John Williams

[Polls, May 12th, 1994]

Mr. Speaker, my question is for the Minister of Public Works and Government Services.

Many Canadians will remember that the Liberals protested when the Tory government kept poll results secret and many Canadians will remember the Liberal election promise of open government. Unfortunately the government does not seem to remember any of these things.

My question for the minister is this. Can he outline what specific criteria other ministers must follow when contracting polls in secret? What specific criteria will determine whether poll results are to be kept secret or is that information secret as well?

[Auditor General Act, May 3rd, 1994]

Mr. Speaker, I rise to speak on Bill C-207 which is the act to amend the Auditor General Act. The bill has been introduced by the hon. member for Ottawa-Vanier. It is noteworthy that the member is a former chairman of the public accounts committee and now sits on the government side and is introducing this particular bill.

The first thing we should note is that this bill is not a partisan bill but is what I call a good government bill. It is long overdue and therefore my sincere thanks to the member for Ottawa-Vanier for introducing the bill.

The bill basically has two major provisions. One of course is to allow the Auditor General to report to this House more often than once a year. We all know that once a year there is a feeding frenzy by the media to read through that voluminous report which is 600 to 700 pages of all the problems, mismanagement and waste of taxpayers' dollars he has found.

Since he is basically restricted to reporting only once a year, quite often the information we receive is a year old by the time the Auditor General is finished with it. He may have conducted his audit some months before but it sits on his desk for a whole year until such time as he produces his annual report.

The report is then referred to the public accounts committee which may take another six months or so before it gets around to dealing with the points the Auditor General has raised. It is not inconceivable, in fact it is more than likely the information being discussed and acted upon in the public accounts committee could be 18 months old, if not closer to two years old before it is dealt with effectively and responses and remedial action taken. Quite often the civil servants involved may have moved on to new positions.

It therefore becomes quite difficult for the public accounts committee to act as effectively as it perhaps could if the Auditor General were allowed to report more frequently.

I would hope if the Auditor General is given the authority that he would report to this House on a frequent basis, after every audit upon the completion of the audit. In that way the information can be referred to the public accounts committee and it can act swiftly and timely on the information provided.

For example, right now the public accounts committee is dealing with an issue where $1.1 billion of revenue was lost through a problem in finance, justice and national revenue. That is $1.1 billion of taxpayers' money. We are now going back to find out what has caused the problem. The Auditor General knew about this a long time ago but because of the current restrictions on his ability to report, he was unable to do so until January of this particular year. The information is old.

Let us make sure that we as the people responsible to the constituents of this country can make a serious and real difference.

We also have the opportunity of the Auditor General being more responsive to directions from this House. For example, the standing committees may require information from the Auditor General. They would ask him to conduct certain audits if it comes to their attention there is mismanagement, waste, or something going on in any particular department, crown agency, and so on.

These things have to be looked at seriously in light of today's situation where we are $500 billion to $550 billion in debt and that amount is growing every day. Anything that can be done in the light of good government to ensure the taxpayers' money is spent honestly and responsibly can only be good for this country.

I have talked to the Reform caucus. The bill is endorsed by the Reform Party as a whole. I certainly wish the hon. member for Ottawa-Vanier success in shepherding this bill through its various stages to ensure it becomes law in this land.

As a member of the public accounts committee I think it is going to be beneficial to the public accounts committee, to the Government of Canada and to the taxpayers. I can support the bill wholeheartedly.

[Supply, May 3rd, 1994]

Thank you, Madam Speaker.

[Supply, May 3rd, 1994]

Madam Speaker, let me put the matter straight. Is anybody in the Reform Party advocating that we eliminate RRSPs?

[Supply, May 3rd, 1994]

Madam Speaker, I understand the member's point that we should stop fiddling with it. However I say ask the taxpayer on the street how we arrive at the amount of taxes due by him and he will say he does not know. We add up the income, take a percentage, and that is what is due. That was the old way of doing income taxes.

Many of my former clients ask me why it has to be this complex when 40 years ago it was a dead simple one page form. We have added and added complexity. Today we cannot get by without our computers. Even as an accountant I have to rely on a computer to do the complex forms because I feel it is more accurate than trying to figure it out myself.

The time people have to spend even trying to get their minds around complex issues like the cumulative net investment losses. That is where a loss which may have been claimed five years ago comes back to hit you with a bill for interest because you had forgotten that you claimed for a deduction five years ago and it now affects your taxes payable this year.

There is no need for that. It used to be that your income this year was what you reported and that was it. Now we have RRSPs that have a multiyear basis, capital gains for a multiyear basis, cumulative net investment losses on a multiyear basis, and on and on and on.

There seems to be no end to the opportunities the government takes to add complexity rather than simplicity to the tax return.

[Supply, May 3rd, 1994]

Madam Speaker, I rise today to speak on the need for simplification of the Income Tax Act.

The Income Tax Act was introduced in 1917. As we all remember it was to be a temporary tax to pay for the first world war. At that point Canadians had an obligation to defend democracy and freedom around the world. In order to do so they introduced a tax which they called the income tax. It was to help pay for the war but it was only to be a temporary situation. After the war when things were back to normal the tax would be eliminated. That was 77 years ago. The war has been over for 75 years and we still have the tax.

There are basically two things in the world we can count on: one is death and the other is taxes. The bad news is that death comes but once and taxes every year.

Back in 1986 the government at the time suggested that it would introduce tax reform because taxes were far too complex. Back in those days we had 10 different categories or 10 different brackets to reach the maximum marginal rate of income tax. The government said that it would reduce those 10 brackets to 3 brackets and that the taxes would be much simpler because it eliminated 7 different categories or brackets of increasing levels of taxation.

It did not say that it would leave the top bracket where it was and take a bit off the people at the bottom or that the middle class would get a bit of a break which the government would recoup later. It called that tax simplification or tax reform.

I have here the 22nd edition of the Income Tax Act published in August 1993, all 2,091 pages. I am an accountant. This may make sense to a layman, but as an accountant I have a hard time dealing with the complexity of the Income Tax Act. There are statements and sentences that go on for hundreds of words without a period to indicate the end of a sentence. The complexity and the meaning of the Income Tax Act test the abilities of the wisest, the most intelligent and the most expert in the country.

I sit on the public accounts committee. We were examining people from the Department of National Revenue and the Department of Finance regarding a loss to taxpayers of $1.1 billion that was pointed out by the Auditor General because the government that wrote the legislation could not understand the meaning of its own words. The resource sector disagreed with the interpretation of the words. It ended up in court. The government lost. The resource sector won. Taxpayers are out $1.1 billion because of the complexity of trying to define the true meaning of one simple clause in the Income Tax Act. All 2,091 pages of the act give some idea of the complexity.

Capital gains was introduced back in 1971 by the Liberal government at that time. It was deemed to be a tax on increasing wealth. However at that point in time this country was at the threshold of a decade of tremendous inflation. Capital gains in essence became a tax on inflation.

Capital gains was not a tax on increasing wealth but a tax on inflation and the government knew that. It knew people were not getting richer. If you bought a house in 1971 for $25,000 and sold it for $100,000 in 1981, the actual value of your wealth may

not have gone up, but in terms of actual dollars it went up significantly. The government said: "You have to pay a large part of that in tax". It was a tax on inflation, not on wealth creation.

Along came the Tory government which said: "We would like to give our friends a break". So the Tories brought in the capital gains exemption saying it was going to be phased in over a number of years. They envisaged that the first half a million dollars of capital gains was going to be tax free. Remember that the average person on the street really does not get the opportunity to have half a million dollars in capital gains. However the intent was: "We are going to give it to the taxpayer and we are also going to segregate it into things such as the capital gains exemption for farmers". They were going to be different.

As time went on the government realized it could not afford this measure it was introducing so it capped the capital gains exemption at $100,000 but said: "Wait a minute. We are going to add some complexity to this. What about the farmer and his half a million capital gains exemption? Is he going to get both?" No, he can only get one, half a million dollars.

As one accountant explained it to me, we are going to have two buckets. There will be a big bucket for the farmers which will hold half a million dollars capital gains exemption. Inside that big bucket will be a small bucket which contains the $100,000 capital gains exemption. When the small bucket runs over then that of course is subtracted from the large bucket.

The concepts being put forward belie the comprehension of the average person on the street. When someone does not understand the tax he is paying, how do we expect him to pay it voluntarily and willingly in a democratic society? This is why we are finding that coercion and pressure are becoming more and more the order of the day. That statement has come right from the Minister of National Revenue who has said he will not tolerate people who evade taxes and so on. Yet the people on the street cannot understand the tax they are being asked to pay.

This government has to listen. When people fill in their tax returns they write the cheque saying: "I am mad at the government. I don't know why I have to pay all this amount of money. My accountant says I have to pay it but I don't understand it. I feel I pay far too much and I am being ripped off". We have a problem. This government has to explain to taxpayers how the taxes are arrived at. Having 2,091 pages of small print is not the way to go about it.

We have seen complexity added to the Income Tax Act as a kind of smoke and mirrors attitude to collect more taxes. Ten years ago the government introduced limitations on the Canada savings bond accrual.

Canada savings bonds are a Canadian institution. We have been buying them since the war to help the government fund its debt. Some people bought the compound interest bonds. They keep them for seven years, cash them in and get all the interest at once. Maybe that was their plan, with the high income they would keep them until maturity when they retired. The government said: "No, you cannot do that. You have to report the interest at least every three years".

As an accountant filling out income tax returns many times I had to tell people who had compound Canada savings bonds that they cashed in at maturity: "Wait a minute, you should have reported this three years ago". They said: "Well nobody told me". The Bank of Canada knew these people were holding compound bonds but it did not tell them they had to pay taxes.

When we finally make the adjustment we have to go back three years. The government says: "Fine, thank you very much and here is the interest owing because you are three years late in reporting". Is that the way for government to endear itself to the taxpayers?

I could go on. Time after time after time there is unneeded complexity which is useless and is there to basically generate more revenue through penalties, interest and other maintenance for the government. It feels that the taxpayer can be squeezed unceasingly.

My time is up. I could go on, but I think I have given some indication that reform is long overdue.

[Pearson International Airport Agreements Act, April 29th, 1994]

Mr. Speaker, I rise to speak on Bill C-22 which is the Liberal government response to the Pearson airport fiasco it inherited from the previous government.

We all know that over the last number of years the previous government tried to address itself to the cost and administration of regional airports in this country. One of the things it tried to do was follow through on a different policy regarding its budget management by setting up local airport authorities and quasi-independent authorities.

The administration and financing of airports were moved off the government's balance sheet and therefore away from the government's deficit. This allowed these independent authorities to borrow on their own although the loans were guaranteed by the federal government. Because the federal government guarantees a loan it allows them to avoid bringing forth documents to show that the budget would have been that much larger, yet the amount of money borrowed by the government and its institutions would nonetheless remain the same.

This was part of the smoke and mirrors used by the previous government to deceive the Canadian public as to the true situation of this country's finances. The previous government should be ashamed of that approach. Of course the election showed that Canadians had lost complete faith in its approach to the situation.

Because of the magnitude of Pearson airport and because it was the only profitable airport in the country, the Conservatives decided they would take a different approach. They entered into negotiations which were behind the scenes and not public tender to lease, sell and give away property belonging to the taxpayers.

It seems ironic they would choose their friends and those of other political parties to come forth and negotiate with the government behind the scenes. The agreement would allow them to take charge of one of the prime federal assets in this country, hundreds of acres of property close to downtown Toronto. They would have a sweetheart lease on it for many years which guaranteed them income, all at the taxpayers' expense.

When the situation blew up in their faces during the last election this government decided it was time to do something about it and said to stop the deal from going forward. Of course the government did not heed the cries and concerns of the electorate and the last government in its dying days signed a deal.

Now we have the present government's response to that in Bill C-22. It is going to kill the deal signed by the former federal government. It was a sad day for Canada, for government and for administration in this country when the previous government entered into the contract. However, it is an equally sad day when the government presents Bill C-22 in which it is going to use its force and power to override a signed agreement.

The phrase force majeure means if someone of a higher authority exerts their power to kill a legitimate transaction that is already in agreement, it is perfectly acceptable in law. But when the federal government enters into a transaction with the private sector and then changes its mind, no one in the private sector can do that without recourse. Nonetheless the federal government has used its power, the ultimate power in this country, to cancel the agreement which has already been signed.

Our position in the Reform Party is that we do not like the bill. It gives compensation to some people who knew that the Canadian taxpayer disagreed and knew the Canadian taxpayer was being taken to the cleaners in this situation. We do not like the bill because the minister, in the sum of millions of dollars to be determined, is going to compensate them for the costs they incurred in the negotiations on this contract. They knew it was contrary to public policy and contrary to the desires and benefits

of the Canadian taxpayer. Now they feel they are entitled to compensation because they entered into that type of a negotiation.

The taxpayer is being taken to the cleaners. The Canadian taxpayer is being insulted by this bill. In our opinion the people on the other side should not be entitled to any compensation whatsoever. They knew when they signed the contract there was a very good chance if the Liberals won the election that the contract would be gone. For them to wait another week or two for the outcome of the election would have prevented them from being in a position to claim any money from the government whatsoever.

Therefore, being responsible to the taxpayers and being concerned about taxpayers' money, our position is that this bill should be defeated and voted down. No compensation whatsoever should be paid to the group that signed the lease.

I mentioned on a wider topic that the whole local airport authority concept as it was envisaged by the previous government was an attempt to move some borrowing off the balance sheet and off the budget. We disagree with that as well. The Auditor General has looked at these situations over the past number of years. He has been quite critical of the way the government has approached the method of financing and administration of the airports.

It is time this government that is so new in its mandate decided to review the whole area of administration and financing of this country's airports. It should develop a clear, concise policy to ensure this type of boondoggle does not happen again, to ensure that the taxpayers are respected and that their money is spent wisely and fairly for the benefit of all Canadians in the transfer of people moving around in this country.

That is the position of the Reform Party. I hope that the government will take that into serious consideration and if this bill does go forward, when it comes time to negotiate with the other parties that the amount is kept if not to nil, to an absolute minimum.

[Unemployment Insurance, April 28th, 1994]

Mr. Speaker, my question is for the Parliamentary Secretary to the Minister of Human Resources Development.

It was reported in the Globe and Mail that the government paid out $440 million in unemployment insurance benefits due to fraud, abuse and mistakes in 1993. An internal investigation and control audit identified a study which pointed to a better focus on who abuses UI, but the use of this focus was prohibited because it contravened the Charter of Rights and Freedoms.

Will the parliamentary secretary confirm that the Charter of Rights and Freedoms, which was set up to protect law abiding Canadians from abuse by government, is once again being used to protect criminals at the expense of ordinary and law abiding Canadian citizens?

[Supply, April 18th, 1994]

Mr. Speaker, the question deserves one answer. We are working very hard to keep Quebec in Canada. We are proposing a new way of handling the official languages in this country. That will ensure that there is French available for Canadians coast to coast for the people who wish to speak in the French language.

That can be done best by ensuring that everybody, including the 54 Bloc Quebecois MPs who want to work for the benefit of their constituents, has an opportunity to work and communicate in the language of their choice in this great country called Canada.

[Supply, April 18th, 1994]

Mr. Speaker, the facts speak for themselves. Seventy-five per cent of Canadians are English speaking and 25 per cent of Canadians are French speaking. In our neighbouring country to the south there are 250 million people who speak English. If the province of Quebec goes alone and forms a separate country it is going to be a French speaking island in the sea of English speaking North America. It is going to be lost in a big sea with no friends. No anglophone group will be there to help it. If its language and economy are to be preserved, it would be far better off in a larger group such as Canada than by itself. If it sets out on its own and feels it is going to preserve French with no friends whatsoever, it is going to be totally dominated by the cultural impact of the rest of North America.

With regard to the hon. member's other point about the shoreline of the north shore of the St. Lawrence, it is a fact that that is what Quebec would have. It is far better to recognize the facts and call them for what they are than to pussyfoot around and let the people of Quebec or the 54 MPs from Quebec who advocate separation push the Liberals around.

They have been pushed around for so long that we have found ourselves in the situation where our country is at risk. Let us recognize the problem, deal with it aggressively and solve it once and for all.