Charlie Penson

[National Defence, May 12th, 2003]

Mr. Speaker, that is not what military officers are saying. They are saying that those who work for the maritime helicopter project are admitting that it is the PMO that asked them for a Sea King replacement. The PMO told them what to ask for in a Sea King replacement project. That is quite different from what the minister just told us.

Will the minister admit that the requirements for the maritime helicopter are not what the military asked for, will not lead to the best choice, and will he apologize for his misleading statements?

[National Defence, May 12th, 2003]

Mr. Speaker, we now know why Ambassador Raymond Chrétien sent his memo on the Sea King replacement project to the Prime Minister's Office and not to officials in charge of the program. The Prime Minister had a stranglehold on the process so he could dictate the choice of helicopter.

The Minister of National Defence claimed the statement of requirements had not changed since 1999. Was he saying this because he knew that the PMO wrote those requirements over the objections of the military, or has the Prime Minister simply used him as the front man?

[Budget Implementation Act, 2003, May 12th, 2003]

Mr. Speaker, I am pleased to take part in the debate today on the budget implementation act, Bill C-28. There are a lot of things we would like to see in the act but they are not in place. We would certainly like a vote of confidence from the Canadian public to give us the opportunity to see some meaningful tax relief in the country. Unfortunately we have to put up with what is in the act today. We see a lot of shortcomings in it, but I want to deal specifically with a few things covered by the motions introduced by the various members today, which have been grouped together.

I would like to start with the GST issue, specifically the GST on school buses which was brought to our attention by the Bloc through its amendment. We see a lot of things wrong with the GST, a GST that was going to be scrapped by the government when it came to power in 1993. At that time, it was generating about $15 billion of revenue for the government. Ten years later it was generating $25 billion. In this current year it looks like it is going to exceed $30 billion. It has become quite a cash cow for government. Over $4 billion dollars per percentage point is what it is generating for government.

The concern introduced in the amendment lies in the unfairness of the GST issue in terms of rebates for school boards. We are concerned that there is a problem. There is a problem in treating the private sector the same as municipalities or government; we think there should be a fairness there. The difficulty with this particular amendment, though, is that when this issue was taken over through the GST from the old manufacturers' sales tax, it meant that the school boards would have the equivalent effect of the manufacturers' sales tax when that was in effect for the purchase of school buses and all of the costs for having school bus service for schoolchildren. That equivalent at the time came to 68% of the GST.

Some school boards have found ways around this by contracting out their school bus service and therefore have asked for 100% of that contracted service to be rebated. The court found that this should be the case, but we believe that it is really up to Parliament to decide what the issue is here. Essentially what the court decision does is put the boards on a different footing depending on whether they contract out the service or provide it themselves. School boards tell me that if this court ruling were to stand they would have to move to a contracting system themselves because they would gain a considerable amount of money.

The government, through Bill C-28, has moved to close off this abrogation of what was happening to put it back to its original intent of essentially 68%. We support that, but we do see a lot of things wrong with the GST. We think it needs a general overhaul. In fact we would start by reducing the amount that the GST takes in per year for the government, partly because we think that the government does not need this extra income. As I said, it is raising $15 billion more now than it raised in 1990 when it first came into effect.

If it were just that the government needed the income, that might be a good argument for keeping it as such and not having to reduce the rate, but we see the government wasting a lot of taxpayers' money day in and day out in the House. My colleague from St. Albert had the waste report out the other day and gave a lot of examples of how that has happened. We think that giving business subsidies to huge corporations in Canada should not be what the Government of Canada is all about. In fact, if individual Canadians want to invest in Bombardier or Pratt & Whitney or General Electric, Canadians have the opportunity to buy stocks. They have that opportunity through their mutual funds. Why should the Government of Canada do it for them? The government is giving hundreds of millions and in fact billions of dollars to those corporations every year and mismanaging or wasting a tremendous amount of money.

Therefore, we think there does need to be an overhaul of the GST. We would start by reducing the amount that is brought into the government. One per cent equates to about $4.5 billion.

A couple of other issues have been identified in the amendments. I notice that the NDP would like to delete any changes to the capital tax. We want to get rid of the capital tax altogether, but the NDP sees it as another source of revenue for government.

When we travelled across the country with the finance committee we were told repeatedly that the capital tax was one of the most damaging taxes in order to attract investment to Canada. The reason is that it is a tax on a business. I would compare it in some ways to a property tax. Essentially, that tax is there whether the business makes any profit or not.

That does not make any sense to me. Canada has lagged behind pretty badly in investment. We have fallen off as a source of direct foreign investment for others to invest in Canada as a percentage of world investment over 30 years. That is a discussion for another day. Suffice it to say that public policy, largely by this Liberal government, accomplished all that in about 30 years. However we think the capital tax should be reduced and we would like to reduce it over two years, not over five years, as the government has suggested.

There are couple of other things we are dealing with today in the amendments that are before us. There are a couple of amendments on the disability tax credit for those people who have disabilities. We certainly have received a lot of mail on this issue. The government seemed to be sort of the grinch who stole Christmas in the way it treated people with disabilities. I notice that the Liberals have responded to some of that pressure and will be changing the wording to try to deal with that issue.

We support easing the definition of disability from “feeding and dressing oneself” to “feeding or dressing oneself”, which could make a considerable amount of difference for those who qualify. We would also support that the government stop harassing disabled people who have been receiving disability tax credits for a number of years only to find themselves reassessed and no longer receiving them.

I made the case in the House on previous occasions about a constituent who contacted me. He has lost a leg and has to wear a prosthesis to get around. He is a proud individual. He works in the oil patch. It is a problem for him to have to use a prosthesis in a very tough environment. However he wants to work and does not want to be sitting there on welfare. The disability tax credit allows him a little measure of comfort in being able to claim some of the extra costs involved to rig his van so he can drive and so on. The government took that away from him, as it did from many other Canadians.

I hope the government has learned its lesson and that some of the changes made to the tax act today will address that.

The other area the amendments deal with is the RRSP. I see the NDP would also like to cancel changes to the RRSP limit. We believe it is important for Canadians to have the ability to save for themselves and raising the RRSP limit is a measure that we would support. We would support it because it looks like Canadians will have to rely more and more on themselves for their own retirement income. They will not be able to rely on government, especially the Canada pension plan which has seen some fairly substantial losses in the investment sector over the last year. Be that as it may, we think the plan continues to be in trouble, partly because the former finance minister, the member for LaSalle—Émard, would not listen to the chief actuary of the Canada pension plan when he said that rates would have to be even higher than the 9.9% that it has risen to in the last couple of years. He also said that It was not sustainable. As the Canadian birth rate continues to decline, unless something changes, there will be a small amount of people working to support the system down the road.

While we agree with a lot of the measures being implemented in the act, in most cases they are half measures, such as the capital tax only going part way. We see no personal tax relief. Canada is falling generally well behind the United States in corporate tax rates again as a $600 billion tax package is working its way through congress at the moment.

Our productivity and our competitiveness will be affected once again and, with the rising dollar, I suggest that a lot of these chickens will be coming home to roost pretty quickly because the government has not made the changes on the side of reducing taxes in order to compensate for the rising dollar. This will continue to be a bigger issue well into the future.

[Taxation, May 9th, 2003]

Mr. Speaker, the U.S. congress is proposing changes to the Bush tax plan that could seriously hurt Canadian business. It would only restrict dividend tax reduction to domestic companies. This would leave hundreds of Canadian companies, such as Nortel, Canadian Pacific, TELUS and many others, that have offices in the United States out in the cold.

My question is for the Minister of Finance. Has the Minister of Finance made the appropriate calls to his counterpart in the United States to tell him this is simply wrong?

[Question No. 183, May 5th, 2003]

Has any government department or agency conducted an analysis of the economic consequences of the failure of Canadian banks being permitted to consolidate/merge?

[Petitions, May 5th, 2003]

Mr. Speaker, I would like to present two petitions today that have over 130 signatures combined.

The petitioners call upon Parliament to protect our children by taking steps to outlaw all materials promoting or glorifying pedophilia or sado-masochistic activities involving children.

[Taxation, May 5th, 2003]

Mr. Speaker, what the minister has failed to tell the House is that the $100 billion tax cut largely has been eaten up by tax increases that his own department has introduced in the last two years.

During the first full year, the GST took in $15 billion. Ten years later, GST revenue had climbed to $25 billion. For the last fiscal year that just ended March 31, it is expected to generate over $30 billion.

Why will the Minister of Finance not give Canadians a break by reducing the GST?

[Taxation, May 5th, 2003]

Mr. Speaker, in 1990 the Mulroney Conservatives introduced a goods and services tax. The Liberals promised to scrap the GST, but the most hated tax in Canadian history is still with us.

The GST is regressive because it weighs heaviest on Canadian families with modest incomes.

At the very least, will the Minister of Finance lessen the tax burden on hard pressed Canadian families by reducing the GST?

[Family Supplement, April 30th, 2003]

Mr. Speaker, it is a pleasure to speak to this private member's motion moved by the member for Ahuntsic.

The motion is one which the Canadian Alliance supports. I know it is a private member's motion, but it fits with our notion that families are hard pressed in Canada, that families are the building block of society, and therefore need all of the help they can get in terms of tax relief.

In this case, it has to do with employment insurance and a provision that deals with an additional benefit to low income families for those people who are collecting employment insurance. Under that system, families are eligible for the supplement if their net income is under $25,921. It is not a big amount, but the principle is right that we should index this to inflation, in keeping with the idea that we are trying to keep a neutral cost. Inflation does eat away at these things if it is not indexed, and therefore we are supportive of this motion.

As the member who introduced the motion told us earlier, the same concept works with the Canada pension plan, old age security, guaranteed income supplement and the Canadian child tax benefit. The preliminary cost of indexing would be about $7 million annually. While that is a substantial amount, we believe that it is important that this still be done.

We strongly support and believe that families should benefit and those people who are unfortunate enough to be out of work and having to collect employment insurance should benefit from this provision.

However, I do want to take the opportunity today to talk about some of the problems with the current EI system. This is a band-aid. We believe that reforms need to go far beyond this motion today. While we are supportive of it, we will be pushing hard and are pushing hard for basic reform of employment insurance.

One of the problems we have seen in this place is that the government has used the employment insurance fund, or employment insurance premiums from employers and employees, to build up a tremendous reserve. It has overtaxed or overcharged Canadian employers and employees to the tune of something like $40 billion over the past eight years.

While people might think that this amount is sitting in a fund someplace, available for employment insurance premiums, that is simply not true. It has gone into general revenue and been spent on a lot of government programs. I would make the case that some of those programs should not be priority programs, and that employment insurance premiums should be reduced for employers and employees so that it is revenue neutral.

We hear from the various people who look at these things, the chief actuaries, that there is a need for about a $15 billion fund for employment insurance. We think it should be a hard fund that is put in place and should not go into general revenue, but that fund would have to be built up over a period of time. However $15 billion is what they suggest is necessary to ride out an economic downturn or a cycle in the economy. Unfortunately, that fund has now reached over $40 billion, which represents $25 billion being overcharged by the Liberal government over the past several years.

It gets worse than that. The fund continues to build about $3 billion a year. The government is conscious of this. It knows that the fund is building and that it is overcharging, but it will not reduce the amount that is needed to bring this into a revenue neutral position. It is not just families who are collecting EI, about which the private member's motion talks, but families in general are being overcharged because they are employees, and in many cases employers as well. That is our biggest complaint with the EI program. The federal government must simply stop overcharging Canadians on this account.

In addition to that, we believe that the employment insurance program should be brought back to a true insurance program for job loss. That was the original intent some 25 years ago and that has changed. It has become more of a social program these days and we believe it needs to be brought back to a true insurance program and run in a business-like manner. That is what our Canadian Alliance supports and would do if we were elected. We would revamp the EI program.

The minister has told us that the government wants some transparency and that it is looking at that but in the recent budget we were very sorry to hear that the minister had postponed those reforms for a further year. We have to wonder how serious the government is about really making the changes that are necessary to the EI program.

Under our proposal, employment insurance premiums would be set by an independent commission and would be based on the recommendations of a chief actuary, as I have just said. That would vary from time to time, depending on how much is required in the fund, but it would be adjusted to be as revenue neutral as possible. As I said earlier, there would be a hard reserve there that would not be just put into general revenue and spent at the discretion, or lack of discretion in some cases I would point out, by the government.

In addition to that, employer premiums would be experienced rated so that employers who have a record for fewer layoffs than other employers in the same sector would pay lower premiums. I think this would help in the rationalization of the industry.

In addition to that, there are different methods to resolve the problem that the member who introduced this motion brought forward. We think families are hard-pressed in terms of paying too much tax right now. One of the things that the Canadian Alliance has suggested is that there should be a child tax deduction of $3,000 per year, which would be off the taxes payable. That would represent about $3.5 billion in savings to Canadian families per year, which is a substantial amount.

In addition to that, we think there may be some room to do something within the four personal income tax brackets, especially for hard-pressed, middle income families that pay so much tax.

We have a little different point of view. The Liberals seem to think that families earning $60,000, $70,000 or $80,000 a year are rich. We do not think that at all. We know there is a high cost to raising a family in this country. We believe those hard-working taxpayers, who are trying to raise families, trying to put their children through university and trying to do everything they can to provide their children with opportunities for the future, need some relief. We would reward them by giving personal tax relief.

I was just looking at how much the basic personal exemption is right now. It is only $7,757 per year before an individual starts paying taxes. It just seems to me that is a very low amount. I hate to get into the debate about what is the poverty level, but I think someone who earns $7,700 a year should not be on the tax rolls at all. We think the basic exemption should be raised so that individuals working and their spouses should have the same exemption rates. That would provide some relief. The $3,000 exemption for each child would also make a significant difference so that low income families would be given a leg up. They would be able to work and earn an amount of money that would be more in line with what they need before they would even start paying taxes to the federal government.

The reason we think we have that kind of flexibility is that we think the government is spending far too much money on program spending right now. It is not necessarily the program spending that it is locked into, such as the equalization program, health care and all of that, but the direct program spending for which it is responsible.

In the budget that was brought down on February 18, the finance minister introduced $25 billion of new spending initiatives over the next three years. That is a 25% increase in spending. Those were the kinds of spending levels this same Liberal government was guilty of from the late 1960s onward for about 15 or 20 years that put us into a very deep hole and caused our national debt to rise to $536 billion. It has put us in a difficult position.

Canadian families are paying about 22¢ out of every tax dollar they send to Ottawa just to pay the interest on the national debt.

We simply have to correct some of these past failures, not go there again, and give tax relief to Canadian families so they can do things with their tax money with their priorities in mind.

[Canada Airports Act, April 29th, 2003]

Mr. Speaker, I do not know. However I would think that there is always that possibility of political influence or interference. We have seen it many times in the past from this government.

The government has put people on boards of directors who seem to have the same philosophy as the government. Is it not strange that the government would do that? It certainly has a way of directing and punishing those airport authorities that do not comply. Just the threat of appointing directors who are friends of the Liberal government is enough to cause concern from airport authorities.