Debates of June 11th, 2014

Economic Action Plan 2014 Act, No. 1

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, for the minister and for those in the House who may be “Hooked on Phonics”, I think I should just kind of go through the name of my riding so people can kind of get it.

It is Tobique—Mactaquac. One person told me one time it is like “toe” of a foot, “bic” like the “Bic” pen, Tobique; then Mactaquac would be like if there was a duck named Mac and someone was going to teach Mac to quack. Then we would be good to go. That is just for future reference.

I am pleased to have the opportunity to discuss Bill C-31 concerning our government’s economic action plan 2014. As we know, many measures are really crucial for our economy, and that is why I support Bill C-31.

It is not possible to discuss all the clauses, but in the time I am allowed this evening I would like to talk about two things. First, I would like to address the clause that creates a stable environment in the area of income tax, and more specifically the Financial Administration Act. Second, I would like to share a few observations on the provisions concerning the implementation of the Canada—United States enhanced tax information exchange agreement.

There is a clause concerning financial administration, and more specifically the initiative that I proposed in my private member’s bill, that will improve transparency when there are potential changes to our Income Tax Act.

When the Certified General Accountants Association testified before the committee, it said that clause 31 required the Minister of Finance to table a list of legislative proposals in Parliament every year. The first version of this bill proposed to include the legislative proposals announced publicly that were not enacted by Parliament since the last federal election, not all proposals.

The committee decided to amend that clause because it thought we could improve clause 31 significantly by amending it. In its initial form, the clause required that the minister report only on the tax measures proposed during the current Parliament. Accordingly, the list tabled would not include the numerous tax measures that were already in the wings before the current Parliament took office.

The committee members adopted the CGAs' recommendation, and we amended the Public Finance Act. Now, the Minister of Finance has to present cumulative reports, not just the changes since the last election.

In addition to that, it would also provide for the government a 12-month lag for a new minister, after an election, to file their first report of these unlegislated tax measures.

I want to thank my colleagues on the committee for working together to incorporate constructive suggestions from CGA-Canada to improve clause 31.

I would like to spend a little time on the enhanced Canada-U.S. tax exchange agreement and cover a number of topics under this. First is a bit of the history of where we are and how we got here, a bit of what FATCA is and what it is not, and what the repercussions would have been if we had just let FATCA happen as opposed to taking the initiative to sign an intergovernmental agreement with the U.S.

I would also like to talk a bit about the due diligence processes that are going to be in place for the banks, as well as the exceptions from reporting for the banks. I maintain that the changes and the intergovernmental agreement that we have negotiated is a good agreement to protect as many Canadians as we possibly can.

The U.S. has had a taxation on citizenship since 1913. It is one of only two countries in the world, the other being Eritrea, that has that kind of taxation. Most, like Canada, tax on residence, but the U.S. does not.

In fact, that was challenged in the early 1920s, through the Constitution, in the U.S., as being unconstitutional. That constitutional challenge was actually defeated. Here we are with U.S. citizens required to pay taxes in the U.S.

We all agree, and I do not think anybody in our committee disagrees, that FATCA is overreaching, on the part of the U.S. There is no question about it. We are left with the situation where, as a government that deals with the 28 other countries that have signed intergovernmental agreements, and there are about 33 that are actually working toward agreements in principle now, we have to learn to deal with this in order to protect as many citizens as we can.

In the discussions we had with the U.S. Treasury, this spring, in Washington, it was pretty evident that the U.S. Treasury, in spite of some of the lobbying we did, was not hearing any of it and that FATCA was still going to exist. The fact that FATCA was passed in 2010 means that is how the U.S. was going to apply that law.

With that in mind, we have a choice. Do we just let FATCA happen, as it is and as it was passed by the U.S.? Or do we try to negotiate an intergovernmental agreement in the best interests of Canadians based upon what we are going to have to deal with? Because it is a false choice to say that we can opt out of FATCA. We cannot opt out of FATCA. There is no way we can opt out of FATCA.

If we let FATCA happen, then we are going to be faced with up to a 30% withholding tax on the transfers coming in, not only to banks, but also to individuals. As we know, there are a lot of investments that are U.S.-denominated and there is going to be a 30% withholding. As we heard in committee, that is not just a withholding tax. It is not a withholding against tax. It is a withholding tax. Essentially, there is potentially double taxation.

There are also potential privacy issues if we just let FATCA go the way it is because, then the IRS is going to negotiate individual agreements with every bank. That is what is going to have to happen. And every bank that wants to continue to do that is either going to have to suck up the 30% withholding or it is going to have to come up with an agreement to actually transfer this information to the IRS.

Also, it could get so crazy, to the point where banks would actually have to turn down clients if they ask them, “Are you a U.S. citizen?” They would have to turn them down, under the way FATCA is worded.

With the IGA and the intergovernmental agreement that we have, there is no withholding tax. The transfer of information that is going to be transferred between Canada and the U.S. will actually go through existing tax exchange agreements. It will go through the CRA, to the IRS, and it will be used very strictly within the rules and regulations of that information transfer. That is a very important concept.

Also, it would ensure that we have that privacy kept and it would also allow the banks to take on U.S. clients.

I want to talk a bit about due diligence. When we talk about due diligence, Canada did really well in the negotiations of the due diligence of this agreement because accounts under $50,000 are not even reportable. Accounts between $50,000 and $1 million are done through an electronic scan. If there do not happen to be any U.S. indicia on the account, such as a U.S. tax identification number, a U.S. address, or some other U.S. identifier, then that account is not reported. All of a sudden this million people we are starting to talk about in Canada might be impacted. When we take out the underage people who might not even have a bank account, we are squeezing this down to a very small number of people. If the account is over $1 million, then, in addition to the electronic scan, there will be a manual search in case of U.S. indicia.

I would suggest that the individuals with accounts over $1 million do have the wherewithal, in that case, if they happen to be U.S. citizens, to deal with that and its challenges and to actually ensure that they do the proper filings. It is important to understand that those are some of the things in there. Not only that, we filtered out the RRSPs, the RESPs, and even the agriculture accounts.

Furthermore, there is a favoured nations clause in there so that if a better deal comes around, as time progresses, Canada will be able avail itself of better clauses.

I have heard a lot about FATCA. Most of what I have heard is that there is a lot of mix-up between the filing of taxes, which has been an obligation for U.S. citizens since 1913, and this obligation, which is on the transfer of information through the CRA to the IRS under existing processes. They are two separate things.

Furthermore, I would maintain that the deal that was signed, the intergovernmental agreement between Canada and the U.S., is the utmost best we can do from the standpoint of protecting taxpayers. We have done very well when we compare ourselves to the 28 other countries that have agreements with the U.S.

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

Mr. Speaker, I would like to thank my colleague from Tobique—Mactaquac for his speech. I invite him to pronounce the name of my riding in his reply.

I sit on the Standing Committee on Finance with the member, so we heard the same group of witnesses who appeared before the committee. I am going to speak to the tax agreement between the United States and Canada whose purpose was to provide an alternative to FATCA. What is clear, and I think the member can agree, given the complexity of the technical details he gave in his presentation, is that the agreement and the study of the agreement are extremely complex. This issue had to be negotiated as part of a collection of other measures that covered more than 60 acts.

He mentioned in his speech that we absolutely have to pass this treaty now and that we have no time to lose. If we look at what is going on in the United States, it is clear that the process for getting compliance is underway. Countries involved in such a process can have 18 months to comply. There was no urgent need to negotiate the treaty in an omnibus bill. There was no urgent need to address this matter and all of the related issues. There are a lot of privacy issues here. The Interim Privacy Commissioner told us about several of those issues, and she was not the only one.

I would like to know why the government could not split the bill and remove the part about this tax treaty from the omnibus bill so that we could use our time to identify its strengths and weaknesses and deal with the privacy issues that were raised in committee.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, I thank the member for Rimouski-Neigette—Témiscouata—Les Basques. I really appreciate his question. I agree that the agreement between Canada and the United States is very complex.

However, I do want to say that, with that in mind, the banks have to start collecting this information as of July 1. That is when this due diligence process has to start.

As has been pointed out, these banks will have to make investments. They will have to make investments in information technology and other processes to collect this information, which they would have to do under FATCA and will have to do under the IGA. I would argue that they will probably have to spend less money under the IGA than they would under FATCA. At the same time, it is also important to understand that they need certainty with respect to getting this started because I believe it would be very difficult to try to go back and collect that information in 2015 or 2016.

I also want to reference a comment by the Interim Privacy Commissioner. She said:

The risk to privacy here is therefore mainly related to over-collection, over-reporting.... To avoid over-collection and over reporting, education and outreach to institutions affected by this new reporting requirement will be crucial.

I agree. It will be important for the CRA to ensure that it communicates well and gets these structures in place with the banks before they start.

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

Mr. Speaker, I have just a quick question for the member for Tobique—Mactaquac. I want to talk about regional development because I am not sure if it was in his speech. I do not think it was. Being from Atlantic Canada, the movement of the ECBC in Cape Breton into ACOA represents a far greater change than we anticipated. I am worried that there is no focus on regional development like there was in the past. Hopefully, we are not getting away from that.

Could the hon. member address that, as far as investments go into New Brunswick and how important they have been? Would he dispute the fact that there has been less investment in economic opportunity through ACOA?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, to reply directly to my colleague's question, I believe we have maintained that level of investment in positive aspects and projects in New Brunswick. I have seen them in my riding. I have also seen very much the structure with ACOA, looking at the innovation that we are doing, investing in innovation with various companies. We continue to do community projects, and we do significant numbers of projects in Newfoundland as well.

ACOA has been playing a tremendous role in our region with respect to economic development, through innovation, but also through our business development loan program, which provides businesses an opportunity to have low-interest loans, no-interest loans for a period of seven years. It is very effective in terms of access to capital.

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

Mr. Speaker, I am pleased to rise to debate this budget bill at third reading. I also had a chance to speak at second reading and at report stage.

This bill is so huge. It is over 350 pages long and amends, repeals or adds some sixty laws. We have criticized this process many times over. However, it seems this is becoming the usual way of doing business for the Conservative government. It puts forward a series of measures, even though many of them should be studied in greater depth. I will mention several of them in my speech, as I did in my previous speeches.

This is the government's usual way of doing things, but parliamentary tradition dictates that omnibus bills have always been an exception to the rule to be used under very special circumstances. This is highly deplorable.

If we just want to cover the content, I will be able to discuss only a few of the issues. I have already talked about the creation of rules for the demutualization of mutual insurers, which will be bad for policyholders, who do not really have any rights in this process. They stand to lose a lot compared to the mutual policyholders, whose rights are somewhat more substantial and who are the ones making this decision, motivated by greed.

When a company demutualizes, it becomes a corporation and can merge with another company or be purchased. Only a handful of people share in the profits, while hundreds of thousands of others do not and even lose some of the assets they had with that insurance policy.

As we can see from the section of the bill on the Champlain Bridge, the government wants to impose a toll on the bridge, but it is not considering the impact on traffic and Quebec's economy. The goods that move across the Champlain Bridge account for 19% to 20% of Quebec's GDP. There will be serious consequences.

For members from the Toronto area, this would be like deciding overnight to put a toll on the Don Valley Parkway because it was just paved. It makes no sense. No witnesses in committee supported the government's stance on this, yet the Conservatives are moving forward without amendment.

I also spoke about a measure that the Conservatives brought in last year on labour-sponsored venture capital funds. The bill contains more measures associated with eliminating the tax credit. I am not going to talk about these issues right away, because I would like to talk about the bigger picture of what the Conservatives have done.

I represent the beautiful riding of Rimouski-Neigette—Témiscouata—Les Basques, where the economy can range from one extreme to the other, from very promising to weak. For example, Rimouski-Neigette has the Technopole Maritime.

The city created a vocation for itself with its institutions, such as the Université du Québec à Rimouski, the Rimouski CEGEP, the Institut maritime du Québec and research centres such as the Maurice Lamontagne Institute. This institute is not in my riding, but many researchers who work there live in my riding, since it is just a few kilometres away. The Maurice Lamontagne Institute is one of the main Canadian institutes specializing in oceanography and marine environments, particularly in the St. Lawrence.

All of this has helped Rimouski develop a specialty in marine research and marine biotechnology development. Many companies have moved in to take advantage of this research and momentum. Rimouski did the right thing by specializing.

However, I represent two other RCMs, the Témiscouata and Basques RCMs, which have their own challenges. With respect to per capita income, a recent report by the Institut de la statistique du Québec indicates that these two RCMs are now the poorest in Quebec.

It is not because of a lack of work. On the contrary, Trois-Pistoles and the superb Basques area have taken advantage of this natural beauty to develop their tourism industry.

I can personally attest to the entrepreneurial spirit of the people of Témiscouata. When they have a business gala, it is attended by just as many businesses, people and participants as would attend such an event in the City of Rimouski, which is three times larger than the entire Témiscouata RCM.

There really is an entrepreneurial spirit, but the situation is difficult. They could use the government's support to move forward.

I spoke about the Conservative era and the fact that since the 2011 budgets, or when the Conservative government gained a majority, the complete opposite has happened. I would like to remind members that the Conservatives' slogan during the election was “Our regions in power”. All the decisions concerning the regions have had negative repercussions.

The Rimouski region lost the employment insurance processing centre and the Canada Revenue Agency office. Although the Maurice-Lamontagne Institute is not in the riding, cuts there had a significant impact on the Technopole maritime, namely the closure of the ecotoxicology department and the firing of a number of scientists.

The various measures that have been taken with respect to research and development—in particular the ones that have redirected funding, in various ways, from basic research towards applied research—have had a major impact on the Technopole Maritime, ISMER and the institutional community.

There have also been cuts to employment insurance. I mentioned that Les Basques has something quite unique. The people there have developed a very professional niche tourism market. Tourism is a seasonal industry.

Témiscouata relies heavily on forestry. That is another seasonal industry. The people there also depend on tourism, which is a seasonal industry.

Those RCMs—including Neigette, the area surrounding Rimouski—still rely a great deal on agriculture, which accounts for 12% of the Lower St. Lawrence economy.

All of the measures included in the employment insurance reform have had overwhelmingly negative effects on regions such as the one where I live and that I represent, where the economy largely depends on seasonal industries.

With their budgets and economic measures, the Conservatives have impoverished regions such as the ones in eastern Quebec that I have the honour, pleasure and privilege of representing.

What is in this budget bill? Are there measures that will correct the excesses we saw in the previous budgets? Of course not.

We have a pile of bills that are combined in one document. This bill affects the appointment of judges and will add seats to the Quebec Superior Court as well as the one in Alberta. The bill also deals with the Enterprise Cape Breton Corporation, amendments to the Importation of Intoxicating Liquors Act and rail regulations. The Railway Safety Act and the Motor Vehicle Safety Act are amended by this bill.

Now, changes to regulations will no longer have to be published in the Canada Gazette. Why is that? It is because the government went back to consult stakeholders again, so the general public does not need to be informed of changes to the regulations. That is what we discussed at the Standing Committee on Finance.

Especially with the year we have had, it makes no sense to deal with an issue as sensitive as the Railway Safety Act and amendments to the regulations, made without transparency perhaps, and to discuss it at the Standing Committee on Finance. Is there some logic behind this? No, there is not. The government has never wanted to provide reasons to justify the use of omnibus bills.

I could talk more about 30 different divisions in part VI that pertain to about 30 different departments, not to mention all the extremely technical amendments, such as the changes to the GST, measures to counter tax evasion or all the tax measures in the bill.

This was already mentioned by my colleague from Skeena—Bulkley Valley, but I would like to point out that this is not the first time that the government has been forced to make corrections in a budget bill or that we have had to correct errors found in previous budget bills that were pushed through without amendment because the Conservatives obviously rejected all our amendments.

For example, this bill creates—that is how the government wants to present it—a GST exemption for hospital parking. The Conservative government was so pleased with this that it even sent out a press release stating that the government was again reducing our taxes by exempting hospital parking from the GST. Did it mention that the Conservatives had eliminated the exemption last year? Certainly not.

We have pointed out the problem with other measures in budget bills. It is the official opposition's role not only to oppose, but also to make proposals and point out flaws in bills so that the government can take note and make the necessary corrections. We are all here for all Canadians. That does not seem to be the case because, as I was saying, none of our amendments have been accepted, at least not for the four omnibus bills I have seen, with the exception of just one element in this bill. We proposed an amendment that was adopted by the Standing Committee on Finance, but even that took a Conservative amendment to the amendment. It took some doing and certainly was not easy to get adopted. It is therefore an NDP-Conservative amendment.

I wonder why we have to rush all these bills through so quickly, with all their flaws. The government systematically refuses to correct the flaws, even when tax experts and constitutional experts point them out.

In the time I have left, I would like to address two specific issues I have not covered in previous readings. The first is a measure that affects the Trade-marks Act. I mentioned it in a question I asked my colleague. This change to the Trade-marks Act alone is 50 pages long. We had between an hour and a half and three hours to discuss this issue and 12 others at the same time. Obviously, we cannot really get into the issues in such a short amount of time. What is more, the NDP does not even get the chance to call witnesses to discuss and analyze bills and laws appropriately.

The Trade-marks Act is extremely technical and drab. I will not dwell on it, but I must say that Canada's economic sector is extremely concerned. The government is telling us that this will make us compliant with the international agreements it has concluded. However, there are a number of ways to get there, not just one. In this case, the economic community, the business community, starting with the Canadian Chamber of Commerce, is opposed to these measures.

I have here an article from National Magazine, which is published by the Canadian Bar Association. When representatives of the association appeared before the committee, they expressed concern about the changes to the Trade-marks Act. I will quote the article:

If anything, Bill C-31 has accomplished one impressive feat. It has provoked a virtually unanimous response by trade-mark professionals. Law firms and other professional firms across Canada have openly criticized Bill C-31’s changes to the Trade-marks Act....

Why these changes have been proposed and who suggested them in the first place remain a mystery. Notwithstanding that, the bigger question is whether (and how) the government reacts to the outcry regarding Bill C-31’s Trade-marks Act amendments.

The Canadian Bar Association knows that the government has not reacted at all. It rejected all of the amendments we proposed. We had a series of amendments on this particular issue.

The hon. member for Skeena—Bulkley Valley briefly mentioned that administrative tribunals will be merged. The government wants to merge 11 administrative tribunals. It wants to merge their funding and give the Treasury Board more discretionary powers over these special tribunals. That is extremely problematic. Numerous experts who are familiar with the tribunals pointed out all of the weaknesses, problems and shortcomings that would be created if these tribunals are merged.

My colleague mentioned the Canadian International Trade Tribunal and the fact that merging this tribunal with the 10 others could create serious problems. We may also contravene the international obligations we have as a member of the World Trade Organization. That is a serious accusation, to the point where the Canadian Bar Association issued at least four warnings about Bill C-31 and addressed various components that affect the association directly or that will have an impact on the profession. The association has been very active with regard to this bill.

Cyndee Todgham Cherniak, a tax expert with the Canadian Bar Association, appeared before the committee and made a very bold statement. She said that Canada's international reputation is on the line.

Canada's international reputation is on the line because of a measure that the government is trying to pass off as purely administrative. Did the government even heed that warning? No. None of the proposed amendments were accepted.

Two of the tribunals they want to merge are the Canadian Human Rights Tribunal and the Public Servants Disclosure Protection Tribunal. These are the people who are whistleblowers, who report wrongdoing in their workplace. These people need special protection, but that protection is being compromised because more discretionary powers will be given to the Treasury Board president. He spends a lot of time overseeing the machinery of government, and he is in a position of power with respect to various services that may have employed these whistleblowers.

How is a whistleblower, who is already in a pretty vulnerable position, supposed to feel comfortable going ahead, and how can he feel fully protected by a tribunal that will be merged with several others to make one single tribunal, while greater powers are being given to the Treasury Board president? This is someone who can take steps to cut back the tribunal's funding and logistics. That would give him undue influence, a fact that really worried the witnesses who appeared before the committee.

I want to say a little more about the intergovernmental agreement. I would like to thank my colleague for his remarks on the subject. I do not necessarily agree with him, but his remarks provided information, and I really appreciate that. Once again, that did not justify the need to negotiate this issue extremely quickly because there are privacy concerns. The Privacy Commissioner and other witnesses raised those concerns.

One thing to note about this tax treaty between Canada and the United States is that it is not an information exchange because the information is flowing in one direction only. It is a tax treaty designed to comply with the United States' unilateral measure, FATCA. This measure could jeopardize dual citizens holding both Canadian and American citizenship. They could be seen as Americans who would have to pay the United States a portion of everything they have ever earned, even if they have lived their whole lives or almost their whole lives in Canada, paying what are, in many cases, higher taxes in Canada.

There is something else my colleague and I have in common, since both of our ridings border Maine. In the 1940s, 1950s and 1960s, when it was much easier to cross the border, many Canadians, either from Témiscouata or New Brunswick, often gave birth in the United States and then returned to Canada. They did this because hospitals and health care were lacking. Children were therefore born in the United States, but never lived there and were immediately brought back to Canada. These people could be considered Americans and could be subject to this agreement. That is a very serious concern that has not yet been addressed. Since we had more time, it would have been good to study this provision separately and more carefully, in order to identify the weaknesses.

We need to respond to FATCA and propose an agreement. We cannot accept just any agreement. We need an agreement that takes all of these concerns into consideration.

I could go on about this for hours. I will stop here, but I do want to answer questions from my colleagues and probably expand on these ideas.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, I would like to ask my colleague a quick question about the trademark part of this. In the testimony we had, our officials from the department, who are trademark lawyers, in fact indicated that we are the 93rd country that is going through this. There has been no demonstration of any issues that have been happening so far on the trademark issue. Further, they also indicated that, under the changes that are being made, the cost of business would go down from the current application cost of $4,000 to $400.

Does the member not believe that would be a positive thing for business? Does he also not believe that, with those other 93 countries and ourselves on this protocol, we have done more than enough of our due diligence on this?

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

Mr. Speaker, it is a very appropriate question. The question is not whether we think it is good for business; the question is whether businesses think it is good for business. They do not. I told members about the Canadian Chamber of Commerce, which is opposed.

The Conservatives were unable to actually bring a single witness from the business sector who was in agreement with these changes. They are worried about this.

I am not saying that we should not do something about our agreements. Yes, we sign international agreements, but it does not mean that this specific piece of legislation is the only one that could have been offered. There might have been different legislation or clauses that would have addressed those concerns. There was no attempt in that manner.

This is why I am saying that this specific part, which is over 50 pages long, should have been set aside and studied independently. We could have had a lot more information and many more comments from the business sector. Eventually, we might have corrected it in a way that would still have been in conformity with our international obligations.

The fact that we are presented with legislation does not mean that we need to support that specific legislation.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Speaker, I thank my colleague from Rimouski-Neigette—Témiscouata—Les Basques for his speech. I definitely will not blame him for skimming through this monster bill in the little time he had, barely 20 minutes.

I am going to keep the ball rolling on trademarks. In a sham consultation, the Standing Committee on Finance instructed the Standing Committee on Industry, Science and Technology, of which I am a member, to examine the part respecting trademarks, among others. We obviously had too little time to do it thoroughly and of course faced criticism and in fact virtually unanimous opposition to the measures proposed by the government.

Despite that mandate given by the Standing Committee on Finance, which made no sense, we, as a committee, could not submit any recommendations without making some sort of amendment. In any case, what we proposed from our side was rejected by the government.

I would like my colleague to characterize this parody of a procedure, all these roundabout attempts to legitimize this omnibus bill, which is in fact the catch-all device the government uses to pass whatever it wants.

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

Mr. Speaker, once again, the question is relevant and was in fact asked with respect to all the other omnibus budget bills.

In the case of the first omnibus bill the Conservatives brought forward, a monster bill, mammoth as it was called at the time, we initially asked the government to divide the bill so that its component parts could be studied in the relevant committees.

If we are actually addressing the Trade-marks Act—which is really a specific feature of industry—in the bill, then let us divide the bill and have that studied thoroughly by the Standing Committee on Industry, Science and Technology. If the Standing Committee on Finance must examine a measure that adds to the number of judges or makes amendments to the operation of the Supreme Court, as we saw in the last budget bill, it is not up to the Standing Committee on Finance to study that, but rather to the Standing Committee on Justice and Human Rights. They have the expertise and deal with those questions on a daily basis. However, we wind up with it, and a succession of other elements, in the Standing Committee on Finance.

Unfortunately, as a result, the process is absolutely not rigorous. It is not as stringent as it needs to be to address the financial, economic and budgetary context for a G7 country in the 21st century.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I would like to thank my colleague for his exhaustive speech on this bill. I know that, given his passion and expertise, he could not have provided a mere overview.

I would like to focus on one point. I would like to thank him for mentioning demutualization. I know he brought forward amendments on this. I also know that the Conservatives’ budget completely overlooks the entire co-operative and mutual sector. As the co-operatives critic, I find that worrying because it is a very important sector of our economy, particularly for the regions. It is also an important sector in the cities, but it is especially important in stimulating and revitalizing the regions.

I would like him to speak to this budget’s harmful effects on the regions. Perhaps he could talk about the harmful effects of demutualization.

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

Mr. Speaker, the co-operatives issue is largely overlooked by the Conservatives in general. The only good measure, which is one that we requested and on which the Conservatives seemed to agree since they implemented it, was the transfer of powers or authority over the co-operatives to the Department of Agriculture and Agri-Food. For historical reasons, they were previously held by the Department of Industry.

The Department of Industry had a new tool that could have been used for economic development purposes, However, I saw nothing of it. The secretariat was eliminated at the same time as the transfer was made, or even slightly before it. It was not really abolished, but no one works there anymore. That is virtually the same thing. It was a co-operatives secretariat.

Much was made of the International Year of Co-operatives. We had some major gatherings in Quebec City. The minister went there to boast about his work. In the meantime, however, Canada was reducing the co-operatives’ power and influence. Ultimately, instead of assisting them, it took away their tools. In several measures, particularly regarding the caisses populaires, tax rates were increased.

In that sense, the Conservatives give the co-operatives absolutely no support.

[Gerald Keddy, Conservative, Parliamentary Secretary to the Minister of National Revenue and for the Atlantic Canada Opportunities Agency]

Mr. Speaker, I listened to the hon. member and this discussion on trademarks. The reality is that this would allow us to adopt the Nice classification, which would allow us to adopt the Madrid protocol and the Singapore treaty. At the end of the day, that would allow Canadian companies and individuals who are developing trademarks to list that trademark in more than one country at a time.

What is wrong with that process?

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

I am not talking about the process, Mr. Speaker. I am talking about acceptability.

If the government actually had acted as a government should, it would have gone to businesses, the Canadian Chamber of Commerce, and the Canadian Manufacturers and Exporters. It would have gone to all of those groups that are worried right now about the impact it will have. Those groups have huge research abilities, and they have done research on this. The arguments the government has given them have not convinced them that it would be a good deal for them.

The government is trying to tell us that the only way to deal with those international obligations—because we signed those treaties—is by the legislation that is presented to us. That is not true. We have a piece of legislation, which can be amended in a way that would alleviate those fears and still respect our obligations.

I do not buy the argument that it is either this piece with no changes or nothing and then we would be in breach of our obligations. It does not work that way.

It is the same for the agreement with the U.S., answering to FATCA and the proposed IGA, where it has to be this way or no way. I do not buy that argument.

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, I would like to point out that I will be splitting my time with the member for Mississauga South.

I would like to focus tonight on three specific issues that I have been involved with in this Parliament and previous ones: number one, housing, in terms of our economic action plan; number two, skills training and, more precisely, skills shortages, the mismatch; and third, if I have time, the budget initiatives for assisting persons with disabilities and helping them find places in the Canadian workforce.

First is housing. The importance of the housing industry in this country cannot be understated. I will provide some of the facts. The first fact is that it is one of the most key economic drivers in the whole nation. It is the single biggest investment that Canadian households will ever make. It is, on average, 40% of a family's total assets or net worth. It accounts for around 20% of Canada's GDP. According to the Canadian Home Builders' Association's estimates, the total spending on residential construction and renovations is over $120 billion annually. It provides more than 900,000 direct jobs for Canadians. Lastly, it is a fact now that Canada's housing industry is the fifth largest in the world.

Why is that significant in relation to Canada's economic action plan? It is significant because it is often said in economic circles that the health of the economy can be measured by the health of housing starts or the housing industry. We have been very fortunate over our term in government to be able to foster the conditions of a healthy platform for private market housing in this country, and we continue to do that with our economic action plan, continuing on with the first-time home buyer's tax credit, so that more Canadians can achieve the dream of home ownership.

Also, in consecutive budgets, due largely to the good work of our finance minister, we have moved to ensure accessibility and sustainability of the social housing stock in this country, providing housing for those who are most in need. In fact, we have committed $1.25 billion in funding beginning this year to renew the investment in affordable housing for five years. We are also renewing the homelessness partnering strategy and implementing our housing first approach to homelessness. In 2013, our government announced nearly $600 million over five years to renew and refocus the homelessness partnering strategy using a housing first approach, which involves giving people who are homeless a place to live and then providing them the necessary supports to sustain them in that housing.

Why is that important? It is important for us to take action for those who are truly in need in this category. What is also important is to give them a hand up to enable them to take advantage of the supports to move themselves up economically so that one day they can buy new homes.

Affordability is one of the largest issues in the country today. Interestingly enough, in our discussions through the Conservative housing caucus with all the sectors involved in housing across this country over the last two years, we have done a bit of analysis on how much taxation plays in the role of single family housing, multi-family housing, or any type of housing. It is quite shocking to see the graph. It is similar to what we see on the gas pumps when we put gas in our vehicles, we see the breakdown of how much the government takes through taxation for a litre of gas. In a similar nature, the housing industry, particularly the Canadian Home Builders' Association, is working on quantifying that.

It varies across the country from community to community, but what is shocking is the first drafts and first average estimates of what the taxation load is for a new homebuyer: fully 25% of the cost of that home. I believe the average cost of a home in the country now exceeds $400,000. I think the average home price in Canada is in the $460,000 range, and now one-quarter of that price is in direct taxation.

Tonight I also heard a speech by the member for Skeena—Bulkley Valley. He said that our government has somehow reduced environmental regulations and protocols. I can speak to that in the housing industry. When I was in the industry for 25 years and had my own company, when we went to develop a properly zoned piece of land in our community, we would be required by the province, in my case Ontario, to do all the environmental assessment reports, send them to that ministry for evaluation, and seek approvals. The average time to get a result was three to five years. There were carrying costs of the land, let alone the taxation costs, and the development charges that went with that land.

What we have done at the federal level is this. We have reduced the duplication of those studies, because not only did we have to do it for the Province of Ontario, we had to do it for the federal ministry of natural resources as well. It did not accept the report we did for the Province of Ontario, and paid for. It demanded a different report that said the exact same things. What we have done as a government is remove the duplication. We have also put reasonable time limits on how long it should take the bureaucracy to process those applications.

Is that a bad thing for a small business like mine, which had 20 employees? No, it is a good thing, because what it does is keep people working, especially in down times. That is important to our country. There are 900,000 jobs in the construction industry on average over the years.

The opposition talks about understanding small businesses and their needs and supporting them. It should be stated that the housing industry is made up primarily of small builders across the country who build fewer than 20 houses a year. Yes, there are the big developers in the major centres and the big home building companies. We hear about them. However, more than 90% of homes in our country are built by small builders. Should our government be supporting them by reducing taxation on these small companies so that they can employ carpenters and workers, the type of people who are producing this product for Canadians, the product that counts the most? That is what our government is doing.

Let me move on to skills shortages. Where we have moved on skills shortages primarily is by providing assistance that immediately ties back to that important housing industry. It is with the apprenticeship incentive grant, the apprenticeship completion grant, the new Canada apprenticeship loan, and a host of tax credits students can take advantage of through the apprenticeship job creation tax credit. This helps to move young people into the trades and through the trades, where there are many jobs. In fact, we need to de-stigmatize the trades in our country instead of saying that every young person needs to go to university and get a university degree. That is not the case. We need to build a culture in our country that equalizes the cultural status of being a tradesperson in this country.

I am not going to get to my third point on persons with disabilities, unfortunately. However, on skills shortages, our government is working toward matching talent with task. Who better to set the task than the employer? With the Canada jobs grant, the employer and our governments, three parties, have skin in the game to bring this about.

I am pleased that I could rise tonight to talk about just a couple of the areas I am personally involved in. Our budget is delivering real, tangible results for Canadians.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Speaker, I have some good statistics to give the member.

First, one in four Canadian households spends more than 30% of its income on housing. Second, 30% of the population rents an apartment, but only 10% of new construction is in the rental market. Third, people spend 5 to 10 years on a waiting list for social housing. Lastly, rents have increased by approximately 40% over the past 20 years, while people’s incomes have remained virtually the same.

Yes, the government has invested money in affordable housing, but it does not always renew social housing agreements, which could affect 600,000 households in Canada. Many people could wind up in the street. It looks as though the Conservatives’ policies do not work that well.

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, let me talk about the Conservative policy that is working, because it is working for people. I mentioned it in my speech. It is the housing first policy to supply people who are truly in need with a level of support that puts them in a house and then creates the supports around them to enable them to rise through the economic chain.

My experience is in Ontario. In the mid-1990s, I headed up the Ontario Home Builders' Association, and I can tell members what drove people out of the rental housing market. It was rent control. Rent control drove them out of developing new rental housing. Any developer in the Toronto area will say that it is because the NDP government of Ontario decided to put rent controls on properties, which took the whole economic foundation out of building rental properties.

Also what is curious is that lately there are developers building rental housing. The reason they are starting to develop rental housing is that it has been a condominium-flooded market, and the developers have seen the opportunity to come back in at competitive rates, because there is the ability, with the lower taxation this government has brought about, to make that economically feasible, so there is hope.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, I know the hon. gentleman did not get to the part of his speech about disabilities, but still I would like to ask him a question about that. Would he agree that it would be a good and useful thing for the government to revise the threshold for people having access to the disability savings plan? It is a good plan. It can be improved, like any other plan.

To get into the plan now, people first have to qualify for the disability tax credit, which means they must be fully disabled today. People diagnosed with MS, for example, a long-term debilitating condition, may not be fully disabled today, but it would be a very good idea for them to be able to save today to deal with other eventualities down the road.

Would the government consider a different threshold for the disability savings plan so that people like those long-term sufferers of MS could have access to the plan at a time when they still have earning power and can make the most of it?

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, what our government has done for persons with disabilities is open opportunities for them to save, and of course, the wider we broaden that over time, the better that will be. I will not disagree with that.

However, one of the big challenges for those who have individuals with disabilities in their families is that a lot of the programs that provide the support are provincially provided. ODSP is the one in Ontario that I am thinking about. The rules and regulations around many of these conflict with the ability to save any money whatsoever. If someone has more than $5,000 in an asset, ODSP in Ontario starts to be clawed back from that person. These have to be harmonized. This is a much more critical issue than opening the savings plan to those who have the ability to save.

Those who do not have the ability to save right now are our biggest concern. We need to provide vehicles so that they can save and are not penalized. Many of these people who also want to work are penalized by going to work because of the other supports they have.

[Stella Ambler, Conservative, Mississauga South, ON]

Mr. Speaker, I am pleased to have the opportunity to speak in support of the government's budget bill. I would first like to say a few words about Jim Flaherty, who passed away just two months after delivering the budget.

At the very start of his budget speech on February 11, Jim quoted Canada's first budget speech from 1868. In that speech, then-minister of finance John Rose said:

....we ought to be most careful in our outlay, and consider well every shilling we expend.

It is lucky for Jim that his predecessor did not mention pennies, but I digress.

To continue, Jim Flaherty was a mentor and a boss before we became parliamentary colleagues three years ago. He was also a friend to me and my family for many years. .

Like many members of this House, I had been working toward becoming a member of Parliament for some time before finally succeeding, and like many members, I had disappointments and setbacks along the way. Jim was always there with words of support and advice. It is hard to accept that I will not be able to call on him for his thoughtful and wise point of view, but his values and personality were so strong it should be easy to guess what he would have thought about almost any problem or situation. I know that I will always try to make that guess before I make any political decision in the future.

As many noted in the days following his untimely death, Jim's last major accomplishment before leaving cabinet was presenting this budget. Probably the best known feature of budget 2014 is that it forecast a return to a balanced budget next year. That is a tremendous accomplishment, given where we were five years ago. However, the budget contains many initiatives whose benefits will stretch well beyond 2015. I would like to speak to a few of these initiatives that will benefit individuals, families, and businesses in my riding of Mississauga South.

Over my three years as the MP for Mississauga South, I have come to know my riding very well. We have beautiful residential areas, lush parks, and attractive shopping districts. We have families of every size and type. We have people from every culture and religious background. We have seniors and disabled people.

Many of my disabled constituents want to work or need to work, but everyone knows that it can be difficult for the disabled to find and keep employment. Budget 2014 has help for disabled workers. It introduces a new generation of labour market agreements for persons with disabilities. Over the next four years, the government will provide $222 million annually through these transfers, to be matched by provinces and territories to better meet the needs of persons with disabilities and employers.

Mississauga South has a very large population of seniors. While some are happily retired, others are looking for work or are planning to return to the workforce. Budget 2014 renews and expands the targeted initiative for older workers for a three-year period, representing a federal investment of $75 million to assist unemployed older workers.

Many parents in Mississauga South have children who are in university or college or who are getting ready to go. I happen to be one of them. Budget 2014 will eliminate the value of student-owned vehicles from the Canada student loan program assessment process to better reflect the needs of students who commute or work while studying.

Small and medium-sized businesses are Canada's largest employers. Job seekers in my riding will be knocking on the doors of those businesses in hopes of getting a job. However, government red tape and paperwork will make it harder for small businesses to expand and hire more people. Budget 2014 will build on the work of the Red Tape Reduction Commission by reducing the tax compliance and regulatory burden for small and medium-sized businesses.

Real estate prices have risen astronomically in the greater Toronto area over the past 30 years. When our parents and grandparents tell us what they paid for their homes in the 1960s and 1970s, we laugh. Well, they laugh, and we silently pray that we will be able to pay off our mortgages before we retire. What they paid for a bungalow or semi-detached house would barely pay for a minivan or SUV today.

The family home is a major asset for most couples, and often a heavily leveraged one. Canadians looked south with horror when the U.S. housing market collapsed five years ago. In the years since, this government has paid very close attention to ensure that Canadians are protected from such a collapse happening here.

While it is fun to sit around the dinner table and imagine how much our houses might be worth, those dreams must be rooted in the reality of what an actual buyer can afford in a down payment and ongoing mortgage payments. Budget 2014 includes measures to increase market discipline in residential lending and reduce taxpayer exposure to the housing sector. High mortgage payments mean that most families are taking a closer look at all of their other monthly bills.

That is why we also took steps to increase competition in the wireless sector, which has reduced wireless rates by 20%. Budget 2014 continues this commitment to keeping the cost of wireless services fair. This budget includes steps to lower wholesale roaming rates within Canada and would give the CRTC the power to impose financial penalties on companies that did not comply with the rules.

While Canadians do not envy the way their house prices fell so quickly in the United States, they do like the prices in American stores. They wonder why Canadian and American consumer goods prices remain so far apart, when the Canadian and American dollars have been so close in value. Budget 2014 also introduces legislation to prohibit unjustified cross-border price discrimination to reduce the gap between consumer prices in Canada and the United States.

I am grateful for the opportunity to speak to the budget bill. It continues the prudent management that has defined our government's economic action plan. It will bring real benefits to the constituents and communities of my riding of Mississauga South.

These benefits will help Canadians plan for a bright and secure future, a future that will be deficit free this time next year. The promise of a balanced budget is a fitting legacy of our friend Jim Flaherty, and just one of many.

I am proud to speak in its favour today and will be happy to take questions.

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

Mr. Speaker, I would like to thank my dear colleague for her speech and especially for her kind words about our dearly departed colleague, Mr. Flaherty. Mr. Flaherty had a big heart when it came to tax credits for people with disabilities and he was very knowledgeable on the subject.

The problem with this budget, and my colleague spoke about it briefly, is housing. Right now, Canada is one of the very few OECD countries that does not have a housing policy or any appropriate budget measures to go along with it.

In my riding, people who are earning wages—actual workers—have to use the food bank; otherwise, they would not have enough money to put food on the table and pay their rent. More and more Canadians are in this situation.

It is all well and good to talk about budgets over five years for social housing and interest, but in reality, people are clearly feeling the impact of the federal government's total withdrawal from housing policy.

I would like to hear my colleague's comments on that.

[Stella Ambler, Conservative, Mississauga South, ON]

Mr. Speaker, I am sure the member listened to our colleague from Brant. The majority of his speech was on the topic of housing.

I do not want to repeat what our colleague said about that, but when it comes to being able to afford housing, our government has helped all Canadian families by lowering their taxes so they can afford a higher quality of life.

In fact, we have lowered taxes nearly 180 times, saving the average Canadian family $3,400 per year in taxes. On May 27, the Parliamentary Budget Officer released an analysis which showed that since 2005, Canadians actually paid $30 billion less in tax than they did just nine years ago. That is just under $1,000 less for every man, woman and child in Canada.

The best thing a government can do to help families afford housing is to lower their taxes, put more money in their pockets and create that kind of prosperity for families so they can purchase a house.

[Ray Boughen, Conservative, Palliser, SK]

Mr. Speaker, just let me offer my service to my colleagues across the way. They are having trouble again reading this document, which reads like a good book. There are not too many big words. There are pretty small words. I used to help young people with their reading, so I could run some remedial reading classes if we could work that in.

Anyway, let me talk a little about one thing that is in the book, and it is all here. This book is divided up into chapters. It is an easy read. This is a supplemental one. I do not know how many folks may have seen this book.

Let us look at affordable housing. On page 207 and 208, we have: $1.7 billion annually through Canadian Mortgage and Housing Corporation; $1 billion in 2012, the first $1 billion in 2011; $1.9 billion for affordable housing for homeless, helping out with 147 households; $303 million annually in support of first nation housing.

On page 208, we have: $2 billion to create new and renovate existing social housing; $2 billion for the municipal infrastructure program, which has provided 272 low cost loans for municipalities with a housing program in place.

I respectfully submit that this is a housing philosophy and a housing policy. It is in the budget book, and many questions I have heard the hon. folks across the way ask this evening are found in this book.

It is a good read. If the members get stuck, they should give me a call.

[The Deputy Speaker, NDP, Joe Comartin]

I am afraid the member for Palliser has not only used up all the time for the question, but all the time for the answer as well. We will move on.

Resuming debate, the hon. member for York South—Weston.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, I am very pleased to rise today to speak to Bill C-31. It is under time allocation, so not many members of my party will be able to speak to it.

This huge omnibus bill which, according to the member for Palliser, is very easy to read, does call into question some person's ability to have basic math skills, because math skills are some of what is necessary to actually follow the money. Some of the money that is announced in this budget bill and in government's budgets is money that is old money. It was here before.

I will be splitting my time, Mr. Speaker, with the member for Beauport—Limoilou.

Like the current Ontario Conservative leader, math is not the Conservatives' strong suit.

One of the things about the bill is something called FACTA, which is a U.S. legislation that we are now imposing on Canadians. That U.S. legislation applies to Canadian citizens, according to the government, who happen to be considered American citizens by the U.S. government.

The legislation before us would require Canadian banks to disclose personal, private information to the U.S. government through the Canada Revenue Agency at some unknown cost. Again, being math challenged, the Conservatives have not figured out just how much this will cost us. The banks estimate it would have cost them $100 million per bank to implement FACTA and now it is being passed on to the CRA. The CRA will then have to cost that out and it will be taxpayers ultimately paying that cost. However, that is not the worst part of this.

This legislation would give the American government, through our own government, the personal, private information of Canadian citizens. We are now discovering that this has happened through the CPIC database with personal medical information being shared with the U.S. government to stop people at the border, to prevent them travelling. Do we really want to help another government to tax Canadian citizens, people born here who have never been to the United States in their lives?

Maybe the members opposite do not understand what the U.S. government has decided. It has decided that some individuals who were born in Canada and have never lived in the United States are now U.S. citizens. Those people are U.S. citizens because their parents happen to be U.S. citizens. Therefore, it is the parents of children who cause the children to be deemed to be dual citizens by the U.S. and therefore caught by FACTA. They are dual in Canada, but they are U.S. citizens under the U.S. law.

Let me tell members about a woman in Calgary whose son is caught in this dilemma. He is disabled and he has filed his U.S. taxes. His mother filed them for him. It cost his mother thousands of dollars because our government has not negotiated a tax treaty with the U.S. that allows the individuals in Canada to be treated the same under the law in Canada as they are in the U.S.

If the members opposite would stop shouting, I could actually explain this to you, Mr. Speaker.

Those individuals who have disability tax credits in Canada are not allowed that exemption in the U.S., so they have to pay taxes in the U.S., thousands of dollars of taxes. He cannot renounce his citizenship because the U.S. government will not let him.

There is laughter across the way because they do not understand this situation. The individual is mentally challenged and the U.S. government will not allow him to withdraw his U.S. citizenship—