Debates of May 13th, 2016

Excise Tax Act

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, I rise concerning the Order in Council appointments tabled earlier today. I would like to inform the House that some of the appointments tabled are late due to an administrative error by officials. I thank members for their understanding.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Noted with thanks.

Resuming debate, the hon. Parliamentary Secretary to the Minister of Finance.

[François-Philippe Champagne, Liberal, Parliamentary Secretary to the Minister of Finance]

Madam Speaker, I am very pleased. I was not looking at talking notes, but I was looking at the facts. Actually, we not only spoke, but we acted in the last budget. By enhancing the Canada student grants, we will have given $1.53 billion over five years to students and education. So this is the government that is acting, not talking.

I would like to speak on behalf of the government regarding Bill C-241. The bill would amend the excise tax to increase the goods and services tax, the GST, rebate for school authorities from 68% to 100%.

The Government of Canada believes that there is no clear rationale for increasing the rebate rate other than to provide financial assistance to primary and secondary schools, an area as I said before, of provincial jurisdiction.

We feel that there are much better means to support education in this country and that is why the bill may encroach on provinces.

Without a clear rationale, unintended consequences could arise from the other orders of government that do have jurisdiction in this area. That is why we respect the jurisdiction of provincial and territorial governments in this and many other important matters.

Furthermore, it is imprudent to make piecemeal changes to GST exemptions, especially in light of the government's tax review.

As part of our commitment to ensuring tax fairness in this country, the government announced in budget 2016 that it would be conducting a review of the tax system to ensure our measures are fair, efficient, and fiscally responsible.

The principle of fairness was applied when GST was introduced, and the rebates to public sectors, including school authorities, were designed to ensure fairness. If, as the bill proposes, the government were to arbitrarily adjust the GST rate for one public sector body, this fundamental principle would be undermined.

While the bill before us focuses on a narrow issue, we are instead focused, as they know well on the other side, on the big picture. This is why, in budget 2016, growing the middle class, we introduced several measures that provide benefits for a broad cross-section of Canadians.

The first one that I would like to bring to the attention of the House is the Canada child benefit. Compared to the existing system of child benefits, the new Canada child benefit would be simpler, tax-free, more generous, and better targeted to those who need it most. It would put more money in the pockets of nine out of 10 Canadian families, representing the most significant innovation in social policy in a generation. Let me repeat: the most significant innovation in social policy in a generation.

As well, the middle-class tax cut that the government introduced last fall is already benefiting nearly nine million Canadians. These are exactly the kinds of measures that demonstrate fairness and leadership. Through these measures, families will have more money to save, invest and grow the economy.

Returning, if l may, to the bill before us, I would like to provide some context to the House about the bill. When the GST was introduced, rebates were provided to certain public service bodies to ensure that their overall tax burden did not increase.

In 2004, when the rebate for municipalities was increased to 100%, this additional support was part of the plan to provide long-term funding to help municipalities participate in a larger infrastructure initiative. As such, this was viewed as an exceptional measure.

We also have other exceptional measures: the investments made in infrastructure through budget 2016. In addition to providing direct help to families, we are making strategic investments in order to grow the economy for the long term. This will help to better position Canada for the global economy of tomorrow.

Over the next 10 years, our government will implement a $120 billion infrastructure plan that will help reshape Canada in the 21st century.

Investing in infrastructure creates good, well-paying jobs that help the middle class grow and prosper. However, it does far more than that. Properly chosen and implemented, these projects can collectively improve Canada's fortunes. By working with our partners to develop world-class transit systems, improve and expand trade corridors, and reduce the carbon footprint of the national energy system, these investments will deliver cleaner growth, improve trade, and ensure the middle class can seize new economic opportunities.

Over the next two years, we will implement a plan to immediately invest in the infrastructure projects Canadians need most: modern and reliable public transit, water and waste water treatment systems, affordable housing, and retrofits and repairs to protect existing infrastructure.

Next, we will take a longer view that will also help support our ambitious vision of a modern, cleaner economy, and a more inclusive society that is better positioned to capitalize on global trade. The government believes that municipalities are best placed to make decisions about how to meet the needs of these respective communities. They will be our partners. Their involvement will not just ensure our collective economic success but also help to translate a broad vision into tangible change at the community level. We recognize that municipalities are already playing a significant role in federal efforts to upgrade and build infrastructure, but we want to work even closer with them to build our communities.

Our goal remains the same. We are committed to strong economic growth. We need the resolve to follow through on the sustained strategic investments, guided by a vision of the future in which all Canadians have a real and fair chance to succeed. This is our government's central mission. We are choosing to take advantage of a historic opportunity to invest in people and the economy and to prepare Canada for a brighter future.

[Erin Weir, NDP, Regina—Lewvan, SK]

Madam Speaker, since we are discussing education, I want to take a moment to congratulate Lindsay Stuart, an early childhood educator from Regina—Lewvan, who is now in Ottawa receiving a Prime Minister's Award for Teaching Excellence.

I would also like to thank the member for Saskatoon—Grasswood for reviving a private member's bill that was presented in the last Parliament by Alex Atamanenko. Good ideas sometimes cross party lines and it is great to see a Conservative MP presenting a bill that was previously advanced by a former New Democratic MP.

I would like to make four points in this debate. The first one is about the value of education.

I think that the member for Saskatoon—Grasswood already spoke very eloquently on this point. I would note that education and a strong public school system provide a foundation for a much more prosperous and also a much more equitable society. I think that is a goal we should strongly support in this Parliament. How can the federal government support it? One thing it could be doing is investing in a child care and early learning system. The current federal government is failing to do that.

Another thing the federal government could do is transfer money to the provinces in support of post-secondary education. Unfortunately, what we saw in the recent budget was no increase in federal transfers to the provinces relative to the economy. In fact, by 2019-20, the current budget envisions transfers to the provinces that will be a billion dollars below what the previous Conservative budget had set for that fiscal year. Therefore, the government is actually cutting transfers to the provinces in support of public services like post-secondary education.

What about the K-to-12 system? As was pointed out by the Parliamentary Secretary to the Minister of Finance, that is in provincial jurisdiction so the federal government cannot directly fund school boards. However, what the federal government can and should do is stop taxing school boards. This is a very straightforward proposal for the federal government to simply stop collecting GST from school boards. We believe that is a tangible thing that can be done to support K-to-12 education.

That is the first point in favour of the bill.

The second point that I want to talk about is fiscal federalism.

Before being elected I worked as an economist in the federal-provincial relations division of the federal Department of Finance. Therefore, I very much like to talk about fiscal federalism. I have not had too many opportunities in the House but I think it is a particularly important point, given that the government seems to be hanging its hat on this notion of provincial jurisdiction in today's debate.

A fundamental principle of fiscal federalism is that one order of government cannot tax another. For that reason, provincial crown corporations do not pay federal corporate income tax. Based on that same logic, municipalities do not pay GST. I would submit that if we are really serious about respecting provincial jurisdiction and really want to adhere to the principles of fiscal federalism, that is an argument in favour of the bill because it does not make sense for the federal government to be taxing school boards, which are part of provincial jurisdiction, in effect. I would say they are very much analogous to municipalities. It does not really matter whether it is the municipal government or a separate school authority that runs the schools, they should not be paying tax to the federal government.

The third point that I would like to touch on is that the federal government has indeed imposed some costs on school authorities by increasing the number of refugees coming to Canada. I want to stress that the NDP is absolutely in favour of extending a helping hand to people who are running for their lives. We certainly pushed hard to have refugees brought to Canada and brought out of the horrific circumstances that they were facing in Syria. However, the member for Saskatoon—Grasswood is absolutely right to point out that this does create a real cost for the school system, and it would make sense for the federal government to play some role in alleviating that cost.

Removing the GST from school boards is a straightforward way of achieving that goal. It probably does not compensate schools precisely for the amount they are spending on integrating refugees, but it is a simple thing the federal government could do to help school authorities who are trying to make do in spite of this additional cost.

Speaking of costs, that is the fourth point I want to make. The cost of this proposed bill is actually very reasonable. The member for Saskatoon—Grasswood talked about $187 million per year. Presumably the government is opposing the bill because it does not want to have to pay that cost, but I think we need to put it in context. The budget shows that annual revenues from the goods and services tax are about $33 billion. If we look at $187 million compared to $33 billion, we find it is only about 0.5% of GST revenues.

The cost of this private member's bill would be about half a per cent of all the money the GST currently brings in. It is a very affordable way of helping schools. At the same time, it would provide real dollars to schools and would make a real difference in terms of education and extracurricular activities, which were very well enumerated by the member for Saskatoon—Grasswood .

The final thought I would share is that all we are really voting on at second reading is whether or not to send the bill to committee. If members on the government side are seriously concerned about the potential cost or genuinely concerned that it might have some kind of implications for provincial jurisdiction, let us send the bill to the committee so we can have a proper study of those things. Those are not actually arguments to vote against the bill at this stage.

If we value education, if we believe that a strong public school system is necessary to build a more equitable and prosperous society, if we want to respect provincial jurisdiction and fiscal federalism by not having the federal government tax other levels of government, if we want to alleviate the cost on schools from integrating refugees, and if we want to have a further study of this excellent proposal at committee, I would urge all members of this House to vote in favour of the private member's bill of the member for Saskatoon—Grasswood.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Madam Speaker, it gives me great pleasure to speak in support of Bill C-241.

Like my colleague from Saskatoon—Grasswood, I understand what this additional money could mean to our school boards from coast to coast to coast.

This is a well-thought-out bill that would benefit all taxpaying Canadians. This is an additional tax burden on what already tax-funded school authorities pay. The GST was lifted from municipalities for precisely this reason, and the same should be true for our schools and the good of our students attending them. Therefore, the comment of my colleague across the way that we do not want a precedent is wrong, because we already have had a precedent municipally since 2004.

Let me tell the House why I am passionate about the bill. School is in my blood. My 91-year-old mom was a teacher, starting at the age of 17 in a little schoolhouse in Prince Edward Island teaching eight grades. My daughter is a primary school teacher in the GTA. My first job was as a teacher's assistant in summer school. In addition to my professional career, I have been a youth leader for over 32 years, organizing weekends, camps, directing camps, planning activities. I have spent a lot of time with children, and it is through these various endeavours that I have gained an appreciation for the needs of our youth. The most basic need is a good, solid education to start them on the path to success.

I do not believe this should be a partisan issue. We all have schools in our ridings and we all have children in those schools who deserve to have the best education we can give them.

Not surprisingly, the author of the bill has received widespread support for the bill from all over the country, and he shared some of their messages with me. One that was very striking came from the Calgary Board of Education. It would have received an additional $3.6 million in fiscal year 2014-15 if it had had the 100% GST refund. The quote reads in part:

To put this into perspective, $3.6 million is equivalent to the entire operating costs of one of our large elementary schools for 600 students.

That same school board welcomed 427 Syrian students and is expecting more. Imagine how a $3.6-million increase in the school board's budget could help provide the necessary services and support to those new students. They wrote to the Prime Minister about it. Like my colleague, I believe that a 100% GST refund would be an excellent way for the government to support our schools.

In my own province of Ontario, the main cities, as one can imagine, have experienced an enormous growth in student population, while my riding is experiencing declining enrolment. The following is a quote from the Lambton Kent District School Board's annual budget. It states:

While this Provincial funding amount is stable year-over-year, about two-thirds of [grants for student needs] funding is enrolment based. The declining enrolment in our region has a significant impact on GSN funding requiring cost saving measures to be implemented.

Just this week, on the front page of the Ottawa Citizen, was an article about the radical choices the Ottawa-Carleton District School Board is having to make. Its 2016-17 budget proposes many cuts, among them, upward of 38 teachers, four ESL teachers, four principals and vice-principals, and 47 administrators, support, and learning support staff. This is all to cover a $9.3-million budget shortfall. The additional 32% GST rebate would cover almost half of that shortfall in Ottawa.

Let us talk a bit more about the cost of doing this. The lost revenue from rebating 100% of the GST has been said to be about $187 million. We talked about how that compares with the revenues received. Let us talk about how it compares with some other things.

Compared with the $10 billion in interest we are going to pay each year on our deficit, it is a small amount. Compared with the $2.65 billion we gave to the foreign climate change fund or the $1.2 billion for Syrian refugees or the $5 billion in foreign aid, it is a small amount.

These are Canadians who will benefit from the bill, our children, who deserve a bright future. Our children are our most important asset. They are the future.

This week, during Science Odyssey, there were many activities promoting that more young people get interested in science. I loved when the Minister of Science said that children are born curious. This is a fact, and stimulating that curiosity with science-based activities in school requires funding that current school boards are struggling to find. Therefore, the money rebated back through Bill C-241 could also help more school boards put a focus on science. More science in schools from the early ages on up will encourage boys and girls to enter this field where the future of well-paying jobs lies.

Another thing I like about Bill C-241 is that the mechanism to rebate the money to school boards is already in place. Since municipalities and other organizations receive their rebates, no new structure has to be put in place to make it happen. It can be done quickly and cost-effectively.

Think of the cost of the kinds of activities school boards are trying to promote these days: robotics, computers, coding. All of these things cost more than the crayons of old, and here is an easy way to help schools and to help our children as well.

I was glad to hear the member talk about another example of curriculum that has been added to the schools, which is the first nations, Métis, and Inuit component. As a mother of two non-status Métis children, I am proud to see this introduction. The Ontario Catholic School Trustees' Association has said that it would use this rebate to implement that curriculum.

One other thing I will say is that looking through the gender lens of a gender-based analysis, which we are currently studying in our Status of Women committee, we see that teaching is a profession that is more predominately women than men, especially at the primary grade level. It is also a fact that with many cuts to the school board budgets that have occurred over the years, many teachers are now having to purchase with their own money their own supplies for arts, crafts, and activities within their classrooms.

We would never imagine making a construction worker responsible to pay for the equipment they are using, nor would we expect policemen and firefighters to pay for the tools of their trade. However, we do see it in this female-dominated environment. Therefore, the returning of the full GST rebate to the school boards would, in my opinion, ease this gender-biased burden, and can be part of the measures described in budget 2016.

I encourage members to support Bill C-241. I am not sure if this is the shortest bill ever written, at just 30 words, but I do know that this little bill, if successful, would have the biggest positive impact that schools have experienced in a very long time.

Let me say that the loss to the government coffers is miniscule in the whole scheme of things, miniscule to the government but gigantic to the students who attend our Canadian schools.

I thank the member for Saskatoon—Grasswood for bringing forward this very positive initiative. I also thank my colleagues on all sides of the chamber for their attention to Bill C-241 and the benefits it would bring about for our children.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, it is with pleasure that I rise to address the private member's bill. I find it very encouraging when private members take an initiative upon themselves to try to make a difference. I applaud this particular member in terms of what he is hoping to get before us so that there can be some sort of discussion about the issue of taxation and how taxation impacts, not only individuals but different types of entities.

I do find it relatively interesting. The Conservatives, as we all know, were in government for 10 years. They had the opportunity to invoke the type of change that is being promoted within the bill and they chose not to do so.

[An hon. member]

It's real change.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Yes. We are going to see real change, Madam Speaker, with the new government, I can assure the member of that and I will talk a bit about that real change.

I suspect, if we would have had a dialogue with the Conservative minister of finance at the time, the types of arguments he would have been bringing forward would have been something to the effect of, “What is the actual cost?” and “Where are you going to get the money to replace it?”

We are talking an estimated $200 million a year, in terms of lost revenue. An hon. member has just indicated that it is less than $100 million.

I think we should take a look at the percentage difference, because it is important for us to recognize, and I do believe the member did, that there are current rebates. When we talk about the actual dollar amount, my understanding is that it is closer to $200 million over the years.

If we take a look at those selected boards where there are rebates, and we are talking about the municipalities, as has been pointed out, in I believe 1994 the rebate was raised to 100%, recognizing through our municipalities the important role they play. There were different types of stakeholders at the time that articulated why we needed to move in that direction, and it was 2004. I believe it was a Liberal administration back then that recognized that this was something that had some value to it.

We also give exemptions to universities and public colleges of somewhere in the neighbourhood of 67%. If we take a look at our school authorities today, and this is what the member is trying to enhance, it is estimated at about 68%. Then for hospital authorities, facility operators, and external suppliers it is based on 83%.

What we are really talking about is that gap between 68% and 100%, and this is what the member is advocating for.

I know a question was put forward to the member with respect to the type of consultation or representations that might have been made to the member. I am not too sure in terms of exactly where the provinces themselves might be at.

We also need to take into consideration, when we talk about school boards or school entities, that there are public entities and there are private entities. I am not 100% clear, but I believe that the member across the aisle, by his actions, is implying that it would apply to both private and public. I do not know to what degree there would be an additional cost, but I can assure members that there would be an additional cost factor to it if we have both private and public.

I think the current government has been very clear in terms of what our taxation priorities are. We do recognize the need for reforming our taxation. We have seen some of the most significant changes probably in the last 15 or 20 years in terms of taxation policy with an underlying theme that what we want is for taxation to be fair. We want people to be paying their fair share.

That is why one of our government's first initiatives back in December was Bill C-2 which provided a middle-class tax break which will ultimately benefit all Canadians indirectly and nine million directly. That was a very important priority of this administration. Along with that particular tax change, we saw a tax increase for Canada's most wealthiest, those who have an income in excess of $200,000 a year, again with the idea that Canadians expect a fair taxation policy.

The Government of Canada has not given up. We recognize there are many inequities within our taxation policies. That is one of the reasons we made a commitment to strengthen the middle class and grow the economy in the long term. The government made a commitment for the coming year to undertake a review of the tax system as a whole to ensure all tax measures are fair, efficient, and fiscally responsible.

It is very important to recognize that the federal government has a responsibility to work with the different stakeholders and get a sense from them where they believe the inequities are and how we might be able to assist in trying to cure some of those inequities while at the same time establishing some priorities as to where we might be able to act.

Would it not be wonderful if the Conservatives had left us in a better situation as opposed to a deficit? Would it not be wonderful if they had provided us with a better situation? Would it not be wonderful if we could just wave a wand and see if we could deal with all tax inequities and deliver the types of tax breaks that we on the Liberal side would like to deliver? It might take a bit of time in order for us to do that.

Do not underestimate the commitment of this government and our ability to work with others to deal with issues that come before the House of Commons, like the member opposite who brought forward Bill C-241. We recognize that is an issue which we will have to look at.

I would suggest to the Parliamentary Secretary to the Minister of Finance or the Minister of Finance that in the negotiations and the consultations that will take place going forward, one of the agenda items could very well be the issue of our school divisions both public and private.

I would encourage the member across the way to continue to lobby any way he can. I know through consultations with the Government of Canada what we have seen is a genuine commitment to work with Canadians, consult with Canadians on the very important issues of tax fairness. I can assure members as we witnessed even in that small window from the moment in which we took office to the time we presented legislation on tax fairness to the presentation of the budget, that thousands, and if we factor in the Internet, hundreds of thousands of Canadians were brought in to the circle of consultation in the hope of improving our system.

The good news to the member across the way, even if he does not get what he wants within this legislation, that at the end of the day, he is looking across the way at a government that is genuinely concerned about reforming our tax system. We will do our work in terms of talking to the many different stakeholders, because we want what all Canadians want, and that is a higher sense of tax fairness.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Before we resume debate, I just want to remind the members of the official opposition that I know that this is a passionate issue. I would just ask them to please extend the respect that was provided to them during the debate to ensure everybody can hear what is being said.

As we resume debate, I just want to remind the member that I will unfortunately have to interrupt him at some point as we near 2:15.

Resuming debate, the hon. member for Drummond.

[François Choquette, NDP, Drummond, QC]

Madam Speaker, I taught French for over a decade in high school and in the adult education system. As a teacher, I am pleased to take part in the debate on Bill C-241.

As everyone knows, school boards can get a 68% refund on the goods and services tax, the GST. The bill proposes increasing the GST rebate to 100%. That would contribute to increasing the funding that our school boards are getting, which is extremely important.

I am pleased to support the bill. The bill was introduced before by my former NDP colleague Alex Atamanenko. I want to point out that he did very good work during the time I knew him in the last Parliament.

I am very pleased that my colleague is bringing back this pertinent bill, which could help those in education who need it. I absolutely agree that we must go on. Even though it must not intrude in provincial jurisdictions, the federal government has a responsibility to provide health and education transfers. It is extremely important that it make these transfers so that the provinces can make appropriate investments. There is no logical reason for the GST rebate to be 68% instead of 100%. The figure is arbitrary. This bill would help school boards that need it.

I would like to take this opportunity to salute the school trustees and people on the school boards in my riding and thank them for their work. For example, Jean-François Houle, the chair of the Commission scolaire des Chênes, has been doing an excellent job for about two years now, since he accepted the position vacated by Jeanne-Mance Paul. She did fantastic work as chair of the school board. I met her on a number of occasions. She attended every important community event in Drummondville. I thank them for their significant involvement. These people do excellent work, outside of their professional careers.

An honourable mention goes to Christiane Desbiens, a young retiree who left her position in December 2015. She was also very active as the chair of the school board. She did a lot of work to increase the graduation rates and the services offered to students within the Commission scolaire des Chênes, which is growing.

I would also like to take a moment to acknowledge the arrival of France Lefebvre, who was recently appointed chair a few weeks or months ago. I congratulate her on her appointment and I wish her good luck in the future. There is a lot of work to be done, but I am pleased to see that the new staff is taking their work seriously and will continue to take on any challenges that arise.

I would like to mention Brigitte Bourdages from the CEGEP in Drummondville. I want to congratulate her and tell her to keep up the good work.

In closing, I would also like to thank everyone in the greater Drummond area who made the Drummondville university campus possible. Keep up the good work. There is a lot of work to be done in the field of education.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

The time for debate is up. The hon. member for Drummond will have approximately six minutes to finish his speech the next time.

The time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the Order Paper.

It being 2:16 p.m., this House stands adjourned until next Monday at 11 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 2:16 p.m.)