Ray Speaker

[Committees Of The House, December 13th, 1994]

Madam Speaker, one of the things the Reform Party has done is lay out the details of our expenditure reductions. We placed before Canadians a week ago Thursday last $10 billion of expenditure reductions. First, we went into the details and presented that to the committee.

Second, we made this available to the media and anybody else who wanted the details. We went into the specifics, beyond the presentation of the finance committee, and made those available to show that there was credibility to any of the numbers we presented. If one reads any of the media reports in the Financial Post , Globe and Mail and a long list of others, there is tremendous support for the presentation we made.

We recognize that after economic growth of some $16 billion we still have to eliminate on average about $14 billion over a three year period. We see $24 billion of expenditure reduction over a three year period. On average that is about $8 billion per year.

That is approximately 6 per cent to 8 per cent per year which was not in the business community when there was a downturn after 1982 and a downturn after 1984. Some of those business people cut their business costs by anywhere from 15 per cent to 25 per cent. The expenditure reductions we are talking about here are minor and can be accomplished.

Where are they? In the social program areas, we will be outlining by the first week of February for Canadians specific expenditure reductions. The focus of our expenditure reductions will take the dollars that are left. There will be some $50 billion to $55 billion in what we call the social program area. I could define that but it would take a few moments so I will not do it. However, in that $50 billion to $55 billion we will be reducing the expenditure of that area. We have already reduced it from $67 billion because there was $67 billion in that social program area that I am talking about.

However, we will give specifics to the Canadian people as to where we will do it. Nothing will be hidden. The $50 billion to $55 billion that is left will be used for positive programs to help those people who are in true need in Canada. We will show compassion because we care about our responsibility to those people in need across this nation.

[Committees Of The House, December 13th, 1994]

Madam Speaker, I would like to comment on both issues raised by the hon. member. First, with regard to the deficit reduction surtax, it says in the report that a single rate levy would be made on all businesses and personal income. That means all Canadians regardless of income or circumstances would have a single levy. It does not mean 1 per cent. It could mean 5 per cent, 4 per cent or 3 per cent.

The chairman of our committee, the hon. member for Willowdale, indicated that a 1 per cent surtax collected across Canada would bring in about 700 million in tax dollars. I would think the minimum the government would charge as a surtax would be 2 per cent to bring in about $1.4 billion, because that is the amount of tax money it has looked at in this report.

Regarding the second question of the Public Utilities Income Tax Transfer Act, I think it would be very unfortunate if the government tried to take $249 million from the private utility companies of this country. The problem is that it focuses that source of income on two or three provinces and mainly Alberta. Alberta has some major private resource electrical companies. That is $249 million that would be sucked out of the industry. In addition, it would raise the cost of utilities in those respective provinces. That would be like a targeted tax. I do not think that is fair as a tax principle as well.

In Alberta the farmers who now use electricity to pump for their irrigation systems would be significantly affected by the implementation of this tax, or changing the current circumstances with regard to the public utilities income tax transfer at the present time.

[Committees Of The House, December 13th, 1994]

Madam Speaker, I move that the 10th report of the Standing Committee on Finance, presented on Thursday, December 8, be concurred in.

I appreciate the fact that I have the opportunity this morning to discuss the 10th report of the Standing Committee on Finance and bring it before the House of Commons for discussion.

The motion states that we should concur in the report. I want to put on the record this morning the fact that the Reform Party agrees with some parts of the report but we do not agree with all of it. I want to point out those areas where we do not agree and, as well, those areas where we do agree.

It is very important that it go on the record at this point in our discussion whether or not the government concurs in the report. It is a majority report, and represents the Liberal members on the finance committee. We would like to know if their position is accepted or rejected by the government. If it is then the people of Canada, between now and February when the 1995-96 budget is presented, will have the opportunity of reacting and giving the government advice before it formalizes the next budget. I would

say it is the most important budget for the government and for Canadians at the present time.

I have this to say about the process in terms of the report. The object of the 10th annual report is to allow Canadians to have some input into the budget prior to its being accepted by Canadians. That was a good idea. But there were some shortcomings that should be explained and should be referenced so that in the next fiscal year when we go through this process we will improve the process and more Canadians can be involved.

I have observed that three types of presentations were made to the committee. First, presentations were made by those people who are very fiscally conservative and believe that the government's 3 per cent target is not adequate. They believe we should go further and balance the budget within the term of this Parliament. I certainly support those presentations.

Second, there was a group of people who believe that we should not move on the expenditure reduction side but move on the tax side, that if we tax the rich, we can balance our budget. They believe that if we allow economic growth, eventually we will grow out of our fiscal problems. Past governments have tried this. Tories over the past 10 years have attempted to do this. We have only compounded the problem and made things more difficult.

The third group of people who made presentations were the vested interest groups. They came for one purpose and one purpose only. They made presentations that said: Don't take my public funding away from me. I am a special interest group and you must protect my funding and I would like a little more. How they could ever make those presentations in light of today's fiscal realities, I cannot understand at all. Listening to those groups was very disappointing.

Those were the three types of presentations we heard. Where are the shortcomings? First of all, we did not hear from a broad cross-section of Canadians. What we must do is change and update the process to a more contemporary, grassroots, I would say Reform process, whereby Canadians have access to tell their government what to do and what their priorities should be. That was a major shortcoming of the presentations that were made to us. The government did not allow for that.

The other shortcoming was timing. In November we decided we would start hearings. The various groups were given maybe a week, at the outside 10 days' notice that they could make presentations. People came to the committee saying they had done their best in the few days. They did not know we were having the hearings and would have liked to have known sooner.

There is no reason why we cannot let the Canadian people know in July, August or September that hearings are going to take place. Then they can prepare to make well thought out presentations. Even in light of the short period of time they were given some of the presentations were very well thought out.

If those two things were corrected it would improve the process. Canadians could direct their government and tell it what their priorities are. We would have had greater input in terms of priorities for expenditure reduction. That is the first point I want to make. The process is a good start by the government but it has some weaknesses and can be improved.

My second point is with regard to the recommendation of this report to increase taxes. As Reformers we were most disappointed. I know many Canadians are starting to echo the sentiment that they do not want an increase in taxes. "Please do not increase my taxes. I cannot afford to deal with the deficit by paying more taxes. I have paid enough and I am at the point where I am going to react negatively to this whole ongoing process". I do not blame them in the least.

As members of Parliament scatter out across the nation following adjournment this week, we will hear from our constituents that they have major concerns about new taxes being imposed on them at this time.

Businesses are starting to have a growth pattern. Individuals are feeling more confident in their jobs. That is a good circumstance. If in that environment we as a government impose more taxes and start to squeeze them harder so that they do not have more flexible income for personal purposes or for expanding their businesses, we are doing those people and those businesses a major disfavour. We cannot do that.

What about the taxes that are proposed in the 10th report by the majority of the committee, the Liberal members? First, they have said to Canadians and they said to us in committee that some type of a tax must be introduced. If expenditures are reduced and people are laid off there is a period of time in the first year when the expenditure reductions do not take place. There is a delay for one or two years before there is a significant expenditure reduction. Government members have said that some kind of interim tax must be introduced to compensate for that period of time.

Everyone knows that whenever a government introduces a tax it never gets to the point where it is terminated. It is there forever after. Since the 10th report was tabled I have heard people say over and over again that it is just like the income tax brought in for the war and we still have that income tax. It has

expanded and intervenes in people's lives more and more every day. That is what has happened.

However the government has said it is going to put that tax in. It is going to argue that it needs it on an interim basis to get itself through the period before it really reduces the government expenditures. I do not think that argument is good enough.

Alberta reduced expenditures by some 20 per cent across the board in government both in social program areas and non-social program areas. That was not the problem there; the event projected by this government which is being used as an excuse did not happen in Alberta. I do not believe it would happen if we had effective expenditure reduction at the federal level. I do not think it would happen the very same way.

What are those taxes that were introduced by the government? First of all it said it wanted to collect about $1 billion by putting a tax of one and a half cents on each litre of gas. The government said: "We can do that for all Canadians and it will not hurt them". One of my colleagues said it was a kind of carbon tax. We cannot really say it is that because it does not focus completely on Alberta. It affects all people right across Canada.

Last week I was listening to an Ottawa radio program. They were discussing the cost of fuel in Ottawa versus Toronto. The people in Ottawa were saying: "Why do we have to pay so much more? We are paying too much for our fuel". A number of people phoned in to say they needed to drive their cars to work. Some people think if there is a tax put on fuel that the extra tax will be coming from people who are holidaying or driving without a specific purpose. One person said: "Just about all I use my car for is to drive from home to work. It is part of my costs in my job".

If this extra cost is added, all it does is take away the money Canadians need for their personal use, their food, clothing, shelter and health care and maybe something extra when they want to buy Christmas gifts and so on. That is one part of it. That is the individual.

What about the business community? What about the trucking community out there? People are on the road every day moving their merchandise across this nation east and west, north and south, trading with the United States and taking advantage of the free trade agreement we have set up. All of those people are impacted. It takes money away from the business community that is needed maybe to hire more people or to invest and create more jobs. This tax is a depressing thing. It is not positive toward building our economy, it depresses it.

I am sure if a poll were taken people when talking to us would say very clearly that expenditures must be cut that we must reduce expenditures. The 3 per cent target set up by the government is not good enough. The $25 billion we will be left with in 1996-97 is still going to add $100 billion to our deficit. It is going to increase the debt to over $600 billion. It is going to increase the interest payments of government from some $40 billion up to possibly $50 billion.

People would say very clearly: "The cost of government must be cut back, but do not increase my taxes. I am struggling to pay the current rate. Do not take more away from me if you expect me to be the engine of the economy". I have heard politicians say for years that it is the small businesses and individuals that will make the economy move. Small businesses are the engine of our economy, not the big corporate ones. Here we are hitting them right on the chin with an extra gas tax. We are going to take $1 billion out of the economy with regard to this gas tax. That is unfair when we are trying to build the economy. We are not trying to depress the economy, but we are doing it by this tax.

I want to ask a question of my colleagues on the finance committee. There were nine Liberal members, three Bloc members and three Reform members on the committee. I will ask the question as well to this assembly: Who asked for the tax? I never heard anybody make the presentation that gasoline should be taxed, that a one and a half cent tax should be put on every litre of gasoline.

It was slipped into the committee report that there would not be a tax on diesel fuel. The government said that maybe the farmers in Ontario, Alberta or B.C. should not be taxed on their diesel fuel which was a rather compassionate consideration. Maybe some of the truckers who use diesel fuel will consider it to be a bit compassionate.

Every Canadian is being hit with this tax. I believe the Liberal members on the committee were encouraged by the finance department to float that as a balloon to see what would happen, see the reaction. If over the Christmas season while Canadians are trying to enjoy the holiday with their families, they are not yelling at Ottawa and creating a ruckus in the media, then it will be implemented.

It is a terrible time to fly a balloon because we are all trying to relax and back off from some of our responsibilities. Who wants to sit down and write a letter to their member of Parliament about a gas tax? However they might be mad enough to do just that and I hope they do.

My colleagues say they are already receiving letters of concern on this issue. The government should listen before it decides to implement a 1.5 cent a litre gas tax across the board that will affect every Canadian whether they are working or whether they are the poor. Whether they are mothers with dependent children who need to drive to day care, whether they are small business persons, whether they are trying to expand their businesses or trying to invest, every one of them is going to be hit by this 1.5 cent per litre gas tax.

We in this House had better stop that today. I would appreciate it if government members would get up today and say: "We made a mistake. We are sorry. We think we should withdraw that. We were flying a balloon". That would be a tremendous Christmas present for Canadians. That would be true Liberal compassion right on top.

That is only one tax the government intends to impose on Canadians. The next one is a corporate tax. To satisfy the left wing socialist element of the Liberal Party it was to introduce some kind of corporate tax. It is trying to wriggle it around so that it is put on the capital. Rather than being up front and saying it is the kind of tax the government is going to impose on Canada's corporate sector, it is a way to weasel some money out of those in the corporate sector. They will not know what hit them until the tax bill is laid on the table before the executive director of this country.

I know the corporate sector does not have much of a defence. There is no political group out there to represent it. Granted the committee heard from what I call the left wing presentations that we should tax the rich, we should tax the corporations, that the corporations are paying fewer taxes now than they did back in 1986. There were graphs and presentations to show that the corporate sector was slipping out from under the rug again.

I am not here to defend the corporate sector. However we have to realize the situation of the corporate sector in Canada after 1984. The real recession and downturn in the economy hit Alberta in 1982, but in 1984 real estate values for example dropped 25 to 30 per cent in a period of about 18 months. It was devastating for those people.

That is one reason, and there are others, the corporate sector is paying less. It is not because it is dodging or hiding from the tax. We should realize that. A number of groups went after the banks which is another case in itself. I want to make two more points in the two minutes I have remaining.

A tax on lotteries is the third tax being proposed by the Liberal majority on the finance committee. Who wants to defend lotteries? They are a tough thing to defend. Politically we could say that sure some lucky guy wins and he should pay the tax.

The lotteries are already taxed four times. This would be the fifth tax on lotteries. There is not much to squeeze out of the lotteries. We could take it if we want but there is not much there. Some exchanges with the provinces would have to be made. They do have some say about the taxing of lotteries and they are going to be very upset when they find the federal government trying to propose this kind of a tax.

I want to make one more point. The other tax that was going to be introduced was called the deficit reduction surtax. It is something like the gasoline tax, only worse. It puts a tax on every Canadian, no matter who they are. Whether it is an individual or a business, any kind of economic activity or earned income will be taxed by this surtax. Every Canadian will have a government tax imposed on them for government mismanagement. It is the wrong option. Like any other increase in tax, it is wrong. We should reduce the government expenditures more. That is the approach. We are totally against increases in taxes.

[Taxation, December 9th, 1994]

Mr. Speaker, one of those potential tax measures that may have to be taken in light of what the minister said is the deficit reduction surtax that could be used in an emergency contingency arrangement.

As Reformers we believe that if there is any kind of a contingency plan in place it should be for expenditure reduction, not for tax increases.

My question to the Minister of Finance is, having heard the anti-tax sentiment of a majority of the witnesses who appeared before the finance committee, can he support at this time increasing taxes in any way on every single Canadian before one dime is cut from the government's $1 billion boccie, incorporated infrastructure program as an example?

[Taxation, December 9th, 1994]

Mr. Speaker, we appreciate the minister's comments with regard to the process. In that Liberal majority report there is a very important item. There is an indication that we could potentially have a $1 billion tax grab by an increase on gasoline taxes.

One of the comments he raised as a challenge to the committee was when he said in determining which areas of the tax system should be scrutinized more closely, several principles have been adopted. Initiative should help make the economy more efficient. Initiative should improve the fairness of the system and broadening the tax base is preferable to rate increases.

Does the proposed gasoline tax satisfy any one of these three principles?

[Taxation, December 9th, 1994]

Mr. Speaker, the Finance committee report which was tabled Thursday contains a number of proposals and recommendations for possible tax increases, taxes on gasoline, on lottery winnings, on businesses and on cigarettes.

The deficit reduction surtax that is introduced would hit everyone who lives and breathes. Just to make good and sure that the report did not miss anybody the committee suggested going after dead people too by introducing an inheritance tax.

Will the Minister of Finance distance himself from this grab bag of potential taxation measures and commit to tabling a budget which does not increase taxation?

[Taxation, December 9th, 1994]

Mr. Speaker, the Minister of Finance keeps telling us that his government is ready to listen to Canadians.

Witnesses told the finance committee that Canadians are taxed out. Reform listened to this and recommended that there be no new taxes. The government members on the other hand recommended a billion dollar gasoline tax.

I am hard pressed to remember anyone who came before the committee and said to tax gasoline.

Canada's business, academic and opinion leaders appeared before the committee and said that 3 per cent is not enough. They said that we have to stomp out this deficit. We have to kill it before the next recession.

Reform heard the message and recommended the budget be balanced in three years. The Liberal members continued to stick with the 3 per cent target.

A fair question is who was really listening to Canadians? It certainly was not the government members.

As the Minister of Finance finalizes his plans for the next budget I can only hope that he listens better than his Liberal friends.

[Budgetary Policy, December 2nd, 1994]

Mr. Speaker, the pillar of the Liberal Party is the red book. On page 20 of that book it says that there will be a balanced budget, but it also says that it is unrealistic to do it five years. It is time the government puts on the table what is a proper time line. Could the minister indicate to the House when the budget will be balanced?

[Budgetary Policy, December 2nd, 1994]

Mr. Speaker, the Reform Party has been saying that the deficit should be eliminated during this term of Parliament but the Minister of Finance has said it is unrealistic.

In the finance hearing, the Canadian Chamber of Commerce, the Business Council on National Issues, the C. D. Howe Institute and others have said that we should balance the budget within the term of this Parliament.

My question is for the Minister of Finance. Does he believe this is realistic at this point in time?

[The Deficit, December 2nd, 1994]

Mr. Speaker, many Canadians are demanding that the government increase its efforts to reduce the deficit. We must cut the deficit now while the economy is still expanding. The government does not appear to be listening, but maybe it will listen to the latest news.

The International Monetary Fund is also disappointed by the government's deficit reduction targets. A confidential IMF report said that it would be appropriate to plan on the basis of a more ambitious medium term target in the 1995-96 budget, with a view to accelerating fiscal consolidation the next few years.

Along with the IMF, market watchers are becoming uneasy with the federal government's 3 per cent target. Last month witnessed the largest sell off of foreign held Canadian securities since the eve of the Charlottetown accord.

When will this government get the message that 3 per cent is not enough? The debt clock today is $540,471,337,554.19.