Tony Valeri

[Dna Identification Act, May 11th, 1998]

Mr. Speaker, as the member will recall, the Speech from the Throne acknowledged the importance of early childhood development. By investing now in the well-being of today's children this government is investing in the long term health of our society.

Federal, provincial and territorial governments have been working closely for some time on collaborative initiatives aimed at helping children get a better start in life. The community action program for children, the Canada prenatal nutrition program and aboriginal head start are just examples of highly successful programs already in place to help children in target communities.

To ensure that all Canadian children have the best opportunity to develop their full potential, we need a broader and much more comprehensive investment. Early childhood development alone is not the solution. A growing body of research tells us that we must look at the wide range of environmental factors that affect children's lives.

That is why the Speech from the Throne announced the development of a national children's agenda. Three levels of government are working together to develop a national strategy to improve the well-being of Canada's seven million children. This agenda will give us the opportunity to integrate the sometimes fragmented efforts of the different levels of government avoiding overlap and duplication to ensure we get the most out of each dollar we spend on children.

The national children's agenda is a long term action plan that requires a substantial investment of time and effort from all players. In the meantime we will live up to the commitment we made to Canadians.

As announced in the 1997 budget, the Canada child tax benefit will come into force July 1 to help low income families. As announced in this year's budget, we will increase the Canada child tax benefit by an additional $850 million by the year 2000.

Let me conclude by saying to the hon. member that these efforts by the Government of Canada demonstrate quite clearly that we are committed to do as much as we possibly can to move toward the elimination of child poverty, to promote early childhood development and to lay a strong foundation for the future of Canadian children and Canadian society.

[Rural Road System, May 8th, 1998]

Mr. Speaker, this motion recommends that the government dedicate all the revenues from fuel taxes to just one purpose, maintaining Canada's rural road system.

First let us make it clear that from day one this government has recognized the importance of Canada's infrastructure to improve our quality of life, unlike the hon. member across the way.

One of the first actions we took upon taking office in 1993 was to launch the $6 billion Canada infrastructure program together with the provinces and municipalities as partners. The program was extended last year with an additional $425 million federal commitment. This joint effort has benefited both urban and rural communities by strengthening their competitiveness with improved infrastructure, including rural roads.

Let us also be very clear about the consequences of supporting the motion we are debating today. In 1996-97 excise taxes on fuel amounted to $4.4 billion. By earmarking these funds for rural road maintenance, the government would then have three options: reduce spending in other areas by the same amount; raise taxes by $4.4 billion; or let the deficit re-emerge, one thing that the hon. member is very familiar with given the fact that he is from the Conservative Party.

Canadians do not want their health spending, education assistance or old age security cut by $4.4 billion. They do not want their taxes increased by $4.4 billion. And they certainly do not want the deficit to reappear after having made so many sacrifices to get rid of it. Clearly none of these options is acceptable.

Equally important, earmarking taxes is an idea that is fundamentally flawed. It would curtail the government's ability to respond to new and emerging priorities. It could result in overfunding of some initiatives and underfunding of others.

To be effective, government has to be flexible so it can adapt quickly to changing priorities. That is why the government's current policy is to direct all revenues into the consolidated revenue fund from which all initiatives are funded. Simply put, earmarking taxes would tie the government's hands by limiting its ability to address important priorities as they arise. It is simply bad policy.

It is clear that the government is in much better fiscal shape than it was even several years ago and that it will have more room to manoeuvre in the years ahead and more resources to address important issues, but we must maintain a realistic perspective in this regard. In an era of limited resources government must be focused. It must work in partnership and it must only act where it can make a difference. It must take a balanced approach to the overriding objective of building a strong economy and a secure society.

The 1998 budget announced a historic fiscal achievement and reconfirmed our balanced approach to building a strong economy and a secure society. It announced that the federal books would be balanced in 1997-98 for the first time since 1970. We will also balance the budget this year and next year. It is the first time in almost 50 years that Canadians will see three consecutive balanced budgets.

Our commitment to fiscal responsibility to put an end to credit card government does not end there. We will reduce Canada's debt burden through a two front strategy of stronger economic growth and a concrete debt repayment plan.

Our government has always recognized that a healthy bottom line is a means to an end and not an end in itself, unlike the Reform Party. The 1998 budget uses our new leverage for strategic investments in areas where government can make a difference.

For example the budget launched the Canadian opportunities strategy. The strategy, including the Canada millennium scholarships, will improve Canadians' access to knowledge and skills, something that the Reform Party is not in favour of.

The budget provides funding to increase the Canada child tax benefit by an additional $850 million in two steps.

Improving Canadian health care is one of the government's core priorities. That is why as our books improve one of our first and most significant initiatives was to introduce legislation to increase the Canada health and social transfer cash floor from $11 billion to $12.5 billion.

Finally the 1998 budget also begins the process of general income tax relief which is a key priority for Canadians and for the government. We all know, as it has been said often in the House, that at the outset tax relief measures would be modest because the financial dividend that makes them possible is modest as well. The budget announced reductions in taxes for those who can least afford to pay them, low and middle income Canadians. These measures will provide close to $1.6 billion in tax relief to 14 million low and middle income Canadians, that being 90% of all income tax filers.

These are the government's priorities. We believe that they reflect what Canadians want.

Our goal is to build a strong economy and a secure society, one that can provide Canadians with the opportunity and the ability to succeed in an ever evolving economy while still ensuring their security and well-being. Our approach is delivering real benefits for Canadians today and a robust outlook for Canada as we look toward the new millennium. We saw the unemployment numbers just the other day.

Governments have to make choices. We have to make choices about what priorities we should pursue as a government and ensure that those priorities reflect what Canadians tell us.

Earmarking over $4 billion in revenues for rural highway maintenance would not be the best choice for Canada or Canadians. That is why I urge all members to reject the motion before the House. It is bad policy. It is a policy that does not reflect Canadian priorities.

I respectfully submit that what the government has done since 1993 does reflect what Canadians have asked for. We see the fruits of our labour. We see that Canadians have made sacrifices. The government is not about to squander the sacrifices Canadians have made by imposing a policy upon them that would not reflect what they want.

The government will not start to earmark money and get into the whole scenario where it is overfunding in one area, underfunding in another area and ultimately having to make choices. To do what the hon. member is asking we would have to raise taxes. We would have to make cuts in other areas in order to fund $4.4 billion to do what the hon. member is asking. That is not what Canadians are asking for. It is certainly not what the government is prepared to do.

[Employment, May 8th, 1998]

Mr. Speaker, certainly we are very pleased to have the unemployment rate down over one percentage point from a year ago.

There was strong job growth in April especially since it led the decline in the number of unemployed Canadians. The unemployment rate is now at its lowest level in almost seven years.

Over 171,000 new jobs have been created so far in 1998. There have been 543,000 jobs created since December 1996. All of these jobs have been in the private sector.

We will continue to do what we said we would do and that is to make sure that the fundamentals are right. We have eliminated the deficit. We will keep interest rates low to ensure that inflation stays stable and we will continue on that track.

[Millennium Scholarships, May 8th, 1998]

Mr. Speaker, the government has made it clear from the outset that when we take a policy decision that involves taxpayer money we will book the money right away. Gone are the days when the government would rack up billions of dollars in promises and leave the bill to be picked up sometime later.

The auditor general clearly disagrees with us. However, we believe our approach is one that Canadians will support because it is the most honest, transparent and accountable one.

[Depository Bills And Notes Act, April 27th, 1998]

Madam Speaker, I certainly welcome the opportunity to speak today in support of Bill S-9, the depository bills and notes act.

Basically this is technical legislation. It is non-controversial in that it updates federal legislation to provide a legal framework for well-established market practices.

Specifically the proposed legislation supports the secure and efficient processing of trades in financial instruments. It does this by allowing instruments to be held in central depositories. The legislation also allows for the transfer of ownership of these financial instruments on the books of the depositories.

Before discussing Bill S-9 let me first describe some of the changes taking place in the Canadian financial industry in general and the environment in which this legislation will function.

As hon. members are aware, Canada's financial sector in the past few years has dramatically changed the way it does business. International competition which itself is fuelled by ongoing technological changes has been a major contributing factor. In actual fact, few parts of business life in Canada have been more affected by evolving information technology than the financial sector.

This sector is one of Canada's most important industries. It contributes 5% to gross domestic product. It creates almost 500,000 jobs and generates $5 billion annually in export revenues. In addition it delivers essential services and products in today's modern economy, services such as financial intermediation, protection against risks and the provision of financial security.

Globalization, new technologies and deregulation are key forces of change that have been at work making our financial industry more modern and more efficient. The government has also responded to the changing environment.

International trade and investment for example have required wholesale financial services to be available on a global basis. Canadian financial firms, whose presence outside Canada is significant I might add, are strong participants in this global reality.

New technologies are also propelling change. An institution that does not or cannot adapt to technological changes is not likely to fair well in today's economy. Internationally the removal of regulatory barriers is fostering greater competition among different types of financial institutions and among institutions around the world.

Currently we are awaiting the report of the task force on the future of the Canadian financial services sector which will be reporting in September and which will certainly trigger further debate and change. In the meantime other changes are under way.

All major banks, as hon. members know, now have individual ombudsmen. We also have the Canadian banking ombudsman who deals with retail and commercial disputes as well as complaints regarding securities and insurance subsidiaries of banks. Members of this House and in particular the Standing Committee on Industry have played a critical role in establishing this new Canadian banking ombudsman. As the financial sector continues to change, some have indicated that it might be useful to conduct a review on the effectiveness of this important office within the financial services sector.

We are also expecting draft legislation on foreign bank entry later on this year.

We also have Bill C-82 which gives the government the authority to make regulations in the area of privacy and also amends the Bank Act to prohibit coercive tied selling. Tied selling has become an important consumer issue and one that is presently being examined by the Standing Committee on Finance. The outcome of this review will guide the government's decision on whether or not to proclaim into law C-82 provisions that deal with tied selling activities.

Another example of change is the successful conclusion of the World Trade Organization financial services negotiations under the general agreement on trade in services. The end result of these successful negotiations will mean greater international opportunities for our financial companies, new jobs for Canadians and benefits for consumers.

These are just some of the changes that have been taking place to ensure the competitiveness and currency of Canada's financial sector.

The bill we are debating today, the depository bills and notes act, represents yet another measure designed by the government to help in the modernization of our financial sector. The depository bills and notes act updates and modernizes federal legislation regarding the transfer of ownership of certain types of negotiable financial instruments, primarily bankers' acceptance and commercial papers.

In terms of value and volume, bankers' acceptances and commercial paper are second only to federal bonds and treasury bills in the Canadian securities market. For example in November 1996 there was a total of $36.8 billion in bankers' acceptances and $33.7 billion in commercial paper in Canada.

According to the Canadian Depository for Securities, in January 1996 the average daily gross settlements of bankers' acceptances and commercial paper were $5.6 billion and $5.7 billion respectively, comprising approximately 400 daily trades in each security. As I just said, these two instruments rank second only to federal bonds and treasury bills in value and volume in our domestic securities market.

As hon. members are probably aware, federal government securities are held in the Canadian Depository for Securities debt clearing system. Today banks and other players are increasingly holding financial instruments like bonds, treasury bills and other negotiable instruments in a depository institution.

For financial instruments held in a depository when ownership of the instrument changes, instead of physically exchanging the security, the name of the new owner is simply entered into the records of the depository and it is called a book entry transfer. These practices are more efficient and more secure than settling individual trades by moving financial instruments across town.

While book entry transfers are now an established part of the clearing and settlement system, Canadian financial legislation unfortunately does not fully recognize the practice for all types of financial instruments. Specifically the Bills of Exchange Act still does not acknowledge the use of depositories nor the holding and book entry delivery of financial instruments that fall under its rules.

The Bills of Exchange Act still refers to being in physical possession of negotiable instruments like bankers' acceptances and commercial paper when describing the rights of the parties involved in the transaction. For financial instruments held in a depository, these rules are clearly impractical.

Under the current Bills of Exchange Act for example the term “bearer” means the person in possession of a bill or note that is payable to the bearer. This means that the rights as described in the Bills of Exchange Act are impossible to interpret in the context of a negotiable instrument that is held in a depository and the transfer of ownership is done by the book entry because the instrument itself remains in the depository.

The depository bills and notes act makes the rights and responsibilities of buyers, sellers and holders of negotiable instruments compatible with the use of depositories and book entry transfer of ownership.

Bill S-9 does this by creating two new financial instruments for classes of securities: depository bills and depository notes. Both will be eligible to be held in a securities depository.

Someone buying a depository bill or note will generally have the same legal rights as someone buying a bill or note under the Bills of Exchange Act without actually taking delivery of the instrument. Because the depository notes and bills are intended for relatively wide circulation in trading, the rights and responsibilities will be defined with specific reference to the function of the clearing house and book entry transfer. In addition, to distinguish these new instruments from similar securities, they will be marked with wording that indicates they are depository bills and notes subject to the depository bills and notes act.

In no way will these new financial instruments preclude individuals or institutions from buying and holding other negotiable bills and notes which will still be governed by the Bills of Exchange Act.

As I said at the beginning of this debate, this is certainly very technical in nature and sometimes dry. But there is one other part of this bill that deserves to be mentioned.

Bill S-9 also amends section 70 of the Financial Administration Act to provide added certainty that transfers of Government of Canada securities from one person to another are legally sound under a book based system.

I would like to note that the bill is supported by all elements of Canada's financial community. The Depository Bills and Notes Act is also consistent with the recommendations made by the private sector group concerned with the workings of the international financial system commonly known as the G-30.

The G-30 has been calling for widespread introduction of securities depository systems and book entry transactions recordings as they will improve the efficiency of money markets.

As well, the Canadian Depository for Securities has been pushing to be able to hold negotiable money market instruments in its depository and to be able to make book entry ownership transfers as soon as possible, a far more efficient process, it believes, than having to take physical possession of the instrument. Bill S-9 will allow it to do just that.

I should point out that the federal government is not alone in providing a statutory basis for these activities. The Ontario business corporations act, the Quebec securities act and other provincial legislation govern the holding and book entry delivery of government bonds and corporate securities that are not subject to the Bills of Exchange Act.

Like so many other changes in the financial sector, Bill S-9 is simply keeping up with the times. Its passage will allow trades in securities like bankers' acceptances and commercial paper to be processed in a more secure and efficient manner.

Essentially what Bill C-9 does is put into law an already established and accepted practice and therefore deserves speedy passage. I urge all my hon. colleagues to support the legislation.

[Income Tax Act, March 31st, 1998]

Mr. Speaker, Canada's innovation gap was first mentioned in 1995 when the OECD stated that Canada had low levels of R and D expenditures and industrial innovation when compared to other developed countries. Since that report was released, this government has in fact taken bold initiatives to improve the situation.

We have created Technology Partnerships Canada, a $250 million a year investment with the private sector, to assist the development and commercialization of new technologies. As of April 1, 1998, TPC will have approved $521 million in R and D investments which will lever $2.2 billion in R and D and downstream investments by industry.

We established the Canada Foundation for Innovation, an $800 million partnership investment to renew research infrastructure across Canada. The CFI issued a request for proposals on December 9, 1997.

We also renewed our commitment to the networks of centres of excellence by making this program permanent at a level of $47 million annually. Over 400 firms and industry associations are network partners who have benefited from leading edge research.

We established a partnership between the Medical Research Council and the Canadian Medical Discoveries Fund to help bridge the innovation gap for life sciences research through investments which will commercially exploit research in universities and hospitals.

We have given the Business Development Bank of Canada a new mandate to support the growth of knowledge based, export oriented small businesses.

We are working with private and public sector partners to ensure that all of Canada's 16,500 schools and 3,400 libraries are connected to the Internet by 1998. We are also setting the conditions for Canada to become a laboratory for the creation of interactive, multimedia learning software and networks.

These actions demonstrate clearly that we are committed to making Canada an innovation based economy.

[Income Tax Act, March 31st, 1998]

Mr. Speaker, first of all I would like to remind the hon. member that as a result of the generous tax assistance provided by the federal government and many provincial governments, labour sponsored funds experienced very rapid growth in the past few years.

When the decision was made to limit the tax assistance, LSVCCs had about $2 billion in assets. Despite the fact that LSVCCs raised about 50% less in the RRSP season which followed the 1996 budget, their total assets surpassed the $4 billion mark at the end of 1997.

As well, let us not forget that the LSVCCs are not the only providers of venture capital in this country. During 1996 the amount of venture capital in Canada rose from $6 billion to $7.1 billion. The availability of venture capital for Canadian businesses has never been greater. In fact, I pose the question, is there sufficient capital available to meet the demand? Let me provide a few figures.

At the end of 1996 labour sponsored funds had $1.4 billion available for investment in small businesses. They invested about $400 million in 1996, a record year for them. Based on this information there seems to be no evidence of a shortage of funds available for investment.

This is not to say as the hon. member has mentioned, that there is no need for ongoing monitoring of the situation. On the contrary, preliminary figures do indicate that LSVCCs invested in excess of $600 million in businesses during 1997. This investment pace combined with the possibility of large amounts of redemption could signify, at least in some provinces, future shortages of venture capital.

Last year's RRSP season was the first under a reduced tax credit. We need to analyse the results, the adequacy of the supply of venture capital and the efficiency of tax incentives at improving access to capital for small and medium size businesses to be able to determine if changes are warranted.

I want to assure the hon. member as in fact the Minister of Finance has assured him, that this government will continue to monitor the situation very closely and take measures to ensure that venture capital is in supply in strong measure in this country.

[Income Tax Amendments Act, 1997, March 26th, 1998]

Mr. Speaker, the discussion about CPP is all about values. You either believe in the CPP or you do not. This government does and the Reform Party does not.

I wonder if the hon. member agrees with her colleague from Calgary—Nose Hill who said the system is unfunded, there is nothing there so we have to decide how we are going to pay. We need to look at things such as increasing the age at which benefits are payable. We need to look at some of this unfunded liability coming out of general tax revenues.

I wonder if the hon. member agrees with his colleague who is out there promoting the fact that we should be increasing taxes, personal income taxes and corporate income taxes, increase taxes in order to deal with this particular issue. This government decided to consult with Canadians and provinces and we came up with a program to sustain the CPP. It is a staged increase in premiums to ensure Canadians have the sustainability of the plan.

The hon. members across the way seem to be indicating they want to increase taxes. I wonder if the hon. member would like to comment on that.

[Income Tax Amendments Act, 1997, March 26th, 1998]

Mr. Speaker, I appreciate the comments of the hon. member across the way with respect to the film tax credits and the situation he described.

I also want to point out to the hon. member that there is an underlying principle that says one cannot do indirectly what one can not do directly. Therefore, if one cannot do something directly, one should not be able to get around it some way and do it indirectly. That is an underlying principle with which I am sure the hon. member would agree.

With respect to the cable television and cable production fund, I had the opportunity to meet with representatives from this group. They have submitted information for the department to look at so that any of the moneys they would receive from the fund would be treated as licence top up fees rather than subsidies.

What has happened is that the finance department has agreed to take this information under consideration and provide transitional support for this group so that any principal photography commenced before August 31, 1998 would not be affected.

I really appreciate the fact that the hon. member brought this matter to the attention of the House because it is a very important issue. I want to reassure him that the government is very much committed to the production and entertainment industry. It certainly affects his province specifically.

[Income Tax Amendments Act, 1997, March 26th, 1998]

Mr. Speaker, I listened to the hon. member ramble on and on about clause 241. I just want to put some facts on the table.

First, the amendment Bill C-28 puts forward is an amendment and a minor modification of a policy that has been in place since the 1920s. The Bloc asked, essentially when this all started, who asked for this amendment. The response it got and the correct response is IMC Vancouver asked for this amendment.

Who benefits? It treats all foreign shippers alike whether they hold their ships directly or through a wholly owned subsidiary. How much will this amendment cost Canadian taxpayers? The amendment will cost nothing. It applies to foreign companies operating in international traffic. They are not and never have been taxable in Canada. When she talks about the cost to the Canadian treasury, it is nothing.

Despite all the answers, the Bloc persists with these baseless allegations. It is pure politics. I hope the hon. member will at some point decide in her mind that it has gone far enough. It is completely baseless. Bloc members keep shifting the goal post whenever they get an answer.

They talk about what Mr. Wilson said in committee. I was present at that committee. Mr. Wilson said quite clearly that there was no conflict of interest, no appearance of conflict of interest. Len Farber from the department, using her words, said that the minister could actually reorganize his company in order to take advantage of this. If only the hon. member had the capacity to understand what it means to organize and reorganize a company. He would basically have to shut down his entire company and reorganize it all over again. It is highly unlikely and not the intent of anyone.

This kind of approach is one that I am sure hon. members in this House do not agree with, do not endorse, and certainly Canadians will have the final say. I would encourage the hon. member to please, if she would like to debate the bill and the contents of the bill, stay away from the baseless politics that she is encouraging us to engage in today in this House. I would be quite thankful. I am sure her constituents would like to see us get on with the issues at hand.