Tony Valeri

[Income Tax Act, December 8th, 1998]

Mr. Speaker, I will be very brief. I wanted to stand in the House this evening and applaud the member for London North Centre on his concern for students and for bringing forward Bill C-316.

Under the existing legislative provisions students have a credit for tuition fees in an education credit as well as government support in the form of Canadian and provincial loan and scholarship programs. However, growing indebtedness has put many Canadian students and graduates in a difficult situation. That is why the government supports the spirit of the bill, which is designed to facilitate repayment of student loans.

The substance of the bill was an integral part of one of the measures proposed in the 1998 federal budget. The 1998 budget proposed the introduction of a 17% credit rather than a deduction. Only loans obtained under the Canada student loan program and equivalent provincial programs will qualify for the credit. Although the credit is not transferable, it may if necessary be carried forward and used in one of the five years following the year of interest payment. The government believes that the measure proposed in the 1998 budget meets objectives through reducing the burden of student debt for taxpayers with limited capacity to repay and limiting the possible risk of abuse.

The question is often whether it should be a credit or whether it should be a deduction. It is always an issue of debate when it comes to these types of issues. It has been argued that a credit is preferable to a deduction because it provides fair and equitable support to all taxpayers who are repaying loans. There are often many accountants who come before committee or many individuals who are familiar with the tax system who often argue in favour of a credit rather than a deduction because it is in the eyes of those individuals fairer and more equitable.

As I said earlier, the government fully supports the initiatives that will ease the debt burden of students and believes that the carry forward of unused credits should allow the full use of that credit.

The government agrees with the substance of Bill C-316 and that is why the government put forward the proposals it did in the budget and believes that it will provide targeted relief to the graduates who need it most. I to congratulate the hon. member for bringing this forward.

[Division No. 307, December 7th, 1998]

Madam Speaker, the hon. member asked me to delete the rhetoric from my response. I do not have any rhetoric at all.

When the hon. member first asked this question it concerned how the EI premium rate was set. In his original question he stated that every year the finance minister meets with the Employment Insurance Commission in mid-November to set the employment rates. As that statement indicates, it is very clearly false. The Minister of Finance does not meet with the employment commissioners, has no intention of meeting with them and has never met with them.

I offer the hon. member a quick lesson on how the premium is set. It is set by commissioners who are appointed after consultation with their respective organizations which are representative of workers and employers. There is the Deputy Minister and Associate Deputy Minister of Human Resources Development for the government.

It is only after the commission has set the rate that the Minister of Finance and the Minister of Human Resources Development play a role. They jointly recommend the commission's rate for governor in council approval. They do not meet with the commissioners at any time to discuss the actual rate.

When the hon. member talks about EI premium cuts, he knows very clearly that since coming to office the government has continued to reduce the employment insurance premiums and will continue to do so each and every year. When we arrived the Tories had it going up. We have it going down and we will continue to do that.

We will continue to do that in balance. We know that there are Canadian priorities. The reduction of EI premiums is one of those priorities and we will continue to maintain that downward track. But we will also continue to ensure that there is balance: a balanced budget, reduction in taxes and reinvestment in health care.

[Special Import Measures Act, December 7th, 1998]

Madam Speaker, I appreciate the opportunity to speak at third reading of Bill C-35.

As has been stated quite often in the House, this legislation is straightforward and responds directly to the recommendations contained in the 1996 parliamentary review. It updates an act that has been around since 1984 and proposes consequential amendments to a related statute.

Briefly, Bill C-35 improves the operation of Canada's trade remedy system with respect to anti-dumping and countervailing duties under the Special Import Measures Act and the Canadian International Trade Tribunal Act.

It also clarifies certain provisions in both acts through various technical amendments. SIMA is an important component of Canada's trade legislation. It implements Canada's rights and obligations under the WTO agreements in the area of trade remedies.

Under these international rules, special duties can be imposed when imports that are dumped or subsidized are found to cause injury to a domestic industry. First and foremost, this law is intended to protect Canadian manufacturers and agriculture producers whose operations are negatively affected by the goods that are unfairly priced or subsidized.

However, it must also be understood that in today's global environment market openness is critical to attracting investment and maintaining the competitiveness of Canadian companies. These Canadian companies often have to rely on imported inputs to meet the needs of their customers. These companies may, in some cases, be negatively affected by the imposition of special duties on imports.

Given this situation, SIMA must be careful to strike a balance between two often conflicting interests, those of industry seeking trade remedy action and those of consumers and other manufacturers who may be negatively affected by the imposition of anti-dumping or countervailing duties on imported goods.

This question of balance was key to what was addressed in the 1996 parliamentary subcommittees' report that reviewed SIMA. The subcommittees heard from a broad range of stakeholders on their experience with the SIMA system and concluded that the law continued to protect Canadian producers from injury caused by dumped and subsidized imports, while at the same time limiting collateral damage to consumers and downstream users.

They went on to identify several areas where the legislation could be made more efficient and more responsive to Canada's various economic interests.

The government, as hon. members will recall, supported virtually all of the subcommittees' recommendations and it is the implementation of these recommendations that we have before us today in Bill C-35.

As indicated earlier, the bill also contains several amendments of a technical or housekeeping nature aimed at clarifying existing provisions in the law.

The main themes of the subcommittees' report reflected in this bill include: the rationalization of the SIMA process in order to improve efficiency; ensuring access to the SIMA system by small and medium size enterprises; clarification of the public interest provisions; and the enhancement of transparency and procedural fairness.

I want to spend a few moments on the public interest provisions. At the reporting stage, the issue of allowing the Canadian International Trade Tribunal to recommend a lesser duty as a result of a public interest inquiry was raised by the Bloc and the NDP. They both opposed providing for it, and we recall that the Bloc proposed an amendment to the bill which would have amounted to leaving the public interest provision as it is now.

Essentially, the government responded by saying, as I said just a minute ago, that the bill implements the parliamentary subcommittees' recommendation in respect to the public interest and underscores the delicate balance that the bill was attempting to strike between divergent interests in the trade remedy area.

Essentially, the statement that I would make with respect to the public interest is that the lesser duty issue would only come up when it has been determined that there is a public interest issue. When recommended, a lesser duty aims to provide a level of protection sufficient to eliminate the injury caused by the dumped or subsidized imports, which is really the main purpose of SIMA, while ensuring that users and downstream producers are not unduly penalized by the measure.

In my mind, when I was listening to the debate at report stage, I asked the question: How can one oppose this? Those opposed to the lesser duty provision are suggesting that the interests of consumers and downstream producers are irrelevant. As we stated earlier, and I will state again, the government clearly disagrees with that.

In fine tuning the existing law, the investigative functions of Revenue Canada and the Canadian International Trade Tribunal will also better reflect the respective areas of expertise. By bringing Revenue Canada's treatment of confidential information more in line with the tribunal's practice respecting the disclosure of such information, procedural fairness and transparency will be enhanced.

Further, the tribunal will benefit more fully from expert evidence by allowing expert witnesses to play a more effective role in its inquiries. New penalties will deter the unauthorized disclosure or misuse of confidential information in the SIMA investigations.

Bill C-35 also clarifies the conditions under which the tribunal can consider issues of broader public interest and the types of measures that it can recommend in a public interest report.

In the committee deliberations on this bill hon. members heard from industry stakeholders on both sides of this particular issue. The stakeholders gave their support to the passage of this bill and there was agreement that Bill C-35 faithfully reflects the recommendations contained in the parliamentary report. This support is a credit to members of the House who worked together on the review and this legislation and in fact identified improvements that were acceptable to all parties.

In conclusion, I think members recognize that Bill C-35 fine-tunes SIMA to ensure that it continues to reflect Canadian economic realities. It also ensures that SIMA will remain a strong trade instrument that truly protects Canadian producers who have been injured by dumped or subsidized imports, while allowing an opportunity for other producers and consumers to have their interests considered. I urge my colleagues to support speedy passage of this legislation.

[Hockey, December 4th, 1998]

Mr. Speaker, once again I am amazed at the level of questions coming from the Reform Party. This one tops them all.

I cannot believe that Reformers would actually take the time and spend taxpayers money to ask such a ridiculous question. Are those the priorities of Canadians? I think not.

[Leanne Baird, December 2nd, 1998]

Mr. Speaker, it is with great pleasure that I stand today to congratulate an outstanding and energetic young lady from my riding of Stoney Creek.

Miss Leanne Baird, who was crowned Miss Canada International in August, has recently returned from the Miss World International competitions in Seychelles.

As Canada's ambassador to this prestigious world competition, this dynamic 21 year old has displayed the highest level of goodwill, sportsmanship and excellence. Leanne carried out her duties with skill and compassion and should be very proud of her accomplishments.

Her leadership qualities were clearly illustrated here in Ottawa when she attended the week long Forum for Young Canadians.

Leanne is an inspiration to people of all ages everywhere and has shown the world what is right with Canada's young people.

I join with all members of this House, Leanne's family and friends and all the residents from the riding of Stoney Creek in wishing Leanne congratulations for a job well done.

[Income Tax Conventions Implementation Act, 1998, November 27th, 1998]

Mr. Speaker, I am very pleased to have this opportunity today at third reading of Bill S-16.

The purpose of the bill is to implement income tax conventions that Canada has signed with Chile, Croatia and Vietnam. Currently Canada has tax treaties in force with 64 countries. We have been building and updating this network of tax conventions for almost three decades.

Bill S-16 is part of the ongoing maintenance of Canada's system of tax treaties but that does not mean it is merely a routine housekeeping bill of no importance to Canadians.

In today's environment tax treaties are more relevant than ever to Canada's competitiveness and overall economic performance. Foreign economies are opening up, individuals are becoming more mobile and as the pace of international trade and investment quickens tax treaties are becoming increasingly important to investors and entrepreneurs tapping into these opportunities.

Like all of the other tax conventions that Canada and its trading partners have implemented over the years, Bill S-16 has two overriding objectives. One is to avoid double taxation and the other is to prevent income tax evasion.

The potential for double taxation arises when a taxpayer who is a resident of one country earns income in another. In the absence of a tax convention, both the country of residence and the country that is the source of income would be justified in claiming tax on that income.

Tax treaties address the problem of double taxation in one of two ways. The treaty allocates exclusive taxing rights either to the taxpayer's country of residence or to the country that is the source of the income. Or, if the income would be taxable in both countries, the treaty requires the country of residence to give credit for the tax paid to the source country.

Measures that reduce double taxation also serve the purpose of preventing tax evasion. Laws that limit the potential for double taxation normally include provisions that encourage the exchange of information between the participating countries. It is that sharing of information that helps these countries' revenue authorities to identify cases of tax evasion and in fact act on them.

Another benefit of this legislation is the certainty for taxpayers, certainty that a rate of tax limited under any of these agreements cannot be increased without substantial advance notice of any changes.

In addition there will be a reduced compliance burden for Canadian taxpayers who have investments or business interests in Chile, Croatia or Vietnam.

A key part of any tax treaty bill is the withholding tax rate reductions. In this regard Bill S-16 is no exception. Canada and other countries generally impose withholding taxes on various types of income paid to non-residents. In the absence of a bilateral tax treaty or a unilateral exemption from withholding tax, Canada's statutory non-resident withholding tax is 25%.

Under our network of tax treaties however, there are several rate reductions in effect, and these reductions apply on a reciprocal basis. Where such a tax treaty is in effect, the country in which the taxpayer resides can withhold tax.

Without going into a country by country explanation of the various withholding tax rates proposed, I would like to point out that the rate is generally limited to 5%, 10% or 15% on dividends in branch profits. In addition the withholding tax on interest and royalties is generally limited to 10%.

The exception is the agreement with Chile, which provides for a 15% rate. In some cases royalties on copyright, computer software, patents and know-how are exempt at source.

Another feature of Bill S-16 is that it respects Canada's right to tax pension and annuities paid to non-residents. The agreements with Vietnam and Croatia provide for pension payments to be taxed in both countries with the source country collecting no more than 15% of the total payment. In both Vietnam and Croatia, social security benefits will be taxable in the source country with no limitation. Under the Canada-Chile income tax convention, pension and social security benefits will be taxed by the country from which the payments are made.

Another issue that is addressed by Bill S-16 is the treatment of capital gains realized by non-residents. In these cases the source country would retain its right to tax capital gains on the sale of real property, business assets and shares in real estate companies or interests in real estate partnerships or trusts.

The provisions of Bill S-16 are in fact tailored to the realities of international commerce. Reduced withholding taxes and the other benefits of this legislation are reciprocal in nature. This tax convention entails no revenue loss whatsoever, not for Canada and not for any of the other signatories.

When Bill S-16 received second reading in the House of Commons, it received support from members of all parties. Earlier in the week the bill passed through the finance committee without amendments. It is well understood among hon. members that this is legislation that will prevent double taxation and facilitate trade.

As a nation, we all know that almost 40% of our wealth depends on exports, foreign commerce and direct foreign investment. Tax treaties help to ensure that Canada's tax policies are applied consistently in transactions that reach beyond our borders. They also contribute to an environment of stability and certainty for investors and traders.

Bill S-16 will therefore increase our ability to compete and to harness the opportunities of a vibrant and modern economy. For the reasons I have indicated, I urge hon. members to support this bill.

[Special Import Measures Act, November 26th, 1998]

Mr. Speaker, I want to clearly state that the issue was carefully considered and rejected by the parliamentary subcommittees.

The adoption of this hybrid system would among other things disrupt the basic balance that was struck by the bill among stakeholders' interests. It would unnecessarily complicate the administration of Canada's trade remedy system. The government would not be supportive of this motion.

[Special Import Measures Act, November 26th, 1998]

Mr. Speaker, I refer to Motion No. 3 which is essentially a technical amendment that has to do with the translation. In this regard it was the Bloc who suggested that the reference to “dommage sensible” in the French version of clause 44, as a translation for material harm, should be replaced with a different concept.

Essentially that is what Motion No. 3 does, and I am happy to see that there is support for that from across the way.

With respect to Motion No. 4, essentially I would agree with colleagues opposite with the exception of the mover of this that the definition of material harm as it pertains to the disclosure of confidential information really involves the qualitative assessment that is dependent on each separate case. The motion as it is presently drafted in a lot of ways creates greater uncertainty and really does not clarify the term. With this motion one adjective is being replaced with three adjectives and it does not help to clarify anything.

I would suggest that the government would support Motion No. 3 and not support Motions Nos. 4, 5 and 6.

[Special Import Measures Act, November 26th, 1998]

I tend to agree. I thank the hon. member for that intervention.

I am sure this is one of the few instances in which we agree with my colleague's previous statements, that in fact the public interest is a key component. We certainly would not want to in any way diminish that.

I think that by going with the clause which exists in the bill we strike that balance. It is very important to reiterate that the balance is struck between the industries and the stakeholders. That is a great improvement to this act and something which we will look forward to supporting when it comes to a vote in the House.

[Special Import Measures Act, November 26th, 1998]

Mr. Speaker, the consideration of the public interest was a key issue, as my hon. colleague mentioned, in the parliamentary review of the act.

Clause 27 essentially gives effect to the parliamentary subcommittee's recommendations which the hon. member mentioned. It gives effect, in a sense, to clarify and improve the public interest provisions that are presently in the act.

In this regard, clause 27 is really a key component of the bill. It is really integral to the overall balance sought by the subcommittee. The balance is struck by the proposed legislation.

More important, among those Canadian industries that seek protection under this act and certainly other Canadian stakeholders that may be adversely affected by the application of duties are organizations like the steel producers and, if someone looks downstream, the auto parts manufacturers as well.

This government is really interested in ensuring that the interests of those who may be seriously affected by the application of SIMA duties are properly taken into account in our trade remedy system.