Jim Flaherty

[November 3rd, 2006]

Mr. Speaker, the Department of Finance conducts regular projections of Canada’s financial situation and outlook, which cover the medium term outlook, i.e., the next five fiscal years. Two year fiscal projections for 2006-07 and 2007-08 were published in the budget presented to the House of Commons on May 2, 2006

In addition, in preparing for the economic and fiscal update to be released in the fall of 2006, the Department of Finance is preparing five year fiscal projections to the year 2011-12, based on the average of private sector economic forecasts. Private sector forecasters have also been hired to prepare five year projections of the government’s financial situation.

[November 3rd, 2006]

Mr. Speaker, the issue of fiscal balance has garnered much public debate and study.

Many academics, think tanks and stakeholder organizations have produced studies on fiscal balance. The only studies commissioned by the Department of Finance were those from the Expert Panel on Equalization and Territorial Formula Financing. The expert panel was tasked by the Department of Finance with reviewing the two federal transfers and, as part of its work, commissioned studies, undertook consultations and met with a number of provincial and territorial governments, academics and experts. The expert panel was established on March 21, 2005, and it presented its final reports to the Government of Canada on June 5, 2006. These reports are available publicly at http://www.eqtff-pfft.ca/english/epreports.asp.

In addition to commissioning this major report, the Department of Finance produces its own analysis on the issue of fiscal balance, as well as analyzing academic and stakeholder commentary and proposals in the development of its advice to the Minster of Finance.

“Restoring Fiscal Balance in Canada,” the companion paper to the budget presented to the House of Commons on May 2, 2006, was a major study prepared by the Department of Finance.

Following the tabling of “Restoring Fiscal Balance,” the Department of Finance continues to work on proposals to meet the fiscal balance commitments. It sought the input of Canadians through online consultations, and is in the process of reviewing the submissions, many of which were released publicly by stakeholders.

[Taxation, November 2nd, 2006]

Mr. Speaker, I thank the hon. member for his question. I certainly acknowledge the extensive work the hon. member did with respect to advocacy on the issue of income splitting for pensioners in Canada.

That policy is now going forward. It is a major change in tax policy in Canada. There is special reason to make the change with respect to pensioners, to encourage investment and savings for retirement through pension vehicles.

I understand the principle that the member speaks about and certainly it is worthy of further study, as are other tax measures.

[Income Trusts, November 2nd, 2006]

The platform, Mr. Speaker, certainly pledged income security for seniors and there is a major tax change that was announced on Tuesday. I know the Liberal Party is opposed to pension splitting for seniors in Canada. I know that is the position of that particular political party.

We recognize that this is a major change in tax policy that is vitally important for seniors and pensioners in Canada who have sought this tax change for many years. This is a tax change that was recommended more than 40 years ago. The government listened to pensioners in Canada and has responded with a major change in tax policy.

[Income Trusts, November 2nd, 2006]

Mr. Speaker, the commitment of course was to support financial security for seniors in Canada and what we saw this year was an acceleration of the creation of income trusts.

There were more than $70 billion worth of income trusts announced this year alone. Not only did we have this acceleration of income trusts, we also had the reality that income trusts were entering into active areas of business requiring investments in technology, machinery and equipment, particularly in the telecommunications sector. This presented a clear and present danger to the health of the Canadian economy.

[Minister of Public Works and Government Services, November 2nd, 2006]

Mr. Speaker, I dare say, if we are talking about arrogance, how arrogant is it to expect ordinary Canadians to bear a tax burden greater than large corporations bear in this country? How arrogant is it to say to average Canadians and pensioners that they should not be entitled to split incomes for pensions? That is arrogance. That is the position of the Liberal Party opposite.

[Minister of Public Works and Government Services, November 2nd, 2006]

Mr. Speaker, the minister was simply referring to the markets and the fact that there was some volatility in the markets yesterday. That was to be expected.

The realistic view which many people on Bay Street and on St. James Street in Montreal expressed is that one should take the time to look at the fact that there is a four year grandparenting of the changes with respect to income trusts, and that people should have perspective with respect to all of the changes that were announced on Tuesday.

[Income Trusts, November 2nd, 2006]

Mr. Speaker, this is what one would expect from a party that is against reducing the GST, that voted against reducing the GST, that is against allowing pensioners to income split in this country, saving, for example, $2,500 on a single pension household of $40,000, and that is in favour of letting corporations not pay their fair share of taxes. On every tax issue, on every fairness issue for Canadians, that party opposite is wrong.

[Income Trusts, November 2nd, 2006]

Mr. Speaker, that intellectually bankrupt party opposite had no idea of how to deal with this issue. As the Globe and Mail said, Canada in becoming an income trust economy “would be less competitive, less productive, and less innovative than it needs to be in the global arena”.

The Globe and Mail gets it. The members opposite do not get it. Not only did they not get it, they do not get it now. They bungled it last year.

We have done what is fair for Canadians. The Liberals think the phone companies should not pay taxes. We do.

[Income Trusts, November 2nd, 2006]

Mr. Speaker, the party opposite seems incapable of handling this file. The Liberals had no plan for the file. Their critics said they had no position on the file. Then, when they addressed it last year, they bungled it.

I can say that the government has support from Newfoundland and Labrador, Prince Edward Island, Quebec, Ontario and Alberta. Most Canadians and most governments in this country understand the long term interests of the Canadian economy, as does the Globe and Mail, as does the Toronto Star. Those who look at--