Gar Knutson

[Finance, December 9th, 1996]

Mr. Speaker, the question the hon. member asks is a legitimate one in an age when such significant cuts have been made. Certainly some of them have fallen on the disadvantaged in society.

He asks how we can call ourselves Liberals and how we can call ourselves caring. Unfortunately the only answer I can give him is that oftentimes the decisions we have made represent the lesser of various evils. If we had not made decisions to get the deficit down, the country would have been in virtual ruin and somebody else would have come in and made those decisions for us. The poor and the disadvantaged would have paid the highest price from rising interest rates and a country in economic ruin.

Certainly the economic system does not work well for all Canadians. There are far too many Canadians who are not participating in the recovery, far too many Canadians who do not have jobs and far too many Canadians who are suffering from the restructuring. When we take into account all the decisions the government has made and look at them as a whole package, I am not sure any other decision maker, whether the Tories or any other hypothetical government, could have done a better job on the whole.

We know many people are hurting. All I can say to Canadians is that the worst is behind us. We are now enjoying the benefits of lower interest rates. The federal government is the major borrower in the country and is enjoying the benefits of lower interest rates in the cost of borrowing. We should now push the federal government to use some of those savings to try to correct the imbalances and unfairness in the economy over the last few years.

[Finance, December 9th, 1996]

Mr. Speaker, I will be splitting my time with the member for Beaches-Woodbine.

I begin my speech by commending the government for the job it has done on getting the deficit down. Regardless of any of our views on the actual details of the budget concerning how the money should be spent, we could probably all agree that the country is in far better financial shape now than it was three years ago.

In 1995-96 the government achieved a budget of $28.6 billion. By 1996-97 it is estimated that deficit will drop to $24.3 billion and go down to $17 billion or better by 1997-98. In 1992 Canada's deficit was double the G-7 average at 7.4 per cent of gross domestic product. This was a huge burden on our country and I believe we were on the verge of financial ruin. By 1996 our deficit had fallen to below the G-7 average and by 1997 will the lowest of all G-7 countries.

While there has been a tremendous cost to achieve these results, with many people enduring serious cuts, layoffs or whatever, as a country we should feel pleased with the results to date. We are enjoying lower interest rates, which is good for the economy, good for jobs. It is good for the housing market. It is good for consumer spending as people have lower costs when they borrow money. It is good for things like purchasing cars. These are all important issues in driving the economy and helping to create jobs.

Jobs were the key issue when this government ran in 1993. Unfortunately they remain the key issue to date. Let us look at the positive aspects of our record to date. Since 1993 the country has created 670,000 net new jobs. Currently Canada and the United States have the fastest job growth of any countries in the G-7 but unfortunately we all recognize that more needs to be done.

An unemployment rate of 10 per cent is very high and we should work collectively as a nation to solve it. There are no magic answers to the problem of lowering the unemployment rate but we must all appreciate that 10 per cent is far too high. It represents a drain on our economy of lost productivity. It represents a waste of human potential, a waste of human dignity. We must all come together and try to find a solution.

I will talk specifically for a moment about two of the more minor areas in the budget which are unrelated to the broader macro issues of deficit, debt, inflation and jobs. First I will talk about expenditures in the environment portfolio.

Under the current government budget plan we are scheduled to spend roughly $480 million on the Department of the Environment by 1998-99. That is an annual figure. I would like to point out to the government, as I see there is a cabinet minister here, that the defence budget is roughly 20 times higher. I suggest we would be hard pressed to find a Canadian who felt that the defence or military threat to our country was 20 times greater than the environmental threat.

When we look at what people are worried about in terms of climate change, air pollution and toxic chemicals in their water supply, we would be hard pressed to say those are all very serious issues but the military threat is 20 times greater. Not one of us would believe for a moment that those numbers are in proper proportion. If anything, Canadians would probably want us to spend 20 times more on preventing pollution and cleaning up the environment than we currently spend on defence.

The reason we spend so much on defence is probably that concerns about the military and defence have about a 5,000 year history while concerns about the environment probably have a 50 year history. I will leave the issue of defence spending and environmental spending to talk about another important issue, child poverty.

In his budget speech in 1996 the finance minister asked: "Why not decide together that in 10 years hence increasing child poverty rates will be a thing of the past?" The finance minister should do just that. He should decide that increasing child poverty rates should be a thing of the past. Each year something in this regard should be done in the budget. I know we cannot cure the problem in one year, but every year we should put forth a new program or new expenditure designed to cure the problem of child poverty.

Currently Canada's child poverty rate is only exceeded in the OECD by the rates of the United States and Australia. The consequences are well documented including poor health, rising crime and reduced educational achievement. Campaign 2000, as stated in its report card, indicates that child poverty rates in Canada have risen 46 per cent since 1989. The exact data for 1994 is not yet available but it is estimated the problem has not been alleviated with the recovery. Cuts to unemployment insurance expenditures and provincial welfare rates have likely offset any gain due to the improved employment numbers and the increase in the working income supplement.

I do not want to just criticize the government. It is also important to remind ourselves that current government programs including GST rebates, working income supplement, the child tax benefit and others prevent another 64,000 children from falling into poverty.

Let me talk for a minute about the child tax benefit which pays a maximum of $1,020 per child to families with net incomes of $25,921 or less. Benefits are gradually reduced as income rises and

eliminated for a family with a net income of approximately $67,000 annually and one or two children. Neither the benefit rate nor the income level for the benefit reduction is fully indexed to inflation.

I should like to hammer away on this point. Currently the rate for the child tax benefit only goes up, if inflation is above 3 per cent, by the amount that inflation is greater than 3 per cent. The first three percentage points of inflation represent a real cut to the child tax benefit.

Although this might not seem like a lot of money in any one given year, the accumulated inflation year after year can have a huge impact. For example, it is estimated that on a $5.2 billion program, which is what we currently spend through the child tax benefit, almost $600 million in annual expenditure have been eroded away since 1993 when the Liberals were elected. That represents a $600 million cut to poor and middle class families with children. As a starting point the government should say it will protect all programs that protect children from erosion by inflation.

Perhaps the government wants to know where to get the money from. Since tax brackets are not indexed to inflation we actually gain revenue simply by inflation. As the incomes of people go up by inflation they pay more in GST and income tax. The Minister of Finance and the government as a whole should put some of that money into protecting programs that affect children from inflation.

I appreciate that my recommendation if implemented would not solve the issue of child poverty. Issues such as the general level of unemployment, literacy and domestic violence are all part of the problem. However I firmly believe small steps are important particularly when made in combination. Furthermore, small steps will pay off politically for all of us. I ask the government to take into account what I have said and implement full inflation protection for the child tax benefit.

[Hazardous Materials, December 4th, 1996]

Madam Speaker, my question is for the Minister of the Environment.

Bill C-65, the Canadian Endangered Species Protection Act, is the first federal piece of legislation dealing with listing protection and recovery of a variety of endangered species to fall within federal legislative jurisdiction. It covers migratory birds, fish and marine mammals, species that cross international boundaries and all species found on federal lands or within Canadian coastal waters.

The bill prohibits the killing, harming, harassing, capture, taking or possession of an endangered or threatened species as defined in the bill, as well as the destruction of residences of individual members of such species, including their dens or nests. It creates several means of enforcing its provisions, including citizens' rights to take civil actions in some circumstances and penalties for breach of the offence provision such as fines of up to one million dollars.

The bill is intended to put the federal government in a leadership position in a national endangered species regime that will involve the provinces in a number of key areas. Four provinces already have endangered species legislation in place but may have to update it to meet the obligations which the governments have all agreed in principle to meet under the National Accord for the Protection of Species at Risk signed at Charlottetown on October 2, 1996.

In the accord the provinces and the federal government have agreed to establish complementary legislation and programs to provide for effective protection of species at risk throughout Canada, including the provision of protection for habitat of threatened or endangered species. Also agreed was their participation in the Canadian Endangered Species Conservation Council which would be established under Bill C-65.

The bill reflects many years of hard work by environmental groups and other stakeholders who have advocated the adoption of federal legislation to protect endangered species as part of an approach to conserving biological diversity within Canada. Witnesses representing the agricultural community have made an important contribution to the debate.

There are currently 275 species of wildlife included in the COSEWIC list, which is an organization that identifies species which are endangered or threatened. Ten of these 275 species are extinct and 11 are extirpated, which means they no longer live in the wild.

For a number of years opinion polls have shown that Canadians have expressed a consistently high level of concern about endangered species. It is widely seen as an area in which the federal government should exercise a strong leadership role.

The majority of species at risk are in trouble because of threats to their habitat by human activity. Biological diversity, sometimes called biodiversity, means the variety of life in an area, and the area could be as small as a decaying log or as large as the entire country. It includes the variety of species and ecosystems on Earth, and the genetic differences of organisms, communities and populations.

There are many reasons to preserve biodiversity, including its intrinsic value, the rate at which it is disappearing, its value as a source of scientific knowledge and aesthetic pleasure, human dependence on it for food, medicines and other products, its contribution to moderating climate, soil conservation and pest and disease control, and our lack of knowledge about the biodiversity that exists in Canada and the consequences of failing to preserve it.

Canada was the first industrialized country to ratify the United Nations Convention on Biological Diversity signed at the 1992 earth summit in Rio de Janeiro. The convention entered into force in December 1993.

The bill deals with critical habitat, a concept that is key to the American Endangered Species Act. The habitat aspect of the bill is limited by the bill's primary focus on the residence of a creature in a number of key areas, in that a residence is a much smaller area than a creature's habitat and preservation of the residence alone would often be insufficient to ensure the survival of an individual let alone a species.

I ask the parliamentary secretary, what are the stumbling blocks to providing more comprehensive protection for habitat and should the bill be amended in this respect?

[Divorce Act, November 6th, 1996]

Mr. Speaker, I thank the member opposite for his question. I would like to make a couple of points. The way his question came over the translation it was why does the federal government not bind itself legally and put it in the bill?

I would like to remind the hon. member that the only way the federal government can bind itself is by changing the Constitution. The government cannot bind future Parliaments.

If the hon. member would like to engage in a discussion on how we should change the Constitution to deal with these issues, I would be fully prepared to have that discussion with him. From what I understand, it is the position of the Bloc Quebecois and the Parti Quebecois that they are not interested in a constitutional question.

The issue also raises a broader point. In the current Canadian federal system two people can move in together, not get married, have children and become separated. The rules that apply to their separation and how the children are dealt with are all within provincial jurisdiction.

We can have two other people who happen to get married and have children and yet the rules that apply concerning their children when they break up are dealt with under the federal system. That does not seem to make a lot of sense these days. It should be dealt with constitutionally.

I would invite members opposite to enter into a discussion of how we can change the Constitution while taking fully into account the distinct society in Quebec. We could try to find a way to make the country work better for all Canadians, including all Canadian children.

And the bells having rung:

[Divorce Act, November 6th, 1996]

I have read it. It helps with dispute resolution at a very difficult time. It is in the best interests of children that the legislation go ahead.

I would like to emphasize that Canadians, regardless of what political party they support, or what part of the country they are from, share some fundamental values. One is that children should come first. All of us in the House acknowledge that children, by the very nature of their childhood, are vulnerable and powerless and that their interests should be put first and foremost in every piece of legislation affecting children. That is what this legislation does.

Those values make up an important part of providing the framework for the legislation. The legislation will provide adequate and consistent child support levels. Those values should respect fathers who make their payments and make sure that those who are obliged to pay actually do.

The starting point for understanding this legislation is to understand that the Canadian family has changed dramatically over the last 20 years. I agree with the sentiment of the Reform Party that oftentimes those changes are not for the better. I do not think any of us are particularly comfortable with the rise in family break-up and divorce.

Over the past 20 years families headed by an individual parent have doubled in number. There are almost one million such families in Canada. In 1990, 61 per cent of single parent families headed by women lived below the poverty line. That is an extremely difficult social problem. It is not the fault of government per se, it is a combination of a number of factors. But government needs to address the issue.

The poverty level for single parent families headed by women is at 61 per cent compared with just 10 per cent for two parent families with children. While the steps taken in this bill will not end child poverty, they are an important part of the Liberal government's program to try to alleviate child poverty.

This measure derives its value from shared principles that we have as Canadians. First is the principle that children should be first in line. These reforms will put them there and keep them there. Child support is the first obligation of parents.

Second is the principle that a child's standard of living both before and after divorce should reflect the means of both parents. These reforms make sure that it does. Children are a shared responsibility of both the mother and father and the income of both parents should be taken into account. A divorce does not change that.

Third is the principle that people in like circumstances should be treated in like fashion. The guidelines mentioned by my hon. colleague are a core part of this legislation. They will ensure that a couple with children who are getting divorced in British Columbia and are in virtually the same circumstances as a couple getting divorced in Ontario will by and large pay the same amount of support for their children.

The strategy that the government has adopted has four interdependent elements. We are introducing child support guidelines to establish appropriate and consistent support levels and reduce the degree of conflict between separating parents. Anyone who has first hand knowledge of a divorce knows that it can be extremely acrimonious and at the end of the day children ultimately are the losers.

The government is also changing the way the child support payments are taxed to make things fairer and simpler. Furthermore, it is enhancing federal and provincial enforcement measures targeted at the wilful defaulters. We are helping working poor families by doubling the level of the working income supplement of the federal child tax benefit over the next two years. I would like to talk about each of these items in a little more detail.

First is the guidelines. As mentioned in my opening remarks, the guidelines are about consistency. We all know and I think agree that consistency is a fundamental part of justice. At the heart of this approach, the guidelines will be used across Canada by the courts, by lawyers and by parents to establish appropriate levels of support payments for children. At present, courts determine support payment levels on a case by case basis. Too often they are inconsistent and it means that somewhere Canadian children are the losers.

The issue of the lack of consistency prolongs litigation and adds to the anguish of parents. Unfortunately, not all judges take the

same approach or have the same philosophy. As a result, levels vary greatly not just across Canada but even from family to family.

The amount that is available to pay for a child's needs should not depend on which province one lives in or to which court room the case is assigned or which party has the more persuasive lawyer. The guidelines will establish without the need for a trial the levels of child support to be paid according to the income of the person paying. The amounts are calculated by a formula that takes into account average expenditures on children at various income levels. If income levels increase or decrease so will the parent's contributions to the needs of children, just as they would be if the family had remained together.

The guidelines are standard but they are also flexible. They allow for particular circumstances, such as child care costs and uninsured medical expenses to be taken into account when assessing the award. Furthermore, a court can also change the amounts if undue hardship can be established.

This approach has tremendous strengths. It is simple and it is standard. It ensures that support paying parents with the same level of income will pay the same amount of child support.

Second, I would like to deal with the issue of tax treatment. As most of us know, the change we are making has been controversial. I support the changes to the tax treatment for a number of reasons. Currently child support payments are tax deductible for the payer and taxable for the recipient. This rule was put in place 54 years ago and it needs to be changed.

Child support is not income for the parent but is money intended for children and as such it should not be taxed. While I am not divorced, when I spend money on my children it is not tax deductible. If I were to become divorced why should it become tax deductible if it was sent to an ex-wife?

Even when incomes are different, the courts often times do not take into account the tax liability. Therefore, by making this rule it will be taken out of the equation.

The no deduction, no inclusion approach will not come into effect until May 1, 1997. It will apply to all new awards made after that date but it will not apply after that date to existing awards unless parties agree or unless a court directs that the changes be made. By waiting 14 months, Canadians everywhere, as well as the provincial governments, are being given the time to adjust to these new rules.

The second most important part of the bill is the area of enforcement. The guidelines or any law for that matter are absolutely useless if we do not have the appropriate enforcement in place to make the law work.

Let me make it clear from the outset that I acknowledge that the vast majority of parents make their payments on time and deserve our respect. These parents take their responsibility seriously and they follow through. I want to point out emphatically that this bill is about the chronic defaulter and the enforcement provisions in it will apply to people who are far too many in number but by and large are not typical of the majority.

Wilful and chronic default by people who can pay but refuse to pay child support is simply unacceptable. The bill will do a number of things. Let me just mention a few of them. Federal legislation will authorize us to suspend federal licences and certificates such as passports in cases of persistent default. The provinces will be allowed access to the database of Revenue Canada to help trace persistent defaulters. Money and effort will be invested in upgrading computer systems to share information among the provinces to help in co-ordinating their efforts.

Some of these measures may seem particularly harsh, but when one looks at the consequences of defaulting parents and the negative effects it has on children and the fact that often the family in which these children live have to go to food banks and incur the negative effects of poverty, these measures are appropriate.

The fourth pillar in our child support strategy is the doubling of the working income supplement. I take a particular amount of pride in this measures in because I was part of a group that lobbied the government to double the working income supplement. When the working income supplement was brought in by the previous government it was placed at $500. It is a tax free benefit that goes to working families with an approximate net income of $25,000.

It recognizes that sometimes there is a cost when someone moves off welfare into the work force. It gives people an extra incentive to move off welfare and into the work force. The government has decided to double it to $1,000 and I applaud it for doing that.

I would like to point out that the working income supplement is tax free and will go right to the bottom line for families who need dollars for their children. It is distributed fairly, benefiting children of separated families and families that remain intact. It is targeted to those most in need.

In conclusion, these guidelines will ensure consistent awards at the appropriate levels with diminished conflict and expenses. A tax rule that reflects the social conditions and the values of 1942 will be changed to conform to current needs.

Effective tools will enhance enforcement so that the people who make their payments will know that those in wilful default will be pursued. Every dollar of increased revenue that Ottawa derives from the tax changes will be ploughed directly back into the system for the benefit of children in low income working families. I ask all members to support this bill.

[Divorce Act, November 6th, 1996]

Mr. Speaker, it is an honour to speak in support of Bill C-41. I encourage all members to support the legislation.

I say with the greatest respect that after listening to the speech of hon. colleague from the Reform Party, I think at times we are looking at a very different piece of legislation. This bill will make support orders more fair. It will make them more consistent. It takes into account the income of both parents.

[Petitions, November 4th, 1996]

Mr. Speaker, I have a third petition which I wish to present to the House today.

The petitioners are asking Parliament to support Bill C-205 which would prohibit profits from crime.

[Petitions, November 4th, 1996]

Mr. Speaker, I would like to present two petitions containing approximately 100 names.

The petitioners call upon Parliament to refrain from transferring the housing co-operative portfolio to the provincial governments and to preserve it for the citizens of Canada. They are further calling upon Parliament to review its reports regarding the cost effectiveness of our self-sufficient housing co-operatives managed by volunteers and to renew the commitment to support co-operative housing across the country.

[Endangered Species, October 31st, 1996]

Mr. Speaker, my question is for the Minister of the Environment and sustainable development.

A previous endangered species proposal came under intense criticism. How does the legislation tabled by the minister today

respond to these criticisms and provide effective protection for species by also protecting their life sustaining habitat?

[Ethanol, October 9th, 1996]

Mr. Speaker, I rise today in the House to recognize yet another milestone for the agriculture technology industry in Canada.

I would like to congratulate the city of Chatham and the company Commercial Alcohols for their recent announcement of the construction of a new $153 ethanol production facility. The plant will be one of the largest and most efficient manufacturing facilities in the world. It will benefit the corn industry by utilizing up to 15 million bushels of corn per year.

The winners of this deal are corn producers from all across Ontario, including the ones in my riding of Elgin-Norfolk. In the long run, the environment will win as well as Canadians move from burning hydrocarbons to renewable carbohydrates.

The Liberal government has encouraged ethanol development in Canada with the introduction of a national biomass ethanol program. This has meant 400 permanent jobs per plant and could create up to 6,000 temporary construction jobs in the future.

This is another great example of the Liberal government's commitment to jobs.