Jim Silye

[Income Tax Act, December 1st, 1994]

Yes, mind boggling.

Although we support all of these measures with the exception of the capital gains elimination, it represents a whole bunch of tinkering with little gain for Canadian taxpayers and the government. It has spent a year doing nothing but politics as usual, as did the Conservatives. Canadians voted for change. They thought the Liberals would change the way we conduct business and they have changed very little.

We need a new set of principles to set a new direction for federal taxation. The need for reform in matters of taxation is widely recognized. The federal government under Brian Mulroney raised taxes 33 times and implemented the GST plan in the face of widespread opposition.

The Liberal government is now considering revisions that will inevitably prove to be even more unsatisfactory, a combination of the son of GST, called the NATVAT, or a surtax on income or both. Consumption taxes on top of income taxes are not the answer.

Five fundamental principles should be applied to the Canadian system of taxation: first, all taxation programs of whatever kind should be for the exclusive purpose of raising revenue to fund authorized government spending and should not be for the purpose directly or indirectly to shape economic or social activity.

Second, all taxation programs should be consistent with the governmental role of creating a framework. It can be square or round, whichever-we do not have to mess around, whether we square it or round it, or round it or square it-just do what is right so it widens people's choice and wherever possible leaves power and responsibility in the hands of the people.

Third, tax legislation should be simple and easily understood by taxpayers, permitting most taxpayers to file their own returns.

Fourth, taxation should be visible, that is, no hidden taxes.

Fifth, rates of taxation should be limited and not punitive for both individuals and corporations. The incentive should be to reward production and leave more dollars in the hands of taxpayers and wage earners than the government. The only purpose of taxation should be to raise funds.

However, we have become accustomed to a multiplicity of objectives in our taxation system. It tries to encourage domestic production, investment in certain industries, charitable donations and further education. It tries to discourage smoking, drinking, imports and pollution. Unfortunately it also ends up discouraging taxpayers.

There will always be convincing arguments for making the taxation system more responsive to some other government initiative. Examples are taxes on petroleum products to protect the environment; taxes on alcohol or smoking to reinforce moral standards and healthier living.

Once we give in to one of these arguments we leave ourselves open to making judgments based upon personalities, effectiveness of lobby pressure, political expediency and other human frailties.

I believe the only purpose of taxation should be to raise funds needed to pay for government programs approved by the Canadian voters. I believe a proportional tax is the answer to creating a simpler, more efficient and more effective system of taxation.

The idea of a proportional tax is an attempt to improve upon the flat tax models that have circulated for many years to improve upon the single tax as proposed many years ago by the member for Broadview-Greenwood who is presently working on the single tax and trying to refine it, improve it and make it understandable to the government. Now that he is on the government side it would be hoped that members of the government would pay more attention to the proposal because it has a lot of advantages. There are a lot more advantages than disadvantages.

Of course it has that one big weakness that governments do not like and that government bureaucracies do not like. It is too simple and because it is too simple it will not work. It has to be complicated, convoluted and confusing before governments will support it.

[Income Tax Act, December 1st, 1994]

Mr. Speaker, I rise today to address Bill C-59, an act to amend the Income Tax Act and the income tax application rules. This bill is nothing more than a 110-page sequel to the confusing, convoluted Income Tax Act which has become a 10,000 page script of income tax rules, regulations and subsections.

I am beginning to think that the Income Tax Act is some sort of secret government IQ test. Like most sequels, Bill C-59 serves up more of the same, showing no new ideas, no new twists and, for the most part, it would have been better if the writer had sat down and spent the time writing something new.

With Bill C-59 the federal government eliminates the $100,000 lifetime capital gains exemption which will seriously impede the build-up of capital in Canada. This is at a time when most wealthy people have already used up their exemption, whether it was the $500,000 or the $100,000. It is nothing more than a tax on the middle class who are the very people the Liberals purport to represent.

What the government should be doing is eliminating $5 billion in direct subsidies to businesses and start privatizing some of the 380 crown corporations. Like the Conservatives, the Liberals have continued to pick the pockets of taxpayers.

The biggest job that the Liberals are working on right now is figuring out how to get more money from the taxpayer without disturbing the voter. It boggles the mind to watch the government go after capital gains. It is considering taxing RRSPs and it is apparent that the Canada pension plan is in major trouble due to revenue shortfalls.

The questions that beg to be asked by Canadian taxpayers are: What is in it for me? Where are the incentives? What benefit do we get from government spending? Can someone give us a break? The answer is no.

The average benefit to taxpayers is about $20,000 per person while they are paying out about $22,000. In other words, they are getting less in benefits from the government than what they are paying in taxes. That is why people are very sensitive about paying taxes. We are at the high end of the tax scale. In fact, we are too far at the high end of the tax scale.

For the Liberals it is the same old story. The answer to these questions and problems are very complex. They must be studied. They will need committees, subcommittees, task forces and of course, to quote the finance minister, input for effective output and we must square the circle to solve the problems facing Canadians.

A planned economy is what the Liberals are targeting with infrastructure, a $2 billion expense; CIDA, Canadian Interna-

tional Development Agency, $2.2 billion, let us develop the other countries, let us help them not Canada; direct grants and subsidies to businesses, $2 billion. Yes, a planned economy. That is when the politicians make the plans and the people make the economies.

We have seen this movie before under directors Trudeau and Mulroney. Now we are going to add director Chrétien to the list. The only solution the current finance minister can come up with is to blame, first, the previous government for the inherited debt of $480 billion, as the Liberal government conveniently forgets that close to $200 billion of that was left by them when it left the House in 1983-84.

Second, the finance minister blames the Bloc Quebecois, the separatist official opposition, which he claims is negatively influencing the investment community.

Third and most recently, after a year in power he blames small and medium size businesses for not increasing productivity in the marketplace. It is their fault the economy went into a recession, according to the finance minister a couple of days ago in an interview with the Financial Post .

What will be the fourth excuse? I do not know but it will not be addressing the real issue. I would like to tell Canadians that Reformers and the Reform Party are currently working on a different script, a new story that will have a better ending for all Canadians.

If there is anything this bill proves it is the need for true tax reform. Listen to the 12 items the finance minister is trying to deal with: capital gains exemptions; employee benefits; age tax credits; homebuyers plan; charitable donations tax credit; business meals and entertainment expenses; tax shelters; partnership interests; divisive corporate reorganizations; investment tax credits; expenditure limit for scientific research and experimental development; small business deduction and mine reclamation funds.

[Income Tax Act, December 1st, 1994]

Excessive spending.

[Income Tax Act, December 1st, 1994]

If you do not get elected, you are a nobody; if you leave, you are a has been.

[Points Of Order, December 1st, 1994]

Yes, Mr. Speaker.

[Points Of Order, December 1st, 1994]

Mr. Speaker, a point of order.

[Budgetary Policy, November 30th, 1994]

Mr. Speaker, I think you will find all the Reform Party members present today will vote yea.

[World Trade Organization Agreement Implementation Act, November 28th, 1994]

Mr. Speaker, the Reform Party members present today vote yea.

[Budgetary Policy, November 28th, 1994]

Mr. Speaker, I would like to ask the member who just gave his presentation a question.

Earlier today during statements by members one Liberal member indicated that the Reform's recommendation of $20 billion to $22 billion in cuts over three years is too draconian. The member following the presentation by my colleague from Lethbridge asked whether the severity or size of the cuts that the Reform is suggesting would hurt the economy.

The finance minister of the Liberal government said he is looking for $9.5 billion in cuts over two years. That is an average of $4.5 billion. We are recommending $7 billion a year over three years. The difference is $2.5 billion per year. Ours represents a 1 per cent reduction per year on the rate of the GDP.

I would ask the member if he thinks our cuts are severe. Are we really just debating over $2.5 billion per year? If so, what about the question in reverse. Does he not think $4.5 billion a year is too severe and too draconian from that side of the House?

[Budgetary Policy, November 28th, 1994]

Mr. Speaker, we are very definitely interested in helping Canadians solve their problems. The difference between the Bloc Quebecois and the Reform Party is, after having worked with the hon. member in the Department of Finance, that when it comes to cuts it does not want to touch or look at social program spending whatsoever. That is a sacred trust to the Bloc Quebecois. It does not want to reduce one dollar of spending in that area. That represents 67 per cent of its overall budget. If it does not address its complete budget and only makes cuts out of the remainder of the 33 per cent, it is limited to how much it can cut. Social spending has to be addressed as the Liberal government has proposed in its grey book. It is important to discuss and it is important to do something about it.

The difference is that we are prepared to look at social program review and recommend some cuts but the Bloc is not. When it comes to taxation we say no increases in taxes. It says there is room for tax increases, go after the family trust, go after the RRSPs, go after all those wealthy people in our society and that will solve the problem. Those are the differences.