Yvan Loubier

[Budget Implementation Act, May 31st, 1994]

Mr. Speaker, I am glad you allow me this new opportunity to talk about Bill C-17.

Ever since the finance committee formed a sub-committee to study Bill C-17, a measure implementing the largest reform of the unemployment insurance program ever undertaken by a federal government and freezing the salary of public servants, among other things, I have closely followed this matter, as a member of the committee and as an opposition member provided with limited means. I have tried to do a little more than my Liberal friends, I have tried to make democracy speak.

You know that, despite the fact that this bill is the largest reform ever done of social programs in general and unemployment insurance in particular, the Liberal government had planned on only two days of hearings, including one with senior officials who were to explain to sub-committee members the provisions and technical interpretations of Bill C-17. Without the intervention of the Bloc Quebecois which demanded that we make a more thorough study of such a fundamental piece of legislation for social programs and for the future of many communities in Quebec and Canada, we would not have had, like we did, the equivalent of a week and a half to hear witnesses.

I can understand why, this morning, when the secretary to the minister of industry, trade and commerce rose to speak on Bill C-17, he did not dare speak about it, because he was ashamed of that bill. Selling Bill C-17 is an impossible task.

That is why he naively spoke about his recent trip to China. Do you realize, Mr. Speaker, that they are proposing a $5.5 billion cut in the UI system over the next three years. It is all about the despair of the many individuals who must endure the evils of unemployment, the plague of unemployment, in Quebec and in Canada, but the Parliamentary Secretary to the Minister of Industry would rather tell us about his trip to China.

I was outraged when I heard him. I controlled myself, since control is still the best attitude, but I want to say now to my Liberal colleague, the Parliamentary Secretary to the Minister of Industry, that the way he is dealing with this bill is outrageous.

You were here this morning, Mr. Speaker, so you heard as well this same member, and others around him from the Liberal Party of Canada, shouting down duly elected members of the Bloc quebecois and tarnishing their reputation. Not only according to Quebecers who elected us, but also to Canadians in general, on basic issues such as the future of social programs, the economic policy, the disgraceful benefits enjoyed by the richest Canadians-family trusts-the Bloc Quebecois is the real Official Opposition.

Without us, many more objectionable measures like the ones implemented since the February 23 budget and measures that are unpopular and harmful to ordinary citizens, to taxpayers, would have been adopted by the government since it took power.

When a bill or government measure is indefensible, it is normal that members opposite resort rapidly to insults since it is the only weapon they have to sell a plan that is rotten from the start as far as unemployment insurance is concerned.

As my colleague, the hon. member for Mercier, did this morning, I would like to point out that close to 60 per cent of the planned cuts in unemployment insurance for 1995-96 will hit two regions: first, the Atlantic, and second, Quebec. It is 60 per cent even though these two regions have only one third of Canada's population.

Indeed, in 1995-96, the Atlantic provinces, with only 8.5 per cent of the population, will lose $630 million, bearing 26 per cent of the cuts for that year. The same thing will happen in Quebec, where the federal government will cut $735 million in unemployment insurance benefits, or 33 per cent of the total for

that year, when the province has only 24 per cent of the Canadian population.

From the beginning, there was an East-West split in the decision to dip into the UI fund. In 1990, in Quebec, we had the report titled Deux Québec dans un . Some of my colleagues remember very well that that report identified two Quebecs: one that was participating in and benefitings from economic development, and the other, rural Quebec, that was excluded.

The measure proposed by the federal government also identifies two regions where unemployment and underemployment are most widespread. There is more widespread unemployment and underemployment in these regions than any measure contained in the red book can ever solve, despite the fact that those people have shouted themselves hoarse, some to the point of losing their voices, waving the red book and claiming that jobs were the priority of the Liberal governement. In spite of all this, no concrete, meaningful, structural measures have been put into place in order to create sustainable employment. Instead, the government chose to take it out on two regions which do not deserve that, precisely because they are regions where underemployment and poverty are the most striking.

The measure to increase from 10 to 12 the number of weeks of insurable employment required to be eligible for unemployment benefits, which are themselves reduced in terms of percentage and of the number of weeks covered, has plunged several rural communities into utter confusion. These communities have already suffered, in the case of the Maritime Provinces, from the reduction of the fishing activity, from the reduction of the farming activity because of low prices and of the international crisis and from the reduction of forestry activity, all of which are seasonal.

The measure to increase from 10 to 12 the number of weeks of insurable employment required to be eligible for unemployment benefits directly affects the Maritime Provinces and part of Quebec, in particular the Lower St. Lawrence and the Matapédia-Matane areas and, in general, the Gaspé Peninsula. In these regions, where the activities are concentrated in one industry or are seasonal, many already had difficulty gathering the 10 weeks of insurable employment previously required.

I was flabbergasted when I realized that 60 per cent of unemployment insurance cutbacks would be made in the Maritimes and Quebec, particularly because the Maritimes were really hit in a horrible way. I was shocked when I thought that the current Prime Minister was once the member for Beauséjour and that, while he knew about the social and economic realities of that riding, he had accepted, as leader of the government, that such disastrous measures for rural communities be put in place.

I was even more flabbergasted when I heard the Prime Minister allude recently to the people of Beauséjour and said that the unemployed were beer drinkers. I understood then that our Prime Minister, when treating the unemployed this way, the most disadvantaged people of our society, when saying things like that, was not a head of state because a head of state has to show respect for the people who elected him and allowed him to be the member for that riding for four years and to come back into politics. I found that to be really shocking, coming from a Prime Minister.

Besides, what we heard from the Prime Minister and what I saw in the committee which examined Bill C-17 are very much similar to systematic cynicism. I also had to live for two weeks with sarcastic remarks from my Liberal colleagues. I am still calling them my colleagues even though I am deeply disappointed with the attitude of the Liberal members on the finance sub-committee.

We had witnesses, mainly from remote areas in Quebec, such as the Lower St. Lawrence, the riding of my colleague from Matapédia-Matane, and also from Gaspé. People came before the finance sub-committee from Newfoundland and Labrador where, at times, unemployment reaches 85 per cent. These people do not know where to turn to. They had pinned their hopes on this new government which talked about creating jobs, as well as restructuring and diversifying regional economies. They believed in the government. So, now that it has hit them with those measures, they do not know where to turn to anymore.

We had people from Nova Scotia, Prince Edward Island, and from both Acadian and anglophone communities in New Brunswick.

I will quote from a short newspaper article to illustrate the cynicism and the sarcasm shown by the Prime Minister who attended these sub-committee hearings. This article was entitled "New Brunswickers appearing before a sub-committee on unemployment insurance reform are kicked out after barely an hour". They kicked out people who came all the way from New Brunswick, even before their allotted time had expired.

If you allow me, I will quote Mrs. Mathilda Blanchard, who has been a union activist for the past 40 years. She said: "I have never been treated that way in my 40 years as a trade unionist". And you can read further that: "After coming to Ottawa, all the way from New Brunswick, to discuss the impact of unemployment insurance reform on her area, she and another group were cut short after only 30 minutes. The two other groups from New Brunswick that came after her were treated the same way".

In conclusion, the parliamentary committee which was reviewing Bill C-17 and certain budget provisions summoned to

Ottawa four Acadian groups but gave them only a total of 60 minutes to explain the consequences of the reform, when they were entitled to twice that time.

However, a number of business representatives, friends of the party who benefit from what we call tax loopholes and tax conventions, did voice their support for the government's measures. These individuals also receive preferential treatment from this government and contribute to the Liberal Party's coffers. This one group alone was allowed to testify for 47 minutes, whereas normally they would have been entitled to 30 minutes. However, because they were voicing their support for such hateful measures as cuts to unemployment insurance and because they spoke the same language as the government, viewing the jobless as lazy, they were allotted 50 per cent more time than they would normally have had.

I am flabbergasted to see that, in politics, there are people who behave this way toward Quebecers and Canadians, and dismiss offhand the lives of others, people who have no sense of fair play, the fair play which the members opposite claim to have, the same members who profess to be great Canadian democrats who listen to all Canadians. When we see things like this happen, we have some very serious doubts about the honesty of these individuals.

I would also point out that when the witnesses from the Maritimes testified, no Reform members were on hand because, despite what they say about being great Canadians from coast to coast, each time an issue arises which affects that part of the country east of Manitoba where they have no representation, then they become a little less Canadian. I find this rather sad.

Thursday evening, on the last day of hearings, there was one Bloc member on hand and no Liberal members, except for the chairman, and no Reform members. Perhaps they prefer to go out and dine in a good restaurant on Thursdays. In any case, the scheduled witnesses were from Newfoundland. When they showed up, they were astounded and scandalized. That evening, we were quite pleased when we were told that there was only one party in the House of Commons willing to defend Newfoundlanders and Maritimers, and that party was the Bloc Quebecois. How very cynical of this government. The other party is also blatantly guilty of not taking matters seriously.

In view of all this, of the cynicism displayed by this government in spite of its positive bias for employment, in view also of the proposed cuts to the UI program and the way the people who are the hardest hit by unemployment are being treated, I cannot help but compare their treatment to the coddling treatment of Canada's wealthiest families.

This morning and again this afternoon, family trusts were discussed. We were reminded that, year after year, the government deliberately forfeits between $350 million and $1 billion in revenue, owing to a policy put in place by Pierre Elliott Trudeau in 1972 and commonly known as family trusts. I cannot help but contrast the preferential treatment given to the wealthiest families in Canada against these cuts to the unemployment insurance program and their destabilizing effect on rural communities in Quebec and the Maritimes.

I cannot help either, since the two bills were debated one after the other, but think about the tax treaties in Bill S-2 and how major Canadian corporations have managed to dodge taxation and pocket hundreds of millions of dollars every year. I cannot help but notice that this government will cut $5 billion in social programs, and in the unemployment insurance program in particular, over the next three years, and in that it treats ordinary citizens the way I just described.

I would have liked to speak longer, but you are signalling that I have only one minute remaining. I will say this. I urge the government to reconsider its position on Bill C-17, in particular regarding the proposed cuts to unemployment insurance, because these measures will completely destabilize several communities in the Maritimes and in Quebec.

I would also request, with respect to another measure contained in this bill, namely wage freeze, to return to a better frame of mind. Twice in the matter of four years action had to be taken by the International Labour Office to remind the Canadian government it is required to abide by international conventions concerning free collective bargaining. When in opposition, the Liberals denounced the freezes imposed by the Conservative government, but they are now following their lead.

I am calling for a return to a better frame of mind because the government cannot go on like this, treating the people of Quebec and Canada with the kind of arrogance, sarcasm, cynicism and brutality they have demonstrated over the past few months. I hope for a return to a better frame of mind.

[Government Finances, May 31st, 1994]

Mr. Speaker, the institute's report indeed says that the measures in the finance minister's budget are all totally inadequate and totally ineffective for reducing the deficit.

I ask the Minister of Finance if, instead of taking a wait-and-see attitude to the disastrous situation of the Canadian government's finances, he does not agree that he must urgently eliminate duplication and inefficiency and immediately eliminate outrageous tax evasions such as family trusts. It is not social programs that should be attacked in the cowardly way you are attacking them.

[Government Finances, May 31st, 1994]

Mr. Speaker, a study published yesterday by the C.D. Howe Institute concludes after a thorough analysis that the Liberals' budget strategy is inadequate for reaching their goal of lowering the federal deficit to 3 per cent of GDP.

My question is for the Minister of Finance. How does the Minister of Finance react to this study, which totally calls into question his budgetary and fiscal objectives and again singles out his inability to properly control the government's finances?

[Tax Conventions, May 30th, 1994]

Thank you, Mr. Speaker, for the accuracy in your time assessment. I had calculated 23 minutes and 49 seconds myself, but I accept your time of 24 minutes.

So we were considering at third reading Bill S-2, which renews a tax agreement between Canada and five other countries, namely Hungary, Nigeria, Zimbabwe, Argentina and the Netherlands. It is never very enjoyable to be interrupted in the middle of a speech, so I will repeat some of the points I covered in detail in the first part of my speech.

The first point is that the Bloc Quebecois has nothing against the countries that have signed the tax agreements mentioned in Bill S-2. The Bloc Quebecois, like all Quebec sovereignists, has shown in the past that it is open to the world, has a deep-rooted tradition in the international cooperation and development area and supports mainly North American but also international agreements of all kinds.

You will recall how we supported the Free Trade Agreement with the United States and Mexico, as well as the GATT agreements signed last December. After long and laborious negotiations, we came to support these conventions, these international agreements.

The same thing applies to tax conventions. When they meet the original needs and the criteria that have been set, we have nothing against such conventions. First and foremost, these tax conventions are used to avoid taxing twice a company which has foreign affiliates.

These are indeed very worthy conventions, but for them to meet their main goal, there has to be reciprocity between Canada and the countries with which we have signed these conventions. There must be reciprocity as well as commensurate tax treatment for profits made by the companies, capital profits and a similar series of exemptions for private corporations.

But, these last few years, the Auditor General of Canada as well as some Liberal members, then in opposition, denounced in no uncertain terms some of these conventions which were signed and are still being renewed between Canada and countries considered as tax havens for hundreds of millions of federal government tax dollars.

I was pointing to the flaws of the tax convention system and explaining why we have so many reservations about a measure like Bill S-2, as we have long been asking for a review of each of these arrangements between Canada and various countries to discover which countries do not deserve reciprocity agreements or tax treaties such as the one under review this afternoon.

We were not the only ones who denounced these conventions. Several others have already done so. For example, in December 1992, the sitting hon. member for Ottawa-Vanier, himself a Liberal, criticized loopholes in tax conventions with countries considered as tax havens, by declaring the following: "We are really worried because the Department of Finance has done nothing to eliminate most of these schemes"-he was talking about schemes concerning tax conventions with countries considered as being tax havens-"used by foreign subsidiaries to avoid taxation. In my opinion, this problem is not new and we are confronting it again this year".

Indeed, the problem is not new. I would say that, since 1987 or approximately 1987, the Department of Finance has been "dealing with" the problems of tax loopholes associated with tax treaties. Indeed, in 1987, the Department of Finance announced that it would study the taxing of foreign affiliates. These studies were never tabled. Imagine! The Department of Finance of Canada has been aware of the problems for seven years, and has let them deteriorate for seven years. It has let these problems deteriorate while the Conservatives were in office, and it is letting them deteriorate under the Liberals.

I am extremely disappointed that the Minister of Finance and the Liberal government did not respond to our numerous calls for a serious and comprehensive analysis of those tax conventions that are causing the loss of hundreds of millions of dollars to the federal treasury in a period where, for some time already, we can no longer afford to deliberately lose hundreds of millions of dollars. This government continues to be inactive in the examination of those tax conventions. Even worse, it is proposing us to extend those conventions before analyzing their provisions as a whole.

This government perpetuates the injustices detected in some tax conventions, the sieves for Canadian corporations that do not carry out their duty as good corporate citizens in terms of contributing to the elimination of the deficit and debt problem of the federal government. I would tell you that the Liberal government, the Liberals, the members of the Liberal Party of Canada are only sensitive to two words: "lobby" and "friends".

As was the case for all taxation decisions that have been made since the evening of October 25, since the last election, and in particular since February 22 or 23, when the Liberal government tabled its first budget, these two words have become commonplace within the Liberal Party.

All taxation decisions have been made on this basis, on the basis of lobbyists and friends of the party. Perhaps I should have mentioned a third word: lobbyists, friends of the party. Friends who have been handsomely paid for their support since the Liberal Party came to power.

Friends who, for several years, have made generous contributions to the Liberal Party of Canada. Friends who are also stakeholders in tax loopholes such as those provided for in income tax treaties, family trusts and different leaks in the Canadian tax system.

With regard to the funding of political parties, is it normal that big Canadian corporations contribute such huge amounts to the Liberal Party of Canada in the same way they contributed and may still be contributing huge amounts to the Conservative Party of Canada, as they did last year?

Is it democratic, in a country that prides itself on being democratic, for a government to have both hands tied and not to be able to run the country freely because those people, from the Liberal Party of Canada, have to please those who contributed generously to the fund of their party? They have to be careful not to disappoint them. The Liberal Party has to go on. Like any other great federalist party, the Liberal Party must have some continuity. So, when these people come to power, the first thing they have to do is to please the friends of their party.

When someone wants to change a tax convention, for example, and when a Canadian business that made donations to the fund of the Liberal Party of Canada for many years comes under fire for its ability to evade taxation in Canada, it is quite usual, for this government, not to take its responsibilities and bring about sound reforms.

When we learn that the National Trust Company contributed $12,454.70 to the Liberal Party in 1993 and the Royal Bank of Canada gave $45,000 to the same party, we are not surprised to see that this government refuses to put in place measures that could affect it, nor can we fail to notice a certain complicity between a federalist message and the annual report of the Royal Bank or any other analysis of the constitutional impact of a certain decision that the Quebec population could make.

Is it normal too for the Liberal Party to receive $25,000 from the Royal Trust Company, $42,000 from the Bank of Nova Scotia, $40,000 from the Toronto Dominion Bank and $31,253 from Scotia McLeod and so forth? I could go on, there are many other examples.

In any case, the Liberal Party of Canada gets half of its funds from big business. So, not surprisingly, when the time comes to make decisions in the public interest, decisions which could further restore the public finances, at least in part, and which could somewhat tighten the budgetary policy or close tax loopholes, these measures, the real initiatives that should be taken, are not.

The Liberal Party, a great Canadian party, like the Conservative Party, came to office with its hands tied; they feel uneasy because they have to deal with lobbies and friends of the party.

By the way, we saw over the week-end that if you are not part of a lobby, if you are not a friend of the party, you are at a disadvantage. A newspaper article this week-end said that rich families lobbied the government to keep their tax exemption. The Canadian Press article mentioned family trusts and said: "A lobby representing some of Canada's oldest and wealthiest family businesses talked the former Conservative government out of imposing capital gains tax on sheltered trust funds worth billions".

They managed to do the same with the Liberal government, the present Liberal administration. They succeeded to do the same, because despite pressures from the Bloc Quebecois, from the Reform Party and from people fed up with social injustices, tired of paying for fiscal mismanagement and weary of lack of control on public finances, despite all these pressures, the first budget of the Liberal Party did not abolish the privileges of family trusts and did not plug the loopholes created by tax treaties signed between Canada and countries considered as tax havens.

I will continue with the article, because I found it fascinating and very representative of everything we have denounced about this government, about patronage and party friends. You know that family trusts were instituted by Pierre Elliott Trudeau. I can call him by his name since he is no longer a member of Parliament. It was Trudeau's idea. Trudeau is our phantom of the opera; he haunts this place. Every time you happen upon a bad measure, as it turns out, Trudeau was behind it. And if it is not Trudeau, it is the current Prime Minister of Canada.

Interviewed in Toronto, Mr. Sharwood, the former president of Guaranty Trust, one of the contributors to the Liberal Party fund, indicated that the majority of the members of his association-read lobby or interest group-are family businesses that go back several generations. The association also represents families among the wealthiest. This means that all the wealthiest families are bunched together in the same lobby. These families, the wealthiest in Canada, have contributed to the Liberal Party of Canada election fund. So you can imagine what kind of a welcome is extended to anyone from this lobby when

he or she knocks on the door of the finance minister or of the Prime Minister.

I am not surprised to see how powerful these lobbies are, considering they spend millions, even hundreds of millions-if you put together all the contributions made by large corporations formed into a lobby-on furthering their own interests, not those of the people of Quebec or Canada. I am not surprised to see that they manage, as they often do, to prevent this government from making perfectly legitimate decisions that would certainly be welcome, given all the sacrifices asked of taxpayers in Quebec and Canada, people who are already crushed by the tax system.

I am not surprised when I look at the arrangements, at the family trust issue. I am not surprised, but I was even less surprised when I participated in the debate on the bill tabled by the Minister of Transport concerning Pearson airport. During that debate, which was very similar to this one on tax agreements and family trusts, we discovered that friends of the party had once again shown great strength, forming lobbies to ensure that the Minister of Transport, in his legislation regarding Pearson airport, would retain some discretionary power to, perhaps, compensate them if he deemed appropriate to do so following the cancellation of the contract for the privatization of that airport.

There, as in the case of the two previous issues, and particularly this one on tax agreements, we noticed that friends such as Leo Kolber-he is the senator who organized a small lunch at $1,000 a plate during the elections to finance the Liberal Party of Canada's campaign-played an active role in the privatization of Pearson airport. Leo Kolber had invited friends such as Charles Bronfman. Herb Metcalfe, a lobbyist with the Capital group, was also present, as well as Ramsay Withers, a federal lobbyist with close ties to the current Prime Minister.

So, there were many friends of the party who, again, formed a lobby to ask that at least some clauses in the bill tabled by the Minister of Transport provide benefits to them. These are friends of the party who formed lobbies. Imagine their power: they exert direct pressure on the Liberal Party to make sure it implements measures which will benefit their own interests.

When I see all this and when I look at what the government's last budget, which was its first one, contains in the way of budget cuts at the expense of the average citizen, I am disgusted, because I have yet to hear a single Liberal, among all those who have been complaining bitterly about such cuts for the past eight years, object to the fact that the government is doing nothing about unfair practices and loopholes in the Canadian tax system, while on the other hand, in order to improve the state of the federal treasury, it introduces measures like cutting $5.5 billion from the unemployment insurance fund, eliminating the age tax credit, and generally, measures that come down hardest on the neediest in our society who are already depressed because they have no work, and are now facing additional constraints.

As in all other areas, it is clear the members of this government are arrogant and cynical in the extreme. I keep repeating this because it is true. Every day I wonder how the Liberals can treat people the way they did, the Liberal members of the finance subcommittee which examined the bill on amendments to the Unemployment Insurance Act. I am really disgusted at the way they behaved.

People came from the Maritimes, all the way from St. John's, Newfoundland, to appear before the committee, which hardly bothered to listen to their grievances about the unemployment insurance cuts. The government did listen to the lobbyists who asked them not to eliminate certain tax conventions with countries that are considered to be tax havens. The government did listen to the richest families in Canada who wanted the government to maintain the outrageous preferential treatment of family trusts.

They came all the way by car, like those who came from the Acadian peninsula, and they were thrown out because they came to express their grievances. They came to say they were ashamed of supporting a government that had promised to put the economy in the Maritimes back on track, but instead had shown it could not care less what happened to them and dozens of communities in the Maritimes.

I get rather emotional whenever I talk about inequity and unfair taxation, because as a newcomer in politics, I sincerely believed that people who for years had been fighting for more tax equity and who made their objections heard every time the Conservatives introduced measures which they themselves condemned, were sincere. I thought that these people were sincere. In spite of our differences of opinion on constitutional matters, I really thought that they were sincere, but I realize now that they are nothing more than good actors. They are excellent, but the play does not last forever.

When I see this kind of measure, when I see the richest Canadians keep their privileges when the poorest members of our society are being asked once again to tighten their belts, this year, next year, and until the end of this government's mandate, I tell myself that, one day, common sense will prevail. People will realize that this government is a puppet government, and that it may be time for Quebec to change the constitutional order of things, to take its future into its own hands, and to implement real measures. It is time for fair taxes, for a Quebec tax system in a sovereign Quebec, based on the principle of equality for all, and taking into account the needs of our poorest citizens.

I have been wishing for and dreaming of such a system. These people are making this dream of a fair tax system even brighter. Let us dispel the nightmare of this unfair federal tax system.

[Tax Conventions, May 30th, 1994]

Mr. Speaker, I welcome this opportunity to speak again, this time on third reading of Bill S-2, a bill that deals with tax conventions between Canada and Hungary, Nigeria, Zimbabwe, Argentina and the Netherlands.

I would like to take the next few minutes to repeat the reasons for our objections to Bill S-2, that is to say, the objections of the Bloc Quebecois. We do not object to these tax conventions because we object to the countries as such. In other words, the members of the Bloc Quebecois, Quebecers in general and Canadians in general as well, on whose behalf we occasionally speak as the Official Opposition, do not object to Hungary or Nigeria or Zimbabwe or Argentina or the Netherlands.

However, there are certain inconsistencies in the Canadian tax system as well as in the rules and traditions of this tax system, and we often find these inconsistencies in tax conventions of this kind.

As you know, Mr. Speaker, we support free trade, and in fact we were instrumental, and when I say we I am referring to Quebecers, in adopting two international agreements. The first one was with the United States and the second included Mexico. We also supported arrangements to improve the rules of international trade, like those that were adopted last December at the GATT talks.

We also have a tradition of international co-operation and a tradition of reaching out internationally. We remember Lester B. Pearson, whom we admire for his international involvement, and Jean Lesage in Quebec.

Therefore, it is not in that regard that the Bloc Quebecois has to show its opposition in the case of international treaties. Tax treaties are usually a good thing because they allow businesses to avoid double taxation on the benefits of their various affiliates.

Tax treaties also have the merit of creating reciprocal agreements, which allows to draw a clear line between two countries regarding taxation of the profits of companies, because to be effective, those tax treaties must call for levels of taxation that are roughly equivalent between two signatory countries.

Besides, and this will be my first negative point in assessing Bill S-2, as the auditor general mentioned several times, there are flaws in the principle underlying tax treaties and in certain agreements signed with countries that are considered as tax havens.

In some of those countries, for instance Barbados, Cyprus, Malta and Singapore, who have signed tax treaties with Canada, corporate taxation and all that pertains to income or capital gains taxation is much lower than Canadian taxation.

As the Auditor General underlined it in his 1992 report, no corrective measure was adopted, even in the last budget of this government, despite all that was said. According to the Auditor General, incomes earned in countries that are tax havens and that are designated by order may enter Canada tax free even if they have not been taxed or have been at a very low rate.

The Auditor General also said in his 1992 report: "The Department of National Revenue Taxation is aware of a number of taxpayers who have used this scheme-tax havens-to be in a position to move $500 million into Canada tax free".

This first point is already appalling enough. I must tell you that, at the present time and since 1984, middle-income taxpayers have been crippled by the Canadian tax system. Incredible sacrifices are asked of the poorest in our society since the last budget, while other taxpayers, probably those with very high incomes, because they are the only ones who can take advantage of those flaws, are allowed to move $500 million tax free from foreign countries to Canada. I find this appalling.

The second negative aspect regarding tax treaties is that the foreign revenues of Canadian corporations, which are subject to little or no tax, give the Canadian shareholders access to the same federal tax credit on their dividends as on dividends payed by a Canadian company which operates and pays taxes in Canada. How can we speak of developing the Canadian economy while this measure maintained by the tax treaties hampers our economic growth and the development of Canadian businesses?

Good Canadian corporate citizens which pay their taxes also pay for other corporations which benefit from this type of exchange, this type of deduction. And we are asked to quietly support such a bill when tax treaties as a whole should probably be reviewed to determine where are the tax havens and the tax loopholes which allow bad corporate citizens not to pay their fair share of taxes for years and years. I find it rather absurd that we are asked to support this bill when all those treaties should be reviewed.

The third negative aspect regarding tax treaties is that, according to the existing legislation, a corporation operating in Canada can deduct interest on the money it borrows to invest in a foreign subsidiary. Companies that invest in tax havens have found two ways to avoid paying taxes. First, they deduct their loan interests and then they bring back to Canada, free of tax, their profits which are subject to little or no tax in foreign countries.

I am not the only one to say so. For about three years now, the Auditor General has been saying that the tax conventions legislation is full of holes. Let me quote the Auditor General on this issue. It is always interesting to quote someone who is non-political and neutral, someone who can put his fingers on the problems linked to the Canadian tax system and the inaction of the federal government which does not seem to want to do much about the various loopholes. In his 1992 report, the Auditor General said, and I quote: "That deduction of interest reduces Canada's tax revenue and, at the same time, the related income is not necessarily subject to tax in Canada. It may be received as a tax exempt dividend and may never appear in the Canadian tax base".

So, by using such tactics, Canadian companies can avoid paying taxes first by transferring to the Canadian parent corporation the losses incurred by their foreign affiliates. In other words, the Canadian companies which report losses due to their foreign production operations can deduct these losses in Canada, which means that Canada is losing a similar amount of money in tax revenues. Second, according to the tax treaties, profits made by Canadian corporations can be redirected to foreign countries. If profits are made here, in Canada, and taxation levels are lower in the countries where the Canadian parent company has a foreign affiliate, profits can be taxed in the other country. Third, by using such tactics, Canadian companies avoid paying taxes by converting their profits in exempt income.

One element of the Canadian tax system that needs to undergo an in-depth review is all of the tax treaties and the legislation concerning the Canadian tax conventions, because that is what allows people who take advantage of all these loopholes to laugh all the way to the bank.

Among the many examples I could use, I would like to quote only one striking example the Auditor General gave us. I quote: "A Netherlands Antilles subsidiary of a Canadian company had assets of $865 million and income of $92 million. The offshore income is not taxed on entering Canada, but it carries the federal tax credit on dividends paid to Canadian shareholders". Imagine! That allowed the Canadian parent company to report a $29 million tax loss in Canada. There was no production on Canadian soil. No jobs were created. There was no investment in machinery or equipment in Quebec or in Canada. The company was engaged in a production activity in a foreign country without creating economic activity either in Quebec or in Canada, yet it was able to deduct from that foreign activity an operating loss of no less than $29 million.

If that is not exporting jobs and economic activity that are so precious to us, I do not know how else to describe this flight of capital.

The Auditor General gave us an idea of the costs related to loopholes in the legislation governing tax treaties. According to him, for 1990 only, Canadian businesses invested nearly $92 billion in non resident companies with which they have a non-arm's length relationship; $92 billion, that represents significant production activity exported elsewhere and substantial tax exemptions for production activity exported elsewhere. That also represents a lot of tax exemptions on profits from economic activities not exercised on Canadian soil; it amounted to $92 billion for 1990 alone.

Of course, some of this $92 billion has been invested by good corporate citizens. There are companies doing real trading with countries not considered as tax havens, but there are nevertheless examples that can be drawn from the current situation to show that some of these investments in countries considered as tax havens are suspicious. Take for example the investment of $5.2 billion made two years ago in companies in Barbados, a recognized tax haven. These investments generated $400 million in dividends which were tax exempt when received on Canadian soil. As another example, $10.9 billion were invested in companies in Cyprus, in Ireland, in Liberia, in the Netherlands and in Switzerland, all countries also considered as tax havens. These investments generated more than $200 million in dividends which were tax exempt once brought into Canada.

According to the Auditor General himself-who does not hold a membership card from the Bloc Quebecois, nor from the Liberal Party, nor from the Reform Party-and I quote: "It is reasonable to conclude that hundreds of millions of dollars in tax revenue have already been lost and will continue to be if nothing is done to remedy the situation". That was in 1992. The Conservatives did nothing in 1992 and 1993. Then, in 1993, there was a change of government, but to the same effect: the Liberals have done nothing in the face of a tax scandal, a flight of capital scandal, whereas Quebec and Canadian taxpayers are being bled dry. This is unacceptable. It is a disgrace.

The Auditor General recommended a comprehensive review of tax arrangements so that we can really determine which countries we should have tax arrangements with, countries that are not mere tax havens, and do not encourage massive capital exodus as well as the loss of hundreds of millions in tax revenues for Canada. This is not the time for such a waste of money. On February 23, the Minister of Finance said that cuts were in order. But instead of eliminating loopholes such as tax arrangements, he targeted unemployment insurance.

I noticed your signal, Mr. Speaker.

[Budget Implementation Act, May 26th, 1994]

Mr. Speaker, I welcome this opportunity to address the proposed amendments to the clause on unemployment insurance in Bill C-17. I would like to start by making it clear to Quebecers and Canadians that from the very beginning of the sub-committee's consideration of Bill C-17, during which I was the critic for the official opposition, the government tried to sneak through one of the major, if not the major reform of our social programs.

The proposals in the last budget, the first and last budget brought down by the Minister of Finance, provide for slashing $5.5 billion from the unemployment insurance fund during the next three years. More than 50 per cent of these cuts will be felt by two particular regions, mainly the Maritimes, an area that is

not known for its booming economy, and especially in recent years with the crisis in the fisheries, and another region that has been hit very hard, my country, Quebec, which will also absorb a major share of the cuts the federal government proposes to make in the unemployment insurance fund through the Liberal budget.

Next year alone, although the Maritimes represent 8.5 per cent of the population, they will be hit by 26 per cent of the cuts totalling $21.4 billion which the federal government will make in the unemployment insurance fund. The government is going to take $630 million out of the pockets of the unemployed in the Maritimes.

As for Quebec, next year, the impact of these cuts will represent $535 million or 31 per cent of the total for that year. Again, this government, and I see a few of its eminent representatives, will make these cuts at the expense of the unemployed, of the neediest in our society.

That is how this government treats the unemployed. That is how this government says it will create jobs. That is how this government treats people who do not deserve to be treated this way, since they already have to cope with the unemployment and under-employment that is widespread in Quebec, in the Maritimes and more or less across Canada. Should we be surprised that this is happening?

When, not so long ago, I heard the Prime Minister refer to the unemployed as people who were always drinking beer and say they should stop drinking beer and go out and look for a job, I said to myself: Now that is statesman like. That is a man with vision. And that from someone who on so many occasions waved the red book, saying: We are concerned about jobs. Now that is a kind of cynicism we have never seen before in Quebec or Canada: cynicism at the expense of the unemployed.

And when we consider that the present Prime Minister once represented the riding of Beauséjour in the Maritimes, and that normally if he did his job-which I sometimes doubt when I see him in his prime ministerial role-he ought to be aware of the economic situation in the Maritimes and the impact of the cuts he himself proposed as the leader of the government. He should know that these cuts will have a tremendous impact on all the Maritime communities already crushed by the demise of one of its most important industries, the fishing industry, and by other difficulties of industrial revival and redeployment or diversification.

Without the Bloc Quebecois, without our hard work, the subcommittee responsible for studying Bill C-17, and in particular the part relating to unemployment insurance, would have sat only two and a half days. One day to hear department officials explain the content of the report and a day and a half to hear witnesses. By being very persistent, we finally managed to obtain an extension of about two weeks. But even that was not enough, because this is the biggest reform of unemployment insurance since its creation. What I heard during those two weeks was, for example, the feeling of helplessness of the people from the Gaspe.

I was talking this morning with my colleague, the Bloc member for Gaspé, and he was telling me that in his riding the unemployment rate was at least 27 per cent. The increase in the number of weeks required to qualify for UI, from 10 to 12 weeks, will have an enormous impact on some people. My colleague was telling me that last month, only 42 per cent of the unemployed had been able to secure at least 10 weeks of work and were therefore eligible under the new rules introduced by this government. At 12 weeks even fewer people would have qualified. In these single-industry areas, where seasonal work is the norm, there are very few places where you can work more than 10 weeks.

And I would tell you that, during the two and a half weeks of hearings of the sub-committee on Bill C-17, people from the Maritimes came to see us saying that the measures proposed in that bill would destabilize whole communities, would make most of the seasonal workers, fishermen already affected by the fisheries crisis, go from unemployment insurance to welfare and that welfare benefits would come out of the already scarce provincial funds, as we well know.

When I saw how offhand my Liberal colleagues were with the people of Newfoundland, New Brunswick and everywhere else in the maritimes, and particularly the people of the Acadian Peninsula, I could not help but find it revolting. These people presented arguments to us and to the government, saying that with these measures, the government was attacking them directly without offering any compensation like economic development measures, diversification of the economic base or programs to help them get back into the labour force. The government was attacking them and cutting their means of subsistence and it was saying: "Come what may, it is a case of make or break for these people".

I even saw, and I must admit I am still troubled and moved by that, members of this government who threw out people who had driven hundreds of kilometres because they could not afford to fly. They came from the Acadian Peninsula and from Newfoundland to shout and cry their hopelessness. And the members of the government did not even have the courage to listen to all they had to say; they just threw them out.

One evening, there was one Bloc member, no Liberal member, no Reform member, and yet people had come all the way from Atlantic Canada to once again voice their grave concerns.

I was outraged by such a show of cynicism during the committee hearings. We can see this characteristic trait of the Liberals displayed in their attitude in general, and in the measures they are implementing. I can tell you that my constituents in the riding of Saint-Hyacinthe-Bagot, and the constituents of all my colleagues and probably of quite a few Liberal members opposite, have had just about enough of their cynicism, and their sarcasm regarding such fundamental things as human misery and suffering, which are considerable east of Manitoba.

I am particularly interested in one specific amendment aimed at deleting clause 28. The purpose of the amendment is to eliminate the proposed table of required number of weeks of insurable employment, and to go back to the initial provisions. In areas which are heavily dependant on resource industries, people have no other choice than to hope for some better times, and now they see that to be eligible for UI, they need 12 weeks of insurable employment, instead of 10.

What I have heard in the past three weeks has convinced me more than ever that it is important to treat people with respect. For instance, we were given statistics for Labrador, showing that up to 65 per cent of the people there, whole communities in fact, were without work at one time or another during the year, and that, of course, they would be hit very hard by this bill.

All I ask is a bit of compassion for these people. Let Parliament adopt the proposed amendments to the Unemployment Insurance Act and let the government implement measures for the diversification or the strengthening of our industrial base, and to facilitate the re-entry of unemployed workers into the labour force. These people need hope.

[Budget Implementation Act, May 26th, 1994]

moved:

Motion No. 35

That Bill C-17 be amended by deleting Clause 28.

[Budget Implementation Act, May 26th, 1994]

moved:

Motion No. 26

That Bill C-17, in Clause 22, be amended by adding after line 26, on page 11, the following:

"(1.1) For purposes of paragraph (1)( b ), a claimant need only establish a prima facie entitlement to application of the rate of weekly benefit provided under that paragraph, whereupon the onus is on the Commission to establish that the claimant is not entitled to application of the rate of weekly benefit provided under that paragraph.''

[Budget Implementation Act, May 26th, 1994]

Madam Speaker, are you referring to my colleague's motion?

[Budget Implementation Act, May 26th, 1994]

Madam Speaker, I will not talk at length about this part of Bill C-17, since I do not think there are major problems with the administrative provisions on transportation contained in this bill.

I will rather speak about the lack of seriousness of the Reform Party when it proposes to examine the bill section by section. We were just told in a very strange way that the party wants to eliminate the entire clauses of that part of the bill, while recognizing that some provisions could be beneficial. I have never heard such a thing before. I have already seen politicians

who were not serious, but we expected that the Reform Party would be a little more serious than that.

Had they proposed constructive amendments to this part of the bill, it seems to me that it would have been promising for the overall examination of the bill. I see that they are unable to do that, because they are not serious. All the more so since it was just said that the bill contains some provisions that are beneficial for Western grain transportation. They have been elected only in the West and they are proposing amendments to eliminate these provisions as a whole, including the ones concerning Western grain transportation, the famous Crown's Nest Pass Agreement.

Do these people talk to their constituents? As they claim, their way of doing politics is somewhat different. They bring up questions faxed to them by citizens. They should have gone directly to their constituents, especially the western farmers and the western carriers to seek their opinion, instead of acting so irresponsibly and proposing these amendments.

I also noticed that each time a bill, including the motion introduced by the Reform Party, dealt with a region east of Manitoba, it was necessarily bad. One said for example that, in the Maritime Provinces, users could have been asked to pay for the ice monitoring. As if these people were not already overburdened. I noticed it during the hearings held by the sub-committee on bill C-17, especially on the part dealing with unemployment insurance. Let us stop -as the Reformers always do-taking the Maritime Provinces as the sole example to illustrate inefficiency.

The same thing applies to regional development grants. I feel it is a little too much. I wanted to stress that. It does not add anything to the motion introduced, it does not take away anything from it. But the attitude of the Reform Party today is disgraceful.