Pierre Paquette

[Financial Institutions, February 5th, 2003]

Mr. Speaker, a merger of the major Canadian banks will have a direct impact on the public, given the scope of the economic and social issues involved. In the Standing Committee on Finance, many witnesses have called for a careful examination of consumer services in order to ensure that consumers do not bear the brunt of such a merger.

Does the Minister of Finance agree that it would be in the public interest for any planned bank mergers to always be submitted to a parliamentary committee for scrutiny, contrary to the recommendation of the Senate committee last December?

[Question No. 40, December 12th, 2002]

Can the government indicate: ( a ) what studies, reports and analyses have been carried out or ordered since January 1, 2001, by the Department of Finance or the Queen’s Privy Council, on the issue of fiscal imbalance and/or on the Quebec government’s “Commission sur le déséquilibre fiscal”, whose report was released on March 7, 2002 and; ( b ) what long-term (two years or more) forecasts have been made or ordered since January 1, 2000, by the Department of Finance or the Queen’s Privy Council, on Canada’s financial situation?

Return tabled.

[Petitions, December 12th, 2002]

Mr. Speaker, I am pleased to table a petition in the House signed by more than 300 persons in support of rural route letter carriers. The petitioners are from Chertsey and Lanaudière.

Letter carriers on rural routes are calling on Parliament to repeal one paragraph of the Canada Post Corporation Act, which prevents them from bargaining collectively to improve their pay and working conditions.

The petitioners believe that this denial of a fundamental right allows Canada Post Corporation to maintain salaries and working conditions at a level that is unfair and that this constitutes discrimination against rural workers. They hope this situation will be rectified.

[Prebudget Consultations, December 10th, 2002]

I would also like to thank the people of Berthier—Montcalm and Lac-Saint-Jean—Saguenay. Yesterday evening they again made it clear that they reject the Liberal government's policies and are fed up with being shackled to the federal government, and reaffirmed the relevance, not only of the Bloc Quebecois' presence in Ottawa until sovereignty, but also the relevance of the sovereignty project itself.

Certain people, the Minister of Justice among them, spoke yesterday of a moral victory for the Liberals. I hope the future of Quebec will be paved with more such moral victories, as well as real victories, with the election of Bloc Quebecois members, true defenders of the interests of Quebec and great sovereignists. I am therefore most anxious to see these two colleagues come to reinforce our Bloc Quebecois team.

This ties in with today's debate on what the Minister of Finance's priorities ought to be for the government's budget.

As I said, the people of Berthier—Montcalm and Lac-Saint-Jean—Saguenay again made it clear yesterday that they reject the federal Liberal government's approach and want to see an approach much more closely aligned with their priorities and realities.

In the report submitted by the Standing Committee on Finance, there is unfortunately nothing to reassure the people of those two ridings. Their only reassurance is the knowledge that they will have two fine representatives in the House of Commons.

The report of the Standing Committee on Finance is a kind of shopping list which leaves the Minister of Finance with all the leeway. Not only is it a shopping list, but it is one where the only common denominator is the fact that the provinces are being required to be accountable to the federal government for any policies within their own areas of jurisdiction.

In health, without giving any figures, they talk about restoring funds and about the provinces being accountable to the federal level. When I travelled with the Standing Committee on Finance, I was surprised to see that the people in English Canada believed in the validity of the Canada Health Act. This legislation has never stopped the Liberal government from making unilateral cuts in transfer payments to the provinces and from creating most of the problems we faced today in health, in all provinces of Canada, and in Quebec in particular.

You know that four Canadian provinces are at risk of running a deficit this year. This is not just a problem in Quebec. It is a problem across Canada. Most of the blame for the financial problems of the provinces, Quebec especially, can be placed on the Liberal government, the federal government.

Absolutely nothing in the report addresses this reality. The Bloc Quebecois has rejected outright the approach by the Liberal majority on the Standing Committee on Finance, except for two small measures that I wish to point out nonetheless because I feel they are Bloc Quebecois victories.

In the report there is a recommendation that the disability tax credit be refundable. The Bloc has been asking for this for several years. We are currently campaigning, with the member for Laval Centre, throughout Quebec, and collecting signatures not only to make the tax credit refundable, but also to improve access to this tax credit.

You know that recently the finance minister wanted to introduce draft legislation to limit the definition of a disabled person. More than 100,000 letters were sent to people throughout Canada who had to provide or re-submit evidence of their disability. There were situations that were morally unacceptable.

The tax credit has to be refundable because 65% of disabled persons earn less than $20,000. They do not pay taxes, so if the credit is non-refundable, they do not benefit from this help from the community or the State, towards the costs associated with their disability. I support the measure proposed by the Standing Committee on Finance, although I feel it is too restrictive because it does not question the federal government's current criteria for defining a disabled person.

A second measure that is a victory for the Bloc Quebecois, particularly for my colleague and friend, the member for Saint-Hyacinthe—Bagot, is a recommendation on reducing the excise tax for microbreweries.

It was inconsistent and made no sense, considering the recent legislation that reviewed all of the excise tax structure. It was our feeling that microbreweries were, strangely enough, forgotten, thanks to pressure from the big breweries. This is an injustice that could be rectified in the next budget.

Other than these two very specific measures, the rest, as I was saying, is unacceptable. First, I would have expected—and the Bloc Quebecois would have expected—that this government's finance ministers would have been called to order for the way they assess government finances, and the surplus in particular.

There is a blatant lack of transparency. Allow me to give a few examples. In 1999-2000, the Minister of Finance at the time, who now has his eye on the Prime Minister's job, forecast a $3 billion surplus. The real surplus was $12.7 billion. That is a margin of error of 324%. Some would say, “That was the economy. It could not be predicted”.

The next year, in 2000-01, he forecast a $4 billion surplus. The surplus ended up being $18.1 billion. That is a margin of error of 345%. That was the second year in a row. Some might say, “He did not have much luck”. Let us hope that he is more lucky in the election for the leadership of the Liberal Party of Canada. For the third year, in 2001-02, he predicted a surplus of $1.5 billion, and the surplus was $8.9 billion, 494% off the mark.

The average margin of error over the nine years that the former Minister of Finance held the job is 170%. I will never be convinced that the federal government with its bureaucracy and the Minister of Finance with all his resources did not deliberately underestimate the surpluses.

The Bloc Quebecois, with our relatively modest means, was able to forecast these surpluses with a margin of error of only 11%. Last year we forecast a surplus of $8.3 billion; the actual surplus was $8.9 billion. We were off by 7%.

This is clearly bad faith on the part of the Minister of Finance. The Standing Committee on Finance should have called on the minister to rectify the situation.

What is the result of these deliberate mistakes? The government tells us—and the Prime Minister has said this many times here in the House—that non-projected surpluses must be used to pay down the debt. I would remind him that there is no legal obligation to use greater than anticipated surpluses to pay down the debt. This money is obviously being used to reduce the debt. However, it can just as easily be used to increase the government's assets.

Furthermore, with the $65 billion error since 1994-95, the government has paid down the debt by $45 billion. If it had had the legal obligation to do this, then it would have reduced the debt by $65 billion and not $45 billion.

There is more evidence that there is no legal obligation to pay down the debt. In the December 2001 budget, the government announced that future surpluses, obviously unpredictable at the time, would be used to increase the Canada Strategic Infrastructure Fund and establish an Africa fund.

So, there is a political capacity to choose to invest these surpluses in provincial transfer payments. The flexibility is there, but not the political will. The Bloc is forecasting a $10.4 billion surplus for this year. Over the next three years, we are forecasting a $33 billion combined surplus. These are numbers that, I guarantee you, are much closer to reality than those presented by the current Minister of Finance, who has once again underestimated his surplus.

The Minister of Finance talked about a $1 billion surplus for this year. A few months ago, about midway through the fiscal year, the surplus had already reached more than $7 billion. So, the Bloc Quebecois' proposals are based on reality and not on creative bookkeeping.

As I mentioned, we are forecasting surpluses totalling $33 billion for the next three years. It is interesting to see in the Minister of Finance's statement, recently tabled in Halifax, that for the next six years, despite constantly underestimating revenues and surpluses, he is nevertheless forecasting a $71 billion surplus.

What is most surprising is that this $71 billion surplus, despite every effort to hide the real figures, is twice the amount forecast by the Séguin commission and the Conference Board. For the next six years, it was around $30 billion. So we can see that the federal government is swimming in surpluses, and conceals this at times in a way that I would describe as almost childish.

Given that it was clear to the Minister of Finance that the surplus was already huge, despite the fact that he had a tendency to do everything possible to inflate spending and cut back revenues to avoid a surplus that would be too tempting for the provinces, he reintroduced a contingency reserve in his budget statement. This is a $3 billion reserve that the former Minister of Finance had introduced. Obviously this was not enough and there was still far too great a surplus that the public and the provinces would be eyeing. He therefore invented a new category of reserve for economic prudence.

In the House, when we asked him what the difference was between the contingency reserve and the additional economic prudence, he was unable to answer. There is no difference, except to say that the contingency reserve is a reserve for prudence, and that the additional economic prudence was created for contingencies. In fact, this is simply a clumsy way of concealing the broad leeway available to the federal government.

As I was mentioning, the government can clearly afford to provide money again. Of the $33 billion that we are forecasting for the next three years, we propose that the federal government provide $4.5 billion this year for the Canada Social Transfer or as tax transfer points or GST points for the provinces. Over a three-year period, we are proposing that transfers to the provinces, be they in the form of the CST or tax points or GST transfers, which we prefer, be in the order of $15.5 billion. If the government is serious, roughly half of the expected surplus could be allocated to the provinces to help them meet their responsibilities in health, postsecondary education and income security.

I would remind all those listening to us of how totally the federal government has disengaged. That is why the Canada Health Act is, to my mind, a kind of hypocrisy. I was, moreover, most surprised at how much Canadians had been taken in by the government's strategy on this. At the present time, the federal government pays a mere 14 cents of every dollar the provinces spend on health and 8 cents of every education dollar. I hardly need point out how unacceptable this is.

This transfer of $15.5 billion over three years, $3.7 billion of that going to Quebec, would be a first response to fiscal imbalance. It is worthy of note that this figure of $15.5 billion was more or less the number Mr. Romanow came up with in his report which was tabled just a few days ago. It spoke of $15.3 billion over three years. Everyone except the Liberal government agrees on the additional money needed.

Nevertheless, we obviously find the conditions set by Mr. Romanow for this additional funding totally unacceptable. I think there is consensus in Quebec on this, not just among the political parties, but also among all stakeholders in the health field, and the general public. This is therefore the number one priority.

The second priority is that the federal government stop dipping into the EI fund. Since 1989, the government has not been paying into this fund, but has managed remove the equivalent of $45 billion out of the pockets of workers and employers, small and medium businesses in particular.

As we know, EI premiums are an extremely regressive payroll tax, because a ceiling is imposed. Low wage earners and small businesses have therefore been penalized by this highjacking of the EI fund. As I have already said, a total of $45 billion have been used by the federal government for purposes other than those intended by the Employment Insurance Act. As everyone knows, the Auditor General has recently said again that the spirit of that act has been distorted.

In our opinion, it is extremely important to get the federal government's fingers out of the EI till, so as to protect contributions and ensure that they are used for benefits. This government's EI reform is such that, at this moment, only 4 contributors out of 10 qualify for benefits. Six are excluded even if they have contributed. They are unemployed, but penalized by this government, which helps itself to $45 billion to pay down the debt when it has no legal obligation to do so.

In the meantime, seasonal and older workers are being penalized. We have met many such workers, in Lac-Saint-Jean—Saguenay and in the northern part of Berthier—Montcalm in the Matawini region.

I feel that the response given by the people of those ridings last night was a very serious warning that the federal government ought to move quickly to rectify the EI fund situation.

I would say that there is something rather surreal about the Minister of Immigration, the very person who went to Chicoutimi in November 2000 to promise changes to employment insurance, going to Lac-Saint-Jean—Saguenay to give wrap up the Liberal campaign. I believe he was well received by the public, particularly the construction workers, who reminded him of the promises he made two years ago, and never kept.

If we are to keep the federal government's hands out of the employment insurance fund, the fund must be removed from the public accounts and a separate fund created, one which is administered by the contributors, that is the employers and worker representatives.

I remind members that the Minister of Finance reduced the premium rate by 10¢, from $2.20 to $2.10 per $100 of insurable earnings, as he announced a few days ago. This amounts to yet another forecast surplus of over $2 billion. It is doubtful that people who know from the start that they are charging too much have totally lawful intentions.

The last time anyone sought his advice—he is no longer allowed to say what the premium rate should be to sustain the plan—the actuary for the fund was talking about $1.75. This represents a 35¢ per $100 of insurable earnings tax grab by the government, at the expense of workers and businesses.

A separate EI fund would reduce the surplus by some $2 billion or $3 billion this year. Over three years, we have forecast $9 billion. This would still leave $2.9 billion for other measures.

We are proposing that the Minister of Finance extend the infrastructure program, among other things. We think that, much as it did with the first two programs, the federal government should invest $500 million a year in this program, be it for water, sewers, roads or urban transit; with Kyoto, this will become very important. Ratifying Kyoto will also determine a new social contract between people and nature, the economy and the environment. There will therefore be needs in terms of infrastructure.

There will also be needs directly related to conversion resulting from Kyoto. We are proposing that $500 million be earmarked for the conversion of hydrocarbon industries as well as for the creation of renewable energy industries.

I have had the opportunity to mention previously in this House that wind power holds great promise, with the potential to create 15,000 jobs in Quebec alone. We are suggesting that, for the next five years, $500 million a year be invested in the infrastructure program and another $500 million in the environment.

Incredibly, there is still money left over. We suggest other priorities such as international aid. This House already voted that the objective of 0.7% of the gross domestic product should be reached by 2010 or 2011. We propose that this objective be part of the budget.

Like many people, we ask that the air security tax be abolished. There is no evidence to indicate that this tax was anything but a new tax in disguise, somewhat like the employment insurance premiums.

We also propose that the GST on books be abolished. There is talk about a knowledge economy, the need for the public in Quebec or elsewhere in Canada to have a significant level of general culture. It is inconsistent then, to tax culture. As Quebec has already done with its sales tax, we propose that the GST on books be abolished.

Finally, once all that has been taken care of, we estimate that there would be roughly $1.5 billion remaining in the so-called economic prudence category. Obviously, if this amount were not spent, it would be there to offset unanticipated economic conditions, or it could go toward paying down the debt.

We do not subscribe to spending for the sake of spending, but we do believe that paying down the debt is not a priority right now. Canada currently ranks third among the G-7's least indebted countries.

We think the priority should be to reinvest in transfer payments to the provinces for health, postsecondary education and income security. We think it should go to the unemployed and that a certain number of measures should be included in the next budget out of pure and simple compassion and justice.

[Prebudget Consultations, December 10th, 2002]

Mr. Speaker, I would like to begin my speech on the prebudget consultations with congratulations to the Bloc Quebecois for their wins in Berthier—Montcalm and Lac-Saint-Jean—Saguenay. I wish to congratulate Roger Gaudet and Sébastien Gagnon, who will soon be joining us to defend the interests of Quebec and promote its sovereignty.

[Kyoto Protocol, November 28th, 2002]

Mr. Speaker, I think that the level of our emissions compared to the rest of the planet is not the issue. What is important is how we take our responsibilities, as Canadians and as Quebeckers, with regard to a universally recognized problem.

I will remind members that Canada, if we exclude Quebec, is the worst polluter per capita in terms of greenhouse gas emissions. Australia may be worse than we are some years. However, last year, Canada was again the worst polluter per capita in terms of greenhouse gas emissions. Therefore, we have a great responsibility to succeed in meeting our Kyoto targets, which call for a reduction of our greenhouse gas emissions to 6% below 1990 levels.

[Kyoto Protocol, November 28th, 2002]

Mr. Speaker, of course, there will be changes to the industrial structure. When we had the debate on the Canada-U.S. free trade agreement, we also pointed out that there would be changes to the industrial structure. I was among those who supported opening up our borders, but realized that we would need assistance programs for retraining and industrial conversion.

We must approach the Kyoto protocol the same way. Just like free trade, it is here to stay. It is part of the natural evolution of our planet. We must respect nature; if we do not, at some point, we will not have any economy left.

I believe we must deal with this debate just like we dealt with the one on the Canada-U.S. free trade agreement. The question is not to determine if we are against opening up our borders or against the Kyoto protocol. The question is to see how we are going to convert of our industries and retrain of our workers. It isclearly the government's responsibility.

However, I think that the impact has been exaggerated. A study was conducted in Quebec by an environmentalist who is also an economist. He believes that the price of gas will go up by about 1 cent per litre. When one considers that, in the Montreal area, the price of gas can vary from 69 cents one day to nearly 80 cents the next day, a 1 cent per litre increase will have no impact whatsoever on the economy.

We must see the bigger picture. Maybe a few jobs will be lost, but I do not think that number will be significant. There will be a lot of changes to be made in our way of doing things, but there will also be some job creation associated with the implementation of a smart plan—not the one that has been proposed to us—for reaching our Kyoto targets.

It is abundantly clear that the United States is the only country that is directly targeted among industrialized nations. There is a modulation associated with the results in terms of reducing greenhouse gas emissions, depending on the level of development of each country.

For Latin America, it is not the same at all.

[Kyoto Protocol, November 28th, 2002]

Mr. Speaker, I thank the member for Rosemont—Petite-Patrie for his question. This looks a little like when we have a fundraising campaign. Members of this House appreciate that this is not a fundraising campaign. It is easy to go and get the first dollars. It is very difficult to get the last ones.

Quebec having grabbed the bull by the horns several years ago and the Quebec industry and several areas having made this choice, we went and got the first savings in terms of greenhouse gases, that is those that were the easiest to get. For example, when we shift from coal energy to electric energy or to dual energy, we get extremely significant returns on our investment.

As time goes by, returns coming from the reduction of greenhouse gases will require more fundamental changes. In essence, and I was mentioning this earlier, what the Kyoto protocol and the inevitable constraint of the respect for the environment require is a renegotiation of a kind of social contract, with regard to our lifestyle.

Since Quebec has already been investing in the reduction of greenhouse gas emissions for several years, the results that were the easiest to reach have already been reached. If we use the year 2010, the effortwe will have to make will be greater than the effort of the extremely polluting provinces. I am not impugning motives or giving a lecture, in this regard.

For example, a number of years ago, we chose thermal energy, including coal from Pennsylvania, which is low grade coal. At the time, this was not a concern. The thermal plant produces a lot of pollution. When we close it, we will have a very significant reduction in greenhouse gas emissions, at relatively low costs.

In this regard, Quebec will then be penalized—and, then again, the distinction must be clearly made between the principle of the ratification of the protocol and the action plan—to the point that, in the report tabled by the government on the impact of the jobs not created as a result of the action plan tabled by the Minister of Environment, we see that Alberta, which is responsible for 31% of the greenhouse gas emissions in Canada, will only have a burden of 10% in terms of jobs not created.

One can see also that this is all very static, because it ignores the fact that, where industry is concerned, new niches will be developed, which will create new jobs. If nothing changes, however, while being responsible for 31% of greenhouse gases, Alberta's share of the burden of jobs not created will be only 10%.

By comparison, Quebec, which is responsible for 12.7% of greenhouse gases, will have to shoulder 30% of the burden of jobs not created, because much more difficult and expensive choices will have to be made now to achieve reduction targets. That is why this action plan is totally unfair and inequitable. It denies the polluter pays principle.

As I indicated, we do not want this plan. There should be negotiations between the Government of Quebec and the federal government on the basis of principles selected by the National Assembly. That having been said, as I mentioned right at the outset—and my hon. colleague from Rosemont—Petite-Patrie mentioned it again later—we are in favour of ratifying the Kyoto protocol, while being opposed to the action plan tabled by the Minister of the Environment.

[Kyoto Protocol, November 28th, 2002]

Mr. Speaker, I am very pleased to take part in this debate on the motion which reads:

That this House call upon the government to ratify the Kyoto Protocol on climate change.

I think everyone knows that the Bloc has been asking for months now that we ratify the Kyoto protocol.

I want to congratulate the member for Rosemont—Petite-Patrie who was very persistent when the government seemed to waver about this ratification. He worked relentlessly and formed a coalition; more than 70 groups joined in, even large Quebec labour confederations. We owe it largely to him if we are now debating in the House this motion on the ratification of the Kyoto protocol. All this lobbying pushed the Prime Minister into promising, at the Earth Summit, that this protocol would be ratified before the end of the year.

When we look at the facts, we realize that Kyoto is the first step that could lead us to a solution to a very serious problem that jeopardizes our planet and the future of our children. If nothing is done, the current warming trend will only get worse. If nothing is done, 50 years from now, the concentration of CO

2

in the air will have doubled and we will be faced with the effects of climate changes, of which we have already had a taste, like respiratory problems, the recurrence of diseases thought to have been eradicated and serious environmental changes. We know that polar bears are already being affected by the melting of the ice cap. If we do not do anything about this, not only are we doomed, but we show an incredible lack of responsibility.

Kyoto will not solve all of our problems. The target is relatively modest, as we know. We are only talking about the industrialized countries lowering their greenhouse gas emissions 6% below 1990 levels.

When we look at the facts and at the known and foreseeable impact our failure to act could have, I think that any responsible person would support the ratification of this treaty, knowing that it is only a first step and that other measures will have to be taken in a few years to further reduce greenhouse gas emissions.

We must reverse the current trend towards global warming and this is even more important for Canada, which is a large source of greenhouse gases.

I know that, sometimes, some members opposite do not like us giving Quebec as an example, but one thing is certain: in Quebec, greenhouse gases have only increased by 2.3% between 1990 and 2000, as opposed to 19.6% in Canada. If we exclude Quebec, Canada's production of greenhouse gases is about the worse. From year to year, Australia can compete with us on this bad record. So, it is essential that Canada act quickly. We know that the United States plays an extremely important role, being the source of about 40% of greenhouse gases, but, per capita, Canada is one of the worst sources of greenhouse gases.

So, between 1990 and 2000, greenhouse gases in Quebec had increased by 2.3% as opposed to 19.6% in Canada. In the case of Quebec, we see that it is possible to find solutions that are both economically viable and geared toward an effort concerning the environment and sustainable development.

If our greenhouse gases have only increased by 2.3% in 10 years, this has happened despite the fact that our use of fossil fuels has increased by 7%, that our gross domestic product has increased by 26% and that the population has increased by 6%. So there is no contradiction between reaching the goals established by Kyoto and ensuring economic development, as well as responding to the needs of the public.

With the efforts that have made by Quebec—to which I shall return later—we are now at 12 tonnes per person, as far as greenhouse gas emissions are concerned—about the European level—compared to the figure for Canada, which is 23.6 tonnes. As I said, this is one of the worst results of the OECD.

When we look at the efforts made by Quebec, they suggest a direction that the rest of Canada could follow. This Parliament absolutely must call upon the government to ratify Kyoto. Canada is one of the key figures in its implementation. I also think that, on the political level, and let us not kid ourselves about this, ratification by Canada, Europe and Japan will put pressure on the U.S., because it will be totally isolated among the developed countries.

I know it is not always easy to convince. This can be seen with Iraq and the International Criminal Court. Ratification by Canada will, however, add to the pressure on the States to also ratify Kyoto.

As hon. members are aware, Quebec made some energy choices in the early 1970s. These are what have allowed us to achieve the results we have today. That was a major debate, and I have referred to it already in another debate. When Robert Bourassa came up with the idea of using the water from James Bay to generate hydroelectricity, an extremely important debate ensued. Some argued that nuclear energy was the way of the future, as far as clean energy was concerned. We now have a hydroelectricity infrastructure that gives us good results as far as greenhouse gas emissions are concerned. And we did it without any federal assistance, unlike the western petroleum industry.

Let us be clear. The Bloc Quebecois is in favour of ratifying the protocol, but not in favour of the Minister of the Environment's plan, because they want us to foot the bill for the third time. We paid once to develop oil in the west, with the Borden line. We had to pay more for our oil and gas than we would have on the international market.

At that time, we bought our oil from Venezuela. It cost only a few dollars a barrel. However, to make the production of western oil and gas cost effective, we were forced to have a single price across the country. As I said earlier, the government invested a lot of money in oil and gas projects in western Canada as well as in the Hibernia project. In fact, $66 billion were invested in oil and gas projects. No investment was made in hydroelectricity. Almost nothing was invested in renewable energies, whereas $10 billion went to the development of nuclear energy, which has become totally obsolete.

We developed our own hydroelectric production, which is compatible with Kyoto targets. First, we were forced to pay more for our oil. Then, through our taxes and through these $66 billion, we had to pay for part of the infrastructures needed for the development of the western oil and gas industry. Now the government wants us to pay because the action plan that is on the table uses 2010 as base year.

Considerable conversion efforts were made by Quebec, by Quebeckers as well as by industry, including the pulp and paper industry and to a lesser extent the steel industry and the metallurgy industry. All these efforts would not count in the action plan that has been proposed to us. We believe that this approach is totally unfair and that it will be detrimental to Quebec. Instead of recognizing the efforts and investments made by Quebec, as it should, the action plan will penalize Quebec and benefit those that have polluted and are still polluting our atmosphere with their greenhouse gas emissions.

We must be clear here. I said it and all my colleagues said it. The fact that we support this motion does not mean that we support the action plan tabled by the minister. Finally, it seems important also to mention that the National Assembly of Quebec adopted, unanimously, a motion regarding the ratification of the Kyoto protocol. I will read it into the record. It is relatively short.

...The National Assembly asks:

That the allocation formula take into account the reductions achieved since 1990 and those that will be achieved by 2008.

That the manufacturing sector be treated equitably and not be included in the energy sector with regard to allocation of emission rights in order to balance the efforts that are asked of all the major economic activity sectors.

That the allocation formula involving the energy sector discriminate in favour of the energy sources that emit less carbon.

That the Government of Canada initiate with the Government of Québec the negotiation of a bilateral agreement on the financing—particularly of targeted measures—and the implementation of the greenhouse gas reduction strategy.

So, after expressing its support earlier this year—I think the National Assembly supported the ratification of Kyoto in May—this motion was passed on October 24, 2002 to remind everyone that it is not because we agree with the ratification that we are going to buy just any action plan. We prefer a bilateral approach between the federal government and Quebec where previous investments by Quebec would be taken into consideration.

I want to point out not only that we consider the action plan to be unfair, but also that the way the environment minister is presenting the Kyoto protocol is extremely negative. We have to understand that with or without Kyoto, we do not have any choice. I went over some figures earlier. Our economic development should be increasingly in sync with a healthy environment. This is not an economic negative, quite the opposite. The Kyoto protocol and our whole approach to sustainable development give us an incredible opportunity to develop new niches. It is true for Quebec and it is also true for Canada.

Therefore, we must be very proactive regarding this issue. We must not just talk about job losses, we must also look at what this will create. In order to achieve this result, the government must pledge to make investments with the provinces, so that we can be successful.

The Bloc Quebecois presented, among other things, a proposal whereby for each dollar given to industries that use hydrocarbons during the transition process toward the implementation of the Kyoto protocol, one dollar would be paid to industries for renewable energies. We presented a report on wind energy, which can create many jobs.

This is not merely a project to meet our needs for electricity or for energy. We already have electricity. But with these projects, we will be able to meet future needs and export our knowledge and know-how all over the world, and particularly to developing countries, which have a huge need for energy and which, right now, often rely on sources of energy that are extremely polluting, including coal-fired plants. As regards such coal-fired plants, I should point out that Ontario and Alberta are not setting good examples.

So, the Canadian government must not only promote the Kyoto protocol, it must also act as a leader in the repositioning of our economy, it must insist on the benefits that could flow from understanding the global situation, and it must look further ahead than the next six months as regards the implementation of the Kyoto protocol.

As I mentioned, there is a huge economic potential relating to environmental protection. Quebec and Canada must be leaders in this regard. There is a principle of equity that is totally non-existent in the action plan, namely the polluter pay principle. It seems to me that if there is one principle or premise on which there is a world-wide consensus regarding the environment, it is the polluter pay principle, which consists in ensuring that those who pollute are the ones who pay. As I said earlier, this is not how the action plan of the Minister of the Environment has been set up. For us, it is a matter of equity vis-à-vis Quebeckers, but it is also a matter of respecting a universally recognized equity principle.

The federal government obviously must not be allowed to use the ratification and implementation of the Kyoto protocol, namely its action plan, to once again paternalistically pass itself off as having the solutions to everything. Today, when we see the Romanow report and the government's response, it is a bit worrisome. This is not the federal government's only centralization initiative.

In the case of implementing the Kyoto protocol, I believe that there must be an agreement right now that the federal government will respect provincial jurisdictions with respect to the environment, natural resources and economic development. I believe this will be the key to success.

I will conclude by saying that the Bloc Quebecois hopes this House will support unanimously, if possible, the ratification of the Kyoto protocol. We must continue the debate on the action plan. Our position on ratification of the protocol must certainly not be seen as support for the action plan tabled.

The Government of Quebec made some recommendations which were well received by other provinces. I urge the Minister of the Environment to listen to provinces proposing solutions to problems raised by provinces, by Canadians and by Quebeckers.

That being said, I think that the way has been laid. The Kyoto protocol is only a first step. We must learn to live with the need to respect the environment, not in a negative but in a positive way. This is a new opportunity to develop not only technologies but also industrial niches. I think that it is with this in mind that we should promote the ratification of the Kyoto protocol.

I am very happy that the Prime Minister suggested that the House debate and ratify the protocol. I remind the House that the Bloc Quebecois would like to see a debate and a vote in the House on any major international treaty, before its ratification.

We spoke about this in connection with the Free Trade Area of the Americas. We are also speaking about it in connection with free trade agreements currently being negotiated, in particular with Latin American countries. We believe it is extremely important that Parliament be allowed to debate international treaties—the major ones, of course—and vote on them before the government ratifies them.

I think that the Kyoto protocol offers a good example which, hopefully, will be followed by the government during the coming months.

[Tax Conventions Implementation Act, 2002, November 28th, 2002]

Mr. Speaker, I am pleased to rise on Bill S-2, to implement an agreement, conventions and protocols concluded between Canada and Kuwait, Mongolia, the United Arab Emirates, Moldova, Norway, Belgium and Italy for the avoidance of double taxation and the prevention of fiscal evasion and to amend the enacted text of three tax treaties.

First, I would like to point out that, in the title of the bill, there is an error in the French version, because Moldova is the name of the country in the language of the country, but in French, we say Moldavie or république de Moldavie. It seems to me that this could be corrected without us having to go through a lengthy procedure. I remind the House that, otherwise, we would have written Italia, instead of Italie and, in this sense, it seems to me that we must write it correctly in French. Perhaps in English it is indeed Moldova.

I also remind the House that Moldova became independent in 1991. It is interesting to see that the Canadian government is capable of making agreements with newly sovereign countries. I am convinced that this will be the case when Quebec decides to become a sovereign country.

Bill S-2 does not pose any problem with regard to its content and the Bloc Quebecois will support it. However, the problem is what is not in the bill, particularly concerning the issue of tax havens, and this is not the first time that the Bloc Quebecois has pointed this out. I know that, since 1994, my colleague from Saint-Hyacinthe—Bagot has constantly been mentioning this issue of tax havens.

Bill S-2 would have been a good opportunity to denounce tax conventions that are a problem. To give an example, tax conventions between Canada and Italy, and between Canada and Barbados were signed at the same time. In the case of Bill S-2, we are re-opening the agreement with Italia to improve it. In the case of Barbados, we could easily have done the same to put an end to this tax agreement, because Barbados is indeed a tax haven.

There is a rationale for not wanting to force businesses or individuals that already pay taxes in another jurisdiction to pay taxes on the same income in Canada. If it is logical to have these kinds of tax treaties, it is because those countries, like the ones mentioned earlier, have tax rates that are normal for a responsible state that has to collect a certain amount of money to provide services to its people.

In the case of Barbados, it seems to me that we are not dealing with a country that has normal tax rates. Here are a few example. In Barbados, the tax rate is 1% when profits exceed $15 million US. It goes up to 2.5% for profits under $5 million US.

We can see that not only is the tax rate totally ridiculous, but the approach used is completely opposite to the one that we have developed in Canada and in Quebec, where we have progressive tax systems. In this case, small businesses, or relatively small businesses, are paying the most tax. When I say that they are paying the most tax, again it is relative; we are talking here about a 2.5% tax rate, compared to slightly less than 30% in Canada.

Barbados has no capital gains tax, no payroll deductions, and no monitoring or control with regard to trade. Therefore, it is clear that, in the case of Barbados, there is no double taxation and that, in these circumstances, a tax treaty makes no sense. A tax treaty to avoid double taxation implies that both jurisdictions have an appropriate tax rate, one that is normal for a responsible state, as I was saying earlier.

On February 27, 2001, the Auditor General even said that “one of the biggest threats to the tax base lies” in our openness to countries some Canadian taxpayers and corporations use as tax havens. This should be a concern to all of us. When a Canadian corporation decides to avoid paying taxes by opening a branch in a tax haven, it is the taxes of those who choose to take their responsibilities in Quebec and in Canada that go up.

I think it would have been important to use the bill before us to put an end to our tax treaty with Barbados. This is not an immaterial or insubstantial issue. The Auditor General referred to it in her 2001 report, as I mentioned earlier. What caught my attention is that Canada's direct investments abroad totalled $257 billion in 1999 figures.

Some $134 billion were invested in the United States and $29.2 billion in the U.K. That is understandable. But I was quite surprised to see that the third country where Canadians invest the most is Barbados, with $16.8 billion.

I just cannot believe that those investments of $16.8 billion have all contributed to the economy of Barbados. For the most part, these direct investments were done to avoid paying taxes in Canada with the consent of the Canadian government, because, as we know, it is not illegal. This has to stop.

Let me give more examples showing how important this system has become. Out of our total investments abroad of $257 billion, $27.9 billion were invested in Barbados, the Bahamas and Bermuda, three countries the OECD considers tax havens. This represented 10% of all Canadian investments abroad in 1999. This is more than all Canadian investments in Asia, Latin America and Africa. This is far from insignificant. It is therefore imperative that the Canadian government take the bull by the horns and terminate these tax treaties with tax havens.

At this time, the total amount of money invested in tax havens—there are 40 or so in the world—is estimated at $5,000 billion, one fifth of which is considered laundered money.

By being extremely permissive in tax treaty matters and allowing tax havens to be considered legitimate jurisdictions as far as taxation goes, the Canadian government is dodging its responsibility to control money laundering. I repeat that one fifth of the money invested in tax havens is laundered money.

What is cause for concern is the fact that the Department of Foreign Affairs and International Trade promotes tax havens. In a July 16, 1999 document, we can see that one of the conferences scheduled by CanadExport was to demystify tax havens. The items covered were: the origin of tax havens; their use as a financial strategy; the criteria for choosing a good tax haven--as if there could be such a thing as a good tax haven; tax havens and the Canadian tax system; and finally, the steps to follow in order to use them properly.

It is clear that not only did the government duck its obligation to put an end to tax treaties with tax havens, Barbados in particular, but it also promoted tax havens through some of its agencies. On the Department of Foreign Affairs and International Trade Web site, one can order a booklet entitled “Barbados: A Guide for Canadian Exporters”.

It is very worrisome to see that Canada promotes tax havens. I raised the issue a bit earlier; we all know that much of the money placed in these tax havens constitutes not only tax avoidance but money laundering as well, and is probably used by terrorist groups around the world.

There is a blatant contradiction here with what the government officially said about measures that were taken after September 11, 2001.

As I was mentioning earlier, it is interesting to see that, since 1994, not only has my colleague from Saint-Hyacinthe—Bagot, when he was the finance critic, asked that the Canadian government review its relations with tax havens, but the OECD has also asked members—we know that Canada is a member—to consider denouncing tax agreements that may have been concluded with tax havens.

Bill S-2 would therefore have been a good opportunity to raise this issue, particularly because the tax agreement with Italy was signed at the same time as the agreement with Barbados and Italy is one of the countries with which we have reviewed our provisions in Bill S-2.

Until now, the federal government has not listened to the OECD, to the Bloc Quebecois or all the groups in society, including ATTAC-Québec, which are asking the government to assume its responsibilities concerning this laxness toward tax havens. Since the finance minister's businesses were using tax havens—we have identified more than a dozen numbered companies that are operating in Barbados, in Bermuda or in the Bahamas and that are owned by Canada Steamship Lines—we thought that, being judge and jury, the finance minister was uncomfortable raising an issue that, I remind the House, is not illegal, but may have some illegitimacy. When the person responsible for the finances of a state such as Canada encourages his own businesses to operate in tax havens, we are justified in asking some questions.

However, now that we have a new finance minister, it seems to me that we should be able, especially since the former finance minister wants to be the next Prime Minister of Canada, to have a debate not only for the good of Canadian and Quebec taxpayers, but also for the good of politicians. It might raise questions when the public sees this lax attitude towards tax havens and businesses that use them and realizes that some of our most prominent politicians also take advantage of these tax havens.

Therefore, I think that in the next few weeks, maybe in the budget that will be coming in February or in March, the government should propose a number of ways to deal with this issue.

We have made suggestions and we are making them again today. We think that, in the free trade area of the Americas negotiations, we should seek the addition of a clause prohibiting harmful tax practices, as defined by the OECD. We know that a number of jurisdictions across the Americas have harmful tax practices.

The Bloc Quebecois is also demanding that Canada withdraw as soon as possible from its tax treaty with Barbados, as recommended by the OECD. We are also asking that the Canada Customs and Revenue Agency strengthen its international service to discourage tax avoidance through the use of tax havens. We have also been asking since 1996 that an overall reform of the Canadian tax system be undertaken to eliminate tax loopholes as well as certain abusive practices that are used at the expense of the average taxpayer. Taxes that are not paid by large businesses and by those individuals who are rich enough to use these schemes are paid by middle and low income people in our society.

Lastly, I would like to make two suggestions or recommendations concerning tax havens. I think the income earned by Canadian corporations in tax havens should be taxed at the rate in effect here in Canada. Again, I will use Barbados as an example. The tax rate there is 1%, compared to about 29% here. The income of the corporations and branches in operation in that country should be taxed here to make up the difference. In other words, a tax rate of around 28% should be applied. We should also prevent agencies and departments and the government as a whole from providing funding or any form of assistance to corporations which have decided to shirk their fiscal responsibilities. This would be consistent with the official position of the Canadian government.

As I said earlier, the problem with Bill S-2 is not really what is in it but rather what has been left out.

Having said that, as I mentioned at the beginning of my speech, the Bloc Quebecois will be voting in favour of this bill.