Dennis Bevington

[Budget Implementation Act, 2006, No. 2, December 11th, 2006]

And he is so shy that it makes it difficult.

There are fundamental differences in the Northwest Territories, which is an autonomous region and which theoretically, quite plausibly, along with northern Ontario should be a province in waiting.

What is not different about those areas is what the member alluded to. He said that when the government does not pay attention to the northern regions, when it allows them to be exploited without building the infrastructure and proper communities, without making the things happen that will leave behind substance, we end up with something far less satisfactory.

When the government does not do that and we allow ourselves to be manipulated by government and large corporations into doing things in the cheap and dirty fashion, which has been the practice for the last 20 years and which is a practice that has to stop in this country, we end up with something that is far less satisfactory than what we have.

I know that the hon. member's riding has representation at Queen's Park. Ontario is one of the dominant provinces of Canada. How these conditions can go on in this region year after year is something that really shocks me.

In my own territory, I can always blame it on Ottawa. I am able to say that Ottawa is not doing its share. My colleague has to deal with that provincial relationship.

What binds us across the north are the things that the federal government is able to do. I spoke about this earlier when I talked about tax fairness. We need some fairness in the system. The federal government agreed in the 1980s that it was fair to offer northerners right across the country an extra tax break because of their high costs. The government has recognized northern and remote communities in Parliament and in our taxation. What we need to do is to make it fair again.

[Budget Implementation Act, 2006, No. 2, December 11th, 2006]

Mr. Speaker, I know my colleague sometimes blends into the windows that are behind him.

[Budget Implementation Act, 2006, No. 2, December 11th, 2006]

Mr. Speaker, during my previous speech I spoke about the serious issue of tax fairness for northern people. As I indicated, the other issue that I wanted to speak to in this discussion regarding northern issues is the need to change the way that we are funding northern territories. We have had an expert panel reporting on how to change the funding formula for the territories, and I had just started in on this when my time was up on Friday.

I will just repeat that we have identified four key issues that stand in the way of the north achieving its full potential.

The first is a new fiscal arrangement with Ottawa, one that truly reflects the needs of the Northwest Territories. The current fiscal arrangement cannot continue. Not only is it inadequate but in many ways it acts as a disincentive to the Northwest Territories moving forward.

My territory is very much controlled by this august Parliament, unlike the other provinces and regions of this country. This Parliament really does play such an important role in what happens in the north. As a northerner, I have railed against that for my whole life. I have felt, in some ways, the inadequacy of my citizenship, living where I do in the north. Certainly, part of it is the way that the Government of Canada deals with northerners.

As such, we all hope that as the resources of our territory are extracted and developed, they will mean more self-determination for us as citizens of the north. There is no question about that. If our resources simply get taken and we end up, at the end of the day, with what we have now, that would be a tremendous letdown and a tremendous failure of the Canadian system which is to recognize that we are all equal across this country and that we all have equal political rights.

The federal government provides about 70% of the funds for the Northwest Territories, but that really does not make the NWT a have region because this government, not the northerners, owns the vast riches of the territories. Nearly as much goes to Ottawa in royalties, in land sales and in corporate taxation. Nearly as much goes to Ottawa right now from the Northwest Territories as comes in to the Northwest Territories.

With a proper fiscal regime that would put our resources on the same level as other provinces where governments collect considerably more royalty revenues, we would be in a positive situation in the Northwest Territories. We would be ahead of the game.

The Government of Canada has chosen to subsidize businesses that develop in the north at the expense of royalties and taxation that could make the difference between us being a have and a have not province. Province is a term I use somewhat lightly because we are a province in waiting. In the Prime Minister's letter to the NWT, he wrote:

The Conservative Party of Canada agrees unequivocally with the principle that northerners should be the primary beneficiaries of the revenues generated by resource development in the Northwest Territories similar to other jurisdictions in Canada. We also agree that the transfer of authority over lands and resources from Canada to the Northwest Territories (devolution) is the next logical step in the political development of the Northwest Territories.

Northerners would really like to know when this is going to happen and how this is going to happen. If this is the mandate of the Government of Canada, will it say it very clearly to its new emissary, Mr. Harvie Andre?

In 2004-05, public accounts showed that the federal government took in over $270 million in royalties and resource revenue from the Northwest Territories and the amount is growing every year. That amount went up quite a bit last year as well. Those figures have not come out, but that is because our second diamond mine is now into production. At the same time that does not include the corporate taxation that goes with that.

In comparison, the Northwest Territories public accounts showed only $3.5 million in corporate income taxes in that same year. This goes back to a problem that we have just like every other province or political region in the Northwest Territories and that is, if we set our corporate tax rate a little higher than anyone else, then of course the corporations are all filing somewhere else.

We have bounced around over the years because where we had huge surpluses, we lowered the rate and then everyone followed us down and then we balanced out. Then we raised the rate and then we got nothing. That is a fundamental problem with the tax system in Canada which should be addressed by the federal government. There should be some federal-provincial understanding on corporate taxation to avoid this kind of loophole, to avoid this kind of competition that takes the money out of the hands of the provinces and the regions.

People in the north simply want a fair deal from Canada in how our interests are treated. Whether it is on taxation or funding for government programs and services, we actually want to benefit and build our territory on the resources that we have. We want to make that happen for Canadians for the future. I hope in the future that the government will do much better than this budget in dealing with northern concerns and issues. The improvement has to take place.

[Budget Implementation Act, 2006, No. 2, December 8th, 2006]

Mr. Speaker, it is my pleasure to speak in this budget debate. I noted with interest some of the comments the Parliamentary Secretary to the Minister of Finance made at the beginning of her speech. She set the tone that the government wanted to follow. With this bill, she felt it was opening up new opportunities for Canadians to be better served in the tax system and she spoke to a number of specific instances of that.

She also spoke of the importance of working Canadians as part of the whole tax structure, and in a way we all are. Working Canadians are the wealth creators. I come from a region of the country which is doing very well in creating wealth for Canadians, with the diamonds, oil and gas in the Northwest Territories. We are starting to push a lot of wealth into the rest of the country.

We can look the oil and gas industry in northern B.C. and say the same thing. People working in that part of the country are creating a lot of wealth for the country. We could say the same thing about northern Alberta. We can go to northern Saskatchewan where the uranium mines are now pumping out enormous profits, another indicator of wealth creation.

The development of hydroelectric power in Manitoba will create more wealth. The northern Ontario diamond mines, the potential great hydroelectric developments in Quebec, the Labrador nickel, and the list goes on, create more wealth. Throughout northern Canada, working people create wealth for the rest of the country. Wealth is a good thing; it makes our world work.

Within the concept of that, we need workers in the north. We need people to live, work raise their families and have a normal life there, just like every other Canadian. That is very important. It creates wealth and helps the whole country out.

In the mid-eighties we had some pretty far-sighted Conservatives in the Mulroney government who realized it was important that northerners be well protected in terms of their ability to live and work. To their great credit, they created what was called the northern residents' tax deduction. That spoke to fairness.

However, when we look at 2006, and in preparation for next year's budget, we need to talk about what the north needs. We need measures to deal with the high cost of living. The tax deduction created in 1986 and remains the same amount in 2006 does not accomplish that purpose. It does not deliver that for northerners any more.

According to information provided by the NWT Bureau of Statistics, a food item which costs $1 in Yellowknife, on average costs $1.35 in Fort Liard, $1.70 in Wekweti, $1.91 in Fort Good Hope and $2.22 in Pawitik. These increased costs do not reflect the fact that the costs of items in Yellowknife are already significantly higher than southern Canadian cities like Edmonton.

On average, households of northerners spend $15,000 more per year on living essentials than other Canadians. Some will argue that higher northern wages make up for these increased costs. If we were talking about a time many years ago, we might say that was the case. However, when we look at Statistics Canada and we look at the wages across the country, we see it is not the case.

The other day I had the opportunity to travel on a plane with a young fellow from Newfoundland who had worked in northern Canada and in Alberta. When I asked him if he was better paid in the north, he said that his paycheque was larger for less work in Alberta than it was when he worked at the diamond mines in the Northwest Territories. This young fellow was a skilled tradesman whose skills could be used anywhere in the country. It is not working for northerners any more.

High wages are not really the answer. It is not about that. High wages only benefit those who have a job which pays well. For the unemployed and the working poor, the high cost in the north only adds to their burdens. The majority of people in northern communities across the country are working for very low wages in very substandard conditions.

Some would say that the much promoted cut to the GST has helped northerners to deal with the high cost of living. In reality, the 1% cut lowered the price of a cup of coffee in Yellowknife by a whopping 1%. A 1¢ drop in the price of a cup of coffee really helps when the price of a litre of milk is $4 or $5 and when someone needs a loan to buy fresh fruit, vegetables and groceries. The GST is very perverse in what it does to northern communities where the cost of living is high. Northerners pay more GST for every item they buy than southerners. In some respects, we in the north pay more taxes than those who live in the southern part of Canada. The GST, the tax on consumption, exacerbates that issue.

If the government really wants to help northerners, and I am talking about northerners in every province and territory, then it should increase the northern residents tax deduction. This is a pretty simple thing to do.

As many members know, since being elected to the House, I have called for the northern residents tax deduction to be increased by 50%, with future increases indexed to a northern inflationary measure. It has been estimated that for each increase of $1,000 to the deduction, $3 million would be put back into the pockets of northerners.

If the Minister of Finance cannot take my advice, then perhaps he will take the advice of the Canadian Chamber of Commerce. At its annual general meeting in Saskatoon, chamber members, those very progressive and enlightened people we all know as the backbone of the country with their large and small businesses, voted to support the federal government in: reviewing the provisions allowing for income tax deductions for northern residents and increasing the housing deduction to reflect the actual inflation index costs of housing in northern areas; reducing record burdens by eliminating the current employer specified vacation travel deduction and replacing it with a standardized inflation indexed northern vacation deduction based on the number of people in the taxpayer's household and the area of residence; and dispensing with the limit on medical travel being the lowest return air fare and allowing northern taxpayers the deduction for their actual costs incurred in medical travel.

These tremendously progressive statements came from the Canadian Chamber of Commerce. I thank the members for those statements. I thank them for their support because they truly recognize that northern workers are making a difference to our economy. They will continue to add wealth into the country and will continue to support the efforts of southern Canadians to live in a good fashion.

Maybe the Minister of Finance will take the advice of the legislative assembly in the Northwest Territories that unanimously supported a motion to increase the deduction.

Also calling for this change is the NWT Chamber of Commerce and the Hay River Chamber of Commerce. The head of the Hay River Chamber of Commerce said:

Hay River is experiencing a period of rapid economic growth, but to sustain this prosperity we must retain and attract residents.

He went on to point out that in order to address this need for residents, there must be an increase in the northern residents tax deduction. What a good idea.

I do not know if the federal government realizes this, but if we pay the cost of flying people in and out of the north, that adds to the company's costs and reduces its taxes, which go back to the federal government.

By encouraging northerners to live in the north, we are going to improve the financial viability of companies and we are going to see a return to the federal government. That is not a bad idea; it is a good idea. This is what we want to create in our country.

Increasing the northern residents' tax deduction will help ordinary northerners, but more is needed, and I will not stop there. I speak to that first because it is an issue for people and people first is the way our party deals with things. We also need to speak to the increased need of funding to our territorial governments.

During the election, the Prime Minister wrote to the Premier of the Northwest Territories, saying:

We recognize the unique circumstances faced in the North regarding the delivery of programs and services to residents [in small, remote communities] and we are prepared to discuss the challenges regarding the costs and circumstances for the delivery of those services.

I appreciate the Prime Minister's comments. We all appreciate them. We want them backed up in the budgets of the government so they reflect what the Prime Minister said. That seems to be pretty straightforward. The government has had plenty of time to talk. It has had an expert panel report, advising how to change the funding formulas for the territories.

The Northwest Territories has identified four key issues that stand in the way of the north achieving its full potential. First among them is a need for a new fiscal relationship with Ottawa, one that reflects the needs of the Northwest Territories. The current fiscal arrangement simply cannot continue. They are deep-seated. Our territorial government, representing the full number of the people in the Northwest Territories, can only borrow up to $300 million. Most of that is tied up already in debt on public utility systems, which of course it has to provide.

[Budget Implementation Act, 2006, No. 2, December 8th, 2006]

Mr. Speaker, the hon. member mentioned some issues surrounding the fiscal imbalance and the tax points that he would like to see as part of this fiscal imbalance and how we can move money from the federal government to the provinces.

In this budget and in the budgets of the Liberal Party prior to this one, for many years we have seen reductions in corporate tax rates and that has not allowed provinces to pick up tax points.

Corporations in this country are free to file their tax returns in whatever province they want. In my territory, the Northwest Territories, we have had extreme difficulty with our fiscal situation when we adjust the corporate tax rate. Either we scare off all the corporations and they run to another province to file or we lower the rate and they run to us.

I would like my hon. colleague to speak to how we can deal with the corporate tax rate in Canada that is applied in provinces. Do we not need some kind of agreement across the country to fix the corporate tax rate that will apply and will prevent these corporations from treating us as pawns in their game to reduce their after tax rate?

[Budget Implementation Act, 2006, No. 2, December 8th, 2006]

Mr. Speaker, I thank my hon. colleague for his thoughtful dissertation on the green economy and all the things we could do within it. Certainly, we have to make choices. We have made some choices in the past. One of the choices the Liberal administration made in the last few years, which was backed up by the Conservatives when they got in, was to encourage the development of liquefied natural gas terminals in Canada. These terminals would bring gas from other countries to Canada at very high environmental cost in terms of the CO₂ emissions to get the gas here. As early as May, the North American Energy Working Group was busy continuing this plan to develop the infrastructure of delivery of another fossil fuel from somewhere else.

As a Liberal member of cabinet before, does he now see the error in supporting the development of this new fossil fuel energy source for this country? It exports money and creates pollution in other countries. Does he think this is the kind of thing with which we should be moving ahead if we are really, truly talking about a green economy in Canada?

[Bank Act, December 7th, 2006]

Mr. Speaker, I come from a northern part of Canada where banking services are limited in many small rural and remote communities and limited to the extreme. In some cases, people need to air freight their cheque to another community and have it cashed there and then returned to them, which is a huge expense.

Within any amendments that are being made to the acts governing the banks, I would think that we would want to see some attention paid to ensuring that there is some universality in some of the basic banking services across this country, especially in rural and remote communities. It may be that it will require some amendments to the act that would allow banks to provide more online services. I would say that there are things that could be done.

Although we have competition in the banking field, we do have very large companies that dominate the market. The banking industry needs to have some responsibility toward Canadians to ensure their services are available in all parts of this country.

Could the hon. member comment on how these amendments to the act will help people in rural and remote communities?

[Canada's Clean Air Act, December 4th, 2006]

Mr. Speaker, my hon. colleague from Yukon and I are from the same area and have the same issues surrounding climate change and are very concerned about it.

The member speaks to a lot of programs that could have been but when we look at the record of the carbon sequestration program that he was talking about, the Commissioner for Sustainable Development indicated that it missed its greenhouse gas reduction target. It was supposed to be 3.5 megatonnes and it turned in at 0.08 megatonnes. That suggests that there was some work to do there.

At the same time, at the natural resources committee we are hearing evidence that it will be about $100 a tonne for the sequestration of CO₂ in the tar sands. This is quite a large figure.

We must be careful when we talk about these programs that have been put into place in the past because we really need some regulation and that is not what the government provided there. When we talked about getting the lead out of gasoline, we did it through legislation and it happened immediately. There is no lead in the gasoline.

Does the member not recognize how important it is to put in legislation that will bind us to getting results for the Canadian public?

[Canada's Clean Air Act, December 4th, 2006]

Mr. Speaker, it is very difficult to describe the electrical grid in Canada in such short time.

The provincial premiers recognize the need for this infrastructure development. The actual form of this should be taken in the energy strategy that comes forward from the government. We are waiting for that strategy through Natural Resources Canada. The government should be talking about those issues and putting those deals together.

[Canada's Clean Air Act, December 4th, 2006]

Mr. Speaker, the tar sands are an important part of Canada's economic future. At the same time, the issues in the tar sands with respect to the use of energy have not been addressed. We have not seen movement on the development of technologies for CO₂ sequestration. We have yet to see the proper implementation of water management plants.

Living in the area and travelling through the tar sands for the past 20 years, I have seen the air pollution that comes from them. I cannot imagine the kind of situation we will have in northern Alberta and the southern Northwest Territories, if these are five times their size, with that kind of pollution going on. We need to set targets right now for the tar sands as well. If those targets cannot be met with their existing expansion, then we need a moratorium on them to ensure that the technology going into there, the developments taking place there are not going to add to the problem that we have with the tar sands.