Mr. Speaker, I am pleased to take part in this second reading debate on Bill C-47. I will say in advance that the Bloc Quebecois is going to support this bill. We have two reservations, however, and, over the coming weeks, we are going to try to convince the government that we are right about two particular aspects of this bill.
Why are we supporting this bill? Because it simplifies matters in connection with wines, spirits and tobacco, specifically by harmonizing sales taxes, excise taxes with the general taxation system, and by creating compatibility among the commercial accounting periods. This is a clear improvement from a tax administration point of view. However, through you, Mr. Speaker, I wish to draw the government's attention to two problems related to this bill.
The first has to do with the beer sector, microbreweries in particular. The second has to do with small vineyards, which have been appearing in increasing numbers in recent years, such that in Quebec and in Canada, this has become a very flourishing industry which is winning international product quality awards.
In the case of beer, there is a major problem, a problem of fairness, as it were, internationally. In other countries, such as France, Belgium and even the United States, microbreweries are exempt from excise tax. Internationally, this is accepted under WTO rules. There is a special exemption for microbreweries so that they can perform, develop and support numerous regional communities, most of them small, as well as compete with large national breweries.
This is the case everywhere else, but not here. It is unfortunate that, in Bill C-47, the government has not taken into consideration the fact that microbreweries in Quebec and in Canada generate some 3,500 direct and indirect jobs; I would say that three-quarters of them are direct jobs and approximately 1,000 are indirect jobs. It is unfortunate that the government has not taken into consideration this important contribution by microbreweries. As opposed to the United States, for example, where the excise tax is 9 cents a hectolitre, in Canadian dollars, here there is still a tax of 28 cents a hectolitre.
Clearly, advocates of economic liberalism, even in the United States, are looking out for microbreweries and recognizing their contribution. Such is not the case here. But it is the case in France, in Germany, in Belgium, and in the United States. In Canada, however, microbreweries are treated the same as the big breweries that have much greater financial and technological resources to provide stiff competition for microbreweries.
Is this government able to understand that affirmative discrimination, permitted under trade rules, permitted in a world that is moving toward globalization, and permitted within the framework of globalization, could help microbreweries expand and provide fair competition for large breweries from virtually every country around the world? Would it not be a good idea for the government to get in line with all of the major industrialized countries and help its microbreweries?
We will be presenting an amendment to provide microbreweries with a partial excise exemption for the first 75,000 hectolitres, this is approximately the same level of taxation applied to microbrewery beer in the U.S. This would amount to a 60% reduction in the excise tax for the first 75,000 hectolitres produced by microbreweries, whether it be Unibroue or other microbreweries in Quebec and Canada.
This would be of great help to them and would constitute fair treatment. As I said, Unibroue's competitors benefit from this exemption, moreover. It is recognized and allowed under international rules.
So, as I said earlier, we are going to introduce an amendment to this bill at report stage, in hopes that the federal government, with its sizeable surplus accumulated over the past five years, could contribute some $15 million annually. This is not something that would cost the government all that much.
I would remind hon. members that the microbreweries contribute about twice as much in terms of taxes to the various levels of government, a little more than half of this to the federal level. Even with application of such a measure, the federal government would still come out on top. It would still be receiving net taxes from the microbreweries and would help maintain, even increase, employment in a sector that has undergone phenomenal expansion over the past 15 years. This measure would cost between $10 million and $15 million. That is not much to ensure that the existing 3,500 microbrewery sector jobs continue to exist, and even that this sector could become a promising and dynamic one in the years to come as far as job creation is concerned.
There are certain problems in this bill, including one concerning small wineries. As hon. members are no doubt aware—and some Liberal colleagues are involved in wine making, moreover—there has been a considerable expansion as far as small wineries are concerned in Quebec and in Canada over the past 25 years. When I was an economist for the Union des producteurs agricoles, I witnessed the birth of some of the great Quebec wineries. Back in 1986, investment in this sector was just beginning, for instance in l'Orpailleur, in Montérégie.
I was there in the early days of this sector, which has developed from its early, more amateur days to the respectability it enjoys today because of the award-winning, quality products to which I referred at the beginning of my speech. Quebec and Canadian small vineyards have been raking in the medals in recent years on the international scene for the quality of their vintages
Small vineyards are subject to a tax of 51 cents per litre. This is significantly more than elsewhere, including in France, Belgium, Italy and even in the United States. Again, we are asking that small vineyards be treated fairly.
Let us take the example of a vineyard that produces 200,000 bottles. This is not much, considering that, at the international level, large vineyards' production is 10 and 20 times larger on average, including in the United States. What the government could do—and we will again propose an amendment to this effect—is an provide exemption from this 51 cent tax per litre on the first 200,000 bottles.
Again, this exemption would be acceptable from a trade point of view and it would meet all the requirements of international treaties, including the one with the World Trade Organization. Such an exemption would also meet the requirements and provisions of the North American Free Trade Agreement, and it would help small vineyards give additional momentum to their performance.
The cost of this exemption to the federal government would be ridiculously low, but it would really help small vineyards. It would cost the government less than half a million dollars per year, $350,000 in fact. This is very little, but for small vineyards in Quebec and in Canada, it would mean a lot. It would help them tremendously. Why? Because the competition is very fierce for small vineyards. It is very fierce with large international vineyards, and also with exports from small vineyards in the United States and elsewhere in the world.
Once again, we are going to bring forward an amendment so that small vineyards with sales under approximately $2 million annually could be exempt from this tax.
Small vineyards are now working hard on quality and the development of complex varieties of vine. They are making incredible efforts to break into the international market. The quality of wine in Quebec and in Canada is therefore good, and there has been incredible improvement in recent years.
In my view, even more could be done. I am thinking of l'Orpailleur; I mentioned l'Orpailleur, in Montérégie, earlier. I am also thinking of Clos Saint-Denis, in Saint-Denis-sur-Richelieu. These are two small vineyards whose owners I know which have been making amazing progress, year after year, in research and development to improve the quality of their products. They enter all the international competitions and win awards.
It would be worth improving Bill C-47 by incorporating these two amendments. It would not cost the government very much, but it would give a tremendous boost to two flourishing industries of which we are proud. Throughout Quebec and Canada, people are very proud of the efforts being made by the microbreweries, of the quality of their products, and the same goes for small vineyards.
Again, we will be supporting Bill C-47. However, we hope that, at the various stages, the government will understand that it is to the advantage of all Quebecers and all Canadians to approve the two amendments put forward.