Jason Kenney

[Equalization, September 30th, 1998]

Mr. Speaker, I am pleased to rise in debate on Motion No. 424 regarding equalization put forward this evening by the hon. member for St. John's East. I commend the hon. member for his hard work on this matter and his diligent representation of the interest of his province and constituency. I think the member is well known for such diligence.

The motion seeks to end what the member characterizes as a decrease in equalization payments to provinces that see an increase in revenues through resource development projects.

In this case he is referring to the projects recently off the ground in Newfoundland such as Hibernia, Voisey's Bay and others. All Canadians take some gratitude in the fact that we now have some real economic development in terms of natural resources happening in these areas of Newfoundland. We all hope that these developments will signal a new and brighter economic future for the people of Newfoundland and Labrador.

The motion addresses the question of equalization. It seems to us that equalization formulae already take into account the possibility of provincial revenues growing from within the resource sector. There are already in place floors to protect provinces from variations in the reductions from equalization as a result of increases in the provincial resource tax base.

A province with a relative per capita fiscal capacity less than or equal to 70% of the national average in the equalization formula is entitled to a floor protection of 95% of the equalization entitlement of the previous year.

In the case of Newfoundland, which has already signed agreements with the federal government applying to resource projects initiated by the Hibernia project but also applicable to White Rose in Voisey's Bay, this means that in the short run Newfoundland may lose just 5 cents in equalization for each new dollar in resource revenue and that in the medium run it may lose less than $1 or about 70 cents in equalization payments for each new dollar in resource revenues. In other words, a transition mechanism is already built into equalization to smooth resource driven declines in equalization entitlement.

If the capacity of a province to raise revenues increases then its equalization entitlement should decrease, which is what the current formulae allow for. However that decrease is smoothed out over time. It is not jarring. It does not happen too quickly so provinces should have the ability to adjust.

The hon. member appealed at the end of his remarks for a new deal in Confederation based on true equality among Canadians so that all people would be treated equal. Those of us in the official opposition could not agree more strongly. We advocate the principle of equality as the basis for any true and lasting union in our Confederation.

However, the kind of equality that we speak of in economic terms is equality of opportunity and not equality of outcomes. It is simply not possible for this or any other government to guarantee equality of outcomes in terms of the economic situation of various Canadians. We can try to provide a basic level of equality of opportunity, and that is what the current equalization system attempts to do.

The problem with the hon. member's motion is that it would seek to treat Newfoundland differently from all other provinces. The money that comes from equalization payments does not just come from out of thin air. It does not grow on trees. It is not just printed by the Bank of Canada. It is money that is taxed from certain Canadians and redistributed to provincial governments in other parts of the country. In this respect I do not believe that equalization is necessarily the most efficient means of creating equality of opportunity and redistributing income.

There are people in my constituency in Alberta of modest income. They work hard and carry a very large tax burden, yet part of the federal taxes they pay to Ottawa are redistributed in the form of equalization payments to citizens in other provinces, which in the sense of fairness that Canadians pride themselves on is a reasonable principle. Except what you end up with is the aberration of lower income working people paying taxes to Ottawa in areas like Alberta, Ontario and British Columbia in order to subsidize public services that upper income people benefit from in other provinces such as Newfoundland and Quebec and the other so-called have not provinces.

This is not an equitable form of redistribution. It is difficult to believe that in a country like Canada, being one of the wealthiest countries in the history of the world, there are seven have not economically disadvantaged provinces.

We accept the principle that we need to assist those who are going through difficult times such as people in Newfoundland and Labrador. We do not accept the principle that there are seven have -not provinces which should always be guaranteed a transfer from the taxpayers of other provinces. That is why we would propose to readjust the equalization formulas to focus benefit on the four poorest provinces as opposed to the seven provinces which are currently characterized as have not.

In so doing, by changing the incentives in the equalization system we hope to remove the potential for the so-called welfare trap effect taking place. There is now a disincentive for provincial governments to broaden and deepen their tax bases because if they do so they lose some of the equalization payments. What is needed are greater incentives for serious private sector economic development which can create meaningful sustainable jobs for the people of the economically disadvantaged regions.

For 30 years we have followed an economic approach in places such as Newfoundland and Labrador predicated on government intervention, on enormous subsidies and transfers. As a result we have seen unacceptably high levels of unemployment and unacceptably low levels of economic development. If we look to those areas of the country which have relied more on policies that are oriented toward private sector investment and lower taxes, greater incentives for people to work, save and invest, what we see in such jurisdictions as Alberta are the lowest levels of unemployment and the highest levels of growth.

We ought to look to the recent economic history of Confederation to suggest that continuing the enormous subsidization of regional economies does not create real jobs or real opportunities. Unfortunately that is why so many people from the province of Newfoundland and Labrador are leaving, because of a lack of economic opportunities. They are moving to, for instance, Alberta which has for the past many years has pursued quite a radically different approach to economic development, one of lower taxes, less intervention and fewer subsidies.

I close by commending the hon. member for the sentiment behind his motion and his effort to speak on behalf of what he regards as the best interests of his constituents. However, in the true interests of equity and fairness across the country we cannot change the rules of equalization when a province is starting to see some broadening of its tax base. We must treat all provinces with some degree of equity. For that reason we would like to reform equalization but not by creating a double standard where a province can see higher own source revenues and continue to be subsidized by Ottawa.

[Employment Insurance, September 25th, 1998]

Mr. Speaker, I will withdraw the word.

The premier of Ontario says that this is misappropriation.

I want to ask the hon. member, when is he and his government going to follow the law instead of trying to change the law to suit their political agenda to squeeze more tax dollars out of Canadians?

[Employment Insurance, September 25th, 1998]

Mr. Speaker, is this not interesting. The secretary of state's idea of investing in the future is to impose the highest personal tax burden in the G-7 with a 16% youth unemployment rate and running a $1 billion monthly surplus in the EI fund to subsidize wasteful spending by this government. The premier of Ontario calls it stealing. Every major business group in the country—

[Income Tax Conventions Implementation Act, 1998, September 24th, 1998]

Mr. Speaker, I rise on a point of order. I move, seconded by the member for Langley—Abottsford—

[Income Tax Conventions Implementation Act, 1998, September 24th, 1998]

Mr. Speaker, at the outset I would like to remind the House that, pursuant to unanimous consent, I will be splitting the official opposition's 40 minute allocation between myself, the hon. member for Langley—Abbotsford, the member for Medicine Hat and the member for New Westminster—Coquitlam—Burnaby, in that order.

The official opposition supports Bill S-16, an act to implement an agreement between Canada and the Socialist Republic of Vietnam, an agreement between Canada and the Republic of Croatia and a convention between Canada and the Republic of Chile, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

We, as a party for free enterprise, strongly support measures of this nature which can remove barriers to commerce and make efficient financial flows between trading jurisdictions such as Canada and the three countries stipulated in this bill.

We have reviewed this bill in detail and find that it is substantively in keeping with the model for international tax conventions proposed by the Organization for Economic Cooperation and Development.

I would second the substantive remarks of the hon. Parliamentary Secretary to the Minister of Finance who just detailed for us some of the elements of this bill.

I would, however, make reference to one concern that I have, which is with respect to an element of this bill which confirms a tax convention with the Socialist Republic of Vietnam. While in principle I think it is a good thing for Canada to establish firmer trade links leading to greater prosperity between ourselves and international jurisdictions, I think this gives us pause to reflect on the general foreign and economic policies of the current government vis-à-vis tyrannical regimes overseas.

We have seen a recent example of this kind of cosy, pillow fluffing, red carpet treatment that Canada provides to foreign jurisdictions, such as the Socialist Republic of Vietnam and Indonesian, a country we have been talking about in this House recently.

While I do not oppose the effort to establish a tax convention of this nature with Vietnam, I do wish that it were tied more clearly to a more vigorous articulation on the part of the Canadian government of the need for the respect of human, religious and civil rights in communist tyrannies such as the Socialist Republic of Vietnam.

Simply opening up trade and more efficient means of financial balances such as these tax conventions without a concomitant effort to press the need for human rights and political reforms is, in my view, insufficient and is a black mark on the record of this government and of this country.

Having said that, let me say that I and my colleagues object most strenuously to the process by which we find ourselves addressing this bill as S-16. For those not familiar with parliamentary procedure, it is coded as S-16 because it is a bill that was introduced in the Senate in May of this year.

Why was this bill introduced in the Senate? Conventionally in this Parliament, right from its beginning, bills, and particularly meaningful government bills, have been introduced in the lower chamber, the House of Commons, reviewed, debated, passed and then submitted to the upper chamber in the other place.

However, in this case we have before us one instance of the growing and troubling pattern on the part of this government to introduce legislation such as Bill S-16 in the Senate, to pass it there and then to bring it before us here in the Commons. We submit this is a contravention of a long established parliamentary convention whereby we respect the de facto supremacy of the lower Chamber, the elected Chamber, the democratically legitimate Chamber over the appointed patronage haven we call the Senate to introduce and discuss bills here first.

Bills ought to be introduced and debated, deliberated on and passed here and then considered by the Senate as a de facto rubber stamp rather than the other way around. Instead we find ourselves, through introducing this and other bills at the Senate, increasing the legitimacy of what is in actual fact an increasingly illegitimate body in the eyes of the Canadian people and the official opposition. We find this very troubling indeed.

We have asked the government in our negotiations with its House leadership and in public statements here and elsewhere to respect the long established parliamentary convention of introducing legislation of this nature, government bills, in the Commons for consideration by the duly elected representatives of the people before proceeding to the Senate and not the other way around. But the government has decided to refuse to respect that convention and to refuse to assert the democratic authority of this place over the Senate.

This is very unfortunate, particularly in light of the fact that this government has virtually no substantive legislative agenda. Here we are in Canada with an economy that is slowing down, with a nearly $600 billion debt, with the highest personal income tax rates in the G-7, with a dollar that has just this summer reached historic all time lows. Here we are with enormous problems to deal with in terms of the livelihoods of Canadians and what does this government have on its legislative agenda? Very little except for little technical bills of this nature.

So there is no compelling reason for the government to have introduced this bill or similar bills in the Senate for its consideration before the consideration of the Commons. There is no compelling reason except for the government's decision to try to legitimize the upper chamber at a time when in the eyes of Canadians it is increasingly an illegitimate body.

I say this about Bill S-16, an act to implement an agreement between Canada and the republics of Vietnam, Croatia and Chile, because we have before us in this place a rare historic opportunity. That is an opportunity provided to us by the duly elected government of the province of Alberta. The Alberta legislature has decided to convene and hold an election for senators in that province, an election that will be held on October 19. This election is not being held as some symbolic frivolous effort by a political gesture on the part of the people of Alberta.

Rather, the Government of Alberta wants the people of Alberta to choose its next senators to begin the long, arduous but critically important process of fundamental Senate reform so that one day we can reach a situation where the upper chamber is elected and is accountable, so it can exercise effective powers hopefully with equitable if not equal representation from the provinces and regions so that it can consider bills like Bill S-16, so that it can even talk about technical government legislation such as tax conventions with a modicum of democratic legitimacy. Until that day arrives we assert the prerogative of this House, the democratic assembly of this parliament, to consider bills of this nature first before they go to the patronage haven down the road.

Today we heard the Deputy Prime Minister say that the Senate elections in Alberta are undemocratic. Undemocratic elections? Let me get this straight. In this strange twisted Orwellian world of the government opposite it is undemocratic to have elections but it is democratic to appoint people to an upper chamber to decide how tax dollars are spent and to use the enormous and sometimes coercive power of the state. I fail to grasp the twisted logic of the Deputy Prime Minister and the government in introducing bills like this and in attacking a legitimate effort to push the agenda of democratic reform in parliament. The Liberal Party of Canada and the Right Hon. Prime Minister say they favour reform of the Senate. I then invite them to demonstrate that support by introducing bills like this in the lower Chamber first.

Before my time expires I would like to move—

[Observance Of Two Minutes Of Silence On Remembrance Day Act, September 24th, 1998]

moved for leave to introduce Bill C-434, an act to promote the observance of two minutes of silence on Remembrance Day.

Mr. Speaker, I rise, seconded by the hon. member for Edmonton East, to move first reading of an act to promote the observance of two minutes of silence on Remembrance Day. This is a variation of an earlier bill I introduced in this parliament which was substantially to the same effect.

The bill calls upon all Canadians to observe a more fulsome commemoration of the traditional two minutes of silence on Armistice Day or Remembrance Day, a tradition which was once thoroughly held and kept throughout Canada and the rest of the British Commonwealth. Unfortunately in recent years it has been on the wane.

The bill has been modelled upon a similar private members' bill introduced and passed in the Ontario provincial legislature, and indeed one in the British Westminster parliament. It is supported by the Royal Canadian Legion and many other veterans organizations.

I hope that this bill will be drawn and that we will have an opportunity as we approach Remembrance Day this November to debate this important subject.

(Motions deemed adopted, bill read the first time and printed)

[Parliament Of Canada Act, June 11th, 1998]

Mr. Chairman, the government House leader in response to an earlier question said that MPs in the current standard defined benefit plan make financial contributions of up to $10,000 a year. That is true. I am one of the people to whom he refers who in the past has written articles about this. I have never denied the fact that contributions are paid and that they are substantial.

The problem with the plan as continued through lack of amendment in this bill is that it provides benefits much, much greater than the contributions. In fact the benefits paid to an average member out of the defined benefit plan are some 3.8 times greater than the total average member's contributions.

The government House leader also spoke about a recommendation of the Blais commission which would have eliminated the provision in the Income Tax Act which allows members of parliament to shelter a third of their de facto income from taxation. I think this is an outrageous double standard that we impose on Canadians.

The government House leader also said that the committee which discussed the report of the Blais commission decided that this would be inequitable in terms of its treatment of people in different provinces. I take a rather different view of why the Blais commission's recommendations were not adopted.

I refer in particular to a statement made by the hon. member for Mississauga Centre, the government caucus chair, who on February 9 was quoted by the Hill Times as saying with respect to the recommendation to gross up the salary and replacement of the tax-free expense allowance that “if we are going to get nailed at least we want to get nailed for a reason and see it in the wallet”. She furthermore said that the government should “screw the Blais report”.

Does the hon. government House leader think that portrays a constructive attitude to the report of an independent commission? Does he not think that the bill before us today would be more credible with the public were it to have reflected the binding recommendations of an independent commission? Does he not in other words think that this process should be changed so that it is an independent one and that we are not put into a possible conflict of interest position?

[Judges Act, June 11th, 1998]

Mr. Speaker, I appreciate the opportunity to speak briefly to Bill C-37, an act to amend the Judges Act. I know we will be breaking for votes in several minutes and I will therefore summarize my remarks.

I would like, first of all, to commend the hon. member for Scarborough—Rouge River for his thoughtful remarks. He spent a great deal of time and attention on this issue and I share many of his concerns about the question of judicial compensation.

I also wish at the outset to associate myself with the remarks of my hon. colleague from Crowfoot whom I think eloquently expressed the inappropriateness of parliament granting a de facto 10% compensation increase to members of the federal judiciary over the next two years at a time when Canadians have suffered from a reduction in their after tax disposable income over the past two decades.

It occurs to me that parliament's principal obligation is to promote the interests of all Canadians and not small groups of Canadians. It seems to me that until all Canadians have seen some increase in their disposable income and an increased standard of living, we ought not to be using our power to increase the disposable after tax income of a particular discrete elite in our society such as judges.

I would also like to say that we are now debating Bill C-37 and this afternoon we are going to be very briefly debating Bill C-47, which applies to compensation increases for members of this House. One cannot comment on the judges bill without taking note of the fact that we will be voting on our own pay increase this afternoon.

Unfortunately I will not have an opportunity to speak to that bill because of a motion that was granted by unanimous consent of this place to limit debate.

The Scott commission on the increase in federal judges' salaries recommended this 10% increase and the government has taken that recommendation in the sense that it has legislated it in Bill C-37. I find it very interesting that there is a double standard. Bill C-47, concerning MPs' compensation, which we will be debating and voting on this afternoon, has been brought before this place without consideration being given to the report of another independent commission, the Blais commission, which was established following the last general election to review and make recommendations on the compensation paid to parliamentarians.

It occurs to me that we are creating another double standard. Canadians have shrinking disposable incomes because of high taxes and we are proposing an increase in pay for judges. We are also creating a double standard when we accept the binding recommendations of one commission on compensation, the Scott commission, but on the other hand ignore the recommendations of the Blais commission.

I have a very serious problem with this process which I would like to put on the record. I feel that the Blais commission, like the Scott commission, did good work and was sincere in its recommendations, which I thought were very thoughtful and appropriate.

Among other things, the commission recommended full transparency in MP compensation. It recommended scrapping the tax free expense allowance and replacing it with a proportionate amount of taxable income so that MPs alone could no longer exempt themselves from the tax laws that we impose on other Canadians. It recommended no net increase in actual compensation, contrary to the recommendations of the Scott commission for judges, and it recommended reform of the members' pension plan. It also recommended an increase in the housing allowance available to parliamentarians.

On the whole, I thought these were sensible recommendations which respected the need for a single standard of compensation for all Canadians. We ought not to choose one particular group of people, in particular ourselves, to exempt ourselves from the laws that apply to the rest of Canadians, as we do by exempting one-third of our income from the Income Tax Act. We ought to follow the same guideline when it comes to our retirement allowances.

When the Scott commission came down with its report, the government said “Fine. Everything is well. We will go ahead without even a review of a parliamentary committee and legislate this 10% increase”. When the Blais commission came down with its report, suddenly there was a huge clamour among government MPs who said that they rejected its recommendations. I do not suspect all of them did, but certainly some did.

I quote, for instance, the hon. member for Mississauga Centre who in the February 9 edition of the The Hill Times said with respect to the recommendation of the Blais commission that we eliminate the tax free expense allowance and gross up the taxable salaries “If we are going to get nailed, at least we want to get nailed for a reason and see it in the wallet. Screw the Blais report”.

I find that very difficult to swallow, coming from a member of the government which legislated the Scott commission report. We did not say, in the words of that hon. member, “Screw the Scott commission report”—excuse me, Mr. Speaker, but I am quoting another member—but we did with respect to the Blais commission report.

I would like to put this on the record and say that I object to the process by which our own compensation has been handled. I think the process that is contemplated in Bill C-37 is far more appropriate, where an independent commission would make the decisions and recommendations. Although I disagree with the recommendations of the Scott commission and will vote against the bill because of them, I do think that we need to take these decisions out of our own hands, particularly where there is a conflict of interest.

I hope that we will at some point in this place revise the manner in which we change our own compensation so that it is an arm's length process which will not be compromised by an inherent conflict of interest.

[Business Of The House, June 9th, 1998]

Mr. Speaker, I rise on a point of order. Given that on this debate about the absence of government members there is only one government member opposite, I think quorum ought to be called. Could you see if there is a quorum here.

[Business Of The House, June 9th, 1998]

Mr. Speaker, I commend the member on his remarks. The House leader of the fourth party is one of the most distinguished parliamentarians in this place. I usually disagree with things he has said, but he is a man dedicated to parliament as an institution and should be recognized as such.

The hon. member has been in this place for some time, nearly two decades or more. Does he think that the current attitude of the government to the business of the House is consistent with the history of this place? Or, is this an increasing problem over time, this disregard of parliament as a place of debate?