Jim Silye

[Taxation, December 11th, 1995]

Mr. Speaker, last week the Minister of Finance stated in this House that the most important kind of tax relief this country should look to is a reduction in interest rates. Is that all? Is that the reward for his tough, tough budget and his two-year revolving target? Is that all this government has to offer to overtaxed Canadians?

I ask the Minister of Finance when, if ever, can Canadians expect to pay less in taxes than they did the year before?

[Employment Insurance Act, December 11th, 1995]

Mr. Speaker, the government has tabled two bills amending the Unemployment Insurance Act. It is trying to make it better, trying to improve it to make it something that holds hope for all Canadians. The government is trying to show Canadians that it is being responsible.

In my role as an opposition member and as an individual who has employed a lot of people and has seen how the unemployment insurance system works, I am sorry to report that upon evaluation of all the items, clauses and elements in the bill, basically the minister of human resources has taken a 12 or 15-year old idea, brought it to the surface and finally has his way. Instead of making it simple, he has proceeded to make it even more complicated, more confusing and more convoluted than the Income Tax Act. He has done nothing to make it sound and appear in language that people can understand. He had a choice between using the KISS method in accounting, keep it simple stupid, as opposed to what he has done.

I have a number of concerns about this. The minister had the opportunity to make unemployment insurance truly a program for which it was designed: an insurance program against the time when someone is unemployed. The payments should be equal between employer and employee. I do not know why the minister has allowed the practice to continue where an employer has to pay almost 1.4 times that of an employee. This is what kills jobs. This is why payroll taxes are called job killers. The minister has not listened to this.

If this were a true insurance program, there would be no need for the minister to use moneys from UI for five development tools; $800 million for targeted wage subsidies; targeted earnings supplements; self-employment; job creation partnerships; skills loans and

grants. This is nothing more and nothing less than a vote getting method of spending money. It is old style politics. It reeks of self-service, reeks of missing the point.

The money should go to reduce UI payments for both employer and employee instead of being used for these programs. Then if we want job training programs or to subsidize businesses to hire people, it should be a separate envelope and spending should be made visible instead of invisible.

We are giving the human resources development minister$19 billion to play with when all we are spending on UI benefits is $11 billion. All the other programs amount to approximately$3.1 billion and there is still a slush fund of about $5 billion left over. Why?

We could lower taxes, offer tax relief to the Canadian public through relief of payroll taxes. Employers and employees would be happy with that. But no, the minister wants to be king. The minister wants to hold out a carrot on a stick to say that he is going to help all the unemployed people.

I do not understand why there are different rates of payment across the country for people who collect benefits. Why did he not address that problem? In an area of high unemployment, 16 per cent or higher, why do people get more for staying there than if they moved to an area where there is low unemployment of 6 per cent or less, and get less money for staying there? People are not being asked to look for a job. They are being paid to stay put and are paid more money to stay put than to go and look for a new job. That does not solve the problem. It adds to it, just like the Minister of Finance keeps adding to our debt by setting targets which add to the problem instead of solving it.

The name change is serious. Changing the name from the unemployment insurance program to employment insurance program is really serious. What does that mean to the Canadian taxpayer? People are going to say that they paid into it and when they are unemployed they expect to get their money from unemployment insurance. Fine, they get it. Some people have abused the system and we are trying to weed them out.

If the name is changed to employment insurance people are going to think: "I am paying money into a program which will guarantee me a job if I lose my job". That is what employment means. The minister is toying with people's minds. He is toying with a name change which will have a serious impact. The people will be disappointed if they do not get what they want. It is ridiculous. Once again it is all about politics.

Why not address the problem and solve it? Let us use the unemployment insurance program as such. We should not use it for other things which will increase the costs and allow the minister to waste taxpayers' money. It should be used for the purposes for which it was intended: strictly for payment when people are unemployed.

Supposedly somewhere along the line the minister tested a trial balloon on a voucher system. If the provincial governments do not offer training the way an unemployed individual would like it, if they want to be retrained, if they want to receive an income supplement, if they want to become self-employed, if they want a loan or if they want to create a partnership, they can go to the federal government with the voucher and it will give the individual what they want. Does that not add to the problem? Is that not overlap and duplication of services? Is that not what we are trying to avoid with decentralization?

The Prime Minister promised the province of Quebec that he would transfer manpower training to it. With this bill he has not let go of the strings. He has not let Quebec take care of manpower training. With this bill he is still involved in job training. He is still looking after the training of the people of Quebec. That does not solve the problem. Once again it is adding to the problem. I do not see the difference between job training and manpower training. C'est la même chose, n'est-ce pas?

Where would we go? What would the hon. member for Calgary Centre do if he happened to be lucky enough to have the job of the Minister of Human Resources Development a couple of years from now? With all due respect to our current critic, the hon. member for Calgary Southeast who is looking forward to that job, I do not want it. However, if I had the job the first thing I would do would be to make it a true insurance program. I would establish matching funds for employers and employees, not accelerate the payments made by employers. That might create tax relief which might enable companies to hire more people.

The second thing I would do would be to have everyone pay the same rate, qualify the same way and receive the same amount of money wherever they are. I realize there are some differences. Perhaps in tougher areas they might be allowed an additional week of benefits, but that would be it. Everyone would receive the same benefits. That would make people move around the country to find jobs, rather than staying put, staying cushy and saying thank you very much.

I would also change job training. I would not have human resources development looking after job training. The hon. member for Calgary Centre would have the Minister of Industry look after job training, if in fact we wanted to offer job training to people and if in fact the industry was reluctant to provide opportunities for people to learn, to obtain jobs and to become skilled.

The government should get out of the business of being in business. It should lower government spending to the point where it is only collecting money to do the things which Canadians want. This is not a program which Canadians want; this is a program

which the human resources development minister and his bureaucrats want.

We are collecting $5 billion more than we need. It might be more than $5 billion because there are other programs we could abolish. We might be collecting $6 billion or $7 billion more than we need. That is why our taxes are so high.

It used to be that the bureaucrats in unemployment insurance who worked in the towns and cities across the land helped the people who were unemployed. They would look in the papers, they would get on the phone and they would find employment opportunities. There was a three-strike rule, which is something the minister has not addressed.

For example, a plumber is out of work and cannot get a job. He collects unemployment insurance. The agency in the old days when it wanted to help, would say: "We cannot get you a job in your trade right now, but there is an opportunity over here. Would you like to learn something new? Would you like to try something else?" The plumber would reply: "No. I want a plumber's job". The second time it was: "We have something over here working in a school. If you are on the spot and the pipe bursts you might be lucky". The reply was: "No, I don't want that". The third job they offered was paying relatively the same amount of money he was making or something close to it. Even if it was not close to it, they told him to take the job because he is the available person who has some skills they need.

Many jobs are going unfulfilled. We talk about our high unemployment levels but we never talk about the number of available jobs. We never correlate the two. I believe the three-strike rule should be reintroduced as well.

[Recognition Of Quebec As A Distinct Society, December 6th, 1995]

Mr. Speaker, I rise today to address the distinct society motion presented by the Prime Minister and his government with respect to the province of Quebec.

The reason we are debating this motion late tonight is because of the Prime Minister's last minute Hail Mary promise to Quebecers during the dying moments of the referendum campaign. With this motion, combined with a constitutional veto and a transfer of manpower training to Quebec, the Prime Minister feels that he has now made the best and most significant contribution to national unity. We are all going to live happily ever after.

I am afraid I cannot agree with his logic, his proposals and the timing of them. He has resurrected the constitutional ghosts of Christmas past and will witness the same results as was had with Meech and Charlottetown: failure.

First, in analysing the components of the distinct society motion I have to ask the question: Does the Prime Minister truly feel this really satisfies Quebecers' desires, hopes and needs? The Prime Minister is a Quebecer himself. If anybody should know what Quebecers want, it is he.

However, during the referendum campaign he misread, he misunderstood and he misrepresented to the rest of Canada what should be done. He said: "Thank you very much for staying quiet. Don't worry, they won't leave. Just don't say anything to upset them and everything will be fine". He almost blew it and he knew it.

He got the minister of fisheries, Captain Tobin, to use his turbot popularity and throw together a unity rally in Montreal asking everybody from sea to sea to get to Montreal. He then turned around and made promises to the separatists, promises to the sovereignists, promises to the nationalists, promises to the federalists. Aside from the fact that keeping promises is not one of the Prime Minister's strong points-he promised to renegotiate NAFTA, but did not; he promised to eliminate the GST, but has not; he promised to eliminate patronage appointments, but will not; he promised free votes, which maybe is something he is not allowed to deliver on-now we have him promising to recognize Quebec as a distinct society in Canada.

As a Quebecer he should know what Quebecers want when they say distinct society. He knows what they want is for the rest of Canada to recognize Quebec as one of two founding nations. He knows that Quebecers who want distinct society do not feel there is any cost in acknowledging the fact that they are one of two founding nations. They want a distinct society clause that will protect their rights over language, culture and civil law while keeping the province French.

I personally do not disagree with some of these aspirations. What I do worry about are the consequences if the definition of distinct society is not spelled out. If distinct society means that Quebecers are different because of their language, culture and civil law, I recognize that. That means they are unique and distinct from other provinces and people, just as other provinces and people are unique and distinct from them.

However, if Quebecers want this distinct society clause to mean that not only are they different but they also get special legislative powers above and beyond the rest of Canada, then I am against that. I am sorry but the answer is no to one province getting special treatment over another.

While Reformers can agree to recognizing differences, we cannot agree to giving Quebecers some form of special status over and above other Canadians. That is fundamentally unacceptable and I truly feel that most Quebecers understand that point.

All Quebecers want is something that gives them satisfaction that they will not be tromped on, stamped on, kicked on as is currently being done by the Minister of Human Resources Development with his new employment insurance program.

The frustration in Quebec is based on the fact that we have too much federal interference in matters of provincial jurisdiction. Quebecers want the federal government to get out of their lives in a lot of areas. That is where the solution to national unity lies. Give the powers to the provinces that they want and need, regulated by the federal government and let us make government the right size doing the right thing. Let us have a smaller and more open government than what we have.

Simply put, all provinces want control over their purse strings on programs closest to the people, delivered at a lesser cost than is currently the case with the bureaucratic nightmare in Ottawa.

I am not against the distinct society motion which recognizes Quebec as a distinct society within Canada, provided it is fully defined and does not make them the biggest kid in the playground. That is why I would ask the Prime Minister and the government to support Reform amendments to this distinct society motion so that he can get more support from all across Canada, including from those people in Quebec who look on this motion very suspiciously. It would give the people of Quebec and the rest of Canada what they want: recognition with powers, but not special status.

I ask the government to support our amendments because what we are trying to do is please the majority of Quebecers, not the minority. If we keep trying to come up with programs and with definitions to please the separatists it will never work. It has not worked for 25 years and it will not work for the next 25 years. The separatists act like spoiled children, not all Quebecers, just the separatists.

Most Quebecers want what is in their best interests and that is no different than myself as a distinct and different person from the province of Alberta. I want the best for my province just as people in Quebec want the best for their province.

Let us design a motion that appeals to the majority of Quebecers, that appeals to the majority of Canadians. That is how we can build on national unity. For the sake of national unity I ask the Prime Minister to please consider the input and information that has been coming to him through the Standing Committee on Justice and Legal Affairs on the constitutional veto. I hope the government listens. There has been some valuable input there.

We can debate sharing the federal government veto with four regions or five regions. That is not really the issue. I believe there are five regions because British Columbia is more like the Atlantic provinces than it is like the prairies.

That is not the point. The point is that this veto should be for the people of Canada and not their legislative assemblies. We already have the seven provinces out of ten representing 50 per cent within the constitutional amendment clause. The separatist Parti Quebecois will now have veto power over changes to the Canadian Constitution. This is ridiculous. The veto should be given to the people of Quebec and not to the politicians.

We should be and I think we are a country of 10 equal provinces committed to similar goals and objectives, each with the same rights, privileges and powers. If we want to change those rights, privileges and powers, it should be one one way or another through a national referendum from the bottom up, not necessarily by elected officials from the top down.

We have to look at the situation very seriously. We have to conclude that a lot of people in Canada want change, not just the province of Quebec or the people who had the referendum. People across the country want change for the good. They do not want change to justify the status quo.

We have to look at issues like changes to the Constitution or granting one province recognition in a way that the rest of the country worries might give it special powers. We have to address those issue. What is wrong with addressing them? We all have to work together to bring the country together from sea to sea to sea.

We have to make amendments to the Constitution to give it the ability to live and the ability to be changed. It should be difficult. It should not be easy to change the Constitution once we define the powers, the levels of responsibility and the way we will work together as 10 provinces. We should think about how we can make changes to it. We cannot give a veto to every province, or there will never be change. We cannot put that Constitution in a vault, let it die and gather dust. We have to give it life. It has to be a breathing document. It has to be tough to make change but we have to allow change to happen.

We have to look at different provinces and different regions and try to recognize their specific needs and wants. There is no reason we cannot accommodate them. There is no reason we cannot come up with a mechanism to give Quebec what it wants and recognize it as a distinct society. It is different. It is unique. It has made a valuable contribution to the building and the nurturing of this great country called Canada.

If that means that Quebec should also get special powers over and above being recognized as distinct, that is not right and we have to tell Quebecers that. The separatists really want this. It is not all Quebecers. Those who want it want to protect their French language. We should be able to help them protect their French language and their French culture.

They in turn should protect minority rights within their province, the English and any other immigrant, and how they can interface with their provincial problems. They do that. What I am saying is that we have ways and means of producing a collective agreement if we just identify the right problem.

This is a panic effort by the Prime Minister and the government to fulfil a promise that he made in the dying moments of a game that he thought he would lose. The game is called unity and he was afraid he would lose the country. He did not want to go down in history as the Prime Minister who lost the country after having told all of us: "I am from that region. Don't worry. They won't vote to go", and they almost did.

It is sad. Now that it is all over they almost look at us and ask: "What did the Reform Party do?" We kept telling them all along to tell Quebecers the consequences of separation, the price of separation. They did not do it then. We will do it now and never in the future will any province look at itself and say it will separate and everything will be perfect. We will tell them the cost of separation.

[Underground Economy, December 6th, 1995]

Mr. Speaker, if that is truly his answer, if he really believes it is false, then this gentleman is not doing his work.

A report was done by Ernst Young on the underground economy. A lot of field auditors were interviewed, reviewed and visited. They were asked what was going on. Six, seven or eight case reports were done. The study and some off the record remarks by auditors confirmed they were instructed not to audit certain visible minorities "due to potentially explosive political repercussions".

Further, the minister should know that 90 per cent of liquor smuggling in Ontario comes across one certain spot near Cornwall.

I again ask the minister what steps he is taking to ensure his auditors apply the rules of the Income Tax Act to everyone equally regardless of race.

[Underground Economy, December 6th, 1995]

Mr. Speaker, last week the Minister of National Revenue and taxation bragged about raising $1.1 billion out of the underground economy.

If he were truly serious about attacking the underground economy why were Revenue Canada auditors instructed not to audit visible minorities?

[Income Tax Act, December 5th, 1995]

Madam Speaker, Motion 497 seeks to amend the Income Tax Act to eliminate the payment of personal income tax on interest from personal savings accounts when the amount of interest is $1,000 or less.

The rationale used by the hon. member for Bramalea-Gore-Malton is that the motion will do five things. First, it will promote savings. Well, it is pretty hard to save these days. As the hon. member from the Bloc mentioned, this creates different avenues and ways to stuff your savings away where it will be harder for Revenue Canada to find it.

Second, the motion is intended to help the elderly who rely on savings and seldom enjoy the tax advantages of an RRSP later in life. This is an honourable objective and one I would agree with as a problem to solve. But solving it this way is unnecessary, especially if we were to devise a proper system of taxation.

Third, it is intended to compensate for falling interest rates. Why is this the responsibility of taxpayers, adjusting for the inflation component and interest income? That is not necessary. When institutions set their rates they base them on the performance of the economy. They are set at a regular time and over a period of ten years the average rate of return is adjusted for inflation.

Fourth, the rationale is to reduce administration costs because banks will no longer have to issue T4s for interest income, reducing the paperwork for Revenue Canada.

I believe the hon. member has it backwards. In April we all become employees of Revenue Canada and we work for free. We sweat for hours trying to get this income tax done and figure out how much we have to pay, make sure it is correct and then send it in. The information we use has to come from where we have earned our money or placed or invested our money. So whether interest income on savings is less than or higher than $1,000, the banks will still have to issue the paperwork necessary to show you made less than $1,000 or more than $1,000.

We need to stop tinkering with the Income Tax Act and the income tax system. We should stop using it for direct social and economic engineering. This is another example of using it for social engineering. We are using it to solve a problem. I do not deny there is a problem with money, with savings, and with how we look after ourselves, but the way to solve it is not through the Income Tax Act. We are making it too cumbersome and too difficult. It should be under a separate direct-spending program if we want to help seniors and children.

In 1917 the original purpose of income tax was simply to raise money. It was to pay for the first world war. Then the politicians and bureaucrats saw how nice and neat it was. Yes, I agree, it is a great way to deliver social and economic benefits. But problems have been created.

In 1992 the net revenue that was collected by the government on personal income alone was $60 billion. That included all the exemptions, deductions, and tax incentives or loopholes. If there were no deductions, exemptions, and tax incentives, the revenue for 1992 would have been $120 billion. That is $60 billion we are leaving in the hands of people. We give it back to the people. We know it is unfair.

If we collected that revenue and put it into the spending envelopes of the people who are responsible for immigration, transportation, unemployment, and health care, then we would know what that costs. We would know who is responsible: an elected minister or a permanent deputy minister. Those people would be more responsible and accountable. The pressure would be on the government to rationalize and justify its spending. I believe there would be a downward pressure. The problem with our current income tax system is that it is unfair.

The GST is another example. It generates $30 billion to $36 billion, yet the net take of the government is $15 billion to $16 billion. There is the system of rebates, the high cost of compliance and the high cost of collection. It is ridiculous.

If we used taxation for the one simple purpose of raising money and then put the money into the areas where we want to spend it and where Canadians want it to be spent, it would be a more efficient and effective system of taxation than we presently have and we would no longer need all these rates.

We know the system is complicated, confusing, and convoluted. We need to make changes. Yet nobody addresses that. Everybody is afraid to look at a simple system of taxation because in simplicity the cost of transition from the current income tax system to a simple tax system would be too expensive and the transition would be unattainable. I heard that from the chairman of the Standing Committee on Finance, who is an income tax lawyer and an expert in his field.

In the name of deficit reduction and in the name of losing tax dollars, is the government afraid to look at a system of taxation that features a single rate and allows a generous tax-free portion so that the people who need the money most, the seniors and low-income

Canadians, do not have to pay any income tax? That line would be somewhere between the poverty line and the low-income cut-off. Would that not reduce the pressure on our social programs? Would that not be a more efficient way of helping the people who need the help, rather than tinkering with the Income Tax Act, adding five more pages of definitions and rulings and three more reasons why auditors have to check every bank account, as the hon. member said earlier?

We have to look at tax reform. Tax lawyers are afraid to return from holidays to read the latest communiqués from Revenue Canada with the new rulings and definitions.

The current system is a disincentive to work. The more a person makes the higher the percentage they have to remit. They call that progressivity, but at a certain point they stop working for the government. Why? Because they see that government wastes money. If the government were spending the money on programs Canadians want and not what bureaucrats and politicians want, and if people could see their tax money being spent fairly and wisely, in a way that was responsible and accountable, in a clear and visible fashion, we would have more compliance. More people would pay. With a single rate everybody would know they are paying the same rate over a certain base that is tax-free.

It costs us $12 billion to send in our income tax. The personal portion we pay other people to do this for us costs $3.7 billion. Revenue Canada is $1.5 billion. The government cost for GST is $0.6 billion. Corporate costs to do the T4s and their corporate tax is $4.9 billion. The GST industry costs $1.7 billion.

It is clear: our current system is unfair, unclear, and unacceptable. There is no reason we should keep up with it and there is no reason we should continue to promote ways and means of adding more to the confusion of the income tax. We should be cleaning it up, simplifying it, rewriting it.

We have had three major tax reforms since 1971. We went from 18 different brackets and a high marginal rate of 80 per cent in 1971 to 10 brackets and 43 per cent in 1981, to today, from 1988 until now, three brackets with a high marginal rate of 29 per cent. When each of those transitions and reforms went from 80 per cent down to 29 per cent it meant more revenue to the government.

Lower taxes mean more revenue. Simplicity means more revenue. Therefore we need one more major tax reform in this country, one more simplified tax featuring a single rate with a generous tax-free portion that will look after the lower income and retain progressivity. It will introduce fairness. Everybody will know what they are paying. Reduce the rate to the area of 20 to 22 per cent, another 7 per cent reduction, and a single rate. I would argue that would generate even more revenue for the government.

Some of the other principles we should keep in tax reform are keeping it simple and understandable and defining the purpose as raising money. Tax reform is not to add another element that the first $1,000 you make in savings accounts is free because we are helping this sector; not to help the farming sector by giving this deduction over here; not to develop oil and gas by offering flow-through shares over here; not to help this by doing that over there; not to help charitable organizations by allowing generous exemptions over here; not to aid and facilitate seniors by having some moneys there.

In conclusion, the Liberals are neglecting their responsibility to the public in giving lip service to tax reform. They are not prepared to look at genuine comprehensive tax reform in this country. The Reform Party is and will. We will continue to address this issue.

[National Revenue, November 24th, 1995]

Mr. Speaker, with all due respect, I believe the parliamentary secretary is out of touch with this department.

Over the last couple of months I have received evidence that there are questionable management practices. There is evidence of racism. The morale is low and there is a lack of fulfilment in the department.

The minister of revenue and taxation has to do a better job of controlling the department. Tax time is coming up. Budget time is coming up. We know the friction between taxpayers and Revenue Canada collectors.

When will the people responsible for the department improve the image of national revenue and taxation?

[National Revenue, November 24th, 1995]

Mr. Speaker, when the Minister of National Revenue amalgamated Canada customs and taxation he claimed the department would become more efficient and more effective. The auditor general disagrees. In his report last week the auditor general points out that taxpayers are now waiting 26 days longer for disputes to be resolved and that Revenue Canada missed collecting $17 million in interest charges on overdue accounts.

How can the minister claim this reorganization in his department has been anything but a failure?

[Supply, November 22nd, 1995]

We are laughing and joking, but it is not really funny.

This man has been the justice minister for two years. All he wants to do is register firearms at a cost of $400 million and impose a bunch of ludicrous infringements on private property and carrying on like that, rather than doing what really is important which is toughening up the criminal justice system, making our streets safer and actually punishing people who commit crimes.

It is wonderful to talk about the causes of it. It is wonderful to look at how we can help these people to not commit these crimes. Those are solutions that are of a much longer term. In the short term the punishment should fit the crime and parole should not be given to violent offenders.

Why not make violent criminals serve their full sentence without possibility of parole? Why not get tougher with the criminals, show that the justice system is tough, then look at the rights of the victims and give them the satisfaction that at least the government of this land is looking after their rights and not just the criminals rights.

[Supply, November 22nd, 1995]

It is ludicrous, I agree with the member from Manitoba.

I guess I need another preamble for my question. I believe that we should make violent criminals-that was my comment and now to the question for the-