Doug Peters

[Ways And Means, February 10th, 1994]

Mr. Speaker, pursuant to Standing Order 83(1), I wish to table a notice of a ways and means motion respecting the Excise Tax Act, and I ask that an order of the day be designated to debate the motion.

[Income Tax Act, February 9th, 1994]

moved that Bill C-9, an act to amend the Income Tax Act, be read the second time and referred to a committee.

Madam Speaker, I would like to take this opportunity to lead off the debate on the second reading of Bill C-9. This bill proposes to implement a number of amendments to the Income Tax Act that were announced by the previous government in December 1992 and April 1993.

The previous government introduced legislation, Bill C-136, last June to provide statutory authorization for these measures, but the bill died when Parliament was dissolved and election writs issued. For these measures to have legal effect new legislation must now be passed by this Parliament. The measures in Bill C-9 address a number of areas.

Allow me to list them: first, the unemployment insurance premium relief for additional jobs created by small business in 1993; second, the extension of the home buyers plan through March 1, 1994 which allows individuals to withdraw funds from their RRSPs to purchase homes; third, changes in the rules for instalment tax payments that will require more high income filers to make quarterly payments while allowing other low income filers to pay only once a year; fourth, certain tax measures to support small business, scientific research and development, oil and gas exploration and labour sponsored venture capital investments.

Let me be clear at the start in explaining why we are going ahead with this legislation. We have no obligation to the previous government, a government that was resoundingly defeated by the Canadian electorate last October. Our mandate from the electorate is based on a different vision. It is a vision that offers hope to Canadians that we can work together and deal with the difficult legacy that we inherit. Our mandate rests on a clear commitment to create a different and a better future, a prosperous Canada in which everyone has a chance to participate in building the country and a chance to share in the rewards.

That being said, it is essential that the government always reflect the sense of fairness and common sense of Canadians. This is the test we have applied to the unfinished legislative business before us today. Simply put, these tax measures were introduced some time ago. Many were announced more than a year ago and some have fully run their course and are now expired. Many were said to be effective immediately when announced by the previous government and many thousands of Canadians took it at its word.

These individuals have relied on these announcements when making important decisions. Many have, for example, used their RRSPs to buy and build homes and I am sure everyone in the House agrees that buying a home certainly represents a major commitment to those involved. Other Canadians have relied on these announcements when making significant investments or hiring new employees.

The commitment these taxpayers have made is for the most part irreversible. The actions that have been taken are concrete and represent real investments of hard earned savings. We are not dealing simply with plans that some people have for future actions. Consequently, if we were to walk away from this situation many people would be put in a very difficult situation,

an unfair situation. The trust that Canadians have in their government, a trust that we must always strive to keep and enhance, would 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.

One of the measures in the old legislation has been dropped. The previous government had proposed paying the GST credit only twice a year to low income Canadians. For our part we choose to continue paying this credit every quarter to those who qualify during the period the GST remains in force, which will hopefully not be too long. The government is committed to replacing the GST with a fairer and more efficient tax. The House of Commons finance committee will be examining options over the next few months on the matter.

As for the other measures, our primary criticism generally is that they represent only a small piecemeal effort by the previous government to deal with a large and pressing need in this country to strengthen the economy and to create jobs. The approach to economic management by the previous government, a combination that might be called slash and burn on the one hand and ineffective tinkering on the other, needlessly prolonged a painful economic downturn and spread intolerable levels of distress and suffering over this whole country.

For our part we believe we need a long-term process of reform to government policies and programs that is, to quote my colleague the Minister of Finance, creative, compassionate and constructive.

I am confident the upcoming budget will set in motion a process of re-evaluation and reform that will result in meaningful, significant steps to bring this country back onto a path of job creation and economic growth shared by all.

I ask my colleagues and my hon. friends opposite to consider this legislation not as an indication of the approach this government takes to economic management. Rather, this is simply a question of parliamentary housekeeping and the discharge of a trust we in this House owe to all Canadians.

With this in mind, let me outline briefly the measures of the bill. First of all there are measures that affect individual taxpayers. One is an extension of the home buyers plan by one year through 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. This measure will affect those people whose tax payable is $2,000 or more than the total tax withheld at source. In Quebec where we collect only the federal tax, the figure is $1,200. At the same time some 300,000 low income filers will be excused from quarterly payments and required to pay only once a year.

Some member may argue that these measures are yet to take effect and thus could be allowed to die without undue hardship to taxpayers. I would counter by pointing out that these changes represent a small but real improvement in the income tax regime.

Most Canadians pay their taxes either every time they receive a pay cheque or quarterly. Therefore it is only fair to set the same requirement for those Canadians who have substantial income which is not taxed at source and effectively receive a special benefit. At the same time we support the premise that low income filers, many of them elderly, should have their tax payments simplified.

Another area addressed by this legislation is one of the few attempts by 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 business. This program has come and gone unnoticed by the 1.5 million unemployed in this country. Nevertheless a number of small businesses have taken the government of the day at its word and we shall honour that bargain as a matter of public trust.

The same considerations also apply to the other measures targeted at small business. These include first of all the temporary small business investment tax credit for the purchase of eligible machinery and equipment from December 2, 1992 to December 31, 1993.

Second, 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.

Third, the removal of any limits on holdings of small business shares in RRSPs and RRIFs.

Fourth, the extension of the 35 per cent investment tax credit available to small Canadian controlled, private corporations for eligible research and development 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 the 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 more flexibility in managing their affairs by removing the mandatory reduction of the Canadian exploration expenses.

Finally, this bill will put in place new, more flexible rules for investments in labour sponsored venture capital corporations.

In conclusion, let me reiterate the position I put forward earlier. The government has no quarrel with the underlying goal of our predecessors in announcing these measures. No party in this House or in the previous Parliament is against job creation in principle. The issue however is which parties are for job creation in practice. That issue was put to the voters and the voters provided a clear answer. We do not hold out the measures in this 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 small business people, by new home buyers and by others who have relied on these proposed measures.

It is with these thoughts in mind I urge members of the House to support the bill.

[Equalization Payments, February 9th, 1994]

Mr. Speaker, I am pleased to answer the hon. member's question.

The details of the equalization payments are based on the ability of taxation standards among the provinces. They do not relate to tax rates. They relate to the ability to pay taxes including property taxes, corporate taxes and all sorts of other taxes. It is a very complicated formula. I will be happy to supply the member with it if he would like to look at it. It is a very fair basis, as the Prime Minister said, based on the Constitution.

[Deficit, February 9th, 1994]

Mr. Speaker, I am very pleased to report that the Minister of Finance is not a standup comic and neither am I.

We are very serious about the deficit question and are very serious about the pledge in the red book to get the deficit down to 3 per cent of GDP in the third year of our mandate.

What was stated in the press was that a number of forecasters had said that it would be difficult to bring the deficit down below $40 billion this next fiscal year, 1994-95. That indeed will be difficult without changes, but as the Prime Minister said we have a budget coming up.

[Ways And Means, February 8th, 1994]

Mr. Speaker, pursuant to Standing Order 83(1), I wish to table a notice of a ways and means motion to amend the Excise Tax Act, and I ask that an order of the day be designated for consideration of this motion.

[Ways And Means, February 8th, 1994]

Mr. Speaker, pursuant to Standing Order 83(1), I wish to table two notices of ways and means motions.

The first respects amendments to the Excise Act, the Excise Tax Act and the Income Tax Act. The second respects amendments to the Excise Tax Act.

I ask that an order of the day be designated for consideration of each motion.

[Customs Tariff, January 31st, 1994]

moved for leave to introduce Bill C-5, an act to amend the Customs Tariff.

Mr. Speaker, we would wish that the act to amend the Customs Tariff be considered.

(Motions deemed adopted, bill read the first time and printed.)

[Ways And Means, January 31st, 1994]

Mr. Speaker, pursuant to Standing Order 83(1), I wish to table a notice of a ways and means motion to amend the Income Tax Act, and I ask that an order of the day be designated for consideration of that motion.

[The Economy, January 28th, 1994]

Mr. Speaker, I appreciate the question from the hon. member for Hamilton-Wentworth. It allows me to state that this indeed is good news and that there will be some substantial improvement in the economic standing of this country. It is clear that the government's commitment to implement its infrastructure program, its commitment to develop the Canada investment fund and to improve the access to capital by small and medium size business has been very well received by the business community in this country.

[Taxation, January 28th, 1994]

Mr. Speaker, I have answered the question. We are examining fairness in the tax system and the Minister of Finance in his budget will look at those subjects.