Pierre Paquette

[Softwood Lumber, March 9th, 2005]

Mr. Speaker, just as the softwood lumber issue is about to come to a positive conclusion by legal means, the industry is extremely vulnerable, because the government has not put in place a real aid package.

Instead of floating a proposed settlement in Washington, which does not have the support of all the parties involved, should the government not be assuming the industry's legal costs, thereby allowing the industry to hold on until the legal process has concluded, as it is about to?

[Canadian Livestock Industry, March 8th, 2005]

Mr. Speaker, I thank the minister for his question. As I said in my speech, I concede that President Bush has adopted the same position as Canada, or so he said. During his visit, he had effectively guaranteed us that the border would re-open in early March. As far as I can tell, he is unable to keep his promise because, on the one hand, a court in Montana has issued an injunction and, on the other, the American Senate passed a motion.

When American parliamentarians adopt a motion by a slim margin, we have a very serious perception problem. I think that it was 54 to 49, approximately, so it was a relatively slim margin but the motion passed all the same. So, we must deal with this perception problem, and that is not something we can do overnight.

That is why I wanted to put this debate on the closure of the border to Canadian cattle in a broader perspective, in the context of our overall trade ties with the U.S. We have a number of problems. I see that the low-profile strategy has not worked at all.

If we have the support of Mr. Bush here, that is a plus, but there are still some things missing and we need to work on them.

I cannot believe that the Prime Minister will not, in his meeting on March 23 with President Bush, address the question of the border closure. Judging from what the minister says, it is more or less pointless to do so. The matter must be brought up, but so that we look for strategy together that would prove to the U.S. courts that Canadian beef meets all health standards.

This leads me to another topic. Not only does Canada have a wait-and-see attitude in its trade relations with the Americans, but it is inconsistent. I am sorry to again draw a parallel with another issue, but the Liberal government's strategy with respect to softwood lumber is the same as its strategy with respect to cattle. Yes, there are procedures. Informal discussions appear to be taking place; there is nothing really formal in the way of discussions. The government is certainly not threatening the Americans with the implementation of the rules agreed onmoreover, there is no help to the victims here in Canada and Quebec.

Neither the beef producers nor the dairy producers of Quebec have had any sort of program of assistance that can be called such. The message being sent to the Americans is basically: hang in there. The number of victims created in Quebec and in Canada will make us far less of a trade threat in future.

It is the same thing with softwood lumber. We were promised assistance. We saw phase one, assistance with court costs for communities and associations, but then nothing more since 2003. Every year, the softwood lumber industry and the various companies have some $100 million in legal costs just to keep on going.

So without a solid assistance package in place to show the Americans that we are going to be able to hang on to the end, if no public opinion campaign is undertaken by U.S politicians and of course the American administration, we will not be able to survive this cattle crisis.

[Canadian Livestock Industry, March 8th, 2005]

Madam Speaker, it is with both great satisfaction and great disappointment that I take part in this debate. We will recall that, just a few weeks ago, President Bush came to Ottawa to meet with the Prime Minister of Canada. He gave us the assurance that the border would be reopening in early March. At the time, we all wanted to believe it would. I warned against rejoicing too fast, because a similar announcement had been made once before, but then a mad cow, a Canadian cow, was discovered in the U.S. That had delayed things. Once again, a portion of the U.S. cattle industry was able to take advantage of the discovery of another mad cow, this time in Canada, to pursue their protectionist approach, which, in a few areas of the U.S economy, is unfortunately the trademark of producers.

We are talking about agriculture, but we could also talk about softwood lumber. We could talk about live hog and the dairy industry as well. Even though, earlier this year, there was hope that the border would reopen, intensive lobbying of all U.S. representatives and public opinion should have continued to explain that there are no public health reasons to ban cattle exports from Canada and Quebec to the U.S.

I think that we have taken a somewhat careless and wait-and-see attitude in relying only on the word of the U.S. president. I am convinced of the sincerity of the U.S. president on this issue, because, shortly after the injunction was obtained in Montana, President Bush announced that he would be supporting Canada's position, that is for the U.S. border to be reopened to cattle from Canada and Quebec.

Convincing the U.S. president is not good enough, however. Once again, we are getting proof of that. We can think of the cattle issue. In this respect, we have heard all through the evening very important testimonies from members like my hon. colleague from Montcalm. But we have to realize that the same is true for softwood lumber.

We are told in this connection that the Americans are going to respect the decisions by the WTO and special NAFTA panels. Unfortunately, after six positive decisions, in favour of the Canadian position, the Americans are still withholding the $4 billion-plus in countervailing duties illegally collected in connection with Canadian and Quebec softwood lumber exports.

The other example I can give is the Byrd amendment. Canada was right in its WTO challenge with the other countries of the Americans' decision to include in their trade legislation the provision that results—and I will remind you of this here because we are still in the process of putting in place the retaliatory rights to get the Americans to comply with the WTO decisions—in its being illegal for the Americans to levy countervailing duties and antidumping duties on foreign exports in a trade dispute and to hand them over to the industries lodging the complaint.

Obviously, something like the Byrd amendment acts as an incentive to file complaints and to create trade disputes. Consequently, softwood lumber, like the matter of exporting Quebec and Canadian cattle to the Untied States, is part of a context in which it seems, from the American point of view, that they will experience a great deal of difficulty in fulfilling their obligations toward Canada in relation to the decisions reached by the international institutions, or in the case of NAFTA bilateral institutions—in fact trilateral, since Mexico is included—or complying with treaties I would imagine were signed in good faith.

Given this context, after the visit by President Bush, the Prime Minister ought to have taken the bull by the horns—pardon the play on words—and continued his crusade in the U.S. in order to ensure that the President's commitments are respected.

This calls into question the government's approach to trade disputes with the United States. All too often, I get the feeling that the current government, the Minister of International Trade and the Minister of Agriculture and Agri-Food are afraid that if Canada asserts its rights at mutually established institutions, such as NAFTA and the World Trade Organization, it will antagonize the Americans even more. That is not how it works.

We know that the United States is a huge country that has a very diverse economy, particularly in terms of the production of goods, services and agricultural products. Often, we will have to face well-organized lobby groups, but they are limited, however, within the industry.

For example, with regard to softwood lumber, the entire softwood lumber or construction industry is not opposed to the return of the free trade of softwood lumber. In fact, here, we have allies in the U.S., just as we do with regard to Canadian and Quebec cattle, starting with the American president. I could name a number of other allies, particularly in terms of live hog, for which there was a preliminary announcement about countervailing duties.

A large part of the American industry realizes that it goes against its own interest for this lobby, representing one section of the American hog industry, just as in the softwood lumber and cattle industries, to want to use dilatory measures simply to protect their market from exports or, in this case, from Canadian imports.

This is the context, I believe, in which Canada must now raise its voice in terms of its overall approach to Canada-U.S. relations. In fact, we have gotten nowhere by not asserting our rights or by adopting a low-profile strategy and maintaining informal relations. I remember the Minister of Foreign Affairs, when he was Minister for International Trade, saying to let him do his job and to be patient, since he knew what he was doing. Two or three years later and the conflict has yet to be resolved. The border has been closed to Canadian cattle for the past 18 months.

In my opinion, Canada and the Liberal government has to stop taking a wait-and-see attitude and has to let all our trading partners know that the Americans are not honouring their international obligations towards Canada. There are a number of ways to do this.

The meeting the Prime Minister of Canada will have with his counterparts, President Bush and President Fox, will provide an opportunity to make a point. It is not enough to tell the U.S. president that we would really like the U.S. border to be reopened to Canadian cattle and the softwood lumber dispute to be resolved.

On the pork issue, we are looking at a preliminary notice of countervailing duties. I hope this will not go any further. It has been unsuccessful in recent years. Unlike us, the Americans have a plan. It is important to understand that, in reference to the cattle, softwood lumber and pork industries, I am talking about industries relying on protectionism to protect their markets. Informal negotiations or discussions such as those we were involved in are not enough for them.

The time has come for Canada to let the U.S. president know that we want to have a very serious discussion on preventing industries like the lumber, cattle, pork or steel industry from using dilatory tactics to avoid complying with decisions rendered under the rules we have mutually agreed on.

On March 23, the Prime Minister of Canada will have a very big responsibility. I will conclude by saying that I was amazed to learn today—I will check it out tomorrow—that this meeting whose purpose was originally to discuss improvements to NAFTA will not have that particular item on the agenda.This would mean taking not only a wait-and-see attitude, but also an absolutely irresponsible one.

[Budget Implementation Act, 2004, No. 2, February 25th, 2005]

Mr. Speaker, I fully understand what the member for Chambly—Borduas is saying about money laundering.

The existence of tax havens and tax avoidance also allows for money laundering. Canadian law allows for this tax avoidance, and thus it is not tax evasion in the true sense of the word. Major international mafia and terrorist networks use tax havens for their financial transactions. It is estimated that at least one fifth of the money in tax havens is laundered money.

For the Canadian and U.S. governments to tolerate the existence of tax havens and say they want to fight terrorism, is a paradox.

In the case of CSL International—which no longer belongs to the Prime Minister, but his three sons, as I was saying—last spring the show Enjeux reported that the CSL headquarters in Barbados seemed to be a shell company, which is against Canadian law.

I know that an individual from Quebec filed a complaint with Canada Customs to ensure that CSL International was indeed obeying Canadian law, which is full of loopholes, as I just mentioned. I think this is something worth monitoring.

Now, I totally agree with the hon. member that if we collected our taxes ourselves, we could do things much more rationally.

The municipalities are a good example. Some of Quebec's mayors, especially those from larger cities, were pleased with the government's announcement, but when we look at the numbers there is a subterfuge. Billions of dollars are announced over a lengthy period, but this year only $600 million is being transferred to the municipalities, or $150 million for Quebec.

However, a small municipality of 3,000 people does not have as much of a say as the capital of Quebec. My region has 26 municipalities. The vast majority of these municipalities are better off allowing Quebec to help them choose their investments for infrastructure.

[Budget Implementation Act, 2004, No. 2, February 25th, 2005]

Mr. Speaker, the member's intervention is peppered with questions. Unfortunately, I can only respond to a few of them.

First, I must say one thing. Barbados is the only tax haven with which Canada has an agreement. It is not for nothing. It is because some people close to the government have interests there.

Liberia is no longer considered a jurisdiction with which business should be done. There are a whole series of tax havens with which Canada has not signed a tax treaty. How is it that Canada has done so only with Barbados? It is a tax haven, since it meets all the conditions for it to be a tax haven: negligible taxation, standard bank secrecy and a total lack of cooperation with international financial institutions.

If the government in power and the Liberal Party were consistent, Canada would repeal its tax treaty with this tax haven, for the same reasons that it never signed any with any other tax havens.

As for the fiscal imbalance and Quebec sovereignty, I must first admit that the government has in fact improved its finances beyond belief. However, it has done so at the expense of the provinces and Quebec. It cut transfer payments, which has had a terrible impact on health and education, and continues to do so.

Who else was affected by cuts the federal government made in order to improve its finances? The unemployed. In order to avoid using unparliamentary language, I will say that $46 billion was pinched from the employment insurance fund, and used to inflate the surplus and pay down the debt. We can now boast that we have the lowest debt-to-GDP ratio. But, in terms of education, students are striking in Quebec. Why? Because the federal government cut its transfer payments and the Quebec government can no longer sustain the loans and bursaries program.

The same goes for health. The difficulties we are experiencing do not originate with Quebec or the provinces, where numerous reforms have been undertaken. They are the result of federal underfunding. Ours is the only government in the western world that has managed to solve its financial problems on the backs of others, and has never shouldered its responsibilities. The proof: there has never been as much spending here in Ottawa as there has been in recent years.

The committee we set up with Jacques Léonard, former president of the Quebec treasury board, has discovered that, in the five years from 1997 to 2002, the federal government had increased its operating expenses—that is its bureaucracy: its pens, pencils, papers and desks—by 40%. That averages out to 8% annually. The explanation for this is certainly not the population increase, nor the inflation rate, nor increased federal services to the taxpayers. They have quite simply inflated the bureaucracy artificially in order to avoid giving the money to the provinces and to Quebec to enable them to remedy their situation.

This is tantamount to a policy aimed at strangling the provinces and Quebec and imposing federal government standards and vision on all provinces. That is a far cry from the spirit of Confederation in 1867.

Given this context, Quebec sovereignty remains the only path for Quebeckers.

[Budget Implementation Act, 2004, No. 2, February 25th, 2005]

Mr. Speaker, I am pleased to speak to Bill C-33, especially since, as you know, it implements certain provisions of the 2004 budget, and this week we were unpleasantly surprised by what was in the 2005 budget. I will quickly address Bill C-33 and then broaden the debate to cover what the government announced both in 2004 and in 2005. We have noticed that, despite the election promises by the Liberals, the Prime Minister, Minister of Transport and other ministers in this government, there was nothing in this budget to address Quebec's concerns.

As I was saying, Bill C-33 implements provisions of the budget tabled on March 23, 2004. This bill is in three parts: one on the air travellers security charges, another on the First Nations Goods and Services Tax Act for facilitating fiscal arrangements, and a third on implementing a series of amendments to the Income Tax Act.

I will not go into great detail about the first two parts. I will, however, note in passing that, from day one, we have condemned the air travellers security charge, the purpose of which is still unknown. This tax heavily penalizes the airlines, particularly regional airlines and people in the regions needing to travel by air regularly for business or even to obtain health care. Therefore, in our opinion, this tax was never appropriate. Under Bill C-33, it has been reduced. However, it should have just been axed.

As for the second measure, there is a community in the Charlevoix region that would like to take advantage of this. So, obviously, in keeping with tradition, the Bloc Québécois always supports the demands of the first nations when it is a matter of providing them with the means to ensure their own development. We are convinced that the first nations are able to manage their own destiny, particularly their economic destiny. So this will not pose a problem.

However, I want to mention one point in relation to the third part before I return once again to the main budgetary policies—when I say main, I mean the largest, not necessarily the most intelligent ones—in the recent budget.

I want to come back to the general anti-avoidance rule set out in the Income Tax Act, which targets misuse or abuse of the income tax regulations, tax treaties and all other federal legislation.

We are being led to believe that Bill C-33 closes an important loophole identified by the Auditor General with regard to tax evasion. In other words, the capacity of some taxpayers—be it a corporate citizen or an individual—to avoid paying taxes in Canada.

At first glance, this measure seems positive. It was a minimum. However, we are missing the main point, which is that, since the Liberals came to power, the Canadian government has constantly promoted tax havens, particularly its own, which is Barbados.

Since the Liberals came to power, direct investments by Canadians in Barbados has increased 400%. This is a small island of 270,000 inhabitants, which receives approximately $24 billion in direct investments from Canada each year. I wonder what kind of services or goods are produced in Barbados that require that level of direct investments.

I remind the House that Barbados is now the third destination in terms of Canadian direct investments, after the United States and Great Britain. It is strange that an island of 270,000 inhabitants is able to absorb $23 billion to $24 billion in Canadian direct investments. We are no fools. To a large degree, it is simply money sent to Barbados to avoid the responsibilities of all citizens in a democratic country, that of paying taxes to fund our collective tools.

Barbados is now Canada's tax haven. I think particularly of the business held by the sons of the Prime Minister, who greatly benefits from this. Last Spring, on Enjeux , we saw a program on CSL Inc. It was quite interesting to see, when cameramen and the reporter arrived at the headquarters of CSL, that it was a law firm with about 130 names of other companies. In fact, it is an empty shell that benefits from good tax treatment in Barbados, because it must be recognized as an international business corporation .

In this context, it pays 1% to 2.5% in taxes. What is very interesting in Barbados is that, contrary to all logic, the tax is regressive. For example, if your volume of business and your revenues are low, you will pay a 2.5% tax. However, the higher your volume of business and your revenues, the lower is your tax rate. Beyond a certain amount, your tax is only 1%.

Let us do an exercise here and assume that CSL International pays a 1.5% tax rate on its income, which is more or less the average, between 1% and 2.5%. Let us not forget that it is the holding company that owns the companies which, in turn, own the CSL ships that sail the seas. By figuring out, based on the information available to us, the sales that CSL International must make, that is a profit rate equivalent to the average for that industry, we were able to calculate that, over the five-year period from 1997 to 2002, CSL International saved over $100 million in taxes by using this scheme, namely the tax treaty between Canada and Barbados.

These savings of $100 million by CSL International were covered by the average taxpayers, by those who cannot escape their fiscal responsibilities. This scheme results in a heavier tax burden for the middle class. I gave the example of CSL International. As I said, at least $23 billion are invested in Barbados every year.

Banks also benefit significantly from this convention. Recently, I read a small paragraph in the Bank of Montreal's report to the effect that the bank had saved $500 million in taxes. As we know, this is one of the five major banks. Therefore, it is easy to assume that, together, Canada's major banks saved $2.5 billion in taxes. These figures are from the bank's annual report; I am not making them up.

This additional burden lands on the middle class. It explains, to a large extent, why we are being overtaxed by the federal government.

Under the tax treaty between Barbados and Canada, once CSL International has paid its taxes to Barbados, at a rate of 1.5%, it can take its revenues back to Canada without having to pay tax on them here in Canada.

There was a slight problem, though. Since 1972, if my memory serves me right, we have had regulations on what is called passive income, in other words income generated by investments that are not used for concrete economic activity. For example, if you put money in the bank, earned interest is an income that is taxable in Canada, just like dividends, even if it has been earned in Barbados. This was a problem for CSL International, because this corporation is a holding company which does not own ships, but owns companies who are the owners of ships. Thus, the dividends paid by these companies to CSL International were taxable in Canada, under the Income Tax Act because this was a passive income.

This government has been quite creative in finding a way for CSL International and a few other companies that benefited from this taxation amendment—there were only eight of them, I think—to bring their income back to Canada after paying taxes in Barbados and not to pay taxes in Canada. Section 5907(11.2)( c ) of the Income Tax Act was amended so that, in the international shipping industry, the airline industry and another industry I cannot remember right now, holding companies would be considered as the owners and operators of their subsidiaries.

In this case, the scheme went like this: CSL would be the operator of the ships that generate the income and profits of the subsidiaries, so that it could get the dividends from these companies without having to pay taxes.

The Income Tax Act was amended to meet the requirements of a few taxpayers, including CSL International which has, I would remind you, been under the ownership of the Prime Minister's son since 2003. What is rather incredible, however—everyone alive must know this by now—is that the sponsor of the changes, the sponsor of Bill C-28, is none other than the Prime Minister, finance minister at the time. It is pretty incredible, in a country presented as an exemplary democracy, for there to be such a blatant conflict of interest and for this government and the governing party not to be more scandalized by it.

We have spoken out on numerous occasions about it, and have been accused of demagoguery and everything else under the sun, but one fact remains: the present Prime Minister is the one who amended the Income Tax Act in order to enable a handful of taxpayers, eight or so, to benefit from a change allowing them to bring back their profits from Barbados, thanks to the tax law in that country and the tax convention Canada has with it, and to pay no Canadian income tax. That needs to be mentioned.

There is another really juicy tidbit, if I can call it that. When the Prime Minister was in the finance portfolio , he had to move CSL International's headquarters, which had been in Liberia, because there was U.S. government pressure after Bill Clinton was elected to tighten up the rules on tax havens. Overnight, Liberia lost its status as a jurisdiction with all manner of tax advantages.

So then the Prime Minister moved CSL International's headquarters from Liberia to Barbados. That was in 1995. In 1996, the then Minister of Finance introduced Bill C-28, although that was not its title at the time, with the provision I have referred to. It stipulated that a shipping holding company is considered to be the direct operator of the ships of its subsidiaries.

However, along came the 1997 election. We know that during Mr. Chrétien's time the mandates were very short. I was not here at the time; they say they were about three years. In 1997 we had an election, and the bill died automatically. The finance minister at the time, who is now Prime Minister, came back with the same Bill C-28 after the election. That was in 1998. At that point, there was a little problem. What about the years from 1995 to 1998? Those three years fell through the cracks. That could not be, so they made the law retroactive to 1995, the date CSL International moved to Barbados.

We are not fooled. While the general anti-avoidance rule is a step in the right direction, it is not the solution to the problem. If the government had a bare minimum of ethics, I think this situation could be corrected once and for all. It would improve the reputations of the Prime Minister, the Liberal Party and Canadian democracy as a whole. I have a great deal of difficulty understanding why this essential amendment is still being resisted.

However, as you know, the Standing Committee on Finance, spurred on by our two representatives on it, will begin studying this issue of the tax treaty with Barbados. I believe this debate is far from over. Let up hope that common sense prevails and that all taxpayers assume an equitable share of their responsibilities for financing of our collective tools.

I am coming to the budget introduced this week, on Wednesday in fact, by the Minister of Finance. Unfortunately, he has not corrected any of the elements missing from the 2004 budget. There is not one word about tax havens. I will not say any more about it. I think I have been sufficiently eloquent.

What was particularly shocking on Wednesday, and it was pointed out by a number of political observers, was that not only have the legitimate demands of the Bloc Québécois concerning the issues the budget should address been brushed aside, but the needs of Quebec have been completely ignored, as well.

The first thing the Bloc Québécois asked the government to correct was the fiscal imbalance. People are well aware of that. Some may call it financial pressures on the provinces, but the fact remains that the Speech from the Throne recognized there was a problem financially for the provinces. We would therefore have expected corrective measures from the government. Yet, there is nothing more than what was negotiated or imposed by this government in the past few months.

Let me give the example of Quebec for the current year. As hon. members know, the governing party in Quebec is a federalist party. So, I do not think that anyone will question the objectivity of the numbers.

The Government of Quebec has estimated at $3.3. billion the shortfall caused this year by the fiscal imbalance, from too much tax paid to Ottawa compared with its responsibilities and not enough fiscal room for Quebec compared with its responsibilities.

At the time the health accord was signed, in September, Quebec's share resulting from the negotiations was $500 million. This has to be put into perspective. Quebec's health budget is $20 billion. That is to say that $500 million is the cost of operating this system for just a few days. It is no great hardship, but that is what was agreed on in September.

Following the imposition of the equalization formula by this government before budget 2004 and the October meeting, Quebec will end up with an extra $300 million this year. So, for Quebec, this year, what was agreed on in September and what was imposed in October adds up to $800 million.

We need $3.3 billion. The shortfall for this year is $2.5 billion. These agreements have done little to correct the fiscal imbalance.

Given the multi-billion dollar federal surplus, we would have expected the government to do a little more, in its latest budget, towards correcting the fiscal imbalance. The Bloc Quebecois never asked for it to be corrected completely. We struck a committee, presided by the member for Saint-Hyacinthe—Bagot, to find solutions. It should have a report ready by June. We would have liked to see some kind of political effort to alleviate the financial pressures felt by the provinces.

But there is none. The government, sticking close to the books, gave $800 million to Quebec, instead of the $3.3 billion it needed.

We have been told there will be an $11 billion surplus for the coming years. What does the Minster of Finance do? Exactly what Mr. Manley did before him, and what the Prime Minister did when he was finance minister. He does a little arithmetic . He says he'll put $3 billion in the contingency reserve, and $1 billion in the economic prudence reserve. I have already asked Mr. Manley what the difference is between those two reserves. There is none. They are exactly the same. Their sole purpose is to hide the federal government's surplus.

As surpluses will keep increasing, $3 billion will be maintained for the contingency reserve and, over the years, the reserve for prudence will be beefed up by $2 billion, and then $3 billion, $4 billion, etc.

The result is that we are being told that for the next three years, there will be a $15 billion surplus. Where does that surplus come from? Three plus one equals four; three plus two equals five; three plus three equals six. If you remember your arithmetic, that totals 15. It is not any more complicated than that. This is a wholly arbitrary assessment.

Actually, it will be at least double that figure and these are numbers that come from private sector forecasters whom the Standing Committee on Finance heard. In fact, a summary assessment foresees $34 billion to $35 billion over the next few years. So the trick which has been used by this government for many years, when the Prime Minister was Minister of Finance, when Mr. Manley was there and now, with the current Minister of Finance, remains.

The real financial situation of the federal government is being covered up so as not to meet the needs of provinces, to financially strangle Quebec. This is unacceptable to the Bloc Québécois, just as it is unacceptable to the Government of Quebec and to Quebeckers. Indeed, the latter issued a reminder to the Liberals last June 28. They will never accept a federal government continuing to strangle them like that.

I would have liked to talk about employment insurance, but I will have an opportunity to come back to that issue, hopefully, in the debate on the budget. I would have liked also to speak to social housing, for which there is absolutely nothing. As to tax cuts, it makes no sense at all. It is utterly absurd.

In closing, let me state again that if Quebec were sovereign, we would be able to collect all of our taxes, to make our laws, to make choices and to sign international treaties, and we would no longer talk about fiscal imbalance. That would be settled once and for all.

[The Budget, February 24th, 2005]

Mr. Speaker, yesterday's budget speech delivered by the Minister of Finance illustrates the Liberal government's utter arrogance and contempt for people most in need. No new financial commitment has been made for social housing and there is nothing for the homeless either.

The Minister of Finance—with the Prime Minister's blessing and applause from his henchmen, including some from Quebec—will not budge and refuses to pay back the $3 billion his government diverted from the income supplement for low-income seniors.

To add insult to injury, this government proceeded with a set of virtual measures, which will not become reality for two, three or even five years.

The fine words speak of compassion, but the Prime Minister has proven himself to be a very dangerous driver. He signals left and then turns right. A sorry business indeed!

[Definition of Marriage Act, February 18th, 2005]

Madam Speaker, let me say from the outset that I am against this motion, even it is not votable.

The Bloc Québécois finds that two equally important essential values need to be protected and they are equality and freedom of religion. Both these values are protected under the Quebec Charter of Human Rights and Freedoms and the Canadian Charter of Rights and Freedoms.

The Bloc Québécois wants to allow same sex partners to get married if they so wish, in accordance with their right to equality, while protecting the rights of religious organizations such as churches, synagogues, temples or mosques to adhere to their beliefs and refuse to perform religious marriages between same sex partners. In our opinion, this is part of religious freedom.

When we look at the current law, we look at the Supreme Court ruling. In this matter, four questions had been submitted by the government to the highest court in Canada, as follows. First: does the federal government have the exclusive jurisdiction to define marriage? Second: does the charter allow religious groups not to perform marriages they feel go against their religious beliefs? Third: is the definition of same sex marriage constitutional? Fourth: is the traditional definition of marriage, in other words the union between a man and a woman to the exclusion of all others, constitutional?

In its ruling, the Supreme Court affirmed the federal government's exclusive jurisdiction over the definition of marriage and clearly established that the provinces have exclusive jurisdiction over the solemnization of marriage.

Adopting Quebec's position, the court mentioned that Parliament was encroaching on provincial jurisdictions with its draft provision to uphold the right of churches to refuse to perform marriages contrary to their religious beliefs. This falls under the solemnization of marriage, which is a jurisdiction of Quebec and the provinces.

A central element of the court's decision was its recognition that same sex marriage is consistent with the Charter of Rights and Freedoms. It also said that compelling religious officials to perform a marriage between two persons of the same sex that is contrary to their religious beliefs would be an unjustified violation of their religious freedom.

As for the fourth question, the court declined to answer it, citing respect for the acquired rights of same sex couples who have relied upon the finality of the decisions obtained in lower courts. On this subject, the court wrote:

There is no precedent for answering a reference question—this is paragraph 68—which mirrors issues already disposed of in lower courts—

The court is speaking here of decisions where an appeal was available but not pursued.

The court also mentioned that the Attorney General of Canada conceded, publicly and frequently, that the common law definition of marriage was inconsistent with s. 15(1) of the Charter and was not justifiable under s. 1. Thus, the court decided that answering question no. 4 would jeopardize the government's explicit goal of harmonizing civil marriage rights in all of Canada. Thus we see that moral questions are not within the scope of the decision Parliament must make.

Moreover, to demonstrate the way this issue can be understood, one of my constituents has written to me, saying that he is a practising Catholic, very involved in his community and his church. He wanted me to know that a number of Catholics think the Church is not moving in the right direction by not recognizing the rights of same sex couple to marry in a religious ceremony. I replied that, while I was sympathetic to his idea, it was not my place as a member of Parliament, or the place of Parliament, to pass judgment on debates within the Catholic Church or the Protestant churches or Muslim or Jewish congregations. That is the domain of moral doctrine.

What we are being asked to do as parliamentarians is to decide whether the state will give same sex couples the same right to marry as opposite sex couples have. So, this is a legal issue and we should not get involved in an internal religious debate, whether it is with the Catholic Church or any other church.

I should also point out that, in terms of the rulings made by the courts of various provinces, eight courts, in seven provinces and in the Yukon, ruled that preventing same sex couples from getting married violated their right to equality, as provided under the charter, and that such a violation of a protected right could not be justified in a free and democratic society.

The federal government decided not to appeal these decisions from the courts of appeal. These courts of appeal form a majority, since they represent seven provinces, including Quebec, and the Yukon. However, the federal government referred the issue to the Supreme Court to get its opinion. Earlier, I presented the court's opinion on the four questions asked by the government.

So, the definition of marriage, as reviewed by these courts, is the union of two persons for life, to the exclusion of all others, without any reference to the sexual orientation of these persons. Consequently, even if the bill introduced by the Minister of Justice were defeated in the House—something I do not wish at all—the right of same sex couples to marry would be maintained in those jurisdictions where the courts have already ruled on this issue, including Quebec.

I think we need to be very clear. I disagree with the motion because of the issue that we are debating here. I agree that this motion should not be a votable item, since it violates the Charter of Rights and Freedoms. What we have to decide here, without exceeding our jurisdiction, is whether the right to equality necessarily involves the possibility for same sex couples that so wish to have access to a civil institution, namely marriage.

In this context, the member will understand that even if his motion is not votable, the Bloc Québécois in no way supports it. We will have the opportunity to examine in greater detail the provisions of Bill C-38, introduced by the Minister of Justice. The leader of the Bloc Québécois outlined his position on this bill during the speech he made this week.

Still, I remind the House that the Bloc Québécois is allowing a free vote on Bill C-38, even if I and most of my colleagues in the Bloc Québécois intend to vote in favour of this bill. So, we in no way support this motion before us.

[Federal-Provincial Fiscal Arrangements Act, February 18th, 2005]

Madam Speaker, I would like to thank the hon. member for Montmorency—Charlevoix—Haute-Côte-Nord for his questions and comments on tobacco farmers. The issue is not well enough known, unfortunately. Every time we have a chance to talk about it, we can put a little more pressure on the government to settle the matter finally.

He is right. In my opinion, Mr. Séguin did a great deal, first to get the concept of the fiscal imbalance recognized and then to explain the size of this imbalance and the solutions that could be applied.

In a way, we have made considerable progress in this debate. We all remember what the Quebec federalists said when we first talked about the fiscal imbalance. And yet, the concept was not invented by the sovereignists. The first person to mention it was Jean Charest, now Premier of Quebec, when he was opposition leader. Some people, including some editorial writers close to the Liberal Party of Canada, have said that it is a concept invented by sovereignists to promote sovereignty.

No one now denies the existence of the fiscal imbalance, except perhaps the federal Liberal MPs from Quebec. Last week, I read an article by Claude Piché, an economic reporter with whom I rarely agree. This time, however, on the eve of the budget, he was also calculating his expectations in terms of corrections to the fiscal imbalance.

Perhaps I will mention a few figures. Just now I pointed out that the negotiations in recent months concerning fresh transfers of money to the provinces, to Quebec in particular, only came to an additional $800 million, while the shortfall is estimated—according to Mr. Séguin of the Quebec government, of those federalists who often but not always have the interests of Quebec at heart—at $3.3 billion. Thus, if the gap is $3.3 billion, and $800 million of fresh money comes in, $2.4 billion is still needed in order to correct the fiscal imbalance.

I have a few figures for the current year, 2004-05. The amount transferred before the agreement, or the various agreements, was $14.150 billion. Now, with the new funding that has been announced—here I am not speaking only of Quebec, but of all the provinces—funding of $2.125 billion, the new total for funding is $16.275 billion.

Provincial spending on health is $83.133 billion. That means that the federal government's share in health care funding is only 19.6%. We are a long way from the 25% Romanow recommended. That is a shortfall, just in health, of $4.5 billion, which the provinces would be getting if the federal government were assuming 25% of health care costs, but are not.

Since the agreement is spread over 10 years, it could be said that things will be better in 10 years. Nonetheless, the calculations that were done—I did not do them, it was the Conference Board which published its report in August 2004—show that after all the agreements, this 23.8% share of health care funding will remain unchanged, if health care expenses increase at a limited pace.

We see that, if nothing is done to resolve the fiscal imbalance, despite the agreements on health and equalization—and the health accord is a relatively positive measure, as I said, but does not go far enough—the fiscal imbalance will continue to grow. The financial problems experienced by the provinces and Quebec will get worse.

While the federal government is paying down its debt—and I remind the House that in recent years, an additional $60 billion was misappropriated, from both the employment insurance fund and excessive taxation by the federal government, to pay down the debt—the provinces are having trouble balancing their budgets. A number of them are running a deficit. So, this ensures that the provinces and Quebec will continue to see their debt spiral.

I repeat again that there is no logic either financially or in terms of services, because the provinces and Quebec pay a much higher interest rate than the federal government. This means that money is being taken from those paying significant interest on their debt, and the federal debt, which has a lower interest rate, is being paid off. Financially and in terms of services, there is no logic to this.

We must remember that a fiscal imbalance means fewer health care and educational services. This will not fix itself over time.

For example, when a child is living in poverty because the federal government has cut employment insurance and does not want to transfer the money to which the provinces and Quebec are entitled, via the social programs, that child is the one to pay the price. If the federal government does not remedy this in five years, that child will have lived in poverty for five years, and the impact will be life long. This is something the bureaucrats in Ottawa just do not get. When a jobless person does not get benefits, the situation will never be remedied, because the economic and social insecurity of today will have an impact for the rest of his life. Child poverty has the same effect.

Every time the federal government puts off solving fiscal imbalance, social and democratic and service levels are affected. The harm done will never be remedied, even if we do manage to force the government to remedy the situation.

I will point out, before closing my remarks, that it is also a problem of democracy, if legislative assemblies, the Quebec National Assembly for instance, do not have the necessary resources to translate their decisions into concrete action. Parental leave is an excellent example of this. Since 1997, the Government of Quebec, whether Parti Québecois or Liberal, has had this more generous and more accessible parental leave on its books, but the National Assembly is incapable of implementing a democratic decision that reflects the will of the people of Quebec. We are dealing here with a real democratic deficit caused by fiscal imbalance and by the federal Liberals' lack of desire to correct it.

[Federal-Provincial Fiscal Arrangements Act, February 18th, 2005]

Mr. Speaker, I am pleased to speak to Bill C-39 because it shows the true nature of this Parliament. It is unfortunate, but despite the fact we have a minority Liberal government, the Liberals, as you know, have not lost any of the arrogance that has been their trademark for 9 or 10 years, under Mr. Chrétien and the new Prime Minister.

We saw this arrogance when we found out that Bill C-39 was not consistent with the special agreement signed with Quebec at the conference on health. As a matter of fact, Bill C-39 contained only one mention of a specific agreement with Quebec, in clause 25.9. Also, Quebec was not specifically excluded from other requirements in the bill, like the Canadian Institute for Health Information or the dedicated funds. Bill C-39 showed once more this arrogance of downplaying the importance of a specific agreement with Quebec. The agreement was quite clear. I will have the opportunity to deal with this later on.

I mentioned at the start that Bill C-39 shows the true nature of this Parliament because the Liberals, even though they are a minority government, seem unable to suppress this arrogance towards Quebec and this Parliament. Fortunately, the Bloc Québécois and its members in this House immediately sounded the alarm and sent a clear message to the government and the whole Parliament that the bill was not consistent with the intent and the letter of the special agreement with Quebec. Thanks to this intervention, especially by the member for Verchères—Les Patriotes, the Bloc Québécois critic for intergovernmental affairs, and despite the reluctance of the government, we were able to pass an amendment, and Bill C-39 is now consistent with the intent and the letter of the agreement. We think the bill is now quite acceptable and we will support it.

Just imagine what would have happened had the Bloc Québécois not been here. Bill C-39 would probably have been passed unchanged, and Quebec would have been penalized. This goes to show how important it is to have members who stand for Quebec's interests first and promote an exciting collective project--the sovereignty of Quebec.

I mentioned that it cannot be by chance that the government brought forward the original draft of Bill C-39 without taking into account the specific agreement with Quebec, because that agreement was very clear. For the benefit of people watching us, I would like to cite it. In the specific agreement with Quebec, there was a very clear written statement:

--resting on asymmetrical federalism, that is, flexible federalism that notably allows for the existence of specific agreements and arrangements adapted to Quebec's specificity--

Quebec will apply its own wait time reduction plan, in accordance with the objectives, standards and criteria established by the relevant Quebec authorities--

The Government of Quebec will report to Quebeckers--

It could therefore not be any clearer than what I have just read. However, the Government of Quebec, even though it is led by federalists, knowing the reflexes of the federal government, particularly when Liberals are in power, even had the following disclaimer added at the end of the communiqué, to ensure that there would be no confusion possible, and I quote:

Nothing in this communiqué shall be construed as derogating from Quebec's jurisdiction. This communiqué shall be interpreted as fully respecting its jurisdiction.

Members will understand that we were quite surprised to see that, in the original draft of Bill C-39, there were not more references to the clause 25.9 in terms of that specific agreement. Let us recall that, when that specific agreement was signed, for a few days, people believed there really was a new approach on the part of the federal government, which the Bloc Québécois leader, like MNA Louise Harel, had called asymmetrical encroachment.

The federal government was therefore agreeing, in this specific agreement, to respect Quebec's jurisdiction over health issues, as set out in the Canadian Constitution. It was however an innovative approach. In the recent years especially, with the fiscal imbalance and the Liberal government's tendency to impose a federal presence in all areas of Quebec's and the other provinces' jurisdiction, particularly if there was some sort of visibility or political points involved, this asymmetry in terms of intrusion seemed to be a step in the right direction.

Unfortunately, this respect of Quebec's jurisdictions lasted only a few days. Nothing new there. As I was saying, the defence of the 1867 Constitution caused an outcry in Canada. The member for Verchères—Les-Patriotes was talking about that. The former finance minister, Mr. Manley, condemned that. All the dyed in the wool Trudeau supporters told English Canada that the direction we were taking posed a threat to Canada's unity. Since then, we have seen no new asymmetrical intrusion initiatives since the one made at the health conference.

Moreover, a few weeks later, during the funding conference, the federal government unilaterally decided to restrict the conference to the issue of equalization. It announced the amounts available, right at the start, saying that the formula that had been unilaterally imposed before the latest elections would continue to be used. It dealt with none of the provincial concerns, particularly those of Quebec.

When we saw the first draft of Bill C-39, which did not take into account the distinct nature of the agreement entered into at the health conference, the member for Verchères—Les-Patriotes asked a question on February 10, 2005, of the Parliamentary Secretary to the Minister of Health in order to alert the Minister of Health to the fact that there was no explicit reference to the specific agreement with Quebec, except, once again, section 25.9, which was clearly inadequate.

The parliamentary secretary answered that the member's concerns were not justified. We were heading toward a dead end. You will recall that, at second reading, we had opposed Bill C-39. Given the inadequate reference to the specific agreement with Quebec, we could not have supported it.

The Bloc Québécois proposed amendments to Bill C-39, in line with the accord signed in September. First, we reincorporated in the bill the fact that the funding made available by the Government of Canada will be used by the Government of Quebec to implement its own plan for the renewal of Quebec's health care system.

Those who have been following the politics of Quebec for the past few years, know that there have been many studies to reform the health care system, just as in a number of Canadian provinces. First, there was the Rochon Commission, then the Clair Commission. The reforms are now well underway. The so-called expertise of the federal government in this domain is not needed at all. It manages only a few veterans hospitals, which are constantly being criticized.

Second, in our approach regarding the amendments to Bill C-39, we made sure that the Government of Quebec would be accountable to the population of Quebec. We excluded any hierarchical relationship where the federal government thinks that it is supposed to decide on the validity of the actions of the Government of Quebec. The Government of Quebec is accountable to the nation of Quebec, to the people of Quebec only. When elections take place, Quebeckers express their view of government management of health care and many other things.

So our second concern was about the Government of Quebec informing its own population of the progress achieved in the pursuit of its goals.

The third aspect is the Health Commissioner of Quebec being responsible for reporting to the Government of Quebec on Quebec's health system. The Canadian Institute for Health Information should not, therefore, be informing the public on advances by the Government of Quebec, the health department and the other players in the health care system, with respect to the concerns of the public and issues such as the modernization of our health system. These issues must take a number of challenges into account, in particular the challenge of demography, which, as you know, is linked to the aging of our population.

There obviously will be cooperation with Canadian Institute for Health Information. Though it was never a problem, it should have been made clear that Quebec's Health Commissioner was responsible for reporting to the Government of Quebec and, through it, to the public on the state of health care.

This amendment we moved was adopted by the committee. As I mentioned, the original version was unacceptable, but we will support the amended version of Bill C-39.

I mentioned that the concept of asymmetrical federalism, which is in fact asymmetrical interference, was very short lived. To prove it, I point out that on October 26 of last year, at the conference on the provinces' financial situation, which covered more than just health, which had been the only subject of conference in September, Ottawa decided unilaterally that equalization would be the only item on the agenda. The federal government said right at the start what amounts would be available and announced that not one cent more would be added to equalization and that the formula used in its calculation would remain unchanged. I remind you that the formula had been imposed unilaterally by the federal government a few months before the last elections. Moreover, the Prime Minister refused once again to admit that there was a fiscal imbalance and spoke only of fiscal pressure on the provinces knowing full well that the situation is a lot worse.

I repeat that that asymmetrical interference or asymmetrical federalism, as they called it, did not last long. We saw it during today's question period. There is still no agreement on parental leave despite an agreement in principle signed before the elections. There is still a gap of about $200 million between the positions of the federal and Quebec governments. Here again, we can see the federal government's hard line attitude common in its relations with Quebec.

So the problems go well beyond the area of health. Let me give you another, more regional, example. As you know, there is a crisis in the tobacco industry. It is a totally understandable crisis considering anti-tobacco campaigns. Being a non-smoker, I support those campaigns. But the fact is that there was a sharp decline in demand for tobacco. Moreover, the three major tobacco companies decided to stop buying tobacco in Quebec to concentrate their purchases in Ontario.

The region that I represent, namely Joliette and Lanaudière, was home to virtually all tobacco farmers. Out of the 57 who were in business three years ago, fewer than a dozen continue to produce a small amount of tobacco, trying, naturally, to diversify their operations, production and crops, and only three intend to continue growing tobacco to meet the demand of independent manufacturers like Lépine cigarettes and other manufacturers operating in first nations reserves.

This is therefore an emergency. Tobacco farmers need assistance to switch from one type of crop to another, such as Chinese cabbage or kiwi; anything that can grow in sandy soil ought to be considered. Anyway, these growers need assistance.

Like parental leave, this assistance was announced a few days before the election. Electoral democracy is good after all. A few days before the election, approximately $70 million in assistance was announced. That was many months ago, yet we are still waiting for the terms and conditions of this aid package for tobacco farmers in Quebec and Ontario to be defined.

It would appear, and this is more serious, that assistance for the 57 tobacco farmers in Quebec, 95% of whom are in the Lanaudière region, is being blocked by a dispute between Ontario farmers and the provincial government of Ontario.

I find it completely absurd that producers in Quebec are being taken hostage in a situation that is totally out of their control. Naturally, for the federal government—and that is what we were told by the parliamentary secretary in response to a question I put to him last week—the same solution has to apply to producers both in Ontario and in Quebec. Consequently, until an agreement has been reached with Ontario farmers, no money will be made available to the farmers in Quebec.

Their situation is totally different, though. These farmers in Quebec have already stopped growing tobacco or started efforts to quickly switch crop production. To conclude this brief aside, I want to emphasize that the funding problems facing these tobacco farmers is largely due to the fact that tobacco companies have forced them to replace their dryers just two years before they decided to stop buying any tobacco in Quebec.

They need help for converting their land because switching from tobacco to asparagus does not just happen in one season. Often it takes five years before production becomes efficient. They are also burdened by debt, which they are unable to amortize with financial institutions in the region.

As I was saying, this asymmetrical approach was nothing more than a virtual approach, which did not even last long enough for the ink to dry on the separate health agreement. The government no longer mentions this approach. Again, refusing to acknowledge the fiscal imbalance makes it impossible to find a definitive comprehensive solution to the funding problem. This is so for Quebec, but also, unfortunately, for many other provinces. However, the federal government has been much quicker and much more generous with provinces such as Newfoundland and Labrador and others over the past few weeks, while Quebec has to continue to struggle.

As I was saying, the agreement on health does not solve the fiscal imbalance problem. It is like taking an aspirin to try to get rid of cancer. I will give some figures, although the hon. member for Verchères—Les Patriotes already gave some earlier. Nonetheless, if I have time, I would like to go into more detail.

The specific agreement on health provides Quebec with approximately $502 million more this year, out of a budget of $20 billion. Consequently, this fresh federal input represents only 2.5% of the Quebec budget, or about 9 days of operation. That is just for health, so what they have done is the equivalent of helping Quebec meet its health care responsibilities for the equivalent of nine days.

The federal government boasts that it is getting close to the 25% target the Romanow report recommended for health and social funding. When we look at all social spending, that is education, social assistance, the areas covered by the Canada social transfer, which is now, as we know, divided into a transfer for health and one for social programs, it is obviously far from that 25% figure. Especially because, as far as equalization payments are concerned, the results have not been what might had been expected, that is, a new formula that is fairer, more stable and more generous to the provinces needing these federal transfers.

In fact, after the October conference on the provinces' financial difficulties, which eventually shrank to nothing more than a conference on equalization, Quebec will end up with a mere $300 million more in equalization payments.

Overall, in its “generosity”, this government will have transferred $800 million more to Quebec this year, whereas the shortfall—according to the Government of Quebec, or its finance department—is in the order of $3.3 billion. As a result, the shortfall for Quebec, as far as fiscal imbalance is concerned, is still $2.4 billion.

We must therefore hope that the federal government, with its fabulous surplus of $9 billion last year—this year, some $11 billion or $12 billion—will, in the budget to be tabled and debated starting next Wednesday, get its act together and find some definitive solutions by transferring the $2.4 billion Quebec still lacks to resolve the extremely serious problem of fiscal imbalance.