Ken Epp

[Supply, March 15th, 1999]

Madam Speaker, I listened intently to the hon. member. I have a problem with his approach. He wants to get this on the table and he said he will vote for the motion. I wonder whether he actually thinks we should be letting the Liberals off to basically provide them such a cushion to defend their totally inadequate policies which have brought us the 65 cent dollar. It is simply true that if there is a unified currency all the countries act as a shock absorber for the other mistakes.

[Supply, March 15th, 1999]

Madam Speaker, I too have a question for the NDP finance critic. He is a man of considerable insight in a lot of things.

How do I put this without insulting him after what I just said? Does he really understand what the measure of currency is versus the wealth of the country? I can buy a piece of equipment and pay $1 Canadian for it or I can buy the same thing for 65 cents American. It is the same item and has the same value, it is just in a different measure. We have different ways of measuring things. We used to measure things in inches and now we measure in centimetres.

To what degree is his understanding that all we are talking about here is the debate on which measure of our economic health we are going to use?

[Supply, March 15th, 1999]

Madam Speaker, the parliamentary secretary has gone on to stage two. If we have this committee these are the things we are going to have to talk about. I agree, there are many, many measures of economic health. The value of one currency against the American currency is only one of them.

However, the truth of the matter is that we export a great deal to the United States. That means that every prairie farmer, every British Columbia lumberman, everybody who produces something and exports it to the United States now gets paid 65 cents on the dollar because those things are measured in American dollars. Whether we do that conversion using a calculator to multiply by .65 or whether we have a common currency, it means that every worker now, instead of getting $10 an hour, would get $6.50 an hour.

If we want to be competitive at our present rate of inefficiency and with our high level of taxation, especially employer taxation, if we take all of those things into account, I think the bottom line is yes, the currency can act as a little bit of a buffer locally. However, it in no way solves the final problem and that is that we have policies in this country that just do not permit us to be as efficient as we ought to be.

[Supply, March 15th, 1999]

Madam Speaker, the answer is maybe, and that is final.

I will give the hon. member a reason for this. Over and over we see the Liberals on the other side not having debates. In fact on Friday they used a short day to engage in a so-called debate on a bill on which they had imposed closure.

The member is absolutely right. I like debate. We need to debate, not only in this place, but with Canadians across the country on these issues.

In that sense, I would support a wider debate and I would support this motion. However, in the interest of that I intend to sit here all day today to listen to this debate. I have to tell the member that at this stage I literally have not made up my mind whether I am going to support this motion or not. I am going to decide that after listening to more debate and more thinking. At the end of the day I am going to decide whether or not to support this motion. My present inclination is about 52 to 48 to vote for it.

[Supply, March 15th, 1999]

Madam Speaker, this is one of those motions where one cannot help but think that those people to our left, the members of the Bloc who put forward a motion like this one, are playing a game of chess. They are not thinking about the current move but about the next move or maybe the one after. We ought to give them a reluctant commendation for at least thinking ahead.

The level of our currency is a measure of our economic health. When we look at Canada's present economic health we get a 6.5 on a scale from 1 to 10. Compared with the American dollar we have a 65-cent dollar.

They are asking us to strike a committee to debate the issue. I am certainly in favour of debate. I might even be persuaded to vote in favour of a motion to strike a committee because perhaps this ought to be dealt with in considerably greater depth than we can do here. Perhaps we ought to listen to expert witnesses which a committee could do and which unfortunately we do not often get to do here because not many members are economic experts.

My initial reaction is that perhaps we ought to enter into the debate in such as way as to say yes, let us enlarge the debate. However, the underlying reason for this committee and for this study is intriguing. It has to do with the use of currency and the proposal behind the one we are debating.

We are debating a proposal to strike a parliamentary committee, but the idea behind it is to have a common pan-American currency so we will not have to do all the conversions and somehow, I suppose, hide the red faces of the Liberals for its economic policies which have brought us into such dire straits in this country. Our dollar's value on the world scene and particularly as it is pegged against the American dollar is at an abysmal low rate.

An analogy might be appropriate. I do not know if members have ever seen a house going down the road. I have seen this in Saskatchewan and Alberta. Quite frequently they move buildings down the road on many wheels. It could be 20 wheels or 24 wheels set underneath the building. It is intriguing. For a number of years a friend of mine was in the business of doing this and among other things used to haul huge grain elevators that go 100 feet into the sky.

The analogy I want to draw is how those wheels were constructed. If a large building is being moved along the road and goes into a hole, if there is not some sort of equalization between all the axles one axle stops carrying its load. Two things can happen. Additional weight transferred to adjacent wheels can blow the tires on that wheel, causing instability and if an elevator is being hauled it could tip. As a matter of fact my friend tipped one of his elevators because the technicians were not paying particular attention.

I was intrigued when I looked at the mechanism. Every one of the axles is tied together with hydraulic hoses and hydraulic rams so that when one wheel goes into a hole the pressure is immediately reduced, but as the other wheels pick up the load the pressure is transferred back to the wheel during the time it is in the hole. It is never relieved of carrying its share of the load.

Conversely, if one of the wheels were to go over a rock or a high spot on the road, again it could cause the structure to tip. It could result in the tires on that one axle exploding immediately because of the additional pressure from all the weight of the building being on one set of wheels when it is meant to be distributed.

As the pressure increased, the pressure on the rams was transmitted via the hoses to the other wheels supporting the structure. Two things happened. It prevented any one of the wheels from exploding because of increased pressure on it and it kept stability to the whole structure so it could go straight along. There was an additional mechanism available to raise one side to keep it straight if the road was uneven, but that has nothing to do with what we are talking about here.

What happens if we have a larger currency? It has been suggested that we should protect the Canadian currency by tying it to the American currency. A constituent in my riding, if he happens to be watching CPAC this morning, which I know he does from time to time because he is a retired person and has time for it, will be pleased to know I am now presenting his case. He strongly said we should tie the Canadian currency to the American currency, just do it arbitrarily and say this is what it is. My constituent suggested a time line. Perhaps it could be one cent per month over 30 months which would bring our currency back up to par with that of the Americans so there would not be a sudden change.

There is merit in that suggestion. When our economy has a fluctuation, when it goes down the tube, because we are in the larger package they pick up the slack for us and we do not feel an immediate hit in that situation. Eventually we would anyway, I believe.

The general principle of broadening the currency is to give strength to all countries that participate based on the overall average instead of on the vagaries of an individual partner.

One needs to be very practical when one thinks about and does any reading at all on the European Union, the new Euro coin and the Euro currency that is under way. As an aside, Westaim in my riding is a coin plating plant which, among other things, is providing blanks for the new Euro coin. I thought I would throw in that free commercial. That is proceeding.

Why would we not want to do this? I think there are a couple of reasons. I seriously question it. There are some countries in our hemisphere that are not carrying their load. They are inefficient, perhaps worse than Canada. They are very highly taxed as is every Canadian citizen. As a result, our overall economic efficiency is too low.

One really wants to ask the question: Why does the separatist party from Quebec put forward this motion today? I think perhaps, as I said in my introduction, it is thinking a move or two ahead in what it expects will happen, that Quebec will eventually separate. I suppose what we are hearing today is a tacit admission that when that happens the currency and the economic well-being of that province will be seriously threatened. I think that is a political reality.

Members of the Bloc are hedging against the future and hoping they can tie themselves to a larger currency so that the weight of that very uneconomic decision would be distributed over and carried by Canada, the United States and the other countries in the union.

I believe that in the move to do this the separatists better have a good share of realism. There are a number of countries which are being denied entry to the European Union because their economy is not strong. The European Union is working to make sure that its currency is strong, viable and very stable. The European Union literally is not permitting some countries to join because of their economic stability. Economic stability correlates very closely to political stability.

I would give advice to my separatist partners, whom I wish would simply stay in Canada. Let us work together and let us motor on. If they are going to go down this route, they should recognize realistically that there is a possibility that they would not even be permitted in because they would not be meeting the criteria for membership.

[Income Tax Act, March 9th, 1999]

Madam Speaker, I am pleased to add my contribution to the debate on Bill C-312 proposed by my hon. colleague.

There are some fundamental, philosophical questions to be asked when we have a bill like this one. When the government gives an exemption from taxation on income that is used to promote a charity or a political party, it becomes a tax expenditure. The Government of Canada by forgoing some revenue lands up indirectly subsidizing that particular activity.

If there is an organization in one of our communities whose job it is to pick up stray cats and keep them in a nice home with facilities and all such things for cats that is considered to be a socially beneficial activity, the government then feels it is justified in taking money from everybody in the whole country who pays taxes and putting some of it into subsidizing that activity.

Over the years in Canada the support of different charities and different organizations has grown into quite an industry. As a matter of fact, the finance department has a huge branch involved in the designation of charities. One problem that arises from this is that we now have a deputy minister and others who by the role of regulation and interpretation can determine which organization qualifies for the indirect subsidy and which one does not. It does make a substantial difference.

I know the parliamentary secretary said that small donations were not really driven by whether or not there was a tax exemption for them. That may well be because of the current tax law. The first $100 are not affected by it. Quite clearly one will not be giving a donation to somebody for $20 based on whether or not there is a tax benefit since there is not one. If it kicked in right away then perhaps there would be motivation.

Back in the old days it used to be that we could claim $100 of charitable donations even if none were made. We did not have to supply receipts. We could either do that or supply the receipts. It was always my argument that the person who was not able to accumulate $100 worth of receipts in a year for charity is probably such a cheap screw that he would not be giving anything so why should we give him $100. If there were no receipts it seemed to me that there should be no benefit at all because that is a person who does not reach out his hand to help charitable organizations or those in need.

Then we come to political parties. Political parties, according to governments of the past, are an activity which the taxpayer should be coerced to support indirectly through the granting of tax credits. In the old days it used to be a reduction of one's taxable income based on the amount of money given to a political party.

The rate at which political parties are indirectly subsidized by the taxpayer in general is much more generous than that for other organizations such as those that run safe houses for women and children who need a place to escape to when they are in danger or other organizations that help people who are ill.

I know several of those which basically run extended care centres for people with a long term illness. They are run as charitable organizations. My aunt was in one of those because the health care system in this country failed her and her family totally. She was moved into one of them so she could live out her final days with a good and reasonable amount of care.

Those organizations do not have nearly as much benefit and one could really wonder which one is better for society. Which activity provides a greater benefit to society as a whole, the existence of the Liberal Party or the existence of the extended care centre in the small town in Saskatchewan that looked after my aunt? I would contend that it was probably the extended care centre.

By the way, the family received donations to this extended care centre in lieu of flowers because of their great appreciation for the care she got.

The rate at which the government is indirectly subsidizing this should definitely be equal with that for a political party. I would even put my own political party into that category. It is as important to provide support for organizations like that as it is for even the Reform Party and certainly the Liberal Party and the other parties represented here in the House.

We then have the added question of who decides and how do they decide which organization gets the right to give tax receipts. That is a big problem which we have been made aware of just recently. The department tends to be rather discriminatory. It will accept one particular organization but not another, depending on what their supposed activities are and what their purposes are. Sometimes it is quite arbitrary. In my view, some of the situations that have come to my attention have been wrongly judged. These people then have a greater difficulty in raising money through donations.

My hon. colleague has put forward a bill that basically equalizes the contributions to charities as compared to those to political parties. With all due respect, I am not sure that I would go in that direction. I may have put it in the other direction. I would have perhaps considered bringing the political parties' benefit level down to where the charities were instead of what the member has done in bringing the charities up to where the political parties are.

They were quite far apart but there was a limitation on it for political donations. The maximum donation is $1,150 whereas for charitable donations, if I am not mistaken, it is now up to 50% of one's net income.

There is now a greater amount available for the charities even though the rate is lower. We need to consider this very carefully but I can certainly concur in principle with what my hon. colleague is doing. He is saying we should reflect what is valuable to Canadians. There is no doubt in my mind that most Canadians would consider the charities they support to be at least as valuable as the political parties, which many people unfortunately due to the growing cynicism across the country are failing to support.

I commend my colleague for bringing this bill forward. I hope that sometime in the near future we will actually be able to vote on something like this to bring a change and equality into this area.

[Federal-Provincial Fiscal Arrangements Act, March 9th, 1999]

Madam Speaker, these are questions and comments and mine will probably be a comment.

The hon. member is our critic for agriculture. Even those of us who are on the finance committee whose job it is to study this bill and the equalization plan have great difficulty understanding the formula and how it is evaluated.

I would like to comment on the issue of lotteries. The member is looking at the bottom line. According to the bottom line of this bill, when it is passed it is projected—and we got these numbers from the finance department officials—that the equalization payments for Manitoba will go down $37 million. That is the number the member quoted quite correctly.

However, it should be pointed out that because of the lottery component, if the member would look at the sheets, which obviously he has not had an opportunity to examine, in the breakdown per tax component, Manitoba loses about $50 million because of the gaming component. It is in the tables. This means that instead of going down $30 million, $50 million is due to lotteries. Instead of going down, Manitoba would have had an increase. Manitoba went from an increase situation to a decrease because of the lotteries. The total lottery impact is some $50 million.

My other comment has to do with respect to the formula and evaluation. How does one compute the potential of a province to gain lottery revenue? That is how the equalization formula works. It would be very subversive if actual income was used.

As the Conservative member from the east has explained, when a government gets new revenue, it does not like to have that taxed because there is 100% clawback. The same thing is true here. How would it be evaluated?

I would like to give one of my other colleagues a little more time so I will very gently shut down and add that as a comment. It really does not require a response from the member.

[Federal-Provincial Fiscal Arrangements Act, March 9th, 1999]

That is accurate. The member opposite is questioning this point. I have studied it. I have been up to my ears in equalization. This actually happens. It is a fact because equalization is based on a per capita computation.

I would like to give my hon. colleague from the Reform Party who just spoke an opportunity to reinforce in the mind of the member from Broadview—Greenwood that not all government intervention goes in the right direction.

[Federal-Provincial Fiscal Arrangements Act, March 9th, 1999]

Mr. Speaker, I appreciate the opportunity to engage in this debate. It has been interesting today because I think we all recognize that what is happening here is not good enough.

In general there is an inadequate explanation from the finance department to parliamentarians of what we are voting on today. Most members do not understand how the equalization system works. I rather doubt that most government members know how it works. Yet they will be told how to vote and that is what will happen.

I have a question for my colleague who gave a very good intervention that has to do with the debate between him and the member for Broadview—Greenwood. The member for Broadview—Greenwood said explicitly that he was a passionate interventionist. That is a quotation from Hansard yesterday. He said the same thing today. He said he believed in intervention and believed in it passionately.

The equalization payment system takes through taxation money from people in all provinces and distributes it to seven provinces. The result is that the federal government, by intervening in this way, lands up taking money that is paid by poor people in one of the three have provinces and distributing it per capita to people who are very well off in the have not provinces. We have a government intervention that effectively transfers money from poor people to rich people in different parts of the country.

[Federal-Provincial Fiscal Arrangements Act, March 9th, 1999]

Madam Speaker, I rise on a point of order. I am sorry, I thought there was time left for questions and comments. I was giving the hon. member the opportunity to ask a question. I have another question if time permits.