Jim Abbott

[Act to authorize the Minister of Finance to Make Certain Payments, May 19th, 2005]

Mr. Speaker, I would ask the member if he heard the same thing I did from the Parliamentary Secretary to the Minister of the Environment who just spoke before him. I thought I heard the parliamentary secretary say that the Liberals would not do the tax rollback and then that they would. I was a little confused about it. It strikes me that either they have a deal with the NDP that they will roll it back or they do not.

I am a little confused. I wonder if the member could help clarify that for me.

[Act to authorize the Minister of Finance to Make Certain Payments, May 19th, 2005]

Mr. Speaker, my Liberal friend seems to get his lexicon a bit mixed up. He keeps on talking about investments instead of expenditures, an additional $4 billion of expenditures.

He also seems to have picked up the NDP disease. Those members do not realize that corporate taxes are not paid by corporations. Corporate taxes are paid by the corporation's customers.

The member seems to know a bit about business. Surely to goodness he would not think that telling the NDP that the government is not going to be going ahead with the corporate tax reductions is a good move. The member, particularly coming from Ontario, knows it will cost thousands of jobs if we do not get those corporate tax reductions. How can he possibly vote for Bill C-48?

[Points of Order, May 19th, 2005]

Mr. Speaker, I think that the intervention is a little bit off the mark in that the question was speaking clearly to the agenda of that committee. The fact that the minister was choosing not to turn up at the committee, the committee could not even set its agenda. Clearly, the question was on the topic of the agenda which is the point that the member just rose on.

[Budget Implementation Act, 2005, May 19th, 2005]

Mr. Speaker, it turns out that this NDP member suffers from exactly the same problem as his friend from Sault Ste. Marie. Again, NDP members have blinders on when they think somebody other than the customers of the corporation pays the corporate tax. They do not understand that as the most fundamental concept. I do not know how in the world we can ever get it through to them because they seem to be ideologically blind.

However, I must say that I agree with him that normally the NDP comes to the House as just a little small rump off in the corner, and in this particular instance the NDP has managed to actually prop up the establishment. Those NDP members have propped up the establishment of the Liberal Party, which is thoroughly corrupt in the way that they have been handling the country's finances, in the way that they have been governing this country and in the way that they have been extorting money.

It is an absolutely amazing, outstanding event that the NDP would actually come to the House and exert its influence to prop up the establishment. To that I say shame on this member.

[Budget Implementation Act, 2005, May 19th, 2005]

Mr. Speaker, it is always entertaining to listen to NDP members talk about corporate taxes. They have such a lack of understanding about who pays corporate taxes. Corporate taxes are not paid by corporations. Corporate taxes are paid by their customers.

This NDP member comes from Sault Ste. Marie where Algoma is in constant competition with the U.S., China and every other jurisdiction that makes steel. Yet, he does not understand that it is the customers of Algoma who pay the corporate tax. Why does he not understand that by reducing corporate taxes, as was budgeted in the original budget, in 2006, 2007 and 2008 it will continue to make corporations competitive in the world?

Because corporate taxes will ultimately be paid by the corporations' customers, we are talking about making corporations less competitive. It takes away hundreds, thousands, tens of thousands of Canadian jobs by not allowing Canadian corporations to be competitive with the U.S., China, Brazil, France, Korea and all of the customers with whom Algoma is in competition.

The member should be ashamed of himself for not being prepared to stand up for the workers in Sault Ste. Marie, Hamilton, British Columbia and the ones who need the jobs. It is the customers of the corporations that pay the taxes.

[Customs Officers, May 18th, 2005]

Mr. Speaker, at 7 p.m. Sunday May 1, only 100 yards from the Canadian port of Roosville, a man was murdered.

A U.S. sheriff, who just happened to be at the Canadian crossing, took charge of the crime scene. The RCMP were called but they did not arrive until 8:15 p.m. They checked all around both the Canadian and U.S. ports with a dog while a single Canadian inspector manned the port.

In response to the murder, management wanted to double staff that evening but no one would come to work. Why would they when a man had been fatally shot in the head? Canadian customs officers are denied access to weapons for their self-defence.

The inspector on shift had to work alone until 7 a.m. the following morning.

At this same port of entry just months ago, Adam Angel, customs inspector, while also working alone, also died.

When is the minister responsible for emergency preparedness finally going to respond to the dangers faced by customs inspectors at ports of entry where employees have to work alone, isolated and in danger?

[Taiwan Affairs Act, May 16th, 2005]

Mr. Speaker, in the case of the U.S., the information that the member has I believe is incorrect. The Taiwan relations act was established fully six months after the recognition by the U.S. of the PRC as the entity that is legitimate government of China. The Taiwan relations act was constructed, and under much protest by the PRC, fully six months after that actually took place. I think the member and I have a significant difference of opinion on that particular question.

The question raised about clause 5 is a good one, which is why I am hoping to get it to committee so that we could sort it out and put in the necessary stopgap. The point of clause 5 is that it is reciprocal. In other words, right now individuals or corporations do not have in commercial law any way of suing and being sued back and forth between the two entities. There is nothing we can do to enforce the commercial arrangements that we make one on one with Taiwanese interests or vice versa.

This is different from the relationships we have with every other entity that would be called a nation. We are not out to call Taiwan a nation. We are simply out to establish standard commercial relationships to protect the interests of Canadians and Taiwanese people.

[Taiwan Affairs Act, May 16th, 2005]

Mr. Speaker, this gives me an excellent opportunity to further expand on what I was trying to say earlier.

Canada does not currently have any formal relationship with Taiwan as an entity of any type. As a consequence, we cannot have any normal relationships in terms of legal relationships for trade, for criminal matters or even for security issues. That is the problem.

In contrast, the U.S. has the Taiwan relations act, which permits it to do so. Therefore, Canadian individuals and Canadian businesses are put at the disadvantage of not being able to have the same relationship with their Taiwanese counterparts as their U.S. competitors. We are at a disadvantage.

Although the U.S. does not recognize Taiwan as a country or a separate entity and goes with the same policy as Canada says it goes with, which is a one China policy, it has still managed to get into a position where, whether with respect to security issues or criminal matters or legal matters, it can have a relationship with Taiwan. We are lacking that relationship. We are falling behind. Quite frankly, we are putting ourselves at a significant disadvantage to our most significant trading partner.

[Taiwan Affairs Act, May 16th, 2005]

moved that Bill C-357, an act to provide for an improved framework for economic, trade, cultural and other initiatives between the people of Canada and the people of Taiwan, be read the second time and referred to a committee.

Mr. Speaker, Bill C-357 is a private member's bill tabled by myself as member of Parliament for Kootenay—Columbia. There are members from all parties of the House who support this bill in principle and I expect that if it comes to a vote at second reading the bill will pass and be forwarded to committee for consideration.

In 1970, when Canada recognized the People's Republic of China as the sole legitimate government of China and terminated its diplomatic relations with Taiwan, Canada only took note of and neither endorsed nor challenged China's claims to sovereignty over Taiwan. Cabinet records show that the Canadian government policy intended to maintain a de facto relationship with Taiwan after de-recognition of the country.

The position of Prime Minister Trudeau was to leave flexibility in Canada's domestic or international relationships with Taiwan. This allows the various international jurisdictions and competing interests to work out their relationships without interference from Canada or Canadian interests.

In a letter dated May 9, 2005, Canada's Minister of Foreign Affairs wrote:

Canada maintains a one-China policy under which we formally recognize the Government of the People's Republic of China (PRC) as the legitimate, representative of government of China. At the time of its recognition of the PRC in 1970, Canada “took note” of the position that “Taiwan is an inalienable part of the Peoples Republic of China”, but did not formally recognize this claim.

I am in complete agreement with the Minister of Foreign Affairs and this bill is complementary to the position of the Government of Canada on the one China policy. If there is a difference of opinion, it lies in the government's interpretation of the minister's own phrase, “but did not formally recognize this claim”. I believe Canadian government practices are demonstrably contrary to its expressions.

Last year the House voted by a margin of 2:1 to have Canada lead action at the World Health Organization to include Taiwan as a health entity. The Canadian Senate passed a similar motion of instruction. In spite of this direction by both chambers of Canada's Parliament, the Canadian government chose to ignore that instruction at the 57th conference of the World Health Assembly. This morning the general committee of the 58th World Health Assembly decided Taiwan's WHO case will not be included on the conference's provisional agenda. This is a matter of extreme consequence to the world's health.

This bill is more than three decades overdue because of action taken by our mutual trading partner, the United States. Months after the U.S. recognition of the PRC, it enacted its Taiwan relations act. Canada and its interests are in a significant disadvantage to their U.S. competitors. The Canadian government gives advantages to the U.S. in Taiwan commercial, criminal and security regulations. It ignores the U.S. Taiwan relations act while condemning the tabling of this Canadian Taiwan affairs act.

For Canada to take its rightful place in influencing world affairs, our Canadian government should rationalize policy with the U.S. to help build democracy and democratic values. A unified voice with the U.S. in China affairs would bring Canada into this sphere as a player rather than a pretender.

Canada is Taiwan's 11th largest trading partner. Bilateral trade reached $5 billion Canadian in 2004. Taiwan is Canada's seventh largest source of foreign tourists and foreign students with more than 150,000 people visiting Canada each year and 150,000 additional affluent and highly educated Taiwanese live in Canada as landed immigrants.

While the Canadian government emphasizes the importance of trade with China, the government has given very little thought to the shape and substance of our relations and the legal framework necessary to carry it out. In the recent foreign policy white paper there was no mention made regarding Canada-Taiwan relations. Given the trade, political and security importance of Taiwan to Canada, Taiwan issues have become a multi-party concern in Parliament in recent years.

This is well illustrated by the example of the WHO, which I raised earlier, and by issues frequently raised in the House question period. There have been several additional resolutions passed in both Houses as well as the foreign affairs committee.

Taiwan is an economic and democratic success story with a population of 23 million people. Taiwan is a fully functioning democracy governed by rule of law. President Chen Shui-bian's electoral victory in 2000 was the first peaceful democratic transfer of power in the 5,000 year history of the Chinese peoples. His re-election in 2004 confirmed the solid democratic foundation that has been established in Taiwan.

Observers of China affairs noted that while President Chen was re-elected, the explicit will of the Taiwan electorate to move toward sovereignty softened. It was therefore distressing to see the PRC respond to the Taiwan peoples by enacting the PRC anti-secession law in mid-March of this year. This action was an intentional buildup of pressure by the PRC in response to Taiwan's citizens taking the steam out of the Taiwan Strait question.

China observers cannot help noting the PRC's growing military strength, with an estimated budget of $65 billion U.S. According to a U.S. defense department report, China now has 725 missiles positioned across Taiwan Strait aimed specifically at Taiwan.

I note that after China passed its anti-secession law, Canada's foreign affairs minister issued a statement saying that any unilateral action, including the use of force, to change Taiwan's status is unacceptable to Canada. In fact, in April 2004 in a public speech, Canada's then foreign affairs minister called on both sides of the Taiwan Strait to resume dialogue without preconditions and to resolve cross-strait issues peacefully.

Taiwan honours the rule of law, preserves the free market, protects the environment and respects human rights. The world community cannot afford to let Taiwan fail because it is a symbol of the success of democracy and human rights as a universal value. Taiwan is a living rebuttal to the theory that these values are incompatible with the Asian way of life.

In a telephone conversation with a representative of the People's Republic of China I was told that the PRC is firmly opposed to this bill. The PRC in Beijing has called the bill “a brazen interference in China's domestic affairs”. It states:

By proposing this so-called Taiwan Affairs Act, some individual members of Canada's parliament are preaching 'two Chinas' or 'one China, one Taiwan'.

Their assertions are simply not supported by the facts. In part, Bill C-357 states that this is “an act to provide for an approved framework for economic, trade, cultural and other initiatives between the people of Canada and the people of Taiwan”.

I ask members to note that the bill intentionally does not use words to describe state to state or nation to nation relationships. For greater clarity on this point, the first paragraph of the preamble states:

WHEREAS on October 13, 1970, the Government of Canada formally recognized the People's Republic of China as the sole legitimate Government of China and took note of its claim that Taiwan is part of China;....

In the absence of recognition and diplomatic relations between Canada and China, the best approach is to adopt this bill as domestic law of Canada and to spell out the specific manner in which relations with Taiwan would be conducted by Canada without trying to define Taiwan's international legal status.

Due to the lack of recognition and diplomatic relations between Canada and Taiwan, a host of specific matters have arisen, resulting in important legal and pragmatic problems in the interactions. Clauses 4 through 8 of the bill contain explicit provisions to create a workable mechanism to regulate de facto unofficial relations between Canada and the unrecognized entity of Taiwan.

These clauses are borrowed directly from the U.S. Taiwan relations act. The Taiwan relations act provides a strong, solid legal framework between the U.S. and Taiwan. It has been a success in strengthening U.S.-Taiwan commercial relations.

Canadians interests compete daily with their U.S. counterparts. As matters sit today, Canadians suffer a growing disadvantage in trade with Taiwan.

Clause 4 of the bill provides that the absence of diplomatic relations should not affect the application of any Canadian laws with respect to Taiwan, and the laws shall apply to Taiwan exactly as they do to other countries. Thus:

Whenever the laws of Canada refer to or relate in general terms to foreign countries...such laws are deemed to refer or relate also to Taiwan.

Clause 5 protects property rights of Taiwan and its citizens. Clause 6 provides for the capacity to sue and be sued in Canadian courts. Clause 7 enables the Canadian government to sign agreements with Taiwan, enabling the Canadian government to enter into agreements with Taiwan.

I emphasize that this bill explicitly recognizes Canada's one China policy--this is the fifth time I have tried to make that point--but at the same time it brings order to continuing discord.

Clause 8 imposes provisions to protect reciprocal legal rights for Taiwan and Canada when they do business and interact with each other.

Taiwan and Canada have very close relations. As mentioned earlier, every year approximately 150,000 tourists from Taiwan travel to Canada. From 1990 to the present, more than 150,000 high quality immigrants have settled in Canada. Two-way trade between Taiwan and Canada reached $5 billion in 2004.

Taiwan is already Canada's fourth largest trading partner in Asia and is Canada's 11th largest trading partner overall. However, Foreign Affairs Canada claims that “as Canada does not recognize Taiwan as a state, it is not possible to negotiate a binding agreement with Taiwan”. Foreign Affairs Canada boasts of administering 2,267 treaties, yet none of them is listed as with Taiwan.

Taiwan and Canada share the same social values, including respect for human rights, freedom and rule of law. Taiwan's justice system is comparable to that of Canada. We can cooperate with Taiwan in many fields, including the judicial and economic areas.

For combating transborder criminals, in March 2002 Taiwan and the United States signed the agreement on mutual legal assistance in criminal matters, which has been implemented smoothly during the past three years.

With the growing concern about security, international cooperation is imperative. However, Foreign Affairs Canada has refused to sign any kind of agreements with Taiwan. The issue is this: the U.S. Taiwan relations act enables its government to sign international agreements with Taiwan but we have no such agreement.

Between Canada and Taiwan, there is only a handful of exchanges of letters or memoranda of understanding and arrangements concerning some minor technical matters in the commercial and scientific fields. How can Canada promote trade and investment with such an important trading partner like Taiwan without the ability to sign any legal binding agreement?

Clause 9 of the act deals with issues around international cooperation. The purpose of the bill is to help to brighten the prospects for stronger Canada-Taiwan economic, cultural and other relations. The 25 year old U.S.Taiwan relations act, which is the model for this bill, has been a tremendous success in helping the U.S. to build a strong, unofficial relationship with Taiwan.

Canada's interactions with Taiwan are to our mutual benefit. Taiwan is a good friend and close partner of Canada, as Canada is of Taiwan. As such, Taiwan counts on sustained Canadian support as it addresses many important challenges. This very much includes Taiwan's efforts to develop its democracy.

I acknowledge protests from the PRC and certain Canadian business interests. They have said great harm will be done to the relationship between Canada and China and serious consequences will ensue after adoption of the bill. The Chinese took the same position against the U.S. on the adoption of the Taiwan relations act 25 years ago. With the Taiwan relations act in effect for two and a half decades, Canada's competitive position has continued to weaken.

For all the right reasons I am calling on members of Parliament to do what is in the best interests of Canada and the world. I am asking for support in principle for Bill C-357 to move to committee for consideration.

[Bankruptcy and Insolvency Act, May 5th, 2005]

Mr. Speaker, I am speaking on Bill C-281, an act to amend the Bankruptcy and Insolvency Act, the Canada Business Corporations Act, the Employment Insurance Act and EI regulations, as presented by the member for Winnipeg Centre.

I am pleased to make my thoughts known as the member of Parliament for Kootenay—Columbia. I have always taken my commitment to people in my community very seriously, wanting to ensure that their interests are protected and that there is a proper balance between employers and employees.

Shortly after I was elected in 1993, there was a major bankruptcy in my constituency that affected many hundreds of people. As a matter of fact, more than 1,100 people ended up applying for EI benefits as a result of that bankruptcy. The communities throughout the Elk Valley and the East Kootenays had to deal with harsh realities far beyond their control.

The bankruptcy caused tremendous hardship for families and individuals who were impacted by the failure. My office worked diligently on behalf of former employees of the corporation to help them secure portions of their pensions. Unfortunately, those portions turned out to be a small portion of the pension funds owing to them.

Through these events, I became acutely aware of the importance of good legislation in the relationships between corporations, their creditors and their employees. I became convinced that in the event of a bankruptcy there is a distinction between wages owed and the status of employee pension funds. Combining pensions and wages in one piece of legislation is not only impractical but unworkable.

As written, this bill is poor legislation. If Bill C-281 were to receive approval from the House of Commons to move to committee, the first thing I would recommend to the committee is the entire removal of the pension provisions.

There may be value in reviewing pension provisions and protection of pensions in bankruptcies, but consideration of pension provisions should be drafted in a totally different bill.

A pension review must include two tracks. Pensions involve employer-employee relations, collective bargaining, previous negotiations, existing pension funds and regulations. In most cases, there is provincial jurisdiction combined with current financial market forces in the national and international investment community. This names simply a few of the issues.

The second track must recognize that pension funds and employee interests can be reduced to dollars and cents, but that money is totally different from funds that can be realized from tangible assets secured by lenders. We must remember that lenders have choices. They are not compelled to lend money. Anything that increases risks increases the costs of borrowing. A lender may reach a point of choosing to withhold funds as risks increase.

Let us take a look at the wage replacement portion of Bill C-281 as distinct from the issue of pensions. There must be a balance between the interests of wage earners, employers and potential lenders. This balance makes the difference between having a healthy business economy with good, productive, meaningful jobs and the potential for impoverishment.

Whatever legislation we become involved in, it is the responsibility of the House to ensure it does not inhibit relationships between businesses, potential lenders or investors. Put another way, it is the responsibility of legislators to create and maintain a healthy economic environment for all Canadians.

As written, Bill C-281 would place wages owing upon bankruptcy ahead of the rights of secured creditors. Its purpose is to provide superpriority status ahead of all other creditors, including secured creditors, for amounts owed to workers in the event of bankruptcy. This would include wages and salaries, payments in the form of severance or termination pay arising from collective agreements and legislation.

The problem is that secured creditors lend money on the basis of real assets, such as property, equipment or accounts receivable, and calculate the potential of realizing cash from those real securities. In other words, while the liability to the company for wages will be a specific amount of money, that liability for wages has no direct relationship to the security pledged to the lender.

Let me explain it this way. By way of example, a company may have $150,000 security in the form of current accounts receivable. The lender may choose to advance a fixed loan or line of credit up to a limit of $100,000 against a $150,000 asset. If the workers have a combined potential of $5,000 payable for two weeks' work the lender would reduce the $100,000 loan or line of credit by at least $5,000, if not $10,000.

This represents a withholding of dollars to protect the lender against possible claims by workers in a bankruptcy. This seriously diminishes the value of the company's securable assets.

It is irrelevant whether we like or dislike this harsh marketplace reality. The fact is, lenders make choices based on their judgment of what makes good business sense to them. Lenders have choices. They are not compelled to lend money.

If Canadian laws put lenders at a disadvantage in Canada, they could make choices to lend in other international jurisdictions. This would create negative pressure for Canadian businesses by increasing costs of loans and decreasing the amount of money available in the Canadian marketplace.

As of December 2003, there were 2.3 million small, medium and large businesses operating in Canada. Almost every business from time to time requires loans or operating lines of credit. That money is almost invariably secured by some form of asset. If all workers in Canada are given superior status over secured creditors, we will see a significant decrease in the amount of credit available to businesses. This would inhibit Canadian businesses' opportunity to access funds necessary for continuation of operations or expansion.

The fact is that while there are 2.3 million businesses, there were only 8,128 business failures in 2003. This represents only four-tenths of one per cent of all businesses operating in that year. To underline or restate, 99.6% of Canadian businesses would have access to business loans reduced as a result of four-tenths of one per cent of business failures. This is simply bad economic policy that reduces jobs and opportunities in Canada. I believe there is a better way.

Beginning with the premise that workers' interests must be protected in bankruptcy, I support the creation of a wage earners' protection fund. Its purpose would be to protect workers while eliminating potential liability for lenders. This is not a new idea. Many European countries have a form of wage protection plan.

It would be built on the original principles of employment insurance, where insurance premiums are paid by employers and employees into a fund that would be based on actuarial data. It would ensure that there were funds available to protect the employees' interests in the four-tenths of one per cent of Canadian businesses that end up in bankruptcy. It would be funded separately from employment insurance and would stand alone.

We have reviewed the European experience and can state that the premiums would be calculated in pennies, not dollars. The existence of the employee protection plan would eliminate the necessity of the consideration of employees' wages from any potential borrowing or lending activity. The fund would pay benefits to workers affected by bankruptcy within a matter of weeks. This would eliminate the long wait for money that employees endure as settlements wind through months and sometimes years of bickering and negotiations.

The Conservative Party has had a subcommittee dealing with this issue, with the encouragement of our leader. We have worked with actuarial tables and based estimates on foreign experiences in European countries.

We believe businesses drive our economy, creating good jobs, wages and benefits, creating wealth for our nation. We fund health care, social programs and other desirable public expenditures from that wealth. The Conservative Party is conscious of the protection of the Canadian wage earner within a balanced, productive business climate.

It is a matter of responsibility for us to create an environment in which personal dignity and a healthy society can thrive.

In summary, Bill C-281 is poorly drafted and unworkable, but because it is an effort to recognize and give greater protection to workers in bankruptcy, I will be voting in favour of it at second reading.

However, if the bill is not rewritten in committee to reflect the necessary changes I have outlined, I will not be able to support it at third reading.