David Walker

[Income Tax Act, April 26th, 1994]

Mr. Speaker, it gives me great pleasure to participate in this discussion of an issue important to many members of the House.

Hon. members are no doubt aware that the 8.5-cent per litre excise tax exemption for the ethanol portion of gasoline fuels was introduced in the 1992 budget to provide "a level playing field in the taxation of alternative fuels". Prior to 1992, federal excise taxes on motor vehicle fuels did not apply to propane, natural gas or pure methanol or ethanol used as motor vehicle fuels. However the excise tax was imposed on all gasoline fuels, including ethanol and methanol blends.

The exemption from the excise tax for the ethanol and methanol portion of blended fuels was introduced to ensure that all alternative fuels were subject to the same federal excise tax treatment during a period of technological and marketing development of these fuels.

I should note that the excise tax exemption is limited to gasoline blended fuels that use ethanol and methanol made from renewable feed stocks such as corn, grain and wood. Ethanol fuels derived from biomass offer a number of environmental benefits that generate, for instance, lower levels of carbon monoxide than in the case of gasoline.

The excise tax exemption for gasoline-ethanol blends continues to be entirely consistent with the government's current policies on the tax treatment of alternative fuels. Therefore, I would like to assure members that the ethanol and methanol that are produced from biomass and used in gasoline-type fuels will remain exempt from the 8.5 cent per litre excise tax during the course of this government's current mandate.

By encouraging the blending and marketing of ethanol-gasoline blends, this commitment should be of significant assistance to Canadian ethanol producers. It should also benefit the agricultural sector by providing additional domestic markets for grain and corn, as well as the potential for new markets for wood and agricultural waste products.

[Questions On The Order Paper, April 26th, 1994]

Because of the inequities associated with previous approaches of providing tax assistance to northern residents, in 1988 a task force was established to study this issue and to make recommendations. The task force held public meetings in many communities across the country and received a number of written submissions. On the basis of these consultations, the task force concluded that an approach based on broad zones of eligibility was preferable. The northern and intermediate zones were defined using ranking systems developed by the task force which were comprised of objective criteria relating to environmental factors, community characteristics, and location.

Full implementation of this system will result in gradually making certain communities ineligible for some or all of the benefits. For example, those communities becoming ineligible for all benefits were entitled to full benefits until the end of 1992, received two-thirds benefits in 1993, will receive one-third benefits in 1994, and zero thereafter.

A review of the events that led to the implementation of the current system establishes that the zonal approach is the right one. The system must be given a chance to reach a mature stage.

When the full impact of the current system is known after the transitional measures have run their course it will be possible to determine whether the current policy is fairer, simpler, and more effective than its predecessors at providing tax assistance to residents of northern and isolated areas.

[Electoral Boundaries Readjustment Process, April 19th, 1994]

Mr. Speaker, I am pleased today to rise and speak in favour of the motion to refer the issue of the electoral boundaries readjustment process to the Standing Committee on Procedure and House Affairs.

The current process of adjusting constituency boundaries by independent commissions has been in existence since 1964 when the Liberal government of Lester Pearson passed the Electoral Boundaries Readjustment Act. Before then the House of Commons itself was responsible for electoral boundaries readjustment.

The current process has been in place since 1964. After 30 years the time has come for a fundamental review of all aspects of this process by the House of Commons which passed the 1964 law in the first place.

On April 13, 1994 this House adopted Bill C-18. It provides for a suspension of the current electoral boundaries readjustment process for a period of 24 months in order to allow for a fundamental review of all aspects of the process. All aspects of this matter should be reviewed by the Standing Committee on Procedure and House Affairs in a thorough and thoughtful manner.

Some dissatisfaction has been expressed with regard to the current process. I would like to take a few minutes to elaborate on this.

For example, the commissions published their initial proposals without having a chance to obtain input from interested parties. When published therefore, these proposals often come as a complete surprise.

From my former days as a political science professor at the University of Winnipeg when I followed the electoral boundaries review process in a more dispassionate way, I can tell you those in the academic community who were watching the process were indeed surprised by the results at times. They were more surprised at how difficult it was to learn in detail exactly how the new boundaries were set.

Although some commissions explain the reasons for the proposals, they are not required to do so. It is therefore very difficult for a person who intends to make representations, to intervene with a commission, to know the reasons behind the

proposal and to make objections or present alternatives in an effective manner. In that respect the public participation process is not what it should have been.

The criteria the commissions must use to set the boundaries may have to be rethought. The criteria are quite general and, depending on the approach taken by each commission, the rationale for drawing electoral boundaries can differ considerably from one province to another. That has created a lot of controversy in this process for setting boundaries since 1964.

The continual increase in the number of members in the House of Commons after each census is another issue of some concern. Since Confederation the number of seats in the House of Commons has increased steadily from 181 in 1867 to the current level of 295. All of us have heard the electors express frustration with the constant growth of government, the size of the House of Commons and the cost associated with Parliament. This issue should not be passed over lightly.

The above examples are but a few of the areas that should be thoroughly reviewed by the standing committee. The government has therefore decided to ask the House of Commons to refer the electoral boundaries readjustment process to the House of Commons Standing Committee on Procedure and House Affairs for review and to develop improvements to the current procedure.

The standing committee's terms of reference provide that it can bring in a bill respecting the system of readjusting the boundaries of electoral districts.

The committee shall consider the general operation over the past 30 years of the Electoral Boundaries Readjustment Act, including the following major issues: whether there should be a continual increase in the number of members in the House of Commons after each census as now provided in section 51 of the Constitution Act; a review of the method of selection of members of the electoral boundaries commissions; a review of the proceedings of the commissions, including whether they ought to make alterations to the boundaries of existing electoral districts wherever possible; and a review of the involvement of the public and of the House of Commons in the work of the commissions.

I may add to that if we make improvements, as this House does in so many other areas in the way we deal with the country, in the way we involve people, then many of the problems we meet in a process such as we have in the last month in this particular domain will be solved. It is incumbent upon all parliamentarians to think of ways to improve public participation, in the ways in which the general public influence such major decisions such as the nature, shape and composition of their constituencies.

This committee is to report no later than December 16, 1994.

Using one of the new procedures adopted by the House when it approved the government's parliamentary reform package at the outset of this Parliament, the committee will be authorized to frame legislation implementing its proposals.

Again there are benchmarks in the new House where we try to convince Canadians and try to show by example that we are serious about the role of individual members, serious about the role of people outside of the ministries doing work as fundamental as preparing legislation. As I said, this will turn out to be a benchmark in the way we redevelop this House and its approach to problems.

This will be the first opportunity for a parliamentary committee to initiate legislation in response to requests submitted by the government. We are following through on our commitment to strengthen the role of members of Parliament in developing legislation.

The redistribution of electoral boundaries is an important matter for the whole country. We are requesting the standing committee to not only study the issue but to develop and recommend legislative measures it feels may be required to solve this problem.

In conclusion, the readjustment of electoral boundaries touches important questions of democratic representation in the House of Commons. Now is the ideal time to have a thorough review of the process undertaken by the House of Commons itself and to hear Canadians from coast to coast to coast through the standing committee. The committee hearings will be public and outside witnesses will be heard.

[Income Tax Act, April 19th, 1994]

Mr. Speaker, I would like to take this opportunity to lead off the debate on third reading of Bill C-9. The bill proposes to implement a number of amendments to the Income Tax Act that were announced by the previous government.

Legislation to implement these measures was introduced last June but the bill died when Parliament was dissolved. For these measures to have legal effect new legislation must be passed now by this Parliament.

Let me be clear at the start by explaining why we are going ahead with this legislation. Simply put, these past tax measures were introduced some time ago and many were said to be effective immediately when announced.

Many thousands of Canadians took the government at its word and relied on these announcements when making important personal decisions. Many have, for example, used their RRSPs to buy or build houses. Other Canadians have relied on these announcements in making significant investments or hiring new employees.

The commitments these taxpayers have made are for the most part irreversible. Consequently, if we were to reverse course many people would be put in a difficult position, an unfair situation, and the trust that Canadians have in their government, a trust that we must always strive to keep and enhance, will be dealt a powerful blow.

However, we do not approach this question as prisoners of the previous government's actions or inactions, to put it more precisely. We have carefully reviewed the measures in this legislation and believe we can support them in their own right.

With this in mind, let me review briefly the measures in this bill. First of all, there are measures that affect individual taxpayers. One is the extension of the homebuyers plan by one year through to March 1, 1994. As I mentioned before, to renege on this program would cause undue and unfair difficulties to many thousands of Canadians.

As well, the legislation provides that starting next September certain higher income Canadians will have to make quarterly instalment payments on their taxes. At the same time some 300,000 low income filers will be excused from quarterly payments and required to pay only once a year.

Another area addressed by this legislation is one of the few small attempts of the previous government to foster job creation. The December 1992 economic statement announced a one-year program of relief for unemployment insurance premiums for increased employment by small businesses.

This program has come and gone unnoticed by the far too many Canadians who are unemployed in this country. Nevertheless, a number of small business people have taken the government of the day at its word. We shall honour the bargain as a matter of public trust.

The same considerations also apply to other measures targeted at small businesses. These include the temporary small business investment tax credit for purchases of eligible machinery and equipment from December 2, 1992 to December 31, 1993; the extension of the small business financing program to the end of this year, allowing small businesses in financial difficulty to refinance up to $500,000 of debt at low interest rates; the removal of any limits on holdings of small business shares in RRSPs and RRIFs; and the extension of the 35 per cent investment tax credit available to small Canadian controlled private corporations for eligible research and developmental expenses.

In addition, this legislation will give effect to some general improvements in the tax credit incentives offered to encourage Canadian research and development. As well, it removes the annual limits on investment tax credits. This limit introduced by the previous government in 1987 reduced the effectiveness of

the ITC incentives for rapidly growing firms, one of the engines of job growth in this country.

The bill also assists resource companies by allowing 100 per cent of the first $2 million of oil and gas development expenditures to flow through directly to shareholders and be deducted by them. As well, it gives these companies greater flexibility in managing their affairs by removing the mandatory deduction of Canadian exploration expenses.

Finally, the bill puts in place new, more flexible rules for investments in labour sponsored venture capital corporations.

We did not hold out the measures in the bill as any solution to the challenge of job creation, but we do recognize the attempt. Of equal importance we recognize the commitments made by Canadians who have relied on these proposed measures.

This bill should be viewed simply as a question of parliamentary housekeeping and therefore I urge members to support it.

[Questions On The Order Paper, April 15th, 1994]

Under the GST, only the largest 1 per cent of businesses must be monthly filers. Small businesses have, of course, much more flexible filing requirements.

The filing periods for the GST are quite comparable to those in other countries.

Providing large businesses with an extra 30 days to remit their GST would entail a one-time cash flow cost to the federal government of more than $1 billion. This translates into an ongoing interest cost of about $60 million per year.

[Questions On The Order Paper, April 15th, 1994]

With respect to the conference on the deficit and the economy held by the Minister of Finance on December 13, 1993, at the Ottawa Conference Centre, the Department of Finance paid $10,380.84 in participants' expenses. No fees or honoraria were paid by the government. The total cost of hosting the conference is $24,244.91.

Question No. 15-

[Questions On The Order Paper, April 15th, 1994]

The following table provides the information requested by the hon. member form Capilano-Howe Sound.

The data in this table are based on Statistics Canada's survey of consumer finances for 1991 incomes, the latest year for which incomes data are available.

There are a number of different definitions of family. For the purposes of this tabulation, an "immediate family" concept has been used. Thus, a family is defined as either a husband and wife (including common law relationships) with or without children who have never married, or a parent living in the same dwelling with children who have never married. All other persons (including single persons living alone) are defined as a separate family unit. Thus, many recipients of federal transfers would show up in high income families because they live with high income parents/children. For example, a child receiving UI benefits could be living with high income parents.

The table shows transfers before taxes. Thus, the table does not show the effect of OAS recovered from high income individuals. About $300 million of OAS benefits are recovered from individuals with incomes above $51,800. This represents about 15 per cent of total OAS paid to families in the top three deciles. While the entire OAS is recovered from an individual at $81,000 of income, a lower income spouse living with a spouse who has high income is not subject to the recovery.

Family allowances and child tax credit have been replaced by the child tax benefit since 1993. The table does not show the distribution in respect of the new program because the relevant data are not yet available. However, a table showing average child tax benefit by income follows.

Notes: (1) Incomes from some of the transfers in this table are not fully reported in the survey. For example, the survey does

not cover residents of Yukon and Northwest territories, Indian reserves and institutions (including homes for the aged). In the case of OAS, some $1 billion are not captured in the survey data. Further, incomes from some of the transfers are under-reported in the survey. (Reporting on the Survey of Consumer Finances is estimated by Statistics Canada to be 100 per cent for OAS, and 85 per cent for the Canada and Quebec Pension Plans and for Unemployment Insurance.) Hence total expenditures on each program may not correspond with actual expenditures.

(2) A family consists of either a husband and wife (including common law relationships) with or without never married children or a parent with never married children, living in the same dwelling. All other persons (including a single person living by himself/herself) are defined as separate family units.

(3) Each income decile represents about 1,150,000 family units.

(4) OAS expenditures are before taxes are collected, inluding the high income recovery.

(5) Statistics Canada data does not report Canada and Quebec pension plan benefits separately.

(6) The table does not include a number of other federal transfers to persons (e.g. veterans pensions and allowances) because Statistics Canada data does not report these transfers separately.

Question No. 14-

[Product Packaging, April 12th, 1994]

Mr. Speaker, the educational rights of francophones outside Quebec are clearly recognized in the Canadian Charter of Rights and Freedoms. These rights were clarified by two Supreme Court decisions: the Mahé case in 1990 and the Manitoba reference in 1993.

Most provinces and territories have school legislation consistent with Section 23 of the Charter. School governance has been granted or soon will be.

Education is under provincial jurisdiction. The role of the federal government is to assist the provinces to meet their constitutional obligations.

For almost 25 years the federal government has helped the provincial and territorial governments to provide members of the French minority community with the opportunity to be educated in their own language.

Since the Canadian Charter of Rights and Freedoms came into effect in 1982, statistics show that more and more young francophones are educated in their own language.

The federal government recognizes that francophone minority groups still face difficulties, but it is working to address these deficiencies.

French minority language education remains a high priority for the federal government and for the Department of Canadian Heritage. That is why the special initiatives on school governance and post-secondary education in French have been exempted from the latest budgetary restrictions. It is expected that federal-provincial agreements negotiated under these initiatives will result in significant improvements for the francophone communities in these provinces.

[Budget Implementation Act, 1994, April 11th, 1994]

Mr. Speaker, I thank the minister for her comments. I just met on her behalf with a group of women from Winnipeg, a black women's coalition, who brought these types of questions to my attention. They are very much on my mind.

[Budget Implementation Act, 1994, April 11th, 1994]

Mr. Speaker, as the member for Winnipeg Transcona knows, the question of grain cars and the use of those cars is also tied into the Churchill route. As he knows, the member for Churchill has been very active in promoting the interest of that route and has been helped by the member for St. Boniface in whose riding the yards are located.