Debates of Sept. 19th, 2016

Ottawa—Vanier, Calgary Heritage

[The Deputy Speaker, Conservative, Bruce Stanton]

It is my duty to inform the House that vacancies have occurred in the representation in the House of Commons and that the following seats are vacant: the Electoral District of Ottawa—Vanier, in the Province of Ontario, by reason of the death of the Hon. Mauril Bélanger on Tuesday, August 16, 2016; and the Electoral District of Calgary Heritage, in the Province of Alberta, by resignation of the Right Hon. Stephen Harper effective Friday, August 26, 2016.

Pursuant to the Parliament of Canada Act, the Speaker has addressed a warrant to the Chief Electoral Officer for the issue of a writ for the election of a member to fill these vacancies.

Board of Internal Economy

[The Deputy Speaker, Conservative, Bruce Stanton]

I have the honour to inform the House that for the purposes and under the provisions of article 50 of the Parliament of Canada Act, the following members have been appointed members of the Board of Internal Economy, namely, Ms. Chagger, member for the electoral district of Waterloo, in place of Ms. Foote, member for the electoral district of Bonavista—Burin—Trinity; and Ms. Bergen, member for the electoral district of Portage—Lisgar, in place of Mr. Scheer, member for the electoral district of Regina—Qu'Appelle.

It being 11:04, the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

The House resumed from April 22 consideration of the motion that Bill C-232, An Act to amend the Excise Act, 2001 (spirits), be read the second time and referred to a committee.

Excise Act, 2001

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

Mr. Speaker, it is with pleasure that I stand to address this particular bill, even though, as has been expressed by other colleagues, we have grave concerns in regard to it. However, taxation in general is of keen interest to all sides of this House, as Canadians are always keen to know the government's intentions in dealing with tax. I am sure that if we were to canvass constituents, as in the last number of weeks and months we have been working in our constituencies, we would find an overwhelmingly positive response to what has been implemented in a very short time in regard to the issue of government taxation policies. Later this morning, in fact we are going to be talking about the biggest single tax break going to Canada's middle class, of some 7%, and the millions of Canadians who are going to benefit from that.

This morning we have before us a private member's bill that is focused on spirits. Even though I do not necessarily indulge in spirits myself, I understand the importance of that particular industry and how important it is that we ensure we get it right. I would start by complimenting in particular small businesses that have done so well for our nation by the development and research that goes into it. It is not as simple as pouring some water into a container and then mixing in some oats and so forth and voila we have spirits.

In Canada, we have some of the best spirits in the world. Even though I do not indulge, I have been to other countries where I have seen Canadian spirits. It is important when we deal with this particular piece of legislation that we take into consideration the impact of reducing a tariff or something of that nature. We are a trading nation, and the spirits industry in Canada exports a great deal of product outside of Canada. People who have travelled abroad would see that first hand.

Here we have a piece of legislation that would give a bit of an edge for our national companies that are producing spirits, and on the surface one might ask why we would not vote for legislation of this nature. I suspect that members will find, even from within the industry itself, that a good percentage of people say they see future growth not only here in Canada but abroad. We have a very aggressive government on the trade file. We have a Minister of International Trade who is constantly outside of Canada, trying to break down barriers and ensure that not only the consumers but also our exporters will benefit from that.

I think of some of the distilleries we have in the province of Manitoba, Seagram Crown Royal. This is something that people can buy all over the world. When we look on the surface of what is proposed with this legislation, one might ask why not, but there is an argument to be made as to why not. A big part of that argument is dealing specifically with the idea of trade. If we were to look at this sector and say here is how we could give it an advantage, and other countries around the world look at that when we talk about taking down trade barriers, we could see repercussions that could cost our industry future sales. I believe that Canada produces the types of spirits that are quite saleable around the world, and this is something that needs to be taken into consideration.

We know that the single most important thing we can do for small businesses here in Canada is to grow the economy in which we operate.

By strengthening, for example, our middle class, we are ensuring that Canadian businesses will have more customers coming through their doors, not only in the short term but the long term. That is why, at the local level, I made reference at the beginning of my speech as to what this government is doing for Canada's middle class with the tax break we have delivered. That will help at the local level.

Our spirits industry is an important player in our diverse economy. As we discuss the rate of reduction proposed in this bill, it is important to first note that the excise duty rates have effectively been unchanged for the last 30 years. In that sense alone, it means that producers are already benefiting from a diminished real rate of taxation due to inflation.

Part of responsible governance is taking our international rules and commitments seriously. Canada depends on these international rules to protect its exports abroad. If we look at it from that perspective, this morning we are talking about spirits, but let us not kid ourselves: Canada is a trading nation. As I indicated, we are trying to the best of our ability to bring forward an aggressive and freer trade policy in which Canadians, in particular consumers, and I would suggest exporters, who create the jobs, are going to benefit.

When we take that sort of approach, from which all of Canadian society will benefit, I would suggest the timing of this legislation in itself could be questioned. I find it somewhat interesting that even the Harper government before us did not see fit to address this issue. It is interesting that now the Conservatives who are in opposition are bringing forward something the Harper government chose not to do. There is a valid reason for that.

I would argue that as the Conservatives attempted to deal with the bigger issue of trade, while understanding the importance of that to our nation they felt the timing was not right, let alone the content. We notice that they maintained what former prime ministers Jean Chrétien and Paul Martin did, which was to keep that same rate for the last 30 years. I have been involved in politics for a good number of years, and I have heard many different representations both from individual and caucus points of view, and this is an issue that has not been lobbied, at least not to me directly.

There may be a couple of members from the Conservative Party who have honed in on this specific priority issue. However, if we look at it from a broader perspective of taxation policy, I do not believe this is necessary at this point in time. In fact, it could be to the detriment of the industry as a whole. The spirits industry in all regions of our country want to aggressively pursue deals abroad, especially when we talk about some of the trade agreements we are hearing about, the ones that the Harper government did not quite finish or get done and we are trying to finalize.

Those are the types of things I believe are providing hope to industries, manufacturers, and producers at the local level, and they see future opportunities. We do not want to complicate those matters in future trade accords because spirits industries in other countries are saying there are Canadian firms trying to expand their reach into our countries and yet are putting forward taxation laws such as this. Therefore, the Conservatives need to tread carefully, be aware of the bigger picture, and understand why the Harper government itself did not choose to go that way.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Speaker, before I begin I just want to extend a warm welcome to you and to all my colleagues in the House. I hope we all had a restful and productive summer. It is great to see everyone again. Also, I want to wish a warm welcome to this year's new crop of pages. I know they are going to do a great job for us, and we are looking forward to working with them.

I would like to thank the member for Huron—Bruce for bringing forward the bill. I am proud to be speaking in support of it, because I believe that actions like this that help the small craft distillers across Canada, and one in particular in my riding, are going to be very beneficial.

Bill C-232 amends section 122 of the Excise Act, 2001. Its main purpose is to reduce the duty on spirits that are produced in Canada. That is an important thing to underline, because we have heard a lot from the opposite benches about how this is all about trade, as well as some misdirections in the debate. This bill is primarily about helping small craft distilleries, ones that do not really have a market outside of Canada. In a very competitive market, these distilleries need some help from the federal government.

The excise tax, as it is currently written, establishes a duty rate for the absolute ethyl alcohol contained in spirits. Its current rate is $11.69. Bill C-232 is going to see the first 100,000 litres of absolute ethyl alcohol reduced to a duty of $6 per litre, and any production over that will be reduced by a small amount to $11 per litre.

This is a good way to go. I have reviewed the debates from the first hour on the bill, and I just listened to the member for Winnipeg North. Frankly speaking, I cannot really understand why the Liberals seem to be going the way they are with the bill. I have listened to them reasoning the fact that they brought in the Canada child benefit, that the middle income tax bracket has been reduced, and that it might be in conflict with WTO rules and such.

However, hoping that Canadians are going to be spending their child benefits and tax breaks on Canadian spirits is hardly the way to give our hard-working small batch distillers the support they need to thrive. I know that as a father of young kids, with regard to the extra money I get for my children, my immediate thought is not that I am going to go to a liquor store and spend it on a bottle of gin.

There is also the fact that the Liberals have a little bit of a mixed history in this 42nd Parliament about supporting small businesses. They came to the House with a promise to reduce the rate to 9%, and then they broke that promise. I would have thought that a measure like this would be something that they would latch onto, to show small businesses that they did break one promise but they are willing to listen to industry experts and introduce a helping hand.

My party acknowledges the large contribution that small and medium-sized businesses provide to job creation in Canada. In Cowichan—Malahat—Langford, we have some fantastic entrepreneurs. These people put in very long hours. They often pay themselves a very small salary as they are giving their all to their businesses.

With craft distillers, it really is an art and a science all in one. They put a ton of effort into what they do to make an exceptional product. They have to make an exceptional product, because it is a very competitive industry and they do not have access to the amounts of capital that the big players in the market already have.

I do not agree with all aspects of the bill, but I certainly agree with the part that reduces the duty on the first 100,000 litres. To my friends across the way in the Liberal Party, instead of arguing about things that we have not had much discussion on, we should at least take the time to pass the bill at second reading and send it to committee so that we can call forward industry experts and regulatory experts to get an honest view of what the bill's impacts will be.

I do not believe in throwing the baby out with the bathwater. We should give the bill a chance at committee and see if it is going to do the things it says it will.

The government has stated that one of its goals is job creation and it has acknowledged that around 80% of the jobs in Canada come from small and medium-sized enterprises, so if we give our craft distillers a helping hand, reducing the duty on what they pay for their spirts, that is going to be a great thing.

I want to segue and highlight one distiller in my riding of Cowichan—Malahat—Langford. I have an award-winning distillery called Ampersand Distilling Company, which makes an award-winning gin and has moved on to vodka. Ampersand's market is Vancouver Island. It does not export beyond that. Some parts of the Lower Mainland are lucky enough to get its products, but it is not a big player. So far the duty is the same for all quantities of spirits produced. Ampersand does not come close to what big players like Seagram can produce. Even reaching 100,000 litres would be a dream come true for it.

That is just one example. I know that many MPs in the House are lucky to represent small craft distillers. If they are going to vote against the bill, I hope distillers in their ridings have very frank discussions with them about their reasons, because the bill does deserve a second look at committee.

Ampersand Distilling Company is a family-founded craft distillery. It is on a five-acre organic farm and is run by a father, son, wife, and a couple of employees. Giving them a hand-up would not only expand the beautiful product they make, but already the Cowichan Valley is getting a name for itself for producing amazing wines and if we can add craft spirits, that will be a big draw to tourism dollars.

We have been taking a narrow view. We have to look at the spin-off effects, the boost to tourism, and so on. It is already a difficult industry. It is a highly competitive market. Every litre of alcohol produced has to go through rigorous standards and be recorded and labelled. There have to be reports. Sometimes people from the Canada Revenue Agency pop in for snap inspections. It is a heavy burden. Some of these regulations are necessary, but we can ease the burden because larger businesses are able to bear regulatory burden much easier than small businesses. It is about giving these small businesses a leg-up.

Between 2004-12, statistics show the sale of goods manufactured by the Canadian distilling industry decreased by 2.4%. It went from $762.3 million to $744.2 million. During that time the import of spirits had an average annual growth rate of 6.6%, so our share of the domestic market has been shrinking. We have had a lot more imports coming in and our hard-working men and women in the craft distilling industry have to compete that much harder for a smaller slice of the market. As a result, imports represented a greater portion of the domestic market. They increased to 80% in 2012 compared to 74% in 2004.

The Association of Canadian Distillers did a lot of work on this issue and has recommended that the excise tax on the first 100,000 litres of absolute ethyl alcohol be reduced. That is something that I can agree with and I would love to hear more about if the bill is sent to committee.

For all the reasons I just mentioned, the bill needs to be sent to committee, but we can sometimes get lost in the rhetoric. The passage of the bill would certainly raise the spirits of our craft distillers and provide the industry with a great shot in the arm. I hope MPs will support the bill and raise a toast to the hard-working men and women and the great dedication they have to their craft.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, it is indeed an honour and a pleasure to speak to the bill brought forward by my colleague from Huron—Bruce. It was introduced before Parliament broke for the summer and, as has been mentioned, it gave us an opportunity to have discussions with distillers, which I did this summer out in Nova Scotia, along with the folks in my own area in Ontario. I also spoke with the agriculture community, which not only plays a significant role in terms of the success of this industry but also in terms of building the industry and making a quality product. I will touch on that a little later as I move along.

Bill C-232 is about changing the excise tax. It takes it away from the percentage of absolute alcohol and moves it to the volume of alcohol that is being produced. That may sound a little harsh, but the reality is that for alcohol over 7%, the duty was $11.69 per litre. For under 7%, it was $0.295 per litre of absolute alcohol. The idea now is to move that away from that percentage point to a volume, which is quick and simple. In fact, the distillers we have in Canada are micro, small and medium-sized. Therefore, it will move it to a very simplified and fair regime of $6 for the first 100,000 litres produced and $11 for over 100,000 litres.

You have to remember that when we speak of volume, it is equal for all types of alcoholic beverages; that is, 1.5 ounces of spirits containing 40% alcohol, five ounces of wine containing 12% alcohol, and 12 ounces of beer containing 5% alcohol. That is referred to as a standard glass. Therefore, it makes it comparable across the board for those who want to look at the equivalency of different drinks. The excise tax on beer and wine has been lower.

I listened to my colleague from Winnipeg ask why our government did not do this before when we were in government. We in fact took action but it was a process. However, members have to remember that although the Liberals proposed to deal with it in their budget, they chose not to at the time. I am glad to hear that they now see this as a positive move because quite honestly it is. It is about small and medium-sized businesses. It is about the workers in our areas who work hard every day. This is of benefit to them. Why is that? We know that if we give an opportunity to any enterprise, the benefits will come. In this particular case, these small and medium-sized companies, mainly distillers, will take that money and reinvest it into innovation, marketing, and job creation.

In other jurisdictions where the excise tax has been lowered, it was not at a cost to the government. As Conservatives, we have always said that the reason we were able to produce surpluses in our budgets at year end was that when we lower taxes, we increase the revenue to the government.

Why is that? It is because we leave more money in the pockets of people. Businesses hire workers, workers pay taxes, and, as a result, the government and business both win by generating revenue in excess of what they did before the excise taxes, and any taxes, were lowered. That has become evident in the United States, where they have seen tremendous growth in the distillery industry. When the U.K. dropped the excise tax by 2%, it actually generated a revenue increase of some 96 million euros.

We believe that lowering taxes for businesses, particularly small and medium-sized businesses, for the most part, will generate more revenue than if we keep taxing them to death.

One of the other industries that makes this industry so important is obviously agriculture. In my riding of Lambton—Kent—Middlesex, agriculture is the largest industry. For the producers of the corn, wheat, barley, and some rye, that goes to the distillers, it is a significant part of income in the agriculture industry. In Ontario, the distillery industry is the fourth-largest purchaser of corn. Some 320,000 metric tonnes go into the production of spirits.

Why are the Canadian distillery industry and Canadian spirits so well regarded around the world? It is like anything else. Those on the manufacturing and production side who produce a quality product can be assured that in world markets, they will have a select and good market for their products. This is the case with our distilleries and the spirits produced in Canada. Our farmers produce the highest quality grains used to produce these spirits.

One of the great things Canada has is water. Canada is one of those blessed and very fortunate countries that can produce, with the technology we have, some of the best, purest, most pristine water in the world.

We are looking at a market that is shrinking for the spirit industry in Canada. The bill brought forward by my colleague for Huron—Bruce would give this industry an opportunity to start to gain back, through exports and domestic use, some of that market share by producing some of the greatest and finest spirits in the world. We want to make sure that we give these distillers, farmers, and all of those within the industry, the value-added industry, the benefits that, in the end, would benefit the Canadian people, through the government. As I mentioned, all of our distillers in Canada are small and medium sized.

In terms of marketing and promotion, we have world-class spirits. It is Canadian branded. We, and the Speaker of the House, have a designated choice of spirits for Canadians. The only recommendation I would make is that we use Canadian spirits for our designation as the Speaker's choice rather than something from another country.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Mr. Speaker, I would also like to thank the member for Huron—Bruce for bringing the bill before us. The bill supports small distilleries and small businesses across Canada, and as such, I am happy to support it at this stage. However, I think it could be improved.

As my colleague from Cowichan—Malahat—Langford said, this is not a bill about international trade; it is a bill about increasing Canadian distilleries' share of this market. It is certainly not a bill that touches at all on middle-class tax breaks.

The craft distillery industry is booming in Canada. Four years ago, there were only nine distilleries of any size in British Columbia. There are now 34 craft distilleries there, small distilleries, and there will be 44 by next year. They are springing up in my riding. My old doctor's office in Naramata is now a craft distillery. I will not go on to try to relate that to the health care situation in Canada, but it just shows the growth of this industry, both locally in my riding and across the country.

These businesses are creating good jobs, providing high-quality products, and diversifying the economy of many small communities across the country, and we should do whatever we reasonably can to support them.

In my riding, two of the important primary economic drivers are agriculture and tourism, and increasingly, the real growth in the regional economy is at the intersection of those two sectors.

The obvious example is the phenomenal expansion of the estate winery sector in British Columbia and in other parts of Canada. In the south Okanagan, wineries have really boosted both the agricultural sector, through good markets for grapes and good prices for farmers, and the tourism sector, filling in the spring and fall shoulder seasons with thousands of visitors tasting at wineries.

Distilleries have begun to provide the same benefits locally. As I said, a few years ago, there was only one distillery in my riding. There are now five, and more are planned. These are true craft distilleries. Under B.C. regulations, they are restricted to 50,000 litres of alcohol production per year, and they must use B.C. agricultural products to make that alcohol.

These regulations differ across the country. In Nova Scotia, I believe craft distilleries are restricted to 75,000 litres per year, and I think it is 100,000 litres in Ontario. From what I understand, neither of these provinces require that distilleries use Canadian grains to produce that alcohol. Some distilleries simply import raw alcohol to produce their spirits. However, in my riding, and throughout British Columbia, craft distilleries are required to use local products, and for a good reason. They create jobs in our country and produce spirits that are truly local in origin.

Okanagan distillers use Okanagan grains to make alcohol and often use Okanagan fruit to flavour specialty liqueurs. One of the oldest distilleries in my riding, Maple Leaf Spirits, in Penticton, uses apricots from literally the orchard next door, right across the fence, to make one of its liqueurs. This is precisely what brings visitors to these craft distilleries. They want to taste and purchase products that are carefully made, literally handmade, and unique to our region.

Like the member for Winnipeg North, I do not indulge in spirits that often, but I do like to have a cold gin and tonic on some of the hot Okanagan days in summer. This summer I had a friend come up from Vancouver to stay with us in the Okanagan. She was taking advantage, as many visitors do, of the warm lakes and fine wines of the region. She often brings a selection of wines with her, and we enjoy the summer evenings tasting the new vintages, but this time, she arrived with four different gins, including one from a distiller in my neighbourhood, the Dubh Glas Distillery, in Oliver. We did a blind taste test, and I was surprised by the variation. I had always thought that a gin was a gin was a gin and that it did not really matter what we mixed in with our tonic. Happily, I found out that the locally produced gin was far superior in taste, in my opinion, to the others.

It is this superior quality and unique flavour that is driving the growth in the craft distilling industry. It is the same process that has driven growth in the local wine industry. We have helped out that industry with various incentives, and our efforts have paid off handsomely, with a vibrant wine industry in several parts of the country.

One of the things we did to help small Canadian wineries was eliminate the excise tax on wines that use Canadian grapes. This helped them compete with imported wine. We should do the same for craft distilleries.

This legislation, which would lower the excise tax to $6 per litre, is okay as a first step, but we should really provide incentives for the small distilleries that are producing excellent, truly handcrafted products. They distill their own raw alcohol using Canadian grains and therefore contribute to the Canadian economy both in the agricultural sector and the tourism sector.

We should match the tax breaks we gave wineries by having an excise tax exemption for craft distilleries that produce less than 50,000 litres of alcohol per year and produce it from Canadian products.

I am happy to support the bill at this stage. We should provide all the reasonable assistance we can for this thriving industry, assistance that will help small businesses and farms across the country. However, I hope it can be amended at committee to really stimulate the growth of truly excellent craft distilling.

Cheers.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Mr. Speaker, it is great to be back in the House for the fall session, and indeed an honour to speak to Bill C-232, an act to amend the Excise Act, 2001 (spirits). I want to thank my colleague, the member for Huron—Bruce, for bringing the bill forward. It is something that he cares deeply about for a number of reasons, and something that I have worked on with him in the past. In the last session, I tabled a private member's bill, Bill C-456, which was also an act to amend the Excise Tax to reduce the tax on ethyl alcohol by $1 per litre. However, the member has brought forward a far more focused bill, one we should all get behind because of what it could do for the spirits industry.

There are only five types of whisky in the world. One of the most popular is our iconic Canadian rye whisky. I am proud to say that the best rye whisky in the world is produced right in my riding, in Gimli, at the Diageo plant. A lot of people do not realize this, but the Diageo plant in Gimli is the largest whisky distillery in Canada and the fifth largest distillery in the world producing whisky.

A lot of us are familiar with Northern Harvest Rye, which is produced at the Crown Royal plant in Gimli. It is now the world champion whisky, having won in Scotland back in January against all the scotches, the bourbons, and Irish whiskys. It is a very popular blended whisky and one that all of us should be proud of. It is unfortunate that the Speaker's whisky is not a Canadian whisky, and it is definitely not Northern Harvest Rye. I would hope that in the future the whisky featured at the House of Commons could be a Canadian rye whisky.

I want to correct the record on something that the member for Winnipeg North said about making sure that the tax treatment is fair and does not impact imports and exports. We know for a fact that this is an equitable tax that would apply to importers and exporters. When we changed the taxation on beers and wines made by local vintners or craft breweries, these producers never experienced any trade retaliation whatsoever. Therefore, the member for Winnipeg North should get up and correct the record, rather than trying to propagate a dissenting opinion based upon erroneous assessments.

The Diageo plant in Gimli, where all the Crown Royal in the world is produced, has some challenges ahead of it. One of those is trying to deal with a rail bridge over which Diageo brings in its grains and exports out its distilled whisky. It is a short line rail. Unfortunately, there needs to be investment made in it to bring it up to safe standards. The short line is looking at some options on how it can do that to continue to service Diageo. Aside from that, Diageo would love to expand the plant because Crown Royal is the number one export whisky from Canada, as well as the number one consumed whisky within Canada. It would love to expand production, but of course this requires long-term investments. One does not just roll out a batch of whisky and put it out into the market. It has to be aged and blended, and Diageo has to make sure it is putting together a high-quality product.

Diageo would love to see that expansion take place, but there is this unfair taxation within Canada today through the excise tax on spirits. This unfairness is the result of our decision a number of years ago, under our previous Conservative government, to give a greater break to wine and beer, so that taxation on undistilled alcohol from those industries is lower than on spirits. We need to close that disparity to see major investments in distilleries across the country and to allow them to serve the market out there.

If we look at the experience we had, we saw a major increase in the number of new entrepreneurial businesses, small businesses, creating local employment and buying locally produced agricultural products, after we changed the excise tax on the craft breweries and the small vintners and the wines they produce.

Bill C-232 would decrease the current excise tax of $11.696 per litre of absolute ethyl alcohol. It would decrease the excise tax on the first 100,000 litres produced down to $6 a litre. That would be a huge saving to those small craft distilleries, allowing more opportunity for Canadian businesses to produce a variety of spirits, not just Canadian rye whisky but others as well, and really have that local context.

If we look at how that went in the brewery and vintner industries, we saw an explosion in the number of of these small businesses, particularly small craft breweries. We also saw an opportunity for us as consumers to do more connoisseuring, I guess we could say, of the different varieties that are out there. There are different blends, there are different flavours, there are different tastes, which we had not been exposed to for a long time in Canada. It provided us with a whole new experience in trying these different fine wines produced locally, these different great craft beers. It would be fantastic if we could have that same explosion happen in the distillery industry.

The one thing we continue to talk about is how this tax reduction on distilleries would create jobs. A case in point is the craft brewery industry itself. Last week, when I was in Halifax, I had an opportunity to go down to Pier 21 and visit Garrison Brewing Company, a small craft brewery that started after the changes happened in the excise tax for the beer industry. It was able to take an idea and grow it into a prosperous business. Nova Scotia alone went from having just a couple of craft breweries to now having over 45. The interesting fact is that if we take our mainstream breweries and the number of jobs they create and compare those with craft breweries, for every job in the mainstream breweries, a craft brewery has five. It is a 5:1 ratio. We are talking about employment opportunities. This is a time in our economy when we need every possible tool the government can give to entrepreneurs and business to create new jobs. We are going to create jobs, not only in building these distilleries but also in the operation of these distilleries, because they tend to be less mechanized and more labour intensive, giving more attention to the details of their distillery practices themselves, as we see in craft breweries and in small vintners.

It is important that we create this opportunity in a lot of our local communities, not just in the major centres that we usually see.

Gimli, of course, is an exception. The reason that Diageo, and before that Seagram's, set up in Gimli was for the water. The water and locally produced grains produce Crown Royal's unique taste.

I talked about the opportunities from the employment side. It also creates a huge opportunity for agricultural producers, as distilleries are a major buyer of Canadian grains. I see it in my riding of Selkirk—Interlake—Eastman, where local producers are growing rye, corn, barley, and other inputs on contract for Diageo to create that unique taste and flavour of Crown Royal. The same type of opportunities will be presented to small distilleries right across this country as they feed into the growing consumer market for unique and new products in the spirits industry.

I encourage all my colleagues in the House to support the bill. Let us get it to committee for study and allow the committee to bring in experts to document how this reduction in the excise tax would probably increase the level of tax revenue coming back to the government, through increased employment and an increased number of businesses, which would benefit from the changes in the Excise Tax Act.

Again, I thank my colleague, the member for the Huron—Bruce, for bringing forward such an important bill today.

[The Deputy Speaker, Conservative, Bruce Stanton]

Resuming debate. Seeing no one else, I call on the hon. member for Huron—Bruce for his right of reply. The hon. member has five minutes.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Mr. Speaker, it is a pleasure to rise again today with regard to this bill.

There is one thing I would like to correct on the record, namely, that it might be the second time that the member for Winnipeg North has misspoken on trade compliance with the WTO. This bill was specifically crafted so it would be WTO-compliant. I worked with experts in industry to make sure that it is compliant, because they did not want to get into the situation that beer and wine are currently in. Therefore, the reductions in excise tax are not targeted to a specific sector, but to all businesses in the distillery industry. If the bill happens to go to committee, it would be great if the trade officials could provide their take on it. I am sure that their take would be the same as mine.

It is also disappointing to hear the Liberal member for Winnipeg North talk about how lucky the industry is that the taxes have not gone up in 30 years. I hope that is not the Liberal position on all taxation. We should do our very best each and every time to reduce taxation. That said, there is a significant difference between the excise tax that brewers and vintners pay compared to the distillery sector. This bill would reduce it by a small amount to help businesses throughout the country survive and excel.

The other point that the member for Selkirk—Interlake—Eastman brought up is that two years ago, the U.K. reduced its excise tax by 2%. The obvious thinking at the time was that less excise tax would be collected as a result, but the opposite was true, and the U.K. collected more excise tax. That is what happens when taxes are reduced. It provides more money to the people who manage their own businesses, money that they reinvest.

I have received emails and phone calls literally from coast to coast from Conservative ridings, Liberal-held ridings, NDP ridings, and maybe even a Green riding, where distillers are located. What do they say? They say they support this bill and ask why anyone would not support it. One distillery said that if this reduction happens, it would hire 30 people. Another distillery said that if this happens, its excise tax would be reduced by $50,000 and it would be able to hire another person.

This is what Conservatives are talking about: a chance to reduce taxes in a certain sector that would create economic activity by enabling companies to purchase plant, equipment, and materials, as well as hire more people. I can speak from my own experience in my riding of Huron—Bruce. Since the excise tax for wineries and breweries was reduced, we have had many more wineries and many more opening, employing many people. They are becoming more and more specialized each and every day. On the brewery side, there were zero breweries when I was first elected in 2008 and now there are five, with many employees and many growing opportunities.

The great thing about the Ontario example is that the LCBO finally woke up and is now working with small producers to first get their products on the local shelves, and, if there is success there, across the entire province as well. I can speak of one company, Cowbell Brewing, in my riding, which has its products on 100 to 200 shelves across the province. One of the things that enabled them to do that was the excise tax, which allows a certain degree of profitability in the industry.

I would ask my colleagues across the way to speak with small distilleries in their ridings between now and Wednesday to see if they support this or not. We have already contacted them. Members should speak to them to find out what they think. Instead of presenting a rubber cheque at some government funding announcement, this is an opportunity for them to provide a tax reduction that does not cost the government anything and that would create jobs.

It has been a pleasure to research the topic, introduce it in the House of Commons, and have a good debate on it. I am looking forward to the standing vote on Wednesday. Hopefully five or more of my colleagues will stand when I sit.

[The Deputy Speaker, Conservative, Bruce Stanton]

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

[Some hon. members]

Agreed.

No.

[The Deputy Speaker, Conservative, Bruce Stanton]

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

[Some hon. members]

Yea.

[The Deputy Speaker, Conservative, Bruce Stanton]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker, Conservative, Bruce Stanton]

In my opinion the nays have it.

And five or more members having risen:

Pursuant to Standing Order 93 the recorded division stands deferred until Wednesday, September 21, immediately before the time provided for private members' business.

Suspension of Sitting

[The Deputy Speaker, Conservative, Bruce Stanton]

It being 11:57 a.m., the House will stand suspended for a few moments until we reach 12 o'clock.

(The sitting of the House was suspended at 11:57 a.m.)

(The House resumed at 12 noon.)

The House resumed from June 17 consideration of the motion that Bill C-2, An Act to amend the Income Tax Act, be read the third time and passed.

Income Tax Act

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

Mr. Speaker, I will be sharing my time with my colleague from Labrador, which means I only will have 10 minutes to speak to a very important legislation.

This is where the previous Conservative government really lost touch. The Conservatives were out of touch with Canadians and real people, and that it ultimately led to the current Prime Minister. Even before he became the leader of the Liberal Party, he talked about the importance of Canada's middle class. The Prime Minister has been consistent throughout not only his leadership, but even prior to it in saying how important Canada's middle class is to our economy and to Canada's future prosperity. The Conservative government never really understood that. One only needs to look across the way to see how those members have voted on this legislation. I would challenge them to revisit the way they voted on the passage of Bill C-2 at second reading, and listen to what Canadians are telling them. If they are really in touch with Canadians, they will appreciate what Bill C-2 is all about. Not only that, it goes even beyond Bill C-2. It is about Canada's middle class and those who want to become a part of it.

I have been a parliamentarian at the provincial or federal levels now for 25-plus years. Never before have I seen a government so determined to have an impact on Canada's middle class. That is why it is with great enthusiasm that I highly recommend to all members, no matter what their political affiliation, to get behind Bill C-2 and vote in favour of it. If they understand how the economy works, I believe they will recognize how important it is that the middle class be supported. Let me give an example. If a middle class is given a tax break or is enriched, we will have a healthier economy. How does that work? If there is more money in the pockets of average Canadians, that means they have more disposable income to invest in our economy.

There is an immense amount of literature and there are many arguments put forward to tell us that if the middle class has confidence in the economy and they have money in their pockets, they will spend that money. By spending that money, we then enrich and afford small businesses and so many others the opportunity to do that much better.

I find it interesting. Whether from the Conservatives or the New Democrats, and at times we get confused messages coming from those two parties, there seems to be a consistent message in their fight to resist Bill C-2, which I do not quite understand. One of the things they ask us is why the government does not support small businesses. This bill would do more to support Canada's small businesses than anything the previous Harper government did in its ten years. It would put that money back into the pockets of people. By doing that, people would be spend. We can ask small business owners, as I have done, as have many of my colleagues who have canvassed their constituents over the summer in a very real and tangible way. They will tell us that the best thing we can give a small business is not necessarily a tax break, but a consumer. Small business owners want people going into their stores, buying their products and consuming them.

Bill C-2 is all about that. It would give a significant amount of money to Canada's middle class. Ultimately it is not just talk; it was the first piece of legislation that the Prime Minister introduced to the House of Commons, and it was implemented on January 1. Not only did we want to give the middle class that tax break, we also wanted it to take effect as soon as possible. We saw that in the implementation of the government's policy. It was a substantial election platform promise made to Canadians. The Prime Minister and this government are materializing on that promise. We should recognize this valuable legislation. It reflects what Canadians want and is something on which the government is delivering.

Other criticisms on Bill C-2 have nothing to do with the bill. The New Democrats ask about those who make less than the threshold to get the tax break. It is important to recognize that over nine million Canadians will benefit by this tax break. The NDP refuses to acknowledge that this is step one of a number of steps. All my NDP friends need to look at is the Canada child benefit. Some of Canada's poorest families are getting significant increases in child support. We would have to look a long way back before we would see a government taking such a strong social commitment to lifting children out of poverty. Hundreds of thousands of children are being lifted out of poverty because of the Canada child tax benefit. That tax-free money is already being sent to families across this nation.

That is just one aspect to help those with low incomes who want to become part of Canada's middle class. What about the other most vulnerable, our seniors? Some of the most vulnerable seniors are easily identified through the guaranteed income supplement. We saw a significant increase in the last budget for seniors. I believe some of them will receive an additional $900 per year. If people are in a poverty situation and receive the GIS, that $900 is the equivalent of thousands of dollars to individuals making $100,000 per year. It is a significant increase for those vulnerable seniors. Through Bill C-2, they see a government that truly cares and is prepared to invest in Canada's middle class, but we have not forgotten about our most vulnerable such as children and seniors, in particular those who are on the guaranteed income supplement.

We have seen a redistribution of wealth that we have not seen in many decades. The bill is in part made possible because of a new tax for those Canadians making more than $200,000 taxable income per year. There is that expectation from this government. It is making our system that much fairer.

When we look at Bill C-2, I would like to think the commitment to that tax break is being fulfilled here.

I started off by saying that the Conservatives have lost touch. They can demonstrate that they are listening to Canadians by voting in favour of Bill C-2.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, I clearly recall that when the Liberals were campaigning approximately a year ago they talked about the middle-class tax cut, but they never did define “middle class”. I know that the member opposite is in the tax bracket that would benefit most from this tax break, and I do not think that many Canadians would look at members of Parliament and say they are part of the middle class.

Therefore, I would ask the member this. Could he define “middle class”, and would he suggest that the members of this House are the ones who should be benefiting the most from this initiative, which is what the Liberals have done?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, if that is how the Conservative members want to justify voting against the legislation, they can do that. However, I would suggest that it is ill-advised.

The real benefactors of this tax break are teachers, firefighters, professionals, and factory workers. These individuals are part of Canada's middle class. They work very hard to build our society. That is the group that is receiving the greatest total benefit. If members want to nitpick, I am happy to do an overall assessment of who is benefiting, which is Canada's middle class and those who want to be able to participate in it.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, we know that two-thirds of Canadians, 17.9 million Canadians, will not benefit from this Liberal tax break. In fact, those who work full time and earn $45,000 a year, which is $23 an hour or less, will get nothing.

The Liberals talk about lifting people who are not in the middle class and helping them join the middle class, but they have forgotten them with this tax break. They tell them that they will help and grow the middle class. The people who will benefit the most in this tax bill earn between $100,000 and $200,000 a year, or between $50 and $100 an hour. Even they do not think it is fair that those who earn $23 an hour or less get nothing.

I would like the member to tell us what the Liberal middle class is, because in Canada the median middle class is $31,000 a year. I know in his riding it is $24,000 a year. In my riding, it is $26,000 a year. The member likes to scold the Conservatives for being out of touch with Canadians and the middle class. Therefore, I would like to hear from the member, what is the Liberal middle class?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, if the member would read the legislation, he would get a very good sense of what the middle class is.

If the member wants to take the issue to the next election, whether in 2019 or whenever it might be, I would invite him to do that. I would like the members who vote against this bill to tell those individuals I pointed out, the teachers, the firefighters, the health care workers, the many different professionals, the factory workers, and hard-working middle-class members, that they voted against this bill because they wanted their own narrow perspective which does not encompass what the government is providing.

When the member makes reference to those who make less than $45,000, imagine those individuals making under $45,000 who have children, and the benefits they are getting under the new Canada child benefit program. The NDP conveniently forget that.

[Gary Anandasangaree, Liberal, Scarborough—Rouge Park, ON]

Mr. Speaker, I want to thank my friend for outlining our government's priorities on how this bill will help the middle class.

During the summer, I met a lot of people in the constituency who received the Canada child benefit, tax free, for the first time. The difference it is making on individual lives is phenomenal.

I wonder if our member could outline the issues with respect to the TFSA. In many ways, the TFSA was short-sighted in terms of increasing the amount of tax-free growth within the TFSA. It will debilitate our future generations from getting the benefit of tax revenue. Therefore, could our member advise as to the changes, and how those will benefit the economy right away and ensure we have a long and steady stream of tax revenue so that future generations are not debilitated?