Yvan Loubier

[Budget Implementation Act, 1998, March 24th, 1998]

You were not here.

[Budget Implementation Act, 1998, March 24th, 1998]

Who is the liar?

[Budget Implementation Act, 1998, March 24th, 1998]

You are a liar.

[Budget Implementation Act, 1998, March 24th, 1998]

Liar.

[Budget Implementation Act, 1998, March 24th, 1998]

Precisely. This is unacceptable. This is an outrageous approach. The public expects some openness on the part of the Minister of Finance, who should present the true figures, the true situation, the true expenditures for this year, for next year and for three years down the road. The minister should not include in the 1998 budget expenditures that the government will only make in the year 2000, and make it look as if the money was going to be spent this year. These figures make no sense.

People are tired of the government's treating them like idiots who cannot understand balanced budgets and realistic estimates, as opposed to unrealistic, cooked up estimates such as those presented by the Minister of Finance.

Just six months after the Bloc Quebecois presented its deficit forecast for the year ending in April 1997, we anticipated the deficit would be approximately $10 million. With the meagre means available to us as an opposition party, we were nonetheless able take a pencil and paper—we also used a computer, which helped—to forecast what the deficit would be for the next six months. We also looked at the deficit forecasts for the previous year.

We asked the Minister of Finance whether it was true that, far from reaching about $19 billion or $20 billion, as mentioned in the last budget, the deficit for 1997-98 would actually be approximately $10 billion. The minister stood up angrily and almost threw his budget papers at us as he replied that this was nonsense and that we were just throwing out figures.

Six months later, in Vancouver, he confirmed that our figures were right. Six months later, he admitted his forecast was off by 63%.

If we were able to make calculations with a pencil and a computer, it seems to me that, with the help of the hundreds of officials and experts at Finance Canada and Revenue Canada, he could have come up with figures that more accurately matched reality, but he never did. From the very first budget the minister brought down in 1994, we have been presented with nothing but hogwash, making it impossible to see where we are at.

Now the Minister of Finance is making himself look good because all that matters to him, the champion of surpluses, of jack-in-the-box budget surpluses, is the Guinness Book of Records . But that is not what the people want. What they want is honesty and openness from their Minister of Finance. They want to be given the straight goods, not the sort of nonsense we are being dished up, especially in the last budget.

In 1996, the Minister of Finance pulled the same trick he is pulling now with the millennium fund. He included in the 1996 budget the $1 billion in compensation unfairly paid to the maritimes, when this compensation should have appeared after the maritime provinces harmonized their PST and GST, in other words this year, in 1998. He put down $1 billion under fiscal 1996-97, two years in advance, when the actual expenditure came two years later.

What he is doing is not right, and he should look out, because we are getting a little tired of the way he presents things and takes us for something we are not.

The Minister of Finance should look out, because of these examples and because of many others it would take too long to go into here. For instance, why does the finance minister not create an independent EI fund? The answer is that he likes to hide the truth. He knows that he can easily help himself to $6 billion annually from the EI fund. This does not show up anywhere because there is no specific entry showing that the Minister of Finance is going to help himself to $6 billion from the EI fund. He puts it under general revenue. The Minister of Finance's refusal to create an independent fund strengthens our feeling that he has things to hide, that he is not telling us the truth.

The Minister of Finance is really starting to get on our nerves. We began to doubt his integrity, especially when he introduced Bill C-28, which is 464 pages long and which contains two paragraphs on his international shipping companies, and did so without warning, on the sly. When the opposition discovered these two paragraphs, which could mean tax benefits for him, he turned to his ethics counsellor, Howard Wilson, who is paid by the Prime Minister's office to save his neck.

People will realize one day, and I hope they will come to understand it from our arguments, that they have been had, that the Minister of Finance is playing tricks on them, that he did not tell them the truth, that he presented incorrect figures and that he asked them, in recent years, to make unprecedented sacrifices in terms of the excess taxes they have paid. Thirty billion dollars in four years ain't peanuts. He also asked them to make unwarranted sacrifices in the area of social assistance.

He asked the provinces, in particular, and the poor as well, to make unwarranted sacrifices. He also asked students to make extraordinary sacrifices and he is now asking the sick to make extraordinary sacrifices.

Injecting $1.5 billion a year over the next three years is not going to change anything. People have to know that, in addition to cooking the figures, the Minister of Finance is cooking the facts.

In 1995, he brought down a budget that had a domino effect. He announced once in it—he did not dare say it a second time, because he was ashamed—that the social transfers to the provinces to help fund social assistance, higher education and health would be cut annually.

Instead of cancelling the cuts, he announces millennium scholarships for some students, in the amount of $2.5 billion but only starting in the year 2000, as well as $1.5 billion more for the health care system for the next three years. Although the Minister of Finance does not put it that way—the way it is presented is very hypocritical—he is cutting $6 billion per year until the year 2003 from transfers to the provinces. There are $30 billion in cuts still to come.

On the government side, they are bursting with pride over this. Either out of ignorance or ill will, I do not know which, they are telling us “The government has heeded the people's cry of alarm, and will put $1.5 billion per year into health”. My foot they will! They will cut $6 billion per year from health and social programs. That is the reality. They will take $30 billion dollars away from it between now and the year 2003. That figure is a very long way from the $1.5 billion they are putting back into health. They have just made $30 billion in cuts, mostly from health.

The bottom line, then, is that in his 1995 plan the Minister of Finance forecast cuts of $48 billion in health, transfer payments to the provinces to fund health care, higher education and welfare. Now, he is all proud to announce that he will not be cutting $48 billion, but only $42 billion. There is nothing in this government's measures, or the implementation of part of what was forecast in the latest budget via Bill C-36, to be proud of.

This budget—and my hon. colleagues will have the opportunity to return to this point—contains other unacceptable measures which do not reflect what people wanted. For the most part, it contains some general measures which will not provide all those who have done the Minister of Finance's work for him, in other words getting public finances back on an even keel, with any reward for all their efforts over the past four years to achieve that result.

The very day of the budget speech, the public's reaction of those really responsible was obvious. People were angry with the Minister of Finance. They felt it was ungrateful of him to make them do the work and then to boast about his wonderful accomplishments over the past four years. Those who are really responsible, and who received nothing in return, will not forget this.

When the Minister of Finance asks them to co-operate on federal-provincial programs, I doubt he will be successful, and I am not only referring to Quebec—because our province will not forget the millennium scholarship fund—but to the other provinces as well. When Mr. Romanow said he was speaking on behalf of the other premiers in Canada and felt like going after the Minister of Finance to get what he is owed, his statement may have signalled the beginning of more strained relations between the federal and provincial governments.

It seems to me the Minister of Finance had always told the provinces, directly or indirectly, that some day, when our fiscal house was in better shape, he would compensate them for some of the sacrifices they had made. That time has now come, with the last budget and with the next three years.

The Minister of Finance never had a kind word for his provincial counterparts and for all those poor people who had to put up with his savage and drastic cuts. The minister will pay for this.

His integrity will also take a beating, because he has been hiding the real budget figures for the past four years. The result of hiding the real figures, of fixing them, of almost falsifying them—to the point where editorialist Alain Dubuc wrote in La Presse that the budget was almost misleading—is that the finance minister's integrity appears to be vulnerable. Moreover, the minister is sponsoring bills to benefit his own foreign shipping businesses in Liberia, Barbados, the Bahamas and elsewhere. That takes the cake, as far as I am concerned.

Throughout the second reading of this bill, we will point out certain aspects of Bill C-36 relating to the budget, including those that I just mentioned. We are going to repeat them over and over again, and that is not all. Outside the House, we are going to launch a real public information campaign so that people know what sort of government, what sort of finance minister, they are up against, who is really responsible for the problems in the health sector. The guilty party is not Mr. Rochon in Quebec City, but the Minister of Finance here in the House of Commons in Ottawa. These are things we are going to say and keep on saying.

We have not done with the business of the finance minister's ships. If members opposite think we are going to work ourselves into a state over Bill C-28 and the finance minister's apparent conflict of interest while they look all innocent, they are mistaken. We are not about to give up. At the least, the minister appears to be in conflict of interest. He could be in total conflict of interest. I am convinced that he made a mistake in introducing this bill and that he made a mistake in approving a bill that will favour his offshore shipping holding company and shelter it completely from Revenue Canada's reach.

That having been said, I turn the floor over to my other colleagues. They will examine other very important aspects of the finance minister's last budget as they relate to Bill C-36.

[Budget Implementation Act, 1998, March 24th, 1998]

Mr. Speaker, the Liberals are having fun and we are wondering why. They should be working at meeting the needs of the public instead of making jokes as they always, or almost always, do when we deliver speeches on the real issues.

We have before us Bill C-36 to implement certain provisions of the last budget tabled by the Minister of Finance. I am pleased to speak on these provisions and I would like, for openers, to define what we expect from this budget and which expectations have not been met through Bill C-36 before us, which implements certain provisions of the budget for 1998-99.

Just a few months ago and during the election campaign as well, we asked the Minister of Finance to pay special attention to actions that adversely affect the provinces. Since he tabled his first budget in 1994, the Minister of Finance has made cut after cut after cut in transfer payments for social assistance, postsecondary education and health.

He has cut back so dramatically that 52% of the success achieved in terms of balancing the budget and restoring health to the public finances has in fact been achieved through the sacrifices the provinces have had to make because of the drastic cuts made by the Minister of Finance. This means that 52% or most of the sacrifices were made by the provinces, which are really the ones who restored the public finances to health.

We therefore ask that the government take a very simple measure, which was proposed last year by Quebec Premier Bouchard and approved by all the premiers across Canada. The government was asked to use, over the next two fiscal years, that is to say 1998-99 and 1999-2000, 50% of the forecast surplus in tax points—the real surplus, not the one given in the Minister of Finance's budget, with its rounded down and close to falsified figures—to counteract the harm done to Quebec and to the rest of Canada, in the health sector for instance.

A transfer of just 50% of the surplus in tax points, in an area that would become wholly provincial in the coming years, would be sufficient to remedy the increasingly irremediable harm the Minister of Finance has done to health, social assistance and higher education.

The Minister of Finance refused to respond. He even refused to acknowledge that the provinces had inherited the entire responsibility for putting federal public finances in order.

During the election campaign, as well as in the months following it, we also called repeatedly upon the Minister of Finance to change the way he was handling employment insurance and the EI fund.

We proposed three changes which reflected a consensus not only among Quebeckers, but among all Canadians, about the program and the way the fund made up of employer and employee contributions was being managed. Let us not forget that the federal government has not put a red cent into the fund for years. The employers and employees are the ones who contribute year in and year out to the surpluses. Because of the high rates that have been set, they are contributing to the huge surpluses the fund has generated, to the tune of $6 billion yearly.

We therefore called for three things relating to the employment insurance fund. First, that the Minister of Finance stop using the surplus to put his financial books in order. The employment insurance fund is in place for two reasons: to support those who are without work, and to attempt to help them back into the work force.

Instead, the Minister of Finance has been shamelessly pocketing the surplus, and continues to do so. He has not met the expectations of the Bloc Quebecois. He is still pocketing this $6 billion annually in order to build up a spectacular surplus and make himself look good as Minister of Finance.

Second, we called for a substantial reduction in EI premiums in order to boost job creation. The surplus in the EI fund did not just miraculously fall down from heaven. If there are surpluses, it is as a result of the excessive contributions employers and employees have to make. This limits our job creation capacity. In Quebec, Ontario, the west, British Columbia and in the maritimes, employers and entrepreneurs are saying so, and even unions are saying so.

Not only has the Minister of Finance not reduced contribution rates substantially, as we asked, but he has kept them at an even higher rate. We talked about an overall drop in contribution rates of $3 billion, half of the surplus in the employment insurance fund. The Minister of Finance gave us a few tens of millions of dollars in reductions, which has no significant impact on job creation.

The third change we sought, which was not in the budget speech and is not in Bill C-36, is the creation of an independent fund with the employment insurance fund, independent of the government's general balance sheet, so that we may follow the progress of contributions, the size of the fund and the contributions made by employers and employees, and ensure that the fund is really managed appropriately for the labour market.

The auditor general has also asked for this and he has received no response from the Minister of Finance in the budget or in Bill C-36, which implements some of its provisions.

We called for a significant reduction in people's taxes. Some 52% of the results obtained in the effort to improve public funds are due to the provinces' efforts. Bernard Landry and Lucien Bouchard in Quebec did the work there, to the tune of 52%, and not the Minister of Finance.

Taxpayers' share in improving public funds in the past four years amounts to 37% of the total effort. In other words, since the Minister of Finance has been in his position, since he has become a part time shipowner—sometimes he is full time, it depends on the bills he introduces—Quebec and Canadian taxpayers have paid over $30 billion more in taxes than they should have, had the Minister of Finance indexed the tax tables and made a targeted reduction in individual and SMB taxes, as we asked him to do.

Instead, however, he preferred to keep taxes high. These levels, together with the lack of changes in tax rules, to indexing, for example, have resulted in taxpayers paying $30 billion more in taxes than they should have.

The Minister of Finance took $30 billion out of our pockets. This means that 32% of the budgetary effort is not the result of his own efforts, of his department's efforts, or of his innovative spirit—I would rather not talk about the minister's innovative spirit—but of the efforts made by the provinces and the taxpayers.

If the minister's estimates had been based on the proper data— and we will get back to this later on—if the minister had shown the true picture in terms of expenditures and revenues, in terms of the surpluses generated over the years, he could have made a substantial effort to reduce personal and even corporate taxes, but he did not, even though it would have been desirable.

The minister could have done even more to alleviate the burden of taxpayers and businesses if he had listened to us. For four years now, we have been telling him—with the figures to support our claim—that it is possible to reform Canada's individual and corporate tax system and to get rid of all the obsolete provisions that no longer meet the needs of our businesses—in the context of globalization and competitiveness—and of our families, given the current socioeconomic reality.

The first question we asked the Minister of Finance when we got here was when would a true tax reform take place to improve our system and increase our ability to reduce taxes and better manage revenues.

The minister made us wait. We waited for the first two years, since his inaction left us with no choice. But in the second year we told ourselves that if the Minister of Finance could not take his responsibilities, if he was not innovative enough to come up with a new way to collect taxes—that is to say a more efficient and beneficial way for society as a whole, and not just for the federal government—we would propose ways to do it.

We wrote over 300 pages of suggestions to reform personal and corporate taxes. When we tabled our document, the Minister of Finance said we had done a great job, a job that required incredible dedication. It is no laughing matter trying to clean up the Canadian taxation system, which has remained basically unchanged since the Carter Commission in the later 1960s. It is not easy to pick your way through it and identify those measures that still serve a purpose as opposed to those that no longer serve any purpose at all, but which are costing Revenue Canada a lot of money.

Taxpayers must not forget that every time some person or some business somewhere does not pay taxes or avoids paying part of the taxes they would normally have had to pay, had it not been for some outdated tax loophole, which does nothing for society or the economy, but which is there because it has been almost or completely forgotten, or because the Minister of Finance lacked the resolve to do anything about it, it is the average taxpayer who makes up for what the business or rich individual should have paid but did not because of this loophole. We have to remember that.

So, the Minister of Finance had four years to undertake a complete overhaul of the taxation system. He did nothing, and we see the results. Over the last four years, taxpayers have paid $30 billion more in taxes, and the much-heralded cuts over the next three years pale in comparison to what could have been achieved, and in comparison to what has disappeared from taxpayers' pockets through the inertia and ineptitude of the Minister of Finance.

We also asked the Minister of Finance something else—and he did not listen to us—and that was not to create new programs. He he turned a deaf ear and did as he pleased. He acted as though nobody existed but himself and created new programs with the assistance of his Prime Minister, who delights in leaving his symbolic mark on Canadian political history.

He went ahead and created a new program, one we detest, called the millennium scholarship fund.

This is a program we detest because it encroaches, and shamelessly to boot, into an area of jurisdiction which generations and generations of politicians, generations of premiers as well, starting back in the 1960s with Jean Lesage, have jealously guarded as exclusive to Quebec.

According to philosopher Jacques Danton, a people's first need, after bread, is education. Education is the backbone of the survival and progress of every nation. Education gives us everything we need to understand. It tells us where we come from, who we are, who we want to become. Education is the basis of any people's survival.

We understood this in Quebec years ago, and being federalist or sovereignist does not change it in the least. When it comes down to it, every Quebecker is a nationalist. When it comes down to it, every Quebecker wants his people to continue to survive, to progress, to expand as an international presence, to endure for as long as it is possible to imagine.

One of the cornerstones of our longevity as a people, one of the cornerstones of our strength as a people, our economic strength as well as our cultural strength, the strength to which we owe our existence, is education.

Each time the federal government has lifted a finger to interfere in education, or a federal political party or its leader has talked of education, of Canada-wide standards, of making our children take tests, we in Quebec have risen up in opposition. Even some federalists have joined forces with the sovereignists to point out how deeply rooted our belief in education as our prerogative is rooted, so deeply rooted in our convictions that we rise up in aggressive opposition as soon as actions are taken, or words spoken, that point to the possibility of federal intrusion into education in Quebec.

The millennium fund, the millennium scholarships, which are without a doubt the Prime Minister's idea of the way he can leave his mark on the verge of the 21st century, are totally unacceptable to us. This is something we will fight against until our last breath. It raises a hue and cry in Quebec and will continue to do so in the coming months and years. We will never agree to their investing in this field. We will not let them put their foot in the door in order to gain more entry and to take the education sector away from the exclusive jurisdiction of Quebec and make it either shared or the exclusive jurisdiction of the federal government.

We will never let anyone tell us Quebeckers, francophones most of us, what our children will have to learn in school or what they will be tested on in exams at the end of the year. No one but ourselves will test their skills.

We will use every means we have to block the implementation of the millennium scholarship fund and to ensure that what the Quebec premier, Lucien Bouchard, and minister of education Pauline Marois have called for comes to pass. They are calling for the withdrawal of the millennium scholarships, with full compensation for Quebec, given Quebec's exclusive jurisdiction over education.

We will repeat this demand ad nauseam. We will also denounce ad nauseam in this House and elsewhere the claims of the federal government.

This matter really energizes my colleagues in the Bloc and myself, because it symbolizes perfectly what we have always opposed in the federal government and what the Prime Minister has always presented as the centralizing claim of the federal government. We will put all our energy into it and get into the thick of it to make sure that this so thoroughly detested program never makes it to Quebec.

It is not just the way this intrusion into Quebec's exclusive jurisdiction was forced on us, but also the way it was presented, that obliges us to reject it.

I am referring to the Minister of Finance's accounting practices. For four years now—members can check Hansard —there were always questions about the Minister of Finance's dubious public accounting practices. I am not alone, nor is my party, in having raised this problem of borderline accounting practices. Two or three times, to my knowledge, the auditor general singled out the Minister of Finance because of his less than orthodox approach to accounting.

I mention the example of the millennium fund because it comes up in Bill C-36 before us this morning. In the case of the millennium fund, from which initial grants to so-called deserving students will not be made until the year 2000, the full amount of $2.5 billion has been posted to this fiscal year, that is, 1998-99, when—and I would like to repeat this—the first millennium scholarships will not be handed out until the year 2000. Immediately this year, they slap down the cost of a program that will not be implemented until the year 2000. This makes no sense.

There is no accounting rule by which one may honestly attribute to the current budget expenditures that will be made only in two years' time. Once again, the auditor general criticized the finance minister's approach. On leaving the House and reading the budget, we also criticized his way of doing things. This is not the first time, and we will return to this a little later on.

This method of accounting produces the following sort of nonsense. On page 12 of the 1998 budget plan “Building Canada for the 21st Century”, incomplete data are used to show that the government's budgetary balance, in other words the deficit or surplus, will be 0.0 in 1997-98, 0.0 in 1998-99 and 0.0 in 1999-2000. This is partly due to the fact that the $2.5 billion of the millennium fund has been posted under this fiscal year, when payments will not actually be made until the year 2000. An actual surplus of $2.5 billion that could have been generated this year has already been removed.

It is not for reasons of prevention that this amount has been set aside, because it will be spent in any event on items other than the millennium fund. What it boils down to is that the Minister of Finance has gotten us used to his fiddling with the numbers. He is literally cooking the books, and we are not the only ones to say so.

The day after the budget was tabled, all serious financial analysts—whether they are federalists or sovereignists—said it did not make any sense. There is a budget plan, but we do not really know where we stand, because of things like the $2.5 billion for the millennium scholarship foundation which the government has already posted to this fiscal year. It is becoming impossible to make proper estimates. We can no longer say whether the expenditures and revenues indicated are appropriate, because the figures were fixed. The government made sure that, for every year, its expenditures would be more or less equal to its revenues, so as to arrive at a balanced budget. It is a shame to present things in this fashion.

[Income Tax Amendments Act, 1997, March 23rd, 1998]

Madam Speaker, like my colleague from the Reform Party, I did not plan to speak on the motion put forward by the New Democratic Party, but what I have heard the secretary of state and member for Stoney Creek say just made my hair, or what is left of it, stand on end.

I have heard things that verge on misleading statements. I have heard things that totally contradicted—I hope it was by ignorance, not by maliciousness or to be dishonest either—the facts and figures that have been presented to us since 1995 in the successive budgets brought down by the Minister of Finance.

My colleague from the Reform Party touched on the issue. I would like to go into it in a little more detail.

In 1995, when the Minister of Finance brought down his budget, it provided for cuts to be made systematically every year until 2003 in what came to be known as the Canada social transfer. This Canada social transfer was designed to fund provincial initiatives in higher education, social assistance and health.

In 1995, the Minister of Finance pressed the start button for systematic cuts to be made year after year until 2003, cuts totalling $6 billion each year in higher education, social assistance and health.

Now they come up with this Bill C-28. What does Bill C-28 say? It says, and I agree with my colleague from the New Democratic Party on this, that instead of cutting a total amount of $48 billion between now and the year 2003, cutting $48 billion in higher education, social assistance and health, the government will only be cutting $42 billion. And we are supposed to applaud! I find it totally abhorrent to present things in such a way, to use them to trick the public, because that is what is being done right now.

It is not true that there is $6 billion more for health care. It is not true that there will be $1.5 billion more in the coming years for health care. There will, instead, be $6 billion in cuts for every year between now and 2003, and a sizeable amount of that will be in health care. That is reality.

At the same time as health care is being slashed, we are being told that $1.5 billion is being added yearly for the next three years. The truth is that they are cutting $6 billion per year in social programs and health. Let them stop trying to fill the public's heads with nonsense, let them stop expecting the public to swallow any old thing they present it with.

The cause of the present sorry state of the health system is not Minister Rochon in Quebec, nor the other provincial health ministers. The main responsibility lies with the federal government. The little band-aid solution offered during the last election campaign in response to the heavy pressures for something to be done, that $1.5 billion was just a drop in the bucket, barely remedying an iota of the pillage the government had wrought in the health field. That is the reality.

[Income Tax Amendments Act, 1997, March 23rd, 1998]

Mr. Speaker, our fellow members from the Reform Party and the Liberal Party should show some respect toward my Bloc Quebecois colleague, who is making an eloquent speech.

[Income Tax Amendments Act, 1997, March 23rd, 1998]

moved:

Motion No. 2

That Bill C-28 be amended by deleting clause 241.

Madam Speaker, I am pleased to participate in the debate at report stage on Bill C-28.

There are a number of things wrong with Bill C-28. We could mention the government's measures feigning sensitivity with respect to social programs and the deterioration of health care that it has itself brought about through three years of cuts in transfer payments to the provinces in the health, social services and education sectors.

I listened this morning as a journalist put a question to the Leader of the Government in the House of Commons. What the journalist asked him was this: “Has the Government heard the public's cry of distress about health care?” The Leader of the Government in the House replied as follows: “Of course it has. In Bill C-28 you will see that we have added $6 billion for health care and social services. If opposition members vote against Bill C-28, it is because they have not heard what the public is saying”.

If that is not the ultimate in demagoguery, I do not know what is. Because what Bill C-28 says about the $6 billion transfer is that, instead of cutting $48 billion between now and 2003, the federal government is going to cut $42 billion. We will never give our support to a bill that would fly in the very face of what people want, which is an end to cuts in social programs and health care.

There is also a serious problem with an apparent conflict of interest involving the bill's sponsor, the Minister of Finance.

Clause 241 of Bill C-28 provides new tax benefits to international shipping corporations, particularly international shipping holdings. Clause 241 amends section 250 of the Income Tax Act to exclusively protect international shipping holdings against any Revenue Canada claims on taxes applying to profits or other revenues.

There is a moral issue relating to this legislation, but there is also another problem: the bill, including clause 241, was introduced by the Minister of Finance, who owns a holding corporation called Canada Steamship Lines.

The Minister of Finance sponsored a bill that provides him with tax benefits, given his involvement in international shipping.

There is at least an apparent conflict of interest in this legislation, and this is contrary to the Prime Minister's code of ethics adopted in June 1994, soon after he took office. Indeed, this code of ethics refers not only to actual or potential conflicts of interest, but also to apparent conflicts of interest.

There is obviously an apparent conflict of interest, given that the Minister of Finance tabled and sponsored a bill with provisions that favour the finance minister's international shipping activities.

When the Bloc Quebecois put the finger on the problem with Bill C-28, after reviewing the 464 pages of this omnibus legislation, which includes only two paragraphs on international shipping, the Minister of Finance left the House with a historic statement. He was speechless. He began to stutter like people who are caught in the act, like people who have something on their conscience and who just got caught with their hand in the cookie jar.

The second reaction came from the Prime Minister during oral question period. We had barely finished putting our question when the Prime Minister jumped out of his seat to come to the defence of his finance minister, saying he had done nothing wrong and that this new provision would not in any way benefit Canada Steamship Lines, which the finance minister has owned in full since 1988.

The next day, the Deputy Prime Minister joined the Prime Minister in saying that this measure did not apply to Canada Steamship Lines. That same day, reference was made during Oral Question Period to the Department of Finance press release which also stated that Canada Steamship Lines would not benefit from these measures.

The third reaction, as time went on, was less decisive and less definite. It came from corporate taxation division senior advisor Len Farber, the very person to whom we were referred by the Minister of Finance and who is supposedly his right-hand man in terms of policies and political strategies—likely more political than anything else.

Mr. Farber appeared before the Standing Committee on Finance and was asked a series of questions which led him gradually into an area where he felt cornered. He was forced to admit that “Yes, these provisions could be available to that company”, because reference was being made at that time to companies like Canada Steamship Lines, the company of the Minister of Finance.

When the government found itself backed into a corner on the fact that clause 241 could apply to Canada Steamship Lines, as even its vice-president, Mr. Préfontaine, admitted, saying “Yes, perhaps, but we have no intention of applying it”, it turned to the process itself. By February 12, it was starting, through the Prime Minister, to make statements like: “Yes, but all of the rules were respected in tabling the bill. The Minister of Finance did not see its contents, even if he was the one sponsoring it”.

On February 12, the Prime Minister pointed out that, according to what the ethics counsellor had told him, everything was done according to the rules and the Minister of Finance was not at fault. He put his assets and shares into a blind trust and is therefore protected from any apparent or actual conflict of interest.

Unfortunately for the Prime Minister, five days after his statement in the House, his ethics counsellor appeared before the Standing Committee on Finance and was also obliged to admit—not only verbally, but also in his written report—that there was at least a possibility of a problem, because introduction of Bill C-28 had not followed normal procedure. He stated that, normally, had he been approached by the Minister or the Department of Finance on the procedure for tabling, steering or sponsoring this bill, the Minister of Finance would not have acted in this way.

The ethics counsellor recognized that there had been at the very least an apparent conflict of interest. But he later went back on his position and told the finance committee “Look, even if Canada Steamship Lines stood to potentially benefit from these news provisions and the Minister of Finance stood to save substantial amounts in taxes”—we are looking at millions of dollars in the future—“that is not the problem. The problem is that the process should have been more consistent with the rules established in 1994”.

Mr. Wilson, the ethics counsellor, has many problems. The first one is that he changes his tune every time he is questioned on the subject. He writes one thing and says another or vice versa. He has a credibility problem.

Second, his credibility problem is compounded by the fact that he is paid by the Prime Minister, when he should be an independent counsellor reporting to Parliament. In fact, in the red book in 1993 the Liberals stated, and I quote “A Liberal government will appoint an independent ethics counsellor to advise both public officials and lobbyists in the day to day application of the code of conduct for public officials”.

He is not independent, he is accountable to the Prime Minister. This means the Prime Minister can get him to say just about anything, as he is the boss. That is why the government's ethic counsellor has lost all credibility.

The ethics counsellor should be dismissed and replaced with a real counsellor, who would be independent from the government, to shed light on cases like this one without having to wait for an opposition member to put his or her finger on a problem. As it is, the ethics counsellor has become the one who saves ministers' heads.

The motion basically calls for the deletion of section 241, which gives an unfair advantage to shipping companies like the one owned by the Minister of Finance, Canada Steamship Lines, until this matter and the finance minister's apparent conflict of interest have been clarified.

In fact, on February 12, the four opposition parties got together to write a letter to the government, asking that a special committee be struck to shed light on the whole matter. Last week, I personally made a similar request to the Prime Minister, but have not received any reply.

I make the same request again, but in the meantime section 241 should be deleted because we are convinced that there is, at the very least, an apparent conflict of interest around the introduction of the bill containing section 241.

[Income Tax Amendments Act, 1997, March 23rd, 1998]

I did not ask to speak to that motion.