Lorne Nystrom

[Supply, October 21st, 1997]

With respect, Mr. Speaker, I want you to check the record. He said that I was trying to deceive the people of Saskatchewan or the people of this country. I am not sure if that is parliamentary. It is a very polite word for lying. I wonder if you would check the record, Mr. Speaker—

[Supply, October 21st, 1997]

Mr. Speaker, I will take these questions very briefly in reverse order.

What can we learn from the NDP government in Saskatchewan? Indeed we can learn from most governments across the country. In Saskatchewan, in particular, when the cutbacks came from the federal government in health and education, the provincial government backfilled those cutbacks so that spending was at least stable in those areas.

Spending has not increased in constant dollars or in real dollars because inflation has gone up. We still have a problem in that province in terms of spending on health and education, but that problem is not as severe as elsewhere because the Saskatchewan government backfilled the lost federal dollars.

The same thing happened when it came to some cutbacks in areas involving Indian and Metis people. Again the provincial government tried to backfill some of it.

As a consequence, along with Alberta we have the lowest unemployment rate anywhere in the country. It is under 6% and it has been consistently under 6% for a long time. That is better than my hon. friend's province of Manitoba which has a similar economy. One reason for it is investment in social programs.

Recently Saskatchewan is the first province in the country to balance its budget. That happened three or four years ago. There have now been four successive surpluses in the province and a commitment by the province to spend a third of a surplus on new spending for health and education, about a third on tax cuts and a third to pay down the accumulated debt.

We can learn from the Government of Saskatchewan that investing in social programs is a good idea for helping the people and for creating jobs. That is a legacy of the Saskatchewan CCF and NDP with Tommy Douglas, Woodrow Lloyd and Allan Blakeney. I know the member in a previous incarnation was very proud of some of those programs in terms of the ideas he promoted in the province of Manitoba, and I hope he still is.

Now I will go to the banks. I am not talking about an act that would force banks to invest a proportion of their profits in communities but an act that would force banks to invest a certain percentage of their deposits in the community where its deposits were drawn from. We would tailor it after what exists in the United States. Economists who have looked at say that it would create about 60,000 new jobs.

I will make one final point. Just reinvesting money again into health and education to bring us up to the levels of the federal government before the cutbacks would cost about $7 billion. That would be a very positive thing for the government to do.

[Supply, October 21st, 1997]

Mr. Speaker, the most important challenge facing us today in this country is putting Canadians back to work, putting Canada back to work. We now have 1.4 million Canadians who are unemployed, 1.6 million Canadians who are underemployed or who have just dropped out of the workforce and millions more on welfare across this country. Officially 9% of the Canadian population is unemployed. Our challenge is to figure out ways to put these people back to work.

I will say at the outset that I am an optimist. We have an opportunity now. We have turned the corner in terms of the fiscal crisis in the country. We can now turn our energies and resources toward setting goals and targets to put the Canadian people back to work and to build a strong and robust economy to make this country the greatest country in the new millennium. This is the challenge and that is what we have to do.

It is a sad commentary in our country when we have more food banks than we have McDonalds, when we have people who are living on welfare, in poverty and without decent housing. Farmers are going bankrupt. Students are dropping out of universities because they cannot afford the tuition fees. It is a sad commentary when we come from the wealthiest country in the world yet so many of our people do not have an opportunity to do what they want in life, to have a decent job, a decent trade and a decent skill in order to raise their families. This is a national disgrace.

We should have the same determination and zeal to fight the war on unemployment and to set targets and goals as this country has had on the war on the deficit and setting targets and goals over the last five or six years. This makes sense.

I disagreed with many of the ways the government tackled the fight on the deficit. I disagreed with many of the provinces in the way they fought the deficit. But at least there was a plan, there was a goal and a timetable. Now we should do the same thing when it comes to fighting for jobs in the country and for putting the Canadian people back to work.

Mr. Blair has targets and timetables in terms of youth unemployment in Great Britain. The same thing is being done in other countries around the world, so why can we not do that in this country? I am afraid now that the finance minister has wrestled the so-called inflation demon to the ground he is going to allow interest rates to rise and slow down the economy and add to more unemployment in the country.

When we look at what happened in the past, it was not government programs that caused the debt in this country, it was the interest rates. A couple of years ago a study by Statistics Canada showed that 50% of the debt was caused by high interest rates. Only 6% of the debt was caused by government programs. The other 44% was caused by tax expenditures and tax loopholes and the failure to have a fair tax system in Canada.

It worries me when I see stories in the paper about the possibility of interest rates rising once again. We have this great inflation demon raising its head again. Inflation is 1.8%. With inflation at 1.8% and 9% of our people unemployed and the Canadian dollar sitting at about 73¢ American, why is the government now concerned about fighting inflation?

What the government is going to do is cool down the economy. It has already raised interest rates twice this year. In all likelihood it is going to increase interest rates again in the next few days, certainly within the next week or two. When it does, the banks increase their lending rates to small business, homeowners and farmers and the whole economy slows down. People lose their jobs, people are laid off and the wage fare is once again going to remain flat and stagnant in the months and years ahead.

The challenge is to get out and do whatever we can as a nation to put our people back to work. To make sure, the Minister of Finance in his talks with Mr. Thiessen, the governor of the Bank of Canada, should say that a 1.8% inflation rate is not too high, it is not too dangerous and it will not hurt the economy. Instead let us keep interest rates in the country low so we can stimulate the economy and put Canadian people back to work. This is extremely important.

I want to look at the negative part in the manner in which the government fought the debt and deficit. Only 6% of the deficit is caused by the government's programs. About one-half of the 6% was spent on social programs. Because of the cutbacks of billions of dollars we have many needless victims of the war on the deficit. I think of the people who go to the food banks, those living in poverty. There are the cutbacks in the health care system, the line-ups in the emergency rooms, people waiting to get into hospitals and the cutbacks in transfers to the provinces for health, education and social programs. There is tremendous poverty and third world like conditions on many of our First Nations reserves and in the inner cities.

These are the victims of the war of the Minister of Finance on the deficit. It did not have to happen. The natural growth in the economy because of the drop in interest rates in the last few years would have been enough to bring down the deficit within the targets the Minister of Finance set two or three years ago. He did not have to leave a carnage of victims across the country.

Once again I warn the government that if it listens to the Governor of the Bank of Canada and the Minister of Finance we will be back in the same old vicious cycle of higher interest rates, fewer jobs, flat wages and people suffering because of the monetary and fiscal policies of the government across the way.

Instead we need more money spent on health and education. We have to restore at the minimum the funding that was there two or three years ago before the beginning of the cutbacks. We have to restore transfers to the provinces in these important areas. We also need a sensible targeted tax cut.

We are suggesting dropping the GST entirely on some essential goods in Canada such as children's clothing and books and increasing the tax credit for low income people, an expenditure that would cost about $1.2 billion which would not only be a relief to people who need it the most but would create jobs in terms of stimulating the economy. These are some of the things that need to be done.

I will be introducing a motion very shortly in the House to establish a community reinvestment act, an act that is very similar to what we see in the United States. It would require banks and financial institutions to invest a certain proportion of the money they take out of a community back into the community. That is a way of creating jobs. More important, it is one way of trying to rectify some regional inequities in Canada.

Today we have a recovery, so they say, but the recovery is very unequal. The recovery is primarily in four or five regions of the country: Alberta, southern Ontario and two or three other regions. In much of the country there is no recovery. In much of the country there is still a great recession. In much of the country people are still going hungry and there is still poverty.

One way of trying to redistribute income and opportunities a bit is to have a community reinvestment act where banks and financial institutions have to invest a certain amount of the money in deposits they receive from a community back into the community. Those are some things that can be done.

We have a great opportunity. We have turned the page. We have a new parliament that is much more balanced than the parliament we had in the last three or four years, a parliament that can be much more progressive. The government must change its ways and get off that neo-conservative agenda of the Margaret Thatchers and the Ronald Reagans it has been following in the last four years.

The government has to stop listening to the Reform Party which wants to make it more conservative than Conservatives and start listening to the people who want a good, progressive government which gets involved and shows some leadership from coast to coast.

Canadians want a strong government that tries to correct inequities. They want a strong government that supports social programs and social spending. They want a strong government that once again will show some leadership in making the number one issue in the country the creation of jobs by setting targets and timetables; by keeping down interest rates; by having targeted tax cuts; by investing in people, health, education and social services; and by investing in research and development. Then we will build a strong and competitive economy and make Canada the best country in the 21st century.

[Éboulements Tragedy, October 20th, 1997]

Mr. Speaker, I would like to join with my colleagues in expressing my distress and sorrow at the accident that occurred last week in Les Eboulements in the Charlevoix region, in the province of Quebec.

This accident took the lives of 43 people, 42 of them from Saint-Bernard de Beauce. This is the worst bus accident in Canada's history, and tragically it occurred at almost exactly the same place as another accident, which occurred nearly 20 years ago just beside Les Eboulements.

The Quebec premier called for a public inquiry. We hope that it will provide some answers and that its recommendations will help prevent another similar tragedy in the future.

On behalf of my party, the New Democratic Party of Canada, I would like to offer our deepest sympathy to all of the families and friends of the 43 people who lost their lives last week. I would also like to express our solidarity with the people of Saint-Bernard de Beauce and the member for Beauce and offer them our moral support.

[Income Tax Conventions Implementation Act, 1997, October 20th, 1997]

Mr. Speaker, the member's illustrious leader said in the House on October 2 that he believes Conrad Black is overtaxed along with other multimillionaires. His response, just to be precise, was that they pay more than their fair share. Conrad Black and these other multimillionaires pay more than their fair share.

Does he agree with his spokesman in terms of the tax issue that Conrad Black is overtaxed? That is the Reform Party policy. Does he agree with that?

[Income Tax Conventions Implementation Act, 1997, October 20th, 1997]

Mr. Speaker, the Reform critic was talking about tax fairness. He was asked a question in the House on October 2. The question was whether we have tax fairness? Do Conrad Black and other wealthy people pay their fair share of taxes? His answer was “They pay more than their fair share. Conrad Black is paying too much in taxes. Multi-millionaires pay too much in taxes”. I wonder whether the member agrees with the Reform Party on that.

[Income Tax Conventions Implementation Act, 1997, October 20th, 1997]

Mr. Speaker, I do not know what that has to do with this bill but I want to inform the hon. member that I voted against that pension legislation a long time before he was even concerned about MP pensions.

[Income Tax Conventions Implementation Act, 1997, October 20th, 1997]

Mr. Speaker, I want to say a few words on Bill C-10 that implements tax treaties and tax conventions with a number of countries such as Sweden, Lithuania, Denmark and the former Soviet Republic of Kazakhstan. It also amends tax treaties or conventions with the United States and the Netherlands.

The bill is fairly lengthy and detailed. For the most part the NDP agrees with what is being done. Primarily it is a housekeeping bill. It prevents double taxation in many cases. It also prevents fiscal evasion by citizens. In the main we support the direction in which the bill is going.

We do have one major concern and that is with part 7 of the bill. That is the amendment to the convention with the United States. It concerns over 80,000 people who receive social security benefits from the United States but who reside in Canada. What is happening to them is unfair because it is being done retroactively. That is the part of the bill which we as parliamentarians should look at changing.

Until 1996 when Canadians received social security payments from the United States, and a lot of these people reside in the area of Windsor, Ontario, they were taxed on 50% of their social security payments.

That is a system that was in use in this country for many years. It was under that understanding and under that law that people made their retirement plans and did the financial planning for their families. That is what it was based on.

Then in November 1995 the government introduced Bill S-9 in the Senate. That bill introduced a very important change. The Canadian government would not collect taxes on social security payments but instead there would be, in effect, a withholding tax taken off the paycheques of Canadian citizens by the American government. The withholding tax rate is 25.5%.

That was a big drop in income for many citizens. It happened very quickly, without proper consultation, maybe without any consultation with these citizens.

There was a lot of legitimate protest after the passage of that bill because it unfairly attacked the incomes of 85,000 Canadians who had done their retirement planning and had based their livelihood on a set of rules in place when they were working in the United States.

The protest continued for a fair amount of time. Last April the government made the announcement that there would be change. Indeed that change has been made in the bill which is before the House today.

Now instead of the United States taking off the withholding tax of 25.5%, the government in the country where the citizen resides will be taxing the citizen on the social security payment; in other words, the Canadian government in this case. On the flip side of the coin, the American government will tax American citizens receiving the Canada pension plan or the Quebec pension plan.

What the government did not do was go back to the pre-1995 taxation level which was on 50% of the social security payments. Instead the government will be taxing 85% of the social security benefits, 85% instead of the previous 50%. One could make the argument that this is, in many cases, better than it was a year or so ago but it is still not nearly as good as it was prior to 1995. This is very unfair. This was done without properly consulting the people who are affected.

There is an organization called CASSE, Canadians asking for social security equality, which is involved in this issue. It has lobbied on this issue. It made this issue an important one, particularly in the Windsor area for the election of June 2.

These citizens were not properly consulted. They certainly did not approve the change. For these people the change is not good enough. They did their planning based on the rules. The rules were changed after the game was played. Now we are in the world series and all of a sudden there is a lot of interest in baseball. If a team wins or loses that is nullified because the rules were changed after the game was played. It is extremely unfair.

The very least the government should do is grandfather this particular part of the bill so it will not affect people who are already retired. Those people have already planned their lives. They have already purchased their retirement home. They have already budgeted for their groceries and clothing. It should be grandfathered so it does not affect the people who have retired.

Like many other tax bills, if the government wants to go in this direction and it can make a case, then of course it is not unfair in terms of people who are still working not being notified because the rules are there. It is a different situation altogether. We can then argue, of course, whether a tax on 85% is too high or too low.

The first option is to go back to the way the rules were prior to 1995. These people should be taxed on 50% of their social security income. The second point I want to make is that, at the very least, it should be grandfathered so that retirees will not have the rules changed after they have done their planning.

I also want to make a couple of other remarks about the bill before us today and the general issue of tax fairness in this country. I remember the 1993 election campaign when the Liberal Party talked about abolishing the GST, about getting rid of that goods and services tax. All of a sudden the party was in power and there was no action on that.

I want to urge the government, something which our party has been doing, to eliminate the GST entirely from children's clothing and books. That would be a good step in the right direction toward tax fairness. It would reduce taxes by about a billion dollars in a targeted sense on many people who are the least able to pay for taxes in Canada. At the same time it would also stimulate some employment in terms of circulating more money in the economy. That is the kind of thing that should be done.

I was rather amused this morning as I listened to the Reform Party critic for national revenue as he waxed eloquent in the House about the need for tax fairness, to get rid of tax grabs and tax increases. You would think he was thinking about all those ordinary people, those ordinary citizens, those mainstream Canadians who have difficulty making a living in Canada.

On October 1 in Parliament that member was asked the following question: “Mr. Speaker, does the hon. member really believe we have tax fairness in this country, that the Conrad Blacks and other wealthy people pay their fair share of taxes?” He replied that they, meaning the Conrad Blacks and other multimillionaires, “pay more than their fair share of taxes”. What a shame, they pay more than their fair share of taxes. The Reform Party thinks that Conrad Black and multimillionaires are overtaxed in this country, that they are paying too much and that if we reduce taxes for them we would have to up the tax bite on ordinary citizens living right across this country. I think that is utterly disgusting for a democratically elected party in the latter part of the 20th century.

We are seeing some real hypocrisy coming from that side of the House when they pretend to be concerned about senior citizens and about the people in the Windsor area and across this country who are seeing their taxes increase by the bill that is before the House today. People who are watching the House of Commons proceedings should be aware of where the Reform Party really stands and who it really speaks for. It speaks for the extremely wealthy, the multimillionaires in this country, the people who have a lot of money. Reformers want them to have more tax breaks and to hell with the ordinary citizens of Canada.

[Canada Marine Act, October 10th, 1997]

That consultation did take place and we do have an agreement.

[Privilege, October 9th, 1997]

Mr. Speaker, I want to say a word in support of the question of privilege before the House and to welcome the Reform Party to the feeling we have been having for years. There has always been something out of sync and out of character in the history of the CCF and the NDP in that we have never had representation in the other place, nor did we want it.

It is even more pronounced now that three parties in the House have no representation in the other place. That is the new fact which makes this a very legitimate question of privilege.

The other point I want to make is that we also have a duty in representing our constituents to offer constructive criticism to government bills. Since three parties do not have a voice in the other place, that is very difficult to do at the important initial stage.

I conclude by saying that there is a history of technical bills being introduced in the other place. I believe that practice will now be expedited by the government. Just because those bills have been introduced in the Senate in the past does not make it right. There has been an evolution of thought in the country over the last number of years and people want more input. They want their elected members of Parliament to play a more meaningful role. In view of that fact, we must have evolution in the practices of the House as well.