Mr. Speaker, I am pleased to rise and speak to Bill C-33, an act to implement certain provisions of the budget tabled in Parliament on March 23, 2004.
I am pleased, but a little surprised that we are still dealing with last year's budget, particularly since we heard the budget for 2005 earlier this week. It was noted with some amusement by other members this morning when the Clerk called the debate on last year's budget. That is not to trivialize the importance of what is in this bill. Bill C-33 is a large bill that contains quite a number of measures and some of them are very important.
Bill C-33 contains a number of changes to other legislation.
Part 1 deals with amendments to the Air Travellers Security Charge Act to reduce the amounts charged to airline passengers under that act. It is probably a good thing to do, but I do have a general caveat around user fees.
When we put off the collective responsibility through our taxation system for things such as air travel security to user fees, it is a way of adding the tax burden on to individuals. We avoid our collective responsibility there. It is also a way of governments announcing tax cuts and then shuffling the real burden and increasing taxes in other very specific kinds of ways. It is not something that I generally support. I do raise a caveat about it, although reducing it I suppose is a good thing.
Part 2 of the bill amends the First Nations Goods and Services Tax Act to facilitate the establishment of taxation arrangements between the government of Quebec and interested aboriginal nations in Quebec. I hope that takes place. It is good to facilitate agreements between our governments and our aboriginal nations.
Part 3 of the bill has many changes around the Income Tax Act and related acts. These include things such as introducing a new disability support deduction and improving the recognition of medical expenses for caregivers.
Clearly, there are new measures in the new budget earlier this week to do better on those provisions. Probably what we are debating this morning did not go far enough and needed to be improved. In the more recent budget we have upped that, which is good. I suspect we could still go some way to improve the situation of people with disabilities and the people who care for those who have medical health problems.
The bill also addresses expanding the education tax credit to apply to the cost of an otherwise eligible course taken without any reimbursement in connection with an office or employment. It accelerates the 2005 increase in the small business deduction threshold to $300,000. There are a whole series of measures, including things such as limiting the period during which taxpayers may open up old income tax returns to 10 years, preventing the use of schemes to sell otherwise unusable charitable donation tax credits and introducing a new regulatory regime for registered charities. Those are some of the provisions in the bill. There is quite a number of measures in the bill.
There are many important things in the legislation.
One particular measure I want to talk about is something for which the New Democrats have been calling for a number of years. It is with some pleasure that it has finally sunk into the consciousness of the government and it appears in the legislation, and it appeared in the budget last year.
Hopefully not, but probably because we were coming up to an election and this was such a glaring example of a failure of government policy, the government took the opportunity to make this change. The change I want to talk about is the elimination of the deductibility of fines and penalties.
This glaring loophole of avoidance of responsibility and tax responsibilities has been raised a number of times over many years. Members in this corner of the House have over the years called the provision perverse, outrageous and absurd. I have to agree that it is perverse, outrageous and absurd that corporations could deduct fines for criminal activity or for environmental violations and chalk it up to the cost of doing business. Somehow that flies in the face of what a fine or a penalty is.
A fine or penalty tries to seek some kind of corrective action, not provide another opportunity for a deduction against corporate taxation or taxes to be paid. This is an incredibly important issue, so I am glad it is finally being addressed. However, I wonder why it took so long to do so.
Bill C-19 deals with amendments to the Competition Act and includes changes to the fines levied against corporations for a wide variety of anti-competitive offences. However, in the committee my colleague from Windsor West felt that it would be inappropriate to deal with the changes to the Competition Act before we dealt with the change to the taxation laws. The cart was being put before the horse. Thankfully, the committee was moved by that argument and agreed to put off consideration of the legislation until we dealt with this matter.
This is an important issue for the folks who are looking at the Competition Act. If the fines and levies in reference to anti-competitive offences do not have any real effect, then why deal with them. The committee made a good decision, and I am glad the NDP member for Windsor West raised the issue.
Some examples of the kinds of situations that this has led to are really absurd, perverse and outrageous, as I said earlier. One of those examples is a pharmaceutical company was fined $50 million in September 1999 for a variety of conspiracy offences related to the sale of some of its products. That company was able to deduct no less than $10 million or 21% of the fine from its total taxable income. It is unbelievable that somehow the penalty was turned to an advantage for this company. That it got any advantage from being fined for conspiracy related to the way it did its business is a crazy situation. Therefore, it is good that the legislation finally addresses this.
New Democrats have raised this. The member for Winnipeg Centre, the member for Windsor—Tecumseh, the member for Winnipeg North have all raised this issue over and over again, in 2002, 2003 and 2004. All pointed out the absurdity of this situation.
If I get a parking ticket, which I did a couple of weeks ago as I rushed off to an event and forgot to put money in the parking metre, I cannot deduct it from my income taxes. It is outrageous that a business or corporation can deduct fines it encounters in the misconduct of its business. To chalk up fines and offences that way should not be another cost of doing business. It is good that we are finally dealing with this. I cannot believe it took so long, but there is certainly some benefit to it, This has been a glaring example of some of the problems with our taxation system.
When I look back at the budget in 2004, I remember that budget seemed to be about tax cuts and debt reduction. The whole social deficit, the important social spending was ignored again in that budget. We did not need a year ago, just like we do not need now, budgets that ignore the important social issues and concerns, budgets that do not invest in the future of needs of Canadians to improve their quality of life.
The budget of last year was a blatant example of focusing almost entirely on tax cuts and debt reduction. I am glad we have seen a bit of a change this year with the most recent budget. At least there is some reflection that the government is in a minority position in the House and it took a broader perspective on the important needs of the country.
We found out last fall that the surplus projections of the government were completely wrong, which is a continuing trend. The surplus projections of the government have been wrong for a number of years in a row, and by whopping margins.
Last year the government predicted a surplus of $1.9 billion and in the end it turned out to be a $9.1 billion surplus. It shakes our confidence in the ability of the government to do the whole budgeting process. If it cannot get the figures right on what money is coming in, how can it make appropriate decisions about where that money should be spent and what the important expenditures are from year to year? How can the government determine appropriate priorities when it does not really know what is coming in?
Last year was a particularly blatant example of that where incredibly important needs of Canadians were ignored in the budget, yet as it turned out the numbers were based on a faulty projection of the surplus that year. The government could have done a lot more in the budget of 2004 than it did. I hope measures are in place to ensure that down the road it does not make those kinds of mistakes and that it can restore the confidence of Canadians in the budget process.
By focusing on debt reduction and tax cuts, important things were left out of the budget. The government promised for years to address the issue of child care, for instance, and last year's budget did not do that. Yet again for over a decade the promise of the Liberal government to deal with child care was missed. We know something not good enough happened this week, but at least it made it on to the list in this new situation in a minority government.
Last year's budget did not deal with the issue of housing. It did not deal with the issue of student debt. It did not really deal with the issue of poverty in Canada, of child poverty and families living in poverty. I want to talk a bit about some of those issues.
In my riding of Burnaby--Douglas, affordable housing is a crucial issue. During the last election, I campaigned hard on the fact that we needed more affordable housing in our community. Burnaby--Douglas had done very well back in the 1970s and 1980s when Canada had a national housing program. We did very well in terms of the kind of affordable housing which was built in our community. Co-op housing was a major component of our housing stock. Co-op housing is an excellent model of communities and people of mixed economic backgrounds living together and working together to maintain and manage their homes. It makes an incredible contribution to community life and to the overall community. There are a number of fabulous housing cooperatives in my riding.
We need a program like that and we still do not have it. We did not have it in the budget of 2004. We did not get it in the budget of 2005. I know some of my constituents are very disappointed that this did not happen. They know people in our riding are paying way too much for housing. People on the lower end of the economic scale are spending way too much of their available income to be housed in often substandard housing. We need better housing, more appropriate housing and affordable housing in our community.
I represent a community that is generally seen to be a fairly well off community, but the poverty in my community is very well hidden. Almost 30% of people in the city of Burnaby live in poverty. It is a tribute to the caring for people in the community which sometimes makes it appear invisible. This community, like all communities in Canada, has a crying need for more affordable housing. We did not get that in 2004 when more corporate tax cuts and debt reductions were the order of the day and investing in the future of Canadians fell by the wayside. Unfortunately, in 2005 it is the same story on affordable housing.
Students in my riding were really concerned about the budget in 2004. There were no measures in it to address the incredible $20,000 to $25,000 average debt loads that students face upon graduation. That limits the ability of students to undertake post-secondary education.
The cuts in transfer payments to the provinces which were made the Liberal government years ago, and which have not been restored, have forced up tuition fees, making post-secondary education unaffordable for many students and their families. That is a huge issue in my riding. Burnaby--Douglas has two fine post-secondary educational institutions: Simon Fraser University and the British Columbia Institute of Technology. We depend on students being able to attend those institutions. We want to ensure that they have access to them.
Families in my riding want to make sure that their children can get the best possible education so that they can succeed in life. That is very important to people in my riding. It is very important to new immigrant families in my riding. They very strongly believe in the importance of education and want to make sure that their children succeed in their new country.
This is an important issue. The 2004 budget did not deal with it. The 2005 budget dealt with one aspect. In the 2005 budget a student loan is forgiven if the student dies or is completely disabled. That hardly addresses the situation. It is a good measure, but students are literally dying to get help and the government is saying that they really do have to die before they get any assistance with their post-secondary education. That is not acceptable.
The Simon Fraser Student Society has decided to pursue this issue. It has been trying to be very creative about how it pursues the responsibility of the federal and the provincial government in British Columbia for post-secondary education.
Recently the society launched a complaint with the United Nations saying that both Canada and British Columbia are in violation of the United Nations International Covenant on Economic, Social and Cultural Rights which was approved back in 1976 and which Canada signed at that time. Article 13 of the agreement calls for the progressive introduction of free education as a means to achieving equal access for all.
I think everyone in the House knows that we have been going in the opposite direction on free education. Education is becoming increasingly expensive. Tuition rates have gone up 75% to 150% in British Columbia. A significant part of the reason is that the federal government cut the transfers to provinces for post-secondary education.
I am proud that the previous NDP government in British Columbia put a freeze on tuition fees during its term so that students did not face ever increasing tuition fees. The NDP put on that freeze in the face of the decrease in transfer payments, the shortfall in money that the province received from the federal government. The B.C. government made education and health care a priority during the difficult period when funding from the federal government was cut because of the social transfer payment cuts to the provinces.
I am proud that the New Democrats held the line on that. As soon as the NDP was out of government and the Liberals were back in, tuition fees shot up dramatically. That is an unacceptable situation.
I strongly support the Simon Fraser Student Society in its attempt to bring attention to Canada's failure to move toward free education and improved accessibility to education. It is a very important issue and one on which Canada should be leading the world, not struggling to catch up with other countries that are making important strides in this area.
Last year's budget and this year's budget have done little for people living in poverty in Canada. We have heard how EI continues to suck money from workers and employers, but it is not being put back into programs for workers in Canada. We need to reduce the threshold for qualifying to 360 hours from 720 hours. That change is long overdue. The money is there to do it. There is no excuse. That move would go a long way to reducing poverty for families and children in Canada. EI is not just an insurance program; it is a key part to reducing poverty in this country.
The new budget increases the basic personal tax exemption. That is touted as a measure to help low income Canadians. I suppose it provides a small measure of support for those people, although it is hard to imagine how somebody who is only earning $11,000 a year should be paying any income tax. It is a very small measure. Unfortunately, proportionally it benefits high income Canadians far more than it benefits low income Canadians. We need to target our tax measures a little more carefully around eliminating poverty than we have been doing.
Mr. Speaker, I see you are indicating that I should be wrapping up my speech. I will say it has been interesting to speak to last year's budget when we are already dealing with the budget for the coming year. It is time to get on with it.
I am glad that finally after years of pressure from New Democrats in this corner of the House the government has finally sought to eliminate the deductibility of fines and penalties. That is a good part of the bill. With that I will close my remarks.
