James Rajotte

[Wage Earner Protection Program Act, September 29th, 2005]

Madam Speaker, I will do my best to address the question. Perhaps I misheard my hon. colleague, but I thought he said that under the bill up to $3,000 would be paid by the employer. Up to $3,000 actually is paid out of the wage earner protection program which would be paid out of government funds. Instead of the employees having to take their places in line to try to get their money from the company or from the creditors, they will be replaced in the line by the government. I do not know if my hon. colleague was confused on that issue.

In terms of the injustices, that is exactly what the bill is intended to address. The employee will not have to wait in line for months and months to get those unpaid wages addressed. As stated in the bill, they will be addressed very quickly, paid for out of the program by the government. It should tide the person over, whether it is finding a new job or accessing employment insurance if that is the only route available.

I am sorry if I did not quite completely understand the question, but I think the bill is very much intended to address the injustice that the hon. member mentioned.

[Wage Earner Protection Program Act, September 29th, 2005]

Madam Speaker, my colleague's question gives me the opportunity to explain. I know it is not related specifically to Bill C-55, but it is related to income trusts.

The member mentioned that the United States does not have income trusts. That is true. However, it also do not have double taxation on dividends. If double taxation of dividends were not done in Canada, then we would not need income trusts. Income trusts allow the company to pass on the profits to their investors. People say that is evading taxes. What it does is pass on profits to the investors and thereby companies do not pay the double taxation to the government.

It is interesting, but it is a fundamental difference between the New Democratic Party and the Conservative Party. If we look at productivity and competitiveness, I do not believe the path to productivity and competitiveness is by double taxing those people who are taking their hard earned dollars and investing it in companies in Canada. That is what investors are doing.

By double taxing companies, we are not increasing our productivity and competitiveness. We are in fact lessening our productivity and competitiveness by giving more resources to the government, by double taxing those people who are taking their own hard earned capital to invest in our companies in Canada. That is exactly the wrong path to go down.

If the finance minister wants to come forward and say that the government will stop double taxing investors who take their hard earned money and put it into companies in Canada, we in the Conservative Party would probably say that we should look at that. That is what the United States does and maybe that would be even a better way to go than the income trust angle.

If we want jobs to be created, whether it is in northwestern British Columbia, on the east coast or anywhere else in Canada, we need Canadians to use their excess capital to invest in companies here.

Our biggest problem in Canada with productivity and competitiveness today is a lack of access to capital by small and medium size companies. If we go to any research institution in any field across the country, talk to the head of the NRC, the ARC or whomever else, they will say that our number one issue in Canada is productivity and competitiveness.

The forestry sector has been hit by unfair trade practices by our colleagues. It has had to put up $5 million in duties. This sector has actually made profits because it has responded by becoming more efficient and more competitive. The forestry sector has not done this by evading taxes. I think, frankly, it has been by trying not to pay double taxation to the government and passing on some gains to investors. The investors can then use the surplus money to reinvest back into the communities across the country.

[Wage Earner Protection Program Act, September 29th, 2005]

Madam Speaker, it is my pleasure to address Bill C-55, an act to establish the wage earner protection program act and also to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act and make consequential amendments to other acts.

This is very complicated but important legislation. I am pleased to say that my Conservative colleagues have shown a great interest in the bill. A number of them will be speaking to the various aspects of it and the amendments. We will be proposing amendments at committee stage on this bill which we think will improve the bill.

It is appropriate, and the minister mentioned this, that we should recognize the member for Winnipeg Centre who raised this issue in a private member's bill. It should be noted that he brought the issue to Parliament's attention. Our party certainly appreciated his efforts in this area. We did have some disagreements, but our response, I thought, was very responsible.

We formed an internal committee under the leadership of our labour critic to try to formulate our party position on the issue even prior to the government bill being introduced. We wanted to be ready as a party to debate this issue substantively. Today I would like to offer our party's position on this legislation, but obviously other Conservative members will expand the comments in other areas.

Our view is that Bill C-55 is a good first step. We recognize that both the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act need to be amended.

It is a sad fact that every week dozens of companies and individuals declare bankruptcy in this country. We need to make sure that we amend our bankruptcy legislation so that it is clear and workable. Some 11,000 businesses and 100,000 individuals use the Bankruptcy and Insolvency Act on an annual basis. Therefore, I support making changes to both acts.

One particular proposal I support is that bankrupt individuals with more than $200,000 in personal income tax debt representing 75% or more of their total unsecured liabilities will not be eligible for an automatic discharge.

I am also pleased that we are trying to bring our bankruptcy laws in line with international insolvency laws. That being said, there are some problems with Bill C-55 that we will be seeking to remedy at committee. I have made some efforts to be in touch with various associations, organizations, labour groups and people in the private sector who are anxious to make representations on the bill. Hopefully they will all be able to do so at committee.

We will seek to clarify some issues because the legislation is rather complicated, particularly on the bankruptcy side.

The first issue I want to touch upon is wage earner protection. I want to be clear that prior to this legislation our party fully supported, as we do now, the payment of unpaid wages in a quick manner.

Bill C-55 will compensate individuals for amounts earned but not paid during the six months preceding the bankruptcy or receivership of their employer. The wage earner protection program will be funded by the consolidated revenue fund, which is essentially the taxpayers of Canada. Payments of up to $3,000 will be made to employees. I support the expedited payments to workers who are caught in bankruptcy proceedings. It is an appropriate amount of income to be paid in these situations.

Our party does have some concerns with the proposed change in the rank of creditors. Though it may sound strange, good national and provincial bankruptcy and insolvency laws improve the investment environment. Investors gain confidence knowing that should something go wrong, a stable system is in place to protect what is left of their assets.

With that in mind, wages are currently paid fifth after secured creditors and other preferred creditors. I am concerned that elevating wages above secured creditors may lead to increased financing costs for small business owners and therefore fewer investments. While I support the wage earner protection program, I do not believe that the rank should be changed from fifth to third or to a limited superpriority status. I want to be clear on this. We are not opposing payments to the workers. That should be done and it is something that our party supports.

Our party is concerned that once the government pays the worker, the government then takes a position and its position as a creditor is what has changed from fifth to third. Our concern is that this may impact the investment climate, particularly for small and medium size businesses that are attempting to access capital. I believe my colleague from Edmonton addressed that in a question to the minister.

We look forward to input from the Canadian Federation for Independent Business. I know it is concerned about this specific issue. In an attempt to address an imbalance in a system for workers for a small amount of income, we should not in remedying that injustice cause an injustice to small business owners who are creating an awful lot of jobs across this country.

We think it could be left in fifth place where it is currently. To be clear, the worker would be paid but the government would take fifth place and therefore not upset the investment climate for small and medium size businesses. My colleague from Souris—Moose Mountain will be addressing the wage earner protection program in his speech in great detail.

What I want to touch on next is the whole issue of RRSPs. Under the current laws if people go bankrupt, the trustee will seize their RRSPs. Bill C-55 will make RRSPs exempt from seizure with a few exceptions. For instance, contributions made in the 12 months prior to bankruptcy will not be exempt.

RRSPs have become a contentious issue. For example, the province of Saskatchewan exempts RRSPs entirely in bankruptcy proceedings. One of the issues we will need to address at the committee stage is whether or not there should be a cap on the dollar value of the RRSP. While pension plans can safely accumulate, RRSPs are still partly vulnerable and self-employed individuals could lose their investments and security upon bankruptcy.

This is something that was called for by investors and self-employed people who use RRSPs to build up their nest egg for retirement. We think it is a reasonable change to make, such that if people in their 40s or 50s have to declare bankruptcy, their entire nest egg will not be taken from them at that stage. Obviously the exception of the 12 months prior is to prevent someone from loading up his or her RRSP in the last few months and then declaring bankruptcy. This is a good change, especially for entrepreneurs who rely very heavily on RRSPs for their retirement years.

In addition, the bill is silent on registered education savings plans. This is an issue on which the Senate committee on banking made a recommendation in 2003 in its comprehensive report regarding bankruptcy and insolvency. I was remiss in not complimenting the report and the senators who worked on it, as well as the member from Winnipeg. The report was certainly instrumental in bringing forward a lot of the changes to the bankruptcy laws. The Conservative senators who worked on it did an absolutely outstanding job, in my view.

In addition, Bill C-55 makes changes to the treatment of student loans. Currently student loans are not discharged in a bankruptcy unless 10 years has passed since the applicant was a student. Bill C-55 reduces the period from 10 years to 7 years. In other words, the student loans of a person who goes bankrupt after having ceased being a full time or part time student for seven years will be automatically discharged. The Senate banking committee report which I referred to earlier recommended that there only be a five year wait before the discharge of student loans. I know the New Democratic Party would prefer the time period of two years.

The second issue regarding student loans is hardship. There is a provision to allow for the discharge of a student loan due to hardship. Bill C-55 allows a bankrupt person to apply to the court to obtain a discharge on the grounds of hardship five years after the person has ceased to be a full time or part time student. Five years in this case may be too long if we add in the additional issue of hardship, but that is certainly something the industry committee can look at more closely. It is a reality that all post-secondary education costs have risen since the Liberals have been in office.

While many individuals successfully finance their education and repay all their student loans on time, some Canadians are burdened by student loans to the point where they have difficulty providing for the basic necessities of life. Therefore, I think the so-called hardship clause should be examined in detail at committee.

Another issue that Bill C-55 raises is that of income trusts. This has become a very topical issue recently with the Minister of Finance, quite frankly in my view, making an absolutely unprecedented interference in the marketplace, in our investment community. This is disrupting the retirement nest eggs of thousands and thousands of Canadians. It is affecting the investment climate in perhaps the most negative way in recent years. I just cannot believe a finance minister would act so imprudently. It is an absolute disgrace.

We in the Conservative Party under our finance critic, the member for Medicine Hat, have argued that we need certainty in our investment community. We should also realize, though, that it is mainly middle class Canadians who have a lot of their retirement funds tied up in the stock markets. To cause markets to decline precipitously overnight because of the imprudent actions of the finance minister is unconscionable. I hope that decision will be reversed, but unfortunately, I do not think it will be unless there is a change of government.

The whole issue of income trusts is raised in the bill. My colleague, the member for Kelowna—Lake Country, the vice-chair of the Standing Committee on Industry will be addressing the whole issue of income trusts in his speech, how they are affected by the bill and what should be done. I do not know whether the government is intending to change how it will address income trusts with the recent actions by the finance minister, but that is something the government should address.

I want to conclude by saying that consumer insolvency has increased on average by 12.8% per year since 1968. Business bankruptcies are decreasing, which is good news. We do like the parts of the bill particularly that amend the bankruptcy legislation, which encourage restructuring of viable but financially troubled companies. Obviously, we would like to see it worked out rather than going to bankruptcy, if it is at all possible. A lot of the recommendations made to address the Bankruptcy Act that were in the Senate report in our view would lead to less regulation, less interference and would make it more efficient. Those initiatives that address that part of the act we certainly support.

We also recognize that we need better protection for wages. We are fully prepared to support that, but we obviously want the issue of where the government ties in, in terms of the creditors issue to be addressed at committee.

We do support the principles in the bill. We will be supporting the bill at second reading. At committee we will be asking all sorts of witnesses to come forward with their thoughts on the bill. We will be proposing some amendments. We hope other parties will approach the bill in the same reasonable, prudent manner that we have, and in the end we can address all of these issues in a very responsible manner.

[Technology Partnerships Canada, September 28th, 2005]

Mr. Speaker, $2.8 billion, 5% repayment, that is the truth about what the government has recovered. The fact about any proprietary information is that this is taxpayer money and taxpayers deserve an answer to these questions.

There is a discrepancy here between $350,000 and $460,000. Why does the government continue to hide how much money former Liberal cabinet minister David Dingwall received?

[Technology Partnerships Canada, September 28th, 2005]

Mr. Speaker, here is something more about former minister David Dingwall. It had been reported that he had received $350,000 to help Bioniche obtain a grant through Technology Partnerships Canada. This is expressly forbidden by the government's own rules.

Yesterday we learned, however, that Bioniche has in fact paid back $460,000 to the government for violating its agreement. That is more than $100,000 difference.

Will the industry minister come clean on this issue and tell us how much money was paid to that former Liberal cabinet minister?

[Technology Partnerships Canada, September 27th, 2005]

Mr. Speaker, this is taxpayer money that is being squandered. Canadians have a right to know why a former Liberal cabinet minister received a kickback against his government's own rules.

I have two direct questions for the Minister of Industry. How much money has been received that he knows of, in total, for lobbyists securing these TPC grants and why is the government itself not pursuing the kickbacks paid to these lobbyists instead of leaving it up to the companies?

[Technology Partnerships Canada, September 27th, 2005]

Mr. Speaker, under section 6.5 of all Technology Partnerships Canada agreements, it is expressly forbidden to pay lobbyists contingency fees for successfully securing a TPC grant. Despite this, former Liberal cabinet minister David Dingwall was reported to have received $350,000 from a company in exchange for securing a technology partnerships grant.

Will the Minister of Industry simply confirm that David Dingwall did in fact receive the bonus for securing a TPC grant for his client and if so, exactly how much was he paid?

[Gasoline Prices, September 26th, 2005]

Mr. Speaker, I strongly disagree with the member opposite that this would not have an impact. There would be an immediate impact. It would be an action way beyond any of the words offered by any of the members opposite tonight.

The member said that the government does not benefit that much but it has had a windfall of over $300 million. I do not see how that is not much of a benefit to the government.

I will take no lectures from any member opposite about seniors, especially after the last budget in which the government's increase to seniors will result in about $30 per senior by 2007. That is an absolutely shameful way to treat seniors in this country. I do not think we in this party need any lecture from the government on that.

We have offered other initiatives. Before the last election we talked about things to improve energy efficiency in Canada, like reducing the capital depreciation tax on manufacturers across this country as part of an overall energy framework. We talked about addressing things like the over-utilization of things like natural gas, which is causing home heating fuels to increase. People in this sector have been calling for some leadership from the government for years now and have not been getting any. This would lower the cost of these products over time and provide more stability. There are things like what the provincial Liberals in Ontario are doing in terms of deciding one day they may shut down all the coal fired plants, ignoring the good work done in clean coal technology in provinces like Alberta. It is just contributing to the instability and the overall increase in these prices.

The immediate thing the government could do would be to stop applying the GST to the excise tax and give back the $300 million windfall to Canadians. It is going to be reaping more of a benefit in the future. The government could look at things like a tax credit for hybrid vehicles. It could look at affecting capital depreciation rates. It could also look at an overall energy policy framework that would provide more stability to consumers and industries across this country.

[Gasoline Prices, September 26th, 2005]

Mr. Speaker, I am pleased to rise tonight to discuss gasoline prices, the rapid increase in fuel prices and costs and the effects on Canadians. It certainly has spiked in recent weeks and it has caused a very direct effect on many industries and certainly all consumers in the country of all fuel products.

Some industries have been very directly affected. The trucking industry has been mentioned. It is very directly related to fuel costs. The airline industry which in recent months had shown some signs of real growth and profit potential has really been hit by these high fuel costs. Obviously people in the agriculture industry who are now trying to cultivate the fields are really feeling the impact of these high fuel costs.

That is essentially why we are having this debate tonight, not to mention all consumers who use these products. Right now the big focus is on those who drive vehicles and fill up at the pumps. I think an even bigger problem is looming for consumers, particularly those on fixed incomes, who will be using home heating fuels this winter and not only the increase in gasoline prices at the retail level but the increase in the price of natural gas, something which has not been mentioned here tonight. That is going to have a real impact for people on home heating fuels.

I would like to provide some background on what actually goes into the price of gasoline. There are four main components that we have to keep in mind.

The first is the price of crude oil. It is determined globally. The Minister of Industry said that Canadians produce about 3%. We are price takers. We cannot directly control the price of crude oil. We have to take that price. The main factors are things like OPEC. Obviously political events have a dramatic effect. The demand caused by emerging economies such as China, Brazil and India are an influence as well.

The second component is the wholesale price, which is commonly referred to as the rack price, which is charged to gasoline marketers by refiners. This is on a North American basis. It explains partly some of the regional diversions in gasoline prices. Gasoline at the wholesale level is very much on the North American market, which is why if we exclude taxes, gasoline prices in the New England area, the Atlantic area or eastern Canada, or gasoline prices in western Canada if we exclude taxes are often very similar.

The third component is the retail margin which is the local gas stations where we fill up. This tends to be very competitive. The level of competition tends to determine how low prices are relative to other regional markets.

It is very complex to go from oil out of the ground to the refined product at the pump. There are many influencing factors.

There have been some calls for government to control these markets. In my view we should not control the markets in terms of these three levels. We should allow them to operate as freely as possible. If government were to try to intervene at the crude level, the wholesale level or at the retail level, in my view it would actually lead to distortions which would cause the price to increase.

As my colleague the member for Vancouver Island North pointed out, people who build a large refinery need a lot of investor confidence. They need some stability. They need to know that they are going reap some investment from that in order to build the increased refining capacity in North America. We are not advocating government intervention in these areas.

I also point out to those people who want to regulate gasoline prices in Canada that it can be done but it is done at the provincial level. It is not a mandate of the federal government to regulate gasoline prices. That responsibility lies with the provinces. I would not recommend a province follow that route, but if members of the House want gasoline prices to be regulated, then they should pressure their provincial governments to do so.

The fourth component is taxes. From the information presented to us from the Department of Natural Resources, we find about 39% of the total cost of the price of gasoline is taxes. It is not just federal taxes. It is provincial taxes and in fact includes some municipal taxes. That is a very large component in the price of gasoline.

To provide some background, from a federal point of view there are three types of taxes that are imposed. Royalty taxes are imposed at the extraction stage and enter the manufacturer's total cost or base price before profit margins and other taxes. There are the excise taxes, the federal government's 10¢ per litre excise tax on gasoline and 4¢ per litre excise tax on diesel fuel. Excise taxes generate about $5 billion to $6 billion each year for the government.

There are also the sales taxes which are the variable taxes, the GST and the HST. They are different from the excise tax. This is important and it is why our party is calling for some relief in terms of the GST applied at the pump. The amount of GST or HST is calculated as a percentage and therefore rises or falls with every increase or decrease in price and other taxes. Those sales tax rates may not change, in other words 7% is applied, but the amount collected does change. That is what our leader was trying to explain to the government during question period. As the price goes up, the amount collected from the GST goes up and the government coffers benefit. Our view is that the benefit should flow to the consumers, not to the incumbent government.

The only way to provide immediate relief to consumers is therefore to reduce taxes. That is why we have called on the government for months now to apply some relief, to stop charging the GST and other taxes, to axe the tax on tax, and to even consider perhaps that if the rate reaches such a level, to stop applying the GST on taxes as a whole.

I would also like to comment on some of the things that the new Minister of Natural Resources commented upon, and the Minister of Industry did as well. That is the whole issue of refining capacity.

In order to develop more refining capacity in this country we would need to have an energy policy framework whereby people in the energy sector would have some sort of an idea as to what the government's policy is on energy. I would say respectfully that the government has no energy framework policy. In fact a lot people in the energy sector, and there is a good group that has been formed, the energy dialogue group, with members from the oil and gas, the wind and solar and the electricity sectors, would state that the federal government has shown an absolute lack of leadership on this entire issue.

If one wants to create more refining capacity in this country or in the United States, one will need some sort of framework to provide to these associations. It is interesting. It is not just the oil and gas sector. It is the wind sector and the solar sector that are saying this about the government.

The Minister of Natural Resources was talking about the fact that he drives a hybrid vehicle and he was outlining all the programs that the government has done. One of the things the government could have done from a very practical basis is to do what many states have done, and what the federal government in the United States has done, and that is to provide a tax credit for those people who purchase a hybrid or a clean diesel vehicle. It would lower the amount that they pay for a hybrid vehicle, which is typically about $6,000 more per vehicle. It would lower that amount. It would still be a little more expensive than a standard vehicle but over time it would hopefully pay off if they drove it over a seven or ten year period.

In terms of providing more information and transparency, for which members of the Bloc Québécois and members of our party have called for years, we are fully supportive of that and we endorsed it in a 2003 industry committee report. We would encourage the industry to do that, but if the Department of Natural Resources feels that it needs to provide more information, that Canadians be more transparent, we would obviously be supportive of that. The one thing the government could do on a very immediate basis to provide some relief to consumers and to industries is to take some action and stop collecting so much tax at the pump. That is what it could do immediately. That is what it should do. That is what a Conservative government would do if it were in power in this country.

[Gasoline Prices, September 26th, 2005]

Mr. Speaker, I would like to pose two questions to the Minister of Industry.

First, there have been some members of this House who seem to imply there is some collusion going on in component parts of the gasoline prices in this country. I would like him to answer very directly, does his department or any other federal department or agency have any evidence whatsoever of any collusion at any level, whether it is at the rack level, whether it is at the crude level or whether it is at the retail level?

Second, I would like to ask the minister why he has not proposed or his government is not willing to accept some reduction in taxes so that we can give immediate relief to consumers. The most variable aspect of the price of gasoline that we can actually affect as parliamentarians is the taxes on gasoline. It is about 42% component cost right now. Why will the government not reduce the taxes on gasoline?