Monte Solberg

[Cultural Property Export And Import Act, September 25th, 1995]

Mr. Speaker, would the hon. parliamentary secretary acknowledge that this tax legislation also applies to works of art that are not Canadian, that it applies for instance to American works of art as well as Canadian works of art?

[Cultural Property Export And Import Act, September 25th, 1995]

Mr. Speaker, I apologize. The hon. member for Broadview-Greenwood has campaigned long and hard in the Liberal Party for a flat tax system that gets rid of the very type of loopholes that wealthy Canadians are taking advantage of today through this legislation.

Lately the Reform Party has talked long and hard about the need to have legislation that treats everybody fairly. Reformers believe in equity and this is very inequitable legislation. I really do have a tremendous problem with its essence which is special treatment for people who donate these objects of art. That is of great concerns.

I challenge the government to review this matter and to ask itself, in its heart of hearts, if this is really fair. I am sure on reflection members across the way who in good conscience stand in the House and tell us that they do not like to see privilege go to wealthy Canadians, if they understood the essence of this bill they would have a tremendous problem with it. That is one of the things that concerns me greatly about this legislation.

Our party views this as Robin Hood in reverse. It is not only that wealthy Canadians are getting a tremendous tax advantage here. It is the lack of revenue that is created by the $60 million in tax credits. It means that when taxpayers have to pay for things the government views as priorities, average Canadians have to be taxed to a greater extent in order to bring that revenue in. In a day and age when the talk is about cutting social programs, reforming UI

and possibly looking at pensions for seniors, that $60 million would be extremely valuable.

I will be moving a motion in just a moment on the need to bring this type of legislation in line with what currently exists in the income tax system. Ultimately Reformers would like to see a flat tax implemented which would get rid of these types of abuses and privileges for the wealthiest of wealthy Canadians.

I conclude by saying that I recognize that wealthy people are discriminated against in this country. Being wealthy is quite a burden. People are not protected in the Canadian Human Rights Act for being wealthy. Wealthy people are not protected under Bill C-41, the legislation that extended protection in the justice system to people based on certain categories. I do not believe wealthy people are protected in employment equity legislation either.

I appreciate that wealthy people have a tremendous burden to bear. I appreciate that sometimes people say snide things about them behind their backs and talk about them as though they are better than rest of us. I can see that is a large concern, but I do not know that we have to go so far to correct that abuse and that inequity as to give them the $60 million in tax credits every year.

I am going to conclude by moving a motion. I move:

That the motion be amended by deleting all the words after the word "that" and substituting the following therefor:

This House declines to give second reading to Bill C-93, an act to amend the Cultural Property Export and Import Act, the Income Tax Act and the Tax Court of Canada Act, since it fails to address the issue of the burden the tax credit system places on middle class taxpayers who are asked to pay for a potentially endless stream of donations of questionable cultural and artistic value claimed by wealthy Canadians.

[Cultural Property Export And Import Act, September 25th, 1995]

Mr. Speaker, it is a pleasure to address Bill C-93. When addressing an amendment it is important when doing research to look at the actual act and make some judgments about whether or not the act in itself is a good piece of legislation and whether or not it is appropriate for a political party such as ours to support the act overall. I will touch on the amendment and speak a little more broadly about the overall act.

Both the minister and the hon. member who just spoke talked about the appeal process. Previously there was an appeal process which permitted people to go to Revenue Canada and ultimately to the tax court to get a ruling on the value of a piece of art being donated to a recognized Canadian cultural institution. We do not have problems with that. One big concern we have with respect to the whole issue is the potential for bureaucracy and the potential for abuse. I want to talk about that in a little more detail.

One concern we have is that there is a potential for a board which has been appointed by a government to be very cosy with people in the arts community. Very often they come from the arts community. I am very concerned that we will have a situation similar to what we have in the Canada Council today where artists sit in judgment of other artists. It is a "you scratch my back and I will scratch your back" situation. I can see some real potential for abuse.

To be a little more specific, when appointees are passing judgment on the historical value of papers belonging to former prime ministers who may have appointed them to the board, there is some real concern in my judgment about those types of things. We have to be mindful of this and ensure there are processes in place so that people are not caught in a conflict of interest position.

I know my hon. friend from Okanagan will be talking about that a little bit later.

Another concern is that a lot of these things are going to end up being appealed to the tax court. In my judgment there is very little doubt about that. People will say: "I am getting a raw deal" when they bring their work of art forward and ultimately say: "We want to take this on to the tax court".

This was not something told us officially, but when we were researching this, someone in the department told us there are 22 tax court judges across the country but something like 6,000 cases before the court, an astonishing number. That is a tremendous backlog of cases for determination about the value of these various articles. Given that backlog it may be advisable to allow this to remain in the hands of people who are experts in this field.

I want to talk a little bit more about the actual tax credit system itself. This is an area in which I have grave concerns. This is a tax loophole that definitely benefits wealthy Canadians more than anyone else. In the last budget the government talked very enthusiastically about the need for tax fairness.

I would argue very few ordinary Canadians are going to be able to take advantage of this legislation. Somebody who is a subsistence hunter in northern Canada, a wheat farmer in Saskatchewan or somebody who works in the coal mines in Glace Bay is not going to be able to take advantage of this loophole. The people who are going to take advantage of it are going to be the crème de la crème, the top 1 per cent of income earners. If anyone does not need a tax loophole it is them.

I would encourage the government, when it is engaging in this rhetoric about the need for tax fairness, to think about that for a little while. Not only does this legislation reward them in so far as they are the ones who are most likely to have the important pieces of art that institutions want, but it rewards them in how it has skewed the tax system for them.

Let me give some detail on that. It is amazing. In fact when I read it I could not believe it. Right now the department issues about $60 million in tax credits every year through this legislation. It works like this. If something is donated to one of these institutions the tax credit is far greater than is available for any other type of charity in the country. In fact, normally if you donate to the food bank you can get a tax credit up to 20 per cent of your income. That does not apply to people who are making cultural donations. They can get a tax credit for all of their income. They can carry the tax credit forward into years down the road so that it can be applied against income.

It is an amazingly lucrative way of avoiding paying taxes for the wealthiest of Canadians. If one has an income of several hundred thousand dollars and gets a tax credit through the cultural export review board for $300,000 one will pay no tax. To me that is absolutely ridiculous. I wish the hon. member for Broadview-Greenwood was here.

[Excise Tax Act, September 25th, 1995]

Mr. Speaker, I can assure the hon. member that our party stands up in favour of a strong Canadian culture. What we disagree with is how to get there.

I would like to pose a question to the hon. member. First, the hon. member talked about economies of scale. I think he would

acknowledge that other industries over the last several years have utilized economies of scale but this has not meant the complete collapse of various Canadian industries. In fact what has happened, which I think he would acknowledge, is that many of those industries have grown stronger and have gone on to compete around the world.

Bill C-103 actually prevents that from happening for the Canadian magazine industry. I will give the member a perfect example of that. Télémédia, a Canadian company, which actually publishes Harrowsmith magazine out of the United States, had to be grandfathered into the bill so that it could continue to publish in Canada as well.

When this legislation is put in place, assuming it will be, in the future Canadian companies will not be allowed to publish out of the United States and then have it come back into Canada. In effect, it stops Canadian companies from expanding. To me, that is absolutely ludicrous. It shows how provincial and inward looking this legislation is.

I challenge the hon. member to defend that particular aspect of this legislation and ask him how that is going to promote Canadian culture around the world.

[Excise Tax Act, September 25th, 1995]

Mr. Speaker, at the beginning of the hon. member's speech he mentioned free trade in cultural industries was to be the death knell of the industry. Is this not exactly the same argument the Liberal Party made in 1988 during the free trade debate? Did it not say the free trade was to be the death knell for all these industries in Canada?

I ask the member if he was on that side. Was he making those same arguments? Will he not admit that many industries did not die but have prospered as a result of free trade? Will he admit that competition and the flow of capital back and forth have actually been good for all kinds of industries, and that ultimately the best way to help Canadian cultural industries is for the government to ensure a level playing field by getting taxes down so these industries can compete against their American counterparts?

[Excise Tax Act, September 25th, 1995]

Mr. Speaker, I have heard Liberal member after Liberal member and actually Bloc members talk about how we are such victims in Canada, that the U.S. is exploiting us. I suppose that is one world view of the situation, but to me it is a pretty morbid and pessimistic way of looking at things.

What I think is completely in alignment with how creative people think is that Canadians can overcome some of these things. They can overcome the fact that they have strong competition. The reason they can overcome it is that they are the same genetically as the Americans. Canadians can produce the same quality of books and music as anyone else. They have proven this time and time again.

Constantly complaining and whining about our lot in life is not helpful at all to the debate. I am amazed the hon. member was so distressed to see a U.S.A. Today box in front of the Toronto Star . He must be shocked when he walks into a library and sees Shakespeare, Tolstoy, Montesquieu and Jean-Jacques Rousseau. It must be a horrible experience for him. Imagine there not being enough John Brydens and David Suzukis. All kidding aside, I know the

member would not be shocked by that and really would not oppose that.

The point is not in the absurdity of the exaggeration. The point is in the premise, which is where there is real absurdity. Canadians are more than capable of making good choices. Every day we make thousands of decisions about all kinds of things, including very important things such as raising our children, et cetera. We are perfectly capable of deciding among the plethora of magazines and books available which ones we want to read and which television shows we want to view.

If the hon. member's argument is sound, does he recommend we take it to its full extent? Would we put up complete barriers thereby protecting all Canadian magazines, books, et cetera, and not allowing others in at all? That is the logical end of his argument.

[Excise Tax Act, September 25th, 1995]

Mr. Speaker, it is important to be very clear about the nature of the bill. In essence it is designed to kill international competition between magazines, more specifically magazines which come into Canada. The killing of that competition kills a lot of good things which flow from competition.

The legislation is really an anachronism. It is a throwback to an earlier time when we did not have trans-global communications, when people did not always have a great interest in seeing what was happening in countries around the world. Clearly that does not fit the reality of Canada and the world today.

With the bill the minister is walking up to our largest trading partner, the United States, poking it in the eye with a stick and asking: "Now what would you like to buy from us?" This is a step backward. Cultural protectionism is no more appropriate today than any other kind of protectionism.

While the minister is putting forward this measure of cultural protectionism the international trade minister, the finance minister and others are very anxious about the bill because they are trying to endeavour to liberalize trade in other sectors. We see other countries trying to liberalize trade, but for some reason we are taking a step back. That betrays an attitude about what the minister and people of this mind think about the Canadian periodical industry, the people who write for it and the people who read those magazines.

Canadian magazines do well because they are good. As the hon. member from the Bloc pointed out, something like 67 per cent of magazines on news stands are Canadian. That is not because there is a dictate somewhere which says we must read Canadian magazines. It is because people are interested in knowing what is happening in their country. They are interested in knowing the Canadian perspective.

According to the Canadian magazine industry task force referred to earlier, American magazines are already losing circulation while Canadian magazines are gaining circulation. There are good reasons for that. People want quality and they are getting it from their magazines.

The minister pointed to one of the things that has really helped Canadian magazines. In that is the seed of the solution not only for Canadian magazines but also for anything to do with Canadian culture. He pointed to the fact that with the growth in disposable income more people are spending more money on Canadian periodicals. To me that is a very good indication of where we should be going with Canadian cultural policy.

In 1988 members of the present government in the House and across the country argued against the concept of free trade. Since then it is no exaggeration to say that the idea of protectionism has been thoroughly vanquished. Not a country in the world that is at all prosperous does not believe to a large extent in the idea of free trade any more. Even the government since 1988 has turned around and decided it can support ideas like NAFTA, the GATT and the World Trade Organization because there are some laws of economics that are indisputable. Free trade does increase prosperity.

In a sense Bill C-103 is an extension of an argument against one particular law of economics, the economy of scale. All Sports Illustrated and some of these other split run publications are guilty of is utilizing the economy of scale. We do that in Canada and we see it all the time. We see it in other sectors. We even see it in the magazine sector where for instance Maclean's magazine, which has a much larger circulation because it aims at a national audience, is able to have a smaller overhead and can produce its product for a lot less than a regional magazine like Ottawa Magazine or Alberta Report . I do not see anybody railing against them for utilizing the economy of scale. It is good economics; it is good business to do that kind of thing.

It is very misleading when the minister says in his speech that if split run publications are allowed to continue in Canada it would kill the magazine industry here. It will not be split run publications that will contribute to the downfall of any magazine. It will be consumers deciding for themselves what magazines they want to purchase. That is the key.

Cultural policy has to be about what consumers want. They certainly have in my judgment more than enough knowledge to make those types of decisions.

A moment ago I pointed out that we should be concerned about poking the United States in the eye with a stick, which is what I feel we are doing here because we rely on them to consume a lot of our exports. Thirty per cent of our national income comes from exports, the great majority of which goes to the United States. I wonder even for people of a protectionist sentiment if it really is worth it to go around doing these types of things.

A moment ago a member of the Bloc Quebecois was talking about the need to get Canadian cultural products into the United States. Will we really be able to do that when we are on one hand closing down our borders to culture and then on the other hand saying that we need to get into the United States?

We have some real inconsistencies between what is being proposed in the magazine industry by the government and what is currently happening on the Internet. I do not see this as just competition between magazines, American or foreign and Canadian. I see it as a competition between different technologies. The Internet does not have any kind of regulation that prevents people from getting whatever they want. If people are not able to subscribe to the magazines they want and get Canadian advertising through the periodicals industry, they certainly can get just about anything they want off the Internet.

The legislation indicates that the government is not in line with what is happening in the world of technology today. On direct to home satellite, where the minister's department also has some jurisdiction, there is what is called the grey market where all kinds of American signals are coming in, completely uninhibited, and people have complete access to them.

The Canadian periodical industry has to be the same way. We must have that kind of direct competition and people can ultimately make their own judgments.

One thing that is disturbing about the excise tax that is going to be put on revenues gained from Canadian advertisers in split run editions is that it is a punitive tax. A tax level of 80 per cent will be levied against the printers and distributors of these magazines. It is a punitive tax. I would argue there have been recent court decisions which point out that the purpose of an excise tax is not to be punitive, that it is to gather revenue. I would also argue that this measure will not stand up in the courts. The government will have a lot of explaining to do when it brings this measure before the courts.

I want to talk for a moment about what the minister is implying when he brings forward this kind of legislation. He implies several things. He implies that people do not appreciate Canadian magazines, which is why there needs to be protection for them. He implies that Canadian magazines somehow cannot meet the standards of quality of magazines from outside the country. He implies that Canadian magazine publishers are not as capable in the field of business as are American publishers.

Quite frankly, I really do not think the minister believes those things, but he is implying them. With this legislation he is saying that for some reason Canadians do not want to buy Canadian magazines. There is a much more positive way to approach a cultural policy for Canadian magazines. We should ask what things can be done to ensure that Canadian magazines can compete in a free economy against magazines from around the world.

Probably the best way to approach it is by a method the minister hinted at earlier but really did not expand on, which is that if there is more money available to Canadian consumers they will buy the types of products they want. I believe those will be Canadian products because Canadian products can compete with any in the world.

If the government wants to come up with a cultural policy that really benefits Canadians and leaves them complete choice and free to pursue value and quality as they define it, it should ensure that taxes go down. The best way to do that is to battle the debt and the deficit which today is $564 billion. By the end of the government's mandate Canadians will be paying something in the order of $51 billion a year in interest payments on the debt.

I do not have to tell members or the people who are watching today that it is a very heavy tax load. With that very heavy tax load people have less disposable income. It is not only Canadian magazines that suffer because of that; it is all of Canadian culture. Leisure activities are the first to go when there is a crunch.

If the Canadian cultural industry is to be expanded in all its permutations, the best way is to ensure that Canadians have more disposable income. If members think I am kidding, let us look at the United States. The population of the United States, relative to ours, has a lot of disposable income. It has a very healthy entertainment industry. The correlation between the two is absolutely direct. The solution for Canadian culture is not in the past or in Bulgaria. We do not have cultural protectionism here. The solution is in what has worked in other places in the world. It is in what works in other sectors in our own country.

Therefore, if we want to find a way to enhance the ability of Canadian periodicals, television, the film industry and the book publishing industry to succeed, the best way is to knock down the barriers, get rid of all the impediments to trade and start levelling the playing field by ensuring that we have a tax regime that is somewhat comparable to that of our closest trading partner. When that day comes I can guarantee that Canadian cultural industries will prosper like they have never prospered before.

[Culture, September 19th, 1995]

Mr. Speaker, last Friday the heritage minister gave what he claimed would be a visionary speech on the future of Canadian culture. To be kind, we will just say it fell somewhat short of its billing.

The speech was really a little temper tantrum replete with contradictions and embarrassing pleas for respect from the big bad Americans. The sub-theme of the speech was: "It is not our fault; we are all victims".

In the face of worldwide competition the Canadian cultural industry needs to take full advantage of American capital markets. We need competition. We need international partnerships. We need new markets. Subsidization and protectionism will only produce trade wars, feeble and inefficient companies, and the loss of the choice and value that Canadians deserve.

Yes, change sometimes can be frightening, but the minister should quit his whining and stand out of the way. Even while he spoke and with no help from the government, individuals and private sector Canadian companies were charting new ground in introducing Canadian culture to the world and the 21st century.

[Petitions, June 22nd, 1995]

Madam Speaker, the third petition calls upon Parliament to preserve Canadian unity, parliamentary tradition, and to protect the rights of all people of Canada by prevailing upon the Speaker of the House of Commons to recognize the Reform Party of Canada as the official opposition during the remainder of the 35th Parliament.

In this they have my wholehearted concurrence.

[Petitions, June 22nd, 1995]

Madam Speaker, the second petition calls on Parliament to oppose legislation that would directly or indirectly redefine family, including the provision of marriage and family benefits to those who are not family as designated in the petition.