Mr. Speaker, I would like to begin by commending the government for its response to, as the Prime Minister said, a very complex problem and also to thank the government for the briefing provided to us earlier today on the details.
Our understanding of the government's program is that it consists really of four components: first, a stronger enforcement of the laws against smuggling; second, a stronger anti-smoking educational campaign to be financed by a surtax on tobacco company profits; third, an export tax on tobacco exports; and, fourth, the reduction of federal taxes on cigarettes consumed in Canada.
Our initial response to this program is this. First, we commend the government on its program but want to point out one missing element in the presentation the Prime Minister made this morning and in the briefing package presented to us. That is a detailed estimate of the cost of the program. How much is it going to cost? Who is going to pick up the tab?
Our understanding in going through the material is that the net impact of the tax changes is in the vicinity of about $300 million a year. It is my understanding that the implementation of the other parts of the package are probably in the vicinity of about $150 million per year. Therefore we are talking about a package of about half a billion dollars net cost per year.
I would like to encourage the Prime Minister and the finance minister that when these programs are presented to the House, no matter what their merits, that they be accompanied by a more detailed presentation of the cost implications because of the financial situation that the government is in.
We find ourselves in support of about three-quarters of the government's program, three of the four major items. We find ourselves supportive of stronger enforcement of the laws against smuggling, supportive of the stronger anti-smoking educational campaign and supportive of the concept of reinstating the export tax on tobacco exports.
I do have to tell the government that the majority of our members believe the majority of their constituents are not convinced at this point in time of the wisdom and viabilityof the
fourth point in the government's program, namely the reduction in federal taxes on cigarettes consumed in Canada.
We share the concern of many of the health groups that tax reduction will encourage smoking. We recognize this proposal is not yet supported by a majority of the provinces which is necessary to affect the differential between the price of cigarettes in the United States and in Canada.
We question the reduction is really sufficient, particularly without full provincial co-operation to deter smuggling activity. We assume the revenues lost through the tax reduction will be compensated through tax increases in other areas. We would very much like to know what those tax increases are and who will be paying them.
We recognize that the tobacco tax issue is becoming, as the Prime Minister said, more than a tax issue. It is becoming a justice issue. It is becoming a social issue. It is becoming an aboriginal issue. It is becoming an issue of interprovincial relations, but at the root of it is overspending that leads to overtaxation in the first place and all these side issues.
We believe the House and the government have yet to deal with the root of the problem which is the overspending. We expect and hope that will be dealt with in the budget presentation in a couple of weeks.
The Reform caucus will be reviewing the government's program in detail tomorrow morning and we hope to have further contributions in the days ahead.