Rahim Jaffer

[Supply, February 10th, 1998]

Mr. Speaker, I will wait until after question period.

[Ice Storm 1998, February 4th, 1998]

Mr. Speaker, I will be sharing my time with the member for Prince George—Peace River and all future times of members of the official opposition will be shared as well.

My faith in the dignity of the human race, and my feeling of national pride have been bolstered by the testimonials I have heard about Canadians coming together to help their neighbours during the ice storm, a tragedy which left a large part of mid-Canada under a frozen blanket.

This event has demonstrated the strength and generosity of the Canadian people and has given us food for thought. We can reflect on the importance of family and of community, without which still more people would have suffered.

This terrible event has, however, also given us the opportunity to reflect on which it means to be a nation. We have heard the warm praises of our Armed Forces, who provided expertise and manpower during the clean-up stage. I too want to thank them for their good work.

We also heard praise for the public and private broadcasters and the listeners who served as links with the communities hit by the storm. They provided continuous information on when power would be restored, while also giving survival tips.

Community groups and local charities also contributed by donating food and money. Volunteers patiently listened to people who were often scared, confused and lonely. They all deserve our thanks and our respect.

I would like to tell my own little story to the House. Not only did the ice storm bring people from central Canada closer together, it also touched people in western Canada, where my riding is located.

An Edmonton businessman told my office about an idea which shows that westerners were truly saddened by the devastation experienced in central Canada. He wanted to send Ontarians and Quebeckers a message telling them they were not alone in their efforts to survive the storm.

My constituent, who is not a wealthy individual, donated greeting cards printed in French and in English. He owns a marketing company that produces greeting cards, and he thought this was a unique opportunity to take part in the relief effort.

These cards are currently being distributed in Edmonton's elementary schools, and the message printed on each of them is simple and sincere. It reads “Our thoughts and our prayers are with you. We simply wanted to give you a warm thought to help you make it through the winter”.

The children who received these cards added their own personal messages. Some of these messages tell the victims not to give up and embrace the good things in life, such as one's family and friends. Others share stories about obstacles that were overcome and send messages of hope.

It is now my great privilege to deliver these messages of hope to the children in the regions in Canada hit the hardest. The opportunity was given to me by a generous businessman, who is not prepared to sit still and do nothing while people he has never met are dealing with the consequences of this tragic event.

I would like to think him not only for his generosity and his community sprit and not only for giving me the opportunity to provide some help but also for reminding hundreds of children in the schools affected that we as Canadians are a family. Sometimes we argue, but, when the going gets tough, we are always there for each other.

[Judicial System, February 2nd, 1998]

Mr. Speaker, all the excuses in the world will not heal the scars this young woman will bear for the rest of her life. She was injured twice: first by her two assailants and then by our judicial system.

Will the minister draw a lesson from this painful incident and immediately amend the law?

[Judicial System, February 2nd, 1998]

Mr. Speaker, in 1996, a 17-year-old Quebecker was brutally raped by two men. Last week, she was raped again, by our judicial system this time, as both men who committed this harrowing crime were allowed to go free.

This unacceptable sentence is the result of the Liberal legal loophole known as conditional sentencing.

Will the Minister of Justice put an immediate end to this legal loophole?

[Canadian Unity, December 1st, 1997]

Mr. Speaker, I wish the hon. minister would act on his words.

The separatists alarm clock is ringing but the government is hitting the snooze button. It is sleepwalking its way toward another referendum.

Why are Quebeckers the only Canadians not being consulted on the Calgary declaration? Why is Lucien Bouchard the only politician talking to Quebeckers on unity?

[Canadian Unity, December 1st, 1997]

Mr. Speaker, ten long weeks ago, the Minister of Intergovernmental Affairs said he was going to consult Quebeckers about the Calgary declaration.

Ten weeks later, he has done nothing. Separatists, however, have not been sitting idle. Lucien Bouchard is already talking about a snap election or referendum.

What is the government doing to ensure that the separatists no longer overtake it?

[Goods And Services Tax, November 28th, 1997]

Mr. Speaker, I rise in the House to speak on Motion No. 93, which reads:

That in the opinion of this House, the government should consider the advisability of increasing literacy in Canada by removing the goods and services tax on all reading materials.

I applaud the member for Dartmouth for presenting this motion. My constituency of Edmonton—Strathcona is home to the University of Alberta, an institution that is poised to become one of the finest in Canada. So I can appreciate how important it is to address the question of taxes on reading materials.

In fact, I even support the argument presented by the hon. member that the GST on books and other reading material works to discourage reading. As the cost of books and reading materials goes up, the demand goes down. That is the irrefutable law of supply and demand.

I am surprised to learn, however, that the member from the New Democratic Party has embraced such an important free market concept. I wait eagerly for the day when the NDP caucus stands in solidarity in the House and declares that taxes kill jobs. It will be a great day for Canada.

At the heart of the motion is the claim that taxes can create perverse incentives. In this case it is argued that taxes on books discourage people from purchasing books. This was not the intended purpose of the tax but the unintended and unseen consequences of the tax.

This argument is completely valid and it is an argument that has been made throughout history by many great scholars. It was an argument made by 17th century satirist Frederick Bastiat in his classic essay What is Seen, What is Not Seen , and it is an argument that is being made today by Nobel prize winning economists like James Buchannan and others.

What I find curious, however, is that while the members of the New Democratic Party understand the principle of supply and demand when it applies to books, they do not understand this principle in other applications.

For instance, when Reform argues that increases to the CPP contributions are a tax on jobs, the members of the NDP seem confused. However, when the cost of labour goes up, demand for that labour goes down. Taxes kill jobs.

When the cost of books goes up, the demand goes down. It is a very simple law of economics that has been proven over the course of history.

Let me provide the House with another example. The Liberal government taxes consumption at 15%. That means that when we spend our money we are now paying about 15% in taxes on average. When we save our money we are taxed at 54%.

This is another example of the perverse incentives which taxes can create. The incentive in this case is not to save. With the state of our CPP, encouraging Canadians not to save is a very bad idea, and yet I have heard so many individuals on the ideological left claiming that RRSP tax exemptions should be eliminated because they are a tax avoidance measure employed by the wealthy.

There is also the question of capital gains tax. This is a tax on productivity. When people are taxed for creating wealth, disincentives are created for productivity. Yet those on the ideological left are often heard calling for a higher capital gains tax. That is a recipe for economic stagnation and unemployment.

I could go on and on. For every tax and government regulation created there is an unseen and unintended consequence. Overtaxed cigarettes and liquor create underground, illegal black market industries. Increased payroll taxes create unemployment.

It is simple. Big government is the very source of our economic problems and not the source of the solutions. Big government is a disease masquerading as its own cure. I wish the NDP could come to appreciate this fact.

Having said all that, I regret that neither I nor the members of my caucus can support the motion. Reformers believe in tax cuts and we hate the dreaded GST, but it is our position that tax cuts should be broad based so that one product or one industry is not given preferential treatment.

I am sceptical of the merit of eliminating taxes on certain products or even on certain industries while neglecting other products or industries.

We subsidize Canadian book publishers to the tune of almost $20 million. Now the Liberals are adding another $15 million to this subsidy in the interests of promoting Canadian culture. A GST tax exemption would add to this preferential treatment.

Do not get me wrong. Canadian businesses are overtaxed. Canadian consumers are overtaxed. However, a fair tax system is one which provides for broad based tax relief.

Every Canadian business makes the claim that its product or industry makes a vital contribution to Canadian society and should be granted certain tax concessions. I am very sympathetic to this claim. Canadian businesses are overtaxed and they are looking for any way to get out from under the thumb of the federal government, but we must be extremely careful when we create tax concessions which give certain industries preferential treatment.

My hon. colleague from the NDP will very likely point out the many preferential tax concessions which are currently in place, but I would counter that by promising that a Reform government will implement a more simplified tax system which will be built on the principles of equality and fairness.

Having said all this, I am not convinced that GST on books is affecting literacy in Canada. Access to literature through public libraries and public schools ensures that those who wish to have access to books can do so. However, I would agree that access to the latest information may be hampered as universities and public schools try to find money in their budgets. But this is not a threat to literacy in the country.

I can understand the frustration which the hon. member feels for this issue. The Liberals broke their promise to scrap the GST as it applies to books. The Reform Party has criticized the government's lack of accountability in this House. Campaigning promises should be kept.

We support the member of the NDP in so far as she is bringing the question of accountability to the attention of this House. We cannot, however, support the motion for the reasons I have already stated.

In closing, I applaud the hon. member for the NDP for her clear economic thinking and for bringing the issue of accountability to this House.

[Debt Reduction, November 28th, 1997]

Mr. Speaker, on Tuesday, the Conseil du Patronat told the Minister of Finance that any budget surplus should be devoted to reducing the debt and the tax burden.

The Minister of Finance heard that same message from ordinary citizens and from business groups.

Does the Minister of Finance have an excuse for not complying with this request?

[Income Tax Conventions Implementation Act, 1997, November 28th, 1997]

Mr. Speaker, much of Bill C-10 concerns simple parliamentary housekeeping. I think my hon. colleague from Calgary West would agree with that.

However, as my hon. colleague from Calgary Southeast has pointed out in past debates on this bill, part VII of this act concerning tax treatment of social security payments from the U.S. social security fund to Canadian residents reveals another Liberal tax gouge.

I am losing track but I think this is tax hike number 38, what a record.

Arguments have been made in this House and in committee that this bill will make amendments to the 1995 third protocol that will increase tax fairness and provide tax relief for lower income Canadian seniors.

Tax relief and fairness for low income seniors is an important and noble goal but unfortunately it is a goal that will not be achieved through this legislation.

In fact, I find it difficult to belief that tax relief is the goal of a Liberal government at all because the very tax treaty that imposed a 25% flat withholding tax for U.S. social security payments coming to Canadian residents was negotiated and agreed on by this government, the very government whose members are saying that it was an unfair agreement.

To fully understand this issue, I have to review the history of public policy on social security payments and taxation. It has given me a pretty clear idea of the low quality of the legislation before us today.

The 1984 U.S.-Canada Income Tax Convention Act allowed 50% of social security payments to Canadian residents to be included for purposes of Canadian taxation. That made a lot of sense because it was the same treatment that U.S. recipients of social security have. That is to say 50% of their social security payments were included for the purposes of taxation. With only 50% of their social security payments included for taxation, many low and middle income seniors avoided paying any taxes on their social security income.

This policy was changed in 1995 when the government entered into negotiations with the Americans to produce the third protocol which imposed a 25% flat withholding tax on those payments being made to American residents retiring in Canada.

For low income seniors, this meant 25% of their income disappeared. After Canadian seniors let this government know that their treatment under the third protocol was completely unacceptable, the government went back to the table.

The fourth protocol, the results of which are included in Bill C-10, would see the inclusion rate of U.S. social security payments rise from 50%, as it was before 1985, to 85%. That is a 70% increase on the inclusion rate.

Every senior who pays taxes will now pay more under this legislation. It is not just wealthy seniors, it is all taxpaying seniors who will be hit by this tax grab. This very fact was admitted in committee and, while I was not privy to the discussions, it was a matter of public record. Section 7 of part VII of Bill C-10 is clearly another Liberal tax grab.

When seniors suffering under the 1985 treaty asked for tax fairness, when they asked the government to do something about the 25% withholding tax, they were not looking for a 70% tax increase.

What this policy will do is penalize any and all seniors who have private savings that supplement their incomes so that they are at least within the lowest tax bracket.

Middle income seniors who have made sacrifices and wise financial choices about their retirements are being punished. This is not exclusively the very rich. It is every senior who pays taxes and who collects the U.S. seniors benefits, whether they make $10,000 a year or $1 million.

I am sure that this point will be ignored and my colleagues from across the way will remark that Reform is protecting the interests of the wealthy. This is simply not true and I would ask my colleagues to think about the facts before they perpetuate misunderstandings and misinformation.

Further to the issue of U.S. social security payments to Canadian residents it must be known that unlike CPP payments that are taxed only as income when they are withdrawn, U.S. social security payments are taxed at the time they are made and not when they are withdrawn. So Canadians receiving U.S. social security benefits have already paid taxes on those benefits.

A Canadian working in the U.S. would pay taxes on his or her premiums but would pay little or no taxes when he or she claimed the benefits. This makes sense since seniors are less able to pay the taxes when they are on a fixed income in their retirement years.

If that worker who contributed to the U.S. social security system moved back to Canada he or she would have to pay taxes on 85% of his or her social security income. They are being taxed twice. This is not only unfair, it violates the intended goals of our tax convention which is to eliminate any tax duplication.

I want to stress some key points before I conclude. First, this legislation was rushed through the industry committee. The critic for this bill, the hon. member for Calgary Southeast, only discovered that Bill C-10 would proceed through the industry by chance at the last minute. This makes me pretty suspicious that this legislation contains merely house cleaning matters.

Second, as I understand, the chair of the industry committee disallowed the hon. member for Calgary Southeast to request that seniors affected by Bill C-10 be allowed to testify before the committee. If there were nothing offensive in the legislation, the government would have nothing to fear from being transparent.

Another unfounded concern that came up in committee is that Reform is trying to delay the issuance of cheques owed to seniors by not allowing Bill C-10 to be fast tracked through the committee. Bill C-10 provides for the partial or full refund to some seniors of the IRS to a 25% withholding tax which occurred because of the original Liberal bill that was flawed.

The government has also said that Reform is doing this in an attempt to protect a small group of high income seniors from taxes. This is not true. The facts are every senior who receives U.S. social security and who pays taxes will pay more under this legislation. The inclusion rate for calculating taxable income moves from 50% under the pre-1996 convention to 85% under this bill, the fourth protocol.

By suggesting that Reform somehow wants to protect its idle rich supporters by supporting this bill, the government apparently feels that any senior who pays taxes is a high income senior and an idle rich supporter of the Reform Party.

For the record, let me remind the House that demographic studies show that the Reform supporter on average is less wealthy than the average Canadian. Our supporters are not very rich. They are average Canadians who are hurt by the heavy burden of taxation. However, I am not here today to speak exclusively on behalf of Reform supporters. I am here to speak on behalf of Canadians.

I would like to bring the attention of the House to the fact that the committee reports contain a clear statement by senior tax bureaucrats that the inclusion rate would rise from 50% to 85% under Bill C-10, and that this rise would cost all taxpaying seniors.

Reform resents the suggestion that we are responsible for delaying Bill C-10. We did not create the problem in the first place; the government did. Reform did not delay bringing forward this legislation until after the election; the government did. Reform did not wait three weeks since the debate to bring Bill C-10 to committee; the government did. And Reform did not refuse to hear witnesses explain the impact that this would have on their livelihood; the government did.

I am not naive to the fact that government backbenchers followed the lead of their cabinet. But an issue that involves raising taxes of Canadian seniors is just the sort of issue that should compel hon. members of the House to either change their caucuses or defy their caucuses.

Canadian seniors need a unified voice in the House, a voice that will speak resolutely whenever the government reaches its hands into their pockets. I fear that they do not have this voice with the government. This is not just about money, it is about seniors with retirement dreams and it is about seniors who will face their retirement years in government imposed poverty.

[Income Tax Conventions Implementation Act, 1997, November 28th, 1997]

Can I seek the unanimous consent of the House?