Bryon Wilfert

[D-Day, June 6th, 2003]

Mr. Speaker, today is the 59th anniversary of D-Day when Allied forces landed on the beaches of Normandy.

When the Canadian Forces landed on Juno Beach, my father was one of them, a member of the Argyll and Sutherland Highlanders. His landing craft was blown up from enemy fire and he wound up recovering in a London hospital from severe shrapnel wounds until his return to France to fight in the battles of the Falais Gap and Caen in August 1944.

My father and his comrades were volunteers--men and women who fought for freedom and democracy. They were known as the “shock troops” of Europe.

Today, we commemorate a memorial in the configuration of a maple leaf overlooking the invasion beach. This memorial is a living testimony to the tremendous sacrifices of Canadians who were prepared to pay the ultimate price in order that we may enjoy our fundamental freedoms today. This is an historic and important date to remember and to honour.

[Message from the Senate, June 5th, 2003]

Mr. Speaker, as I indicated to the hon. member, in fact, rates have been coming down. There is consultation going on and I would invite the member to contribute his thoughts with regard to the consultation issue on EI rate setting.

Essentially though, the power of municipal governments to get out of property taxes is in the hands of the provinces. It is not in the hands of the Government of Canada. If the provinces want to allow a municipality to have a hotel tax, part of a gas tax, or any kind of tax, they have that power and responsibility under section 92 of the Constitution.

In 1994 the Government of Canada became the first government to deal directly with municipalities when it came to the national infrastructure program, something the municipalities had been asking for 10 years. It was this government that said it would deal directly with municipal governments in areas dealing with the environment. It set up a 20% club to reduce C0

2

emissions by 20% over 10 years.

It was this government that said, on the payments in lieu of taxes, which I know the hon. member is concerned about, that the federal government will now be treated like every other taxpayer. If we do not pay on time, we get a penalty. We must go through the same process of appeal, et cetera. It was this government that brought in that legislation. The Canadian Alliance, of which the hon. member was unfortunately a member at the time, voted against it.

I am glad to see at least that the member is on the road, and is now understanding the importance of municipal government and the work we are doing together.

[Message from the Senate, June 5th, 2003]

Mr. Speaker, first, I would like to make it clear to the member that I understand the question very well. I come to the House with 12 years of municipal experience and, as a former president of the Federation of Canadian Municipalities, I think I can say with some certainty that I understand the question.

However I would point out to the hon. member that if he wants to talk about the Constitution and about empowering municipal governments, those are different issues.

What the member is suggesting tonight, however, is something which I want to point out very clearly: the municipal governments are treated no differently than any other employer. All workers and employers are required to pay employment insurance premiums. As members know, for the last 10 years the rates have continually gone down since the government came into office.

The member raises the issue that this is unfair to municipalities because they raise money through the property taxes. However their workers benefit, obviously, if they are unemployed, similar to workers in any province or in the federal government.

The fact is that there is a responsibility for employees and employers to pay employment insurance premiums. The employer in this case happens to be city X, and that is what it is doing. Cities are not treated any differently or unfairly.

The GST issue is a whole different issue on which I will talk with the member some other time.

However I would point out to the member that the government reduced the EI premium rate for 2003 to $2.10 from $2.20, and proposed in budget 2003 to set the premium at $1.98. This will mean a savings of $1.1 billion in 2004, compared to 2003. Therefore we are continually reducing EI.

The minister has gone further. We know there is now a review, a whole EI setting mechanism and consultation, which will be completed at the end of this month. That is very important. We will get the stakeholders. Yes, it does go into consolidated revenue but that is because the Auditor General said, in 1986, that we could not have a separate EI account. That has been, and continues to be, something suggested in the House, which in fact is a fiction of some people's imagination. The reality is, yes, it goes in there.

The minister has said that we will have consultations, which is what he has been doing. We want to make sure we take into account and design a permanent premium setting rate, one that will realistically deal with those whose needs are there. We do not want it to be underfunded, and that is important.

However the municipal issue is a red herring because very clearly the municipalities are treated no differently than anyone else.

I sympathize with the member. I know the member is now showing an interest in municipal politics and I would be more than happy to talk to him about municipal politics any time. However the reality is that there is no difference.

I would say to him that had we written the Constitution today, instead of in 1867, and had certain amendments been accepted in 1981-82, the municipalities would have had many of the things that the member would like to see.

[Committees of the House, June 5th, 2003]

Mr. Speaker, I am a bit surprised to be debating the issue of bank mergers, particularly when a very detailed report by the Standing Committee on Finance was finished in March 2003. Obviously my colleagues in the corner missed a lot of this review because they would not be raising an issue today which went through many months of detailed analysis.

We were charged by the Minister of Finance to look at the issue of public interest. Some of my colleagues believe that we cannot allow bank mergers. The fact is that Bill C-8, legislation which was before the House in 2001, allows for that.

The Minister of Finance asked us to look at the public interest. For the record I would like to make it very clear what it is he asked for. He asked that Canadians in all regions be able to have quality financial services, with special attention to the disabled, low income individuals and rural communities. He wanted us to look at the choice among financial service providers and the availability of financing for businesses, particularly small businesses and Canadians; creation of long term growth prospects for Canada; having more effective internationally competitive institutions; and adjustment and transition issues, including the treatment of employees. We took the minister's letter and evaluated the issue of public interest.

It is important for all Canadians to know that we have and will continue to have the strongest financial institutions, I would say, in the world. During the Great Depression of the 1930s the banks in the United States folded like cards. The banks in Canada did not. We did not have any bank failures.

The process began. The banks were brought before the standing committee. All sorts of interested stakeholders were brought before the standing committee to evaluate these issues. We did not take these issues lightly.

The review process is important. Obviously the banks may make a decision and it may be based on whether or not they feel they can be competitive internationally. They are going to make a business decision. It is up to us as parliamentarians to evaluate the public interest to see if it will be served and how best to respond.

We produced a report with 11 key recommendations. I would invite members of the New Democratic Party to read them sometime. They will find that the recommendations address the issues that were presented by the minister in his letter.

The discussions with the banks in terms of issues were wide ranging. Any proposal, if it were to come forth, would be reviewed by the Competition Bureau. The Competition Bureau is going to look at the issue of competition in areas across the country. The Office of the Superintendent of Financial Institutions plays a key role. It analyzes any proposed merger with respect to the soundness and stability of the banking system. The Standing Committee on Banking, Trade and Commerce in the other place and the House of Commons finance committee were asked to look at the public interest.

The majority of the witnesses who came forward indicated very clearly that we have strong financial institutions. Some did not want to see any changes. Some of the members were suggesting earlier that some of the banks were closing in their ridings. I am sympathetic to that, but that is a decision the banks make and they would go ahead whether or not there are mergers. The decision to open branches in certain areas is based on the needs as perceived by those particular banks. Obviously there are procedures in place to deal with notification issues, et cetera.

The finance committee was charged with the responsibility of seeing how the public interest would be dealt with. Dealing with and defining the public interest in anything is very difficult. It depends upon whom we are talking about in the public. The various stakeholders range from bank presidents to interest groups to community organizations who are concerned, and legitimately so, about the state of financial institutions and the implications if there were to be mergers.

There have been no proposals presented, but we wanted to be proactive as a committee to make recommendations to the minister. There is a procedure, as members know. The minister is going to report later this month on the recommendations. What I find interesting is that the New Democratic Party would have us move concurrence when the fact is that we have asked the minister to respond to the report.

I want to know what the point is of producing a detailed and thoughtful report by parliamentarians on which the official opposition agreed, except for my friends in the corner who did not agree and that is their right, in which we asked the minister to respond. Now that the minister will be responding, the NDP want to jump the gun. That does not make any sense. Why would we spend all that time putting forth a detailed report, asking the minister to look at some very important recommendations which we believe will advance the public interest and are important to the public interest and will help in shaping the minister's response to the recommendations? No, the NDP would rather spend time in the House today talking about something with which we have dealt and are waiting for a response under the guidelines and the timelines granted to the committee and to the minister.

The minister will fulfill that timeline and in doing so, we will get a detailed response. If members in the House do not like the minister's response, they have every right to say so and they can respond accordingly. But to jump the gun, to jump the queue before the minister responds makes no sense.

If members of the New Democratic Party were to read the report in detail, they would realize, and in their own dissenting report they would at least be able to say that it has had a fair hearing before the minister. If they do not like the recommendations, so be it.

In my view, they would rather play politics here and waste the time of the House by talking about something because they do not want to talk about something else which is of importance to Canadians as well. We all know that, but this is the way this institution works.

Let us talk about some of the key issues in that report that we addressed to the minister.

The issue of access is important to Canadians whether they live in a big city, in rural Canada or remote places. My New Democratic friends would agree with that as well. The issue then becomes, what kind of services? Are we talking about full banking services?

Today in the age of technology we can go to ATM machines, but some ATM machines are not convenient for people because they may not have a full range of services. People may not be able to use a particular card or the machines may not have the kind of transactions that they would like. They may be okay to take the money out but they may not necessarily be good for bill payments and other things. That came out during the discussions. We talked about access issues, saying that there needs to be full service access, whether it is through bricks and mortar or machines. They have to provide access to Canadians wherever they live and it needs to be high quality.

Jobs are also important. People who live in a rural community where the only bank in that community has closed may want to take out a loan. What happens then? They knew the bank manager in their community but now they have to go 100 kilometres down the road to a bank where no one knows them. Those issues were brought to our attention and we responded.

The Bank of Montreal said that its strategic plan was to deal with small business loans. Its niche in the banking sector is small business. That is what it wants to deal with and it wants to expand on that market. It was not necessarily so for other banks, but they all look at the issue of how they can take care of their customers. Banks are no different from anything else. Obviously if they do not have customers, they are not going to have profits. If they do not have profits, they are not going to do very well. Naturally those were issues we wanted to deal with. As I said, that was an important issue.

We know that if any bank mergers were to occur, people in the big cities would be all right, primarily because of the concentration and number of financial services available in large cities, but that is not so in rural and remote communities. This was a very important point which we stressed in the report. Again I would suggest that my friends in the New Democratic Party may want to read it.

On the other hand, I know the NDP has talked about employment issues. We certainly tried to address some of the issues in the report, such as job protection for Canadians who work in these financial institutions, early retirement and what things can be done to make sure, through attrition or whatever it happens to be, that we do not have a great dislocation, particularly for people on the front lines.

One of the issues that the financial institutions talked about was the issue of competitiveness internationally. We have six very strong banks in this country and yet they have to compete on a global scale. What is the impact on a global scale? Is there a strong rationale to do so?

I said that we have very strong financial institutions in this country, and we do. In fact, we can be proud that they operate efficiently and that we have not had the collapses that we have seen in other jurisdictions.

The discussion of course is, on scale, on international competitiveness, which was one of the major issues the banks addressed. Another issue they addressed had to do with the whole issue of shareholder value. They also talked about the health of the financial service sector.

From our standpoint, obviously we are concerned about whether these institutions will be able to deliver in this market and what they may do elsewhere. We know, for example, that 50% of the Bank of Nova Scotia's profits comes from overseas, particularly in areas in the Caribbean. That is where it decided to focus its particular niche.

However we wanted to make sure that, in terms of addressing the minister's letter, we responded effectively, which is why the March report was presented.

Normally, when committees present their reports they wait to hear from the minister. Hopefully the ministers, when they read those reports, and I know they read them very carefully, will respond effectively to those 11 recommendations. I know the Minister of Finance is very much interested in what we have to say or he would not have asked us to undertake the issue of public interest.

The fact that we have done that and that we are now waiting for a response from the minister within the prescribed timeframe, it seems a bit strange that today we would try to, in my view, hijack the House by suggesting that we need to deal with an issue for which a report has already been presented, and trying to say that we are not getting a response. The fact is that we are doing it under the prescribed timetable that the committee works under and that the minister works under.

I can tell the House that the Minister of Finance will respond in a way in which he will look very carefully at the 11 recommendations because it is not only important to members of the House, it is important to every Canadian. Every Canadian has the right to know the approach the government will be taking. I can assure members that is one thing the Minister of Finance will do and he will be do it effectively .

It is also important to note that, as I said, we do not want to mix apples and oranges.

Bill C-8, as we know, was the Financial Consumer Agency of Canada Act . We know that under that legislation the issue of mergers was allowed. What the minister is trying to find out is how that can be further clarified in terms of the public interest, and therefore if banks wanted to merge tomorrow they could make a proposal.

The fact that they have not presented a proposal means that they are waiting. They are not jumping the gun. They are waiting to hear what the minister has to say. Only the NDP wants to jump the gun. However Canadians and the banks want to hear what the minister has to say, as do, I believe, all members in the House. When that comes down, I would then expect a full and thorough discussion, as it should be.

We listened to many witnesses who made very thoughtful and useful presentations to members of the Standing Committee on Finance. We were able to look at the issues very carefully and to dissect some of the key problems that people were seeing out there.

We were not just focusing on large urban communities but also on rural and northern communities to make sure that if we were going to do it we would do it right. If we are going to allow something, we want to do it right because 70% of the mergers generally across the globe fail and therefore we want to make sure that it is done right. The New Democratic Party wants to rush it but we do not. We want to make sure it is done right.

I hope those members will give the minister the ability to present his report and for us to be able to then respond. I have great faith in the fact that the Minister of Finance will do so in a very timely manner.

At this point, as we wind down to our question period, we are faced with the issue of what the guidelines are and what we want the minister to evaluate. He has 11 key recommendations that deal with the issues of access, competition and employment. Those are important issues and they need to be addressed under the timelines and guidelines set out by Parliament. Otherwise we will have a response that will not do justice to the committee report.

I congratulate all my colleagues who were on the committee and who spent long hours to make sure we heard from Canadians and various stakeholders in order to do our job effectively. The report, which the minister has been looking at, is one for which we are very pleased. I can tell the House that when the minister responds I expect we will be able to evaluate his response and say where it is that we agree. Hopefully, we will agree on everything, but if we do not, at least we will have had a fair hearing.

One of our responsibilities as parliamentarians is that we do not have to agree but we have to talk about the process, and nobody has complained about the process. I want to make it very clear that the process is important to us and to all Canadians.

I hope my New Democratic friends will read the recommendations, because clearly they must have missed them. They also must have missed their own minority report because obviously if they had read it they would know that they were asking the minister to respond, and that of course is what we are trying to do.

[Committees of the House, June 5th, 2003]

Mr. Speaker, we consented to 20 minutes in total, 10 minutes for speaking and 10 minutes for questions and answers, not unlimited time.

[Federation of Canadian Municipalities, June 4th, 2003]

Mr. Speaker, over the weekend in Winnipeg, I attended the 66th annual conference of the Federation of Canadian Municipalities.

As a past president of the FCM, I have seen a significant evolution in its relationship with the federal government. Prior to 1993, few, if any, federal cabinet ministers addressed the conferences. Gone are the days when federal representatives ignored FCM issues. Today we have a significant recognition by Ottawa that in order to have competitive communities, the theme of this year's conference, there needs to be a healthy and ongoing interaction between governments.

It is this government that has embraced and implemented the national infrastructure programs. It is this government that established the green municipal fund, strengthening and protecting the natural environment of communities. It is this government that dealt with the payments in lieu of taxes issue. It is this government, through CIDA, that has advanced and promoted municipal expertise around the world through FCM international programs. And it is this government that has regular contact with FCM representatives, including contact with the Prime Minister and many cabinet ministers.

This government continues to be a strong partner with municipal governments across the country.

[Public Service Modernization Act, June 2nd, 2003]

Mr. Speaker, first of all, as I said last week to one of his colleagues in the Conservative Party, if in fact he believes that the allegations and the charges which the member is saying this evening are true, then he should say that outside the House. The member says that in fact he has no problem standing outside the House. I invite him to do so.

I think those kinds of allegations against an hon. member, against an outstanding parliamentarian and an outstanding finance minister, should in fact be made outside the House. If the Conservative Party wants to go on with this type of mud-slinging, let it do so. If the member wants to talk about taxes, that is a different story.

I think it is important when we talk about Barbados that we say the tax treaty which formed the basis for this exemption on Barbados has been in place since 1980, even before this government. The choice was quite clear. To leave the long-standing exemption for income from these Barbados corporations was entirely reasonable. Does that mean we are standing still? Of course we are always reviewing these things. I explained to the member why he was wrong on Liberia. I have explained some on Barbados tonight. No doubt the Tories will come back to the House again this week or even next week with the same question, and they are going to get the same answer.

[Public Service Modernization Act, June 2nd, 2003]

Mr. Speaker, I have to say to my hon. colleague, for whom I have a great deal of respect, that I am somewhat disappointed. The issue that I know the member really wants to talk is the issue of taxes and multinational companies, but it disturbs me that the hon. member is more than suggesting that the former minister of finance deliberately created a tax loophole in 1995. This allegation by the member is unwarranted, of course. It is an attack on a very honourable parliamentarian. I would suggest to the hon. member that if in fact he believes that what he says is true and he believes these allegations have any substance, then he should take them outside this chamber and make them out there, where he will be outside parliamentary immunity. To me, to suggest that there was a deliberate action taken by the former minister of finance of course is outrageous.

But I would like to talk about the issue which I know the member really wants to talk about, I am sure, and that is the issue dealing with taxes.

First of all, with regard to Liberia it was taken off the list because no formal treaty was ever consummated with Liberia, so Liberia never signed on, it was never ratified and that is why Liberia was off the list. I want to point that out to the hon. member to start with.

I also want to point out that the issue of tax policy obviously makes a key contribution to business success. As members know, it has been part of Canada's tax policy not to subject to double taxation earnings of Canadian corporations and their subsidiaries in foreign countries. We do that in different ways, I would point out, by not subjecting to Canadian taxes the incentives, the active business earnings that a Canadian company's foreign subsidiaries earn in a country with which Canada has a tax treaty.

The member asked, and the question I think comes down to this: Why did the government revise certain aspects of these rules several years ago? Was the exemption left in place for a particular kind of subsidiary resident in Barbados that does not pay a substantial tax rate? The answer has several elements.

First, it is not clear that abruptly curtailing the exemption would have benefited Canada. In a world of tax planning opportunities, there is no assurance that corporate groups would not simply move their corporate functions performed by Barbados to another jurisdiction where similar results could be obtained. In that case, the corporations would not pay any more Canadian tax. Indeed, forcing businesses out of Barbados actually could be counterproductive. Why is that? Because as a tax treaty partner, Barbados gives Canada tax information and assistance, more than any other jurisdiction does. That is important, and I certainly will continue to elaborate on that after the member responds.

[Infrastructure, May 29th, 2003]

Mr. Speaker, as the hon. member knows, the government has worked in a collaborative form both with the provinces and municipal governments when it comes to transportation issues.

In fact, it is rather ironic that his friends in Ontario have not come up to the plate yet for the $435 million that we put forth in the GTA for transportation improvements. They have been waiting for an election in Ontario and I guess they want to do it then. However the needs are now and we would like them to move on it now.

[Parliamentary Employment and Staff Relations Act, May 28th, 2003]

Mr. Speaker, I think the simple solution is if the hon. member believes that what he has read in the newspapers is in fact the case he can say it outside, put it outside, and deal with the implications of that. I think it is unfair, it is unwarranted and it is unnecessary to besmirch the reputation of an honourable gentleman in this House without evidence. If the member does not have it, that is one thing. If he has it, he should say it outside where he is not immune.

I thought the issue here was taxes. It is not about a particular member. It is about an issue. Let us try to enlighten the House a little bit. Canadian businesses understandably want to be competitive. What is important here is that as a fellow Commonwealth state, with which we have deep ties, a tax treaty formed the basis, in this case, of giving an exemption to these Barbados corporations that have been in place since 1980. The choice to leave in place the long-standing exemption for income from these Barbados corporations was an entirely reasonable one.

I want to point out to the member that this does not mean we are standing still. For the benefit of the member, we are currently reviewing both our tax treaty with Barbados and the relevant income tax regulations to make sure they fit our tax policy goals.

Changes, the hon. member may like to know, may be considered, but let us be clear: Any changes will have to result in a careful and thorough analysis and we are going to look at that not by political motivation but by real facts.