Werner Schmidt

[Export Development Corporation, March 24th, 2000]

Mr. Speaker, the hon. minister has not addressed the question at all. The hon. minister must recognize at least at one point in his lifetime that he has made a mistake.

It is interesting to hear this minister, not only today but on other days, blather on about the fact that Canadian taxpayers are not on the hook for the bad loans of EDC. Let me read for the hon. minister a quote from the EDC which does not see it that way: “It is a fact that the Canadian government has invested in EDC in the form of equity, which makes the Government of Canada EDC's sole—”

[Municipal Grants Act, March 24th, 2000]

Mr. Speaker, it is a privilege to enter the debate on Bill C-10. Essentially, we should recognize that it is a good bill. It moves in the right direction and does some of the right things. In particular, it changes the word “grants” to “payments”. They were grants in lieu of taxes and now they will be be payments in lieu of taxes. In terms of what has been happening in the House in the last little while concerning grants, and the auditor general's comments yesterday before the HRDC committee and the reports of his statements this morning in the National Post , we can easily see that perhaps it was even some kind of a portent on the part of the minister of public works to change the word “grants” to “payments”. There are some good reasons he would want payments rather than grants.

We need to recognize that the bill accommodates much of what ought to be happening in the world of government and in the world of business generally.

The bill is also supported by the Federation of Canadian Municipalities, which has suggested that there are some things the bill should have accommodated that it did not.

I should also indicate that there was some reticence on the part of departmental officials as well as the minister to make certain amendments. I think he should have adopted some of the proposed amendments, but he chose not to. I will speak about them a bit later.

The third thing we should recognize is that we can support the bill as Reformers because our policy is very clear. It states that all laws pertaining to individuals and the private sector apply equally to the Government of Canada, its personnel, its agencies and parliament.

We do not believe that a parliamentarian is above the law. Neither do we believe that individuals who work for the Government of Canada ought to be above the law. They are subject to the law just as any other citizen ought to be subject to the law. This is particularly relevant when it comes to the business of taxes to be paid to municipalities or tax assessing authorities where there are government owned buildings and the municipality or the taxing authority provides services in the form of roads, infrastructure and utilities. It costs money to provide those services and government should not be exempt from paying an amount that is fair, equitable and comparable to that paid by other taxpayers to the taxing authority.

The same issue applies to crown corporations. We should be clearly cognizant of the fact that both crown corporations and the government ought to be responsible and pay their legitimate dues to the taxing authorities which provide services to government properties.

There are some very serious issues that ought to be talked about. The constitution of Canada says very clearly that the minister or the government cannot be forced to pay taxes to the taxing authority in the municipality where a particular piece of real estate might be located. The constitution says that the government is exempt.

This legislation has been crafted in such a way that the minister may pay in lieu of taxes certain moneys to the taxing authority. The key word is “may”. It should be “shall”. Just like the people, the government should have to pay, but the constitution says that the government does not have to pay.

There is another possibility which could have been adopted, which is that the minister may not unreasonably withhold moneys. Or, if he does withhold or amend the amount, he must give reasons to the taxing authority as to why he is amending, changing or withholding certain payments in lieu of taxes.

It does not only go to that point; it also goes to the advisory panel which provides certain advice. I will get into that in a bit more detail later.

I want to talk as well about late payment of taxes. Supposing that the government decides through its minister that rather than pay the taxes on the date specified in the tax assessment it will pay on some other date. In that case, if the government decides to make a late payment, it is up to the minister to decide how late it will be—and there could be a dispute on the dates—and he may have to pay a bonus or an interest charge.

Business people know very well that if they are late in the payment of their taxes they are assessed a service charge, interest on the late payment. I believe that the minister should be in exactly the same position and should be obligated to at least give the reasons for which he is withholding the interest charges.

The bill also provides for an advisory panel. This is a very useful mechanism. The advisory panel would give the minister advice on the assessment. If a building that the government owns is fully occupied by the government, then it should pay the full amount. If the government has leased the building to a third party, who is liable? Is it the third party? Is it the government? Who is liable? The bill provides that the advisory panel would advise the minister on these issues.

However, the minister is not obligated to take that advice. He may ignore the advice.

The panel would be comprised of people who understand what this is all about. It would be made up of tax assessors, people who know how to evaluate property for its fair market value, whether buildings or land.

There could be disputes, as there are with tax assessments on real estate. The minister might question the assessed value. He might say that it is too high. There is an appeal process. He may also talk about a variety of other issues when he comes to the appeal. He may talk about ownership and things of that type.

This advisory panel, which acts as a dispute resolution mechanism, may provide some advice to the minister. It may say that the assessment, which the minister says is really too high, is correct. Or, it may tell the taxing authority that their assessment probably is too high. Nevertheless, the minister, regardless of what it is, is not obligated to accept this advice. He may amend it, he may change it or he may use it. It is entirely up to him.

Why is it that we are so concerned about these issues? Why is it that the minister would want to ignore the advice of the panel? Why is it that the minister might not wish to pay taxes, or he might wish to pay late, or he might wish to adjust, or whatever the case may be? He is not obligated. Why is it that he does not want to have the requirement of this parliament to give reasons. He should be required to give reasons to the taxing authorities as to why he would not accept the full assessment of the taxes that he is to pay. If he has the authority to pay he should be obligated to pay if he is operating in an equitable, fair and open basis.

It could be that the minister just simply wants the power to say that he is able to do this and do whatever he jolly well pleases. It is quite possible for him to do that. If we look at some of the arrogance that exists on the front bench that we have seen in the last little while, it could be that.

I happen to know the hon. minister in this connection and I do not believe that is his motivation at all. It could be something else. It could be manipulation. There could be friends in some of these taxing authorities where the money should be paid immediately. However, there should be no question that if there is a late payment the appropriate interest should be paid.

There could be other municipalities or other taxing authorities where the particular management is not necessarily friendly with the minister because they may have voted for a different party rather than the one that is in power. In this case the minister could say that maybe he should not pay the full amount, that he should wait a little while, or that he will reduce the interest rate on this one. There is a possibility of playing favourites here. I happen to know that the minister involved would not do that but the possibility exists.

When we make legislation in the House we should write the legislation in such a way that partisan politics does not become an issue. When it comes to the business of taxing and paying taxes, it should be done in a fair, equitable and transparent manner so that every Canadian is treated the same as every other Canadian. There should be no particular advantages to one group vis-à-vis another group. It should not be possible for a minister to intrude and manipulate the situation to his advantage or the advantage of the political party that he is involved with.

The very same set of arguments also applies to the panel. Why should the minister, having a group of experts that is available to him and providing him with good advice, be in a position to ignore their advice? I think the advisory panel is there as a mechanism, as a protection for Canadian taxpayers so that disputes can be resolved equitably, quickly and in an impartial way. If the minister chooses to ignore the advice of the panel he should be required to give reasons for doing so.

We also need to look at a couple of other things. The first of these are the rights of the taxpayer. What rights do we have as Canadian taxpayers who support the government, who support the programs and who pay for the programs even if they do not support them? What are the rights of the individual taxpayer? The rights of the individual taxpayer are that we should know where our taxes are going, how much our taxes are and the basis for those taxes so that they are equitable and fair and we know exactly what is happening in each of these areas.

It goes beyond that. There are three crown corporations that are for-profit corporations. They include the Canada Mortgage and Housing Corporation, the Canada Post Corporation and the Royal Canadian Mint. These are only three Crown corporations out of many more that have somehow been exempted from a requirement to make payments in lieu of taxes. Simply because they are crown corporations they can be exempt. The Business Development Bank of Canada pays taxes because it is listed in schedule IV. For some reason or other these three corporations, CMHC, CPC and the Royal Canadian Mint have been exempted. We do not know why.

It was suggested by the Canadian Federation of Municipalities and by our amendment that these be included, but it was ignored. Why? The National Housing Act was amended last year to allow Canada Mortgage and Housing to pay dividends to its major shareholder, the Government of Canada. Clearly, it would not pay dividends if it did not have a profit. We have here a corporation that uses the services of a municipality which are paid for by taxes. Why should those corporations not be required to make payments in lieu of taxes, just like the other crown corporations?

It is the right of the taxpayer to be protected and that the taxes be equitable, fair and universal for all those who are liable.

There is also a responsibility on the part of the minister for sound management. There have been examples of good sound management in that particular department, and I commend the minister, but that is not the issue here. On this particular issue there has been good management on the part of the department but there are other areas where the department has failed and where, I would suggest, the minister should call into question some of the management practices, in particular the Canada Post Corporation.

The way in which the rural route mail couriers are being administered by that particular organization is scandalous, particularly the way in which the contract process is being operated. Something needs to be done to ensure that the contracting procedure and process is fair and equitable. At the moment it is not.

I now want to move into the area of accountability. The minister is accountable to this parliament and he should be held to account. Parliament should know the reasons why taxes have not been paid, why payments are made in lieu of taxes, why some people are not paying as much, are late or have had their interest payments adjusted. We need to have that information.

We also need transparency. What needs to be hidden? Nothing needs to be hidden. Why should this be some kind of deep secret. It should not be. Why not tell Canadians that the minister is appealing a particular tax assessment? Why should we not know that in his or her opinion it should be reduced? That is legitimate. If members in the House have a question we can appeal to a tax appeal authority. The minister is accountable to parliament.

Finally, there is the business of commitment. We need to know if there is commitment to peace, order and good government in this department? I will again refer to that specific instance with the contracting procedure at Canada Post. It does not promote peace, order and good government because it pits one group against another. The process is not open. It is one sided and, in many ways, discriminates against other people.

If the minister would say that he will be accountable and that he is committed to this, then we would really be able to say that we have moved a long way. It could be done with the amendments we have suggested on the report stage of the bill.

I want to say how significant this is, particularly when I refer to Mr. Desautels, the auditor general, and his comments from yesterday. This was reported this morning in the National Post . He said “If members of parliament are involved in the decision making process”—in this particular instance he is referring to job creation grants, but it applies everywhere—“that blurs the line and makes it harder for them to play their oversight role of government”.

I cannot underline more strongly than the auditor general did, the significance of that statement.

It is in the same way that I want to protect not only the minister but the taxpayers of Canada. I want to tell them that they will be treated fairly and equitably, and that the decisions we make will be transparent. If that happens, the auditor general would not have to give advice like that because we would be committed right from the start.

I suggest that we must decide to play fairly, equitably and honestly. We need to tell our municipalities that we are here to recognize them and respect them.

The principle is the same, whether it is with HRDC grants, EDC grants or loans, or with any other department. The principle is that MPs, including the minister, should recognize that all laws pertaining to individuals and the private sector apply equally to the Government of Canada, its personnel, its agencies and parliament. A commitment to that principle characterizes all Reform MPs and will characterize all Canadian alliance MPs after Saturday's decision. This policy and this commitment I give to all hon. members on my behalf and on my colleagues' behalf.

I recommend to the minister that although he missed the opportunity to protect himself and his successors, he can provide amendments in the next session of parliament to bring about those amendments that will protect him and make sure that it is clear and above-board.

With regard to the three other corporations, CMHC, CPC and the Royal Canadian Mint, the minister could then bring that amendment forward and include them under schedule four. We would then have a fair and equitable treatment of all crown corporations. They would then be obligated to pay taxes to the taxing authority.

While we agree with the bill in principle and support it, and while there are many things about the bill we like, I suggest to the minister that he has not gone as far as he could have gone or should have gone. It would have been in the interests of this parliament and all Canadians to have gone further and accepted some of the amendments that were presented to the House on the occasion of the reporting of the bill.

[Supply, March 20th, 2000]

Madam Speaker, I am not surprised with the history of the member that he would be confused. He has always been confused. I raised two points. Number one, there is an administrative problem that has to be fixed. Number two, more money should be put into the system. I mentioned specifically technology and other things. These are not necessarily the same thing. They are mutually exclusive or certainly can be treated and should be treated separately.

[Supply, March 20th, 2000]

Madam Speaker, I was wondering how long it would take before somebody would raise the tax point issue. The point is that the discretionary cash has remained constant in a variety of areas, so the tax points really do not adjust to the full measure which the member has suggested.

I would like to address a more important part of this issue, and that has to do with the balanced budget. The hon. member, in an almost sanctimonious tone of voice, suggested that the Liberals balanced the budget, thereby licking the deficit, and what a wonderful job they have done. It is pretty easy to balance the budget, simply by increasing taxes. That is not hard to do, and the Liberals have done that.

There have been some 37 tax increases since the Liberals took office. If governments keep raising taxes they are ultimately going to get to the point where they will have a balanced budget, and the Liberals have done exactly that. But who balanced the budget? The taxpayer; not the good spending of the government.

Let us not forget that the Liberals have paid nothing down on the debt, or if they have it was a minuscule amount. About $42 billion is taken out of the treasury each year to pay the interest on the mammoth debt. Think of what could be restored to health care if we did not have to pay that tremendous service charge. And if there should be a shift in the interest rates, imagine what would happen with $580 million with an increase of 1% in the interest rates. That is a little better than $5 billion. Look at what that would do.

This is not idle talk. We need to do this through the reallocation of resources that we have. We do not want to throw more and more money at these things. That is what is happening. We are increasing the money where departments have shown that they are not totally responsible. We want to put it into health care which is where the people of Canada want it and where it is needed.

[Supply, March 20th, 2000]

Madam Speaker, I would like to advise you that I will be dividing my time with the member for Esquimalt—Juan de Fuca.

I would like to address the motion which is before the House. For the edification of the member who just spoke and the one who preceded him, I would like to read the motion which we are debating. It reads as follows:

That this House calls on the Minister of Finance to increase the Canada Health and Social Transfer by $1.5 billion and forgo the $1.5 billion increase to federal grants and contributions in this year's federal budget.

I wish sincerely that the two members who just spoke would have read the motion and debated it, rather than talking about something which they know very little.

I would like to address a number of the accusations that were made. I will do so implicitly, as I proceed through my speech, but I want to focus my attention on three perspectives of this motion and I will explain why it is before the House.

First, health care is more important to Canadians than increasing grants and contributions. They want health care to be the number one priority.

Second, I want to address the lack of internal audits from the various departments that are in the grants and contributions business.

Third, I want to look at the boondoggle in HRDC.

Before I do that I want to underline that the purpose of this motion, the intent of this motion and the content of this motion is not to suggest that there should be no money in grants and contributions, but rather to not increase grants and contributions.

According to the budget, there will be a $1.5 billion increase in grants and contributions. We believe and respectfully suggest to the Minister of Finance and the Prime Minister that instead of putting that money into grants and contributions it go to health care.

Let us be abundantly clear that this is the motion. That is our purpose. That is the direction we wish to go.

People in Canada, hon. members included, want health care. We want a good, sound, solid, defensible, sustainable health care system, one which will look after our needs, one which will look after the needs of our families, our children and our grandchildren.

There are a lot of things about the health care system that are excellent. We have wonderful servants in the health care system, health care workers who know their jobs well and who are true professionals. We have excellent people in the research field and I commend them for the work they are doing, but all is not well in our health care system.

I would suggest that one of the difficulties in the health care system is in its administration. There is duplication. There is duplication as far as the federal and provincial governments are concerned. There is duplication in the respective municipal organizations and administrative structures that exist in the various health regions and hospital boards.

There is a tremendous turf war that is going on within the health care system as well, among the nursing professions, the specialists, the medical personnel and the various other professions. There are turf wars being fought at the expense of the health care system and the recipients of the health care system are not benefiting from them.

Something needs to be fixed. I will not do that and I do not think it is the government's job to do it. The important thing is to recognize that something needs to be done to fix the system so that the delivery of the health care system is as efficient and as effective as it possibly can be. Very closely allied to that is the business of money. We have had tremendous technological advances which we need to pay for. There are very expensive procedures and very expensive machines. The adaptation of technology costs a lot of money. We need to pay for that.

At this point I cannot help but look at the history of this government. There were a lot of statements made a moment ago about how much money the government put into the health care system. I want to read into the record exactly what has happened.

In 1993-94, the year the Liberal government took office, there was some $18.8 billion transferred to the provinces for health care and social services. In 1994-95 it was reduced by $100,000 to $18.7 billion. In 1995-96 it was reduced to $18.4 billion. In 1996-97 it was $14.8 billion, a reduction of $3.6 billion. In 1997-98 it was $12.5 billion, a further reduction of $2.3 billion. By this point there was a tremendous reduction.

In 1998-99 it remained at $12.5 billion. Then in 1999-2000 it was increased by $2 billion to $14.5 billion. In the 2000-01 budget, which we just received, it was increased by $1 billion. That is what we are being told.

If we add those figures we discover very quickly that the amount of money which is being added to the transfers is actually less than the amount taken out. What kind of business is that?

We are coming to the House and saying, instead of increasing grants and contributions, why does the government not take that increase and put it into health care? Does that not make a lot of sense? That is exactly what we ought to be doing. That is what we are talking about and that is why we are concerned.

On one side we hear about all of these wonderful things that have been done by putting all of this money into the health care system. Some money has been put in, but what the government forgets to say is how much was taken out. That is where it lies. That is where the dignity and the respect of the government comes into question.

Why does it not tell the whole story? Why does it tell only half of it? Why does it tell only that part which sounds good? Why does it not tell the people the rest of it? Does it think that doctors do not know what has happened? Does it think that medical professionals do not know what has happened? Does it think that the administrative districts of the hospital systems do not know what has happened? They know exactly what has happened. Ask the ministers of health and the provincial premiers what has happened. They know what has happened.

It is all very well for the government to say “That is not what really happened”. Look at the bank accounts. If the premier of Ontario has money left in his bank account, good for him. He will spend it in a way that is far more effective than the minister who says that health care is some kind of big black hole.

I want to move a little further into the area of grants and contributions. First, we need to recognize that some of the biggest winners in this year's budget are: the environment, which received a 35% increase; HRDC, which received a 30% increase; industry, which received a 29% increase; Canadian heritage, which received a 28% increase; ACOA, which received an 18% increase; citizenship and immigration, which received an 18% increase; and finance, which received an 11% increase. How is this money being spent? That is really important. We have had one audit presented to the House which showed a very damning picture as to where that money went.

Let me address this issue from another point view, that of internal audits. I discovered that since January 1, 1994, which is close to the time the government took office, there have been no audits performed that we know of in the Department of Finance, which received $250 million, and none in National Defence, which received $1.44 billion. Industry Canada had one audit in April 1995 and it spent $3.19 billion. Justice had no audit and it spent $1.63 billion. The Treasury Board, which had the smallest grant, $82 million, had two audits.

That really is a frightening situation. Billions of taxpayer dollars are being spent. Where are they going? How are they being used? These are very critical issues.

Let me give the House another example. The Minister of Human Resources Development rose in the House and referred to Kelowna as having received some $37 million in grants from her department. I looked at the numbers on the list. One of the entries was for a $7.6 million grant to an aboriginal management group. What did I discover when I checked into it? The money did not go to Kelowna. It went to nine different aboriginal bands, but Kelowna was identified as having received the money.

The Business Development Bank of Canada received $250,000 from HRDC. When I questioned the regional director on where the money went and why it went to the bank, he said that it was a mistake and that it should have been recorded as having gone to Kamloops.

[Petitions, March 20th, 2000]

Mr. Speaker, I have two petitions both dealing with the same subject. I will only read one of them.

It states “Your petitioners pray that parliament take all measures necessary to ensure that the possession of child pornography remains a serious criminal offence and that federal police forces be directed to give priority to enforcing this law for the protection of children”.

[Human Resources Development, March 16th, 2000]

Mr. Speaker, never mind all the garment workers who lost their jobs because of this particular grant.

The industry officials indicated very clearly that many of the garment industry workers would have to leave their jobs if Iris got this particular grant. In fact, the Canadian Apparel Manufacturers Institute warned that job losses would take place right across this country. Iris got the grant anyway.

Is $21,190 the price of doing business with the government?

[Human Resources Development, March 16th, 2000]

Mr. Speaker, Iris Hosiery received $6 million of taxpayers money that top garment industry officials thought was crazy. Never mind the record of the owner of Iris. Never mind the warnings of the industry. Darn it all, there are socks to be subsidized.

Was the $21,190 that Iris and Mr. Badia donated to the Liberal Party necessary to get this grant for Iris?

[British Columbia Fruit Growers, March 16th, 2000]

Mr. Speaker, British Columbia fruit growers are experiencing serious problems because of low prices and high expenses in their orchards. In order to compete in world markets many have begun replanting to high density, better quality fruit trees.

Two such people are my constituents Bill and Sheila Ackerman, orchardists in the Kelowna area since 1985. Until the orchard is once again productive Bill and Sheila must rely on off farm income.

Does the federal government commend the efforts of British Columbia fruit growers? No. In a callous ruling government tax collectors have chosen to restrict the deduction of legitimate farm expenses, preventing the Ackermans from providing a decent living for their family.

Farming in this country is already in jeopardy. Rulings like this one will only contribute to its further decline. I strongly oppose this decision and call for the ministers of agriculture, finance and revenue to overturn this unfair ruling.

[Canada Post Corporation Act, February 23rd, 2000]

Madam Speaker, I will address the content of the bill and the amendment in particular. The reason for the amendment is that I think there is a very strong ability on the part of the industry committee to deal with the bill in the context of the Competition Act that is law in Canada today. Therefore I will divide my analysis of the bill and the amendment pertaining thereto by distinguishing between mail and telemarketing.

The overriding concern, and I commend the hon. member for her work in this regard, is the preoccupation and the desire to protect consumers. I only wish that other members of the governing party would support and protect the taxpayers of Canada and would be as judicious in protecting the way taxpayer money is spent as the hon. member now wants the consumer to be protected from certain unscrupulous marketers.

I emphasize the fact this kind of thinking is very much in line in its outlook with both compassionate and humanitarian thinking. It is also very justice oriented in the sense that it brings to justice people who would take unfair advantage of unsuspecting people. In particular I draw attention to the provisions of the Competition Act which deal directly with the subject matter of the bill. I refer to subsection 52(1) of the Competition Act which is pertinent to this subject. It states:

No person shall, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose promoting, directly or indirectly, any business interest, by any means whatever, knowingly or recklessly make a representation to the public that is false or misleading in a material respect.

What is being addressed here is very clear. It is significant that we use the existing legislation to its maximum extent.

It goes beyond that. The hon. member made a point about telemarketing. The example she gave about seniors being the group that is very often targeted and very susceptible to being abused by reckless or sometimes unscrupulous marketers is very true. In this connection I will read into the record the provisions of the Competition Act dealing specifically with telemarketing. The pertinent subsection is 52.1(1) which states:

In this section, “telemarketing” means the practice of using interactive telephone communications for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest.

One of the business interests is to get some kind of a benefit or a prize of some kind by using the telephone. First of all they send a card or something saying that they must phone in order to collect their prize or to get the product. Then they use the persuasiveness of the voice and the persuasiveness of their personality reflected in the voice to get them to part with their money.

The bill presented by the hon. member has a fine of $5,000 rising to a maximum of $20,000. The Competition Act is far more punishing than the bill. I suggest there is a good reason it should be referred to the industry committee and the bill be withdrawn in its present form. Subsection 52.1(9) states:

Any person who contravenes subsection (2) or (3) is guilty of an offence and liable

(a) on conviction on indictment, to a fine in the discretion of the court or to imprisonment for a term not exceeding five years, or to both; or

(b) on summary conviction, to a fine not exceeding $200,000 or to the imprisonment for a term not exceeding one year, or to both.

People who take unfair advantage of older unsuspecting people should be punished rather severely. As a consequence of their illegal action I think they should be dealt with very severely, and I think the Competition Act does that.

While I think the bill is moving in the right direction, the amendment will do what the hon. member wants done more effectively, more efficiently and more readily. Therefore I encourage all parties of the House to get together and support the amendment.

The House should recognize that it began with the Liberal member acting as a private member supported by me and by a member of the NDP. We have a really good triumvirate going here.