Roy Cullen

[Senate, February 24th, 2000]

Mr. Speaker, I rise on a point of order. I fail to see the relevance of what the member is saying. We are here to debate Motion No. 98, having to do with the televising of debates in the Senate. Is what he is saying relevant to the debate?

[Income Tax Act, February 14th, 2000]

Madam Speaker, first of all, I would like to congratulate the member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans for this initiative and for his work on this very important subject.

This private member's bill proposes that the Income Tax Act be amended to permit automobile mechanics to deduct the cost of tools they are required to provide as a condition of employment.

The deduction encompasses maintenance, rental and insurance costs, the full cost of tools under $250 and the capital cost of tools over $250. This is a complex issue with many aspects that need to be examined carefully.

In framing the issue, however, a number of tax policy principles must be kept in mind. First, any tax policy change should be fair. Second, changes should also be relatively simple to administer and enforce for the Canada Customs and Revenue Agency and easy to comply with for taxpayers. Third, any change should be consistent with the government's overall fiscal situation.

Mechanics are not the only workers who have to incur considerable expenses as a condition of employment. It would be difficult to justify giving tax relief to mechanics and not to other taxpayers, as proposed in the bill.

In fact, other groups are also seeking tax relief for work related expenses. Other expenditures for which tax recognition has been sought include personal computers purchased by employees, reading material, professional journals and other general costs associated with skills upgrading, business clothing and construction safety clothing, home office expenses, photographic equipment for staff photographers and tools for employee trade persons.

Extending relief in all of these situations would be a major shift in policy and would be fiscally very expensive. This is all the more difficult in view of the many other priority areas for tax reductions, given the overall level of personal income taxation that Canadians face.

Moreover, one would need to ensure that any tax relief is targeted only for items required as a condition of employment and not for those purchased for personal use. This would be difficult for the Canada Customs and Revenue Agency to administer and enforce and for taxpayers to comply with as many items, such as personal computers, provide a personal benefit even when they are required for work.

The provisions that would have to be made to solve these problems would necessarily be complex since they would have to cover a wide variety of items which could be subject to tax relief as well as the various situations where these articles are used at work. To have an idea of the monumental task that would represent, one just has to think of the numerous provisions dealing with car expenses.

The provisions governing the deduction for equipment acquisition expenses by employees would apply to hundreds of different items and to a good number of occupations.

The private member's bill that is before the House today would also provide tax relief to all mechanics, irrespective of the size of their expenditures, instead of targeting relief to those incurring extraordinary expenses relative to their income. For mechanics with employment expenses comparable to those incurred by other employees this would be unwarranted as tax relief for normal employment expenses is provided through the basic personal amount.

Given the complexities associated with providing tax recognition for specific employment expenses and the need to reduce the overall level of personal taxation that Canadians face, the government provided broad based tax relief in the last two budgets and will continue to do so in future budgets.

I hope the hon. members present will agree with this approach and not support the private member's bill before us today.

[Super Blue Box Recycling Corp., February 11th, 2000]

Mr. Speaker, I would like to inform the House about a leading edge company whose head office is located in Etobicoke. Eastern Power Limited has developed a total solution waste management technology called Super Blue Box Recycling Corp., or SUBBOR for short.

The SUBBOR process addresses two major problems confronting not only Canada but indeed the entire world. First, it disposes of municipal solid waste in an environmentally responsible way and second, it meets our Kyoto commitment to reduce emissions of greenhouse gases.

Industry Canada has taken a key partnership role in this technology through its TPC program.

Unsorted solid waste deliveries will be required for these facilities. SUBBOR is working with municipalities around Toronto as well as elsewhere in Ontario.

SUBBOR looks forward to bringing this technology to Etobicoke, Toronto and the rest of Canada. Good luck SUBBOR.

[Standing Committee On Finance, December 16th, 1999]

Mr. Speaker, I thank the member for Oak Ridges for his participation in this debate and for his contribution to the thought process for the budget 2000.

I know the hon. member has been very much involved in municipal affairs. I also know that he has taken an active interest in an infrastructure program. In the throne speech, there was mention that the government intends to move on an infrastructure program. There have been representations by the Federation of Canadian Municipalities to proceed with an infrastructure program. It talks about social infrastructure as well as physical infrastructure.

I wonder if the hon. member could comment on what he would like to see if the government proceeds with an infrastructure program.

[Standing Committee On Finance, December 16th, 1999]

Mr. Speaker, I would suggest that if there is time for questions and comments, I could pose a question to the member for Oak Ridges.

[Standing Committee On Finance, December 16th, 1999]

Mr. Speaker, I appreciate the input from all members as we continue this debate.

I am puzzled with the position of the Reform Party. In their platform Reformers talked about tax reductions but not starting until the year 2000. We would not have had any tax cuts at all. The Liberal government has already implemented tax cuts of 10%.

In their platform they talk about a tax cut package that in the third year of their proposal would cost the federal treasury $26 billion. They also talk about an equal amount against paying down the debt. That is $26 billion in year three for tax cuts and $26 billion for paying down the debt. If my arithmetic is correct, that is $52 billion. When I look at the document released by the finance minister a month ago and the surpluses projected forward by 11 of Canada's leading economists, it shows that in year three the surplus would be at a level of $12.5 billion.

Then the other Reform member was talking about increased expenditure on defence. Other members of the Reform Party have talked about increased expenditures on farm income relief. How does the arithmetic add up? How does this package fit?

[Committees Of The House, December 15th, 1999]

Mr. Speaker, if the member checks the blues he will learn that what I actually said about EI was that no one on the government side or any member in the House would say that everything is perfect with EI.

I also said that a very strong point would have to be made to cause the government to go back to the days before we reinvented EI. To say that there are not some areas that perhaps need some fine tuning is one thing, but I do not think we really want to go back to the days when we had a situation where EI was causing some fiscal pressures and problems for the government and for all Canadians.

I acknowledge that with the international liberalization of trade, Canada as a major exporting nation has benefited from that. That is very much part of the economic success that we are now experiencing.

I will highlight some measures that this government can take some credit for, such as low interest rates, which is often forgotten in the debate. Because of the low interest rates today, the average family with a $100,000 mortgage save something like $3,000 a year.

Business investment has much improved with low interest rates. I know this from my days in the private sector where decisions were being made to invest in the United States because of the cost of capital differential. That has now been removed.

As well, the monetary policy of the Bank of Canada has created a situation where inflation is being moderated. That has also contributed to the economic success of Canada and has created a situation in the country where Canadians are feeling more confident today than they have ever been and certainly more confident than they were in the days of the Tory regime.

[Committees Of The House, December 15th, 1999]

Mr. Speaker, the member forgets that during the term of this government unemployment has declined. It is a generational switch. We are down to 6.9% and we will take it down further.

The member opposite talks about child poverty. The latest data shows that the incidence of children living in low income families declined from 21.1% in 1996 to 19.8% in 1997. Is that good enough? Probably not. As a result, 100,000 fewer children are living in families with low incomes.

However, a real problem remains and there is room for action. This government has acted on this with the child benefit program, with a huge commitment of approximately $7 billion annually once it is fully in place.

While the member talks about this doom and gloom scenario, we should recognize the huge progress that we have made and the progress we will make in the future. With a growing and strong economy, we will be able to devote more resources to the issues that the member is referring to. If we had not taken the measures that were needed to bring the deficit under control, we would not be having this debate today. We would still be reducing the deficit. We have achieved that and we now have to have a good debate on what to do with the surpluses.

[Committees Of The House, December 15th, 1999]

Mr. Speaker, I thank the member for his question but I believe that that cuts in transfers are things of the past because the minimum amount of the CHST has now been increased to $12.5 billion, which means $1.8 billion more for Quebec over five years. Moreover, $11.5 billion have already been put into the CHST. This means $2.7 billion more for Quebec.

I could go on and on. Equalization gives Quebec $2.8 billion more over five years, and Quebec now receives about half of the money available in the equalization fund, or about $4.5 billion per year.

In last year's budget, the government injected $11.5 billion into the CHST for health care and Quebec was a recipient of that. Whether the CHST should be augmented further is a very debatable point, which is the purpose of this discussion.

With respect to the question around employment insurance, Canadians understand and appreciate that the government had to take some very decisive action on this. Would everybody in the House agree that every measure we took was perfect? Would everyone in the House agree that perhaps there are some adjustments that need to be made? Perhaps. That is why we are having this debate. However, to say that we should fundamentally go back and re-open EI as it once was, I do not think Canadians would support that.

[Committees Of The House, December 15th, 1999]

Never again.

That being said, I am sure most hon. members will agree that there are actions that must be taken, investments that should be made to strengthen our economy and provide Canadians with the prospect of better incomes, a higher quality of life and increased security and opportunity.

The committee's report highlights some excellent suggestions, but let me note that two of the commitments that this government has already acted upon, debt relief and tax relief, are a critical part of a context for the upcoming budget and for today's debate. First, we will continue to reduce the debt load on the economy and its taxpayers. Second, we will continue to reduce taxes.

It is a fact that we have already made some headway on our national debt.

The last two years, with the debt decreasing by some $6.4 billion, we were able to save more than $300 million in interest every year.

And there is more good news. We have actually paid down debt previously borrowed in financial markets by almost $16.4 billion. These achievements in combination with sustained economic growth also contributed to the reduction of the debt to GDP ratio. This ratio assesses our debt according to the size of our economy.

In 1995-96 that ratio peaked at 71.2%. In other words, our debt was equal to nearly three-quarters of our entire yearly economic output. For 1998-99 that ratio was down to 64.4%. This marks the third consecutive annual decline in the debt to GDP ratio.

By the way, there is another important comparison that should be highlighted. If one uses comparable accounting standards, our federal fiscal turnaround, combined with the positive fiscal performance of most Canadian provinces, means that on a total government basis Canada has achieved the largest improvement in its fiscal balance of all the G-7 nations since 1992.

Let me emphasize to all hon. members and all Canadians that such fiscal improvements are not abstract accounting achievements. Combined with our commitment to low inflation, they have contributed directly to keeping interest rates down. Gone are the days when Canadian rates were axiomatically higher than U.S. rates. In fact our rates are generally equal to, if not lower than, American rates.

But Canada's financial challenges are not over. We have to stay on track and that includes getting our debt burden down further. Five years ago 36 cents out of each federal revenue dollar went to pay interest on the debt. However because of our financial progress the portion of each revenue dollar eaten up by interest charges is down to 27 cents. That is progress, but it is still too high.

This is money that could otherwise be used to cut taxes, or for health care, or for investing in knowledge and innovation. For this reason we are continuing with our debt repayment plan.

We will continue to include every year in the budget a $3 billion contingency reserve. This will ensure that the government will be in a position to fulfil its obligations toward Canadians without ending with a deficit because of some unforeseen economic hardship. If the contingency reserve is not needed it will be applied to the debt.

Paying down absolute debt is only part of our strategy. We will continue to make important investments in strengthening our economy, such as boosting our national research capability and boosting knowledge, skills and training. The dynamic at work here is clear and concrete. The combination of a shrinking debt and a growing economy work together to make the burden of debt fall faster. Just like a family with a mortgage, the more one earns and the more one pays down, the lighter the load.

It is this consistent strategy of falling debt and a growing economy that will help Canada and Canadians build a foundation for success in the 21st century.

This takes me to the second firm commitment I want to highlight. That is continued tax reduction. With the end of the era of deficits and growing debt, our government has moved to cut taxes for all Canadians. Quite simply, people have the right to expect that each year we will bring down taxes. It is not a matter of debate. Tax reduction is essential to secure strong and sustained economic growth. We may debate the means and the pace, but from the point of view of our government, reducing taxes is not a debatable item.

What is more, we have taken some actions already. The actions taken in the 1998 and 1999 federal budgets have removed 600,000 low income Canadians from the federal tax rolls. The combined actions taken in the last three budgets mean that the personal income tax relief for Canadians will total $7.5 billion in 1999-2000. That is about 10% of all personal income taxes. For families with children, total personal income tax relief provided in the last three budgets represents an average of 16% reduction in their tax burden. That is families with children.

We are going to do much more. This process continued the day of the minister's update presentation itself when we announced that for the sixth year in a row, employment insurance premiums will be reduced from $2.55 to $2.40 for each $100 of insurable earnings starting this January 1. This means that employees and employers will save a further $1.2 billion next year, bringing total savings, compared to the rate that prevailed in 1994, to $5.2 billion.

Looking beyond that, as the Speech from the Throne and the fall update both emphasized, in the 2000 budget we will spell out a multi-year plan to cut taxes further and we will explain how we intend to carry it out. This plan will be based on a number of key principles.

Our approach must be fair which means starting with those who need it most: middle and low income earners, especially families with children. We will focus initially on personal income taxes, since that is where we are most out of line. We will also have to ensure that Canada has an internationally competitive business tax system. Finally, we will not finance tax relief with borrowed money because that just means an inevitable return to higher taxes in the future.

Suggestions on how best to implement further tax reduction and by how much are important elements of the finance committee's report.

I know that the minister and his team are studying the report very closely. I congratulate the chairman and all members of the Standing Committee on Finance for such a comprehensive and detailed report.

I know the minister will be very interested in the ideas and criticisms that each and every hon. member can add in the House today. I encourage my hon. colleagues from all parties to provide their own positive, concrete suggestions.

I hope my few remarks have put some of these issues in some context, but I am sure we will not agree on everything that should go into the year 2000 budget. However, it is a process that is respected and it is very worthwhile having the debate in the House of Commons because budget 2000 will likely set the tone and thrust for Canada's continuing growth and security in the new millennium.