Mr. Speaker, I would be happy to debate the truth of how the country should be run with any member or members opposite any time they want.
I believe the bill will create more smokers because of the lower cost of cigarettes. In particular it will target and encourage younger smokers, people who have never smoked before, to begin to smoke because now the cost is so affordable. All this will create a huge demand on the already strained health care crisis in our country.
The government sought to battle smugglers at the expense of the health of its citizens. There is no doubt about that in the bill. It should have been looking at stricter ways to enforce the laws against smuggling. That is where the answer lies. It is not in trying to go into competition with the smugglers by selling cheaper cigarettes than they can.
With the introduction of the bill the government simply acquiesced to smugglers and is now trying to undercut their pricing. This is a shameful way to deal with law breakers. The government should be ashamed of itself. Without an attempt at stricter enforcement the government has now entered into competition with the smugglers. What a fine way to uphold the criminal justice system in the country: go into competition with smugglers.
I could give a few examples. If that is the way the government is going to treat people who break the law, by going into competition with them by offering a cheaper price, it could really get carried away. I will not cite some of the instances we talked about earlier.
No one disputes the fact we had a serious problem with respect to contraband cigarettes. It was a big problem. In 1981, 1 in 176 packs of cigarettes were smuggled into Canada. By 1992 that number had risen to 1 in 6 packages. We had a problem.
It is estimated that smuggling represented a yearly loss to Canadian retailers of some $1.2 billion. The government should have been looking into tougher laws and increased enforcement of those laws rather than going into competition with the smugglers. People looking at this action from afar would say that the government was dealing with law breakers and would expect that it would enforce the laws. However the government lowered the price of cigarettes and went into competition with them. Those people would have to scratch their heads and ask what is going on down there.
The government talks about the cost of enforcing the law and asks why the Reform Party is going off on tirades about spending more money on law enforcement. As a matter of fact the Reform Party has always advocated increased spending in law enforcement areas. We have always advocated that and we always will. The government would like to cut back and take a more middle of the road approach or it is society's fault approach to it. Canadians are demanding that we get tougher on people who break the laws.
At present some provinces have chosen not to reduce any provincial tax on cigarettes. What has happened? It has resulted in the creation of smuggling within Canada. We have taken one problem, smuggling between the U.S.A. and Canada, and have created another. Now a package of cigarettes can be bought in Ontario for about $2. They still cost $6 or $7 in B.C. This is sort of free enterprise, but it is against the law and the government created it with Bill C-32. The bill does nothing to stop interprovincial cigarette smuggling.
It proposes that interprovincial smugglers will be susceptible to a tax penalty of three times the excess tax avoided. This is only a slap on the wrist. Interprovincial smugglers with this kind of penalty are still making a fortune in what they are doing.
Such a penalty is of little significance to these people and would impact little, if any, on the profit margins of smugglers shipping cigarettes from Ontario or Quebec to western Canada. I return to my previous point that the lack of resolve of this government to enforce the laws of the land has led to a government attempting to make its cigarette prices appear more attractive than those of the smuggled cigarettes.
This strategy founded on the reduction of the tax on tobacco will ultimately lead to an increase in the numbers of smokers in Canada and a subsequent increase in the number of Canadians hospitalized for smoking related illnesses.
Of particular concern to me are the number of adolescent smokers who are going to be created as a result of the implementation of the government strategy in this regard. Even before the reduction of cigarette taxes, some studies have shown that the number of teens taking up smoking is on the rise for a number of reasons, peer pressure probably being one of the biggest causes.
In 1991 statistics showed that 120,000 children and adolescents began to smoke for the first time. With cigarettes selling for $2 and some cents a package in the stores and being available to adolescents, let us not be fooled about the corner store penalties that this government is talking about.
If these adolescents want cigarettes, they will get them, believe me. At $2 a package it makes it all the more attractive for them to buy.
In 1994 the number of adolescents smoking for the first time is going to rise dramatically. Despite the anti-smoking advertising campaigns that the government has talked about, this year the Minister of Health admitted in the House that the government's anti-smoking advertisements targeted at adolescents were not working.
Bill C-32 works in direct contradiction to the Tobacco Sales to Young Persons Act which serves to protect the health of young persons by restricting their access to tobacco in light of the risks associated with the use of tobacco. What a contrast in thought and deed.
On the one hand, the government is saying that it wants to protect the health of young persons regarding the use of tobacco and yet it lowers the price of cigarettes by taking the tax off and making them around $2 a package. It is certainly a contrast.
With these new tax measures, young people will now have greater access to tobacco products because of the cheaper price. There is no doubt about that.
As well, in June 1993 the Department of Finance reported that with respect to cigarettes teenagers are more sensitive to price changes than adults. Further, in 1991 the Department of Health began a program known as the national strategy to reduce tobacco use.
This program started with the premise that tax on tobacco products was a crucial element of reducing tobacco use. In other words, the higher the price, the lower the use. It was a deterrent.
Here again, as we have seen the government's attitude toward criminal justice and law enforcement, this government does not know the meaning of deterrents. Why would it be likely to understand the reasoning of this statement using tobacco tax as a deterrent?
The Minister of Finance is moving a bill that would see the reduction of taxes on cigarettes, a move that will dramatically increase the number of teenage smokers in this country. This bill promotes more smokers, particularly younger ones, and creates substantial increases in health care costs for the future.
It is estimated that 38,000 Canadians die as a result of smoking related diseases.
To help offset the criticism of promoting tobacco by lowering taxes the government has introduced this health promotion surtax on tobacco manufacturers and it will raise about $185 million a year. It is supposed to go toward advertising to deter adolescents from smoking. This is wonderful. It takes a billion dollars off the cigarette taxes and encourages young people to smoke because they are now more affordable and now it puts $185 million back into combating the problem it is creating with lowering the price of cigarettes.
Someone said in this House a few weeks ago that it is like trying to bail out the Titanic with a teacup. This surtax will only apply until 1997. What is it going to do then? Is it going to raise the cigarette taxes back up and create the smuggling problem?
Through Bill C-32 the government promotes the use of highly addictive substances and then as an afterthought creates a tiny program to remove people's addiction to that substance.
It is interesting to note in the red book, the infamous red book, in relation to health care the Liberals promised: "Our approach to problems in our country will be based on our values". I shudder to think that the values of the Liberals are demonstrated in Bill C-32. If their values and their attitude toward health care in this country are demonstrated in Bill C-32, this country is in deep trouble. This is a sad commentary considering the implication Bill C-32 will have on our already strained health care system.
Even within my own riding there are examples of people waiting months and years for needed operations. The health care system has had cutbacks. What is going to happen with the increase in tobacco related illnesses? It is going to swell the lines of people waiting for health care and it is going to create an even bigger backlog to our already strained health care system.
This will be the legacy of this government's action in reducing tobacco taxes; the legacy of a health care system that is going to be far worse than what we are experiencing currently. This will be the legacy of Bill C-32 which this government is trying to put through this House.
The government should have been looking for alternate ways to curb the smuggling of cigarettes. We suggested, but obviously the tobacco lobbyists got to the government first, why not a higher export tax? Why not put on a $22 a carton export tax on cigarettes and raise the price south of the border so they could not be sold cheaper in Canada. No, the lobbyists for the tobacco industry were at work and they got to the people in the government who were making that decision.