Debates of May 9th, 2013

Opposition Motion—2013 Spring Report of the Auditor General of Canada

[The Deputy Speaker]

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 March 27, 2013, consideration of the motion that Bill C-463, An Act to amend the Income Tax Act (travel expenses), be read the second time and referred to a committee.

Discover Your Canada Act

[Blake Richards, Conservative, Wild Rose, AB]

Mr. Speaker, I appreciate the opportunity to speak to this legislation, which, I would suggest, would be very costly and is very poorly thought out.

It is really a novelty proposal from the Liberal Party for a new taxpayer-funded travel subsidy. There are numerous flaws with this Liberal proposal, but unfortunately the 10 minutes allotted for my speech are not nearly enough to explain them all. However, before I address them in detail, let me briefly explain what this Liberal proposal would actually do.

This costly bill would give a very generous tax deduction of up to $2,000 for certain types of travel across at least three provinces by bus, train or airplane or, for short, the Planes, Trains and Automobiles subsidy. Unlike the 1987 comedy by the same name, with the great Canadian actor John Candy, there is nothing funny about this Liberal proposal, especially for the Canadian taxpayers who would be asked to fork over hundreds of millions of their hard-earned dollars to pay for it. Indeed, for Canadians watching at home, today's Liberal proposal is a perfect example of what our Conservative government means when we say that the opposition is fiscally incompetent.

In an era when governments are trying to get back to balanced budgets, I ask Canadians why a party with any sense of fiscal responsibility would suggest that a new novelty subsidy with a price tag of over $200 million each year be a sound idea. More importantly, why do the Liberals think it is the responsibility of government, which is taxpayers, to subsidize personal travel? That kind of big government thinking is a relic of the 1960s and 1970s. Respected National Post columnist Kelly McParland provided commentary on this Liberal proposal in a recent article. She wrote, in part, “...the shrunken little Liberal caucus is pumping out silly ways to spend even more borrowed money trying to manipulate Canadian behaviour, just like the old days”.

What's worse, this bill would not even accomplish what it sets out to do, and that is according to the Canadian tourism industry itself. The head of the Tourism Industry Association of Canada said directly, “...we don’t think this is a particularly useful mechanism because Canada’s challenge is not a lack of domestic travel”.

In the remainder of my time here today, I will address the flaws of this proposal in greater detail. These flaws include its unfairness to Canadians across the country, its sizable cost to taxpayers, and its inability to actually increase domestic travel.

After that, I will present our Conservative government's constructive, effective and more fiscally responsible approach to promoting Canadian tourism.

First, let us examine the issue of fairness—or unfairness, in fact—as it relates to this proposal. For instance, let us consider the modes of travel that are available: buses, planes and trains. What about boats? What about cars? What about motorhomes? Why would some be excluded? Why would some be included? It seems to be completely arbitrary.

What about the fact that eligibility would be tied to travel crossing three provincial boundaries? This would mean that some Canadians would benefit more than others, given the shorter distances between provinces in certain areas of the country.

Second, let us remember that this costly subsidy would not even accomplish what it sets out to do. As I noted before, the Canadian tourism industry itself has already dismissed today's Liberal proposal. It has done so for the good reason that it is clear this proposal would do very little to actually encourage interprovincial travel within Canada.

For that matter, even a basic analysis quickly reveals that it would carry a significant cost. Specifically, according to the Department of Finance and based on existing travel patterns and expenditures, preliminary estimates suggest that this proposal would cost at least $215 million each year.

I should note that is a conservative estimate based solely on existing travel patterns. If Canadians were actually motivated to change their travel plans to qualify for this costly subsidy, as is the stated intent of the member for Saint-Léonard—Saint-Michel, this proposal would cost taxpayers even more.

I know the Liberal Party might not think that $200 million a year is a lot, but Canadian taxpayers know it is a lot of money.

We can think of it another way: over the first five years alone, it would cost, at the very least, $1 billion—not $1 million, but $1 billion. When politicians propose $1 billion in new spending over five years, Canadian taxpayers expect and demand that they also explain how they are going to pay for it. Canadian families working on their household budget around the dinner table know that if they add new spending, they had better know how they are going to pay for it. Even though the Liberals have come here today with a plan for new spending, have they told us how they are going to pay for it? Would they cut government services? Would they cut government programs? Would they cut health care transfers, as they did in the 1990s when they were in government? Would they just hike taxes, such as income taxes or the GST? Maybe they would simply add to the government debt.

We do not know what they would do, because the Liberal Party and the member did not think about those questions. That is the very definition of fiscal irresponsibility.

It is little wonder that many Canadians have given a thumbs-down to this proposal already. Indeed, here is what some everyday Canadians said when asked by Global News about this proposal. One man said, “It reduces tax revenue to the government, which means government has less money to do other things that I might value more.” Another added, “We are in financially tight times right now, and letting our country go further into debt for that sole reason seems like a bad idea to me.”

It is comforting to know that these everyday Canadians have more wisdom and more fiscal responsibility than the Liberal Party. It is no wonder more and more Canadians are turning their backs on the Liberals. By rejecting this costly Liberal plan, our Conservative government is standing by the existing support that we provide to Canada's tourism industry.

This government recognizes the importance of the tourism industry to this country. It contributes about $80 billion to our economy. It creates jobs for 600,000 Canadians and is an industry that touches all regions of the country. It is important to all regions and to all our constituencies.

That is why, in October 2011, we brought forward our federal tourism strategy. It is a whole of government approach. It reaches across 20 different departments or agencies and touches on 31 different recommendations across those 20 different agencies and departments.

It is centred on four key areas. The priorities are, first, increasing awareness of Canada as a premier tourist destination; second, facilitating ease of access and movement for travellers while protecting the safety and integrity of Canada's borders; third, encouraging product development and investments in Canadian tourism assets and products; and fourth, fostering an adequate supply of skills and labour to enhance visitor experiences through quality of service and hospitality.

One of the biggest things it does is pull together all those departments for the first time. It does so by bringing together a steering committee. The steering committee takes the plans and priorities we have for tourism, pulls them all together and gets all the departments and agencies thinking about the importance of tourism and the effect they have on tourism. For the first time, we are including the tourism industry in those consultations and meetings and making sure their voices are heard at the government table.

We are making a difference. If I had more time, I would like to share all the great things we are doing for tourism. Unfortunately, time runs short in the House, so suffice it to say that we are very excited about the future prospects of the tourism industry.

As a government we are committed to fiscal responsibility, and for this reason we will be voting against this proposal. That is also why we are supporting effective programs to boost tourism rather than the costly novelty of the Liberal proposal for a taxpayer-funded travel subsidy.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, this bill is truly based on good intentions, to encourage tourism in Canada by Canadians. Of course, taxpayers are in favour of more tax credits, especially when this would enable them to reduce the cost of their family vacations by a considerable amount.

However, before saying that this deduction would be good for both families and businesses, we should look closely and weigh several factors, including the cost of the bill itself, and thus its consequences for the government's revenue, Canadians' expected participation rate, the real effects of such a deduction on Canada's tourism industry and the additional complexity of the tax system.

The cost of this bill was estimated by the former parliamentary budget officer, Kevin Page. He responded to a request by the House of Commons Standing Committee on Finance for an estimate of the lost revenue to the government if such subsidies were granted. His conclusions were not really surprising.

Since no revenue source was proposed to counterbalance the expenditures related to this bill, Bill C-463 would result in reduced tax revenue.

Thus, according to the Parliamentary Budget Officer, the net impact of Bill C-463 on federal tax revenue would be between $90 million and $120 million in 2017, in constant 2013 dollars.

Yet the hon. member for Saint-Léonard—Saint-Michel claims confidently that the economic spinoffs from this bill would be sufficient to cover the cost of these deductions or, in the worst case, would be revenue-neutral for the government.

It is undeniable that such a bill would generate economic spinoffs. How big will they be? That is the question. If the hon. member has some calculations or more information on this, it could be interesting to hear about them, because even the Parliamentary Budget Officer was not able to establish an estimate.

We must determine how much use the taxpayers would make of this tax credit and what impact it would have on tourism. Will there really be new travel? Will people simply change their means of transportation or decide to go across one more provincial border in order to claim the tax credit? If they lengthen a planned trip in order to cross three provinces instead of two, only one part of the trip should be counted.

The Parliamentary Budget Officer added that he made his calculations based on the assumption that the proposed deductions would not cause carriers to increase prices, since if that were the case, a corresponding decline in induced demand could be expected.

It is a matter of aligning complex calculations with behavioural factors that are rather subjective. As it stands, we do not really have any credible figures, except those from the Parliamentary Budget Officer. Those are the figures we will use to make a decision.

It is not enough to simply bring in this measure. The public must know that it exists to be able to take advantage of it.

The costing of the bill is based on the assumption that all those who are eligible will use the tax credit. We know that is not true, but we have no choice but to take that into consideration. However, that assumption skews the figures in favour of the proposal.

On the one hand, travellers who do not use the tax credit will save the government money by not claiming the money they are owed. On the other hand, their travel cannot be included in the statistics used for costing Bill C-463, since they would have travelled anyway.

Something really bothers me about my colleague's logic. He claims that the bill is meant to encourage Canadians to explore, appreciate and discover their country, to meet other Canadians and experience culture. He said the following when he introduced the bill:

We should remove some of the financial barriers that stop them from exploring this great land and tell them to go out and discover your Canada...

With all due respect, I do not see how families with financial struggles would prioritize travel across the country. They may want to, but times are tough for many people.

My NDP colleague from Abitibi—Témiscamingue also questioned why the member chose the rule of crossing at least three different provincial boundaries, and she did so very eloquently. I agree that if we want Canadians to travel more within the country, they should be able to choose their destination. In her example, she explained that someone who crosses three provincial boundaries does not necessarily travel further than someone who goes from the far north of the Northwest Territories to southern Saskatchewan.

Acknowledging the limitations of his bill, the member said that the main reason for his bill was as follows:

Canadians have to start getting to know one another and discovering Canada. The only way to do that is to get them to travel as far as possible in the regions. When I talk about the regions, I am not talking about going from an urban area to a rural area. I am talking about travelling to eastern, western and central Canada. That is how people can get to know one another.

To be honest, I do not see the difference. In fact, from what I understand, Canadians will prove they want to visit Canada and get to know their fellow Canadians by travelling across three provinces. That is rather ridiculous. He spoke at length about Canadian tourists who buoy up American tourism, so he should be happy simply that someone decides to travel in Canada.

After looking at the tax credit requirements, it is clear to me that the three-province rule was put in place to try and restrict accessibility and eligibility in some way. According to statistics from the Parliamentary Budget Officer, 92% of trips within Canada are taken by plane, train or bus, and the vast majority of those, 88%, are not work-related and would therefore be eligible for the tax credit proposed in Bill C-463.

However, as far as the distance criterion is concerned, travellers cross at least three provinces in only 23% of travel by airplane within Canada. That being said, people who can afford to travel in three provinces are, for the most part, relatively well off. What is more, to benefit from this tax credit, a person would need a high enough income to pay taxes and for this non-refundable credit to make a difference in the taxable income. This is an important aspect of the bill that, I hope, in no way reflects what the member was getting at.

Travel, within the meaning of this bill, is considered a luxury for many Canadians. Many do not have the means to travel very far, or at least not far enough to benefit from the tax credit. According to the Parliamentary Budget Officer, a maximum of 10% of tax deductions for travel would come out of this bill, which is equivalent to roughly $110 million out of $1.1 billion.

Is it worth the trouble? There may be less expensive and more sustainable ways of encouraging tourism and helping people to travel. I am not sure this is the best way to go about it, especially at a time when we are trying to have the government simplify the tax system and reduce economic inequality. I think it would be hypocritical to encourage a new tax credit that goes against the primary goal of the tax system, which is to distribute wealth, and makes it less progressive.

The Parliamentary Budget Officer confirmed that when he said that “the benefits of tax measures proposed under Bill C-463 are anticipated to concentrate to higher income earners”. I am not necessarily talking about this credit in particular, but the direction of the tax policy in general. To be more progressive and more effective, the tax system has to remain as simple as possible.

To conclude, despite what the hon. member thinks, I believe that many trips that do not follow the three-province rule contribute just as much to helping people learn about socio-cultural differences. As a result, I do not see why they are completely disregarded. If the intent really is to have people travel and discover Canada, simply travelling from one province to another should be enough. Whether a person leaves from downtown Toronto or from Calgary to get to Chaleur Bay, the trip will be no less memorable.

With that thinking, the member is minimizing the unique character of each province and is reinforcing certain cultural stereotypes, like the idea that western Canada is all the same, regardless of the province, when that is not true. I truly hope that everyone has an opportunity to travel; not only is it pleasant, but it is also enriching. However, I am not sure that it should be a government priority, quite frankly. I think the $200 million or thereabouts could be better invested right now.

In short, I understand the member's intent, which is commendable. It is very important to encourage Canada's tourism industry. We support the intent of the bill. My riding in particular, Rimouski-Neigette—Témiscouata—Les Basques, depends largely on tourism, an important industry. However, the bill and its tax credit will do nothing to achieve the objectives or to help Canadians get to know each other better. This bill creates a tax credit that will benefit the wealthy more than everyone else.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, I am pleased to rise and close the debate on my private member's bill, the discover your Canada act.

I outlined previously to the House why we should send the bill to committee. I spoke about why I believe this legislation is important for building Canada's unity. I was very clear that this legislation is an initiative to encourage Canadians to travel within Canada, period. I have produced figures, testimonials and polling data. I have even shared personal insights to help my colleagues better appreciate my reasoning for introducing this bill. I do not intend to spend the little time I have today restating what I have already said. I will instead use the limited time I have to address some of the criticism brought forward by members, because I am disappointed by the pessimistic tone and the calibre of debate.

Our duty as members of Parliament is to assess the merits of legislation. In order to do so we must have accurate and detailed data to make better-informed decisions. However, many members are obviously not using accurate information. I heard the remarks made on March 27 by the member for Etobicoke—Lakeshore, who said that the bill is really just a novelty, a gimmicky distraction that would cost taxpayers more than $200 million without really encouraging tourism within Canada. I have problems with this statement that go beyond its non-collegial tone. Accusing me of imposing a gimmicky distraction upon Canadians is bad enough, but I dispute the claim that the discover your Canada act would cost over $200 million a year. It is a little exaggerated.

When researching where this number came from, I realized it was based upon a number that the Department of Finance came up with. To this date, the department has yet to provide me with a breakdown on how this number was arrived at, so I am not sure how credible this number is.

However, the independent Parliamentary Budget Office has provided everyone here with a full-blown detailed analysis of this legislation so they can better understand the fiscal implications of what they would be voting on. The PBO calculations determine that the discover your Canada act would have a fiscal cost of $90 million, but at the same time, it also says there will be a revenue windfall of as much as $110 million due to the increase in tourism spending. If I were to use industry standards, which are quite conservative, every $1 spent would generate $5 of economic spinoffs. Members can see that the cost is not even a factor, contrary to what some Conservative and NDP members have said, who have used this as an argument to speak against the bill.

Therefore I am left to ask the question: What passes for solid evidence on the government side and on that of other members of the House, when time and time again the PBO has put out estimates more accurate than the government's? This happens when the government is more interested in partisanship than pursuing the best interests of Canadians. It is shameful. It is ongoing. It has to stop.

Unfortunately, I was also disappointed with the NDP's arguments against this bill.

My colleague for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup read the report by the Office of the Parliamentary Budget Officer, but he does not seem to have understood it very well.

He seems to think that we are milking the Canadian tourism industry. If that were the case, why would the Parliamentary Budget Officer state that the measure will have $110 million in tourism spinoffs? It seems that there is some milk left.

My colleague also talked about potential fraud that the bill could encourage. For example, people could claim that a business trip was a vacation. As an accountant, I am very familiar with taxation. Business deductions are far more generous than the proposed measures in this bill.

In short, a business person who tries to claim a business trip under the provisions of this bill will pay more taxes because this deduction is less advantageous.

The bill may not be perfect. I accept that, and I am ready to work on it at committee. However there appears to be no desire by some Conservative or NDP members to work with me on the bill, which has the support of 70% of Canadians and would come into effect in 2017, in time to celebrate Canada's 150th birthday.

The PBO's estimate of $110 million in economic spinoffs is another piece of information that my colleagues have failed to mention in their haste to discredit the bill by claiming it would not encourage tourism within Canada, which is totally false. An independent Harris/Decima study confirmed that four out of ten Canadians surveyed would be more than likely to travel within Canada if the bill were passed.

I am asking all my colleagues to set aside partisan politics and vote for this bill so that we can study it in committee and improve it.

I will close by simply stating that we should vote in favour of the bill, which 70% of Canadians support in its current form, so we can send it to committee, work collaboratively to improve it and pass an even better version at third reading, so that even more Canadians will approve. We owe it to Canada to support the bill, which is good for national unity.

[The Deputy Speaker]

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

[Some hon. members]

Agreed.

No.

[The Speaker, Conservative, Andrew Scheer]

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

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it.

And five or more members having risen:

Pursuant to Standing Order 93, a recorded division stands deferred until Wednesday, May 22, immediately before the time provided for private members' business.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[The Deputy Speaker, NDP, Joe Comartin]

The hon. member for Cape Breton—Canso not being present to raise, during the adjournment proceedings, the matter for which notice has been given, the notice is deemed withdrawn.

Pursuant to Standing Order 81(4), the House will now go into committee of the whole for the purpose of considering votes under Indian Affairs and Northern Development in the main estimates for the fiscal year ending March 31, 2014.

(Consideration in committee of the whole of all votes under Indian Affairs and Northern Development in the main estimates, Mr. Joe Comartin in the chair)

Indian Affairs and Northern Development—Main Estimates, 2013–14

[The Chair, NDP, Joe Comartin]

I would like to open this committee of the whole session by making a short statement on this evening's proceedings.

Tonight's debate is a general one on all of the votes under Indian Affairs and Northern Development. Each member will be allocated 15 minutes. The first round will begin with the official opposition, followed by the government and then the Liberal Party.

After that, we will follow the usual proportional rotation. Each member will be allocated 15 minutes at a time, which may be used both for debate and for posing questions. Should members wish to use this time to make a speech, it can last a maximum of 10 minutes, leaving at least 5 minutes for questions to the minister.

When a member is recognized, he or she should indicate to the Chair how the 15-minute period will be used; in other words, what portion will be used for speeches and what portion for questions and answers.

Members should also note that they will need the unanimous consent of the committee if they wish to split their time with another member.

When the time is to be used for questions and answers, the Chair will expect that the minister's response will reflect approximately the time taken by the question, since this time will be counted in the time originally allotted to the member.

Though members may speak more than once, the Chair will generally try to ensure that all members wishing to speak are heard before inviting members to speak again, while respecting the proportional party rotations for speakers. Members need not be in their own seats to be recognized.

As your Chair, I will be guided by the rules of the committee of the whole. However, in the interests of a full exchange, I am prepared to exercise discretion and flexibility in the application of these rules.

I also wish to indicate that in committee of the whole, ministers and members should be referred to by their title or riding name and, of course, all remarks should be addressed through the chair. I ask for everyone's co-operation in upholding all established standards of decorum, parliamentary language and behaviour.

At the conclusion of tonight's debate, the committee will rise, the estimates under Indian Affairs and Northern Development will be deemed reported and the House will adjourn immediately until tomorrow.

We may now begin tonight's session.

The House in committee of the whole pursuant to Standing Order 81(4)(a), the first appointed day, consideration in committee of the whole of all votes under Indian Affairs and Northern Development in the main estimates for the fiscal year ending March 31, 2014.

The hon. member for Nanaimo—Cowichan.

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

Mr. Chair, I will be using my full 15 minutes for questions.

I would like to begin with the main estimates where the department is asking for $262 million for aboriginal economic development. However, the information from the PBO's integrated monitoring database shows that the department only spent 50% of its allocated funding in the first three quarters of the last financial year. What is the most recent financial data that the minister has on this line item and does he expect the unused funding to be carried over into the estimates currently before the House?

[Bernard Valcourt, Conservative, Minister of Aboriginal Affairs and Northern Development]

Mr. Chair, when we talk about economic development there is no question that our government recognizes that the most effective way to address the gap in socio-economic conditions that are faced by aboriginal Canadians remains increasing their participation in the economy. As all members will agree, all Canadians benefit from strong, healthy, self-sufficient aboriginal peoples and communities.

The historic Crown-first nation gathering reaffirmed the Government of Canada's commitment to creating conditions to accelerate economic development opportunities and maximize benefits for all Canadians. The funds that are allocated in the main estimates for economic development are in line with what was done in the previous fiscal year, which will ensure that we can continue to make progress on that front.

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

Mr. Chair, in the main estimates, the department is asking for $11 million for Metis rights management. However, the information from the PBO shows that the department only spent 38% of its allocated funding in the first three quarters of the last fiscal year. What is the most recent financial data that the minister has on this line item?

[Bernard Valcourt, Conservative, Madawaska—Restigouche, NB]

Mr. Chair, again, the hon. member will have observed that in the program architecture of that specific program there have been changes. As a result, the estimated amounts budgeted in the estimates for Metis can be found under program 1.

It is important that we continue to work with Metis people to improve their quality of life. As a matter of fact, I had a good meeting with the president of the Métis National Council the week before where we renewed and signed the protocol to ensure that we can--

[The Chair, NDP, Joe Comartin]

The hon. member for Nanaimo—Cowichan.

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

Mr. Chair, my understanding is that the time allotted for the question and the time allotted for the answer are supposed to be roughly the same.

[The Chair, NDP, Joe Comartin]

You are correct. I would direct the minister to try to restrain his answers to roughly the same length of time as the question. We will go back to the member for Nanaimo—Cowichan.

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

Mr. Chair, after two fiscal years of higher spending, why is the government only planning on spending $9.7 million in the coming year on emergency assistance when we already have high flood forecasts in much of northern Canada?

[Bernard Valcourt, Conservative, Madawaska—Restigouche, NB]

Mr. Chair, emergency preparedness for first nations is a serious concern of the department. That is why I was recently in western Canada where I visited other communities that were affected by the 2011 flood. I had meetings with the leadership of the first nations where we discussed emergency preparedness.

As a matter of fact, I will meet with the minister of Saskatchewan in the next few weeks to ensure that emergency preparedness is effectively implemented on first nations not only in Saskatchewan but throughout all of western Canada.