House of Commons photoWon his last election, in 2000, with 50% of the vote.
Social Programs October 25th, 1994
Mr. Speaker, the Minister of Finance seems to be saying that the provinces were really happy to learn that there were going to be cuts.
After one year in power, does the Minister of Finance recognize that he has reached a dead-end with respect to the election promise to do away with the GST, since several provinces are refusing to go along with his proposal to create a 12 per cent national sales tax which is nothing more than the GST in disguise?
Social Programs October 25th, 1994
Mr. Speaker, my question is for the Minister of Finance. For the past year, in his efforts to cut spending, the minister has targeted unemployment insurance benefits and transfer payments to the provinces for social assistance, post-secondary education and health. The federal share of these social programs amounts to $32.6 billion.
Why is the Minister of Finance making cuts in these social programs which represent $32.6 billion when it could instead reduce its operating expenditures, business subsidies and further reduce the defence budget which all together amount to $34.5 billion?
Social Security Programs October 24th, 1994
Mr. Speaker, the hon. member has stated that the consultation document being debated for the past few days ago accommodated a need for change. I would like to tell him that we will wait and see how the people react, if they feel there is really a need to cut in our social safety net. Let me give him an example of the impact one of the measures contained in this document will have.
As this is only a consultation document, I will ask him to tell us how he feels more particularly about cuts in established programs, the post-secondary education shared-cost programs between the federal government the provinces. A $300 million cut is contemplated. Cutting transfers in this area will have the following impact on the provinces, which have no more financial resources than the federal government: just for the education system to be maintained, tuition fees will have to be at least doubled.
On the other hand, the same document mentions training objectives, the fact that in today's competitive market, adequate training is essential and we must find a way to target training well, to make sure Canadians are adequately trained. At the
same time, the government pushes for a measure that will result in tuition fees doubling, because we must recognize that these fees will double. I have heard the member give the example of a large family. Does he not believe that this measure will adversely affect access to post-secondary education and thus hinder training in terms of secondary and post-secondary education?
Hibernia Project October 18th, 1994
Mr. Speaker, the Prime Minister has a short memory. He should remember that his party supported the Hibernia project when they were in opposition.
How can the Prime Minister refuse to make a commitment not to invest any more public funds in this very risky venture, when there is no evidence that this project will ever be profitable?
Hibernia Project October 18th, 1994
Mr. Speaker, my question is for the Prime Minister.
Yesterday, the Minister of Finance announced in his economic statement that the government intends to end subsidies for megaprojects. While the government slashes social programs, it will sink over $250 million into the Hibernia project this year alone.
If the Prime Minister wants to be taken seriously, are we to understand that his government has now committed itself to not sinking the additional hundreds of millions of dollars required by the Hibernia project?
Economic Policy October 17th, 1994
Mr. Speaker, I wish to remind the Minister of Finance that the position taken by the Government of Quebec is the same as the position of the Bloc Quebecois in the Finance Committee report.
Could the Minister of Finance tell us what other scenario he intends to propose to the provinces in order to fulfil his commitment to abolish the GST before January 1996?
Economic Policy October 17th, 1994
Mr. Speaker, my question is for the Minister of Finance. Last Friday, in Toronto, during the Federal-Provincial Conference of Finance Ministers, he proposed a national sales tax of 12 per cent on goods and services, to replace the GST that his party had promised to abolish. That proposal was rejected by Ontario, Quebec, B.C. and Alberta.
Given the opposition of several provinces to such a national sales tax of 12 per cent, does the Minister of Finance not recognize that his proposal is doomed?
Registered Retirement Savings Plans October 4th, 1994
Mr. Speaker, does the Minister of Finance not realize that by thinking of taxing RRSPs, he gives a clear signal that he has chosen the option of raising taxes instead of doing what everyone expected of him, that is, cutting government expenditures?
Registered Retirement Savings Plans October 4th, 1994
Mr. Speaker, my question is for the Minister of Finance.
The government has not tried to stop speculation that RRSPs may be taxed starting with the next federal budget. The Minister of Finance himself fuels the uncertainty about this possibility that some observers call reactionary, outrageous and odious.
Does the Minister of Finance not agree that by fuelling the uncertainty about the future of RRSPs, he makes it much harder for thousands of middle-class taxpayers to make the extremely important retirement-planning decisions required at this time of year?
Income Tax Act October 3rd, 1994
Madam Speaker, before I start my speech on Motion No. 256, allow me to congratulate the people of my riding, especially those of Rouyn-Noranda, for making it into the Guinness Book of Records with the longest banner in the world. This 425-metre banner was made by several families to draw attention on the International Year of the Family. It was stretched in the streets of Rouyn-Noranda, yesterday. It was quite a sight, I congratulate them.
Now, let us move to the motion of the hon. member for Mackenzie which I will read before commenting on it:
That, in the opinion of the House, the government should consider the advisability of introducing amendments to the Income Tax Act so that taxpayers whose income may fluctuate from one year to the next would be able to average their income over five years.
The hon. member explained the objectives of this motion. At first glance, it would seem that it would benefit a number of people in very special job categories. For example artists can make a lot of money one year and very little the next. There are also those who are into production of some kind, like farmers or fishermen. Think of all the self-employed persons who, from one year to the next, do not know how much their income will be. This is the most positive aspect, which does not mean there are not others.
We tried, through various schemes-be it unemployment insurance, crop insurance or others-to stabilize income as much as possible, with relative success, depending on the area of activity. These insurance programs are precisely income stabilization schemes which guarantee a certain income stability.
The problem is that the motion is not restrictive in any way, and would apply to people with very high incomes in a given year, even though they do not belong to any of the categories I just mentioned. Does it mean that anyone with a sudden high income would be able to defer it at will? This might be a way of ensuring that individuals go on a sabbatical every four years. It just might be. But then again is that really the objective?
I believe that the real objective is more to help people whose income fluctuates due to the type of economic activity they are involved in. On several occasions, the member referred to the fact that nowadays our economy is very diverse and that it should be taken into account. However, I doubt very much that it is appropriate to do so for everybody since, obviously, the more time you have to plan how to manage your taxes, the easier it becomes to evade them. Balancing revenues and expenses is one of the fundamental principles in accounting but this goes slightly in the opposite direction and the more you separate the two the more complicated it becomes.
Of course, as the Liberal member mentioned later on, we must wonder whether the whole tax credit system and the entire tax structure would have to get adjusted to take the deductions into account? Should we allow the same income averaging? It would become extremely complex. This does not mean that we should not permit a certain level of income averaging in some specific economic sectors or for individuals involved in these sectors, but it should be done as simply as possible and only in a very limited and strictly controlled way. Obviously, this kind of measure cannot be very simple.
The Income Tax Act allows companies to carry forward profits and losses, at times with some degree of success, but at other times, the government is depriving itself of significant revenues. Companies are allowed to do some tax planning and they certainly take advantage of it. You could say that they reinvest this money in the economy, except that, in some cases, they minimize the taxes they will have to pay.
I have some concerns about extending this system to include all Canadians. I think that we should identify our target more clearly and even take a hard second look at the provision in our tax system that allows businesses to carry forward profits and losses over a certain number of years.
Family trusts are another means used to defer taxes. We have been looking at this issue since our arrival in the House of Commons and this morning is an ideal time to speak about it.
As you know, in the case of trusts taxes can now be deferred until the last beneficiary has died. In some cases, this represents 80 years of tax deferral. With tax planning horizons as distant as this, you can be sure that the government will be seeing very little revenue indeed. There are limits-taxes cannot always be avoided-but the longer they can be deferred, the more possibilities there are and the greater the amount due will vary.
I therefore have some reservations about the motion, and rightly so, in my opinion. Not that we need linger too long over the motive for the motion. I can recall people, particularly artists, calling for income averaging. Given that only people in certain sectors are affected by it, I think it should be looked at more closely.
The hon. member seems to have examined the question very carefully because there was a similar system in the past. He should now focus his attention on specific groups in certain areas of economic activity rather than on all taxpayers. When this is done, it will be possible to comment with more assurance. At this stage, there are arguments for and against.
We understand the reasons for the motion, but cannot give our support to something this broad. The goal is very obviously to allow all high-income earners to average their income, but it could lead to some odd situations. Would not those with high salaries or income from company profits-in other words, dividends from businesses they own-have an opportunity to average even more of their income than is already the case? They will have two ways of allocating their dividends or corporate revenues. This will produce rather surprising results at the fiscal level.
Public finances being what they are at present, I doubt very much that such an idea could be put forward. Since allowing this would reduce the tax impact on certain clients-artists, self-employed and seasonal workers were mentioned-such a measure would deprive us of revenues.
I think that we should secure revenues from other sources. Of course, a motion cannot pursue several goals at the same time, but we should keep in mind the need to look for revenues elsewhere. If we stay with the same approach, we may have to look at corporate or trust tax deferrals, particularly the extraordinary revenue losses from family trusts whose renewal had been allowed by the previous government. The current government, for its part, does not appear committed to correcting the situation as it does not seem to believe that there are large revenues to be collected from this sector.
In conclusion, although the goal is commendable, the motion is much too broad and troubling because everyone would be allowed to average their income. It would be difficult to support the motion but, given its goals, the hon. member could explain it further and ensure that specific sectors are targeted, in particular the arts community. From there we could move on to a private member's bill or something more concrete in order to get good results.