Yvan Loubier

[Division No. 359, March 23rd, 1999]

Mr. Chairman, the President of the Treasury Board has partly justified using this special bill to impose working conditions on the basis of the fact that there have been financial losses in a number of areas, including grain handling and transportation.

Could he inform the House of the total amount of the financial losses caused by these work stoppages?

[Division No. 358, March 23rd, 1999]

He is not here.

[Division No. 358, March 23rd, 1999]

Mr. Speaker, I rise on a point of order.

When my colleague from Trois-Rivières talks about the workers' fate, when he talks about the employer's responsibilities, would it be possible for the President of the Treasury Board and for members of the Liberal Party of Canada to listen instead of throwing paper at each other—

[Catherine Girardin, March 18th, 1999]

Mr. Speaker, I proudly and enthusiastically extend my congratulations today to Catherine Girardin, a young lady of 16, who has brought honour to Quebec, to her culture, and to her language.

Last week she was named top young journalist by the Conseil pédagogique interdisciplinaire du Québec, and awarded their prix du Mérite du français en éducation.

Today, on the occasion of the Journée internationale de la Francophonie, she has been named top young journalist by the Association canadienne de l'éducation de langue française.

On behalf of the Francophonie, on behalf of Quebec, on behalf of the Bloc Quebecois, and on my own behalf, I again offer Catherine my congratulations and encourage her to continue to strive for excellence, to promote the French language that is so dear to our hearts, and to put her immense talents to the service of the advancement and emancipation of Quebec.

[Income Tax Amendments Act, 1998, March 18th, 1999]

Mr. Speaker, briefly, what I said was that one had to have money to be able to put any in a registered education savings plan. The present ceilings are perhaps too high for middle income earners, with the result that they are not contributing as much as they should to these plans.

As for the other question, the point here is not to worry about every little comma and period. The point is to recognize that there are things that need changing in the current tax system.

My eminent colleague admits that there are inequities in the federal tax system. What he should be doing is bringing all his energy and intelligence to bear on eliminating these inequities.

As for taxpayers earning less than $30,000, there is certainly work to do here in all categories. I gave the example of people earning around $30,000, between $30,000 and $40,000, which is the bracket into which 70% of Canadian taxpayers fall. That was the example I gave, and it is quite a striking one.

[Income Tax Amendments Act, 1998, March 18th, 1999]

Mr. Speaker, I am not sure the hon. member asked a question, but he provided good topics for discussion.

I do not know Bob McPherson's particular situation, what his taxable income or his assets were. There are many circumstances that may explain why, even while trying to help his grandchildren, he ended up having to pay taxes.

What I do know is that, generally speaking, the Canadian tax system is characterized by obvious unfairness and injustices. The hon. member and his party pointed out some of them, and so have we. We expect that, some day, the government will take action because, since 1994, the Minister of Finance has tabled many omnibus bills that were supposed to correct a number of tax provisions. But when we look at the overall picture, we realize that not much has changed.

In fact, I intend to soon ask a question on this issue. Members will recall the family trusts scandal, where $2 billion were transferred to the United States without any taxes being paid. At that time, the Minister of Finance promised to table a bill in 1999, to eliminate this tax loophole. We are still waiting. We do not remember him talking about that issue this year, and nor do members from the Reform Party.

So, there is a lot to do. The government could do a lot more about education savings plans, so that middle income earners could benefit from them. Right now, these plans benefit first and foremost the privileged in our society, not the middle class, as should be the case, since the objective is to improve access to education.

[Income Tax Amendments Act, 1998, March 18th, 1999]

Madam Speaker, I am pleased to take part in the debate at second reading of Bill C-72, an act to amend the Income Tax Act and to implement various measures announced in the 1998 Liberal budget.

Members will remember—and I will be pleased to remind it to those who do not—that, in 1998, when the Minister of Finance tabled his budget, we strongly criticized it. We particularly condemned the unfairness and the injustices contained in that budget, such as the fact that the Liberal government was using funds—and I am referring to the employment insurance fund—that belonged to workers and employers to finance inadequate measures, given what the Minister of Finance could do, in 1998 and this year, to help improve the well-being of Quebec and Canadian taxpayers.

That basic criticism still applies. What we had against the 1998 budget still holds true today.

At the same time, the Bloc Quebecois said there were certain measures in the budget that represented an improvement, given the unfairness and flaws of the tax system. Some of the measures announced in the 1998 budget had been promoted by the Bloc Quebecois since the 1993 election.

The bill to implement the 1998 budget, namely Bill C-72, which is before us today, does provide measures that are improvements. Take for example the $500 increase for the personal tax credit, the reduction in the personal income surtax, the home buyers plan, the RRAP for the disabled, and the tax credit for interest on student loans.

This was one of the first measures the Bloc Quebecois proposed to the government as a way to help students in a general reform of personal income tax. It has taken some time coming, but at least the government is vindicating the Bloc Quebecois.

There are also measures such as the educational tax credit and the child care deductions available to eligible part time students. We also encouraged this sort of measure, and it appeared in the 1998 budget.

The Bloc Quebecois also advocated deductions for child care costs in general terms. Although in Quebec, with its government's excellent policy on $5 daycare, the importance of the deduction will decrease. But Quebeckers and Canadians still currently benefit from this measure.

On the maximum $1,000 deduction for volunteer firefighters, we supported this measure following representations by volunteer fire brigades.

On the subject of raising the ceiling on investment in labour sponsored venture capital firms from $3,500 to $5,000, we would have had a hard time opposing it.

Let us render unto Caesar what is Caesar's. The Bloc Quebecois had proposed these measures as a step in the right direction. In general terms, however, and I will provide reasons later in my remarks, we found that the Minister of Finance did not do his job well and could have done a lot better had he not so brazenly hidden since 1994 the true picture of public finances and especially the operations surplus he could have used on measures much more consistent than these.

Nevertheless, these little measures following one after the other were positive and, in our opinion, remain so and therefore we are a little hard pressed to reject the whole thing saying it is a matter of the past, should be set aside, with the result that taxpayers who should be benefiting cannot.

We are not completely comfortable with the amendment moved by the Reform Party, which reads as follows:

this House declines to give second reading to Bill C-72... since the principle of the bill fails to address the federal tax system to end discrimination against single income families with children.

We agree with the Reform Party with respect to the content, but not with respect to the political approach they wish to take.

Just because one fundamental unfairness in the tax system has not been eliminated does not mean we should toss the whole bill out, that we should decline to go to second reading, even though the bill contains certain amendments.

If we were to support the Reform Party amendment, we would find ourselves in the situation of creating more unfairness than the Reform Party claims to be eliminating. This makes no sense.

If, for instance, we rejected the $500 increase in the basic personal tax credit, if we rejected the elimination of the surtax for individuals, if we rejected the tax credit for interest on student loans, would we be helping people in any way? Would we be helping single income or other families?

As to the content, an overhaul of the tax system is clearly in order. The Bloc Quebecois was among those who supported the Reform Party in its efforts to eliminate the astonishing spread between the amount of tax paid by a single income family with children and the amount paid by a two income family with children whose total income was the same.

There are also other inequities in the tax system. We will do what we can, as we have since 1993, to improve the situation.

But we cannot approve of the Reform Party amendment. We would be shooting ourselves in the foot, and only increasing tax inequities by rejecting Bill C-72.

That said, if this might have seemed to be bouquets for the government, now I would like to add some brickbats. Exactly like the 1999 budget, the 1998 one contained precisely the same fundamental defects for which we criticized the Minister of Finance when he brought down his latest budget.

The minister has hidden the true face of public finances. In so doing, he is not presenting the real possibilities there might have been for righting the injustices in the taxation system, for example by ensuring that the employment insurance surplus remains in the hands of employers and workers and goes to benefit the unemployed.

He could have done far more for students, for the disabled. Where the fault lies with this Minister of Finance, the same one we have had since 1994, is that he presents budgets to us that contain unreliable figures. He tells us that he done all he can do within the opportunities and the leeway available to him. The problem is that the leeway he refers to is false. He does not give us all the possibilities.

I would remind the hon. members of what we in the Bloc Quebecois said in 1998, before the 1998 budget, and again in 1999. We said it in 1997 and 1996 as well. Every year, the minister was out by about 60% in his predictions, between 60 and 150% in his predictions of the deficit and surplus, within six to eight months.

We gave him the right figures. As far back as 1998, we told him this, a number of months before the budget “You have the opportunity, all throughout fiscal year 1998-99, to solve a lot of problems, if you just tell us the truth, if you give us the right figures, if you give us the true range of possibilities offered by the actual surplus”.

At that point, members no doubt recall, barely a few months previously, we had tabled an analysis by the Bloc Quebecois, well received by the Minister of Finance, of ways to reform the personal and corporate tax system.

We had told him that he could as of that point—in 1998—start changing personal taxes over a 12 month fiscal year by fully indexing tax tables. He could have done so.

In 1998-99, we had set the surplus he would realize in the fiscal year at a minimum of $10 billion. Here we are in March 1999 and we see that the surplus for this fiscal year will indeed surpass $10 billion.

He could have corrected these basic injustices, but he did not, and this is what we are criticizing today.

The measures set out in Bill C-72 represent some improvement, but it is minimal compared with what the Minister of Finance could have done, this minister who is too lazy and who lacks imagination and transparency when he reveals the true picture of public finances.

I will simply give the House an example of the unfairness of the tax system at the moment because it is not indexed. Let us take, for example, the basic personal exemption in federal income tax.

In the 1998 budget, the minister proposed the figure of $6,706. The amount that he proposed in 1999, in the last budget, is $7,131. If the minister had fully indexed that basic personal exemption, it would not be $7,131 but close to $8,100 per taxpayer. This is not negligible. The total figure for all taxpayers represents a significant shortfall for Quebec and Canadian families.

The same goes for the spousal amount. Given the proposed amount in the 1998 and 1999 budgets, there is a shortfall of about $700 in the basic personal exemption. Seven hundred dollars helps make ends meet, particularly if you are in the middle or lower income category and have made the greatest contribution to help this government puts its fiscal house in order. That money would be helpful.

But there is worse. The Bloc Quebecois condemned the unfairness resulting from having two different tax treatments, depending on whether there is one or two incomes in a family, and the amendment proposed by the Reform Party seeks to correct that situation. However, that unfairness is exacerbated and made worse by the fact that tax brackets are not fully indexed.

Take the case of single income family, which pays more taxes than a two income family with the same total income.

Let us assume that a single income family makes $36,500. That family pays $1,118 more in taxes than it would if tax brackets were fully indexed.

If we take a two income family earning the same total amount, $36,500, but with both spouses paying taxes, this family pays $272 more in taxes than it would if there were full indexing.

There is a terrible imbalance here. Whether we are dealing with a single income family or a two income family, the difference in the taxes paid for an equivalent income no longer make any sense.

If only the tax brackets were fully indexed, as we have been proposing since 1994, since we first set foot in the House. We went further still in our comprehensive review of personal and corporate taxes, but indexing has always been a sort of mantra for the Bloc Quebecois.

An examination of the tax rates for the various brackets shows how ridiculous this is. For instance, taxes are 17% on the first $29,590. With full indexing, and not just on the basic exemptions, the rate would have been 17% on the first $36,918.

Up to $36,918, the rate would be 17%, while right now, without indexing, it is 17% only up to $29,590.

It is the same for everything up to $29,591, and then up to $59,180. This second bracket is taxed at 26%. If there had been full indexation on this income level, the 26% tax rate would have kicked in at between $36,919 and $73,838, before going up another 3% to 29%.

It makes no sense that, even today, with the means available to the Minister of Finance and the government, we are still at the stage of not having given a minute's thought to satisfying the bulk of Canadian taxpayers by fully indexing income tax brackets.

Merely by fully indexing the $29,590 tax bracket at the 17% tax rate, taking it up to $36,918, 70% of Canadian taxpayers would be affected. This general measure would have beneficial results. All taxpayers would benefit, yet the Minister of Finance has not responded to our invitation to correct such an injustice, despite our telling him in 1998 that the surplus for the 1998-99 fiscal year offered him real possibilities for doing so.

Later this week we will be addressing 1999, and again he has not responded. He has preferred a few little measures relating to taxation rather than any overhaul, any overall planning.

I am beginning to agree with an editorialist at the Globe and Mail , who said the other day that the Minister of Finance was perhaps what it took to bring the deficit to zero with measures that were and are totally questionable. However, he may not be the right person to manage growth and surpluses.

When we see over the past two years what this man has done, when there are huge needs and wide open possibilities, I start agreeing with the editorialist at the Globe and Mail .

Let us talk about the unemployed. We were saying the same thing in 1998. Things are worse for the unemployed in 1999. In 1998, we rejected the budget of the Minister of Finance for one of the basic reasons we gave for the 1999 budget as well, which is that the unemployed are the real losers. Bill C-72 does not resolve this issue. The unemployed should benefit from the huge surpluses accumulating since 1996 in the employment insurance fund. They will total over $25 billion at the end of this fiscal year.

Every year, the minister takes $6 billion that should go to help those hit by the scourge of unemployment. As they are hit by this scourge it is not the time to make them poorer than they are.

Despite what the government said and the figures of the Department of Human Resources Development, only 43% of the unemployed benefit from the employment assistance plan. The CLC cites 36%. He preferred to keep these surpluses, set them aside, make himself look good, prepare his run for the leadership rather than help the unemployed.

Our basic criticisms remain. The basic criticisms of the Reform Party remain as well.

Unfortunately, the amendment is drafted in such a say that, if we agreed to it, we would be creating an even greater injustice for people with a disability and for students, among others, and we are not prepared to do that.

[Supply, March 15th, 1999]

Mr. Speaker, that is not the point. The members opposite should try to show a glimmer of intelligence for once.

The issue is whether we are going to take a back seat to global progress. Will Liberals refuse to have a real debate, as they are asked, and in particular to hold a forum at the finance committee? I have asked for a two to three-day forum bringing together experts from Quebec and Canada.

We could examine the pros and cons of a monetary union, see what the conclusions could be drawn and prepare members of parliament to hold debates which would be more enlightened than those we have heard today from the Liberals and the New Democrats in particular. That is what we are asking for.

[Supply, March 15th, 1999]

Mr. Speaker, I thank the member for Drummond for her excellent question.

In fact, when we look at the evolution of monetary policy since 1950, the independence of the Bank of Canada's policy is highly suspect. Since 1950, almost 100 basis points, or 1% in terms of Canadian interest rates, have been added to American interest rates.

In other words, each time the U.S. Federal Reserve Bank makes interest rate decisions, the Bank of Canada follows suit. That is entirely natural because we are in lockstep with the American economy. There is capital circulating at the speed of lightning, and increasingly freely. Given Canada's weaker performance compared to the United States, more money may leave the country if there is a difference between Canadian and American interest rates.

There was 1996-97, when the Bank of Canada boasted that it operated independently from American monetary policy, when Canadian interest rates were over 1% lower than American rates. What was the result? The Canadian dollar took a nosedive, made even worse by the Asian crisis.

Apart from 1973, when the Bank of Canada made a decision completely unconnected with the U.S. Federal Reserve Bank, this was the only such occasion.

In the circumstances, therefore, any talk about the independence of the Bank of Canada is complete nonsense. The Bank of Canada is not independent.

We had another example of this as recently as August and September. The president of the U.S. Federal Reserve Bank lowered American interest rates by 100 basis points. Fifteen minutes later—not one or two days, not one week, but 15 minutes later—Mr. Thiessen, the governor of the Bank of Canada, lowered Canadian rates by exactly the same amount. We are continually following the evolution of American monetary policy. A common currency for the three Americas, or even an international currency, would not be such a great loss of autonomy.

[Supply, March 15th, 1999]

Madam Speaker, I would have thought, with a debate as important as this one on the future of the Canadian currency and the use of a North-American currency, or perhaps a pan-American one, there would have been more interest forthcoming from the government side. They have had virtually nothing to say right from the start, with the exception of using their speaking time for a ten-minute speech of highly dubious nature.

I would like to begin by congratulating my colleague from Charlesbourg, the man behind this most important debate. The question, as set out in the motion, is not whether we must change to some other currency starting tomorrow morning. The question is this: are we going to put on blinkers in the next few weeks, months or years, when debates arise concerning economic interdependence and the future of macroeconomic tools such as monetary policy?

The question is this: are we going to isolate ourselves from major world trends, or are we going to start right now looking at the pros and cons of changing the way we do things.

What I have heard so far has been pretty esoteric. I did not believe we had reached the stage here in parliament of being so blinded by narrow Canadian nationalism as to declare ourselves “staunch defenders of our independence”. Prepared to fight to the death to maintain the Canadian dollar. Ready to fight to the death to prevent Canada from becoming a banana republic”. I will come back to the remarks by the member for Kamloops, Thompson and Highland Valleys, which were totally out of the current debate.

Let us consider some of the arguments we heard from the other side of the House. We heard the Secretary of State for Financial Institutions, not just anyone, but someone who is supposed to be somewhat more open to changes in economic development and in international world trade. He said “Canadian sovereignty is vital. We will not hand Canadian sovereignty over to the Americans”.

We have to recognize the fact that the economic interdependence that was built over the past 50 years, in fact since the start of the first GATT agreement in 1947, is practically complete.

There are 134 countries who are signatories to the WTO agreements. Almost all trade is governed at the moment by rules that are liberalizing it, rules that became rules of law with the creation of the WTO and the establishment of the Marrakesh agreement of 1994.

The government is so far behind that it is now avoiding any debate on the use of a North American currency or one for the three Americas. However, the World Trade Organization, in which Canada is represented, is entertaining the idea that, some day, we might have a world currency. Members can imagine how far behind we are right now. And the one who brought up the ides of a world currency is not just anybody, but the WTO's current director general, Mr. Ruggiero.

We are so far behind here that we forget that, while goods and services have been moving freely under the GATT, and now the WTO rules, capital is not subject to such strict rules that would provide similar protection. As we saw with the Asian crisis, the financial sector is not subject to strict enough rules. The result is that secondary currencies such as the Canadian dollar are subjected to devastating speculation.

It must be pointed out that daily capital movement is currently 30 to 40 times greater than the movement of goods and services throughout the world. If we want some form of protection, we should wonder about the recent Asian crisis, which may not be the last financial crisis to occur in the world. We must ask ourselves questions about the forms of protection that we can create. And one of them is to consistently reduce the number of secondary currencies in the world. Eleven of them have already been merged into a single currency, thus eliminating 11 possibilities for unscrupulous speculators, who destroy national currencies, thus threatening the countries' economic future and job creation efforts.

The Liberals are not interested in talking about this. They would rather talk about Canada's independence. I have never heard so much talk about economic sovereignty in parliament as I have this morning. Independence, as they are using the term however, misses the whole point.

Do the Secretary of State for International Financial Institutions and the Minister of Finance think it is more important to have symbolic, artificial independence, or real powers within a North American organization of the three Americas or an international organization?

My colleague, the member for Charlesbourg, earlier told us how European monetary policy worked, explaining that France had only just recently acquired a say in the future of the French franc, because the future of currencies in Europe was determined by the Bundesbank.

With the creation of the Euro, France will have a say in German policy. That is real power, real sovereignty. France has exchanged an ultimately artificial—because it no longer had any power at all—independence with respect to monetary policy for real power. It did so by banding together.

The same is true for international economic integration, economic interdependence. All members of the House should know this, but they are obtuse. There was the case in 1997 of Costa Rica, a small country of 2.5 million inhabitants, winning an international case against the claims of the American government. Imagine that. Costa Rica never would have thought itself capable of swaying decisions of the United States, the strongest power in the world. Because of economic interdependence and common rules, these small countries have gained extraordinary powers. That is real independence, true national sovereignty.

I listened to the speech of the member for Kamloops, Thompson and Highland Valleys. It was a despicable speech. We are fortunate that the NDP will never have a chance to be the government because if there is a party that would establish a banana republic, it is that party.

I thought it was so preposterous of the member for Kamloops, Thompson and Highland Valleys to ask “Do we want to avoid, after the separation of Quebec, a debate on the use of the currency and a situation where a sovereign Quebec would have no right to use the Canadian dollar?” I am sorry, but the member is really out of touch with reality.

We hold 25 per cent of the money supply. Twenty-five per cent of the money circulating in Canada belongs to Quebec. Whether there is sovereignty or not, this money will always belong to Quebeckers. That is very clear.

Whether we have a North American currency or not, they will have one heck of problem when this happens and it is decided that we will be using the Canadian dollar whether they like it or not. They do not want to hear about it. I can understand that. It would bother me too.

The member for Kamloops, Thompson and Highland Valleys quoted the governor of the new European Central Bank, who said something along these lines “Countries of the European Union will not have any say in the monetary policy of the new bank”. This goes without saying, since in every industrialized country the monetary policy is essentially independent from political power.

Even under the Bank of Canada Act, the powerful Bank of Canada, which he reveres and which does not have any power left according to us, is said to be independent from the political powers in Ottawa. The member told us, quoting the governor of the new European bank, that the use of a common currency generates a loss of sovereignty. Obviously, the hon. member does not know how monetary policies work.

The Parliamentary Secretary to the Minister of Finance said “We cannot have a monetary integration of the three Americas. We have different economic realities, different inflation rates, different unemployment rates”. So what? Do the 11 European countries that adopted the Eurocoin as their common currency have similar inflation rates? Do they have similar unemployment rates? Do they have similar domestic policies? Come on. What we heard here makes no sense at all.

I would have liked to have a real debate on this issue, the kind of debate this motion brought forward by my leader and by the member for Charlesbourg deserves. Instead of that, what we have heard so far today is just political bragging about Canada's sovereignty, about the need to defend that sovereignty at all costs. But Canada is losing this debate and it will cost us dearly in terms of our sovereignty.

Canadians may have an identity problem, but Quebeckers do not. We are able to have a debate on economic, monetary and global integration without fear of losing our identity. Quebeckers are sure about their identity. Canadians are not.