Jim Peterson

[Resignation of Member, June 20th, 2007]

No. They are right up there.

My staffers are among Heather's and my closest friends today. My mom and dad are both 94 and they have given me more than any son could hope for. They are to this day an incredible inspiration. I could not have chosen better parents or better Liberals. To my brothers, David and Tim, who have always been there for me, I look forward to seeing more of them and their exceptional families. I could not have chosen better brothers.

My most important thanks goes to Heather, who, if members looked in the gallery she would be there but I cannot recognize her. I met Heather the first week of grade nine and eight years later I finally got her to marry me. That was 44 years ago. Heather has shared this journey with me 24/7 and I thank her. I thank her for her unconditional support that has made all of this worthwhile. I thank her for her wisdom and advice which have proven invaluable. I thank her for her love that has made tough times easier, good times better and, at election time, she got far more signs up in Willowdale than anyone else.

Lastly, I want to thank my colleagues throughout the years from all parties in this House, including you, Mr. Speaker. We may at times have differed over policies but we never differed over the need to serve our constituents with dedication and commitment, to work to make a difference in the lives of people and to build a better Canada and a better world.

In closing, I would like to say that over the course of my life I have visited and worked in many countries but it has always been such a great joy to come home to Canada. We Canadians are among the most fortunate of all people on earth.

I leave my colleagues today fully confident that they and those who follow will ensure that Canada is always the envy of the world.

Thank you for everything you have done for Canada. Thank you for everything you have done for me.

[Resignation of Member, June 20th, 2007]

Mr. Speaker, I want to address you and my colleagues. It is with great emotion that I announce today that after July 12, I will no longer be the federal member for Willowdale.

While this is a very difficult decision for me, we all know a law was passed that would see an election in the fall of 2009. As my good friend and colleague, the hon. member for Toronto Centre, said yesterday, I feel this is the best option we have for renewal and for the voices of tomorrow to be heard in this august chamber.

For the right hon. Prime Minister, while I respectfully understand the calling of a byelection is his sole prerogative, I can assure him that the people of Willowdale will stand behind him if he chooses to do so.

It was a great privilege and a great honour for me to have served in the national capital under this Prime Minister and to have represented the people of Willowdale.

There have been many highlights. I am proud that in 1982, as parliamentary secretary to the minister of justice, the Right Hon. Jean Chrétien, I was able to help pass Criminal Code changes that created the offence of sexual assault and ensured that a woman's previous relationships could no longer be put on trial.

As chair of the finance committee in 1993, the very first duty assigned to me by the prime minister was to find a way to honour our election commitment to replace the GST. We looked at over 20 alternatives and we found one. The conclusion was that we would harmonize the federal sales tax with the provinces. We would have tax included pricing and, most important, we would change the name to the national value added tax.

I can say that former Prime Minister Chrétien was not very happy but former Prime Minister Mulroney was.

The finance minister at the time, the member for LaSalle—Émard, instituted pre budget consultations by the finance committee which continue to this day and have been adopted by other legislatures in Canada and abroad. Our reports were long and scholarly and, as I was so often assured, they were, perhaps sometimes, read by someone in finance.

Secretary of state for financial institutions was an active stint. It included foreign bank branching, a five year review of the Bank Act which resulted in the longest bill to ever hit Parliament, the deneutralization of our insurance companies, FINTRAC to counter money laundering, major reforms to the office of the ombudsman and four major financial institution mergers without a public furor.

I want to say that our financial institutions in Canada are among our leading corporations and many are global champions. I believe mergers will help our banks remain competitive and that these mergers can be engineered without major job losses or branch closings, as evidenced by the TD Canada Trust merger. We should not fear bank mergers.

As minister of international trade, I received incredible support from the prime minister at the time, the member for LaSalle—Émard, to develop and implement a commercial strategy, not just for the U.S., EU and others, but especially for the Brazils, Russias, Indias and Chinas. We see the strategy being continued today but I believe there is urgency in bringing greater resources and efforts to bear.

I visited China three times and India twice, as well as Russia and Brazil. The prime minister at the time, the member for LaSalle—Émard, was a huge help with these BRICK countries. We visited them and opened doors for Canadians that only a prime minister can open.

India is especially dear to me. Last Saturday night in Toronto, I met with Kamal Nath, India's industry minister. He is a great leader, politician, statesman and friend. Later on in the evening, Heather and I attended the Indo-Canada Chamber of Commerce dinner where he was a keynote speaker, along with someone else from this House. It was a splendid event.

I remember not only fruitful bilateral dealings with Minister Nath, but our work at the WTO. I especially recall going three days without sleep as we worked in the green room in Geneva at the end of July. It was hot and there was no air conditioning. We opened the windows but there were no screens. Millions of mosquitoes joined us inside but, nevertheless, we achieved a framework agreement for Doha.

Today, success in this realm seems illusive. However, I leave this House believing that a successful outcome of the Doha round is critical. It must be about development and, most important, only the WTO can rein in the obscene agricultural subsidies that we find in the U.S. and in the EU. Bilateral and regional deals will not do it.

Life in the public eye has had some precious moments. A few days after the same sex vote in this House, I was scheduled to attend the laying of a cornerstone at a convent, something I faced with great trepidation. The Mother Superior met me at the gate and said, “Jim, thank you for what you did”. I asked her what she was talking about. She replied, “Your vote for same sex marriage”. I told her that she had to be kidding. She said, “No, Jim, Jesus would want us to be inclusive”.

I am very proud of the parishioners of Newtonbrook United Church who have donated a huge, expensive property at Young and Cummer, raised the money and built 52 affordable housing units. This is a shining example of what more of us might do to help others.

I recall the time I worked long and hard to get a young man with severe disabilities into a proper facility that could cope with his needs. During the next election, I called at the family's door and asked if I could put up a sign. He replied, “No, I am not Liberal”. As members in this House know, one's best efforts are not always met with a reward but that is not the reason that we make those efforts.

There are so many to whom I am grateful. I want to thank the involved, caring and committed people of Willowdale who made my public years possible. To the officers and employees of this House, I thank them for being unfailingly helpful. To the many public servants at finance, trade and elsewhere, I thank them. They are among the hardest working and ablest people I know. To our extended family of outstanding staffers over the years, to whom I owe so much—would it be in order to recognize them in the gallery?

[Sales Tax Amendments Act, 2006, April 25th, 2007]

Mr. Speaker, I will answer the question because the hon. member obviously does not know the answer.

In the event that a Canadian company has operations or does business in Europe and that the tax rate in Europe is 25%, then the applicable tax rate in Canada for any income returned directly to Canada is nil. Zero. The income tax paid is still 25%. If the same income goes to a subsidiary in Barbados, the tax rate in Canada is zero. The rate paid remains 25%. It is exactly the same. What is the problem with that?

[Sales Tax Amendments Act, 2006, April 25th, 2007]

Mr. Speaker, I think the hon. member has put it in a way that every Canadian can understand. I could not agree with him more. What is worse is that the government has pledged to another percentage point reduction in the GST. How the hell is it going to pay for that? It is going to be coming out of the pockets of those who need it most.

Could I just add to the eloquent words of my colleague? Looking around the world, we see that we have one of the lowest consumption tax rates of any nation in this world, and the government is bent on lowering it further. We have seen how other countries that are competing with us in the global marketplace have enhanced and raised their sales taxes, their consumption taxes, with some of them approaching 20%. This means they can lower their income taxes and be more globally competitive.

How do we protect the weak if we raise our sales taxes or consumption taxes? We do it through a tax credit. We already have that in place. We have a means, if sales taxes are raised, of compensating those least able to cope with increases at the consumption level.

In our global economy, this is the type of fiscal policy that is responsible. It is the one that allows us to deliver the services that are so critical for the least well off in our country.

[Sales Tax Amendments Act, 2006, April 25th, 2007]

Mr. Speaker, I have a question for the hon. member. He seems to know a lot about the tax haven situation.

Let us take the example of a Canadian corporation that has direct operations in Europe, and the tax for the corporation is roughly 25%. If this income came directly to Canada, would it be taxed here, in Canada, or at the rate of 25%? If the European corporation had a corporation in Barbados and then the income came to Canada—from Europe, through Barbados on to Canada—would the tax rate be 25%, or the rate in effect in Canada?

If the hon. member can answer that question I will continue to discuss this with him.

[Sales Tax Amendments Act, 2006, April 25th, 2007]

Mr. Speaker, it is an honour to speak once again in this great House of debate and innovative thought.

Our party is supporting Bill C-40. This bill is the natural evolution of a fiscal policy, the goods and services tax harmonized in certain parts of the country. It is a natural evolution as we gain experience with it. We find that it does not always cover every little contingency the way we would think is best.

I commend the government on coming forth with a number of amendments which harmonize and streamline, and deal with exigencies which could never have been envisaged from the very start. We must continue to always adopt this type of attitude to changes in the tax law because we can always learn from our experience as we move along, so that the tax code becomes a living organism, a living body of law.

There are some areas where I believe that the government could have gone farther in making changes to our goods and services tax. One is with respect to the exemption for housing. The original exemption was $250,000, but we have seen how prices have skyrocketed in some cities across the country such as Vancouver, Edmonton, Calgary and Toronto.

The idea was that we would help new homebuyers overcome the difficulties of purchasing a home by exempting them on GST up to a certain level, and that level has never been changed. We should be adjusting it, not according to the ordinary inflation rules, which are around 2% a year or slightly higher, but according to the inflation rates for actual housing in particular markets across the country. I am sure the government will want to consider this type of change in the days and months ahead.

The hon. parliamentary secretary talked about a number of other tax measures. I have no hesitation in moving from Bill C-40 to the general fiscal policy of this government.

Let me just mention a few particular issues. The first is the government's treatment of the GST in general. The government has reduced the GST from 7% to 6%, costing about $5 billion. That money could have been used to pay down the debt, to invest in new productivity measures in Canada, or to help those most in need in our country. What is worse, the government did so by increasing personal income tax by .5%.

There is not one economist in the country, let alone the world, who would say that the tax cuts given on the GST sales tax consumption level are preferable to overall tax cuts to the personal and corporate income tax rates, cuts which would make us more globally competitive.

We are in a global competition for capital. Capital knows no borders. It flows seamlessly around the world. We have to be able to be competitive unless we are prepared to introduce capital controls and barriers. No sane economist would advocate that as well. Therefore, in order to remain competitive, why did the government give up this great chance to lower personal income taxes as well as reducing our corporate income tax rates so that we could attract that capital?

Under the previousfinance minister and previous Prime Minister Jean Chrétien, the Liberal government took a very important step. Even when we were dealing with the whole issue of the deficit, we were looking at what we had to do to attract new capital investment and the best jobs to this country. One of those was to reduce the corporate income tax, and we did it.

We were headed on a course down to 30% combined with the provinces. That would have compared with 35% in New York State, 41% in Michigan and 41% in California.

That was a responsible way to attract jobs to this country. We have seen how under our leadership the unemployment rate in this country fell to a 35 year low. This is great because we all remember back in 1990-91 when unemployment hit 11.4%. The toughest thing as an MP was to meet with constituents who had lost their job, who had used up all of their savings, had used up all their RRSPs, had lost their home, their car, their self-respect, and often their families.

We must never be content with a system which allows that level of high unemployment and this is why we must on an annual basis check our global competitiveness. The cut to the GST did not do that. It was stupid. It was obviously done for short term political gain, but Canadians are not stupid. They know when they are being had. The Canadian electorate is very smart and they recognize that the best politics is always the best policy.

Let me go on to a second area where I am very dismayed with the government in terms of its fiscal policy, income trusts. It is not just the broken promise where the Prime Minister said he would never touch income trusts, it is the fact that the measures taken were totally without tax foundation. They were totally without study. Did the government know it was going to cause a $30 billion meltdown in capital of investors who had put their money in savings, a lot of them seniors, a lot of them retired, as a result of the measures that it took?

If the Conservatives knew that, then they have to be condemned. If they did not do the studies as to what the impact on the capital markets was going to be, then they must be condemned. Why can they not admit a mistake? We had numerous witnesses before the finance committee who showed that the tax leakage figures suggested by the government were totally exaggerated, totally out of sight. They did not have to go from a zero tax to a 31.5% tax on income trusts in order to kill them.

We listened to those witnesses. Some of them said the government was even making more money by having in place income trusts where the distributions were taxed usually at high personal rates rather than the same amount of money coming out of a corporation being taxed at about 6.2%. As members know, personal rates go up as high as about 45% in Canada and that is why the tax leakage was not there. It might have been there with respect to some non-residents, but if we take a 6.2% tax equivalent at the trust corporation and compare that with the withholding tax on dividends going to foreigners, often we would find there was no loss.

Then take the money going into the tax exempt such as the pension funds here in Canada. Granted that dividend going into the pension fund was not taxed at that time, or the trust distribution, but those pension funds were very quickly distributed to individuals in this country because retirement depended on them and were again taxed at the full corporate rate.

Our Liberal government looked at this after having talked to the experts and we were convinced there was a better way. We said leave the cap on no new income trusts being created for the moment. Put a 10% distribution tax on funds going to non-residents and it will more than make up for any tax leakage that there might have been, if there was any in fact.

Meanwhile, the issue should be studied. Do we really want to blow away investment instruments such as income trusts, which were providing a decent rate of return to our retired citizens? If they are investing in bank instruments or government bonds, what rate do we think they are getting, 4%? That is only 2% above inflation. How can retired people live on that and how can they live on it when the government caused a meltdown of some $30 billion to the value of their savings?

Do the right thing. We are prepared to study it further. Why is the government afraid to study it further? My God, is it a sin to be wrong? We all make mistakes. The sin is in failing to admit that one is wrong and doing something about it. Everybody knows the government is wrong on this thing. Everybody knows that the emperor is wearing no clothes. Why does it not just admit what everybody knows and be prepared to look at this thing and give it a second thought?

Another area where I have great concern with what the government is doing in terms of fiscal policy is this issue of interest deductibility. It has said that if a Canadian investor or company borrows money to buy a company abroad in order to expand its global operations, in order to be globally competitive, it cannot deduct the interest on the money it borrows to acquire the shares in that foreign entity.

This last budget was not the first time that we in Canada have seen that particular measure. It was a measure brought in following the Carter commission many years ago, brought in by a Liberal government, where we said if the dividends coming back into Canada are not taxable, why should there be a deduction for the interest to acquire those tax free dividends? We established that measure and found out how stupid it was. We very quickly reversed that measure.

Why is it stupid to do this so-called type of non-interest deductibility? It is stupid because our foreign competitors can deduct the interest they pay on money borrowed to buy up our companies and foreign entitles, to grow, to become powerful, to become Canadian and global champions in terms of the competition that we face. This measure was not thought out in terms of the practical realities of this world.

Again, why would the government want to handicap Canadian companies? Why would it want to handicap our competitiveness? Why would it want to divert jobs out of Canada? I can say from experience what will happen. This is what a government in Canada tried before and the result was that Canadian multinational corporations were not going to continue to exist. They would simply move their global operations and headquarters out of Canada.

This is what we need in order to have the high level, high paying, good jobs here in this country. We want Canadian head offices here. We want the global champions to be based in Canada because that is where the best jobs are.

If anyone needs an example of what has happened, let us take Hong Kong. In the early nineties it was going downhill because of the fear of what would happen when it would revert back to China. The cover of Fortune magazine said, “Hong Kong is dead”. At that time Hong Kong had an 80% manufacturing economy. Anything that anyone picked up had “Made in Hong Kong” on it.

Today Hong Kong is no longer manufacturing. It is an economy that is about 90% service, with all of its manufacturing operations in foreign affiliates in the Pearl River Delta in China. Hong Kong, by being the headquarters for the multinational corporations, is producing the great jobs and the great wealth. It is booming.

We cannot be afraid to change. We have to be open to change in this global economy or we are going to lose the best jobs here.

This is another blatant mistake in fiscal policy by the government. Again I say, my God, we are all human and we all make mistakes, but the government must admit it and do something about it. We will work with the government to do something about it. We will make it possible to for us to have a strong, competitive economy here in Canada, producing the best jobs, with Canadian champions that are reaching out around the world.

Are we not proud of our Canadian banks and insurance companies that have offices in almost every other country in the world? They are showing the Canadian flag and the Canadian name. They are helping Canadians invest there, acquire things there and do business there.

We want more of these Canadian champions. The measures that the government has brought in are simply going to drive those Canadian champions out of this country.

I saw that back in the days of Carter, when we wanted to tax all dividends from foreign affiliates. For foreign entities, a buck earned in a low tax jurisdiction such as Singapore would be taxed at the same rate as a buck earned in an affiliate in a high tax jurisdiction such as France, the United States or even Canada. That may be great economics if one is an economist, but if one is a business person, one has to compete with other entities where they say that the rate of tax one pays globally is the rate set by the country in which one earns the income.

It is the host country where the activities are carried on that sets the tax rate. If a big corporation from the United States could do business in Hong Kong, for example, and pay a 12% tax rate, and a Canadian company had to pay a 50% tax rate, who was going to win? Who was going to get the jobs? It was going to be the American competitor of the Canadian company.

Therefore, that tax policy brought in by a government many years ago had to be reversed. It meant that we stemmed the flow of Canadian-based multinationals leaving this country. I beg of the government, which knows it is wrong, to just admit it. We will work with the government to fix this.

In closing, let me say that the tax fairness bill brought in by the government was not a tax fairness bill. It was a wealth-stealing bill. I am very pleased that our finance critic, the member for Markham—Unionville, has taken such a vigorous stand in taking the tax fairness bill to task right across this country. We will continue to do so until we get justice for all those people who lost their savings because of the idiocy of the government.

[Petitions, April 25th, 2007]

Mr. Speaker, I have the honour today to table in the House of Commons a petition from 26 residents of my riding Willowdale. The petitioners ask the government to investigate the allegations of illegal organ harvesting in China, calling for a respect for the human rights of practitioners of Falun Dafa.

[Petitions, February 28th, 2007]

Mr. Speaker, the second petition is to amend the Canada Health Act to include therapies for children with autism and to establish more teaching facilities that deal in those therapies.

[Petitions, February 28th, 2007]

Mr. Speaker, I have two petitions to table today signed by people from the GTA, including the great riding of Willowdale.

The first petition, signed by 44 petitioners, is to raise the age of consent from 14 to 16 years.

[Committees of the House, February 19th, 2007]

Mr. Speaker, Joseph Schumpeter referred to the world of a globalized economy as one of vast creative destruction.

I agree with the hon. members from the NDP that international competition is really rough. I agree with them that we have to do as much as we possibly can to help the workers who are being transitioned out to try to have the best possible jobs here in Canada. This is why we have to figure out how we are going to do it.

Unlike the NDP, I do not believe that we are ever going to succeed in repealing globalization and creating a totally level playing field in every country on earth. We know that is unrealistic. How are we going to help the workers best in the meantime?

Our government gave millions in support to our garment and textile workers to help the workers, to help the towns, to help the communities, to help the companies with transition. My goodness, there have been some that have been highly successful. For example, Peerless is producing men's suits here and exporting them all around North America.

How do we help our workers adapt to the new globalized economy? I will give two examples and we have to be good at it.

In the early 1990s everything we picked up said “made in Hong Kong”. In the middle of the 1990s the front cover of Fortune magazine said, “Hong Kong is dead”. Go there today. It is no longer a manufacturing economy. It is a service economy and it has never been richer and it is booming. It transposed and transformed itself.

Let me give an example of how a Canadian used China to his advantage. Phoenix Performance Products was making sporting goods here in Canada. Two years ago it had 52 employees. It found out that it could import one of the real staple products from China at one-sixth the cost. It had to in order to compete. Phoenix imported that product and kept its doors open because it was globally competitive. Did it lose jobs? No. What it did was transfer the people on that line to a higher value added custom product and a year later it had 93 employees.

That is how companies have to transpose themselves. This is why we as a government brought in CAN-Trade with $470 million over five years to work with small businesses to form the strategic alliances they need in these other economies around the world, to help them take advantage of globalization rather than be threatened by it.

What did the NDP do, it voted against it--