Alex Shepherd

[Supply, November 6th, 1997]

Madam Speaker, I was happy to hear the member for Medicine Hat admit that the harmonization system may well be a benefit. It seems to me it was that party that argued against the harmonization in this House.

I listened with intent as the member talked about the importance of reducing taxes and getting taxes back in the hands of everyday Canadians. He also asked where the money was coming from.

We have in this country a program of equalization payments. It is a very complex formula but basically the object is to bring everybody in the country to common standards in health and education. Through the mechanism of the equalization payments certain portions of this country are already sending money to the Atlantic provinces. As a nation we want to build a dynamic economy. One of the features is a harmonized sales tax in the Atlantic provinces to allow those provinces to compete internationally.

One of the big features of a harmonization package is to reduce sales taxes for Canadians in the Atlantic provinces. It did just what the member is talking about. It reduced taxes and allowed more disposable income in the hands of Atlantic Canadians. Can they not see that?

[Supply, November 6th, 1997]

Madam Speaker, I listened with intent to the hon. member for Mercier and also the last intervener.

The harmonization of the GST is a positive thing economically. I will give one example. My riding is highly influenced by General Motors which pays provincial sales tax on its input costs. When it exports it does not get a relieving provision which is what the GST basically does.

It means that the costs for automobiles manufactured in Ontario and landed in the United States are greater than for those produced in St. Therese, Quebec, for instance.

The fact that Quebec harmonized the GST quickly gave it a tremendous economic advantage. If there is anyone who should receive compensation I would argue that it is the laggers such as my own province, which has refused to move into the area of harmonization. The Quebec economy has received great economic advantage for doing that early.

I wonder if that is part of the calculation, how much benefit has been realized from looking forward to export trade which Quebec has already received by harmonizing quickly.

[Pensions, October 27th, 1997]

Mr. Speaker, my question is for the Minister of Finance.

With respect to the Canada-U.S. tax treaty, over 80,000 seniors receiving the U.S. social security pension have seen their incomes drop by more than 25%. Many of these are low income seniors.

What is the government doing to get this money back into the hands of those who need relief now?

[Supply, October 21st, 1997]

Mr. Speaker, I can see that the members are getting a little upset with the facts, but the facts are quite clear. The government has committed to spending more in the area of post-secondary education.

It is quite clear that the Conference Board of Canada recognizes that Canada spends tremendously more money than most of its competing partners in the OECD countries. At the same time, we are not really getting a lot of positive results. Yes, we are getting a polarization between knowledge based workers and all the rest. We have to find better ways to get more people involved in lifetime training skills.

I recognize and I share some of the things that the conference board has said. I would have thought that some of the members of the NDP would be concerned about some of these issues.

They talk about how to develop lifelong learning skills, how to encourage employers to engage in some of these programs. It has been this government that has recognized the importance of making an intervention between people who are now taking higher skilled education in the post-secondary education system and integrating them with a work force.

I have been very pleased to be part of a government that has developed a program to take young students who are engaged in information technologies and introduce them to some of our small and medium size businesses to upgrade their skills so that they too can employ more people.

It is amazing when we actually look at some of our industrial structure, that we see many of our businesses spend less money on technological innovation than do our American partners. It is very important that we start putting more stress in these areas.

The government has expanded the use of the IRAP program to encourage and foster evolving technologies in small and medium size businesses. It has created another horizons plus program which basically takes some of these young people who are also engaged in the area of trade and studying trade at post-secondary education and injects them into small and medium size businesses, the purpose of which is to make them export ready. These are some of the positive ways that governments can be part of that.

The government is introducing an $850 million Canadian innovation foundation. I can tell members that the post-secondary institution in my riding is very happy with that initiative. I am spending a lot of time making sure that they get a piece of that so those young people can get better and higher skilled jobs in the future.

At the same time as we are talking, we have a problem because the immigration department is besieged with requests to bring more people into the country to take highly skilled jobs because we do not have people to do that work. That is atrocious. It is a travesty of our system.

But saying that—

[Supply, October 21st, 1997]

Mr. Speaker, it gives me great pleasure to enter this debate.

The motion by the New Democratic Party talks about the immorality of the government in reducing its deficit and debt. The previous intervener talked about dinosaurs. It seems to me that every time the NDP brings something to the floor of the House I have heard it before, usually about 20 or 25 years ago.

We had to deal with the deficit and debt problems. We have done that ferociously, so much so that interest rates in the country are at an all time low.

These are some of the basic fundamentals of economics which create jobs. In the last nine months 297,000 new jobs have been created. Only in the last couple of months 63,000 of those jobs were filled by young people.

Why is it difficult to set targets, as the motion entertains? It is because of something called the elasticity of labour. As people begin to seek and find work in the economy more people offer themselves for those jobs. Even though there has been a tremendous amount of job increase, a number of people are seeking employment. It is very difficult to determine who is going to seek new employment. As more and more people reach the labour market their friends, who are at home for one reason or another, may decide they also want to enter the labour market. It is a very difficult problem to solve because it is always changing.

One part of this motion deals specifically with education, which I find interesting. The Conference Board of Canada recently issued a report. I suggest the members of the NDP take some time to read it. Despite its motion, which talks about the dismal failure of the government to deal with matters of education, the Conference Board of Canada states that in 1993 Canada spent 7.6% of its gross domestic product on education. That is more than in the United States, Japan, Germany, France, Italy or the United Kingdom. Nearly two-thirds of all Canadians aged five to 29 are enrolled in educational programs, a record exceeded by only three other OECD countries.

Despite Canada's spending, its grade 8 students placed only in the middle of a pack on standardization in international tests in science and mathematics. Domestic testing confirms these disappointing results.

What is being said here? It is saying that increased spending does not necessarily get results. This flies in the face of the rhetoric of the NDP whose members believe that they can solve all problems simply by cranking out cheques.

I was amazed to notice in this survey that in the area of post-secondary education, Canada spends 2.8% of its GDP. That is the highest in the world. The one area for which the federal government has some responsibility, post-secondary education, Canada is spending the highest amount of any country in the western world.

The NDP members say that we are not doing enough. Are we supposed to be spending three times more money than every other country in the western world? I would have thought the NDP would have been concerned about giving people basic skills to get high paying jobs. I would have thought that they would be trying to find ways in which to make that spending more effective, not just to crank out more dollars. In fact, I suspect less money can actually be spent while getting better results, that is, if we take a little more of an approach to managing the way we are spending some of our money today.

At the same time as this spending is going on, Canada's literary skills are only middle of the pack in the western world. I am proud to be part of a government that recognized that two years ago, before many of these members showed up here, increasing the budget by over $50 million in the area of literacy skills.

[Income Tax Conventions Implementation Act, 1997, October 20th, 1997]

Mr. Speaker, I have a comment on the issue of hypocrisy. I thought it was kind of unusual in the speeches on Bill C-2 by Reformers that they talked about wanting the time to go back and consult with their constituents. I know we are getting a little off topic but Bill C-2 was presented in the 35th Parliament. The negotiations for Bill C-2, that is to say pension reform, occurred during that period of time. It included the Government of Alberta which has basically signed on to the amendments.

I thought it was really remarkable that Reform Party members wanted to go back and talk to their constituents now, when I and many of my colleagues had town hall meetings two years ago. When is the Reform Party going to get its act together?

[Income Tax Conventions Implementation Act, 1997, October 20th, 1997]

Mr. Speaker, the Reform Party seems to have an agenda which represents probably less than 10% of the people of the country.

Yes, there is high taxation in higher income groups, but not unavoidably so. We have a progressive taxation system. As the member knows, we have lowered the number of taxation categories from something like six to about three.

The agenda of the Reform Party is a flat tax. A flat tax would shift the total tax burden from the higher income earners to the middle income earners, the people that party does not represent.

[Income Tax Conventions Implementation Act, 1997, October 20th, 1997]

Mr. Speaker, once again it depends on the definition of low income.

I will tell him that the people I represent who are making $14,000, or the example given of the individual making $10,000, no, they will not be paying any tax.

[Income Tax Conventions Implementation Act, 1997, October 20th, 1997]

Mr. Speaker, I can understand why the member is having such a problem with this issue. It is because he does not understand the difference between income inclusion and taxation.

These people will see 85% of their income included on their tax returns. The reality is, they do not care. They are not taxable.

The very few people who the member is trying to defend, yes, they may see lower taxes. By the way, they are not going to be any worse off than they were for the two years in which that legislation existed.

Who are these people defending? It is not low income seniors.

Bloc members should be ashamed of themselves too—

[Income Tax Conventions Implementation Act, 1997, October 20th, 1997]

Mr. Speaker, I thank the member for his question.

First, if he is concerned about his constituents then he does not understand the retroactive nature of this protocol. He talks about going back to January 1, 1996 for the money previously paid by his constituents that will be refunded and that we are putting the world back to 1996.

I am surprised by the member. What would some of his constituents say if he is willing to support an initiative which delays this legislation? It is his constituents who are out the money. Every month that goes by another 25.5% will be deducted from their cheques, money which they will not have to spend in his riding. I am surprised that the Bloc would support the Reform Party.

These people are desperate for their money. These people are saying “Alex, when are we going to get our money? We want our money back”. That is what we should doing. The Americans have realized this and that is why they are pushing their protocol without amendment. They realize the demoralizing effect it has on Canadians.