Brent St. Denis

[Research and Development, June 6th, 2002]

Mr. Speaker, yesterday the space shuttle Endeavour blasted off on a flight to the international space station to deliver a mobile base that will help build the station in orbit. Given Canada's excellent aerospace reputation, can the minister responsible for science, research and development tell the House how Canadian industry has contributed to this mission?

[Supply, June 6th, 2002]

Mr. Speaker, notwithstanding my respect for the member for Kelowna, I think he is arguing that we do away with the very Canadian approach to equalization that has been the case for many years in Canada. To transfer federal dollars to the provinces strictly on a per capita basis in lieu of equalization is absolutely unfair. We do have different regional needs in this country. Some provinces have access to more resources than other provinces.

I suggest that, yes, he was intrigued by my response to his colleague's comments and question. I think he is intrigued because he probably needs to understand better the real needs of our regions across the country.

[Supply, June 6th, 2002]

Mr. Speaker, even though he is a little off topic when he refers to health care, I would be more than glad to offer a response. He failed to recall in his comments that the provinces asked the federal government for a substitution of tax points in lieu of cash, believing practically that over time they would have more revenue from tax points than from a straight cash transfer from the federal government. In failing to acknowledge that, the hon. member is supporting a weak argument because the contribution of the federal government to the provinces for health care and social services is vastly higher than the 12% figure he quotes.

I really wish in fairness he would at least mention that the provinces asked for tax points from the federal government many years ago and received them. Had they not done that, they would be in a lot different position, even according to his own formulas, than they are now.

I would also add that if we do not deal with this overpayment and deal principally with the four provinces that received most of the overpayment, we will be unfair to the provinces that do not have an active mutual fund trust. It is a matter of fairness to the other provinces as well.

[Supply, June 6th, 2002]

Mr. Speaker, I wish to join the debate on the motion before us today which deals with the consequences of a problem that was recognized by the Canada Customs and Revenue Agency in its accounting processes.

This is an instance of the opposition failing to recognize that the government has done an effective job of recognizing and attempting to correct a problem immediately. Rather than recognizing this fact, the opposition would tie the government's hands as it tries to negotiate a solution with the provinces who I am sure will be willing to come to an agreement on the most appropriate course of action that is most fair to the taxpayer.

Indeed, an error was made and the error should be corrected. It is only fair for the provinces not implicated in the error that we do something about it. Because they do not have the mutual fund activity as these six provinces do, they have in effect been penalized.

As a result of the problem, the Government of Canada, based on the accounts provided by CCRA, overpaid six provinces under the tax collection agreements that it entered into with those provinces. Members of the House must realize that the impact of the accounting problem did not affect all the provinces equally or proportionally because it related to mutual fund trusts. These investment companies are based primarily in the four provinces of Ontario, Manitoba, British Columbia and Alberta.

The issue goes back to the introduction of the capital gains taxes in 1972. The problem for many years was virtually undetectable because mutual fund trusts only became a significant investment vehicle in the early 1990s. The overpayment to the six provinces was a result of a tax accounting omission in CCRA reports used by the Department of Finance to determine how much tax revenue to distribute to the provinces.

In the course of enhancing computer systems used for tax accounting, the CCRA identified a problem that caused it to initiate an indepth review. With some 2,200 separate accounts, CCRA's tax ledger system is complex.

The problem, in brief terms, is as follows. Mutual fund trusts pay federal and provincial income tax on capital gains as their business proceeds. Under circumstances set out in the income tax legislation, mutual fund trusts can receive a refund of both the federal and provincial portions of the tax paid once the investors realize the gains and pay tax themselves where the tax benefit has been transferred from the trust to the taxpayer.

Due to a problem in CCRA accounting processes, which are audited by the auditor general, the provincial portion of the capital gains refund claimed by the mutual fund trusts was not being deducted in the computation of the provincial tax revenues. Instead it was deducted from federal revenues; a mistake.

Very simply, when mutual fund trusts paid provincial income tax on capital gains, the amount of tax paid was added to the payments to the provinces. However when the mutual fund trusts received a refund of provincial taxes paid, or the individual taxpayers made their claims, the amount was not deducted from the payments to the provinces.

As soon as the CCRA's internal review process indicated that the omission of certain data in its reports to the Department of Finance was resulting in overpayments to the provinces, the agency informed the Department of Finance and the auditor general. Remedial measures were put in place as soon as the auditor general confirmed that the problem was real and overpayments relating to mutual fund trusts were stopped.

Detecting the problem was not easy. The Auditor General of Canada herself noted that audit work had focussed on changes in systems and accounts, something that typified the CCRA's management of the process. The system for recording tax revenues relating to capital gains associated with the mutual fund trusts had not changed substantially since its inception in 1972.

Focussing on changes was indeed where the problem came to light. In the course of introducing computer processing to reporting for mutual fund trusts, CCRA discovered a problem. As members know, a great revolution in the application of computers to business and government has taken place over the last 30 years, a sea change in fact.

Members need not be reminded that one does not make dramatic changes to the tax accounting system without being absolutely certain. In their position the CCRA managers and staff were looking at a problem that had not been picked up before by the auditors. The problem was brought to the attention of the CCRA's commissioner in late December. On the very next day he ordered a full internal review to be certain that this was a problem.

When the report of this review was received by CCRA management on January 9 this year, the Department of Finance was informed and the auditor general was asked to review the CCRA findings and confirm that a problem truly existed. As soon as the auditor general confirmed that the problem was real, the CCRA implemented remedial measures. Additional ledger accounts were created for each of the provinces to ensure that provincial shares of capital gains taxes arising from mutual fund trusts were debited when refunds were issued.

As members are aware, people often blame computers and modernization for many of the problems that organizations experience. It is refreshing and heartening to see that an organization that has adopted technology as eagerly and energetically as the Canada Customs and Revenue Agency has benefited from its embrace of technology, not just through better service to Canadians but also by identifying problems that could have continued for much longer.

The House should also be grateful to the Minister of National Revenue and the management of the CCRA for being so upfront when the problem arose. At no time did they seek to avoid responsibility or blame for the problem. When action was required, they acted decisively. The House can be assured that the Government of Canada will demonstrate the same responsible leadership in addressing the consequences of this problem.

We should acknowledge that an error has been made and for the benefit of all taxpayers the error should be corrected and remedial action taken.

[Competition Act, May 31st, 2002]

Madam Speaker, I am pleased to have this opportunity to address the Senate's amendment to Bill C-23, an act to amend the Competition Act and the Competition Tribunal Act. Bill C-23 is before us today in the form of a Senate amendment which corrects a small technical problem between the English and French text in subsection 106.1(4) of clause 14.

Bill C-23 is vital economic legislation designed to strengthen and modernize our existing competition laws to the benefit of consumers and businesses alike. For example, the legislation would prohibit the sending of deceptive prize notices which target the most vulnerable members of our society. It would enable Canada to gain access to evidence in other countries concerning civil competition matters. It would broaden the scope under which the competition tribunal may issue interim orders. It would improve the competition tribunal process. It would allow individuals and businesses to apply directly to the competition tribunal for relief from certain anti-competitive conduct. In addition, it would provide additional measures to protect competition in the Canadian airlines industry.

The bill has been carefully reviewed by both Houses of Parliament. The Standing Committee on Industry, Science and Technology carefully listened to a broad range of witnesses and concluded that Bill C-23 takes a balanced approach. Members will recall the bill passed the House of Commons with all party support on December 10, 2001.

Section 106.1 of Bill C-23 would allow for the possibility of a consent agreement between a person, other than the commissioner of competition, that has made an application to the competition tribunal for an order to be made under sections 75 or 77 of the Competition Act and the person against whom the order is sought. This provision would provide that such an agreement can be registered with the competition tribunal if the terms of the consent agreement are consistent with the provisions of the Competition Act. However, any consent agreement made under that section would have to be published in the Canada Gazette to give third parties an opportunity to examine the consent agreement.

During its consideration of Bill C-23 the Senate committee on banking, trade and commerce suggested that a minor discrepancy existed between the French and the English translations in subsection 106.1(4) of clause 14 of the bill. Indeed, according to the English version of the subsection 106.1(4), a person could within 30 days after its publication register a consent agreement. This would not leave a third party any time to make an application to have the consent agreement cancelled or replaced or to even examine the agreement. This would defeat the obvious purpose of the provision which was to allow third parties a chance to challenge the consent agreement.

The French version however indicates that the consent agreement can be registered only 30 days after its publication. The French version gives an appropriate effect to the provision. On May 2, 2002, the Senate committee reported back the bill with one minor amendment to subsection 106.1(4) to correct this discrepancy. The English version of subsection 106.1(4) has been corrected to that effect and now reads that the consent agreement “shall be registered 30 days after its publication”.

It is now up to members in this place to adopt this minor amendment and provide for speedy passage of Bill C-23. In so doing we will enhance the competition law enforcement in Canada to the benefit of consumers and businesses alike.

[Committees of the House, May 31st, 2002]

Madam Speaker, I have the honour to present, in both official languages, the ninth report of the Standing Committee on Industry, Science and Technology on the main estimates 2002-03.

The committee reports the same, less the amounts voted in interim supply.

[Species at Risk Act, May 8th, 2002]

Madam Speaker, I knew we had a quorum. We always have a quorum. Members are working busily in the lobby behind me making phone calls to constituents, following up on very important files in support of issues in their ridings and issues across the country. I am very pleased that they are monitoring this debate from the lobby and I hope we will not have any more interruptions such as we have just seen.

Back to the point of compensation, as I said, Bill C-5 will provide for fair and reasonable compensation that can be paid for losses suffered as a result of any extraordinary impact when it is necessary to prohibit destruction of critical habitat. Funding is already available through the Government of Canada's habitat stewardship program to help landowners and resource users modify their activities so as not to harm species and habitat.

I should add that this legislation would be complementary to existing provincial and territorial legislation. In fact I would like to touch on the issue of co-operation with our provinces and territories. Under the accord for the protection of species at risk, we joined our provincial and territorial partners in making a series of commitments. We are working to live up to those commitments. We should understand that many provinces and territories have in many ways already lived up to theirs. Certainly we do not want to lag behind nor do we wish to compromise the efforts of our provincial and territorial partners.

As we have, the provinces have struggled with policies in relation to this issue as well. I would like to single out Nova Scotia and Newfoundland for the efforts they have made already in this regard. We have all repeatedly endorsed the spirit of the accord for the protection of species at risk. We have repeatedly pointed to our joint commitments to protecting species and their habitats and to bringing in legislation that enshrines these practices in law.

For decades the federal, provincial and territorial governments have been working together on wildlife management. We have many success stories as a result of this co-operation. The provinces, territories and the federal government have worked side by side on recovery, stewardship, critical policy questions and process. The Canadian Endangered Species Conservation Council has met in good faith on a number of occasions and has simply pressed on with this very important work because we made a commitment and we are all determined to honour the bargains we have made. That is why the co-operative approach has to fit. That is why we need to fulfill the federal obligation for legislation on species at risk.

The public wants us to move forward on this. They want us to be mindful of the important concerns of our farming community, our tourism industry and our forest industry. Yes, these are important elements in our economy, and there is no intent here to compromise our ability to create and sustain jobs, to help build the economy, such as we have been doing since 1993. We plan to continue as long as the public will honour us with their support.

I would like add, too, that in a certain legal sense the issue of strict liability is something that deserves mention here. I do not want to lecture the House on what all of this means, but it is very important that interpretations of strict liability be consistent with other government legislation. Almost all federal environmental legislation and provincial wildlife legislation have strict liability offences. Anyone accused under this legislation would have the possible defence, however, of due diligence. Many witnesses who spoke before the standing committee told members that protecting endangered and threatened species represents the emergency room of wildlife conservation.

As I wind up my remarks, let me say that the public likes to see different levels of government working together and co-operating. They expect us to do together the things that make life better for our communities and their citizens, so that in fact when we imagine this country 500 or 1,000 years from now, if we indeed can, we imagine a country that is better than the one in which we live right now.

[Species at Risk Act, May 8th, 2002]

Madam Speaker, I am pleased to join this very important debate on an issue that has been a subject of discussion for many years. My hon. colleague from Surrey Central mentioned that this was a campaign promise made by our party going back to a couple of elections. Why it has taken this long is probably testament to our willingness to consult and find the best path through the difficult issues which comprise this important subject.

Our own caucus has had vigorous debate on the bill, ranging from the concern that it does not go far enough to the concern that maybe it goes too far. I believe we have come to a reasonable consensus that even though this legislation is not perfect, it is a great advance in the protection of wildlife species, which really is not only an issue of concern for ourselves and our children but for our children's children and beyond. This is an issue that speaks not just to decades in the future but to hundreds and conceivably thousands of years.

It goes without saying that as the population of the world has grown and shifted, the price being paid by our wildlife species has been very high in many cases. If we as a society do not take seriously the concerns that we have to build, to manage and to have economic benefit from our natural resources, and at the same time balance that against the needs of our wildlife, then we will all pay the price for not having seen far enough ahead.

I would suggest that this vigorous debate and the many months and years it has taken to get us to this point have brought us to probably the best bill that is possible under the circumstances. I encourage all members to move on with this very important subject. We must not waste any more time because various species are at risk every day as we sit in the House debating this issue.

One of my colleagues from Prince Edward Island made mention of our aboriginal people and how important this issue is to them. They have lived in harmony with nature for untold thousands of years. We have many lessons to learn from them when it comes to protecting nature and protecting wildlife. In managing our relationship as humankind with nature, it is not often easy to find solutions but indeed we must.

As I have stated, some believe that Bill C-5 does not go far enough but for others it goes too far. This suggests to me that we have found a balance. When people provide criticism on both extremes, then possibly we have done the best we can do for the vast majority of people.

Not only would the legislation in Bill C-5 be effective in preventing wildlife from becoming extinct, it would also provide for the recovery of species. While not coming to a perfect result, after eight years of consultation I think the result is excellent, and the bill should move forward as balanced and effective legislation.

Much has been made in some quarters about the costs for agriculture, for forestry and for tourism. For example, people are concerned about the possible effect on snowmobile and ATV trails. It is my understanding that the legislation is not intended to impair the appropriate and proper evolution of our tourism activities. They are important to our economy. The legislation is not intended to impair traditional activities such as trapping. It is not intended to impair practices that have become commonplace. All we are saying here is let us be mindful of nature's place in all of this. We are saying that without nature we all lose as a society. It is a question of finding the right balance.

Much has been said about compensation. Under Bill C-5, fair and reasonable compensation can be paid--

[Research and Development, April 22nd, 2002]

Mr. Speaker, the issues facing government are becoming increasingly more complex. They often impact greatly on our society and economy. The public relies on government to use science and technology to ensure the health, safety and well-being of Canadians.

Could the Secretary of State for Science, Research and Development advise what the government is doing to ensure that Canada is able to keep pace with the rapid rate of technological change and the advancement of science and technology?

[Research and Development, April 19th, 2002]

Mr. Speaker, as the government advances the innovation strategy to rank Canada among the top five countries in the world for research and development, our country also needs to develop highly qualified people to fuel Canada's innovation performance.

Could the Secretary of State for Science, Research and Development tell the House what the government is doing to help attract young people to careers in science and engineering?