Mr. Speaker, I am going to argue against this non-votable bill. Based on words and the ideology of the Bloc Quebecois member and the Liberal member who moved the motion, they are out to lunch when it comes to corporations. Do they not realize that corporations pay taxes and lots of taxes?
They talk about how this being a tax deductible item and the corporation getting it at half price while the person who takes his lunch to work has to pay full price. The corporation or business has generated the revenue to have the right to buy season tickets, to have the right to spend $50,000 for a box.
Why do the government and the current income tax system allow these businesses to write that off against their incomes? It is for a very good reason.
They are sizeable corporations. They are movers in the business world. They are growing and expanding and they wish to communicate their message. The best way to get the attention of others who might possibly buy their product is to mix and mingle with them at times when they are not busy producing their product, from the hours of 8.00 until 12.00 and the hours of 1.00 until 5.00. The noon hour and evenings become prime time for people to spread their message.
Having a box at a hockey game can be a legitimate deduction because of expectation of profit. Companies in Canada cannot afford to buy a box if they are broke. Companies in Canada cannot afford to spend that money unless they are generating the money against which they can deduct the cost of the box from income.
Even at 50 per cent it is a good compromise. At 50 per cent the company has to think about how it is spending its money, whether it is justified and whether it will get a return through this contact and through this sales pitch.
It is a good compromise. It reduces the abuse. It legitimizes the expense. When it was 100 per cent I agree there was a lot of abuse. The 80 and 20 was not enough to ensure that companies thought twice about it. The 50:50 rule should not require a motion like this. It makes a mockery out of people going into business.
Profit leads to more tax revenue for the government than it loses through the tax deduction. That is another point. If the company
has a box which leads to more business, for example a high tech corporation with a box at the Corel Centre, the company makes more money. The bottom line increases. The tax revenue increases. I bet it is more than the 50 per cent deduction on the $50,000 box. What they are arguing against is less revenue for government, if it is taken away.
It would not apply to food. That is good. I was pleased the member made that clarification.
I do not understand how everybody seems to think we have to tax, tax, tax the rich and the corporations. We have to make sure that they pay their fair share. There is no question. People with lower incomes should pay less taxes than people with higher incomes. The simplified tax system I recommended would be progressive. It would have the same level of generous personal deduction. Everybody would pay the same rate with none of the tax exemptions. They would be eliminated. People would pay the single rate and maybe a dual rate on incomes up to a certain level and then a higher rate on incomes above $30,000, say 17 per cent and then 25 per cent.
The point is that what sets a country apart from less fortunate and less expanding countries is how it handles its tax regime. Is it a punitive tax regime or is it an inducement tax regime? Do people get to keep more of their money when they make more money?
Our system is getting pretty iffy. We seem to punish incentive and successful people by taxing them more and more. The levels are higher than they should be. We are at the maximum in terms of taxes. The finance minister knows that. That is why he has not raised personal tax rates in the four years he has been here. He has been very smart not to do that. Had he done that, the Liberals would be a lot lower in the polls than they are right now.
With respect to corporations, the tax regime is important because we are now in a global economy. If the separatists want to have their own country, they had better learn quickly that if they punish their corporations by taxing the heck out of them, there will not be very many jobs. Who creates the jobs? It is the corporations. Do corporations really pay taxes? No, they do not.
We could say that the banks contribute $8 billion in taxes. We could look at any financial statement of a public company to see how much it paid in taxes. Do they really pay those dollars in taxes? No. It is the consumer who pays the taxes. The tax cost is built into the corporation every year. It is built into a price increase to protect the bottom line. It is the people who pay. It is the consumers who pay the taxes.
The whole argument that we should tax corporations more is bogus. On the surface we must have a tax regime for corporations. I am not one who says corporations should not pay tax. That is what some people say. They think costs would be lower and product costs would be lower and they would pass it along to consumers. No, I do not think so. I do not agree with that. They should pay some tax.
It is important to have the right incentives in place, a tax regime that is properly thought out. If there is expectation of profit it is a legitimate expense. If corporations are investing in hardware or investing in people, how do they get their message out there? They advertise. They advertise in a lot of ways. It is not just a media buy in the electronic media or the print media. Word of mouth sometimes is the best form of advertising.
If I just started a brand new restaurant, one of the better ways for me to increase clientele and sales so I can hire more people and end up paying more taxes is to start bringing people there. That is a legitimate deduction if I bring people there to introduce them to my product, my place of business, and show them what we have.
Both the Bloc member and the Liberal member who have just spoken do not understand the corporate environment. They do not understand what corporations really do. They do not understand how much of a contribution corporations make.
It is government's role to create the right incentive and the right environment for the private sector to create jobs. We are slowly getting the Liberals to accept that. They are talking the talk now. Maybe they will start walking the walk.
A bill like this one is draconian. It is dinosauric. It is from the past. We must create incentives for businesses to stay in Canada. We must give businesses the legitimate opportunity to deduct their expenses. Those expenses that are clearly and legitimately intended to increase their profitability should be deductible.
The 50 per cent rule legitimizes, reduces abuse and allows corporations to have the respect they have when they spend this kind of money. If these corporations did not spend this kind of money, does the member know how many rinks there would be in the country? Does the member know how many sporting venues or other venues would exist if there was not an inducement for companies to spend these moneys? There would be a lot less. How many jobs would be lost? I do not think the whole psychology has been thought out by the two members. They see high profits.
I would rather go after Bombardier. Lending money to Bombardier as the government has done is shameful. It is a profitable company with a profit of $400 million last year. Over the last 10 or 12 years it has received over $1 billion. We do not know when it will be paid back or how much will be paid pay back. How much of the $400 million is the government getting back. We do not know those things.
Those are the ways in which I would increase revenues. That is how I would go after corporations. I would not subsidize businesses to that extent. If they cannot survive on their own they should go broke.
If Bombardier with its huge profit this year wants to buy a box at the Molson stadium, it should be allowed to deduct that against its income because it generated that $400 million. A company does not generate $400 million profit unless it hires a lot of people and has a lot of clients. It is a worldwide company. It needs to show the kind of operation it has. The member should rethink his position on going after corporations and not allowing deductions of this nature.
While I have the floor is it proper for me to move third reading?