Debates of Sept. 28th, 2018

Multilateral Instrument in Respect of Tax Conventions Act

[Colin Carrie, Conservative, Oshawa, ON]

Mr. Speaker, I want to read the Minister of National Revenue's mandate letter, dated November 12, 2015. It says that the Prime Minister wants the minister to invest “additional resources to help the CRA crack down on tax evaders and work with international partners to adopt strategies to combat tax avoidance.” That was three years ago, and we are seeing this bill coming forward but the member knows that under our previous government, Mr. Flaherty really got this initiative going. Does the member think the Liberals are actually serious about doing anything?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, I am sure if the member of Parliament for Oshawa could say what he really wants, he would probably want to direct that question to the member for Calgary Rocky Ridge because he is that capable of a member.

I would simply say results, results, results. Let us bear in mind that this particular multilateral instrument is about the use of highly sophisticated techniques to shift income so that, ultimately, states such as Canada will not receive full taxation, which is all done by Canadian law. It may be where it pushes the envelope, but that is because we have allowed these things when our regulatory environment and tax agreements are just not up to date. This would allow that to be sped up.

Making sure there are proper resources is important. I would also say that it is far easier for the CRA to go after existing businesses, and that is why I hear from so many small business owners who are continually audited for really little things. That needs to end. The focus needs to be on the big money.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Mr. Speaker, I am pleased to rise today to speak to this legislation. It is my pleasure to follow my colleague from Central Okanagan—Similkameen—Nicola and his excellent discussion on a topic that he is interested in and knows a great deal about.

Bill C-82 is a welcome step forward. It is the natural conclusion to work that was first undertaken by the previous government in 2013. This is a good, positive step forward by two governments now to help address the serious problem of base erosion and profit shifting.

This legislation seeks to address a global problem that Canada is a part of, namely tax evasion, whereby corporations, through a corporate domicile or clever accounting, can shift profits between different jurisdictions or shop for the most desirable tax treatment from any of a variety of different jurisdictions.

For years we have heard in the news criticism of many global giants, including Starbucks, Apple and a number of other familiar global brands, that will seek to minimize their taxes by shopping for the most favourable jurisdiction. This is a problem that confronts western governments.

If the bill passes, Canada would be able to participate in a protocol that the OECD has in place.

We heard a bit about the scale and scope of this problem at the finance committee, and we welcome the bill.

The bill is an effective and efficient means by which we could deal with a wide variety of different tax jurisdictions through the same instrument. We would not have to separately renegotiate dozens of different existing tax treaties. As a result, we could co-operate much more efficiently with our global trading partners and combat what has been described by some as a “race to the bottom”.

Perhaps close to $25 billion in taxes is not being collected from economic activity that takes place in Canada. During its first two years in office, the Liberal government claimed it was going to recoup this $25 billion. The Prime Minister in late 2017 said in the House that the government looked forward to collecting this money.

While I do support the bill and acknowledge that it is an important step forward, it is certainly not a panacea or a solution to deal with all of the problems. I do hope colleagues from all parties will support it.

With respect to this $25 billion, the government has yet to really tackle the issue at all and it is now three years into its mandate. That number has been debunked. It would seem that most of the money the government planned to collect, money from tax evasion and tax avoidance, through the steps it would take, would be on the domestic side, the majority of which is believed, even by the department, to be uncollectible.

The CRA, almost three years into the government's mandate, has failed to make significant progress on foreign tax evasion, but during that time period it has floated a number of, in some cases, strange ideas on how it would plug its gaps in revenue. These ideas do not involve foreign tax evasion and do not involve corporate profit shifting.

They involve ideas that arose when the CRA first floated the idea of taxing employer benefits, like health and dental benefits; taxing retail discounts to service industry employees; and the war that was being waged this time last year on disabled Canadians, including the rejection of the disability tax credit for type 1 diabetics and a number of people who suffer from other health ailments.

In my riding, I have spoken to people who suffer from different types of chronic fatigue, who had been receiving the disability tax credit for years and suddenly were denied it. In one case, someone had been receiving it for 10 years and was suddenly denied it while her medical evidence had not changed. We have also heard the parents of autistic children losing their disability tax credit at the hands of the CRA under the Liberal government.

None of these seemingly small and petty attempts to raise additional revenues address the issue at hand and fulfill the promise of the government to crack down on foreign tax evasion and tax avoidance. These are nickel-and-dime measures targeting low-hanging fruit. The CBC reported again last night how the Liberal government makes it very difficult for single parents, with its onerous requirements on their proving they are indeed separated. We have seen quite a number of cases of this, and it has been raised in the House.

The other side of this and what this bill does not address is a different type of base erosion. Base erosion from profit shifting is an important global phenomenon that must be addressed. However, perhaps a bigger threat to the Canadian economy and a bigger drain on the tax revenue of the government than base erosion from profit shifting is base erosion from capital flight taking place right now.

Since the Liberal government took office, we have seen the imposition of a carbon tax. My colleague from Central Okanagan—Similkameen—Nicola spoke about carbon leakage, how chasing economic activity with emissions into a different jurisdiction does not change global emissions, but does change the tax revenue base of the Canada Revenue Agency and costs jobs. We have seen the carbon tax and have seen Bill C-69, which should be titled, “an act to ensure no pipeline is ever built in Canada again”. We have also seen tax increases, which the government had indeed promised to impose on the wealthiest Canadians, actually result in a reduction in tax revenues from the wealthiest Canadians. That is a different type of base erosion that would not be addressed by this bill.

We have seen the debacle over the Trans Mountain expansion. That will also result in an erosion of the tax base, as that economic activity is curtailed. We also all know what is happening with the NAFTA negotiations, and we know how many hundreds of thousands, perhaps millions, of Canadians who fear for their jobs as this unfolds.

To conclude, this bill is an excellent step forward to address a serious global problem that Canada must play a part in solving for our own tax base and in participation with our economic partners. I look forward to its coming to committee, where it may be improved and where I could address some of the issues that have been raised by my colleagues.

I will be supporting this bill, and I commend the government for moving ahead with this initiative.

[John Oliver, Parliamentary Secretary to the Minister of Health, Lib.]

Mr. Speaker, I know that residents of Oakville, particularly taxpayers there, want to make sure they have the same opportunities to succeed and benefit in a growing economy. That also means making sure that the tax system is fair to everyone, so I am delighted to see that we are taking steps in the fight against aggressive international tax avoidance and countering strategies that allow business and wealthy individuals to avoid paying their fair share.

It seems to me that this legislation would allow for a much quicker and more efficient updating of multilateral conventions and bilateral tax treaties. Could my colleague say a few words about his impression of that in this bill?

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Mr. Speaker, I hope I was clear in my remarks. That is exactly what the bill may accomplish in creating a more efficient and effective way to deal with the multitude of tax treaties that we have.

However, I will return to the broader point that an erosion of the tax base is happening as capital is fleeing Canada under the anti-business, anti-energy policies of the current government. That has to be addressed, but it cannot be dealt with solely by closing loopholes that allow sophisticated multinational businesses to avoid taxes.

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Mr. Speaker, the NDP will be supporting the bill. Of course, we want to make sure that we recover as much tax money as we possibly can. However, the bill does not go far enough. We really do think that tax havens need to be a part of this whole discussion and that a much better job needs to be done in closing loopholes.

Also, I do not know if other members have tried phoning CRA over the last couple of years, but I gave it a shot and got caught in its loop after about 10 minutes. At the end of it, a voice told me that there was really nothing they could do for me and to call again some other time. I had received a notice that I owed CRA some money, which was incorrect. In fact, it owed me money. We contacted the department, which said that I would continue to get threatening notices about owing money even though they knew I did not, and that it would be least six months before I would get my cheque.

The CRA is in a mess, and from the perspective of my constituents in Kootenay—Columbia, there is a lot of work that needs to be done in that regard. I have to say that I know the cuts started with the previous Conservative government, but would my colleague not agree that the government should be doing something about tax havens and the general state of the Canada Revenue Agency and its lack of responsiveness to Canadians?

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Mr. Speaker, I will deal with the first part of the member's question quickly by saying, yes, we support the bill and that it is important that the loopholes be closed.

To the second part of the question, the personal experience the member relayed is so familiar to people I have spoken to across Canada. Everything he addressed, from the inability to reach someone on the phone to being given incorrect and conflicting information when getting through to a person, to being told that it would take months to get a cheque even when there is no information in dispute, is so painfully typical of the experiences I have heard from taxpayers across Canada. I have heard tax preparers from across Canada say that the service and the level of competence have never been worse. Quite specifically, I have been told by tax professionals that even in the last couple of years, it has gotten worse. Therefore, it is certainly going to take more than the passage of the bill before us to address the comprehensive problems with tax collection in Canada.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, today I rise to address the subject of tax fairness.

In the last federal election, the Prime Minister barnstormed across the country, promising billions of dollars of new spending. A chicken in every pot, he said. When Canadians inevitably asked how he would pay for it all, he said not to worry for a moment, that he would just raises taxes on the so-called wealthiest 1%, the rich guy living up on the hill.

Today, as we debate the subject of tax fairness, it is appropriate to ask if he has, in fact, kept his promise to fund his spending through those means. He certainly has kept the promise to spend vast new sums. Spending has grown, at around 7% per year, which is three times the combined rate of inflation and population growth. In other words, the government is spending three times faster than is the need among Canadians.

The result has been that the deficit this year is three times the size the Liberal Party promised in its most recent election platform and the budget will not be balanced next year, as the Prime Minister promised it would. According to Finance Canada, that will only happen in the year 2045, a quarter century from now, during which time Finance Canada admits the government will add a half a trillion dollars in additional debt. In other words, the budget will not balance itself.

What has become of the rich? The Prime Minister claimed he was going to raise taxes on those people. The results are in. CRA data released two weeks ago demonstrated that in the first year after the tax increase took effect, the government actually collected $4.6 billion less from the wealthiest 1%. Finance Canada released documents almost exactly a year ago today in its annual financial report, on September 19, 2017, in which it revealed almost exactly the same phenomenon. Revenues went down from the wealthiest 1%.

The government said that this was all due to one-time factors. People were playing games to avoid the higher taxes, said the government and that phenomenon would disappear in future years. The government is right. There were some wealthy individuals who moved money around to avoid paying their fair share.

One of them is the Minister of Finance. He announced a tax increase to take effect on January 1, 2016, and he sold his shares in his own company, Morneau Shepell, just 30 days before that in order to ensure his capital gain would be taxed at the lower earlier rate so he would not have to pay the same higher taxes he imposed on everyone else. Is that not nice? He knew the tax increases were coming, but being a multi-millionaire who had worked hard his entire life to avoid paying taxes, he was not going to pay a penny more on that capital gain. He was going to ensure he was taxed under a lower rate than everyone else.

He says, and his department has said, that many people did that. However, now that phenomenon is behind us, they say that in the future more revenue will come in. There is no question that in the 2017 tax year there will be probably be a one-time windfall of revenues from certain entrepreneurs and other Canadians as a result of reactions to government policies.

For example, the anecdotes by accounting firms and the reports in our business media are so common now that it is hard to be skeptical of their truth that people are moving money out of Canada. They are moving money out because the tax burden and the regulatory burden is so high that it is better for some people to do business outside of the country rather than keep their money here. Therefore, they will pay exit taxes. As that money goes out the door, it will be taxed one time.

The Prime Minister, who is only concerned about the here and now, who wants to spend more money today, might celebrate that one-time burst of cash as he shovels it out the door as quickly as possible.

What he forgets is that the problem with one-time cash is that a person only gets it one time and in the future it is gone. That money, once it leaves the country, will be taxed by other governments. When a wealthy CEO moves his fortune to London, England, the government today gets a one-time tax benefit for that as he pays an exit tax. However, in years subsequent, his tax burden in Canada is zero. He pays taxes to another government and funds services for another non-Canadian population. In 2017, I have no doubt that many people will pay one-time exit taxes as they took their money out of our country.

Furthermore, in the fall of 2017, the government announced small business tax changes that would have punished families for selling their businesses to their children. If a farmer sold his farm to his kids, he would pay a dividend tax rate of nearly 45% instead of a capital gains tax rate of 25%. If he sold that same farm to a foreign multinational, he could pay the lower tax rate.

In other words, there is a massive penalty for farmers selling their farms to their own kids, but a tax break for selling those same farms to a foreign multinational and having that multinational turn those children into tenants on their ancestral lands.

Because of the ferocious backlash led by the Conservatives and spontaneously ignited on the ground by Canadian taxpayers, the government has decided to put that change on hold until after the next election when it will surely be back. However, small businesses and farmers are not stupid. They know what bullet they dodged and are not going to risk having that change brought forward again.

What have many of them done? According to some of the most respected accounting firms in the country, many of them did their farm sales immediately upon learning that the government had put the change on ice. Therefore, those people will pay a one-time tax on that transaction in the 2017 year. After that year is gone, so too will future revenues, because those transactions will not repeat themselves every single year.

Finally, the government proposed to punish families that shared the work and earnings of a company. It calls that “sprinkling”. I can understand why it calls that sprinkling. The Minister of Finance and the Prime Minister did have their wealth sprinkled upon them as if by an angel from above. Would it not be wonderful if we could all have trust funds and if we could all be trust fund babies like those two trust fund twins? They did have money sprinkled upon them from above, so it is not surprising that they would use the term “sprinkling” to describe small family businesses that own a local restaurant and therefore share the earnings of that restaurant with the kids who show up everyday and help run it.

The change proposed by the government took effect on January 1. Businesses knew that so they had to pay out higher levels of dividends to their children and their family members in 2017 before the tax change took effect. There is no question that the government will tax those dividends in the 2017 year. In other words, the government will get a burst of revenue from that phenomenon of forcing businesses to pay out to their family members before the punitive new rules take effect. There is no question the government will get more money in the 2017 year as a result of that.

Any day now, though, we can expect that the Minister of Finance and the Prime Minister will march triumphantly into this room, as if they were Caesar at a Roman triumph, saying,“Aha! Look at all the money we took from all these people”. They will say that their high-tax plan actually worked in raising cash for them to spend. However, all of these phenomena I just described are one-time cash, in and out. Then it is no longer available to future governments to spend. For that reason the burden will inevitably fall upon the working and middle class that always suffer the most as the government gets big and expensive.

Why is that? Because higher earners and capital are far more mobile than lower earning people and workers. Labour has a harder time moving. Why? Because labour is carried out by a person and therefore he or she would have to move physically to another jurisdiction to have his or her labour tax at a lower rate. However, capital can flee or travel just like the air. Anyone can open their laptop computer and purchase equities, foreign stocks in companies around the world, literally in a matter of five minutes, moving their money out of the country just like that.

However, a working family who lives in Oshawa or Windsor on the assembly line floor cannot just get up and move because the government has hit it with a higher tax burden. That is why workers and labour cannot move around to avoid taxes the way capital and wealth can move around.

The end result is that when government gets big, capital flees and the burden gets more and more punitive on the working class Canadian. That is exactly what has happened. The average Canadian middle-class family is paying $800 higher income tax today than when the government took office. That is before the carbon tax and before payroll taxes that the government plans to institute the year after the next election. In other words, it is only going to get worse.

It is also before the increased cost of servicing our national debt, which is growing at a spectacular rate. In fact, last year, our government spent $23 billion on servicing the national debt. Within three years, the Parliamentary Budget Officer says that amount will rise to $40 billion, a two-thirds increase in just a few years, as debt rises and interest rates rise simultaneously to have a compounding effect of transferring more and more wealth, again, from the working class taxpayer to the wealthy bankers and bondholders who own our debt.

Here we are with these social justice warriors bringing in deficits and debts that have the effect of transferring wealth from low-income people who pay tax to wealthy bondholders and bankers who own the debt, in exchange for which we will get nothing. Interest on debt does not pave roads, does not build hospitals, does not hire nurses, does not pay soldiers, none of those things. It simply fattens the wallet of the wealthy people who have enough means to lend to the government.

If people ever wanted proof that these people are wealthy, the government cancelled the Canada savings bonds. It used to be that modest income people would buy Canada savings bonds and lend to the government. The government does not do that. It borrows all of its money from wealthy private equity fund managers, investment bankers and others of vast fortune.

Therefore, it always is that when the government gets big, the wealthy and well-connected and powerful are better off. It is ironic. Jeremy Corbyn, who calls himself a socialist, the socialist leader of the Labour Party in Great Britain, says that he wants to end greed is good capitalism. He is going to ban greed. The Prime Minister has made similar comments. The plan to end greed is to make the government so big that there is no room left for greed. It will be removed from human DNA. People will become altruistic and generous. No one will have more than anyone else, so they say. These socialists are actually going to transform human nature because they are so powerful they can do even that.

Can they really transform human nature? Apparently they did not read Macaulay, who wrote:

Where'er ye shed the honey, the buzzing flies will crowd;
Where'er ye fling the carrion, the raven's croak is loud;
Where'er down Tiber garbage floats, the greedy pike ye see;
And wheresoe'er such lord is found, such client still will be.

The point is that wherever there is money, there will be people trying to get it. If all the money is in the government, there will be greedy people trying to make money off the government. We see it all the time.

There are corporations coming to Ottawa saying they need a corporate handout, and they have had a very generous benefactor in the Liberal government, such as the $400 million for Bombardier, which went on to immediately give big bonuses to its executives. There is the infrastructure bank, for example, which will provide loan guarantees to powerful construction companies so that if ever their projects lose cash, the taxpayer and not the business owner will pay the price.

In Ontario, the Liberals brought in something called the Green Energy Act, which simply did not create any green energy, but it did put a lot of green in the pockets of the wealthy lobbyists who were able to get the so-called green energy contracts, double the cost of electricity and cause what the Ontario Association of Food Banks call “energy poverty”. People literally walked in with their power bills and said that they could not afford to keep their lights on and eat and asked for food so that they could pay their power bill. So, yes, it was great for the wealthy one percenters who got tens of billions of dollars in subsidies for their phony electricity, but it was not so great for the working-class people who could barely afford to turn the lights on and live a normal life.

So, yes, wherever we fling the honey, the buzzing flies will crowd. My colleague did not say “bees”. He said “flies”, and flies do not make honey but will happily consume it. They are parasitical. Bees create honey through the process of pollination, which is the free exchange between a vegetative life and a creature, which is the essence of the free market economy, right? That is the free market economy, the voluntary exchange of capital for interest, product for payment, work for wages.

Every single transaction in a free market economy happens through voluntary exchange. Do members know why? It is because every single transaction must improve the lives of both people or they would not engage in it. It is why we have something called the “double thank you”. We go to a coffee shop, buy a cup of coffee, pay for our coffee and say “thank you”. What do they say back? It is not “your welcome”, but “thank you”. Why? It is because our payment is worth more to them than their coffee, and their coffee is worth to us than our payment. In other words, we both have something worth more to us than we had before. If I have an apple and want an orange, and someone else has an orange and wants an apple, we trade. We still have an apple and orange between us, but we are both richer because we each have something worth more to us than we had before. That is the genius of voluntary exchange.

Why does no one write “thank you” on their tax forms? It is supposed to be a voluntary exchange. It is supposed to be an exchange. We are paying for something. We are supposed to get something in return. The answer is, because we have no choice. It is not a voluntary exchange. It is mandatory. We are forced to engage in it, and that is the rule of the government economy. Every single transaction in the government economy is done by force. Every single transaction in the free market is done by voluntary will of every single participant.

We on this side of the House of Commons believe in a bottom-up free market where businesses obsess over customers rather than over politicians. It is where one gets ahead not by having the best lobbyist but by having the best product. That is the free market economy. It is a bottom-up economy and not a trickle-down, government-directed economy, like the government on the other side of the aisle believes.

Therefore, we will continue to champion the free market system, a system based on meritocracy, not heiritocracy, where we do not have to have a trust fund to have hope for a better future. We just have to have big dreams and hard work. That is our plan for tax fairness.

[The Speaker, Liberal, Geoff Regan]

There will be 10 minutes for questions and comments following the member for Carleton's speech when the House next resumes debate on this topic.

It being 1:30 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

Department of Health Act

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

moved that C-326, An Act to amend the Department of Health Act (drinking water guidelines), be read the third time and passed.

Mr. Speaker, I am very pleased that Bill C-326 has moved past second reading and committee stage and is back in the House for third reading. Although the scope of the bill is narrower than what I had hoped as a result of the amendments proposed in committee, the fact remains that the bill is another important lever that will ensure greater transparency when establishing drinking water standards and that this process will look to the future, that is the study and control of emerging contaminants.

When developing and drafting the bill, I borrowed elements of the American system for drinking water. I use the term elements only because, in general, here in Canada we favour an approach to regulating drinking water that is a little different than that of the U.S. For example, we do not favour adopting uniform standards that are enforced by law across the country. Instead we use a regional approach, that is a provincial one, which in reality places greater importance on the efficient management of water purification plants than on attaining certain specific limits or thresholds for a large variety of water contaminants. In other words, our approach gives regulatory bodies greater flexibility.

Ironically, the stricter approach can make the work of plant operators more complex and can even be detrimental to the objective of ensuring quality drinking water. I sincerely believe in the Canadian model, which, according to the experts, is becoming more prevalent internationally for the regulation of drinking water.

That being said, the United States is actually being more proactive and transparent about studying and regulating drinking water contaminants, especially those known as emerging contaminants. The United States amended its Safe Drinking Water Act in 1986 and again in 1996 to give the U.S. EPA additional responsibilities regarding drinking water.

These amendments included the requirement that the U.S. EPA develop and manage a candidate contaminant list every five years. In other words, every five years, the EPA must select at least five contaminants from the candidate contaminant list and make decisions on whether to make regulations pertaining to them, in a process that is called regulatory determination. Moreover, the EPA is also now required to monitor at least 30 unregulated contaminants every five years. In the event that it decides that a new contaminant will be regulated, the EPA has two years following that decision to draft a regulation and an additional 18 months to finalize it. There is thus a well-structured, forward-looking and transparent process in place in the U.S. with respect to managing contaminants in drinking water in that country.

Publishing the candidate contaminant list is a key strength of the U.S. system. Making the list public enhances transparency regarding the future regulatory direction of the EPA. It provides important information that researchers can then use to make decisions, namely, regarding the contaminants for which they would want to collect primary data to inform the regulatory process. Moreover, this proactive approach spurs research and innovation, including in the area of water filtration processes.

In essence, Bill C-326, both in its original and current forms, aims to encourage that same kind of forward-looking and transparent approach. The amended version of Bill C-326 calls on the minister “to identify any foreign government or international agency that, in the Minister’s opinion, has standards or guidelines respecting the quality of drinking water that should be compared” to Canada's. This determination, which until now has not been legally required, nor, to my knowledge, made public, if the minister has in fact considered such a comparison, will necessarily elicit questions from those with an interest in the quality of our drinking water, and questions, of course, are the very currency of accountability.

In other words, civil society, including NGOs and researchers, will be able to seek clarification and justification publicly through Order Paper questions, oral questions, correspondence to the minister or other means, of the minister's decisions with regard to the agencies and/or countries she has chosen as a basis of comparison to Canada in regard to drinking water guidelines. Civil society will in turn be able to offer its own opinion as to the validity, or conversely, the lack of validity of the minister's choices.

Furthermore, Bill C-326 requires the minister to identify which standards set by the chosen agencies or countries should be compared to the standards being developed in Canada. Again, civil society will get a chance to critique or support the minister's choice. This will help us look ahead and look at other countries or international agencies that may have more stringent standards than ours, as well as at specific standards outside Canada that may be higher or stricter than ours.

This bill highlights gaps, and as budget analysts and scientific analysts both know, gaps are what stimulate reflection, research and corrective action.

I also hope that this bill—if passed—and the debate it has stimulated so far will spur the government to focus more on emerging contaminants in its Canadian Environmental Protection Act annual report.

In the interest of increasing transparency, promoting research and innovation, and ultimately improving human and environmental health, I ask the House to support this bill.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I would like to thank the member for Lac-Saint-Louis for his lifelong dedication to greater government action to protect our water, including safe drinking water. I am well aware that this has been a long-standing interest of his.

The parliamentary committee on environment and sustainable development, in March 2016, was directed by this place to undertake a review of the Canadian Environmental Protection Act, which is the law that regulates toxins in our water, land and air. The committee submitted a report to this place in June 2017, more than a year ago. We are hearing from the government that it does not intend to bring forward any response to those 87 recommendations to regulate toxins in our water until after the next election.

I wonder if the member shares our concern that this action needs to be taken in a timely manner to make sure that our drinking water is safe.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Mr. Speaker, the tracking of contaminants, the evaluation of contaminants is something that governments have been doing through a chemicals management plan for some time. It is an ongoing process and is often a cumbersome process because there are so many chemicals in our environment. Previous governments have maintained that process and I hope this legislation will put an additional focus on the need to take action with respect to contaminants.

A study on contaminants in drinking water was published in the spring by a working group of experts. All of this should inform, I would hope, government action to evaluate contaminants that could be dangerous to our health and act on the conclusions that are the result of that examination.

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

Mr. Speaker, I am pleased to rise today to speak to Bill C-326, an act to amend the Department of Health Act with regards to drinking water guidelines. I am truly grateful to the member for Lac-Saint-Louis for introducing this bill. I also want to thank him for his ongoing work on this issue.

Bill C-326 would require the Minister of Health to examine existing drinking water standards in 35 OECD countries and, if necessary, make recommendations to change Canada's drinking water standards.

Canada is currently a World Health Organization collaborating centre for water quality and has an active role in drafting the WHO guidelines for drinking water quality.

Canada also shares information on this subject with other intergovernmental organizations such as the agency that handles these matters in the United States.

It is important to note that developing water quality guidelines falls under provincial and territorial jurisdiction. However, I believe the federal government should contribute to the conversation and has a role to play in standardizing those guidelines nationally.

All Canadians must have access to drinking water of the highest quality no matter where they live, their history or their income. Drinking water in Canada should be available to everyone, and the fact that entire regions do not have consistent and permanent access to water is unacceptable.

Federal oversight and the clear responsibility of the Minister of Health to report to the House will greatly improve this situation and hold the government to account on its commitments to Canadians.

As with all other matters pertaining to health, we must ensure that changes put forward come from up-to-date sources and scientific data.

As always, I expect that the federal government will use the best data possible when developing these measures.

Now that we have a bit of background on the intent of this bill, I would like to outline exactly why I think the bill may actually be a bit redundant. The committee heard that the Minister of Health and the Department of Health already, on an annual basis, review the World Health Organization's standards on water quality and check back to ensure that they are implemented. The problem is not that the check is not happening. The difficulty is in making sure that we adhere to those standards across the country.

There is some difficulty with that because there are so many layers of standards. It would be great to get to a place where we would say that the World Health Organization's standards are the ones we want to meet and that federally, provincially and municipally we would all line up to the same thing. Some effort to get there is time well spent.

With respect to our first nations people, there was a commitment on the part of the government to eliminate the boil water advisories and $8.4 billion was pledged. There are some statistics on that. Since 2015, 40 boil water advisories were lifted, but another 25 were added to the list and a total of 91 boil water advisories remain in effect. We need to make sure the water quality standards we have in place federally make their way across the country and that we address the issue of water on reserve.

As of last year, two-thirds of the $2 billion that was allocated to address water systems in budget 2016 is unspent, so it is important to make sure that if we put money in place to address issues, we spend the money,

The other point I would make is we are three years into the mandate and have not yet made the progress we wanted to make on those boil water advisories, so I encourage the government to make tracks to see that happens.

There is a lot of technology in place. I took note that the government is shipping bottled water into many reserves. There is technology available today, where for $300 we could supply a family of five for a day. It is a water filtration system that filters both organic and inorganic materials, and just requires a cartridge filter change every 10 years. This is the kind of significant technology that could be brought to bear, along with water treatment systems that the government is putting in place.

There are other things I wish we were talking about in terms of water. Many of my constituents, when they found out I would be speaking on this, had issues they wanted to bring forward. Nick Young sent me some information about Nestlé and the withdrawal of millions of gallons of water from our lake system for mere pennies. He is concerned we are not adequately protecting our resources.

Similarly, I had input from people in the community who said the government should weigh in on the issue of whether or not we should be fluorinating our water. There was quite a volume of data provided to me. If we looked around the world to different places, some fluorinate and some do not, and there actually is not much difference in terms of dental health and some of the determinants that happen there. However, because there are municipalities that are constantly seeing this issue come forward, it would be good for the government to complete the research and come with an answer on how we could standardize across Canada. There have been cases in Calgary where they took the fluoride out of the water and now we are seeing an increase in dental health problems that they believe are related to that,

In addition to these issues, we should do some work on updating some of the guidelines. There is a lot of inconsistency between jurisdictions. Sixteen of the 94 Canadian drinking water guidelines are consistently applied across all provinces and territories. A very small percentage of what we say we want to have is in place. Only eight Canadian provinces and jurisdictions have legally binding drinking water standards. Obviously, we want to include that as part of the law.

I want to thank the member for Lac-Saint-Louis, because I know he has done a lot of work in the area. There is still more to be done, not just in setting the standards but in the work to clean up and remediate our water. In Sarnia—Lambton, we are part of a binational effort to clear up the areas of concern. When the work began between Michigan and Sarnia, a lot of the industries have been there over the years and there was a lot of cleanup to be done. The efforts have resulted in most of the areas of concern being cleaned up and the blue flag status being returned to the water in Sarnia—Lambton, so it is great to swim and enjoy the beaches there. However, there still remain areas of concern.

I was speaking with the Minister of Environment today about finding money to finish up that remediation. They have extended those areas of concern now from Sarnia all the way down to Niagara, and there are five remaining areas of concern to be addressed. I encourage the government to do that, in addition to drinking water standards. We have some of the most beautiful lakes in the world. We have the largest volume of water on the planet. We should be leaders in setting the standard in making sure that everything we have here is kept for generations to come.

That said, I appreciate the member bringing this forward. It would put into law the practice that the government currently has of checking with the world standards every year and making sure it brings those back to try to get some coordination and implementation across all of the provinces and territories.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, in Bill C-326, the member for Lac-Saint-Louis proposes a number of measures related to empowering the federal Minister of Health, under the Department of Health Act, to investigate and report on the need to update regulation of toxins in drinking water.

I want to say again that I am aware of the long-standing interest of this member in calling for greater action to protect Canadian water quality, including safe drinking water, and I commend him for this dedication. I also wish to echo the calls by the MP for Sarnia—Lambton for the comments she has made on the concerns about the continuing boil water advisories in our indigenous communities.

However, the member for Lac-Saint-Louis' specific reforms appear at odds with, and may actually conflict with, recommendations made by the parliamentary committee on environment and sustainable development in a number of reports tabled in this place in 2007, 2008 and as recently as 2017, which have still not been acted upon.

Certainly, repeated calls have been made for greater action at the federal level to protect water quality, in particular from contamination from harmful toxins. Strengthened measures have been demanded by parliamentarians, government officials, scientists, physicians, lawyers, environmental advocates and our own commissioner of the environment and sustainable development.

Indeed, during our committee study of the Canadian Environmental Protection Act, we heard testimony that Canadian drinking water standards often lag behind international benchmarks. CEPA, or the Canadian Environmental Protection Act, is the federal law that has been in force since 1988 for regulating toxic substances, including those that may be found in drinking water or potential drinking water sources. It is also important to note that it is this law that extends powers to both the Minister of Environment and Climate Change and the Minister of Health for the control of toxins.

Following an extensive study that heard testimony from government officials, the commissioner of the environment and sustainable development, industry, scientists, legal experts and environmental advocates, the committee tabled a report calling for substantive reforms to this law to ensure improved control of toxins, including in water.

Bill C-326 proposes that the Minister of Health be empowered to review drinking water standards to ensure consistency with standards imposed by other OECD nations. Our committee was advised that in some instances, Canada has in place the lowest standards among OECD nations for 27 toxic substances. While the committee recognized the need for the reforms, they do not appear to coincide with those the member recommends under Bill C-326.

In fact, the committee recommended amending CEPA to require a mandatory assessment of any substance where an OECD country has placed restrictions on it and more. It also called for action where there was an increased use of that substance or any new scientific findings came to the attention of the Minister of Environment and Climate Change. The committee recommended that CEPA be made the principal statute to regulate any products containing toxic substances, not the Department of Health Act.

The parliamentary committee did recognize the need to enhance the powers of the Minister of Health in recommending controls on a toxin where it may pose risks to health. However, it was noted that the law must require dual reviews by both the health and environment ministers to ensure that risks to both health and environment are assessed.

A recommendation was also made to ensure that any assessment consider risks to vulnerable populations. The committee went a step further than Bill C-326, recommending automatic listing of any substance once it is determined to be toxic, not simply that it be reported to Parliament. It called for immediate action where there is information that a substance may be harming human health or the environment. However, we still await action by the government on these languishing critical calls for reform to protect our environment and human health.

Finally, many have called for the current national guidelines for Canadian drinking water to be made binding in law, as is the case in many other western nations. Further, they have called for communities, including indigenous communities, to be granted the right to participate in risk assessments and the setting of standards. This would be consistent with Canada's having recognized, at the UN conference on sustainable development in 2012, the right to water. Such calls have been made for decades by Ecojustice, the Forum for Leadership on Water, the Centre for Indigenous Environmental Resources, the David Suzuki Foundation blue dot campaign and indigenous leaders.

Should Bill C-326 be passed, it will be important that the proposals be considered in tandem with the recommendations by the parliamentary committee.

I call on the government to table amendments to the Canadian Environmental Protection Act this year. That would enable them to be debated and implemented as expeditiously as possible to ensure the protection of Canadians.

As my colleague from the Conservative Party noted, yes, the government is showing a greater commitment to removing boil water advisories in aboriginal communities, but no community in 2018 should be suffering under a boil water advisory. Yes, there may be certain gizmos that can be attached to taps, but frankly, many of these communities do not even have water from taps and have to go to a well.

A number of years ago, I wrote a handbook for indigenous communities to ensure that they had protections for their safe drinking water, because there was a law proposed by the Conservative government to regulate safe drinking water in indigenous communities. Regrettably, essentially what that law did was simply transfer liability to indigenous communities.

It is absolutely critical that the resources be given to our indigenous and rural communities so that they can, in fact, be granted the same opportunity many of us have to simply turn on the tap and have clean, fresh water. I have had the privilege of working overseas in a number of countries, such as Bangladesh and Indonesia, and on those occasions, it was not necessarily safe to drink the water from the taps, so I recognize in a very small way what is being suffered in many of the communities.

I again commend the member for his attention to this issue and the initiative he is taking, but I would encourage the government and the committee, when considering this bill, to look at it in the context of the report done by the parliamentary committee.

[John Oliver, Parliamentary Secretary to the Minister of Health, Lib.]

Mr. Speaker, I would like to sincerely thank the member for Lac-Saint-Louis for his hard work and insights on Canada's drinking water guidelines, which he introduced through Bill C-326, and also for his leadership in this area over many years. I know that all members in this House come from ridings that pull their drinking water from multiple sources. In my community of Oakville, we pull it from Lake Ontario. Therefore, drinking water guidelines are essential and important to every one of us.

Canada has a long history of developing guidelines to ensure that Canada's drinking water is among the safest in the world. In fact, the first guideline was published 50 years ago. Today over 100 guidelines are maintained and renewed. If passed, Bill C-326 would help ensure that Canada's drinking water guidelines are protective of health and are comparable to those in leading jurisdictions internationally. Furthermore, it would improve transparency on how drinking water quality guidelines are developed in Canada.

It is important to understand that drinking water quality is the responsibility of all levels of government, from federal to municipal. While drinking water is primarily under provincial and territorial jurisdiction, the Government of Canada plays a central role in drinking water safety. Health Canada works in close collaboration with the provinces and territories to establish science-based guidelines for Canadian drinking water quality, which are published by Health Canada. Each of these guidelines is specific to a contaminant found in Canada. These guidelines are in turn used by the provinces and territories as a basis for establishing their own drinking water quality standards, in accordance with their respective public health priorities. The guidelines are also used to ensure the safety of drinking water in areas of federal jurisdiction.

This collaborative approach between federal, provincial and territorial governments is applied consistently throughout the process, from identifying priorities and assessing risks to developing draft guidelines to consulting with Canadians and working toward implementing the guidelines across Canada. This process is based on robust science, national and international peer review and the consideration of standards and guidelines from other international jurisdictions. This harmonized approach helps ensure consistency in the levels of protection across Canada while respecting the existing constitutional division of responsibilities.

Canada takes an approach to the development of drinking water guidelines that is similar to what many other countries do. Health Canada develops guidelines for substances of concern that are found in Canadian drinking water supplies at levels that can pose a risk to human health. A drinking water contaminant in Australia, for example, is not necessarily a concern in Canada because of differences in industry and geology. This means that the substances needing guidelines or standards will vary internationally. Canada identifies issues that are specific to Canada and takes these issues into consideration when developing guidelines designed to protect the health of Canadians. The science generated, as well as the standards developed by other global authorities, are used to help inform the development of drinking water quality guidelines in Canada.

Every four years, Health Canada, in collaboration with the provinces and territories, conducts a comprehensive review of chemical substances, including new or emerging potential drinking water contaminants. This review aims to assess whether there is new science related to the potential health impacts of a contaminant, new information on Canadians' level of exposure, and any new treatment technology developed nationally or internationally. On the basis of this review, a list of prioritized contaminants is created. This collaborative, science-based process ensures that federal and provincial resources are directed at substances most likely to pose a risk to the health of Canadians.

Internationally, Canada is considered a leader in the development of drinking water quality guidelines. Health Canada is also recognized as a collaborating centre for water quality by the World Health Organization, highlighting Canada's international prominence and expertise. The department has been a contributor to all the World Health Organization's drinking water quality guidelines for the last several decades, and over the past 10 years, the World Health Organization has used Canada's drinking water assessments as the basis for developing its own guidelines for 12 chemical substances and has requested specific input from Health Canada on a further 10.

As part of its assessment process, Health Canada routinely monitors and reviews the drinking water guidelines and standards developed by other key organizations. The science supporting these international standards is taken into consideration when developing our Canadian guidelines.

This approach ensures that Canadian drinking water guidelines are based on credible, science-based criteria and also take into consideration the science behind new and updated drinking water standards developed globally.

The Government of Canada also works closely and shares information with international government agencies. Health Canada recently collaborated with the United States Environmental Protection Agency to develop a risk assessment on blue-green algae, also harmful algae blooms, which affect a growing number of drinking water sources in Canada and the United States. This risk assessment was used as a basis for a Canadian guideline and for a U.S. health advisory on blue-green algae.

Health Canada has also co-operated with Australia in the development of an online risk assessment tool. The online tool is developed to help operators in small communities with small drinking water systems to evaluate their level of risk and prioritize areas for action.

To summarize, Canada's effective, collaborative, science-based process for developing drinking water quality guidelines is among the best in the world. However, are improvements possible? The answer is yes. If passed, Bill C-326 would, for the first time, formalize in legislation the role of the federal government and specifically the Minister of Health to coordinate the development of national drinking water quality guidelines and to consider the guidelines and standards developed in other jurisdictions. This represents a significant step toward improving federal accountability on the issue.

The intent of Bill C-326 is not to question the quality of the work that is being done by Health Canada and our provinces and territories. The intent is to maintain Canada's status among the world's leading agencies on drinking water quality. It highlights the need for our scientists to review the work of other leading agencies to keep abreast of new scientific approaches and studies. It demonstrates the need for having open and transparent scientific processes and to better communicate our work and its importance to Canadians on an ongoing basis.

If adopted, Bill C-326 would strengthen federal accountability by improving the transparency of the process by which drinking water guidelines are developed.

Health Canada is already moving in this direction. In addition to being posted on the Government of Canada's website, new and updated guidelines for Canadian drinking water quality are now published in the Canada Gazette under the authority conveyed to the Minister of Health under the Canadian Environmental Protection Act.

Each guideline published in the Canada Gazette will include a comparison between corresponding guidelines or standards of leading international jurisdictions and agencies. If passed, Bill C-326 would build on these efforts and enhance information that is available to Canadians on drinking water quality guidelines.

Publishing the guidelines for Canadian drinking water quality under the Canadian Environmental Protection Act will help enhance the government's transparency and outreach to experts, stakeholders and interested Canadians, and formalize the consultation process on all guidelines.

In conclusion, Bill C-326, if adopted, would strengthen Canada's efforts to ensure our guidelines are among the best in the world, that they are based on up-to-date science and that they are protective of the health of Canadians. It will inform Canadians and stakeholders of the process used to develop guidelines and how our drinking water quality guidelines compare to standards and the guidelines of leading international agencies.

I am pleased to advise the House that the government will be supporting Bill C-326. Once again, I would like to thank the member for Lac-Saint-Louis for his work on this important issue and for his leadership past and ongoing in ensuring strong drinking water guidelines for all Canadians.

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

Mr. Speaker, it is an honour to rise today to speak in support of Bill C-326, an act to amend the Department of Health Act (drinking water guidelines).

My colleague from Edmonton Strathcona did a great job of talking about things that are missing in this piece of legislation and also what is important.

Before I get started, I want to talk about some of the water defenders in my riding. I want to recognize Linda Safford and the great work that the Comox Valley Council of Canadians do. I want to recognize Dan Lewis and Bonnie Glambeck from Clayoquot Action, and my friend Sarah Thomas, who has fought so much for the Alberni Valley and the protection of the watershed there. I also want to recognize Tsimka and Gisele Martin from Tla-o-qui-aht First Nation for their defence of Meares Island and protecting our water there.

It is really important that we have water defenders in our communities. We are fortunate to have eight Nuu-chah-nulth nations in my riding, the Qualicum nation and the Comox people. They are always there to defend what is important and that is our water.

We rely heavily on clean water in our riding for our water supply. Comox Lake is something we are looking at as a water supply in the Comox Valley to ensure that we have clean water. Meares Island supplies the water for Tofino and Ucluelet is looking at getting its water from Kennedy Lake.

We all know that water makes life possible on our planet. We learn this as children. If we are fortunate to live near the streams, rivers, lakes and oceans of our country, we learn that it is fundamental to our local economies, our culture and our food security.

Too often we take this knowledge of water as the essence of life for granted as we live our lives. We waste it and we pollute it with industrial waste and debris such as single use plastics, which I have raised repeatedly here in the House.

Protecting and preserving our water is urgently required through a national ocean plastics strategy, including filling the legislative and regulatory voids that are required to ensure effective stewardship.

At the same time, there is no question that water is a human right. Nothing can survive very long without it. We can live up to a month without food, but only for a week without water.

Most of us also take the right to safe drinking water for granted because most of us have access to an abundance of fresh water like I just spoke of. I live in a temperate rain forest so we do take it for granted. However, this is not true for two-thirds of all indigenous communities here in Canada. These communities have been under at least one drinking water advisory at some time in the last decade and people in many municipalities as well face repeated drinking water advisories.

This is true, for example, of the Comox Valley in my riding which has been subjected to multiple boil water advisories covering a period of 126 days just over the past three years. We have an application for the Comox Valley water treatment project and we desperately will need federal and provincial support to establish that and ensure that we do not have these boil water advisories and that we know that our children, our elders and all citizens will have access to clean drinking water.

During the last election campaign, the Prime Minister promised to end drinking water advisories in indigenous communities within five years. The government is three years into its term and we are far from that. According to a recent report from the David Suzuki Foundation, the Liberal government is not on track to fulfill this promise and, sadly, it has no plan to get there. The government has two years left in its five-year promise and there is no plan to fulfill this promise. This is completely unacceptable. It is disappointing and frustrating. Frankly, it is embarrassing.

According to a 2014 Ecojustice Canada Report, drinking water standards in Canada continue to lag behind international benchmarks. The report compared the guidelines for Canadian drinking water quality with corresponding frameworks in the United States, European Union, and Australia, as well as standards recommended by the WHO. While Canada has, or is tied for, the strongest standard in 24 instances, it has, or is tied for, the weakest standard for 27 substances. That is unacceptable.

In 105 other cases, Canada has no standard at all where at least one other country does. There is no regulatory framework holding the federal government accountable for safe drinking water in indigenous communities. This is largely because provincial laws and regulations that apply to municipalities do not apply to reserves, which are considered federal lands under federal jurisdiction.

The federal government's unacceptable failure to provide clean drinking water in indigenous communities is still unacceptable, and its funding continues to be inadequate for addressing urgent, immediate drinking water and wastewater and waste management treatment.

While the mandated guideline reviews called for in this bill are important, more stringent national objectives and standards in line with the European Union, United States, Australia and the WHO are clearly required.

In closing, all Canadians clearly do not have equal access to clean drinking water. It is time for Canada to establish a national water policy to secure the principles of water as a human right and as a public trust. We need a plan to implement that strategy.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Mr. Speaker, it is a great honour and pleasure to be in a position where I am wrapping up debate on the first private member's bill that I have had in my career here that has made it to this stage.

I thank all those who participated in the debate. I think we all learned from the perspectives that different parties and MPs have brought to this debate. I know that I did.

I want to make clear that the bill is not aimed at suggesting that we do not have excellent quality drinking water in Canada. I would not want anyone watching this debate to somehow be alarmed or suggest there is a generalized problem. I say that with the caveat that we have a problem in first nations.

I am part of a group that is working with the Minister of Indigenous Services to focus on the first nations water issue specifically. From interactions with the minister, she is deeply committed to getting this job done. In fact, as a sign of how committed our government is, we added water systems to the government's target for maintaining good water systems. If a government were trying to get off easy, it would not do that. Therefore, it is a sign that we take this issue very seriously.

I am very proud of the work that the minister has been doing. I believe we are on track to meet our March 2021deadline. There have been 70 long-term water advisories that have been lifted already. Indeed, it is the result of investment, but it is more than that. It is the result of political will. I am very proud of the work our government is doing.

With respect to the bill, it is not a magic wand. It is one small step in bringing attention to water issues in Canada, which should be moved up on the public agenda.

There is a role for the federal government. Of course water is very much a provincial responsibility, with municipalities involved in managing different aspects of water, but the federal government has a role to play. However, I do not think it is necessarily a question of having, as the member who just spoke said, a broad-based national water vision or strategy. It requires a more granular approach.

By that I mean that the issue of water is so vast that if we try to envelop the whole issue in one kind of policy statement, we necessarily abstract from the discrete issues with which we have to deal. Therefore, we have to build a water strategy from the bottom up. We have to tackle issues like the one the bill attempts to tackle. There are other issues of course that we have to address. I have done that over my years here, including with the member for Edmonton Strathcona when we sat on the environment committee and looked at the oil sands industry and how it managed water in the Athabasca region.

The bill is not a cure all. It is just meant to introduce a little more accountability into the process. We know our government officials, in league with provincial government officials, do a very good job of comparing with standards elsewhere. However, the bill, in a sense, would require them to be a little more proactive. It would require the Minister of Health to be a little more proactive in telling us who the government is comparing to; why it is comparing to a particular country or entity; and explain why, in that comparison, it is focusing on a particular contaminant and maybe not on another. It would permit civil society to see a little more clearly how the government is operating in this respect and to question it on what it is doing.

That is really the essence of democracy in general. In this case, it will help advance the water agenda. It may be a small step, but at least we are going forward.

[The Speaker, Liberal, Geoff Regan]

Is the House ready for the question?

[Some hon. members]

Question.

[The Speaker, Liberal, Geoff Regan]

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

[Some hon. members]

Agreed.

No.

[The Speaker, Liberal, Geoff Regan]

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

[Some hon. members]

Yea.

[The Speaker, Liberal, Geoff Regan]

All those opposed will please say nay.

[Some hon. members]

Nay.