

Drinking water has to be stringently managed and regularly analyzed to ensure that it is safe and to protect public health. The provinces have put legislation and regulations in place to secure their drinking water distribution systems, but those do not apply on reserves.

Health Canada is responsible for ensuring that drinking water quality monitoring programs are in place and has to collaborate with the provinces and territories to make recommendations about drinking water quality in Canada.

Environment Canada is responsible for developing standards, guidelines and protocols for wastewater systems located on federal or aboriginal land, as defined in the Canadian Environmental Protection Act.

These same departments, which are responsible for conducting water management studies based on rigorous scientific standards, are engaging in mass layoffs of dozens of scientists because of the Conservative government’s budget cuts.

It must be noted that over 1,500 federal government professionals and scientists represented by the Professional Institute of the Public Service of Canada were informed this week that their positions will be affected by the government’s irresponsible budget cuts.

Two thousand professionals represented by the Professional Institute of the Public Service of Canada, including 100 at health Canada, received a work force adjustment notice when the 2012 federal budget was tabled.

As well, in the Public Service Alliance, it is estimated that 1,200 unionized positions will be affected by the cuts at Health Canada and Aboriginal Affairs and Northern Development Canada. In short, the Conservative government’s budget cuts could reduce oversight.

In 2005, however, the Auditor General of Canada said that in most first nations communities, drinking water was analyzed less often than required under the recommendations for drinking water quality in Canada.

Why does the Conservative government want to set us back 10 years by making cuts to science and oversight?

In March 2012, I had the opportunity to participate in the showing of Wapikoni mobile in Boisbriand. This is an excellent travelling audiovisual creation project that criss-crosses aboriginal communities in Quebec to give young people an opportunity to tell their stories on film and in music. It is an excellent project, and one that has unfortunately been cut by the Conservative government.

In short, the NDP recognizes that the water supply systems are jeopardizing the health and welfare of the first nations.

But we also find it unacceptable that Bill S-2 proposes only to transfer responsibility for water supply systems to the first nations without giving them the resources they need in order to acquire adequate systems that meet their needs.

Like most first nations organizations that have spoken to this, and I am thinking in particular of the Assembly of First Nations, the Chiefs of Ontario, the Nishnawbe Aski nation, the Assembly of Manitoba Chiefs and the nations that have signed Treaty 7 in Alberta—

[The Deputy Speaker]

The member will have two minutes the next time if she wishes to finish her speech.

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

The House resumed from September 26 consideration of the motion that Bill C-427, An Act to amend the Income Tax Act (income averaging for artists), be read the second time and referred to a committee.

Reflecting the Realities of Canadian Artists Act

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, this is something that has been talked about for quite some time. Actually, it was in practice in a general sense back in the 1970s and 1980s. I believe that it was discontinued around 1987.

I want to congratulate the member for Jeanne-Le Ber for bringing this forward. It is a comprehensive bill. I said to him that when one amends the tax code this way and uses the formula to do it, there are probably only about five people who could truly understand how the formula works and those five people should probably be locked away. It is comprehensive, no doubt, but nonetheless it is something that is necessary. I congratulate the member because he did some fine work in the legislation.

Before getting into the discussion of the actual bill, there are several things in it. This is something for the arts industry in this country, for people who create, who disseminate material from their own imaginations. The dissemination process today is not what it used to be. It is far more instantaneous. We are not even getting into talking about copies anymore. Now it is all about clouds and instant access for the world.

It is difficult for artists nowadays to recoup their investment in their own work, whether through music, through art, productions, plays, movies and so on. This would allow, through the tax code, these people to actually make a living or at least get them to the point where they could make a better living and reap the benefits of what they do. That is because of the nature of what they do and how they are able to receive remuneration.

If we think about this for a moment, authors spend roughly three to five years writing a book. I am not an author but I assume three to five years is in the ballpark for a major novel. All of a sudden, they publish it and it is out there in the market. If they are lucky the book gets on the bestseller list for a period of two or three months and the income comes in dramatically, and most of it during that period. Then the book goes to paperback and then to digital, and slowly but surely, the amount of revenue received from it dwindles.

However, all that money that is received in income falls into one taxation period. If artists receive all revenues from their created work in one year, obviously they will be taxed at a higher level than if the income were spaced over three to five years. If this were treated like a normal job in the world of taxation, people would be taxed over the period that they worked on it, three to five years or maybe more.

There is an unfairness in this. There are other industries where that is the case. There used to be a situation where we could apply this principle to the general public, but we no longer do that. It was changed because the tax code was simplified in the late 1980s and the difference in rates between the top and bottom were not as great, so that concept was thrown out because it was said not to be as beneficial.

It is beneficial for certain industries to this day and this is one of those industries. It would allow artists to average their income over a two- to five-year period. We can debate and amend as to what that number would be, but certainly the principle is sound in the sense that artists could amortize income over a certain period of time that reflects the amount of work put into the body, as opposed to all the money they have received in a short period of time. That is simply the nature of the business.

Income averaging is a concept that dates back to agriculture and to the fisheries as well, where people get an incredible amount of money in a short period of time and try to average that out. Luckily, we have government programs to help them do that. Fisherman's EI is another example of that. It is not called income averaging, but that is essentially what they are doing. They get an average income over the course of the year instead over a short period of time.

Many of these projects, when it comes to the artistic world, reflect that nature. There may be a project that goes year over year. That is fine. The bill does not affect those people who are getting a steady income. However, what it does do is even out income for those who are on their own.

Let us face it, artists in our country are on their own, doing their own thing. Not only are they artists but they have to become financial analysts and tax people. It is difficult for them to follow all the rules, given that there are so many rules around what they do because they are pretty much on their own. It is expensive to hire a taxicab. What we see reflected in the bill is fairness in the tax system.

I may have neglected to mention it and members may have figured this out, but I will be voting yes to this particular bill, just in case I gave anyone the wrong impression.

The number of stakeholders who agree with this all over the artistic community is phenomenal. This is why we have been talking about this issue for quite some time. The stakeholders have talked about this ad nauseam. The individual who brought the bill here is an artist. I have seen him in movies. He is good at what he does.

Stakeholders who support the bill are: the Canadian Federation of Musicians, ACTRA, the Independent Media Arts Alliance and the Canadian Conference of the Arts. These are broad umbrella groups that give the bill a lot of support.

The angst from all this, as I am sure members will hear, is whether we can do it for this one group and not do it for the others. Someone once said to me that if we cannot do it for all, we should not do it for any. Does that really make a lot of sense? What about when Saskatchewan created medicare? Would the federal government at the time have said it could not do it because if it did it for one province it would have to do it for the rest? We did do it for the rest. It took one province to show leadership and do it.

By being a leader on this particular issue, the arts community could be the leader and open it up for others. Granted, it could be an expensive endeavour. We realize that. In a time of austerity we have to keep that in mind. However, it is certainly one of those things where we should allow these people to continue to make a living at what they do.

The other thing is to look at how many of our talented people go south of the border. Would income averaging allow these people to have a better life in our country and they would not have to go south of the border, particularly actors and performers? The numbers are out there. I think it would. Some people could argue that it would not. It is hard to tell. However, it certainly gives them a better footing in our country to be able to make a living, to pay their mortgages, to pay for their vehicles and to help raise their families. That, in essence, is what this is about. It is a social concern. It is something that provides this particular community with the tax fairness it needs.

Back in the last election campaign, the Liberal Party endorsed this. This is from the 2008 election. It states:

Support for Canada’s arts and culture must also extend to support for artists themselves. That is why a Liberal government will provide income averaging for artists drawing on the inspiration of Quebec’s income-averaging provisions.

There we go. We have a leader here, a province to look to for how this is done, similar to the way the Province of Quebec handled pensions and similar to the way Saskatchewan handled medicare. What Quebec represents is a vanguard to how this plan could be implemented.

As for costing, Finance Canada estimates the income averaging bill, Bill C-427, would cost the federal treasury approximately $10 million a year. That is not a lot in total spending for the government. It estimated that this measure would benefit approximately 55,000 individuals, with an average benefit of $130 or more.

We get the idea that it is not a tremendous measure. It is not a great anchor hoisted upon our federal treasury. However, it is something that would go a long way for the individual artist or artist groups who want to receive fairness from the tax system and to make a living in our country without having to go somewhere else.

I applaud my colleague for bringing this forward.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, I am very pleased to speak in support of the bill.

I would like to thank my colleague, the member of Parliament for Jeanne-Le Ber, for his tireless efforts on behalf of Canada's artist community. I would also like to thank the previous speaker for his support of this bill and some of the important points he laid out.

Before I start, I should say that the member who introduced the bill has had a long and distinguished career as an independent artist. He learned first-hand how unforgiving our tax system can be for those engaged in creative enterprise.

The member has consulted extensively with the artistic community. He is determined, and I am hoping we can all support him in his efforts to enact this modest measure of promising, one could say, greater fairness to those in the artistic community.

Bill C-427 seeks to enact a form of income averaging for artists and cultural entrepreneurs under the federal tax code and to exempt from taxation a portion of their income derived from royalties and residuals.

It would allow artists, as carefully defined under the Status of the Artist Act, to average their income for the purposes of federal taxation over a period of two to five years, producing significant tax savings on a flexible scale.

It would exempt from taxation the first $10,000 in income derived from royalties, residuals and other special payments.

It would ensure greater overall tax fairness for a specialized group of taxpayers significantly disadvantaged under the existing federal tax code by the inconsistent hours of work associated with their careers and by punitively high levels of taxation in years of high earning. They are further disadvantaged by lack of access to certain government programs such as employment insurance.

The act would also stimulate a broader public debate about how government can act to appropriately recognize and valorize the cultural industry and artists who enrich our society, unify our country and represent an ever more crucial driver of economic growth, which I will talk about a little later.

Despite strong support for the arts and the existence of many highly developed and competitive cultural industries, Canada lags far behind a number of other developed countries in terms of fiscal policy actions designed specifically to support the work of artists and cultural entrepreneurs.

Due to irregular working hours and fluctuating incomes often associated with their work, artists are almost always disadvantaged both by outrageous tax rates in years where their income is high, and also by their inability to take advantage of certain federal programs, including employment insurance, the Canada pension plan and others.

Bill C-427 will give artists the small business support they need by allowing them to spread their income over a chosen period and make significant tax savings over two or five years. It will of course be possible for them to reinvest their savings in their business and for them to better provide for themselves and their families.

A number of governments, in Canada and abroad, have implemented income averaging mechanisms in order to acknowledge the particular status of certain groups of taxpayers, of cyclical or seasonal industries, whose incomes do not fit the stable and predictable formula of wage-paid work. There are income averaging models specifically for artists in dozens of European countries, including England, France, Germany, the Netherlands and other countries that are Canada's trading partners.

Here in Canada, income averaging models have been used on a number of occasions to provide support to our east coast fishers and to invest in resource exploration projects and in other high-risk employment sectors. In 2004, the Quebec government introduced the only permanent income averaging system in Canada.

Most people understand the importance of arts and culture for the dynamism, expressiveness and vitality that it offers Canadian society, but many do not realize the economic and positive impacts. In a landmark study in 2007, the Conservative-leaning Conference Board of Canada calculated the overall economic footprint of Canada's cultural sector to be greater than $84.6 billion or a staggering 7.4% of Canada's real GDP. By way of context, this means that cultural industries make a larger annual contribution to the Canadian economy than fisheries, mineral extraction and a variety of other crucial industries, accounting for over 1.1 million jobs.

Freelance artists in Canada overwhelmingly confront a situation of income precariousness. The Canadian socio-economic information management program administered by StatsCan indicates that, based on the North American Industry Classification System, the average annual income of an independent Canadian artist was only $37,476 in 2011, which is significantly less than that of tradespeople, contractors and virtually every other variety of independent employee in the Canadian economy. This is not a lifestyle of galas and soirées; it is survival, often on the very edge of the poverty line.

The measures included in Bill C-427 are completely affordable. The analysis conducted by the Department of Finance, further to the request we made to the Parliamentary Budget Officer to give a figure for the cost of the bill, determined that the total cost of the bill’s implementation would be less than $25 million in deferred income tax per year.

The impact of passing the bill will be both reasonable and widely shared. Using the best information available from Statistics Canada, the Parliamentary Budget Officer calculated that some 55,000 taxpayers would probably take advantage of the income averaging provisions in Bill C-427, with an average savings of about $130 per taxpayer. Similarly, the consequences relating to the royalties exemption provision in the bill would benefit some 41,600 Canadians involved in artistic pursuits, with an average savings of about $1,500 per taxpayer. This represents real money in the pockets of real taxpayers that will be used to stimulate Canada's economy and Canada's economic recovery.

In the few seconds I have left, I want to once again thank the hon. member for introducing this bill. As was mentioned earlier, it already enjoys the endorsement of ACTRA and other major national organizations representing Canadian artists. It is a way of stimulating our economy, putting more money into our communities, supporting the arts and at the same time supporting small business. Therefore, I urge all members to support this bill.

[Shelly Glover, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, thank you for allowing me the opportunity to speak to this NDP proposal to grant some preferential treatment in the area of taxes to a select few Canadians.

Before I continue, let me say at the start that our Conservative government is tremendously proud of the talent and accomplishments of Canada's artists, whether they are international stars such as Justin Bieber, Ryan Reynolds, Seth Rogan and Carly Rae Jepsen or our local stars in our community theatres like my son, handsome actor Michael Strickland, who is always a star in his mother's eyes.

The arts and artists not only enrich our lives; they also express and strengthen the Canadian identity, and that is why we appreciate and support them. By this I mean more than moral support. We have made major investments in the arts sector since 2006. The following are a few examples of these. We have established two new national museums. We have increased Canada Council for the Arts funding to an unprecedented level. We established the Canadian Media Fund to support Canada's film and television industries, and the creation of content for digital media. We have invested in cultural infrastructure. We introduced the children's arts tax credit.

We have also expanded our contributions to the arts through various initiatives in the economic action plan 2012. For example, we gave further support to museums through the Canada travelling exhibitions indemnification program, and maintained our record level of financial support to the Canada Council for the Arts in spite of the current budget situation. I am pleased to point out that these initiatives were warmly welcomed by the arts community.

The Canada Council said that it was “enormously heartened by the positive message sent by the 2012 budget and the support of the government in recognizing the Council's leadership role…This vote of confidence in the Council is a clear signal of support for the arts as the creative heart of the nation.”

The Canadian Museums Association added that it was, “very pleased with this budget…museums are being identified as important generators of jobs and growth in Canadian society.”

Indeed, we support and value the arts not only because they contribute culturally to Canada, but also because of their importance to the Canadian economy. The arts sector generates $46 billion in economic activity in Canada and provides jobs for more than 635,000 Canadians, twice as many as in the forest industry.

One thing is clear: the arts play an important positive role in employment and growth across Canada. They generate many jobs, help to attract investment to our communities and contribute much more as well. As we said previously, the arts are an integral part of a vigorous economy.

That is only one of many reasons why our government will continue to provide solid and full support to Canadian arts and artists through sound but affordable policies to help them compete and succeed.

That brings me to the conversation around the NDP proposal today. We have to ask if today's NDP proposal is the kind of affordable policy that would truly help the arts to grow. Would it be fair to other taxpayers? First, let us look at the issue of fairness.

While the idea of giving artists alone special tax treatment to reduce their tax bill in high-income years may sound attractive to high-income artists who would benefit, it likely would raise concerns for other taxpayers, especially those who also may see big swings in their incomes from year to year. This list would include everyone from our farmers, fishermen, real estate agents, car salesmen and self-employed contractors to seniors who may realize large capital gains, such as in the selling of a family cottage. The list goes on and on. I am sure we would all agree that, even though they work in different ways, artists and all the groups I mentioned work very hard and with dedication.

To suggest that someone's work is more valuable than another's by giving them a special tax break would not be well received and would raise serious fairness concerns. On that note, I will quote the well-known and widely respected University of British Columbia economics professor Kevin Milligan. Professor Milligan looked closely at this proposal and concluded the following:

[T]he NDP's tax policy proposals still need some more rehearsal time....

[I]ncome averaging is an extremely clumsy apparatus for supporting the arts--to the extent it would even help at all. Let the debate on support for culture flourish, but let's keep income averaging out of it.

Quite clearly the NDP's proposal for income averaging would make the tax system more complex and only benefit a select few Canadians, with questionable effectiveness. Indeed, general income averaging for all Canadians, not only for artists, was permitted in Canada at times in the 1970s and the 1980s. It proved such a policy failure then that it was phased out completely. Moreover, with reforms to the personal tax system since the 1990s, the case for income averaging is even weaker.

Again I quote Professor Milligan:

[I]ncome averaging deserved its death, and should stay that way.

First, [in the 1970s and 1980s] the averaging mechanisms became extremely complicated.... [They] added a substantial administrative burden to the tax system.

Second, we don't have so many tax brackets any more. In 1971, there were 17 different federal tax brackets.... Now in 2011, with only four broad brackets, volatile income creates fewer problems.

Nevertheless, even if we were to ignore all the other policy concerns with this proposal, like its lack of fairness and administrative complexity, we would still have to consider its cost. In times like these, Canadian taxpayers want to know that their tax dollars are being used wisely and that their elected representative knows and considers the cost of any proposals he or she makes.

We have looked at the cost of today's NDP proposal, and it would be significant, in the tens of millions of dollars at a bare minimum, and likely much more depending on the take-up. We have also asked the Parliamentary Budget Officer to cost the proposal to further illustrate the significant cost.

I am somewhat disappointed to note that we had to cost this proposal because the NDP simply did not bother to do so initially. Indeed, last year, when the NDP first proposed income averaging for artists, this is what the NDP said when asked about its cost at a press conference. I am quoting the hon. member for Timmins—James Bay in a 680 News story that is still posted online for all to see. When questioned about the total costs, the NDP member could not give an answer. He simply said, “We don't have the exact number....”

No responsible Canadian family would ever consider adding something to their household budget when they did not know the cost, and they would expect the same of their MPs.

To conclude, our government will take action and will support the arts, as it has repeatedly demonstrated. But it will do so by supporting sound, effective and affordable policies.

I stand here today on behalf of the Government of Canada, saying that we respect all taxpayers equally. We expect equal treatment. That is something the NDP has said time and time again in this place. I would ask them, how on earth could they propose such a bill that would treat Canadians differently? I would suggest that they rethink this. It is not fair to most Canadians who are in the exact same situation. If one looks at the costs to include all Canadians who face this very type of situation, we are looking at significant costs that have not even been considered by the NDP member who submitted this. I would suggest it is something that ought to have been done before he got so deeply into this.

[Andrew Cash, NDP, Davenport, ON]

Mr. Speaker, first of all, I congratulate my colleague from Jeanne-Le Ber for his hard work on this subject, which is very important to Canadians from coast to coast to coast and in my riding of Davenport, where we have one of the highest concentrations of artists in the country.

No doubt every one of them who is listening has taken offence to the speech we just heard from the other side. When we are talking about favouring some taxpayers over others, those guys on the other side of the aisle wrote the book on it. The Conservatives dole out heaps and heaps of delicious tax cuts to the wealthiest corporations in Canadian history, and then turn around and display once again how much they do not understand arts and culture in this country. They are still in that frame, where they think that artists go to galas and sip champagne.

I would point out to the Conservative members who represent ridings in the greater Toronto area, in Vancouver, and on the East Coast that artists are significant contributors to the local economy. They are engaged in their communities. In many communities across this country, when communities are grappling with issues such as violence, unemployment or youth disengagement, they often turn to the arts and culture sector, and the expertise that has been developed over many years in their communities by artists, for solutions to some of the more difficult community issues that we need to grapple with in our society.

I want to start there because it is clear that if the government misses this opportunity, it is just one more wasted opportunity to actually nurture this sector, which even by the most conservative accounts—and their numbers are lower than the Conference Board of Canada's numbers, and in fact about half of the latter's—has a significant economic footprint in this country.

What we need to be doing is crafting policy that nurtures and supports an emerging, stable, vibrant, middle-class of artists in Canadian society. That is not what is happening right now. I think the government likes the situation as it is right now, because it fits its neoconservative, neoliberal frame, which is either feast or famine. In the arts and culture sector, that is exactly the situation. That is one of the things this bill seeks to address.

I have sat on the heritage committee since I got here in May 2011. It is clear that many parliamentarians, and certainly many members on the government side, do not understand how artists make a living in Canada and the fact that by and large most artists live below the poverty line and yet contribute in a very robust and muscular way to the economy. It is a construct that is completely skewed against them.

One of the reasons it is skewed against them is that much of our employment policy, much of our policy around our social safety net, is predicated on stable employment over a stable, consecutive period of time. Well, that is just not how artists work.

In fact right now we are studying the video game industry at the heritage committee. This is an emerging industry that employs artists, actors, and musicians. It is a new and vibrant industry, and we are looking at ways in which we can nurture it, because the industry could potentially be an even bigger job creator. It creates jobs for artists, and it creates jobs for other people too.

That is another point, because artists create jobs for other people. If we look at the Conference Board of Canada's numbers, artists are significant economic engines. Oftentimes, they are really individual, sole proprietorship, freelance operators. They almost always have no access to employment insurance during those periods they cannot find work. They are rarely able to access CPP. They do not get sick leave. They do not get bereavement leave. They do not get parental leave of any sort. They basically have to work every day. Even if they do not have work, they are out hustling other work.

What a measure like this would do is take a realistic look at how an artist makes a living.

We are not in the 1950s any more, folks on the other side. We are just not. I know that is a hard message for some of them to get. However, we are not. We are not in an economic reality now where people get jobs when they leave school, work for the same company for 40 years and retire with a decent pension that allows them to live in dignity. We are not in that situation any more, in part because of the policies of the government on the other side.

Artists, on some levels, are the canary in the coal mine when we look at the way the economy is going, when we look at the employment that is out there. When we look at the latter, we see serial contract employment. We see young people who are working in multiple part-time jobs, we see young people who are working as contractors for a couple of months, then looking for other work. We see people who are classed as freelance employers or self-employed, whereas maybe even as recently as a couple of years ago, they would have been classed as employed. However, their employers have now deemed them to be self-employed in order to cut down on their own costs, which is something that the government turns a blind eye to.

We are not going to turn a blind eye to the realities of work today, especially in our urban centres, and we are not going to turn a blind eye to artists. In fact, I am very proud to speak in support of my colleague's bill today because it would deliver on a promise that we made, a promise that Jack Layton and the whole team made in the 2011 election around income averaging. This is an expression of how we view tax fairness in our society.

The Conservatives' idea of tax fairness is to give taxpayer dollars to the wealthiest corporations, which then turn around and close factories and go somewhere else. I am sorry, but that is not what we are here to do. That is not what this party, the NDP, stands for. This bill underlines part of the policy that we are building toward in this party. This bill represents a larger vision, but is also something that has very much been supported in the arts and culture sector in Canada.

I do want to say that the concept that many people have about the arts and culture sector is that people just sit around, sip champagne, get grants from government and produce nothing. However, what we are talking about today are workers, arts workers, in a milieu that is difficult for many of us to understand because we have not taken the time to understand it. I think one of the things I am most proud of is that my hon. friend from Jeanne-Le Ber has taken the time to craft a well-thought-out bill that has been costed. I am very proud to speak on its behalf and on behalf of the artists's who live in my riding of Davenport and right across the country.

[Chungsen Leung, Conservative, Parliamentary Secretary for Multiculturalism]

Mr. Speaker, thank you for the opportunity to speak to today's NDP costly proposal for special preferential tax treatment for a select few Canadians.

Let me preface this by saying I fully appreciate that our country attempted, during the period 1971-88, to do some sort of income averaging, but now I think there are many other tax administrative tools that are much more effective and efficient in providing that type of income security and income levelling out.

Before I continue with my remarks here today, I want to be clear that our Conservative government has always been a strong supporter of the arts and culture. Our government recognizes that arts and cultural activities enrich our lives immeasurably as individuals, communities and as a country. Not only are they an expression of the many faces and many stories of Canada, but because of that, they help strengthen and define our Canadian identity.

I am very pleased to have this opportunity to highlight some of the support that is available to Canadian authors, musicians and other artists under our Conservative government.

First, Canadian authors and publishers benefit from the Canada book fund. Its principal objective is to ensure access to a diverse range of Canadian-authored books in Canada and abroad. The program seeks to achieve this objective by fostering a viable Canadian book industry that publishes and markets Canadian-authored books.

For our filmmakers, key measures include the Canadian film or video production tax credit, which objective is to encourage Canadian programming and develop an active domestic production sector. This fully refundable tax credit is available at a rate of 25% of the qualified labour expenditure for an eligible production.

Musicians can benefit from the Canada music fund. Its objective is to enhance Canadians access to a diverse range of Canadian music choices; to increase the opportunities available for Canadian music artists and entrepreneurs; and to ensure that Canadian music artists and entrepreneurs have the skills, know-how and tools to succeed in a global and digital environment.

Members of the performing arts can take advantage of the Canada arts presentation fund, which gives Canadians direct access to a variety of quality artistic experiences, by providing financial assistance to arts presenters and the organizations that support them.

These artists can also benefit from the Canada arts training fund, which contributes to the development of Canadian creators and future cultural leaders of the Canadian arts sector by supporting the training of artists with high potential through institutions that offer training of the highest calibre.

It is clear that our government is helping artists to market their works and providing them with the tools they need to succeed on a local, national and international scale. Our Conservative government will continue to stand behind our artists and champion their causes and indeed, we are doing more. We provide numerous special incentives through the tax system to support the cultural industry in Canada. For instance, employed musicians may claim the cost of maintenance, rental, insurance and capital cost allowance on musical instruments against employment income earned as a musician.

Employed artists are also entitled to deduct expenses related to their artistic endeavours, up to the lesser of $1,000 or 20% of their income derived from employment in the arts. Artists who receive prizes for meritorious achievement in the arts, such as the iconic Governor General's awards in arts, do not have to pay taxes on these awards. As I noted earlier, film producers can receive a tax credit for Canadian film and video productions, including the cost of scriptwriters. Also, self-employed artists receive an immediate deduction for the cost of producing their work, even if the work is unsold and remains part of their creative inventory.

Clearly, our Conservative government wants to see a thriving cultural industry in this country, and we understand that the best way to achieve this is through a low tax plan. The positive initiatives I have highlighted are measures that benefit artists of today; however, we also are looking to help the artists of tomorrow. We understand the necessity to assist Canada's next generation of great artists, possibly the next Céline Dion or Justin Bieber. That is why we introduced the children's arts tax credit, available since 2011, to promote children's participation in artistic, cultural, recreational or developmental activities.

This credit is provided on up to $500 of eligible fees per child in respect of qualifying children's programs for those under the age of 16. This credit has been warmly welcomed across Canada, especially among moms and dads.

Here is what Christin Dewald, organizer of an arts summer camp in Calgary, said:

...it shows that our society understands the importance of creativity in the development of children. The children who attend our classes have the opportunity to use their whole brain. We see children develop new skills like problem solving and risk taking. As a result, these kids enjoy increased self-esteem.

Clearly, our government is supporting artists and helping to foster the arts here in Canada with smart and affordable policies. Unfortunately, today's NDP proposal is not such a similar policy. I would like to point out that income averaging, as outlined in today's NDP proposal, is an idea that was tried and failed in the 1970s and the 1980s.

As the Parliamentary Budget Office report on C-427 itself points out, expert opinions even then, “...suggested that the averaging provisions were exceedingly complex”.

Basically, when income averaging existed previously it proved to be a failure as tax policy, as it was used primarily by high-income taxpayers to avoid paying taxes. Not surprisingly, that is why over 20 years ago the then federal government eliminated income averaging.

Furthermore, bringing back income averaging today fails to recognize that there have been major reforms to the Canadian tax system since that time. When income averaging existed in the 1980s, Canada had 10 tax brackets. Today we have only four brackets, and the top federal marginal tax rate has decreased from 34% to 29%, not to mention that all federal surtaxes have been eliminated.

Again, all those tax reforms have made the need to bring in income averaging essentially redundant. However, do not simply take my word for it. Listen to the independent experts and the economists who have studied income averaging proposals.

For instance, here is what Kevin Milligan, a professor of economics of the University of British Columbia, had to say about income averaging and today's NDP proposal specifically:

[T]he NDP's tax policy proposals still need some more rehearsal time.... Many Canadians support the presence of a healthy cultural sector in our society. However, income averaging is an extremely clumsy apparatus for supporting the arts—to the extent it would even help at all. Let the debate on support for culture flourish, but let's keep income averaging out of it.

I could not agree more with that statement. We all support the arts and we all want to see the arts succeed in Canada, but we want and should want to do that with smart, affordable and effective policy. Unfortunately, income averaging is not such a policy.

[The Deputy Speaker]

The hon. member for Argenteuil—Papineau—Mirabel has about seven minutes.

[Mylène Freeman, NDP, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, the bill introduced by the hon. member for Jeanne-Le Ber deals directly with justice and equality among all Canadians. The bill allows income averaging for artists and cultural entrepreneurs under federal income tax practices. It also makes some income that is derived from royalties or gratuities tax-free.

The Canadian tax system is crucial to our government, but it is hardly fair for artists. In addition, artists do not have much of a social safety net to rely on. The tax system puts them at a disadvantage because of the irregular hours usually associated with their work and because of punitively high taxation during years of high earnings. The years before and after a high-earning year should be taken into account, since they are often very modest. In terms of the social safety net, artists are often ineligible for certain government programs, such as employment insurance, Canada pension plan, and so on.

This bill addresses one of the challenges that comes with a career in the arts. At a reasonable cost, we could help nearly 100,000 Canadians make ends meet and guarantee that they are no longer put at an unfair disadvantage.

The performing arts are unparalleled for the flexibility required because artists are hired, but they can easily be fired. By definition, any creative work carries its share of risks and uncertainty that expose the artist to a precarious life, more so than the typical salaried worker. It is obvious that this work model is only sustainable if the government is prepared to provide an element of stability in the employer-employee relationship. That is what we would like to do.

Managing risk is a vital function that prevents prolonged and intermittent periods of unemployment from making employment in the world of arts and entertainment even more precarious. The principle of income averaging for artists, in general and in Bill C-427 in particular, has almost universal support from members of Canada's cultural community. They believe that this measure can mitigate the uncertainty of the artist's work. Unlike what the Conservatives seem to be saying, income averaging is quite common throughout the world and it is an effective means of spreading out the tax liability.

I will talk about an organization that is an economic driver in my riding and in the Montebello region: Outaouais Rock, which hosts the largest rock festival in Quebec. When Alex Martel, the business manager of Outaouais Rock, heard about Bill C-427, introduced by my colleague from Jeanne-Le Ber, he wrote to me to say that he wanted to offer his support, as well as the support of all those involved with Outaouais Rock, for this bill that would do a lot for artists.

Artists and people who work on stage or behind the scenes, like Mr. Martel, recognize that work is needed to adapt our tax system to artists' realities. This year, the economic spinoffs of Rockfest in Montebello were estimated at $4 million. The festival brings in a number of investments to our region and is good for all those who live there. It also acts as a tourism draw for the region.

Careers in the arts, as in many seasonal industries, are often characterized by large fluctuations in income and by irregular work hours. This situation has an unfortunate consequence: it harshly penalizes artists on their taxes when they receive a higher income.

Contrary to what the government seems to believe, careers in arts and culture make an enormous contribution to our economy. The least we can do in return is to take into account the distinct nature of work in the arts and give artists their just due so that they can continue to enrich our culture. Artists, artisans and those who work in the cultural industry generate huge economic spinoffs and positive economic externalities. They need us to adjust the tax system so that it takes into account their reality.

To quote Gabrielle Roy, “Could we ever know each other in the slightest without the arts?” There is no better way to describe the importance of the arts in our society. This reminds us of the importance of supporting these occupations that are essential in our society.

This bill is an excellent example of how much the NDP supports artists and the cultural industry. This sector leaves a huge economic footprint. It accounts for a large part of our GDP. It provides many jobs and generates good economic spinoffs.

My colleague's bill recognizes the importance of this industry and is an excellent way to allow artists who live for their art to also make a living from it.

[The Deputy Speaker]

The hon. member for Jeanne-Le Ber has five minutes to respond.

[Tyrone Benskin, NDP, Jeanne-Le Ber, QC]

Mr. Speaker, would that I had more time to address the time-shifting, trans-dimensional contributions of my colleagues from across the way. I will bring this back to this dimension and this reality.

The bill would respond to the needs of artists. It has very little to do with support for the arts and institutions. The institutions that get the get tax credits and support that the Conservatives have talked about are fine. This is about the artists. A lot of the contributions to these organizations do not necessarily trickle down to the artists. The bill looks at the work that artists do, the remuneration they get and looks at a way of helping in spike years to ease some of the massive tax burdens that artists have because of it.

I will address one issue in particular. The fact of how we would pay for this is a question that kept coming from the other side. We would pay for this by the same means as are all tax easements contained in the tax code. It would be done through choices, through making a good choice for artists. This bill would offer an investment into the economy. It would allow artists to put more money into their pockets so they could contribute to the economy and to themselves as small businesses and as people. This is not about whether a film can be made. It is about what happens after that film is made.

The other thing I will touch upon is the question of what we say to other sectors that look at this bill and ask, “What about us?” What we say to them is that this is the beginning. It is the beginning of a conversation we need to have in how we collect taxes. We can no longer look at the tax regime as being how much money people make and how much they should be taxed. We have to look at it in addition to how that money is made.

Farmers have particular needs, as do insurance workers, car salesmen and artists. This is not be about selecting a few individuals and special treatment toward those individuals. It looks at the realities of this group of individuals and this a portal, if I may continue the same analogy, to looking at how we tax our citizens.

When the Income Tax Act came into being in the 1940s as a means of funding the war effort, the labour force looked different. There were labourers, factory workers or office workers. It was very simple. Now it is as diverse as the medical industry, as I have said before. We go to the GP now not to get fixed as much as to get a little slip to go to see a specialist in one area or another. The workforce is that same way. We need to start to look at ways to derive income tax from our citizens in ways that reflect how they make their money and not simply how much money they make.

To again address a comment that was made on the other side, this bill has been costed. It has been costed by the Parliamentary Budget Office. The income tax averaging aspect of this bill would come in at around $7 million, rounded up to $10 million. That money goes back into the pockets of our citizens, which eventually goes back into the coffers through economic and consumer activity and through investment activity. I cannot think of a better way to help artists in our country by giving them that power to be full and active members of the economic and cultural community that is Canada.

[The Deputy Speaker]

It being 6:30 p.m., the time provided for debate has expired.

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