House of Commons photoWon his last election, in 1993, with 46% of the vote.
Canadian Broadcasting Corporation September 29th, 1995
Mr. Speaker, I most certainly agree that the CBC's French network plays a magnificent role in developing the "francophonie" in Canada and throughout the world. I certainly agree with that, and I will do everything in my power to ensure it continues to do so.
Canadian Broadcasting Corporation September 29th, 1995
Mr. Speaker, we know that the Canadian Broadcasting Corporation is examining and is, in fact, engaged in a thorough analysis of its budgetary requirements. On behalf of the government we have initiated a process to examine the mandate of the CBC. We will also consider the finances of the CBC in the next budget, and that is our position at this time.
Canadian Broadcasting Corporation September 27th, 1995
Mr. Speaker, our colleague should know that is precisely what we asked for, a panel of three people to make recommendations on the mandate. His wish will be granted. In the meantime the management of the CBC is managing at arm's length, as we all know.
Canadian Broadcasting Corporation September 27th, 1995
Mr. Speaker, let me congratulate our colleague for putting his first question as critic for the heritage portfolio.
The management of the CBC is now engaged in a very serious review of the financial dimensions of the corporation, as we have seen in the press. What it has in mind is to cut down on any possible
waste, increase the effectiveness of the CBC and make it one of the most modern and efficient broadcasters in the world.
Corrections And Conditional Release Act September 25th, 1995
moved that the bill, as amended, be concurred in and read the second time.
Cultural Property Export And Import Act September 25th, 1995
moved that Bill C-93, an act to amend the Cultural Property Export and Import Act, the Income Tax Act and the Tax Court of Canada Act, be read the second time and referred to a committee.
Mr. Speaker, I am pleased to introduce, at second reading, a bill which seeks to allow appeals of decisions made by the Canadian Cultural Property Export Review Board.
The Cultural Property Export and Import Act was proclaimed in 1977 to ensure the conservation, in Canada, of important objects which are part of our movable cultural heritage. To that end, the act provides export controls, as well as tax incentives to encourage the donation of cultural objects to designated museums, archives and libraries in Canada.
Moreover, the act established the Canadian Cultural Property Export Review Board, whose mandate includes three major responsibilities: to hear appeals filed when an application for an export permit is rejected; to determine whether cultural property given or sold to a designated Canadian institution is of outstanding significance or of national importance; and, to determine the fair market value of certified cultural property.
The fair market value of certified cultural property can be eligible for a tax credit, just like a charitable gift. However, unlike in the case of a charitable gift, the eligible amount is not limited to 20 per cent of the net income. Moreover, any capital gain realized following such a gift is exempt from the capital gain tax.
From 1977 to 1991, the board only had a mandate to hear appeals related to the rejection of an application for an export permit, and to determine whether cultural property was of outstanding significance or of national importance.
In 1991 responsibility for determining fair market value of cultural property was transferred from Revenue Canada Taxation to the Board. At that time, there was no provision for appealing Board decisions in this connection. Thus the right of appeal provided by the Income Tax Act was inadvertently lost.
The number of gifts of cultural property has increased constantly since 1991 and the Board received a record number of requests for the 1994-1995 fiscal year.
In performing this new function, the Board carefully examines the fair market value proposed for a gift. In the majority of cases, it accepts as the fair market value the amount indicated in evaluations made in good faith by at least two independent assessors and obtained by the recipient institution.
If the Board requires additional information, the recipient institution may seek another opinion, or in certain cases the Board itself may have an assessment done by Canadian or foreign experts. After it receives this information and approves the proposed amount, the Board issues a tax certificate for the cultural property in question for the amount established.
In approximately 10 per cent of cases between 1991 and 1994, or some 150 cases annually, the Board determined that the monetary value of the gift was lower than the evaluations accompanying the application.
In conformity with the current provisions of the Act, if additional information becomes available, the applicant may request that the Board redetermine the fair market value of the gift. If the Board does not change its initial assessment, the applicant will then have no further avenue of appeal.
Donors in custodial institutions have complained about the lack of an appeal process. In the interest of natural justice, they have suggested that donations to institutions might decline if it is not possible to appeal review board decisions.
In 1993 the former department of communications hired KPMG Peat Marwick Thorne to undertake an independent assessment of the needs for an appeal of determinations of the review board. During this study using professionals, art dealers, donors, collectors of cultural property and members of the review board were interviewed about the need for an appeal. Agreement was unanimous: an appeal process should be established.
As a result in June 1993 it was announced that the Cultural Property Export and Import Act would be amended to allow donors of cultural property to appeal determinations of the review board to the Tax Court of Canada, a right that had been in place before 1990.
At the same time it was announced that amendments would also be included to extend the circumstances under which donors would be able to request determinations by the review board. Donors, institutions and some professional associations such as the Canadian Museums Association have advised me that they continue to believe it is essential that there be an appeal of the review board's determinations.
It is expected that the expanded circumstances whereby the review board can redetermine fair market value will mean that the donor and the review board will be able to come to an agreement about value. It is expected that this will significantly limit the number of appeals to the Tax Court of Canada.
The question of who is eligible to request a redetermination of fair market value has been the subject of some discussion with the Department of Finance. The legislation states that either the donor or the applicant can request a redetermination while only the donor can appeal to the tax court.
These proposed amendments will benefit donors, museums, archives, libraries and art galleries throughout Canada. While donors do receive a tax credit, their donations enrich public collections for the enjoyment and education of all Canadians. This program is open to all. Many important objects of Canadiana have been donated by individuals from every sector of society, gems of
history, heritage and culture that may have been in their families for generations.
In conclusion, the tax incentives for donations of cultural property continue to enrich public collections. They ensure that objects which might otherwise be lost to Canada are retained here for the benefit of all Canadians.
I also believe that the establishment of an appeal process is sufficiently important that we will be reallocating resources within the department of heritage to ensure that it will function effectively. The establishment of an appeal of determinations by the Canadian cultural property export review board is in fact only the reinstatement of the right of appeal that was lost in 1990.
This legislation will help to ensure that Canadians do not lose the evidence of their heritage. I would ask for support of this initiative which will strengthen legislation that has been instrumental in preserving our national heritage.
Excise Tax Act September 25th, 1995
moved that Bill C-103, an act to amend the Excise Tax Act and the Income Tax Act, be read the second time and referred to a committee.
Mr. Speaker, it is a pleasure to introduce the second reading stage of Bill C-103, an act to amend the Excise Tax Act and the Income Tax Act. The purpose of this bill is to support Canada's cultural industries, and especially the periodicals industry.
Canadian periodicals are essential to cultural expression in Canada. They bring Canadians together from coast to coast. They provide a clearing house for the exchange of ideas and information. They disseminate information and points of view that are specific to this country and provide a voice for the country's artistic and cultural expression.
Issues that concern Canadian periodicals are important to the public. More than 1,400 periodicals are sold in Canada. They are an integral part of the media environment of Canadians and, from the economic point of view, constitute a substantial part of the cultural sector.
Today, more than 92 per cent of the content of Canadian periodicals is Canadian. Some of the more popular ones which have a long publishing history, like Saturday Night and L'Actualité , have become genuine institutions.
Strong and diverse editorial content notwithstanding, limited circulation figures will necessarily restrict the volume and viability of Canadian periodicals. The problem is the relative size of the market and economies of scale.
Over the years, Canadians have consistently shown that periodicals are important to them. For instance, in 1978 and in 1990, an increasing number of families preferred to spend their recreation budget on Canadian or foreign periodicals as opposed to any other cultural activity, with the exception of buying newspapers.
Bill C-103 provides for the implementation of two measures which I announced following recommendations by the task force on the Canadian periodicals industry. The first measure consists in imposing an excise tax in respect of split run editions of periodicals distributed in Canada. In these split run editions, publishers reuse content which was targeted at their own market and which made money there and insert new advertising intended for a foreign market.
These so-called Canadian split run editions are inexpensive to publish and attract lucrative advertising. It is therefore not surprising that they pose a serious threat to the long term viability of the entire periodical industry.
The second measure is an anti-avoidance rule with respect to the deductibility of advertising expenses. Let me explain. Advertising revenues are essential to the survival of the periodical industry; 65 per cent of the revenues of Canadian periodicals come from advertising. Since 1965, two measures taken by the Government of Canada have helped inject advertising revenues into the Canadian periodical industry. These revenues enable it to live alongside the
powerful American periodical industry, which has direct access to readers, to newsstands and to Canadian distributers.
These two measures are custom tariff 9958, which prohibits the importing of split run periodicals, and section 19 of the Income Tax Act, which permits the deduction of the costs of advertising directed primarily at the Canadian market, on the condition that this advertising is placed in Canadian editions of Canadian owned or controlled periodicals.
These measures paid off, because they led to the growth of the Canadian periodical industry. Thanks to them, the industry has expanded and prospered.
In April 1993, however, Sports Illustrated Canada was launched in Canada. It was a split run edition, printed in Canada and transmitted directly electronically from the United States. Canadian advertisements were substituted for American ones, and a little Canadian content was added. Sports Illustrated Canada managed to get around custom tariff 9958, because most of its content was sent electronically from the United States. It was simply a loophole in the tariff laws since electronic transmission made it possible to avoid tariff regulations.
In March 1993, the Government of Canada set up a task force on the Canadian magazine industry. The task force's mandate was to find ways to modernize the existing measures underpinning government policy on the magazine industry.
After researching the problem, the task force concluded that split run editions presented a real threat to the Canadian magazine industry, which stood to lose up to 40 per cent of its advertising revenue over a five year period. According to the task force, such losses would put many magazines out of business and marginalize even successful ones.
Task force members explored several avenues and finally concluded that the proposed excise tax was the best solution. It could be designed and implemented in order to avoid split run editions.
The task force's main recommendation is therefore the key element of this bill, whose purpose is to amend the Excise Tax Act and address the problem of split run editions printed in Canada. This new excise tax would apply to all periodicals distributed in Canada and containing more than 20 per cent of reused editorial material as well as one or more advertisements aimed at Canadians.
The proposed amendments to the Excise Tax Act will impose an 80 per cent tax on the value of all advertisements appearing in a Canadian split run edition. Depending on circumstances, the tax would be paid by Canadian publishers, distributors, printers or wholesalers and not by consumers.
Periodicals otherwise subject to the tax would be exempted from the tax based on the number of split run editions that were distributed in Canada during the 12 month period ending on March 26, 1993, the day the task force was set up.
This tax would not restrict access to the foreign periodicals Canadians enjoy reading. It will make it possible to modernize a government policy that is already several years old.
The proposed amendment to the Income Tax Act will add an anti-avoidance rule to section 19 of the act. The purpose of this provision is to ensure that newspapers and periodicals that claim to be Canadian are in fact Canadian owned and controlled for the purposes of the act.
The other recommendations of the task force deal with strengthening the industry through increasing the effectiveness of existing measures. Bill C-103, the legislation now before the House to amend the Excise Tax Act and the Income Tax Act, would not change or create new policy concerning Canada's magazine industry. It would simply provide a new tool to support a longstanding magazine policy. The tax would close the loophole in the existing policy framework.
The emergence of Sports Illustrated Canada as a new Canadian split run edition revealed to us that we should re-examine our policy instruments which support the Canadian magazine industry. This led to the formation of the task force, the resulting recommendations and the proposed new excise tax. In short, we are modernizing the policy tools that underpin this important sector of Canada's cultural industries.
I repeat that the excise tax would not result in a tax for Canadian consumers. The publisher, the distributor, the printer or the wholesaler of any magazine subject to the tax would be responsible for paying the tax.
Why is the tax necessary? In view of the challenge to federal magazine policy and in particular to custom tariff No. 9958, some means must be found to maintain an environment in which Canadian magazines can survive and flourish. Canadian magazine publishers would be at a grave disadvantage if they were forced to compete for advertising revenues with magazines that have recovered their editorial costs in markets which are much larger than the Canadian market. The average profit for a Canadian periodical is only 2.6 per cent. To compare, the average profit for U.S. consumer magazines is 12 per cent. Advertising is the most important source of revenue for magazines, accounting for 65 per cent of income. Ensuring adequate access to those revenues is essential in main-
taining a healthy Canadian magazine industry, benefiting all magazines in all regions of the country.
The Sports Illustrated Canada case has sent a signal that it is not possible for split run editions to enter the Canadian advertising market in spite of the policy measures in place. The threat to the health of the industry is real. The Canadian industry could lose up to 40 per cent of its advertising revenue over five years. The task force noted that such a loss would put many magazines out of business and marginalize even successful ones.
Clearly we do not have the resources to provide the magazine industry with a direct subsidy program that would offset the split run problem. The proposed tax, however, would bring the support framework up to date.
The Government of Canada is committed to the continued existence of a viable Canadian magazine industry. We recognize that advertising is key to the health of the magazine industry. The new tax is consistent with Canada's international trade agreements and obligations. Canada is the most open country in the world to imported magazines. The new excise tax will not limit the access of Canadians to foreign publications. Furthermore, the new tax will not be borne by the general consumer.
Finally, the new excise tax updates the legislative framework supporting Canada's longstanding magazine industry. The Government of Canada agrees with the findings of the task force on the magazine industry. The best way to support the Canadian magazine industry is to adopt measures which will encourage original content, regardless of the country of origin. We do not want the kind of recycled editorial material that is commonly dumped into split runs. We want a Canadian magazine industry that reflects Canadian voices.
The legislation now before the House for second reading promises to provide the kind of environment in which the Canadian magazine industry can survive and thrive.
I urge my colleagues in the House to promptly pass the legislation.
French Scientific Journals June 22nd, 1995
Mr. Speaker, I always expect our national museums to have high quality products in both languages.
French Scientific Journals June 22nd, 1995
Mr. Speaker, earlier this week, I had an opportunity to comment on a sports-related case, and I emphasized the importance of maintaining the status of the French language and complying the official languages legislation.
My answer will be the same today. I intend to see that these rules are observed by all federal government agencies.
Privilege June 21st, 1995
Mr. Speaker, at issue is not the respect I have as a Quebecer for all parts of Quebec, but a knowledge of how to speak the French language. I refer you to page 1632 of the Petit Robert , where reculé'' is defined aslointain, difficile d'accès, isolé'' (distant, hard to reach, isolated). I see nothing to offend people in this.