Rahim Jaffer

[Finance, February 1st, 2005]

Mr. Speaker, it is a pleasure to speak in this prebudget debate session. I was pleased to hear from my colleague from Edmonton—Leduc who highlighted many of the systematic problems that we still see with the government in the way that it forecasts numbers and in the way that it approaches budgetary processes. He highlighted some of the tax issues very well.

I would like to follow up on some of those issues, namely the issue of small business from my experiences and the experiences still of my family. I will then focus specifically on some of the infrastructure challenges, which were just talked about, because there are some huge critical challenges not only in Windsor and other parts of this province but right across the country. We need to have a systematic approach on how we can fund some of these critical challenges that we have in infrastructure across the country.

We have heard from a number of members in the House, not only from our side in the opposition but from a number of members who do agree that Canadians are taxed too heavily. This is a continuous problem. Regardless of what tax cuts have been implemented, through regulations or through other forms of increases, Canadian families still have a huge burden, especially middle and lower incomes families. They have huge challenges in making all their commitments and making ends meet and yet we still have not seen any effective tax relief come forward from the government, especially in light of the surpluses that continue to grown.

Many of my colleagues have talked about the fact that the finance minister had challenges in reading what surplus numbers were going to be coming down, especially when there can be such a huge mistake made: a forecast of $1.9 billion when in fact it was a $9.1 billion surplus, which is just outrageous. It clearly indicates that we need to do something when it comes to reducing the tax burden on Canadian families.

We in the opposition were glad we were able to include some of our thoughts in the Speech from the Throne when it came to putting a focus on what is hopefully the government's mandate to reduce overall taxes on middle and lower income Canadians.

As my hon. colleague from Edmonton--Leduc mentioned, we know that high taxes reduce growth, which happens at all levels of the economy, whether it is small, medium or large businesses. We have seen that continuously where the economy is not growing at the pace that it should, especially because of the fact that taxes continue to choke the productivity in this country.

As I mentioned, with my background in small business I remember working long hours trying to meet all my commitments when it came to payroll taxes, to paying my suppliers and when it came to ensuring I was paying my employees effectively. I remember that at the end of the day, if nothing else was adding up, I was the one taking the pay cut. I, as the business owner, made sure that I met all my commitments.

I can look at my parents today who are working as hard as ever. They have been in this country now for over 30 years, and very thankful to be in this country, but as small business owners they work from early in the morning until late at night, especially when there are changes in the economy and people are not spending as much money on some of the items that they sell through their retail businesses. They are not having coffee or other things that they work so hard to produce and provide. They are the ones who take the cut but the taxes remain the same. There is no break for them when it comes to the obligations that the government puts forward, especially when it comes to taxes and when it comes to regulations.

Those are the things that governments can do something about, especially when it comes to encouraging these people who work so hard. My family is a perfect example of that, as I was not too long ago, with some of the challenges that we had to continually face.

I will be addressing that in a little while, but the EI surplus is something that continues to irk especially small business owners who work so hard. They have to pay the EI tax and contribute on behalf of their employees and then they look at the surplus that exists. I believe it is over $40 billion and the government still has not made any effort to give that money, which rightfully belongs to the employers and the employees, back to those people who work so hard.

We argue that this high tax position is both unfair to Canadians whose take home pay has barely grown over the last 15 years and dangerous to our long term economic growth and therefore to our ability to fund our social safety net. I continuously travel and speak especially to people who are approaching retirement. They are concerned about making contributions to their CPP and yet they know that in the long run that program will not be there for them in the way that they had been promised and had hoped for.

Some of those people may have been fortunate enough to put extra savings aside but the government has done nothing to encourage that sort of retirement savings, especially in the way that we should be because we are facing a huge crisis when it comes to the working group that will be out there. The number of employees versus the people who will be retiring is a huge problem.

The budget should include a longer term standard of living strategy that starts at the process of strengthening Canada's competitive position through a program of targeted tax relief, reduction of burdensome regulations and strategic spending and measured debt repayment. Some of my colleagues talked about measured debt repayment. We have not seen any clear vision when it comes to the government and paying down debt. We continue to push the government to hopefully make some sort of legislated effort to pay down debt. We would be more than happy to provide some of the details for the government if it wishes.

I have talked about the long term strategy of raising the living standard for Canadians. During the past 40 years Canada's productivity has remained relatively unchanged compared with that of the United States. It remains stuck at about 85% of the U.S. level. This productivity gap is relevant because it accounts for an income gap of just over $6,000 per Canadian compared with Americans.

When we look at unemployment rates we see that they are set well above those in the United States and this has persisted for a quarter century. I think it was in the 1970s, in looking at some of the figures, that Canadian and U.S. unemployment rates were the same. We have obviously continued to slip and I think that is really affecting, as we know, the productivity gap. If we had some prudent fiscal management by the government I think it would have a huge impact on the way that our productivity gap would be dealt with.

I also mentioned the EI surplus. This is still something we have not dealt with. It is about a $46 billion of surplus. The government should stop overcharging Canadians. EI premiums should be lowered immediately and stakeholders must be given a say in the benefit and premium levels.

I now want to talk about the infrastructure and the critical problems that we have. We have been very disappointed with the way the government has come forward. As we all know, it talked about the new deal for cities over the course of the election. It has been close to six months since the government took power and yet we have seen nothing come forward when it comes to any new deal for cities, nor any idea of how the fuel tax money will be transferred to the communities. I think the minister has been dragging his feet. No new information has come out on how that will work. I take it that we will be forced to wait for the budget to see how that money will be transferred and what sort of criteria will be placed on that new deal when it comes to transferring the money.

This is an issue that goes way back. We know that the fuel taxes being collected on gasoline were supposed to be invested into critical infrastructure, namely highways and other forms of infrastructure in our municipalities, but we know that the government took the fuel tax, put it into general revenues and spent it on things like the sponsorship program or other things that did not give value back to Canadians when it came to problems in infrastructure.

Hence, today, whether, as I mentioned, it is in the area of Windsor or all the way out to B.C. or even in my own backyard in Edmonton, we see huge problems with the bridges, roadways and pot holes. Canadians see that on a daily basis. We have to figure out how we are going to proceed in order to actually bridge that gap in critical infrastructure.

We on our side have proposed ways to identify what critical infrastructure means and how to coordinate a strategy with the provinces and municipalities to ensure that sort of infrastructure gets funded. We have not seen any form of direction from the government. We hope to see some sort of announcement on whether or not it plans to impose some sort of conditions on the fuel tax transfer, but also to look at a long term strategy. Is there a plan in place to actually fund infrastructure in a strategic way, working with stakeholders, to be able to plan on a long term basis so that we can start attacking the infrastructure deficit that is in the billions of dollars and continues to rise?

As many of my colleagues have said, we would like to see a real effort on the part of the government to get its fiscal house in order. It seems to have fallen by the wayside, especially in light of all the surpluses that the government is continuously collecting.

We need to give Canadians a break but we also need to make those strategic investments. Infrastructure is something that communities have been calling for, whether it is rural or urban, and we need to see some clear criteria that government is going to bring forward hopefully in this budget.

[Finance, January 31st, 2005]

Mr. Speaker, I wish to congratulate my colleague on her very well versed and very informative speech. I found it refreshing to hear, as she mentioned, that younger people are focusing on debt and on problems in the country when it comes to paying back debt.

I agree with her fundamentally and it was interesting to hear the question from the member of the NDP. We can focus in on investment, especially strategic investments on the environment, but one way to continue to foster that growth here, which is the argument we have been talking about all along, is in creating the environment for investment so that these companies can continue to meet better targets when it comes to environmental standards, something that the NDP members refuse to even look at. If they would take a moment to look at our plan they would learn a fair amount. I think they should do so.

My hon. colleague talked a lot about youth. She spoke about it very passionately. One of the things that we continuously forget--and I know that it has come up at different times in the past--is the loss of our youth in this country, who are looking for better opportunities and unfortunately leave many parts of the country and even look at the United States as an alternative. It is just a sad thing in this country that we are not creating a competitive environment which would keep some of the talent that was educated here working here.

I would like her to address that. She spoke about it briefly, but could she expand on how we can foster that youth and creativity here instead of losing them to the brain drain elsewhere?

[Broadcasting Industry, December 8th, 2004]

Mr. Speaker, the Minister of Canadian Heritage is just grumbling. She is spreading her culture like jam and gets away publicly with censorship. The president of the CBC may not have been her choice, but he is sticking to his mandate, unlike Telefilm Canada, and respectfully suggests the minister do the same.

Can the minister resist the temptation to interfere in programming?

[Citizenship and Immigration, December 2nd, 2004]

Mr. Speaker, the immigration minister told the House on November 19 that she has an itemized binder of ministerial permit requests made by the opposition, but when asked for this itemized breakdown of permits by riding, she tabled an answer yesterday which claimed that the department did not keep those statistics.

The only conclusion possible is that she deliberately is trying to conceal the number of permits granted in Liberal-held ridings. How many permits has she personally signed off on requested by Liberal ministers?

[Citizenship and Immigration, December 2nd, 2004]

Mr. Speaker, the Minister of Citizenship and Immigration is rending her garments in public, but hiding behind the veil on the question of granting permits on a riding by riding basis, except of course, in her riding, which lit a fire under the Liberal caucus, according to the discreet member for Mississauga.

How many discretionary permits did she sign in her riding in June 2004?

[Committees of the House, November 30th, 2004]

Mr. Speaker, that is a tough question to answer in the short period of time that I have, but I appreciate the question.

As I stressed in my presentation, we need to address the duty remission orders immediately. In fact, we raised it in April of this year in committee because we did not want to leave it until the end of this deadline that we are facing. We still have no indication from the finance minister if the department is going to extend these remission orders.

Clearly, I feel it is very important and that is one of the reasons we addressed it in April. I hope we will get some indication, after today's debate, from the Department of Finance and the minister that this will happen.

Regarding the other question that the member asked, it is clear that one of the reasons of addressing the issue of tariffs and dealing with this particular industry, which has been around for a very long time in this country, is to ensure that it remains competitive, employs Canadians and stays here at home. One of the fears that we have, by not addressing the issue of tariffs, is that these industries will leave.

[Committees of the House, November 30th, 2004]

Mr. Speaker, I do appreciate the thoughtful question from the parliamentary secretary. I tried to approach the issue in two ways when we dealt with it at committee. The hon. member was present and we had a huge debate.

What the member is asking for specifically also was addressed by the industry. Can it remain competitive with this particular regime? Also, should we be phasing out the tariffs over time or should we do it over a certain time? How long should the duty remission exist?

Basically the feedback we received from the industry was that it could remain competitive if this were not in place, but obviously not overnight. This is the argument we are making. That remission order needs to be extended.

I cannot answer on how long it should be extended for, because clearly there are certain things we can do in order to deal with allowing for the industry to become more competitive. That is, where we do have trading partners, we can deal specifically with these tariffs that are charged on these types of products and start negotiating through the WTO and others, such as the Free Trade Area of the Americas, with the countries that are not dealing with reducing the overall tariffs.

The government can actually lead on that and try to lead the argument to reduce the overall tariffs. If that could happen more quickly, then we would not need this remission order in place for very long. Clearly our industries can compete once we address those issues of tariffs. Ideally, I would like to see them phased out quickly as long as we can do something on the flip side and deal with the overall tariff regime.

I know that initially we are calling for the extension of the remission order, so that will deal with the initial $30 million that the parliamentary secretary mentioned. We are willing to deal with that right away.

As for eliminating the rest of the tariffs, I am willing to open up that debate and look at ways to be able to phase it in. I know that it would be difficult to do it overnight, just as it would be difficult to eliminate the remission orders overnight. I would be willing to debate that and see how we could possibly phase it in, as I said, for the best interests of the industry.

[Committees of the House, November 30th, 2004]

Mr. Speaker, I would like to start by saying that we in the Conservative Party support this motion for concurrence. This motion moves concurrence in the first report of the standing committee, as we have been debating this morning, “Duty Remission and the Zero-Rating of Tariffs on Textile Inputs: The Canadian Apparel Industry”.

I want to share some background on this because, as the revenue and customs critic, I was quite involved at the time we actually pushed this report forward. This issue first came to the finance committee during the third session of the 37th Parliament when we heard from witnesses on amendments to Bill C-21, an act to amend the customs tariffs. As I mentioned, I was in charge of this at the time. The issue was that the duty remissions which underpin Canada's apparel industry are set to expire on December 31, as we have heard.

Bill C-21 also did not look at the overall tariff structure or textile imports into Canada. That is why we decided to continue on. We said that we would deal with the remission issue but then would ensure that we reviewed the overall tariffs to see what we could do as a committee to work with the industry, and then finally we would look at another problem within the industry, one that dealt with gender biases.

That is what I will do. I will quickly read over the recommendations. We have been focusing on the first one quite heavily this morning, but I think the other two are just as important.

The first recommendation states:

That the federal government immediately extend, for a further seven years, the duty-remission orders covering the apparel sector that are set to expire on 31 December 2004.

Recommendation two states:

That the federal government immediately end tariffs on inputs which are not produced domestically. Textile producers seeking continued tariff protection should be required to establish that they sell their products to Canadian apparel manufacturers.

Finally, the third recommendation states:

That the federal government immediately undertake a study of temporary adaptation measures to enhance competitiveness, as well as the benefits and costs of eliminating tariffs on imports of fabric for use in the Canadian apparel sector, the types and quantities of products produced by the Canadian textile industry and the practice of tariff differentiation on fabrics based on their end-use. The results of this study should be tabled in Parliament no later than January 31, 2005.

That is what the original report said. From what I understand, there may have been a recommendation on or an amendment to that particular date.

Mr. Speaker, I just want to remind you that I will be splitting my time with the member for Cambridge.

All those recommendations, as we can see, are very clear. I think they were agreed to by all members, as I have mentioned, and a lot of thought went into structuring them in such a way that they would not cause problems for the finance department, especially in regard to extending those duty remissions in the meantime.

The remission orders have been around for quite some time. They were first introduced around 1997. There are remission orders for various textiles. Specifically, there was a new shirt remission order that provided shirtmakers with transitional assistance to help them remain in the shirt business in Canada. Similar remissions are also being considered for manufacturers of outerwear apparel and women's blouses and shirts. Shirting fabric and outerwear fabric are sub-sectors that are currently receiving assistance under existing remissions. This means that the duties on those particular areas of fabric will be reduced.

Duty remissions will enable Canadian manufacturers to complement the products they manufacture in Canada so that they would help to continue to encourage our industry to grow and flourish here in Canada. That will also help the textile apparel manufacturers in these import-sensitive sectors to adjust to the same kind of increased competition faced by shirtmakers. This recommendation calls for the extension of these remission orders for the next seven years. This was an easy decision for the committee to make and was reached unanimously, as I mentioned.

The surprising thing about it, as I mentioned in a question to the parliamentary secretary, is that there has not been any action by the government even though many representatives of the finance department themselves said that this issue needs to be dealt with and that we were getting closer to the end of the deadline. Why was there not greater attention paid to what other help is required to keep our industry competitive? Why was there not greater attention paid to the tax structure and the tariff structure?

My colleague from Peace River raised the idea of whether we should even be placing tariffs on these particular products here in Canada, seeing that many of the companies are importing these products that are not produced here. It seems to put them at very much of a competitive disadvantage with all these other competitors around the world. If the government had taken action at the time, maybe we could have moved this industry forward and we would not on the eve of this deadline be faced with this very important motion here in the House.

In the words of the committee:

--remission orders are, by their very nature, an incomplete and ad hoc method of addressing the needs of the entire Canadian apparel sector with respect to input costs: some textiles and sub-sectors are covered, while others are not. Moreover, we note the comments made by witnesses that the 31 December 2004 expiration date of the duty-remission orders is fast approaching, and companies need to make procurement and employment decisions in the immediate future. Consequently, it is vital that the federal government take immediate action to, at a minimum, maintain the current system.

Hopefully that cannot be impressed upon the government too much. I hope that message will get to the finance minister and that action will be taken immediately.

In my remaining time, I would like to focus on the last two recommendations.

The second part of the report details the mishmash of bureaucracy that government employs to deal with determining what is Canadian-made fabric and what is not. Simply, this recommendation calls for a streamlined process to determine if a fabric is made in Canada or not. If it is not, then it should not be entitled to tariff protection, as this raises the cost of importing it into the country. If it is, then it is necessary to see that the fabric is being put toward Canadian uses and not just being produced because of outdated tariff protections. This initiative is estimated to save the apparel industry approximately $9 million a year in unnecessary duties.

As I have said, extending this would specifically help Canadian companies with their inputs. Some of these products are not available in Canada. Clearly that is something of which we should be cognizant. If we are not producing these products at home, we should lower those tariffs because it would give Canadian companies the opportunity to access those particular products. A good example of this that was brought out in the committee was the idea of lycra or other poly-synthetics that are not produced here. Importing these products is very expensive.

Finally, the third recommendation dealt with the end use of fabrics when they are imported into Canada, especially the built-in gender bias that I spoke about. When textile importers bring in a fabric, they must declare what the end use of that fabric will be. For instance, if silk is imported to produce ties for men, the tariffs are not high; they fall under a preferential tariff. However, if silk is imported to produce women's blouses, it is subject to higher duties and tariffs. Therefore, women's blouses are more expensive because the fabric costs more to bring into the country.

It is really bizarre in this day and age that this sort of differential exists. We in the Conservative Party find it really unreasonable for the Liberals to be promoting this sort of gender bias in today's society. It does not make any sense. Gender bias could be eliminated with that simple recommendation.

In the little time I have left, I want to impress upon the House, as I did during the period of questions and comments, that this issue has unfortunately been dragging on for far too long. This affects our industry from coast to coast.

The committee received a number of submissions in the past. It studied the issue a great deal in the past as well. It is not like this has not been lingering around, especially when it comes to the extension of the duty remissions. I think it is clear. There was unanimous support on the committee. There seems to be unanimous support in the House, from what we have heard from the previous chair of the committee and members of the NDP. I am sure we will hear that from the Bloc as well. It seems that there should be some indication from the Minister of Finance that this particular act of extending the remission orders will be put in place.

This has really left the industry in a bit of a lurch. I have to impress this upon members. I was talking to some of the members of the industry. They are making plans for next year. They are trying to be competitive and want to continue to employ Canadians, but they are trying to deal with an industry structure that is very outdated and not responsive to the challenges they are facing.

I agree with the parliamentary secretary when he says it is up to the finance minister, that the finance minister does not have to adopt all the recommendations in this report. That is fine. We will deal with those other recommendations very soon, I am sure, but clearly we have to extend those remission orders so that our industry can feel safe about continuing to operate in this country, continuing to employ Canadians and still remaining competitive.

I will impress again on the Minister of Finance that he should not wait another seven years to deal with this issue. Let us address the tariff structure. Let us ensure that our industries remains competitive here in Canada. Let us not drag our feet on this any longer.

[Committees of the House, November 30th, 2004]

Mr. Speaker, I, too, would like to echo my congratulations to the former chair of the finance committee. When we brought these recommendations forward, he was very helpful in ensuring that we worded them in a way that was acceptable to all the committee, which then further led to unanimous consent of the committee.

I know the hon. member said it, but it is important to continue to press the issue of extending the remissions. I almost fell off my chair when I saw an NDP member in the House rising to call on the government to reduce tariffs or taxes on industry. I do not know if it is because of the visit of President Bush today. Maybe it is having an influence on the NDP. However, it is good to see that party calling for a reduction. The member from Winnipeg was not there during the initial meetings of the finance committee on this matter.

It is important that we look at the issue and note that there is a timely situation here. When the remissions were first introduced in 1997, the current Prime Minister was the then finance minister. The commitment he made at the time was that the government would introduce the remissions, but it would ensure a review of the overall tariff structure on the industry and work with the industry to reduce any challenges it might have as it was restructuring.

I hope the parliamentary secretary, who is now in charge of a different portfolio, will continue to press the finance minister to address the issue of remissions. However, I hope we will be able to work with the industry in restructuring. We should do that in a timely way, not wait for another seven years.

[Citizenship and Immigration, November 25th, 2004]

Mr. Speaker, Terry Koumoudouros, owner of the House of Lancaster strip club, has been a faithful donor to the Liberal Party of Canada, giving over $5,500 to Liberal candidates since they became government.

We know his intention was to get more strippers into Canada, circumventing our immigration laws. Was it the intention of the minister to send her chief of staff and campaign manager to solicit campaign contributions as a quid pro quo for her services?