James Rajotte

[The Budget, February 25th, 2003]

Madam Speaker, I listened to my colleague's speech and he made some rather strong statements on the tax system in place regarding the oil and gas industry. I want to clarify a couple of points. I think I know the answer but I want to get the member on record.

Does the member support or oppose the finance minister's proposal to reduce the resource tax to equalize it to other corporate taxes? Does he support or oppose the oil sands tax regime that was put together in large part by the current Minister of Health?

At the industry committee we are studying the implementation of the Kyoto accord. While we are on opposite sides of the accord, I think we can agree that there needs to be some sort of an implementation plan. We do not sign something without having a plan.

A member of the Sierra Club said quite explicitly that if the federal government had been serious about Kyoto it would have been more detailed and explicit in this federal budget about how it was going achieve Kyoto and what specific credits it would give to homeowners for whatever. It is very disappointing to see this large fund which is just an open-ended fund. Does he think the finance minister should have been more specific as the Sierra Club advised?

[The Budget, February 25th, 2003]

Madam Speaker, I am sure members opposite are just waiting in anticipation to hear my answer.

First, in regard to corporate welfare, I thought I had defined it in my speech. It was the government picking certain companies within certain industries to favour with public subsidies. For an example of that, take a look at technology partnerships Canada, a program that invests millions in certain companies picked by the program. Of those so-called loans or investments, as the Minister of Industry states, 1.6% have been repaid

Can we and Canadians in the gallery see how much has been repaid? No, because we are not supposed to see the books of these companies to which the taxpayers in the gallery have lent the money. This is the example of the government giving billions and billions to certain companies in certain industries. That should be stopped, or at the very least it should be transparent and accountable.

In terms of the tax regime for the oil companies. I do not know whether he is referring to the oil sands taxing that was put together by the former natural resources minister, who is now the Minister of Health, or actually the resource tax which is now made equal to the other corporate taxes. We certainly support that. This is not corporate welfare to set up a tax regime which is equal to other corporate taxes here in Canada.

If cutting 2¢ off EI premiums counts as a long term national vision for an employment insurance program, I think the government is sadly mistaken.

It is about prioritization of spending. It is about moving money from programs like technology partnerships Canada which are clear examples of corporate welfare into other high priority areas in terms of cutting the debt, lowering taxes for all Canadians, and into areas such as health care.

[The Budget, February 25th, 2003]

Madam Speaker, first, with regard to infrastructure, I would differ with him in terms of which level of government has been more responsible certainly in funding basic infrastructure needs.

If we look at basic fuel taxes, the provinces spend, as my party's transport critic pointed out, over 90% of the fuel taxes raised on infrastructure. At the federal level it is less than 5%. Less than 5% of the federal fuel tax has been put toward roads and highways. That is the record.

Which level of government do I trust more to deliver on infrastructure needs? I trust that level of government which is closest and understands the infrastructure needs of Edmonton and understands the infrastructure needs of Ottawa and the smaller communities in Canada. The closer governments are to the people, the better they understand their direct infrastructure needs.

In terms of the debt, a lot of members on the opposite side have said they have reduced the debt since 1996-97. The government took office in 1993. It has actually increased the debt since 1993 and I think that needs to be pointed out again and again. The debt to GDP ratio has decreased, but as I said earlier, when times are relatively good, those are the times in which we should be making some substantive payments toward our debt.

In terms of health care, I know our party's health critic will offer a substantive speech to which the member can certainly listen.

In terms of the fiscal situation, what was most disappointing is that the government did not reduce corporate welfare in this budget by one dollar. It did not address the whole fiscal mismanagement of the gun registry, the GST audits or any of those areas in which it could have truly saved money. As I said earlier, cut corporate welfare and put money into priorities like health care. That is what the government should have done in the budget and unfortunately it did not.

[The Budget, February 25th, 2003]

Mr. Speaker, I will be splitting my time today with the hon. member for Yellowhead.

I rise today to address the budget proposed by the Minister of Finance last week on behalf of the people of Edmonton Southwest and as the official opposition critic for industry.

During my address I would like to first offer a general reaction to the budget. Second, I will comment on some specific initiatives that fall within the industry portfolio. Third, I will present the alternative Canadian Alliance approach.

First, and in general, this is a budget of missed opportunities because so much could have been done that was not done.

I will be the first to admit that there are some positive fiscal and economic signs here in Canada. The economy is relatively strong. We have low interest rates. We have relatively good job growth rates. We have stronger than expected government revenues. This is the time for us as a nation to capitalize on our positive points by focusing on our weaker points: lagging productivity, the lowest in the G-7 over the last 25 years, a low dollar, a high public debt and high and punitive tax levels.

This should have been the budget that propelled Canada to the forefront of the most innovative, the most productive nations on earth by substantially paying down our national debt, providing hard-working Canadians and businesses with some real tax relief and re-prioritizing spending from areas such as corporate welfare to health care.

Instead, the finance minister has not only adopted the track of his predecessor with his massive growth in government spending, he has escalated the process. The budget announces $17.4 billion in new spending initiatives over three years without identifying more than one cut in government spending.

Three things should have been done. First is some real substantive tax relief. It is Canadians, not the government, not the cabinet, who are balancing the yearly budget and they deserve some tax relief from this rapacious Liberal government.

Second, pay down the debt and establish a long term debt repayment plan. We have yearly surpluses but we still have a massive public debt, as well as large unfunded liabilities with the CPP. Passing debt on to future generations is not only fiscally unwise, it is morally wrong.

Third, spending should be re-prioritize. There have been no spending cuts particularly in the area of corporate welfare programs. The government has funded in stop-gap ways for health care and it has funded in absurd ways for climate change for which it has absolutely no plan on how it will meet its Kyoto targets. There is no long term vision on issues such as pensions or EI premiums.

I would like to comment on some specific initiatives that fall within the industry portfolio itself.

First, on the capital tax and following on the Alliance's recommendation both in the last two finance committee reports and in the industry committee report of June 2001, the minister has indicated that he will eliminate this tax. This five year elimination does not make sense. It should be eliminated in one year.

Second, there is the resource income tax change, making it equal to other corporate tax reductions. We agree with this. Also, this could be moved up rather than done over a five year period.

Third, we support funds to research granting agencies. We support addressing the indirect costs of research, as the industry committee has stated in two successive reports. This is simply recognizing that universities need this to sustain a level of service to all students.

We have the Canada graduate program. I know this has been welcomed in most corners. I want to offer a different perspective on this. I know that this may in fact be well intentioned, but in our view this is not the proper way to proceed on education.

Instead of putting in education dollars or transferring the money to the provinces, the federal government is setting up programs for Ph.D. and Master's students. It is setting up the millennium scholarship fund, and last year it set up the Trudeau fellowship. The government is taking money away from students who are in university studying and is putting it into these boutique programs, setting up bureaucracy upon bureaucracy.

If the federal government wants to support education, it should do so through a simple transfer to the provinces and let the provinces and the universities fund it. They are closest to the students and they know how to best do this. If the government wants to also support research and development, then do it through the federal granting agencies. Do it through NRC, NSERC or SSHRC, rather than set up other programs such as the Trudeau fellowship.

This brings me to the Alliance approach. I would like to present our alternative approach to industrial policy and research and development.

First, we need to eliminate corporate welfare. We need to move away from an industrial policy where the government attempts to pick winners and losers and selects certain companies within certain industries in the marketplace. Instead, we should target our public research funds into basic and developmental research and development, preferably through the federal granting councils.

We in this party distinguish between grants and loans to specific companies and funding through the granting councils. Those should always be distinguished. The government, whenever we criticize public spending on R and D through corporate welfare, always says that we would eliminate programs through NRC and NSERC. That is absolutely false. It is not true.

The fact is we do support research, if it is done through these granting agencies and if it is a peer review. We have always supported a peer review process, which is non-political, which ensures that the colleagues will ensure that the research has some merit.

We have always supported prudent investments in innovation and technology. As I said before, we support basic and developmental research. We have called, particularly in the last election, for increased funding to these granting councils.

Second, we would also simplify the funding for research and development.

I mentioned in education how the government is making things more complex and more bureaucratic. In the R and D section, one thing it could do to simplify it is to end the duplication through the regional agencies.

The regional agencies in this country are funding R and D. The reason the government is doing that is to try to justify the regional agencies. It uses it as a corporate welfare program but it also then puts through funding for R and D. Through western economic diversification, it will put in a lot grants to specific companies but then it will fund the synchrotron at the University of Saskatchewan.

Whenever people in our party say that we should not have regional developmental agencies of this type to funnel corporate welfare to certain businesses, we get criticized and people say that we want to end funding for the synchrotron. That is absolutely not true. The funding for the synchrotron should occur through the National Research Council, which it currently does. If we fund the synchrotron through both the National Research Council and through western economic diversification, there is duplication, there is double bureaucracy. It is not necessary. Even one or two government members have recognized this and have spoken publicly about it.

We in this party have consistently called for a funding framework for science and technology, as the former Auditor General did in his report in 2000. Unfortunately, numerous secretaries of state for science and technology and ministers of industry have ignored this advice and failed to establish a framework. This was recommended in the committee report of June 2001. The industry department ignored it again. It was recommended in the Auditor General's report of 2000 in which he stated quite explicitly:

For big science projects, the government should ensure that: A single federal authority is established for accountability purposes. The identified authority reports annually to Parliament on the project's status, on behalf of all the federal participants.

The government responded by saying that this was not necessary, that the program was working well as it was. That is absolutely not true. It is not working well.

One example is the Canadian Coalition for Astronomy. It went to the finance committee, the industry committee, the finance minister and the industry minister. It went to two respective departments. It went to the NRC and the CFI. Five years later the coalition actually thinks it has enough funding. It went through all that instead of having one window where it could present the project and have it approved or not approved, depending on the merits. That is what should be set up. That is what the Auditor General and the Canadian Alliance have recommended. That is what the government has so far refused to implement.

We also hope that the government will appoint a chief scientist of Canada. This is something we have called for in the last two elections. This person would coordinate science activities in all government departments, help scientists communicate their findings and help bridge the gap between scientists, bureaucrats and elected officials.

Also, the government failed in this budget to address the problem with the R and D tax credit. The R and D tax credit on paper is one of the most generous tax credits in the world comparatively. However, if we talked to the researchers and the accountants, we would find that it is simply not effective. The government was asked to address this in the innovation agenda. It failed to even mention it in the budget.

The last point I want to make is with regard to infrastructure development. There was some debate earlier about how we fund infrastructure. The fact is the provinces and municipalities need some guarantee of long term funding.

The way the Alliance believes we should do this is by transferring some of the tax room from the gas tax and from the federal excise tax to the provinces and allowing them then to determine best their infrastructure needs. This would be a source of long term stable funding that the provinces and the municipalities could count on.

In conclusion, I want to reiterate that this is a budget of missed opportunities. Because of some of the good economic conditions, we could have really taken on our fundamental problems like productivity, high debt and high taxation. We could have addressed them and propelled ourselves to the top of the nation. Unfortunately we did not and that is why the budget is so disappointing.

[Lobbyists Registration Act, February 20th, 2003]

Mr. Speaker, I want to begin by commending my hon. colleague for his efforts, not only on this legislation but I think in general he has been very concerned about the issue of influence and the issues of accountability and transparency. I see his motions in the spirit of that.

We do see some merit in the three motions proposed today. I will go over each of them generally and then each of them in particular.

The motions aim at revealing the presence of connections between former public officeholders turned lobbyists and the departments where they previously served or had contact.

As an initial point, it is worth noting that there already exists in the Conflict of Interest and Post-Employment Code for Former Public Office Holders, time based prohibitions on former public officeholders lobbying back the departments where they worked. I know this is not in any specific motion but is worth noting. These amendments appear to be aiming a spotlight on those friendly relationships that might exist between former and current public officeholders and which might lead to undue influence.

I will turn specifically now to the three amendments before us today.

Motion No. 1 would apply to in house lobbyists employed by corporations and organizations. A corporation or organization is required to make a filing if the corporation or organization employs one or more persons who engage in lobbying, for example, communicating with public officeholders with respect to certain types of public business. This is listed in clause 7(1) and the aggregated time spent by all the employees constitutes a significant part, for example 20%, of the duties of one employee or would constitute a significant part of the duties if they were performed by only one employee.

Motion No. 1 would add to the information that must be disclosed by the corporation or organization to include disclosing the name of any employee engaged in lobbying activities who is a former public officeholder, as well as indicating what office they formerly held. The purpose of the motion, as we can determine, is to permit the public to identify those individuals who have greater influence as a lobbyist as a result of having held public office.

While the proposed motion would broaden the disclosure requirements, in our view this addition would appear to be not too onerous. Clause 7(3) already requires that organizations and corporations name all employees who do any lobbying. In addition, corporations must also name the senior officers of the corporation.

Bill C-15 would not require identifying those individuals as former public officeholders or the office that they held. The identity of public officeholders is of course public information and members of the public could, with some research, find out that information. They could make this connection. Still, having this information set out in the registry would save them research time.

It is my intention to support the first motion.

The second motion would require any former public officeholders turned lobbyists to name the particular public officeholder with whom they intended to communicate. The motion would require former public officeholders to name the person who is, so to speak, on the inside, whom they are attempting to influence. In our view this would represent a significant departure from the current approach of the act which requires only that the department itself be named without naming individuals.

In my view this does present some conceptual problems. Former public officeholders would have to know the identity of the person to whom they intended to speak before initiating contact. One thing that the member may want to clarify is what would happen if the former public officeholder went to speak to someone in the department and was then referred to someone else? How would this motion deal with that type of situation? From a practical point of view, could we not get around the motion by simply setting up an intermediary? How would the motion prevent public officeholders from simply setting up an intermediary between the person with whom they actually wanted to talk? How would the motion deal with that type of situation?

During the committee's review of the act it was generally expressed by the witnesses that they wanted to maintain as much contact with departments, bureaucrats, officials, members of Parliament and policymakers without creating a chill, if they could. In other words, they wanted a lobbyist registration system that was transparent and accountable without creating a chill.

In my view, while the idea of bill disclosure has some merits, I feel that with the unanswered problems that I posed, as well as with the overall concern of creating a chill, it is my intention to not support the second motion.

The third proposed motion would change the definition of “employee”. In the current act an employee includes an officer who is compensated for the performance of his or her duties. The motion would change the definition to any person who is compensated for the performance of his or her duties referred to in paragraph 1(a). The duties referred to in paragraph 7(1)(a) are what are commonly known as lobbying activities. The purpose of this is to expand the definition of “employee” for organizations and corporations to include not only officers but any person who lobbies. This would appear to aim at organizations and corporations that try to avoid registration by not naming the lobbyist as an officer.

I have to admit that initially I did not see much of a problem with this when I reviewed the legislation. However I do not think it is a harmful motion and therefore I would certainly offer my support to the third motion.

[The Budget, February 19th, 2003]

Mr. Speaker, let us hope that some of the sewers that the minister's money will build can hold that kind of answer.

The current situation is completely unacceptable to all Canadians. The government has a choice to make, either it dedicates a portion of the federal fuel tax or it transfers the tax to the provinces to allow them to make the funding decisions to address their infrastructure needs.

Will the Minister of Finance consider vacating a portion of the federal tax on gas to allow the provinces room to address their infrastructure needs?

[The Budget, February 19th, 2003]

Mr. Speaker, yesterday's budget proves the Liberals still have an unhealthy addiction to high taxes.

Each year Ottawa collects $4.5 billion in gas taxes, but only 5% of that money is returned to Canadians in the form of federal highway funding. The government is ripping off Canadians at the gas pump and not returning the benefits to them.

Why did the minister yesterday not help to ease the burden on taxpayers by reducing the federal share of the fuel tax?

[Government Loans, February 18th, 2003]

Mr. Speaker, if these two companies are so extraordinary in and of themselves, why do they need $11 billion of taxpayer funded money to help them?

I asked another specific question yesterday which the minister did not answer. Will the government and that minister make EDC more accountable to Canadians and publish a complete list of loans and loan guarantees, including the amounts received by each individual company? Yes or no.

[Government Loans, February 18th, 2003]

Mr. Speaker, the Minister for International Trade told this House yesterday that over 90% of EDC's clients are small and medium sized enterprises. That is misleading. The fact is that loan guarantees to clients of Bombardier and Nortel are designed to assist those two companies.

Again I would like to ask the minister this. Why is over 50% of EDC's loan portfolio directed to help Nortel and Bombardier?

[Government Loans, February 17th, 2003]

Mr. Speaker, that is absolute nonsense. Over 50% of EDC's loans were for the purchase of two companies. No private sector institution would ever do that.

Corporate welfare takes away from our health care, our military and our basic services of government. When the lion's share of taxpayer dollars go to two large corporations, it harms our competitive market. EDC puts billions of taxpayer dollars at risk. This must be changed.

Will the minister today make EDC more accountable to Canadians and publish a list of loans and loan guarantees, including the amount repaid to taxpayers?