John O'Reilly

[Page Program, November 24th, 1995]

Mr. Speaker, in each session of Parliament I offer a challenge to the pages who serve us in the House of Commons. The current group was given the challenge of producing a picture of their home area. The contest included a box of Crayola crayons, which are produced in my riding of Victoria-Haliburton in the town of Lindsay, and a single piece of white paper. The contest was judged by Hélène Monette, a security guard in the lobby.

This session's winner is Katheryn Lyons of the Montreal-Kirkland area. Congratulations to all the pages who took part in the contest with such enthusiasm.

If members wish to view the art work, it is on display in the government lobby. The prize is an assortment of Crayola products and a certificate to prove the bragging rights that go with winning any contest.

[Excise Tax Act, October 31st, 1995]

Mr. Speaker, it is a pleasure to speak on Bill C-103.

Bill C-103 will play a major role in maintaining a vibrant and flourishing Canadian magazine industry. I would like to present the House with the broader perspective of the government's ongoing commitment to this industry. This bill should be understood in the context of the long established tradition of government support to the Canadian magazine industry as well as the industry's contribution to the economy.

Most important, in a country where natural geography makes communications difficult, magazines play a key unifying role. Canadian periodicals are an essential medium of cultural expression for Canadians. They serve as channels for conveying Canadian ideas, information and values. They are an integral part of the process whereby Canadians define themselves as a nation. Moreover, beyond the direct social and cultural impact of the Canadian magazine industry there are sizeable indirect effects which contribute to the smooth functioning of the Canadian economy.

Canadian publications, both consumer and business, inform, educate and entertain but they also are an important advertising vehicle for Canadian products and services. While it is true there are other mass media which can reach consumers, the Canadian trade press fills a unique role in the economy by providing an affordable marketing tool for Canadian business and industrial suppliers.

These producers and services often face stiff competition from foreign companies which reach Canadian customers through spill-over advertising in American trade periodicals. In the absence of an active Canadian trade press reaching Canadian customers, an important segment of our economy would be left without a major communications and advertising vehicle.

Unfortunately Canadian magazines are confronted with a series of unique challenges: massive penetration of the Canadian market by imported magazines; the relatively small size of the Canadian population and its dispersion over a vast territory; the openness of Canadians to foreign cultural products; the effect of cover prices of imported magazines on the Canadian price structure; the impact of overflow advertising on the potential advertising market in Canada.

Even if the magazine industry had flourished culturally with over 1,300 titles, its financial position is fragile, with overall pretax profits of less than 6 per cent on revenues of $795 million in 1993-94.

In my opening remarks I mentioned the Canadian government has supported the domestic magazine industry and will continue to do so for many reasons. The principal reason is the importance Canadians place on having a means of expressing their unique identity and the difficult and challenging environment which the Canadian magazine industry faces.

The need for structural measures of support for the Canadian magazine industry has long been recognized by successive Canadian governments. Over the years a number of policy and program instruments have been designed and put into place which help to ensure the development of the Canadian magazine industry while not restricting the sale of imported periodicals in Canada.

Among them, the publications distribution assistance program, better known as the postal subsidy program, is one of the earliest nation building programs. It is designed to unify a country where natural geography makes communication difficult. Its main objec-

tives are to support Canadian cultural identity and sovereignty, to ensure affordable access to subscriptions for Canadian periodicals and to provide stability in the level of distribution costs for Canadian periodicals in order to permit publishers to develop and implement long term business plans.

Canadian consumer magazines have limited access to Canadian news stands. Less than one-quarter of Canadian magazine circulation revenue is derived from news stand sales. As a result, the industry relies on subscriptions to reach its audience. The postal subsidy, which finances concessionary postal rates for Canadian magazines, has been an important instrument in helping the industry to reach its market.

In 1989 this program was subjected to a cut of 50 per cent, from $220 million to $110 million, as part of a larger government-wide exercise to reduce public expenditures. I am pleased to say that in developing a plan for the implementation of the cut, a decision was made to focus support on subscriber paid periodicals versus non-paid or free publications. Furthermore, it was believed that periodicals, which typically have a national or regional focus and rely exclusively on mail distribution, should take priority over local publications which have alternative means of distribution.

As a result, the most vulnerable component of the industry was protected then and also more recently when the government had to reduce once again the amount of available funding. For the past two years we have limited the increase of the subsidized rates to 5 per cent a year. Therefore the postal program still enables Canadian magazines to reach rural or remote readers at a reasonable cost.

Fiscal measures provide another useful tool to support the magazine publishing industry without investing a considerable amount of money. Two fiscal measures encourage Canadian advertisers to use Canadian magazines to reach Canadian readers. The first measure, section 19 of the Income Tax Act, has been in place since 1965. For advertisements aimed directly at the Canadian market section 19 limits tax deductions of advertising expenditures to advertisements placed in Canadian magazines. A Canadian magazine is defined as one which is 75 per cent Canadian owned and controlled and whose editorial content is 80 per cent different from the editorial content of any other periodical.

The second measures is customs tariff code 9958. Tariff code 9958 prohibits the physical importation into Canada of split runs or special editions of periodicals whose editorial content is substantially the same as the original edition except for the advertising which has been purchased especially to reach a Canadian audience.

Until recently the tariff code dissuaded offshore magazines from soliciting advertising in the Canadian market. Moreover, it succeeded in doing so through voluntary compliance. These fiscal measures were put in place to ensure that the Canadian magazine industry had access to Canadian advertising revenues. There is no evidence that our current policy has made the Canadian industry any less efficient or less profit conscious than its foreign counterparts.

Financial support is provided to a number of cultural and scholarly publications through the Canada Council, the Social Science and Humanities Research Council and through a modest distribution program administered directly by the Department of Canadian Heritage.

Another initiative is the cultural industries development fund which was established in 1990 with a budget allocation of $33 million. Its mandate is to provide Canadian owned and controlled firms within the cultural industries with a range of flexible financing services with an emphasis on investment loans.

The CIDF was created in order to make loan money available to Canadian owned and Canadian controlled cultural firms to compensate for the shortage of capital available to Canadian cultural businesses and improve their financial situation, the intention being that these firms will achieve a sound financial base through the fund and thereby be eligible at some later date for conventional bank financing. The fund was established to reinforce and stimulate the growth of Canadian cultural enterprises which have proven to be dynamic and which have demonstrated their ability to improve their competitive position in the marketplace.

The magazine industry is an active user of the cultural industries development fund, having set up a travelling consultant program in addition to accessing loans through the fund.

The reluctance on the part of financial institutions to create a new financing instrument, the degree of risk involved and the perceived low earning potential of the magazine industry justify the government's establishment of mechanisms such as the CIDF. With more than 20 per cent of the loans awarded and a repayment rate of more than 90 per cent, the magazine industry has demonstrated its professionalism and its managerial expertise.

We can conclude that all of these federal measures have served the industry well. However, with the arrival of the new technological contribution to an increasingly competitive marketplace Canadian businesses must adapt to those market changes and secure and invest new capital in order to bring themselves up to date with modern technology. It is the government's role to review its initiatives and to make sure they still correspond to the new market realities.

Technology has progressed far beyond what could have been foreseen in 1965 when the tariff code 9958 was introduced as a measure of the government's support for the Canadian periodical industry. New technological developments have changed the dynamics of the publication industry. For example, it is now possible to transmit information electronically. Thus it is now possible to bypass international borders and circumvent tariff code 9958.

The proposed amendments to the Excise Tax Act will contribute to maintaining the integrity of Canada's longstanding policy on split runs. The proposed amendment to the Income Tax Act will add an anti-avoidance rule to section 19 of the act. The purpose of this provision is to ensure that newspapers and periodicals that claim to be Canadian are Canadian owned and controlled for the purposes of the act.

The Canadian government has been consistent. Its magazine policy has not changed. What the federal government is doing with these amendments to the Excise Tax Act and the Income Tax Act is modernizing its policy instruments. In this way the entire range of government policy and program instruments can better achieve the overall objective of a vital and flourishing Canadian magazine industry.

[Cultural Property Export And Import Act, October 24th, 1995]

Madam Speaker, I thank the member for Kingston and the Islands for his question. It is a very interesting one. I could not imagine not being in support of the bill.

Museums, art galleries, archives and libraries in every province and territory benefit through the receipt of donations of cultural property as a result of these tax credits.

I recently sent a collection of postcards, with no value or tax incentive for me, that I received dealing with western history, particularly in the province of Manitoba. It was sent in the 1800s to my riding of Victoria-Haliburton.

I came across it in a collection and managed to pick it up for very little and I donated it to the Canadian Heritage Museum in Manitoba. It sent me a thank you. I should have asked for a receipt but I did not feel the collection had a lot of value.

The collection significantly added to the heritage, the culture and preservation of culture in western Canada. It is very important for an eastern Ontario member to be concerned with western Canada and with the culture of western Canada, with the preservation of the culture in western Canada.

I have a lot of trouble understanding why the Reform Party would not support such a bill. I know quite specifically that the areas those members represent have gained from Liberal members such as me, the member for Kingston and the Islands and the member for London-Middlesex.

Somewhere along the line we have donated without any tax receipt. The collection I donated was postcards, but it was invaluable. I should have had it appraised. I felt it should be in a museum and was something people should be able to enjoy. It is preserved forever instead of being thrown in the garbage or kept in some personal collection where it is not seen.

I also collect guns, much to the dismay of a number of people here. The gun bill is still in the other place. I have a gun that was carried by an army doctor in the first world war. I guess we would call it an oxymoron that doctors were issued handguns in the first world war. I have had recent discussions with the museum in Lindsay to donate that gun. If I am lucky enough to get a tax receipt for it, that would be fair. It is the only one of its kind registered in Canada and therefore should be preserved so that the public can see it.

Even going into the law and order issues Reform Party members seem to stand for, I cannot imagine why they would be in any kind of discourse with the bill. It is necessary. It will help preserve our culture and our heritage, a very important part of the fibre of our country.

[Cultural Property Export And Import Act, October 24th, 1995]

Mr. Speaker, I am pleased to speak in support of Bill C-93, an act to amend the Cultural Property Export and Import Act, the Income Tax Act and the Tax Court of Canada Act.

Throughout Canada publicly funded organizations and institutions are being forced to re-evaluate their mandates, their operating procedures and their very reasons for being with increasing costs and reduced levels of financial support from both the public and the private sectors. The existence of many of these institutions is being debated. In my riding of Victoria-Haliburton it is a great worry for many cultural organizations.

The cultural sector in Canada has developed through a combination of public funding, private funding and volunteerism. In order to meet the targets to reduce the deficit the government believes all institutions that receive public funds must become more self-sufficient.

However, government is not going to just cut them adrift. Instead it will develop structural measures to assist them through this transition period. Tax credits, whether to assist in the development of a distinctively Canadian film industry or for the donation of cultural property to designated institutions such as those available through the Cultural Property Export and Import Act, are the one way the government is able to help through that transition time. It must be remembered that heritage institutions and related activities also contribute to the economy of Canada. The impact of heritage institutions and their activities are increasingly having beneficial, economic impacts on communities across Canada. A recent Nova Scotia study, for example, noted that the economic impact of the six major museums in that province significantly exceeded the direct expenditures associated with the operating of the facilities.

Similarly, data available from a series of studies conducted in Alberta show that spending by visitors to historic sites averaged $50 million annually. These same studies have demonstrated that museums such as the Tyrrell Museum in Drumheller are often the top tourist attractions in a region.

Much of the activities of museums, archives and libraries also support research, knowledge and public education. The research conducted by the staff of these institutions often leads to seminal discoveries and the effect of this can have impact in other areas such as the production and dissemination of CD-ROMs and publications.

Exhibitions also educate the public, create employment and contribute to cultural tourism. Visitors who travel to other cities to view exhibits, stay in hotels, eat in restaurants, shop, attend events, take tours and spend money in a variety of sectors of the economy because they travel to a city or town to visit a museum.

The recent exhibit at the Art Gallery of Ontario of impressionist paintings from the Barnes collection, is an excellent example of this and has provided concrete proof of the contribution cultural institutions can make to the economy.

During the three and one half months this exhibit was on display in Toronto, almost 600,000 people visited the Art Gallery of Ontario specifically to see this exhibit. According to an economic impact study that was conducted afterward, almost $75 million was spent in the province of Ontario on trips or excursions that brought these visitors to the exhibit. This $75 million expenditure created ripple effects throughout Ontario's economy that resulted in the production of $137 million in goods and services.

In addition to these impressive statistics, the Barnes exhibit produced employment and the amount of taxes associated with this event totalled almost $22 million for the municipal, provincial and federal governments.

While these almost 600,000 visitors went to this cultural institution to see an exhibition they also had the opportunity to view works from the permanent collection of the Art Gallery of Ontario. The same is true for visitors to any other museum, art gallery, archives or library. Some of the works on display from the permanent collection would undoubtedly have been acquired as a result of the tax incentives offered by the Cultural Property Export and Import Act contained in Bill C-93.

This represents another side of the economic impact of cultural institutions. The idea that the foregone tax revenue that results from a donation of certified cultural property is somehow lost

money is simply not true. In the first place, the work of art or the artefact that is being donated to an art gallery or a museum will either have been with the donor's family for generations or it will have been purchased by the donor at some point in the past and is now being donated to a public collection.

If, in the case of a work of art, it was bought through a commercial gallery or an auction house, an open market transaction occurred. Money changed hands during that transaction and taxes were paid to governments both in the form of sales tax and income tax paid by the art dealer or the auction house.

Similarly, these objects, often of great cultural significance, were purchased with after tax dollars, that is, with the disposable income of the donor. It is important to remember that a donor of cultural property is not reimbursed dollar for dollar for the fair market value of the donation. Instead a donor receives a tax credit equal to 17 per cent of the first $200 and 29 per cent of the fair market value beyond that. Simple mathematics indicate that the tax refund, the forgone revenue the donor receives is only a fraction of the fair market value of the object.

If a person buys an object with after tax dollars, donates it to a distinguished institution and then receives a tax credit for 29 per cent of the fair market value of the object, it is difficult to see how anyone can fault that individual. They will also have donated it to a public institution where it becomes part of Canada's cultural patrimony that is accessible to everyone.

Members of the third party have objected to tax credits for donations but they have not yet addressed the purpose and intent of this bill. Tax credits are not the issue. In any event, I believe I have adequately demonstrated that tax credits for donations provide an incentive and a modest acknowledgement of a donor's generosity. They do not, as stated earlier, even come close to reimbursing an individual and in fact can contribute to significant revenue gains in a variety of areas of the economy.

It is perhaps worthwhile reminding hon. members that the purpose of this bill is to establish an appeal of decisions of the Canadian Cultural Property Export Review Board to the Tax Court of Canada. It establishes two types of appeal: the right of review of a determination by the review board itself and then, if necessary, the right to appeal to the Tax Court of Canada.

This need for the right of appeal is not new however but a re-establishment of the right of appeal that was inadvertently lost in 1991 when the responsibility for determining fair market value was transferred from Revenue Canada to the review board. There has been concern that the right of appeal would simply add to the backlog of cases to the tax court. We do not know if this will happen but every effort has been made to ensure that it does not. The redetermination process will allow the majority of disagreements to be settled directly with the revenue board.

Is the possibility of adding a few more cases to the workload of the tax court a reason to deny someone that right of appeal when they disagree with a decision that directly affects them? Is this a reason to open the reinstatement of right that was lost and now denies some individuals natural justice through their inability to appeal to the courts? I believe not.

It is also questionable if the reinstatement, and this must be emphasized, of a right of appeal will lead to an increase in appeals to the Tax Court of Canada. This right to appeal existed before when the responsibility for fair market value resided with Revenue Canada. Therefore, it seems reasonable to assume that the tax court is in a position to resume this responsibility.

People from every province and territory have made donations to institutions designated under the Cultural Property Export and Import Act and people from around the world are now able to share in the enjoyments of the works of art, archival collections, books and artefacts that are preserved in public collections as a result.

These cultural institutions both preserve Canada's heritage in movable cultural property and make a significant contribution to the economy. Culture is not a frill enjoyed by only a few people but a valuable economic activity as well. To ensure that it continues to play this vital dual role, our museums, archives and libraries must have vibrant collections that will both contribute to knowledge and attract attention and visitors.

The tax incentives offered by the Cultural Property Export and Import Act are an important means to ensure that the donations of significant cultural property will continue. Without a right of appeal, as contained in Bill C-93, some donors will feel that they have no recourse if they disagree with a decision of the Canadian Cultural Properties Export Review Board and they may not be prepared to make a donation.

The appeal process will contribute to the preservation of Canada's cultural heritage collections of international stature. Both activities are important to Canada as a nation. I encourage all members of the House to support Bill C-93.

[Petitions, October 16th, 1995]

Mr. Speaker, pursuant to Standing Order 36, it is my pleasure to present the following petition from the county of Haliburton.

The undersigned residents of the county of Haliburton and visitors draw the attention of the House to the importance of national unity to our country at this time.

They therefore request Parliament to urge the government to impress upon the leader of the Reform Party the need to promote national unity in this very unfortunate situation in which our country finds itself.

[Corrections And Conditional Release Act, October 6th, 1995]

Mr. Speaker, I am pleased to speak in favour of Bill C-242, the public safety improvement act, introduced by my distinguished colleague from Scarborough-Rouge River. Before I address the specifics of the bill I believe it is important for members to understand the history of our colleague's complex initiative.

As many members know, since his election to Parliament in 1988, the hon. member for Scarborough-Rouge River has been a strong advocate for criminal justice reform. He first introduced this bill in the late stages of the last Parliament. At that time the bill received a great deal of attention for three main reasons.

First it was and still is a thoughtful, well drafted and complex piece of legislation which attempts to fill numerous cracks in the criminal justice system. Second, national police and victims groups rallied around the bill because it addressed many of their concerns. Third and perhaps most significant of all, the bill was co-sponsored by the former member for Red Deer who at the time was a government member who shared his opposition colleague's concerns for the issues which the bill aimed to address. Today, more than two years later, we are still debating those same issues in the House.

As previous speakers have noted, this is an omnibus bill which deals with six key areas of the criminal justice system. They include statutory release, sentencing, young offenders, crack and bawdy houses, bail provisions and the rights of victims. To a degree some of us are asking why the government has not already addressed these issues. To a degree it has.

We have had the DNA legislation, amendments to the Young Offenders Act, a new child registry for sex offenders, tougher immigration and deportation provisions, and the list goes on and on. The government has done a good job. We have done a lot more

to improve public safety than any government before us and that is not just Liberal rhetoric.

The deputy bureau chief for the Sun news recently reported: ``This Liberal government has actually done more to toughen up the system in two years than the previous Tory government did in nine''. Although we have accomplished a great deal, there is still more to be done and this bill addresses some of those problems.

The hon. member for Scarborough-Rouge River has proposed that an offender who commits a crime while on early release and who is sentenced for five or more years for that crime would no longer be eligible for statutory release. That proposal makes a lot of sense. The purpose of statutory release and for that matter all forms of early release is to prepare the offender for his or her ultimate reintegration into society. If an offender commits a crime during the trial freedom period, they obviously do not appreciate their freedom and therefore should not be trusted again.

In 1988 had Joseph Fredericks, a convicted pedophile with a long criminal record, not been entitled to statutory release, or mandatory supervision as it was known then, Christopher Stevenson, an innocent 11-year old Brampton boy, might not have been brutally murdered. It is for this reason that serious consideration should be given to this proposal by my colleague from Scarborough.

The issue of an offender committing a crime while on early release for a previous crime brings us to another section of the bill which deals with an area referred to as corrections math. Currently, if an offender commits a new crime while still serving a sentence for a previous crime, the new sentence begins on the start date of the original sentence. I am certain that anyone listening to this is confused, as I was when I first learned about sentence calculation many years ago when I was in Millbrook on the other side of the table doing parole hearings.

It still makes me angry. An offender serving a sentence of seven years for armed robbery commits another crime while on early release in year five of his or her sentence. Although the offender is sentenced to an additional three years in prison for the crime that was committed while on early release, they will not serve additional time in jail because the new sentence will be merged with the original one. Basically they are allowed to commit a free crime.

It is Friday afternoon, 2.30, and everyone wants to leave. It is the end of the time. I am sorry I was not able to finish my speech, but I want to tell members that I support Bill C-242 and the amendments to it. I hope the justice minister is listening.

[Regulations Act, October 2nd, 1995]

He is a legend in his own mind.

[Fleetwood Trailers, October 2nd, 1995]

Mr. Speaker, it is a pleasure to announce that the Fleetwood trailer facility in the town of Lindsay, Ontario, has won the customer satisfaction award for the fourth consecutive year.

The Prowler trailer plant competes against 15 other factories in North America every year and it is the only facility located in Canada. Its rating was over 95 per cent.

It was my pleasure to present a Canadian flag to our friendly American vice-president of operations who attended from California to help congratulate the Lindsay plant employees on their championship.

I say congratulations to the Lindsay management and employees on their success.

[Small Businesses, June 22nd, 1995]

Mr. Speaker, my question concerns the minister of public works. A recent government report shows that a federal program to direct $1.5 billion a year in federal contracts to small business may not be necessary because this sector already gets its fair share of government business.

Could the minister advise the House on the relevance of the report and what changes the minister plans on implementing?

[Employment, June 16th, 1995]

Mr. Speaker, my question concerns the social security overhaul.

Structural unemployment must be addressed by structural change. Can the minister explain how we will ensure that social programs lead to real jobs?