Yvan Loubier

[Budget Implementation Act, 1995, June 5th, 1995]

Mr. Speaker, the problem, with Bill C-76, is in the section dealing with transfer payments-

[Budget Implementation Act, 1995, May 31st, 1995]

Mr. Speaker, once again, I am pleased to participate in the debate on the transportation of western grain.

Most of the amendments now being discussed concern the compensation to be paid to western producers since, by the year 2001, the preferential Crow rate applied to the transportation of western grain to the main points of export will be abolished, as will the Crow rate itself.

The government is trying to transform a grain transportation policy which has been in effect since the end of the last century into a western agriculture development and diversification policy. The Crow rate has been an issue for many years. Many attempts were made to abolish that tariff system dating back to the 19th century, but no consensus was ever reached on how to do it.

Eliminating the preferential rate has the effect of triggering a decrease in the price of western grain. Consequently, abolishing the preferential Crow rate on grain exports provides a competitive advantage to western beef and pork producers. According to various studies, that advantage is estimated at somewhere between $8 and $15 per metric tonne of western grain. So, by triggering this $8 to $15 decrease in the price of a metric tonne of grain, the elimination of the Crow rate destroys the competitive balance between the western and eastern economies, which are respectively based on grain and livestock production.

The abolition of this transportation tariff provides a competitive advantage for western pork and beef producers, who will be in a better position to compete with their Quebec, Ontario and even international counterparts.

During the numerous debates that we have had in recent years concerning the Crow rate farmers in Quebec, Ontario, the maritimes and some in the prairies and British Columbia said that they accepted this fact. The accepted the fact that abolishing the preferential rate would have an impact on the local price of grain in western Canada and that it would change the balance.

If my memory serves me well, even in Quebec, the Union des producteurs agricoles was saying in 1982: "Abolish the preferential rate, stop paying hundreds of millions of dollars a year to maintain this rate structure and we are prepared to accept the fact that such a measure will lower the local price of grain and will thereby help increase livestock production in Western Canada". And now, not only will the reduction in the local price of grain help increase livestock production in the west to the detriment of eastern producers, but the government is telling western producers that it will compensate them for the elimination of the Crow benefit, that it will give them $1.6 billion tax free in transition payments, which is more like $2.2 billion.

Not only has the government reduced local grain prices thereby encouraging livestock production in the west, but it is giving western producers $2.2 billion based on the farmland they own, and that goes for grain producers as well as for beef and pork producers. It is ridiculous to abolish a transportation rate structure and, at the same time, to give compensation payments that will serve to subsidize western economic diversification and the development of livestock production.

It makes no sense that this part of the bill provides for the payment to western producers of $2.2 billion, when 24 per cent of this money, which is federal, comes from producers in Quebec. It makes no sense that these subsidies are being handed out so that western pork and beef producers can compete with our producers in Quebec. In any event, there are many who say that that is not how they see the federal regime. It makes no sense at all.

Those who are sceptical about the effect of this approach on the production of pork and beef in Quebec need only look at what happened in Alberta in recent years with the Crow offset, a policy that my Reform colleagues probably know all about. The result was a 10 per cent annual increase in Alberta's pork production with a policy that was almost identical, but that was provincial in scope.

So that is clear. We are saying that this policy is inequitable. It is inequitable because it disrupts the balance between the east and the west and, in addition, gives western businesses a competitive edge over their eastern colleagues, particularly those in Quebec.

If at least some thought had been given to the effects of this subsidy on eastern producers and some sort of compensation considered for eastern producers, had the funds been available, that would already have been a slight improvement. Furthermore, it has been estimated that just abolishing the Crow rate

would have an effect on Quebec's agricultural economy of between $24 million and $46 million. So we were told by the UPA president himself, Laurent Pellerin, when he appeared before the finance committee two weeks ago.

Quebec is offered nothing, even though it is recognized that there is an imbalance that goes back to the end of the last century.

We find it deplorable that this second crop of Liberals are doing exactly the same as the first crop. In 1982 a similar bill was tabled, a bill that provided for compensation to the west. The federal government was not in the financial situation that it finds itself in today, compensation could perhaps have been considered, but no thought was ever given to the negative effect on Quebec producers.

Now, they come back, because that bill was put aside, when Mr. Eugene Whelan was the Minister of Agriculture. At the time, they said: "Since we cannot come to an agreement, we will put it aside".

Today, they come back with this bill, at a time, moreover, when the financial situation is far from rosy, and they want to pay western producers $2.2 billion as compensation for the elimination of the Crow rate, just like that.

The official opposition is strongly opposed to such a decision, because at a time when the UI funds, the transfers for the underprivileged and the transfers to the provinces are being slashed, the government is able to come up with $2.2 billion to meet the electoral needs of the few Liberals out west and to try and win over the Reformers' supporters.

We support the elimination of the Crow rate, but it should be eliminated immediately, without any compensation. We also deplore the fact that the Reform members, who are usually so eager to protest when the underprivileged are subsidized, are keeping quiet, because this compensation is being granted to their own constituents. I find that most deplorable.

What I also find deplorable is not only what the Liberals did, but also what the Reformers did. They did not attend the sittings of the finance committee when we talked about ways to improve or to repeal some of the provisions found in Bill C-76. If I were in their shoes today, I would be ashamed to put forward amendments, since they refused to hear anyone, except for a few witnesses from western Canada who are as far to the right as the Reformers have been since the election.

This is totally unacceptable. The decisions of the government concerning the western grain transportation sector are unacceptable, and the attitude of the Reform members in this House is unacceptable.

[Budget Implementation Act, 1995, May 31st, 1995]

moved:

Motion No. 78

That Bill C-76, be amended by deleting Schedule II, on pages 46 to 48.

[Budget Implementation Act, 1995, May 31st, 1995]

moved:

Motion No. 17

That Bill C-76 be amended by deleting Clause 21.

Motion No. 18

That Bill C-76 be amended by deleting Clause 22.

Motion No. 19

That Bill C-76 be amended by deleting Clause 23.

Motion No. 74

That Bill C-76 be amended by deleting Schedule I, on pages 39 to 45.

Mr. Speaker, I am pleased to table this series of amendments to Bill C-76, more specifically to the part of the bill which repeals the Western Grain Transportation Act and which transfers, at least as regards that part of Bill C-76, the railway line regulations to the National Transportation Act, 1987.

These amendments are tabled for a simple reason. We feel it is unfair to apply a double standard when it comes to streamlining railway operations in western and in eastern Canada.

Indeed, several sections of Bill C-76 seek to maintain western lines used for grain transportation, for reasons of public interest. In other words, under Bill C-76, a western line will be maintained if it is deemed to be of public interest, even if it is not cost effective, as long as it is used to transport grain.

However, the rules are different in eastern Canada, and that is why we speak of a double standard. Indeed, at least until the Minister of Transport tables appropriate legislation, some branch lines and main lines are being closed in the east, particularly in Quebec, based only on cost effectiveness. This is why we say there is a double standard. In the west, railway lines are being protected.

But the east is passed over because it is not cost effective. Just look at the double standard regarding the west: a huge compensation package, literally huge, will be paid to western producers to offset the decision to abolish the Western Grain Transportation Act.

And when the federal government commits to paying $1.6 billion in tax-free compensation over the next three years to prairie farmers because it is going to phase out the Crow rate, a preferential rate, over a period of six years, that $1.6 billion tax-free is really worth $2.2 billion.

The federal government did not compensate Quebec industrial milk producers when it reduced dairy subsidies. Neither did it compensate them when it announced, after GATT negotiations, that it will be opening up our borders more and more to foreign competitors. Quebec farmers were not compensated when federal subsidies were cut here and there. They were told: "We are cutting, so deal with it".

The federal government is asking all Canadians, all Quebecers, to tighten their belts while it hacks away at the unemployment insurance fund, social assistance transfers to the provinces, post-secondary education and health, tax benefits for seniors. For example, when the Minister of Finance's first budget abolished the old age tax credit, it took $500 million out of seniors' pockets. There is also the threat of cuts to old age security. But, at the same time, the federal government' old double standard comes into play: it is greasing the palms of western producers, the "cattlemen", to the tune of a $2.2 billion package to compensate for the gradual phasing-out of the preferential rate for western grain transportation, which was already loathsome in itself. There was no uproar from Reform members regarding that move.

When subsidies are paid to their constituents, there are no shouts of protest. Not a peep from the hon. member for Capilano-Howe Sound, who merrily keeps hitting at the neediest in our society, day in, day out, and who even suggested abolishing all social programs in Canada. There were no protests from him when it was about subsidizing the people in western Canada, the people he represents. It is perfectly proper to pay billions of dollars to grain producers in the Prairies.

Yes, a double standard, because by getting rid of the Crow rate and paying a subsidy of $2.2 billion, the government is upsetting the balance achieved at the end of the last century, in 1897, when this rate structure was introduced. It upsets the competitive balance that developed over time between western grain producers and eastern producers who are mainly involved in meat and dairy production.

Although the gradual phasing out of the Crow rate destroys this balance, there is no mention of compensation for eastern producers. Not a word about compensation for farm producers in Quebec. However, destroying this competitive balance will

result in losses estimated at from 24 to 40 million dollars annually, losses that Quebec farm producers will have to absorb. The federal government, which has always applied a double standard in the case of eastern farm producers and farm producers in Quebec is not providing any compensation for Quebec producers.

Negotiations between the federal government and Quebec producers have just ended. Last week, I was told that what the federal government offered was peanuts, a small amount that might be paid at some time in the future, provided Quebec producers keep quiet and do not condemn the inequities of this system.

A double standard, because abolishing the Crow rate means that local grain prices in western Canada will go down-not the international price but the local price. This provides an incentive for animal production.

As the preferential rate is phased out and ultimately abolished in 2001, western beef and pork producers are being given a considerable competitive edge over Quebec producers. And on top of this, as I said before, they are getting $2.2 billion in federal funds, part of which, in fact 23.8 per cent, is paid for by Quebec taxpayers.

And so federal subsidies are being given to western farmers, subsidies paid for in part by Quebecers' taxes, enabling western pork and beef producers to come and compete with Quebec producers in their own market.

If this is fair federalism, what can unfair federalism be like? If flexible federalism means looking only at the collapse of a balance in the west and not looking at the other part of the country, which is affected by a decision such as the one to eliminate the WGTA and then compensate western farmers, there is a serious problem here.

We would have preferred, and this is the thrust of our amendments, first, that the Crow's Nest rate, the preferential Crow's Nest rate, be eliminated immediately and not over the next six years. The debate on this issue has been going on in Canada since 1978. I was present at the first, the second and the third debate, in different positions. Quebec's position has remained unchanged: if the preferential Crow's Nest rate, which has no equivalent in the east, is to be abolished, let us get on with it. As for the producers, and here I agree with the Reform Party on certain points, when they talk about areas other than those they serve, they should be made competitive right away.

Why gradually reduce the Crow's Nest subsidy and why gradually get around to increasing railway transport rates, when, according to the Reform Party, all of the west should operate as a free market system, efficiency driven and subsidy free?

They are engaging in double talk. When it suits them, they oppose subsidies. When it does not suit them, because the pressure in their ridings is too great, they say nothing. Look at them. They have no amendment to eliminate the $2.2 million in compensation to western grain farmers.

We in the official opposition would have preferred this rate structure and the compensation to be dropped immediately, because Quebecers and Canadians everywhere else are being asked to tighten their belts. They are not getting any compensation. There is no transition.

When the Minister of Finance decided to withdraw $2.5 billion from the unemployment insurance fund, he did so in one shot, all at once. He said nothing about transition. He said nothing about transition for the poorest families either, for those who are the most disadvantaged whom we have deprived of their only way out, through public housing, for example. He made no mention of transition, the Minister of Finance. There was no talk of spreading these decisions over five or six years.

It is outrageous that, for election purposes, the Liberals, who, as we know, are not strong in the west, are offering gifts to western voters and forgetting about voters in Quebec and the rest of Canada in general.

I find this double talk, this talk of the extreme right, from those beside us really distasteful in the context of subsidies to the most disadvantaged to ease their misery. The Reform Party's attitude toward our society's most disadvantaged is of the extreme right, but when it comes to paying out $2.2 billion to western producers, it becomes most conciliatory, nearly socialist.

The thrust of our amendments is: let us get rid of the Crow rate.

[Budget Implementation Act, 1995, May 31st, 1995]

moved:

Motion No. 5

That Bill C-76 be amended by deleting Clause 11.

Motion No. 6

That Bill C-76, in Clause 12, be amended by replacing line 11, on page 9, with the following:

"12. Paragraph 47( b ) of the National Transportation Act, 1987 is replaced''.

Motion No. 7

That Bill C-76 be amended by deleting Clause 16.

Motion No. 8

That Bill C-76, in Clause 17, be amended by replacing lines 20 to 22, on page 10, with the following:

"branch line or a segment of it than to continue to make payments under".

Motion No. 9

That Bill C-76 be amended by deleting Clause 18.

Motion No. 10

That Bill C-76 be amended by deleting Clause 19.

Motion No. 11

That Bill C-76, in Clause 20, be amended by replacing lines 1 to 7, on page 12, with the following:

"20. The portion of sub-section 178(1) of the Act after subparagraph (b)(iii) is repealed."

[Committees Of The House, May 19th, 1995]

Mr. Speaker, the official opposition wants to express its dissent with regard to the 15th report of the Liberal majority on the Standing Committee on Finance. We are opposed, among other things, to the promotion of national standards in relation to the Canada social transfer.

The official opposition's dissenting opinion is annexed to Liberal majority report.

[Transfer Payments, May 19th, 1995]

Mr. Speaker, the federal government has control over its cash transfers to the provinces and those are the transfers that were cut back in the last budget. These cuts total $650 million for Quebec. The federal government's own officials said so yesterday. They are the ones who brief the Minister of Finance and they should brief this government.

Why does the Minister of Intergovernmental Affairs persist in denying the facts, if not to conceal from Quebec until after the referendum the true extent of Ottawa's cuts to social program funding? The shortfall will reach $650 million next year.

[Transfer Payments, May 19th, 1995]

Since he itabled his budget on February 27, the Minister of Finance keeps repeating that, next year, the cuts in transfer payments to the provinces will represent only a $350 million shortfall for Quebec, mocking the $650 million figure put forward by the official opposition.

Yesterday however, in his testimony before the finance committee, Bill Murphy, a senior official at the Department of

Finance, assessed this shortfall at $625 million, which is very close to the amount put forward by the official opposition.

In light of the statements made by finance officials, does the Minister of Intergovernmental Affairs still maintain, as his colleague from finance does, that cuts in the Canada social transfer will translate into a $350 million shortfall for Quebec in 1996-97, and not $650 million as suggested by the official opposition?

[Transfer Payments, May 19th, 1995]

Mr. Speaker, my question is for the Minister of Intergovernmental Affairs.

[Underground Economy, May 18th, 1995]

Mr. Speaker, I welcome this opportunity to speak to Motion No. 382 standing in the name of the hon. member for Mississauga South. When I read the motion and the accompanying material, I was pleasantly surprised by the hon. member's trenchant analysis in his short but very interesting paper. I must say he put his finger on a fundamental problem in Canada's tax system, and I am referring to the fact that a social contract between taxpayers,

individuals and even businesses and various levels of government has been broken.

This situation is so serious and so widespread, so deeply anchored in our day to day lives that recently, when the premier of Quebec, Mr. Jacques Parizeau, was buying furniture for his residence, he was asked by the salesman: "What do we do about the tax?" When we get to the point where even the Premier is asked whether the tax should go on the bill, the problem is fundamental and requires our full and undivided attention if we are to find a way to deal with the underground economy and the problems it creates for the tax system in Canada, Quebec and all the other provinces.

There are some very interesting ideas in the hon. member's document, and although the official opposition is not usually fulsome in its praise for Liberal members, and you must be aware of that, Mr. Speaker, when valid points are made, when we are offered an intelligent analysis of a problem, we are open to discussion, we are prepared to explore the best ways to deal with a situation, especially one that concerns public finances.

Consider the three suggestions the hon. member for Mississauga South explored in his motion. One is to inform the public. Many taxpayers are not aware of the impact of certain decisions or do not realize the overall impact of the decisions they make every day as consumers. Here is an example. Before the dollar dropped to 73 cents, when it was still 81 cents or 84 cents, people would tell us, and this was quite common: "Last week I went to the United States. I went shopping in the United States, because it was cheaper". That was not necessarily the case, but that is what they said. And those same people were mad as hell about the lack of jobs in Quebec and Canada.

The connection between what they do as consumers and what happens to the economy and employment is not always clear in people's minds. A campaign to educate the public about the underground economy and the impact of acts of civil disobedience, which is what we should call this today, might improve the situation in the future and make taxpayers more conscious of their obligation to contribute to the public treasury through their taxes.

The second suggestion made by the hon. member for Mississauga South also deserves our support.

A limited amnesty for income tax returns of previous years, not future years, should not encourage more people to evade taxes. On the other hand, a limited amnesty for the payment of interest and penalties on unreported incomes subject to federal or provincial income tax could encourage some people, who must feel ill at ease from time to time even if this practice is almost institutionalized, to pay what they owe. People may feel ill at ease by not fulfilling their civic duty to pay their normal share of taxes.

The third option suggested is also very interesting. Every one knows and talks about the fact, even if there are no comprehensive statistics about it, that renovation and construction is an area where the underground economy is flourishing. This is why a tax credit for tax payers who do some renovation could be an interesting idea to explore.

In short, the three proposals and the clearness of the analysis are such that we, as the official opposition, will support the proposal of the hon. member for Mississauga South because it is an intelligent and articulated proposal which deserves to be examined in depth by the standing committee on finance. I invite my colleague, who will have my support as a member of the committee of finance, to present his analysis and to suggest various options to the committee, as he did when he tabled his motion.

I also congratulate him for the clear thinking he shows on page 1 of his document when he says: "In the event of-this refers to the present context-cuts in social programs and a harsh budget-probably the last budget, and even the first one, both were hard on taxpayers, especially the poorest ones-the government will be blamed for not taking action in certain areas".

I congratulate him for having the courage to recognize that the context is very difficult due to the budget measures taken by the finance minister who is slashing transfer payments to the provinces for social assistance, post-secondary education and health, and is also taking, as of this year, $2.5 billion out of the unemployment insurance fund.

My colleague for Mississauga South has the sense to recognize that the government could be blamed for not acting in the areas where it should. He thinks along the same lines as we do.

For the past 15 months, as you know, we have been blaming the government for not taking action in certain areas-we seem to be exceedingly repetitive, but we will keep at it as long as it is not done.

First, when Revenue Canada is not given the necessary resources to collect unpaid taxes, which, over the years, have grown to $6.6 billion, according to the auditor general, and 75 per cent could be collected, in his estimation, with the proper resources, I agree with my colleague for Mississauga South, the government could be blamed for not taking action and for not immediately giving Revenue Canada the necessary resources to collect the amounts owing, amounts which are not even in question. We are not talking about avoiding taxes and the underground economy, we are talking about taxes that have not been paid because Revenue Canada does not have the resources to collect them. The government is to be blamed for this.

My colleague from Mississauga South said, and rightly so, that we are watching the goings on in government and that this is eroding our trust. Every day, we make new discoveries-so does the auditor general each year-regarding more wastage and lavish spending. We also are discovering places where the federal government failed to close tax loopholes. On this point, I agree with my colleague, who had the courage to say that his own government failed to do what it should have done.

They have to practice what they preach. When we see that people in government are still spending extravagantly and wasting money, for example, the trip to the United States for members of the Canadian armed forces for a rocket launching competition, holidays for diplomats at the taxpayers' expense, and when we see that the government just brushes these questions off, I think we must all admit that the government is sitting idly by, when it should be in action.

Let us look at compliance with tax laws. This issue has been in the news for the past two weeks. Once again, contraband cigarette shops are opening up all over the place. It is obvious and the government is not allocating the resources necessary to ensure compliance with tax laws.

Here again I agree with my colleague, the hon. member for Mississauga South. The government could be accused of not acting where it should. All this must be straightened out, as far as the tax system is concerned.

I am not talking only about the federal government, but all governments. Restore confidence, make the public aware of the consequences of not contributing adequately to the tax base, and give a good example. I think these are the essential ingredients to restore the social contract and to improve public finances.

I once again congratulate my colleague from Mississauga South. The official opposition will support his motion.