Pierre Brien

[Committees Of The House, June 22nd, 1994]

Mr. Speaker, it is now my turn to speak on this infamous report of the Liberal finance committee on the GST. I have worked very hard on this matter from the very beginning, along with my colleagues from Saint-Hyacinthe and Charlevoix.

When we first saw the draft report, we were extremely disappointed to see the direction in which the Liberals were heading after all the public hearings, because no one had suggested as an alternative that an integrated tax be introduced. Just try to explain to people now contending with two different taxation systems that the existing GST is going to be replaced by a relatively similar mechanism!

Government members roundly criticized this tax when it was first introduced and continued to do so during the election campaign. The Prime Minister said it was a bad tax, and so did the Deputy Prime Minister who even said she would resign if the GST was not abolished. The Minister of Foreign Affairs and all the Liberal members said it was a bad tax, and now they are asking the provinces to do away with their own tax and replace it with the GST. This is scandalous, Mr. Speaker. After criticizing this as a bad measure, now the government wants to extend it to everything. This makes no sense.

Furthermore, the government wants to broaden the tax base so that the tax will now apply to food, pharmaceutical products and health care. In addition to using strong-arm tactics where the provinces are concerned, the government boasts of wanting to simplify the system for small businesses. I want to touch on this point a little further because up until now, this issue has gone relatively unnoticed. Once again, the government is merely throwing up a smokescreen and I will explain why.

The report says that businesses with earnings of $200,000 or less will be able to use the business transfer tax system. However, the government does not want to call this tax by its real name, preferring instead to call it a VAT. This tax is nothing but a GST hybrid, an added value tax, if you will. This must be clearly understood. Businesses with earnings of $200,000 or less are being told: Now all you have to do is take the sales total, subtract from it your purchases and file an annual report". What they are not being told, however, what the report does not have the courage to say, is that throughout the year, until they file their report, businesses will have to use an accounting method which takes into consideration taxable and tax-free purchases,

as well as taxable and tax-free sales. This is exactly what they must now do with the current GST.

What will happen? Until now, small businesses could use the so-called quick method to calculate the amount of GST. So how will the new system be different? Most likely, it will be worse than the quick method which was not used very much. The government probably should have pushed the quick method more and not changed anything in this regard. But it did not, Mr. Speaker.

The report contends that the new system will be simpler for 80 to 90 per cent of small and medium-sized businesses. Lest we forget, businesses with earnings of $500,000 and over account for 94 per cent of all sales in Canada. What does this represent for Conservatives, in terms of change? Ninety-four per cent of sales will still be subject to the same GST. However, small businesses which account for the remaining 6 per cent of sales will have to contend with a more complicated system.

When they get wind of this proposal, they are going to react very strongly. Let me give you four cases where the new system will prove to be more complicated. To digress, the report is rather non-committal when it says that maybe the door should be left open even for businesses with earnings of between $200,000 and $500,000. On this point, they changed their minds in mid course. The final version says that this could perhaps be an option for businesses with earnings of between $220,000 and $500,000.

Think of it, Mr. Speaker. A firm could sell some products that are taxed and others that are not. But whether the report tells us that they do or do not want to tax food, there will still be exceptions.

If there are any exceptions, how will firms with sales of $200,000 or less be able to have a simplified system if they sell different types of products? What happens if these firms expand? What will happen to a firm with sales of $400,000 that hopes to achieve growth, which is a universal goal in business? When that firm's sales top the $500,000 mark, it will be forced to change its accounting and taxation systems. This is a terrible outrage!

Companies will have to decide which system is most profitable for them. They will spend their time trying to decide between the business transfer tax and the goods and services tax. And they will see that these are relatively similar systems, so they will probably prefer to keep the GST. Many firms will prefer to stick with the GST. If the threshold is set at $200,000, it is even worse. What change? Most firms with projected growth will not change to another system. Firms engaged in interprovincial trade-the provinces will still have differing rates, and it should not be assumed that there will be a uniform rate across Canada-will have to take sales and purchases made in other provinces into consideration in their accounting.

This translates into still more new accounting for these firms. The claim is that now these small firms could, in their annual income tax returns, manage to provide the desired statements. But they will not be able to; they will have to continue keeping daily accounting records. Furthermore, they cannot claim the tax credit for purchases from non-registrants-that is, people or businesses with sales of $30,000 or less who are not obliged to register for the GST. So special accounting records will have to be kept for that purpose as well.

And this is the simplified system for small businesses? Is this it? It is a dog's breakfast. There is no way in the world that this will be simpler. People are being taken for something they are not when they are told things like this.

There are a number of things I want to say in the few minutes left to me. Easier to manage says the report in one of its objectives. Easier for whom? For the government? Do you think that the present staff at Revenue Canada will be able to handle the introduction of this new business transfer tax, a tax of which many small businesses will probably never avail themselves. They will nonetheless investigate the possibility. They will need information. People will have to be hired to provide this information. And after that, the tax will have to be administered.

Since the GST will still be widely used, people will continue to be needed to run that system. Administration costs, which are already high -at least $600 million-are likely to increase. What a mess! What a waste! That is what the Liberal GST is about. Is this the kind of improvement the Liberals have in mind? The public will never go for that, never!

It will not be easier or simpler for businesses either. Someone mentioned the tax credit for low-income individuals earlier. This aspect has been debated vigorously here as well as elsewhere. Huge petitions were brought in, petitions that said the tax credit had to be indexed, that it was wrong to impose a regressive tax. Now, in this report, they do not even have the courage to state that, if a value added tax must be maintained, tax credits for low-income individuals will have to be indexed yearly.

The rate of inflation will not remain as low as it is forever. There will be years when it will be higher. If the economy grows, so will inflation. But the credits will remain the same. In time, the gap will grow. Also, this tax is a hidden tax. We are told that it will not be, that the amount will be shown on bills. That is not true, not at all, because bills could simply mention that the total amount includes a tax of such and such a percentage.

Can you imagine small businesses figuring out their purchase price and the tax paid? They are going to have to take the total amount, take out their calculators, divide all those figures, reprogram their computers-What a nightmare! It is a real nightmare. That is the Liberal GST? That is the improvement the Liberals had promised? Are they true to their commitment? The public will not be fooled. That is not what they had promised. They are in breach of an election promise, and this is a major breach too!

We are proposing an alternative. We are offering them an alternative. The world must have gone crazy, when the opposition offers ways to fulfil a government commitment. We told them, "If you want to abolish the GST, there is only one solution: to abolish it and leave this area of taxation to the provinces. Of course, there will be less revenue, but you can then tinker with the transfers to the provinces, especially in areas where there is a lot of duplication". Reducing overlap is also one of the goals stated in the red book. You could achieve several goals at the same time.

You are signalling to me that I do not have much time left, Mr. Speaker, so I will conclude by quoting from an article by Michel Vastel, a renowned Parliament Hill journalist, that appeared in this morning's newspaper: "Another solution mentioned by the committee"- which did not look at it because it was apparently not its mandate-"and recommended by the Bloc is to abolish the GST and make up for the shortfall by abolishing transfers to the provinces".

He goes on to say, "They would then eliminate at once a lot of duplication and a bunch of public servants. All this is obviously too simple and dangerous for a federal government that wants to raise its profile". He could have added, "that craves absolute power and control and constantly tries to confront the provinces". That is why the Premier of Ontario compares them to a gorilla. I would be ashamed to be compared to a gorilla, and by a Premier no less! But he is right. The people of Ontario should listen to their Premier because he is handling this very well.

I will conclude by saying that they are reneging on their election commitment and that the people of Quebec and Canada will never let them get away with it.

[Committees Of The House, June 22nd, 1994]

Mr. Speaker, I have a two-part question for the parliamentary secretary.

I heard him say that the committee's Liberal majority report draws no conclusions and makes no recommendations on whether the tax base should be broadened to include food, pharmaceutical products and the like. However, the same report says that a simplified system will be adopted for small businesses so that they will only have to report once a year, simply by subtracting purchases from total sales.

Clearly, if the system is to be simplified and if the tax is going to be called a business transfer tax, then everything will have to be taxed. That is the hypothesis behind this model. Can the parliamentary secretary tell me if the recommendation pertaining to small businesses would still allow them both to preserve their current accounting methods and to report as proposed in the Liberal committee report or will they once again have to adopt a different accounting method, one which would take into consideration taxable and tax-free purchases as well as taxable and tax-free sales? That is the first question I would like him to answer. If there continues to be exceptions, then the system will not work. Therefore, to say that the report draws no conclusions and makes no recommendations on whether to broaden the tax base to food is to lack courage. The hypotheses underlying the proposed simplification of the business transfer tax would clearly indicate quite another matter.

The second part of my question has to do with the parliamentary secretary's comment that low and middle-income earners would be compensated, regardless of the new system implemented. How does he explain the fact that families with two young children will receive the same credit, regardless of whether their children are 12 and 14 years old, or 14 and 7 years old years, or whether in one case, a child is sick and needs medication? How can he guarantee that both families will have the same consumption patterns? How can he be certain of the amount these two families pay in taxes? How can he say this credit system is effective? These are questions which I would like the parliamentary secretary to answer.

[Goods And Services Tax, June 21st, 1994]

Mr. Speaker, would the Minister of Finance agree that the Liberals' hidden GST would oblige Quebec to relinquish control over the $5.7 billion it raises in retail sales tax and that consequently, this is a direct attack on the fiscal autonomy of the provinces, as was stated by the Quebec Minister of Finance?

[Goods And Services Tax, June 21st, 1994]

Mr. Speaker, in its report, the Liberal majority on the finance committee recommended full integration of provincial sales taxes with the Liberals' hidden GST, in order to have just one national tax from coast to coast. This proposal would oblige the provinces to comply with federal legislation that would determine administrative procedures and the range of goods subject to GST.

My question is directed to the Minister of Finance. Does he support the approach recommended by the report, which bodes ill for the autonomy of the provinces since fiscal policy would, from now on, be dictated by Ottawa, thus relegating the provinces and Quebec, at best, to the role of branch manager for the federal government?

[Excise Tax Act, June 21st, 1994]

Mr. Speaker, it seems odd to be discussing a bill proposing a reduction in tobacco taxes and to find in it a completely unrelated measure on air transportation. The latter is certainly the measure we oppose the most in this bill. I am going to the bill in perspective a bit and speak about what led up to it, and then about what we support and what we do not.

First of all, we have to remember that there was a serious problem with cigarette smuggling, especially in Quebec but also very serious in Ontario and getting worse in the other provinces. It was a problem that was spreading from east to west. Of course smuggling was not bad yet in the western provinces, or at any rate had not assumed the same proportions.

To alleviate the problem, given that the situation had dragged on for several years, it was almost impossible to come up with a solution that did not involve reducing taxes, that is, using price-related incentives to bring buyers back to the legal market.

The price of cigarettes had gone up considerably over the last six or seven years and tobacco users were getting increasingly annoyed by the increasing tax burden, especially in conjunction with higher taxes of all kinds. Their annoyance pushed them toward the black market, the underground economy, where they bought with a clear conscience. It became a very common practice.

Various measures were tried to correct the situation, but nothing worked, for as we know there was very little real control in the field, even with all the resources of the RCMP, the Sûreté du Québec and everybody else. It would have been very difficult to solve the problem, because it was so wide-spread. It took so long to react that a contraband network had time to spring up, take over the market and provide excellent service, up to and including home deliveries.

That is why at the start of this session we strongly urged the government to take action, to move rapidly after all the pressure and especially after the "MATRAC" movement in Quebec, where merchants themselves decided to defy the law. The problem had clearly got out of hand and at that point the government decided to act. So as far as reducing the tax as such is concerned, there is no major problem.

There are plenty of people who would say we should be cautious. We all know the negative effects of tobacco use, and it is certainly not our intention to encourage consumption. However, bringing people back to the legal market is one of our concerns, as is encouraging people to respect the law and the system that our society has set up.

Except that at the same time as these measures were introduced, the government said it would be bringing in a battle plan, a plan to encourage people not to consume tobacco products. There is supposed to be a vast education campaign on the harmful effects of tobacco use, focussing especially on young people.

So one of the measures in the bill, a surtax on tobacco manufacturing profits, is going to make the tobacco manufacturers finance the plan themselves. But here a first reservation must be voiced. The anti-smoking campaign is supposed to last three years, while the surtax apparently will last longer than that or be permanent.

So at the end of the three years, the revenue that is supposed to go toward discouraging tobacco use will be clearly reduced because the surtax will no longer be used for the campaign. It should have been stipulated that the money be used for this purpose. Besides, the surtax revenues are higher than the amount required for the plan announced by the Minister of Health, which involves spending $185 million over the next three years, while it is projected that the surtax revenues will be at least $210 million. So there is one thing to query, the fact that this money will not be allocated directly when that was what we were told would happen when the anti-smuggling campaign was announced.

There are measures, there is the surtax, which is also designed to penalize to a certain extent people who really collaborated with the smugglers-to punish the producers, in fact, when we know that they can easily get it back by raising the price to the consumer. So this may simply raise prices again somewhat.

Obviously there are people who think that lower prices will stimulate consumption, except that you have to bear in mind that the black-market price was extremely low, even ridiculously low. So the data that should be considered, the prices that should be compared, are the new price now with the black-market price, and not the price now with the old price, since in any event it may have been as little as one-third of the sales that were made on the legal market, mainly in Quebec and Ontario.

Mr. Speaker, these are measures that do not strike us as so bad overall, but the government has done something really crazy with respect to inventories. All the little vendors who suffered the harmful effects of smuggling over the past three or four years, who already have had to shoulder significant losses in most cases, will only get a partial rebate on the stocks they had at the time the announcement was made or the tax reduced.

Since those merchants paid the full amount of the tax, the government should logically reimburse them in full.

The government has said it will refund only $5 a carton, while in Quebec, for example, the reduced federal tax is equivalent to $10 a carton; so this is only a 50 per cent rebate.

Why only $5? Why make those merchants, who have already absorbed costs over the past few years, pay for a portion of the anti-smuggling campaign? And these are small vendors, convenience store owners, small shopkeepers, who are affected. Some would be spared; the ones with at least 5,000 cartons in stock would get a full rebate. Where is the logic in setting a limit of 5,000 cartons?

I will give you an example. In my riding there is a wholesaler with an inventory of 3,000 cartons. He paid $10 in tax on each of them, but he will get back only $5. This is an instant $15,000 loss. People like hin do not make astronomical profits. And it is a serious matter for him, $15,000. It may ultimately mean laying someone off. It might be argued that the market is recovering and this will enable them to get their money back, but that certainly will not be true in the short term.

When departmental officials appeared before the committee, they said that when the opposite occurred, when taxes were increased, retailers then had an advantage, because they had paid the old tax. So when they sold their products, they profited, if you will, from the difference. It is true, but never had tax increases been so drastic, and now the tax has been reduced.

We are strongly opposed to this. And for the same reasons as those mentioned by the hon. member from the Reform Party who spoke just before me-only the minister can table an amendment involving a tax increase. We tried to make many people aware of this point. Representatives of small businesses tried to bring pressure to bear on the minister, but without success.

This is very discouraging, and it is one reason why we cannot support this entire component, because this measure alone will be very harmful to small business.

I would now like to address another feature of the bill. One might ask why a measure concerning air transportation was included in a bill to reduce cigarette taxes.

When we take a closer look at this measure, the whys and wherefores become a little clearer. They wanted to hide it, so that no one would notice that it was going through. They knew there was good support for reducing cigarette taxes, so they put in a controversial measure involving air transportation that affects primarily the regions and the remote areas. A good way to avoid a more heated and more public debate on this particular point was to bury it in a bill whose primary objective has nothing to do with transportation.

The repercussions of this measure will be very serious in most outlying regions, which are already hard hit by the deregulation of air transportation. In the past few years, the price of tickets has gone up considerably. It costs more to travel from some regions in Quebec to Montreal than it does to travel from Montreal to Paris. That situation runs counter to all logic. We should help regions develop and take charge of their future. While, on the one hand, we are trying to do that, on the other hand, measures that will affect those regions are being imposed. I live in one of those regions; I represent the riding of Témiscamingue, which has Rouyn-Noranda as its major airport. We are very much affected.

What is really going to happen with the structure? The former tax structure had a flat rate tax, and then a graduated rate and a $40 maximum. That means that when we bought a $500 air ticket, we paid the maximum $40 tax.

Now we are told that the flat rate is going to be a little lower and is going to go up gradually, but that the maximum tax will now be $50 on all regional flights. And those are not necessarily long-haul flights. They are flights to the major urban centres. The amount of the tax will increase, because it is not often that a ticket costs less than $500, not often at all for a return ticket.

When you get into prices a little over $600, you reach the new $60 maximum. All air tickets costing $450 or more will be negatively affected; and that is true for all regions. I am not talking about Quebec, or the Maritimes, or the west, as a region in itself; I am talking about regions within Quebec, what we call regions here. The same thing will be true in northern Ontario. The ridings adjoining mine will be affected in the same way, and I am sure that when some Liberal MPs hear from the people in their ridings, they will see that this is certainly not a popular measure. But, since it is going pretty well unnoticed, people will not know exactly who to blame. Did the provincial government

or the federal government increase this tax? It will be hard to tell. People must be told.

The overall consequence of this restructuring of the tax on air transportation will bring in extra revenues of $24 million this year and $44 million next year. Mind you, the tax on short-haul flights, from Ottawa to Toronto or from Montreal to Toronto, for example, will go down. The tax on air tickets costing less than $450 will go down.

The regional flights will bear the brunt of that $24 million or $44 million and even more, since the tax on short-haul flights will generate less revenue. What we are talking about here is the 80 per cent of flights that are short-haul flights which will benefit, and the 20 per cent of flights that are regional flights which will be penalized. It is the 20 per cent of flights to outlying regions that will have to bear the brunt of the $24 million this year and $44 million next year. That is not acceptable, not at all.

A one dollar increase in the price of an air ticket in a region where the price is already exorbitant is completely unacceptable. A $10 tax increase is even less acceptable; it contradicts the logic of all those promises of more air transportation tax relief for the regions, and it contradicts other policies to support regional development and help the regions take charge of their future.

What we have to understand here is that many of those flights are used by people from federal or provincial government departments, travelling to the major urban centres and thus simply passing on higher expenses to the other level of government or within their own government, while penalizing consumers.

It would have been possible to look at international flights, as was recommended to the Finance Committee by the Baie-Comeau chamber of commerce, for example-which, by the way, has worked closely with the chambers of commerce in several regions of Quebec, including those in Val-d'Or and Rouyn-Noranda in my region. Would it not be possible, without necessarily losing any revenue, to look at taxation on those flights?

Through the transport committee and the finance committee, the government is being asked to look at why efforts at deregulation and competition are not bringing prices down. The frequency of flights has gone up in certain regions, but the cost of tickets has gone up, while it was anticipated that it would go down. Perhaps it would be appropriate to take a good hard look at the situation and see what could be done to support regional development.

Because of the fact that small merchants who had stocks of cartons of cigarettes will not be reimbursed and because, in a rather underhanded way, a tax is being introduced that will penalize the regions, we cannot support this bill, even though we find some aspects, such as reducing taxes to fight cigarette smuggling, quite positive.

Overall, the fact that some measures, especially the measure concerning transportation, are quite negative-although the measure concerning small businesses is very negative as well-, means that we shall vote against this bill.

I hope however that some of our colleagues from the Liberal Party-particularly those from northern Ontario-will wake up and pressure their government into eventually restructuring air transportation, allowing for regional development and giving regional authorities a better opportunity to plan their economic development than the present contradictory initiatives taken by different departments. These initiatives have left the regions extremely skeptical as to the federal government's capacity to manage economic development in more remote areas.

[Excise Tax Act, June 20th, 1994]

moved:

Motion No. 1

That Bill C-32 be amended by deleting Clause 2.

Motion No. 2

That Bill C-32 be amended by deleting Clause 3.

Motion No. 3

That Bill C-32 be amended by deleting Clause 4.

Mr. Speaker, we have decided to table amendments to Bill C-32 and I will briefly explain why. Then my colleagues will make additional comments.

First, we must put Bill C-32, which is entitled an act to amend the Excise Tax Act, the Excise Act and the Income Tax Act, in its proper context. Originally, the purpose of this legislation was to implement the federal action plan on tobacco smuggling, as well as changes proposed to the tax structure by the government, this past January or February.

However, clauses 2, 3 and 4 of that bill include measures which affect air transportation and result from the last federal budget. These clauses provide that, on flights with a ticket price of more than $500, the total tax amount, which is currently $40, will progressively increase to $50. However, for tickets costing $700 and more, the tax payable will now be $50.

We feel that this is totally unacceptable, given that most remote areas were very affected by the deregulation in the air transportation sector. Considering the current cost of airline tickets to these regions, it seems totally unacceptable to

increase the burden for consumers living in these regions as well as for taxpayers who are already making a very big contribution.

This is why, through our amendments, we propose to bring that tax back to at least the previous levels. At the same time, we urge members of the transport and finance committees to review the situation and bring airfare to a more reasonable level as regards remote destinations.

Here I do not mean the Quebec, Atlantic or western regions. I am referring to regions such as mine, Abitibi-Témiscamingue, Quebec's north shore and Gaspé regions and, in fact, most regions of Quebec and northern Ontario. Several Atlantic regions will also be adversely affected by the new tax. This measure went unnoticed in the last budget and is now hidden in Bill C-32.

We propose these amendments so that the Department of Finance does not get $24 million more this year and $44 million more next year at the expense of taxpayers living in remote areas. Indeed, we think this is totally unacceptable. I do hope that the government will realize the impact of this bill and withdraw clauses 2, 3 and 4.

[Ethics, June 17th, 1994]

Mr. Speaker, I would ask the Prime Minister to read the bill thoroughly. Compensation can be made with Cabinet approval.

Since yesterday's statement was silent on this issue, does the Prime Minister intend to follow up on the Minister of Transport's suggestion to no longer allow lobbyists fees as a tax deduction, a measure which the American government intends to take?

[Ethics, June 17th, 1994]

Mr. Speaker, yesterday, the Prime Minister unveiled his government's action plan to take, as he put it, "unprecedented action to open up the process of government in Ottawa". In his statement, the Prime Minister said, and I quote: "Deals like the Pearson Airport deal must never be allowed to happen again".

Since the Prime Minister claims to mean business when he talks about restoring integrity in the federal administration, how does he explain his government's refusal to give to the ethics counsellor the mandate to investigate the role of lobbyists in the Pearson Airport scandal?

[Pearson International Airport Agreements Act, June 14th, 1994]

Mr. Speaker, it is not with joy in our hearts that we speak to a bill like this one, except that this afternoon's amendment would make it more reasonable.

My colleagues talked about various provisions earlier, about the state of mind that prevailed at the transport committee. I would like to add a few things myself. Earlier I heard Liberal members refer to their commitment, to the fact that the people asked them to cancel the Pearson Airport contract signed by their Conservative predecessors on whom they put all the blame in this.

The deeper we dig into this issue, the clearer things become. People are starting to dig deeper and that is why the government is in a hurry to get rid of this case once and for all to avoid getting to the bottom of things.

Reference was made to witnesses who found it difficult to come before the transport committee. Obviously, it was not in their interest to shed light on this issue and the government did not want to do it either. Why? Because it is not true that only the Tories or those very close to them were to blame in this.

On top of all this, the government found a way to compensate its friends and I do not think that was what the people asked for. The member for Hamilton West just said: "The people asked us to destroy this agreement, to cancel it". Except that the people never asked them to compensate their friends. They never as

Yes, we were told that next year the Auditor General could look into it. As in all the other cases, it will be on a page in his report, denouncing some other anomalies buried among all the other scandals involving the management of public funds. It will make the news for a day, a few hours, and it will be drowned in other bad news, so the government will be able to get away with it and never have to face the people and be accountable.

That is why the Reform Party's amendment at least suggests that these things should be more transparent, that this compensation should be submitted to the House and debated more publicly and openly.

In this regard, this amendment is a second option. We would prefer not to have any compensation at all, especially with all the scheming-that is really the word for it-surrounding this whole contract and its cancellation. If we had gotten to the bottom of it or if someone some day is able to get to the bottom of this story, there would be a big political scandal that would greatly affect the credibility of the government and of all politicians who were here in the 1980s doing business that way.

It is traditional in those parties. Whether it is the Liberals or the Conservatives, they act the same way and there are other agreements made in all sorts of other ways that the people mistrust, perhaps rightly, because when something is rotten in a deal, they refuse to clear it up.

For once we would have had an opportunity to start over on a sound footing, to find the causes and sources of these problems, why politicians are subject to all sorts of-how should I say this?-temptations that make them do deals which are far from beneficial for everyone.

The original idea behind all this of turning airport management over to the community was not necessarily bad. Except that when we see how it is done in practice, we realize that there are many problems. It now casts great doubt on the whole process of privatizing airports or conceding them to community corporations. Now everyone is on the defensive about the process. This is what I had to say regarding comments made a little earlier in the debate.

As for the amendment tabled by the hon. member for Beauport-Montmorency, it has the effect of abolishing clause 10 of the bill. In order to put things in perspective, I will read clauses 9 and 10, and then explain why we propose that the latter be deleted. Clause 9 reads: "No one is entitled to any compensation from Her Majesty in connection with the coming into force of this Act". Good! That clause is just fine; the problem is clause 10, which says: "If the Minister considers it appropriate to do so, the Minister may, with the approval of the Governor in Council, enter into agreements on behalf of Her Majesty to provide for the payment of such amounts as the Minister considers appropriate in connection with the coming into force of this Act, subject to the terms and conditions that the Minister considers appropriate".

That clause includes the expressions "If the Minister considers it appropriate" and "the approval of the Governor in Council". In other words, the cabinet could and will grant compensation, because the hon. member for Hamilton West said earlier that we must compensate those who incurred costs related to this project. Is it normal in the private sector to compensate people who, for all sorts of reasons, try to get a contract or work on a project, when their efforts are fruitless?

Some hard thinking is in order because if we did that with every public contract, regardless of the outcome, we would open the door to an endless process. That clause is terrible and it sets a rather serious precedent. After all, no compensation was provided in other cases. In the case of the helicopter contract, for example, any compensation must be approved by cabinet and the Governor in Council. All this is very worrisome.

Who does the government want to protect with this clause? You can be sure that some evidence will have to be produced, or that requests will have to be made by those who participated in the project. Two groups were involved: Claridge and Paxport. One is closely identified with friends of the Liberals, while the other has closer ties with the Conservatives. I am prepared to say that the requests made will not be reviewed in the same way, and this is why it would be appropriate to have a much more open and transparent process. I understand that some information is of a private nature. In reference to the public domain and compensation paid by taxpayers-these same taxpayers, whom the government must represent by cancelling the Pearson Airport contract, will have to pay compensation at the discretion of Cabinet. This is scandalous.

We have seen some of these enemies with Claridge, specifically all of those people who are closely identified with the Liberal Party, such as Senator Kolber, Peter Coughlin, Herb Metcalfe and others. Those people are not identified with the Conservative Party, and a way will be found to compensate them in a bill. So I think the thrust of our amendment-in fact, I am convinced of this-is that there will be no question of compensation in a completely crooked process. Particularly since, in the light of the work of the Committee-as my colleague mentioned earlier-it was never clearly demonstrated that compensation should be paid. The whole story is very nebulous, and there has been a refusal to get to the bottom of it.

Behind the scenes, it is said in secret said that it will be possible to shed more light on all this and get the clarification necessary to provide appropriate compensation, although we know full well that lobbying fees are tax deductible anyway. This is the kind of thing that the public finds extremely irritating. It makes people mad to see this type of process, to see the government caught red-handed in the act of compensating its friends. We cannot subscribe to such a policy.

Why should Canadians and Quebecers pay compensation for a project that was poorly managed, a project that has now been cancelled and that some day will be back on the agenda. The public will have to pay, but it is not unlikely the same parties will resurface in some other form. They will be the big winners. Do not believe for one minute that these people will just disappear. They are still around. Do not be surprised if they become players in the same project, in some other configuration. They will find a way. No one in this group is going to be on the bread line tomorrow morning.

I think it is important to tell the public that the government tried to sneak this bill through. At every stage, in committee, and at second and third reading, we had to go to the very limit of the time available for debate to show there were a number of discrepancies and give people with a more than casual interest more time to take a close look at what was happening. The government is trying to get this bill through the House in record time, and that alone is sufficient cause for concern, both for the public and the opposition parties. I hope the government will wake up and support the amendment that would delete clause 10 of the bill.

[Supply, June 2nd, 1994]

Very well, Madam Speaker. When I heard my colleague talk about train service, it reminded me of what the hon. member for Bonaventure-Îles-de-la-Madeleine had said. My question is twofold.

The first part refers to what was said earlier. My colleague mentioned train service. The word is that there is talk across the way about a high speed train to develop both regions, Toronto proper and the metropolitan area. This train would apparently have to stop at certain borders.

I would like my hon. colleague to comment on that, because as far as I know, planes do not stop in mid-air when travelling from one country to another to have all passengers passports checked. I think there is a serious problem there.

I would also like him to tell us about independent workers. He never said anything about it, but there were designated areas in which assistance was provided to unemployed workers who wanted to start up a business. But this year, all designated areas will receive almost no money at all. I would like to know what my hon. colleague has to say about that.