Charlie Penson

[Excise Tax Act, October 31st, 1995]

Mr. Speaker, I rise to speak to Motion No. 3, but I do want to comment on a couple of things that were said earlier this afternoon by the member for Don Valley West and the member for Rosedale. They both talked about how our Canadian magazine industry would not be able to compete if they did not have some type of protection. I reject that notion. They are talking about national security interests. They are talking about how we will be dominated by the United States because it is so much bigger and has so much more economy of scale.

My colleague from Medicine Hat talked earlier about other experiences with free trade. When we entered into a free trade agreement with the United States we heard the argument over and over that many of our industries would take a mortal hit and not be able to compete.

We know that this government was not in favour of the free trade agreement. They did a flip-flop at the last minute. Now I really question their sincerity about their commitment to free trade.

What is the experience with other industries? My colleague spoke about the wine industry and how well they are doing. I can tell members about agriculture, the industry I have some knowledge of.

Our biggest fear is the destruction of an industry. If we have subsidies and protectionism, we are hurt far more from that than we are from making trade rules that let us compete internationally on a basis of fair play. We think we can compete a lot better on the basis of quality product than we can on the basis of having to subsidize, because we cannot compete with the treasuries of other countries. Canada is simply too small.

When we talk about security, what about agriculture, food supply security? Do we need regulations to protect that? We found that we do not. The cattle industry is a good example. There was a big fear that the cattle industry in Canada would be basically decimated with free trade. What is our experience? Since 1988 we have had something like a 40 per cent increase in cattle sales to the United States.

We can do very well on the basis of a level playing field and free trade. Our cultural industries can also do very well. They can compete head to head. We have to produce a quality product to do that, but we are up to it.

The amendment we are talking about today strikes out the section of the bill that would impose an excise tax on periodicals equal to 80 per cent of the value of their advertisements. Our amendment goes to the heart of the bill and strikes out its most offensive part. It is assumed that this excise tax will never be collected because it will effectively kill the Canadian edition of Sports Illustrated and any similar ventures that could be on the drawing board.

It is folly for this government to attempt to protect Canadian culture in this or any other manner. If our cultural industries produce quality products of interest to the Americans or any others around the world, let them go out and sell to those markets in whatever way they can based on the marketplace. I am confident they will be able to compete. If Canadians prefer to buy American culture products that have been spiced up with some Canadian content, by all means let them, but I do not think we should be using cultural protectionism here because it probably hurts our industry rather than helps it.

[Excise Tax Act, October 31st, 1995]

Mr. Speaker, I am happy to rise today to support the motions of amendment put forward by my colleague for Medicine Hat. Before I do that, I would like to take a moment to speak about Bill C-103, which is the basis for these amendments in the first place.

What we have here is a form of cultural protectionism. It is protectionism for an industry that I do not think really wants it or needs it. This government seems to assume that this industry cannot stand on its own two feet, that it does not have a quality product that can be sold throughout the world on the basis of that quality. I really disagree.

I wonder what has happened to the Liberal government. At the same time those members have been talking about trade liberalization, bringing in NAFTA, the GATT agreement, they seem to be moving in the opposite direction in the area of culture.

In this area specifically we are talking about split runs for the magazine industry. What they do not realize is that Canadian magazines also use this technology very effectively. We have an industry in Canada out there competing in the international market and we can do it without government help. Those Canadian magazines will get sideswiped in this whole process.

This goes against the whole grain of free trade, of trade liberalization, and Canada does not want to set this example. We want to set an example that we are free traders, that we can compete on the basis of quality.

The question of whether this is actually a dumping issue was raised by my colleague earlier. If this is a dumping issue, that the Americans are dumping cultural property into Canada, it should be how it is addressed. We have a basis for discussing that with a NAFTA trade dispute panel. Why does it not go there instead of taking this round about way of hitting them with an excise tax?

We have to simply move away from this whole idea that we cannot compete unless we have government subsidies. Our cultural industries are actually being adversely affected by our assuming that and we have to get on with the process of competing on the basis of quality.

I want to talk to the first and second amendments proposed by my colleague. The first amendment deletes the term "excluded edition" from the bill. An excluded edition is an issue of a periodical that has less circulation in Canada than outside Canada. The second amendment deletes references to split end editions.

The purpose of these two amendments is to ensure the Canadian magazines we talked about earlier, which circulate in the United States and do split end runs, do not end up paying excise taxes in Canada in their attempt to penetrate the American market.

They are being penalized by an attempt to exercise cultural protectionism. The whole purpose of liberalizing trade between Canada and the United States is to allow goods and services which are superior and which are in demand to find a much larger market. We defeat that purpose of free trade by taxing Canadian periodicals which have a chance to stand, to make it at home and abroad.

Canadian periodicals should be free to export our good ideas and our great culture to the United States. They stand a better chance if they can do so by using the split end run technology on their editions abroad and not be penalized here at home. Presently there are two Canadian magazines, Harrowsmith and The Hockey News , which will be caught in the net of the bill.

Amendments Nos. 1 and 2 by my colleague ensure that these and other Canadian magazines are excluded from the bill's provisions. I would like to see our amendments passed this afternoon.

[Petitions, October 23rd, 1995]

Mr. Speaker, I have before me a petition that has been signed by 424 people.

These people are very concerned that high risk offenders upon their release from prison are more and more frequently committing crimes that result in serious personal injury.

The petitioners believe that there would be fewer such incidents if Parliament would enact legislation permitting the use of post-sentence detention orders. Specifically the petitioners request that Parliament pass Bill C-240 dealing with high risk offenders.

[Candu Reactors, October 23rd, 1995]

Mr. Speaker, I think they gave it away.

My supplemental is to the Minister of Natural Resources, since that is who was quoted here. I quote that minister even further: "The Canadian government will no longer be in the business of negotiating massive support packages for energy megaprojects". If we are not subsidizing megaprojects at home any more, why are we considering doing it overseas where the risk to the taxpayer is even greater?

[Candu Reactors, October 23rd, 1995]

Mr. Speaker, this government has a long history of using tax dollars to fund megaprojects that end up costing us billions. Petro-Canada is just one example.

Now the Chinese premier has visited Canada and walked away with another megaproject deal. The government is planning to use the Canada account to finance Atomic Energy's sale of two CANDU reactors to China.

Does the government not realize it is broke? Does it not realize Canada cannot afford to finance a dime, never mind several billion dollars worth of taxpayers' money on this sale?

[Excise Tax Act, September 25th, 1995]

Mr. Speaker, it is my pleasure to speak today to back up my colleagues from the Reform Party and to speak against the ill conceived Bill C-103.

The bill will needlessly and rightfully attract retaliation by American trading interests. In my role as the critic for international trade for our party, that is a concern to me. Furthermore, it will cheat Canadian sports readers of the bit of Canadian content they presently enjoy.

I offer some background and a bit of history to put the bill in perspective. Decades ago rules were written to protect Canada's cultural industries. Even though the importation of American magazines was and still is allowed, the government of the day imposed some severe restrictions on advertising. Canadian businesses can only deduct the cost of their Canadian magazine advertisements if they appear in Canadian publications. That is why we see so many American magazines on our news stands. They are strictly aimed at the American market and if Canadians are interested they can buy these magazines.

However the government introduced customs regulations which prohibit the import of split runs. These are essentially American magazines that contain some Canadian content and some Canadian advertising and are trucked across the border.

Furthermore, in the NAFTA regulations Canada did retain the right to protect its cultural industries. However, in so doing, the Americans were saying they at least retained the right to retaliate in kind. That is a very important feature. They are exercising that right to retaliate and we think that will happen.

Furthermore, all these rules were written before any advances in technology could be fully understood or predicted. When it became possible to beam magazines across the border and have them printed in Canada, Sports Illustrated took advantage of this new technology and circumvented the split run border rules.

Since April 1993 it has produced several issues per year that are essentially American versions with some Canadian stories. There is a lot less American advertising but there is a problem. There is some Canadian advertising. The big concern is not that Canadians are being bombarded with American sports stories by trying to get their eager hands on some Canadian sports stories. The concern is that Canadian advertisers will spend their advertising dollars in these largely American publications even though these advertisers will not be able to deduct the cost of doing business.

The fact that Sports Illustrated has not been successful in recruiting many Canadian advertisers does not seem to impress the government. It is bound and determined to enter into a trade war over the Sports Illustrated issue. It is a very serious matter, one the government needs to review.

Therefore, what do we do? We have the Liberal government introducing Bill C-103, largely a protectionist bill. The bill imposes an excise tax on the highest level Canadian participant of split run ventures. The excise tax is 80 per cent of the value of all advertisements contained in such magazines or newspapers. It is assumed this excise tax will never be collected because it will effectively kill the Canadian edition of Sports Illustrated or any ventures that could come on to the drawing board. That is what I call protectionism.

The Liberals in 1988 were opposed to the free trade agreement with the United States, although they have largely been converted since. It is sort of a revival. However, sometimes I wonder what their real commitment is. Are they committed to the free trade principle or not? Here it would indicate they are not.

The Minister of Canadian Heritage is quoted as saying Americans cannot retaliate against this protectionism move because the magazine is printed in Canada. I have news for the minister. There is more than one way to cross a border than by walking across it; planes fly and now we have computer beams from the satellites. We cannot stop progress. The Americans will retaliate against the bill and they have every right to. They can make life miserable for Canadian exporters in all kinds of ways, justified or not. We will not be able to cry foul because our hands will not be entirely clean in this matter. We are introducing a bill which is largely a protectionist bill.

What about our artists, our writers and our publishers? What if they want to take advantage of the American marketplace which is much larger and more lucrative than our own?

Approximately 500 new channels will be available by satellite. How will we control this type of information flow? I say we

control it in the marketplace. If we have a good Canadian cultural industry, it is a business and it will compete. If it is poor it will not.

The government is being hypercritical in that it says it is trying to protect our magazine industry while at the same time crushing it to death with taxes. When we ask businesses in Canada why they are not expanding, the common theme has always been that taxes and the cost of doing business in Canada are too high.

That is where we should be concentrating. We should be trying to balance our budgets and bring our Canadian businesses into a competitive position so they can compete in the international marketplace. I believe they will do very well. We are asking our Canadian industries to compete with one hand tied behind their backs. There is the GST. There is a very high tax level and they simply cannot compete under those circumstances.

Some would have us believe our cultural industries cannot compete effectively on the basis of pure competition. That is nonsense. We have some very good Canadian cultural content. It would be even better if it had to face the true test of the marketplace. That test is whether there is a quality product. There are a number of Canadian cultural industry businesses which pass the test and some which will have to fall by the wayside because they simply are not quality products. The question we have to ask is whether we should be supporting the industry through subsidy and protectionism. I do not believe so and I will be voting against the bill.

[United States Sugar Import Restrictions Retaliation Act, September 25th, 1995]

Mr. Speaker, it is my pleasure to speak to the private member's bill introduced by the member for Fundy Royal, Bill C-311.

I must confess that I do have a bit of a sweet tooth, so I can assure the member that I support the thrust of his bill. I am certainly not interested in seeing the Canadian sugar industry damaged in any way, especially not through unfair trade restrictions on the part of Americans. I know of the concern of all parties in the House regarding the possible damage to our sugar producers and I commend the work of the sugar caucus in this regard.

I can imagine though that the bill comes at a rather awkward time for the government, since the Americans are taking us to task for tariffs we have put on that have precisely the same origin as the one the bill is attacking. I have to wonder if during the negotiations on the GATT we were outmanoeuvred and outnegotiated in this area when we allowed the Americans to expand the category for sugar into refined products as well.

I would like to give a bit of background. On January 1 of this year all countries that signed on to the Uruguay round of the GATT were required to replace existing import quotas with tariff rate quotas that would provide similar protection to vulnerable industries, with the proviso that these tariff rate quotas would eventually be reduced and dismantled.

For those members who do not know what tariff rate quotas are, if they do not know the difference between a TRQ and an O Henry bar, I would like to tell them. A tariff rate quota is a cutoff level. Up until that cutoff level has been reached no tariff is payable. After the TRQ is reached a tariff comes into play, which is usually so sizeable that it discourages imports altogether.

On January 1 the Americans put into place a TRQ of 64,000 tonnes on all products containing sugar, such as drink mixes and

gelatin desserts. At the same time, TRQs of 8,000 tonnes until the end of September and 22,000 tonnes from October to December were put in place for refined sugar. Since Canada is not the only country that sells sugar and products containing sugar into the United States, our share of the TRQ will be substantially below that level.

It is ironic that the GATT, which was intended to provide gradual expanded access, has actually led the Americans to restrict access in this regard. This is grossly unfair and totally contrary to the spirit of the Uruguay round. Furthermore, the Canadian Sugar Institute informs me that the Americans have taken advantage of the GATT tariffication by expanding this category to include items that were previously unrestricted. The Canadian Sugar Institute predicts that these restrictions could potentially lead to the loss of 2,400 direct and indirect jobs. It is a very serious matter.

I know that the hon. member who initiated the bill is concerned about the closure of one Canadian refinery, resulting in 700 immediate jobs. He predicts an additional 1,700 jobs will be lost through the reduced production of products containing sugar.

The hon. member proposes in his bill that consultation take place between Canadian and American governments to determine whether previous levels of access can be restored. If after 60 days no satisfactory resolution is reached, American access to Canadian sugar and the sugar products market will be restricted in direct retaliation. More precisely, the American share of the Canadian market will be reduced by an amount equivalent to the Canadian market share of the American market.

Research indicates that prior to these restrictions the Canadian share of the U.S. market was quite small. It was said earlier that it was about 3 per cent. At the same time the American percentage of our market share is 23 per cent. Presumably, American imports would be held to 3 per cent, a reduction of some 20 per cent, if we took this step. This would allow for some of the displaced Canadian sugar to find a domestic home. That is the kind of thing we have to do. We have to give protection to our Canadian producers.

The American sugar industry is highly protected. The U.S. government guarantees producers prices that are up to double the world market price and it maintains these high prices by restricting imports. The American government also provides loans to U.S. producers, loans which are guaranteed by their sugar crop. If prices fall too low and producers cannot repay the loans, the farmers simply forfeit a part of their crop or all of their crop, leaving Washington holding millions of tonnes of unwanted sugar. That is exactly what we were trying to stop through the Uruguay round of the GATT.

Not too long ago Washington assigned allotments or quotas to domestic producers, which could now force a lot of the excess sugar northward across our border. It is entirely possible, as the U.S. border closes to our Canadian sugar products, that our market could be flooded by the same American sugar products that are highly subsidized and trying to find a new home. In the past the Americans have sold Canada twice as much sugar as they buy from us, running up surpluses of some $230 million.

Another fact worth noting is that the industry in Canada is extremely efficient and only about 10 per cent of it receives deficiency payments when prices drop. I am referring to the refined beet sugar industry in Alberta.

Even though I support the bill I wonder whether another approach might not be just as good, if not better. Since the American industry is heavily subsidized, I wonder whether instituting a countervail action might not be a more honourable way to proceed. We do not need to let the Americans get away with this underhanded action, yet it would be preferable if we could take the high road and not stoop to the same level. It is just a thought. I guess we need to bring the Americans to the table and negotiate an end to the situation.

I support the bill. Should it become votable I will vote in favour. I certainly do not want anything to disrupt my supply of bonbons.

In conclusion, I would ask the House for unanimous consent that Bill C-311 be given votable status and that it be voted on, on Thursday, October 5, 1995.

[Customs Act, September 21st, 1995]

Mr. Speaker, as we have heard a couple of times today, we are debating Bill C-102, an act to amend the Customs Act and customs tariff and make related amendments to other acts.

This is a very important bill. As the trade critic for our party I say that it is vitally important to reduce tariffs as quickly as we can. The Reform Party fully supports the bill.

The bill reduces well over 1,500 tariffs and since we are a pro free trade party we are in favour of all of them. The tariffs being reduced are on a broad range of goods used as inputs into Canadian manufacturing operations on certain finished products. By reducing these tariffs our costs of manufacturing will be reduced. The result is that manufacturers will be able to invest more money into plants and equipment.

This type of tariff reduction, I would submit, is a stimulant to our economy. It will create more jobs than the old-fashioned job creation programs we have seen in the past. I urge the government to go further down the road and establish as many cuts to existing tariffs as possible to move this along as quickly as possible.

The cost incurred by Canadian manufacturers are already high enough by virtue of our climate and our great distance from markets. Let us give our manufacturers a break and eliminate these tariffs wherever possible.

We will also be eliminating a lot of paperwork and red tape. Working through all the red tape is a big cost of doing business. I would not be surprised if many of these tariffs actually cost the government more to collect than what it gets from them.

Not long ago I recall reading a story about the so-called Asian tigers of the South Pacific that have enjoyed spectacular growth because they have slashed tariffs more quickly than their competing nations. That demonstrates open competition is very good. We have seen growth rates in some of those areas of 10 per cent per year.

We in Canada have been too cautious in this regard and too concerned about protecting industries and companies that do not really deserve that protection. I would much rather see real competition in the marketplace rather than protectionism.

Bill C-102 also increases the value of goods that travellers returning to Canada can bring back. Returning residents now have a $50 exemption after the absence of 24 hours, an increase of $30. The exemption for 48 hours goes to $200 from $100 and the seven day exemption increases from $300 to $500, all good moves I think.

These changes bring Canadian travellers' exemptions into line with those of our major trading partners and eliminates some of the petty hassles we have heard addressed in the House earlier today that travellers face at our border. I would rather see customs officials concentrating on drug and gun smugglers and other types of smugglers than have them preoccupied with what amounts to a pair of Adidas runners.

Another measure the bill streamlines is customs clearance procedures by treating goods imported by travellers as basket tariff items. My understanding is there is a proposal presently under consideration to replace the thousands of existing customs categories to just 12. That would be welcome as well.

When these changes are implemented at a later date they should speed up our collection of duties by more than 50 per cent. The time savings will allow Revenue Canada to focus on processing commercial imports and spend more time for enforcing the laws against smuggling.

The final major change the bill brings about is streamlining and consolidating the duty deferral programs, making them more accessible to the manufacturing community. Canada has three programs which defer or relieve duties on goods for export or goods awaiting formal entry into Canada. These are duty drawback, inward processing and bonded warehouse programs. By eliminating certain administration restrictions that currently exist these programs will be now more accessible to small and medium size companies.

The Standing Committee on Foreign Affairs and International Trade is currently studying ways to make small and medium size companies more able to take advantage of trade pacts we have introduced in the House such as NAFTA and the GATT agreement. Anything we can do to relieve the pressure they have in doing business in this country is welcome.

Because these free trade zones will now be set up and funded under the auspices of local government rather than the federal, cities and other regions will have greater incentives to set up these free trade zones. I believe more natural trade corridors will develop as a result of this.

Such a free trade zone was set up at the Vancouver airport in March 1994. More recently a similar free trade zone was established at an Edmonton airport. I believe Atlantic Canada is a natural one that should take advantage of this as well.

These free trade zones allow businesses to bring in goods from abroad without paying the federal GST, provincial sales tax or import duties until the goods actually leave the free trade zones. Companies are free to repackage, test or make value added modifications to these imported goods. No taxes or duties are payable until the goods are shipped off again. The companies get to use their working capital for a longer period of time and save a lot of unnecessary paperwork.

Here is another example of how the government can stimulate by getting out of the way; free the hands of business, cut the bureaucracy, the red tape, and watch this great country get back on track. It is something we certainly need.

We support all of these measures and we welcome additional measures to make further cuts in tariffs even if we do it unilaterally.

[Atlantic Canada, September 20th, 1995]

Mr. Speaker, last week all 52 Reform members were in Atlantic Canada to spread our vision for Atlantic prosperity.

The Reform vision sees the region's economy thriving again, just as it did at the end of the 19th century, by re-establishing the trade links they once had with the New England states. We call this trading area of 15 million people Atlantica.

Now that we have NAFTA and almost no tariffs at the border, trading opportunities have multiplied. To take advantage of these opportunities Atlantic Canada needs a new approach. We think that tax relief, elimination of internal trade barriers and better north-south transportation and information links will be far more effective than regional development grants.

Let us look at creative ways of giving Atlantic Canada what it really needs, then watch the region prosper and regain its full economic potential. Let us revitalize, not subsidize.

[National Grandparents Day, June 22nd, 1995]

Mr. Speaker, it is my pleasure today to be asked to speak in support of Bill C-259, an act respecting national grandparent's day.

I am sure that my colleague from Mission-Coquitlam asked me to speak on the bill because despite my youthful appearance she knows that I am a grandfather. So today, to my grandson, Marcel I say: "If you are watching the parliamentary channel on TV, Pop says hello". I am a grandparent and I am proud of it. All together my wife and I have four grandchildren. Marcel is five going on 16. We also have Alannah, Carson and Brock who are quite a bit younger.

We have a national mother's day and a national father's day. Grandparents are either mothers or fathers and I can see the logic in setting aside a day to recognize the importance of grandparents.

Parents are often so caught up in the task of earning a living, keeping the house organized and keeping the children on the straight and narrow they do not have the energy or the patience to enjoy their children in the same way grandparents do.

My wife Bernice says she has more fun with our grandchildren than she did with our own children. When she was a young mother getting the house tidy usually took priority over reading to our children and other things. Now she spends time with our grandchildren, in particular our grandson Marcel, and she says he claims he loves his grandmother more than pancakes. I can assure members pancakes are my grandson's favourite food.

Grandparents have a big influence on their grandchildren. They provide their grandchildren with deeper roots and a sense of connection with the past. They can teach them different things because they have a different perspective. They can be more tolerant because discipline is not their responsibility any more. They can enjoy their grandchildren for who they really are.

Our grandson Marcel has already learned a few things from watching me in the role of politician. The other day at the dinner table he told a story which his mother knew was a little white lie. She gave him one of her looks and without even skipping a beat our five-year-old grandson said to his mother: "Mom, I would like to rephrase that". He is watching television and he is smooth for a five-year-old.

In today's society grandparents can be of enormous help to their children. With so many families breaking up and with so many families stressed out from making ends meet, an extra pair of loving hands is always welcome.

If we were to have a national grandparents day it would be set aside to honour the role of grandparents and the role they can play. It would recognize the wisdom which grandparents can bring. It would give grandparents a sense of importance and worth. It would be a powerful reminder to those grandparents who are not as involved with their grandchildren as perhaps they could be that the more time they spend with their grandchildren, the longer the memory of their influence will survive.

The House should give serious consideration to the bill. It will be an important signal to the nation of our ongoing commitment to the family. It will strengthen the resolve of those involved in taking their roles more seriously and, most important, it will not cost a dime.