Yvan Loubier

[Excise Act, 2001, April 30th, 2002]

They do not support the microbreweries anymore either.

[Excise Act, 2001, April 30th, 2002]

Mr. Speaker, I thank my colleagues for their tireless support, especially on an issue which is not one of the easiest ones we have had to deal with since our arrival in the House of Commons.

It is always troubling that Liberal members confuse human feeling and sexism with cases of corruption and utter dishonesty. We have demonstrated this over the past few days. One cannot be both judge and jury in a position as important as that of committee chair.

Had the member for London West been a man, this would have changed nothing. We would still have tried to get to the bottom of the process whereby a bill such as Bill C-47 gets passed.

The amendment we put forward earlier allows us to voice our criticism of the unfairness and irregular proceedings in the Standing Committee on Finance and in the Department of Finance since this review of the Excise Act first began.

We are moving that adoption of this bill at third reading be postponed for six months so that we can get to the bottom of this process, which is unworthy of an institution such as the House of Commons, unworthy of us as MPs and, a fortiori, of anyone holding the position of committee chair.

This is not how Bill C-47 now before us should have looked. Why? Because Bill C-47 amends the Excise Act, a comprehensive measure. We have been studying the Excise Act since 1997. Since becoming a member of the Standing Committee on Finance in 1994 I have followed all the committee's deliberations, despite what a Liberal member may have said earlier. We have been looking at this review since 1997. We cannot have a general excise tax whose provisions cover a range of products including wine, spirits and tobacco, and leave out one of these products without something looking suspicious.

In the case of Bill C-47, that is what has been done. The government has introduced a review of the Excise Tax provisions for all products except beer. Why? Because an amendment to the Excise Act was in order with respect to beer and the way microbreweries were dealt with.

Earlier, I was listening to the parliamentary secretary to the Prime Minister. He does not know a thing about this issue. The only problem that confronts microbreweries is an excise tax that is too high compared to what their American and European competitors have to pay. That is the only problem. Eliminate this problem, ensure adequate, proper and fair competition—does the notion of fairness exist in the heads of Liberal members opposite?—and microbreweries no longer have a problem. From then on, the competition would be based on the quality of the products. Quebec and Canada are not afraid to see the various products of their microbreweries compete with beers from all over the world, because we have good products, good brewers and good workers in that industry. However, the government must provide a level playing field to ensure fair competition.

This is what we are asking of the Canadian government. This is what was supposed to be included in the new bill and in the proposed amendment to the Excise Act. But we are dealing with hypocrites in the brewery sector. Officials from John Labatt and Molson, who are members of the Brewers Association of Canada and who have been saying since 1997 that they want to help microbreweries correct this injustice, shot them in the back and stabbed them during the legislative process. This is what has happened since 1997.

Recently, we learned that there has been an agreement since 1997 between large Canadian breweries, namely John Labatt and Molson, and the Department of Finance not to include beer in the review of the Excise Act. The only product that is not included and that John Labatt and Molson asked not to be included is beer produced by microbreweries. The president of the Brewers Association of Canada, Mr. Morrison, sent a seemingly innocuous letter in which he tells the Chair of the Standing Committee on Finance that reducing the excise tax must be a priority, that it is a matter of survival for Canadian microbreweries.

It is urgent, but at the same time they do not want the excise tax to go down. What a brilliant lobbyist this president of the Brewers Association of Canada is. That was the wake-up call for microbrewers. And the secretary of state had the gall to argue that we do not have the support of microbreweries. I have to be careful here and not use unparliamentary terms.

There is now an association representing Canadian microbreweries on this issue. It is the only one. It is called the Canadian Council of Regional Brewers. We have the support of this organization, since it asked us to move, before the finance committee, the amendments that were rejected for some frivolous reasons by the member for London West, whose husband is one of the seven directors of Labatt Breweries and also the chair of the taxation committee of the Brewers Association of Canada, which urged us not to reduce the excise tax. The president of the council is Bob King, who also happens to be the CEO of a microbrewery in Alberta.

I just have one little message for my Alliance colleagues who supported our amendments on the first day but later changed their minds. They should realize that we are standing up for their own constituents. If the pressure from Labatt and Molson is getting too much, they should transfer their calls to us. We are not afraid to talk to the directors of Labatt and Molson. We were also subjected to pressure from Labatt, but we held firm. They should do the same to defend their own people. When Bob King has to write to us to extend his support, it means that he does not have the support of the Alliance, and that is too bad.

Stop being being pressured by John Labatt, join with us and stand up for your constituents who work in microbreweries, especially as the president of the brewers association is a fellow from Alberta. Bob King is from Alberta. He is not from Quebec, he is not a separatist. However, he has a social conscience. He knows that if there is no microbrewery left in Canada, the big breweries will take over their share of the market and it will result in a smaller number of products, which will be to the detriment of consumers and industry workers.

Why jeopardize the future of breweries in Quebec and Canada by maintaining an unfair tax treatment as compared to the competition? Because of a big brewery, John Labatt, which is lobbying, acting like a cowboy thinking this is the Far West and it can whip us into submission.

We will stand up to John Labatt and Molson and stand up for our own people. We will stand up for microbreweries. I am asking Alliance members to do the same and to stop acting as John Labatt's lap dogs.

Earlier, in his wisdom, the secretary of state said--I hope the Prime Minister will replace him because he is pitiful--“Listen, we cannot help microbreweries through taxation. It is not good. This is not good regional development policy”. But he knows nothing about this issue.

We are not asking to help regional development through microbreweries, they are already competitive, they put out fantastic products. All we are asking of the government is to put them on an equal footing with the foreign microbreweries that are invading our market and competing unfairly because they benefit from a preferential tax system.

We are also asking the government to open its eyes. Mr. Speaker, could you tell your Liberal colleagues to open their eyes wide open. It is not the Holy Spirit who is flooding the Canadian market with beer from U.S. microbreweries, it is the big breweries, John Labatt and Molson. They are buying exclusive distribution rights to distribute and selling beer from American and European microbreweries on the Canadian market to sink Canadian microbreweries, all the while saying that they are standing up for them.

I am asking my Liberal colleagues to stop letting people walk all over them and to open their eyes. They call themselves great Canadian nationalists. My eye! One cannot be a Canadian nationalist and work solely for big businesses at the expense of Quebecers and Canadians who want to feed their families and develop a quality product, and to do so on an equal footing with their foreign competition.

Give us the same fiscal tools. Give microbreweries the same fiscal tools and the same chances. You will see that we can beat foreign microbreweries on the Quebec and the Canadian market. Do you know why we will beat them? Because we have the best product. We have the best variety of products. We have the best tasting beers in the world. And I am not afraid to say so. We also have the best prices. However, we have to live in a fiscally competitive world and the government has to wake up and stop groveling before John Labatt, Mr. Morrison and John Barnes who, by the way, is the boss of the latest lobbyist for John Labatt who lobbied the Standing Committee on Finance and the finance department so that the excise tax would not be reduced.

I did not make this up. On the Internet, under lobbyist, you can find the name Geoffrey Trussman. His reference and boss at John Labatt's is John Barnes, the spouse of the member for London West who is also chair of the Standing Committee on Finance.

[Excise Act, 2001, April 29th, 2002]

John Labatt and Molson.

[Excise Act, 2001, April 29th, 2002]

Mr. Speaker, I listened carefully to my colleague's speech on Bill C-47. I thought he did a very good job. He should give courses to the secretary of state and the parliamentary secretaries, because they do not often read the bills. He even read part of the bill to us. That was most interesting.

I would simply like to clarify one point and then ask him a question. A distinction must be made between microbreweries and make your own breweries. What the member was talking about earlier were make your own breweries, which allow certain wines to be reproduced, just as some make your own wineries allow certain Beaujolais and so forth to be reproduced, but on a limited scale.

When we talk about microbreweries, we are talking about a production in the neighbourhood of 300,000 hectolitres a year. They are still sizable breweries. They are not brew your own establishments. They produce original beers in Quebec, Ontario and Alberta. Some of these original beers increase diversity in the market and create opportunities for segmentation, while meeting consumers' needs for diversification.

I am sure that the member also has a desire to help the industry, particularly the microbreweries. Since he seems very open-minded and favourable to the microbreweries, and since he recognizes the great diversity and product diversification, especially when it comes to wine, spirits and beer, is he prepared to support a proposal to reduce the excise tax for microbreweries, which is often six times higher than that imposed on American microbreweries?

In asking him this question, I would like to remind him that American microbreweries are making inroads on the Canadian market with this competitive tax advantage. The major problem facing Canadian microbrewers then becomes not being able to compete with this almost unfair competition from the American breweries.

I would also like to remind him, before he gives us his support for reducing the excise tax, that the major Canadian breweries, John Labatt and Molson, have distribution contracts with the American breweries.

It cannot be argued that John Labatt and Molson are defending Canadian microbrewers and, at the same time, taking advantage of the microbreweries' market by selling products from outside Canada. Would the member be prepared to restore justice for Canadian microbrewers?

[Excise Act, 2001, April 29th, 2002]

Mr. Speaker, could you ask the member to answer the question of my colleague from Joliette?

If he, as the chair of a committee, had had a spouse who was involved in an issue that was considered by his committee, would he not have made known, right at the beginning of the examination of the bill, the fact that his spouse was directly involved in the bill and, as appropriate, would he not have proposed that he withdraw from consideration of the bill?

The hon. member for London West never told the committee members that she had a connection with the chair of the taxation committee of the Brewers Association of Canada, which is linked to John Labatt Ltd.

Would he have done the same thing? If he had done the same thing, I would have stepped outside, as I did for the hon. member for London West, and I would have accused him of a conflict of interest. This has already been done.

[Excise Act, 2001, April 29th, 2002]

Mr. Speaker, our colleague does not seem to know what is in the Excise Act. It contains everything we have in Bill C-47, amending the general excise legislation, except one thing, beer.

Why is that? Because the Brewers Association of Canada, through the chairman of its taxation committee, who happens to be the spouse of the chair of the Standing Committee on Finance, asked her not to include in the bill the beer produced by microbreweries. That is why beer is not included.

In 1986, Justice Parker, who presided over the case of a Conservative minister who was accused of 14 counts of conflict of interest, said that we needed a stronger and legally enforceable code of conduct if we were to prevent public office holders from ending up in this kind of situation. One of his key recommendations involved an examination of the position, assets and economic interests of spouses and dependent children. In this case, it is not a neighbour who is involved, but the spouse.

You did not answer the question of the hon. member for Joliette. As chair of the committee--

[Excise Act, 2001, April 29th, 2002]

Mr. Speaker, it is always a pleasure to have you turn the floor over to me in a major debate.

I have a question for my eminent colleague from Jonquière, who adroitly and boldly pointed out the shortcomings in Bill C-47, which is still before us. How did things end up like this and how could this situation be avoided in the future?

We put forward amendments at the Standing Committee on Finance in order to change Bill C-47 in a manner truly in line with the spirit and the letter of the bill. What was not in line was what the Liberals did, which was to remove one of the items in the excise bill.

How could this be avoided? In a departure from the past, the chair of the Standing Committee on Finance, like all committee chairs since Motion No. 2 was put forward by the government, now has the extraordinary power to reject our amendments. This may well be the end of the road because we have no other recourse at report or third reading stage.

First, should the ethics code for holders of public office not be reinforced and, second, committee chairs included in this amended code? Third, should the occupations of spouses and even dependants not also be considered in a conflict of interest case such as the one before us concerning the microbrewery amendments rejected by the member for London West, who is also the wife of one of the seven directors of John Labatt Ltd.? Should this code of ethics not be reinforced and committee chairs considered holders of public office?

[Intoxication of Migratory Birds, April 29th, 2002]

Mr. Speaker, I am pleased to support Motion No. 414 presented by the hon. member for Saint-Bruno—Saint-Hubert. This is a critical issue in the context of environmental protection, particularly wildlife protection.

In 1999, the House passed legislation on the use of lead projectiles for hunting, because we recognized that spreading such projectiles in the environment was causing serious harm to our wildlife. Some experts agree that, since we passed this bill in 1999, there has been a 40% reduction in the lead that may be found in the environment from sport hunting and fishing.

Today, the hon. member for Saint-Bruno—Saint-Hubert had the wisdom to present a motion that complements the work undertaken in 1999, by proposing that we now deal with the problem caused by the use of lead sinkers for sport fishing.

As the hon. member for Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok mentioned, each year, more than 500 tonnes of lead sinkers and jigs contaminate the environment. Depending on the regions, between 5% and 50% of the birds, waterfowl, loons—and now gulls, herons and cormorants—are harmed by swallowing lead shots used in sport fishing.

These figures are bad enough in and of themselves. But it is more troubling, more appalling than that. According to studies, a lake in Quebec or in Canada may contain up to 180,000 hunting or fishing lead devices per hectare. Now, these are essentially lead fishing weights, since the issue of lead shots was dealt with in 1999.

The hon. member opposite said that there are not enough studies, but I listened to him and he provided us with horrifying figures. Why is it that, in light of these horrifying figures on the destruction of wildlife species, including loons, waterfowl, and so on, the government cannot make a decision?

I will support the motion—

[Excise Act, 2001, April 26th, 2002]

Madam Speaker, I thank you for this opportunity to speak to Bill C-47.

We have a situation that has almost never arisen in the ten years I have been a parliamentarian. We have, on occasion, supported or rejected government bills. The situation was clear at the outset and equally clear at the conclusion.

But with Bill C-47, the situation became complicated during consideration in committee, when we suggested that the Bloc Quebecois could support the bill. When a mockery was made of the committee consideration process all the way to report stage at third reading, we backed off, because the bill before us is not the bill that should have made it to this stage.

The bill that should have been before us was a bill for which votable amendments to include the issue of beers and the reduction of the excise tax on microbrewery beers would have been allowed.

Let me summarize briefly the background of Bill C-47. “It re-enacts existing provisions in the Excise Act and the Excise Tax Act relating to the excise levies on these products, together with technical improvements, and incorporates a range of new provisions”.

What is a bit unseemly and could even look bizarre at first glance is the fact that the Excise Act is general legislation of broad application affecting all products mentioned in Bill C-47, as well as beer.

In other words, the only part that was omitted in Bill C-47 is the part on beer. When we speak to legal drafting people from here and elsewhere, they all find it unseemly that we modernize the Excise Act with Bill C-47 and that we find ourselves in a position where all products and all provisions of the previous act, allegedly to be replaced by Bill C-47, are all in the new bill, except one.

In the current Excise Act, before it is replaced by Bill C-47, wine, spirits, beer, tobacco and distillery products are all mentioned. There is reference to breweries and tobacco products. The act deals with everything, every single product touched by excise. There are provisions on licensing, rights of accession, offences, collection, record, accounts, required documents, warehousing and remission of duties or what they call drawbacks in international trade. It touches on absolutely every point. Bill C-47, which is supposed to bring that Excise Act up to date, also deals with absolutely everything, except beer. That is the bizarre aspect of this bill.

Let me explain what happened since 1997 for us to be presented with the proposal for the amendment and modernization of the Excise Act contained in Bill C-47.

Since 1997, there have been discussions between the Department of Finance and various stakeholders with a view to modernizing the excise system to reflect the new realities that were covered by the current Excise Act, for example ship's stores on vessels travelling from Canadian ports to foreign ones. Part of these stores are used to provide the crew with food and drink, whereas the rest needs to be considered export products or products on which there are transactions.

Then there is the tax system, which did not take into account modern warehousing methods. Now the excise tax that was to be charged on sales is charged at the time of production, with consideration of prior revenue. In short, a number of aspects had to be modernized.

Since 1997, many people have been involved in drafting the new excise scheme, particularly the Brewers Association of Canada. The majority of Canadian breweries are members of this association, but it is dominated by the two major breweries, John Labatt and Molson.

Since 1997, the Brewers Association of Canada has been saying “It is a good idea to change the excise régime in the general Excise Act, which Bill C-47 claims to replace, in order to reflect the fact that the small breweries, with a production of less than 300,000 hectolitres annually, may benefit from the same excise scheme as their American and European competitors”. The difference is not insignificant, when we compare the excise tax the Canadian government charges Canadian breweries and what is done in the U.S. and in Europe. I will give a few figures.

Whereas, generally speaking, there is a charge of 28 cents Canadian per litre of beer for all Canadian beers, the rate in the U.S. is about the same for the major breweries, the counterparts of Molson or Labatt but, in that kingdom of capitalism, the charge is only 9 cents per litre for microbreweries. The United States definition of a microbrewery is one producing less than one million hectolitres annually. This is far higher than the Canadian figure of 300,000 hectolitres.

If you are an American microbrewery, or in other words produce under one million hectolitres of beer a year, you benefit from a preferential excise charge that comes to around 9 cents a litre.

For our microbreweries, defined as breweries producing up to 300,000 hectolitres, there is no preferential rate, because they pay exactly the same excise tax, as set out in the Excise Act, as the big breweries. Which means that microbrewery beers from the U.S. that enter on the Canadian market have an unfair competitive advantage, because they have a lower excise tax than our Canadian and Quebec microbrewery beers.

It is the same thing with Europe. They have the exact same preferential tax rate, which is accepted under the WTO rules. These rules make exceptions in specific cases—for example in cases related to the need to diversify the economy, or for the purpose of regional development or for originality to counter the standardization that comes with globalization—where there can be preferential excise tax measures for small businesses, which is the subject of Bill C-47.

Allow me to provide a few examples with figures. For 24 bottles of microbrewery beer produced in Canada, the federal government gets $4.09, when this beer is sold at a grocery store. When it is sold in an establishment such as a bar, the government gets $6.12 per 24 case of microbrewery beer. Are members aware of what the excise tax paid in the United States is? Bill C-47 includes a review of the excise tax, a review from which the microbreweries were excluded. In the U.S., the excise tax on 24 bottles is $1.12. Compare that to the $4.09 and $6.12 charged in Canada.

How do we expect the microbreweries in Quebec, Ontario, western Canada, British Columbia and the maritimes to compete with these beers? It makes no sense.

That is why the Brewers Association of Canada has claimed to be defending the microbreweries since 1997. Publicly, they have said, “There needs to be a lower excise tax rate for microbreweries. We, the big breweries, like Molson and John Labatt, we can afford the full excise tax. We are strong enough to pay it. And the WTO would not accept it with us, as they would for microbreweries”.

This was done for microbreweries in the United States and in Europe. It is accepted, generally accepted, but not for the big breweries.

From 1997 until very recently, we thought the Brewers Association of Canada was standing up for microbreweries. That is until Bill C-47 came up. Then we realized that even though it was a bill aimed at reviewing the whole excise system, the Brewers Association of Canada was recommending that the finance department not include in Bill C-47 the beer produced by microbreweries and an excise tax reduction.

They were proposing to exclude them. It was not because that was not in accordance with the system we wanted to amend. Quite the contrary, as I showed earlier. The current Excise Act affects all products, including beer; all products are subject to Bill C-47, except beer. The finance department bought the arguments by John Labatt and Molson. It agreed with their arguments. Through the review that started in 1997, it took out from the current act, which includes the brewery industry, the microbrewery sector and possibility of reducing the excise tax.

Therefore, there is collusion, which is normally reprehensible under the Competition Act. If we were in the United States, I am not sure things would be working as nicely as they have been since 1997, with the cronyism existing between the government and the big national breweries as well as the cronyism and the collusion between Labatt and Molson against the microbreweries to kill them.

Since 1997, we thought that the big breweries were advocating a preferential rate for microbreweries, with regard to excise tax. That was until Sandy Morrison, Chairman and Chief Executive Officer of the Brewers Association of Canada, with a majority representation from John Labatt and Molson, sent a letter to the hon. member for London West who also chairs the Standing Committee on Finance.

I would like to quote some excerpts from this letter on Bill C-47 and show the point of view of the Brewers Association of Canada. Mr. Morrison said:

On behalf of its 28 members, big and small—

He insists a lot on “small” throughout his letter.

—the brewers association has pressed for a reduction of the excise tax as an essential measure for the immediate and future health of this sector of our industry—

He was referring to microbreweries.

We explained our views during meetings with the Minister of Finance, senior officials from his department, the finance committee and hon. members. However, the industry does not agree that such a change should be done through an amendment to Bill C-47.

I would like to point out something. One wonders why beer should be excluded from a general review of the excise act, which currently applies to beer, wine, spirits and tobacco. If representations that take into account the particular needs of microbreweries and ask for a reduction of the excise tax should be welcomed with regard to such a bill, we wonder why those who claim to protect microbreweries, and who say that a reduction of the excise tax is essential to their survival, would not take an opportunity such as the general excise review under Bill C-47 to immediately demand a reduction of the excise tax.

I continue with the letter:

However, the industry does not agree that such a change should be done through an amendment to Bill C-47, which is currently before the House and which proposes a new excise framework for producers of spirits and wine in Canada. Following extensive consultations on the proposed changes to the Excise Act, brewers concluded, with the Minister of Finance, that there is a lot to do to develop an appropriate program for the beer industry.

Again, I want to point out something. The letter says that there is a lot to do. Either these people are lazy or else they lack imagination when they make such a comment. All it takes is three paragraphs. One that defines microbreweries, one that talks about the excise tax on beer, and one that ensures that Canadian and Quebec microbreweries benefit from a 60% reduction of the excise tax. This is all it takes.

I cannot believe that, from 1997 to 2002, they found it complicated to include beer. Yet, everything is in Bill C-47. Any product found in the current Excise Act is still there, except the beer produced by microbreweries. This is rather surprising.

Mr. Morrison, of the Brewers Association of Canada, goes on as follows:

Instead of delaying matters of interest to the other sectors, it was decided to exclude brewers from this legislative measure and to deal with the industry separately once parliament has passed the amendments concerning the other sectors. This measure has the approval of members of our association, big and small alike.

Small keeps coming up. He has a thing about small.

I have a small piece of news for them. We learned that the Brewers Association of Canada, dominated by John Labatt and Molson, were not defending the microbrewers. It was being hypocritical for, although it said it supported them, when it came time to take action, it said, “No, now is not the time. We would rather see the other sectors benefit, not us”.

These are major lobbyists. They defend their members' interests. It is time to amend the excise regime, it is time for a reduction in the excise tax for microbreweries, and the representatives who say they are defending the microbreweries with the Brewers Association of Canada say, “No, no, do it for the others; we are altruistic; we want things to go well for the others, but not for us. We will wait till a little bit later”.

Do you know what the major Canadian brewers are waiting for? Since 1997, almost half of the Canadian microbreweries have disappeared from the map. If the member for Rimouski-Neigette-et-la Mitis were here, she would say, “Pouf”.

Since 1997, 38 Canadian microbreweries have disappeared from the map. Why? Because of the excise regime which should have been amended by Bill C-47, because it is part of the general amendments to the Excise Act the government is seeking. Thirty-eight of 86 microbreweries have disappeared. They have disappeared everywhere, not just in Quebec. Do not think that because the Bloc Quebecois defends Quebec in particular we are not able to walk and chew gum at the same time, to defend Canada as well, when our interests are the same.

In this case, we must fight against the big breweries, which are hypocritically claiming to defend the microbreweries and regional development. We must make sure that the microbreweries of Quebec and of Canada receive the same fair treatment as those in the United States and Europe. This is something the Bloc Quebecois is fighting for, and it is a cause that all members of this parliament should take up.

These brewers enjoy 90% of the market and they are still not happy. They have adopted predatory practices, and hypocritical ones at that.

Thirteen microbreweries have disappeared in Ontario in the last five years. Eleven have closed in Quebec, in various areas including Quebec City and LaSalle, in the Minister of Finance's own riding. I imagine that he was happy to see the Brasal microbrewery disappear, because it was beginning to compete with John Labatt, which is also located the minister's riding.

In Saint-Hyacinthe, two microbreweries have disappeared since 1997. Others have closed in Saint-Eustache, Baie-Saint-Paul, Amos, Montreal et Cap-Chat. The regional development of microbreweries, the diversity, the wealth, the originality of a product, all that counts too. Seven microbreweries have disappeared in British Columbia, five in Alberta, one in Manitoba and one in Nova Scotia, for a total of 38. There are about 40 left; I unfortunately do not have the exact figures.

This is what the major Canadian brewers are expecting. This is what Mr. Morrison's letter means. It says “Do not include this in the Bill C-47, even though it is a general review of the excise system. Do not include it now. Wait one year, two years, three years, four years, five years”.

According to my numbers, if we were able to make 38 microbreweries disappeared in five years, we will probably be able to make the other 40 or so disappear in six years. So let us wait. Some people will say “ If they already have 90% of the market, this must not be important. Microbreweries currently have 4% of the market”. They had almost 5.5% of the market five years ago. However, because the excise system has been maintained, as it is today, they have disappeared. This is the main reason for their disappearance.

Every time the major Canadians brewers recover 1% of the market left by bankrupt microbreweries, this 1% represents dividends to shareholders of $17 million in net profits, $17 million for each slice of 1%. Killing the microbreweries is therefore a good idea.

This is why, a few years ago, microbrewers, smart people like you and me, decided to create, for this particular issue, the Canadian Council of Regional Brewers, which really represents microbrewers.

The president is Bob King, the President of Big Rock Brewery, an Alberta beer producer. The vice-president is André Dion, of Unibroue, in Quebec. The general manager, who was criticized by Mr. Morrison in his letter as representing no one, is Pierre Paquin, who is doing excellent work. With Mr. King and Mr. Dion, he is really fighting for the interests of microbreweries not only of Quebec, but of the rest of Canada. They are real fighters.

They created the Canadian Council of Regional Brewers, and they have had it with the collusion between the big Canadian breweries and the Department of Finance. They have had it with the collusion and the conspiracy organized them by the big brewers such as John Labatt and Molson, against the microbrewers, with the complicity of the Liberal government. They have had enough. That is the message they conveyed to the Standing Committee of Finance, two weeks ago, when they appeared before it. That is the message they expressed again these last few days, particularly with what happened in the Standing Committee on Finance, when the amendments moved by the Bloc Quebecois were discussed.

To complete the description of Canada's microbreweries sector, I will say that, since 1997, we know that the microbreweries have lost between 1.2 and 1.5% of the market. And this is because of the disappearance of 38 microbreweries, which, of course, was caused by the continued existence of an excise system that makes no sense at all, that is totally unjust and unfair and that, on a commercial point of view, tolerates, on the part of this government, unfair competition by American and European microbrewers on our own market. These great Canadian nationalists cannot even put in place an excise system that is competitive with its main competitors. These competitors are hurting our microbrewers, who are losing their share of the market. And this is being done in collusion with our big brewers. What a mess.

It is not surprising that 70% of the people believe that politicians are corrupt. When we see this sort of thing, that is collusion between the two big Canadian breweries and the federal government, particularly the finance minister, I am not surprised to see that so many people believe that politicians are corrupt.

Not only are we not changing the excise system to help the microbreweries but the Canadian major brewers get beer supply contracts for imported beer from microbreweries. They then sell the microbrewery products and specialty beers on the Canadian market.

Not only do the American and European microbreweries themselves supply the market, the major brewers take exclusive contracts to supply the Canadian market with microbreweries products and specialty beers. That is the case with Corona, Sol and others.

These contracts have already increased 175% since 1997. This increase benefits the major brewers, which also claimed to support the microbreweries in Canada and in Quebec and to agree with a lower excise tax. The cat is out of the bag now that the general excise system is changed by Bill C-47.

As I said, each 1% slice of the market allows the major brewers to get $17 million in net profits for their shareholders. This is what happens each time they gain 1 of the market at the expense of the microbreweries. That is a lot of money.

That means that if they killed all the microbreweries, in today's dollars, taking into account the actual consumption and sale structure, they would pocket $68 million in net profits. And then they say, “We stand for the microbreweries”. We can understand these big companies. Sixty-eight billion dollars for their shareholders, that is a lot of money. The exclusive contracts they have with the foreign microbreweries whose products they sell on our markets are also profitable. There has been an increase of 175% since 1997.

There is a lot of money involved. There is a lot of money to be made. There is also a lot of hypocrisy and collusion. As I was saying earlier, the competition legislation in the United States is very strict. Even Bill Gates had a taste of it. He was forced to divide his operations in two because one operation could not look at the other without compromising consumer interests.

Here we have a situation where not only there is collusion between Labatt and Molson to prevent a reduction in the excise tax—that alone would be unacceptable in the United States; I would be curious to see that—but there is complicity on the part of the government.

Even Mr. Morrison says in his letter “Our position remains unchanged”. When I read that, I was touched. The letter goes on to say:

Our position remains unchanged: we fully support a reduction in the excise tax for small brewers. It is a priority of the BAC—

If it were a priority, it seems to me that they would have wanted it to be done immediately; when we say that something is a priority, we do it right away; for them, it does not matter if it happens four or five years from now.

And he adds:

—and we want to point out that small brewers in Canada urgently need such reduction.

I am trying to understand. Words are pretty powerful things. A priority is something that must be done right away, and urgency is even stronger than that. It is worse than a priority. A priority is an administrative thing; an urgency, an emergency, is about self-preservation. If it is an administrative priority, and if it is about self-preservation as well, than it is a matter of urgency, so how could the letter continue in this vein?

We will support any measure aimed at attaining this objective, but in light of our prior agreement with the government—

Here we have another strong word, an agreement, “our agreement”. This is a way of saying that “with a gentleman's handshake, we are going to do them in, those microbreweries. They are going to get it in the neck, no excise tax reduction for them.” That is what the reference to an agreement means. Continuing with the letter:

—in light of our prior agreement with the government, we cannot support amendments which would include beer in Bill C-47.

The Brewers Association of Canada is a powerful lobby. It exists to defend the interests of all its members, big and small. But when the time comes to do so, they say, “We cannot support amendments which would include beer in Bill C-47.”

If I were a member of the Brewers Association of Canada, I would have left it ages ago. There would only be the two giants left. At least things would be clear. John Labatt and Molson do not want to see the small companies survive. But this way, it is not so clear. It is a good thing that the Canadian and Quebec microbreweries have reacted by forming their own association.

This is not the end of the matter. If it were, the situation would be bad enough, but it does not stop here. When we moved the amendments to Bill C-47, to bring it back to the spirit of the original excise legislation, which they claim to wish to amend and indeed totally rework, we told ourselves that beer had to be included in it.

In the present Excise Act, there is not only wine, spirits, tobacco and ship's stores, as is the case for Bill C-47, but also the beer the Brewers Association of Canada wanted to see excluded, even if this is the appropriate time and place for a reform of the excise tax on beer.

I then said, “Let us move amendments with the support of small brewers”. The amendments were moved, and refused because they were out of order.

Since Government Motion M-2 was moved, a committee chair is very powerful and has the right to refuse or accept amendments. The process ends there, because we cannot bring forward amendments to Bill C-47 at report and third reading stages. This is different from what we were accustomed to in the past.

A committee chair is now the holder of a powerful public office. That person wields more power than a secretary of state or a parliamentary secretary. At times, he or she even wields more power than a minister. Even a minister cannot refuse amendments like this. If those amendments were moved here, the minister would have to rely on the members' votes to have them rejected.

However, the chair can now refuse amendments just like that, and nothing can be done about it. We have no recourse, no appeal procedure that would give us a chance to express our point of view. This is tremendous power.

As I said, the Brewers Association of Canada sent a letter to the member for London-West and chair of the Standing Committee on Finance, indicating that the excise tax on beer should not be included in Bill C-47. It is not because it could not be there, it is rather because they did not want it there.

The Brewers Association of Canada, an organization dominated by John Labatt and Molson, has a committee known as the taxation committee. After analyzing Bill C-47, its recommendation was that beer be excluded. The President of the Brewers Association of Canada taxation committee is the husband of the member for London-West, John Barnes.

Now back to Bill C-47. It should have included everything in the current Excise Act to amend the provisions. The Brewers Association of Canada said, “Yes, include everything, and it is not in violation of the previous Excise Act, except for beer”. This main recommendation comes from the taxation committee, which is chaired by one of the seven directors of John Labatt, who is also the husband of the chair of the Standing Committee on Finance.

We were told that since the chair of the Standing Committee on Finance was not a minister or a parliamentary secretary, she was not subject to the code of conduct. This is a serious admission. As I mentioned, since Motion M-2 moved by the government committee chairs have tremendous powers in the legislative process. They can accept or reject amendments that are proposed. In a tie vote between opposition and government members, chairs can rule, in other words, vote either way, and do not have to say why they voted for or against the amendment. These are considerable powers.

Even here in the House, ministers must commit, they must explain themselves. Even here, ministers could not rise and say, “This is not admissible as an amendment”. They would not be able to say this if we could still introduce them in the House of Commons. There should be a vote in the House on opposition amendments, with members from all political parties.

Under the code of conduct, the responsibility of the chairperson of the Standing Committee on Finance is not that of a public office. However, I recall the case of Sinclair Stevens in 1986. Mr. Justice Parker, who presided over Mr. Stevens' case when he was accused of 14 counts of conflict of interest, said the following:

The code of conduct must be strengthened. It must become law.

Information regarding spouses and dependent children must also be made public for all those in public office.

In 1994 there was a review of the code of conduct. It was not expanded, but the Liberal party said that in cases where there is an issue of conflict of interest, such as the current situation with the chair of the Standing Committee on Finance, the occupation and all of the information regarding spouses and dependent children became relevant.

This has no teeth. The code of conduct is so weak. It was really stupid on the part of the ethics counsellor to present such a thing. However, there is an indication that information on the spouse and dependent children of a member of parliament who holds public office becomes relevant in the case of a conflict of interest analysis.

The hon. member for London West could have been a man. It would have made no difference if she had been a man and John Barns were her brother, father or son. The code of conduct of the government is so weak that the situation of the spouse would be considered as important.

We have a situation where there is at least an apparent conflict of interest. I will now come back to the summary of Bill C-47.

It re-enacts existing provisions in the Excise Act and the Excise Tax Act relating to the excise levies on those products, together with technical improvements—

At present, the general excise legislation contains provisions on wine, spirits and tobacco and numerous provisions on permits, licenses, etc., but also various provisions about the brewing industry and beer.

It would be absolutely incongruous to exclude such an item at the request of the Brewers Association of Canada, since that request was based on an analysis by the taxation committee of the association, whose president is John Barnes, the spouse of the chair of the Standing Committee on Finance.

I repeat, since Motion M-2 put forward by the government, a committee chair has extraordinary power in the legislative process. We no longer have any right of appeal or recourse once amendments put forward by opposition members or a government member are rejected by the committee chair. This is now an incredibly powerful public office in the democratic process.

Even though, under the existing code of ethics, which is very flexible to say the least, a holder of public office includes a minister, a deputy minister, senior officials, secretaries of state and parliamentary secretaries, it should include a committee chair whose responsibilities were increased by Motion M-2.

Conflict of interest, and the appearance of conflict of interest, is not just a matter of a code, and certainly not a flexible one. This is how she can present us with any old legal opinion. It is a matter of judgment, of honesty, of integrity, of transparency, and of intelligence.

Never, anywhere, has the chair of the Standing Committee on Finance told us, since consideration of Bill C-47 first began, that she was related to one of the seven directors of John Labatt, to a director of the Brewers Association of Canada and, to top it all, to the chair of the taxation committee for that same Brewers Association of Canada, which was not favourably disposed to an excise tax reduction for microbreweries. Never has this been mentioned.

And when did she flash her famous legal opinion? When I caught her red-handed rejecting my amendments and told her: “You are no longer entitled to make any decisions about Bill C-47 because you are clearly in conflict of interest, because your husband is the chair of the taxation committee of the Brewers Association of Canada, which recommended that the microbreweries be killed off over the next few years, having already killed off 38 of them”.

If that is not a conflict of interest that the government wanted to give a different spin to yesterday by dragging a legitimate debate on the place of women in society into a debate about integrity, about conspiracies against the microbreweries, about influence peddling, complicity and collusion, we have quite a problem.

The Minister of Finance got caught in the act recently, and the Minister of Canadian Heritage too, with contracts being given left and right to the organizers of their leadership campaign. After such a blatant case, is it so surprising that 70% of the population is fed up with politics and thinks politicians are corrupt?

Had the hon. member for London West been a man, with his brother chairing the taxation committee, it would have been the same thing. They are distorting this debate.

What kind of doormat members do we have opposite, that they should allow such an establishment, and the collusion to go on between this government, which is standing up for the interests of the majority, of the big breweries, at the expense of the microbreweries?

There is one way to turn things around. The government should immediately begin drafting a bill it would introduce before the end of this session, in order to do justice to the microbreweries.

It is imperative that the microbreweries, with their 2,000 jobs, can survive and prosper. We should put an end to this collusion between the big breweries, the government, and the chairperson of the finance committee, who happens to be the wife of the chairman of the taxation committee of the Brewers Association of Canada.

That is what we are asking the government. Because of this hypocrisy, collusion, conspiracy and lack of honesty, we will oppose Bill C-47. It certainly contains good provisions, but—

[Taxation, April 26th, 2002]

Mr. Speaker, over the past 30 years, the federal government has made administrative errors and made overpayments of several billion dollars to four Canadian provinces, particularly Ontario.

The provinces do not have to pay for this federal mistake and this is why those that did not benefit from the error are asking Ottawa for a compensation equal to the overpayments received by Ontario.

Will the Minister of Finance follow up on this and compensate Quebec and the provinces that did not benefit from such overpayments, by taking into account equalization and the federal miscalculation, which amounts to $210 per capita? This would mean an amount of $1.4 billion for Quebec.