Scott Brison

[Taxation, December 17th, 1999]

Mr. Speaker, that is cold comfort to the 22,500 people who will lose their jobs in Ontario, according to the C. D. Howe Institute, because of this payroll tax hike. Will the government listen to the premier of Ontario, stop this tax hike and save 22,500 Ontario jobs?

[Taxation, December 17th, 1999]

Mr. Speaker, Premier Harris is right. The federal government is planning on taking $560 million from the workers and employers of Ontario.

Why is this government, during a season of giving, preparing to take more from Ontario workers and employers, some $560 million? Why is the government playing Scrooge in this the Christmas season?

[The Economy, December 17th, 1999]

Mr. Speaker, on this the last sitting day of the House of Commons in this century, it is time to reflect on the issues that face Canadians.

We have an unemployment rate that is 70% higher than that of the U.S., the highest personal income tax in the G-7, the second highest corporate taxes of the OECD, the highest personal debt rates in the history of our country, and the fastest growing personal debt rates of any country in the G-7. Personal disposable income has dropped 8% in the 1990s and has increased by 10% in the U.S.

Why is the finance minister off to Berlin this week to chair the G-20 meetings when there is so much repair work to be done here at home?

[Standing Committee On Finance, December 16th, 1999]

Mr. Speaker, my question for the hon. member, my colleague on the finance committee, has to do with the issue of leaky condominiums in British Columbia.

On a recent visit there I met with some community groups. I was disturbed to learn that 50,000 condominium owners in British Columbia have been badly served by a systemic government failure at the federal, provincial and municipal levels which has left the 50,000 homeowners with repair bills in each case on average of $24,000 to $25,000.

The PC Party of Canada supports allowing eligible homeowners to withdraw up to $20,000 of their RRSPs without penalty for use in repairs to be repaid over 15 years. Additionally, we would support the government matching the provincial government's sales tax relief with a GST rebate on qualified repairs and renovations for leaky condominiums. We would also allow an income tax deduction for repair expenses for the condominium owners.

Would the hon. member support these tax measures which would address the issues for the leaky condominium owners?

[Standing Committee On Finance, December 16th, 1999]

Mr. Speaker, I thank the hon. member for Medicine Hat, my friend and colleague on the finance committee, for his question.

Employment insurance benefits, particularly those relating to seasonal workers, is a very important issue. The Liberals slashed these benefits after 1995. That created a situation which I do not think even the government expected, and the law of unintended consequences kicked in.

In many cases the slashing of those EI benefits resulted in people who worked seasonally going on provincial social assistance rolls and not working at all. I would assume that the hon. member would agree with me that that created a greater reduction in productivity and human enrichment than would have existed previously.

That being the case, my personal views on this would be that we should investigate and revisit the notion of individual EI accounts. There was a study done in the U.K. a couple of years ago. It was reported in the Economist magazine in the fall of 1997. It studied the idea of having individual EI accounts that people would pay into over their lives. Some of the contributions would be taken from those individual accounts to top up those who draw more frequently.

That type of change would provide an incentive for people to not draw frequently. It would have some of the impact which I believe the Liberals were trying to seek in terms of reducing abuse of the EI system by way of an incentive method, as opposed to purely through a penalty or punishment oriented method that ultimately did not have the effect Liberals wanted.

I am sure the hon. member agrees with me that shifting the burden of social assistance to the provinces certainly did not help in any way, shape or form. In fact it prevented many of these people from participating in the workforce.

It is a complicated issue. There is not a simple, 12 second answer to that. However, I would enjoy exploring the issue with the hon. member at any time in the future.

[Standing Committee On Finance, December 16th, 1999]

Mr. Speaker, it is with pleasure that I now conclude my remarks after question period.

Today's Globe and Mail editorial was very insightful. It was entitled “The Surprising Legacy of the Minister of Finance”. It describes the elimination of the deficit as the single accomplishment of the Minister of Finance.

It says specifically that the finance minister's triumph on the deficit is shadowed by wrongheaded policies elsewhere. Of course, we have already established, as the Economist magazine reported, that the credit for deficit reduction in Canada belongs largely to the structural reforms made by the previous government. Therefore, the finance minister cannot really claim that one-hit wonder because he did not really author that one success. Although the finance minister would like to claim being a one-hit wonder, he cannot claim even that to his credit.

Let us look at some of the policies he has implemented. While it is terrible for Liberals to shamelessly take Conservative policies, to implement those policies and then to take credit for the impact of those policies, what would be even worse would be Liberals implementing their own policies. That is what I am concerned about, because we are starting to see a few of those policies rear their ugly heads.

A year ago, the finance made his no decision on the bank mergers. What has been the impact of that decision? I described earlier the complexities and challenges of the increasingly interconnected, globally competitive environment. In that environment, since the minister's decision, Canadian banks have lost about $9 billion of shareholders' value. During the same period, American banks have increased in value by about 10%. Again, as Americans are getting richer, Canadians are getting poorer.

In making his short-sighted decision on the bank mergers, and refusing to stand up to the banks to defend the long term interests of Canadians by negotiating a better deal on behalf of Canadians in exchange for mergers on issues like jobs, services to rural communities and those types of things, and in unilaterally and arbitrarily saying no, the minister has effectively put his own short term political interests and those of his leadership aspirations ahead of the interests of the 7.5 million Canadians who own bank shares.

Yes, 7.5 million Canadians, directly or indirectly, own bank shares and are depending on the returns of those shares for their retirement funds. Again, that was the minister's decision on those issues.

The minister has failed to address some of the major crises facing Canada right now and the need for significant and broadbased tax reform and tax reduction. On the personal side, we need significant levels of tax reform. On the corporate side, we have, as I mentioned earlier, the second highest corporate tax rates of the 31 countries in the OECD. Last year Germany had the second highest and we had the third. Germany now has the third highest because it has reduced its corporate tax burden. This country continues to cling to the notion that we can tax to death our companies and our individuals and yet still enjoy some level of economic growth.

In this current environment, we should be undertaking significant levels of tax reform. We should be taking the same courage and vision in our approach to policies that the previous government took with policies, such as free trade, GST and deregulation. In our dissenting report, we discussed the need for broadbased and forward thinking tax reform both on the personal and corporate side.

The government received an excellent report on corporate taxation by the Mintz commission. It addressed many of the significant flaws in our corporate tax system. If implemented, it would address the distortionary nature of our corporate tax system, the profit and sensitive taxes that currently create significant distortions and damage productivity in Canada.

The Mintz report also identified the need to bring our corporate tax regime more in line with those of other countries. At a time when other countries are using corporate tax reform and personal tax reform as vehicles and levers for economic growth, including Ireland and the Scandinavian countries, this country continues to cling to the past.

In our minority report, we identified that tax brackets should be re-indexed. In fact, there is a consensus both on the left and the right that we should be returning to full indexation of the tax brackets. The Fraser Institute agrees with the Caledon Institute in this case. The de-indexation of tax brackets took place during a time of deficit financing in a very difficult fiscal period. In a post-deficit time now more than ever, we need to revisit and eliminate bracket creep which has unfortunately brought more Canadians onto the tax rolls than we have ever had before and we need to revisit that, eliminate bracket creep and re-index tax brackets.

We need to lower the capital gains tax rates. I was pleased to see that the finance committee report did address this to a certain extent. We would go further. We would reduce the capital gains inclusion rate to 50% from the current 75%. The fact is that we could reduce our personal capital gains tax rates to be equivalent with those of the U.S. It would cost about $240 million per year. For the dramatic unlocking of capital that would occur and for the economic growth that would ensue with that type of visionary policy, $240 million per year is a small price to pay.

Unfortunately, public policy, in particular for the Liberal government, is focused more often on perception rather than reality. There is a stubborn intransigence in areas of capital gains tax and corporate tax reform. That is why the government has shelved the Mintz report and ignored many of its recommendations.

We would like to see the government set and keep firm debt reduction targets. This is very important. Our country is now in a worse debt to GDP ratio situation than those countries of the EU. We would not qualify under the Maastricht treaty to participate in the common currency of Europe. This is comparing Canada with bastions of fiscal fortitude like France. It is not exactly a positive indicator that we have not been able to maintain the same or lower debt to GDP ratios than our cousins in Europe.

We would suggest that the foreign content limit be increased to 50% immediately, and ultimately be eliminated once we have had an opportunity to evaluate the impact of it. The finance committee is recommending some level of incremental increase over a period of time.

I would argue that at this stage, with the dramatic infusion of capital into the Canadian equity markets, with the Canada pension plan funds and the superannuation funds that we are going to be seeing, there has never been a better time than now to end this economic imprisonment that forces Canadians to accept lower returns, which have cost about $32,000 to the average RRSP over time.

During a time when the Dow Jones has appreciated 300%, the TSC has performed in many ways anemically, gaining about 100%. I referred to it earlier as fiscal or economic imprisonment. I think it is very important, in particular while the government clings to the types of tax and regulatory policies that will pummel initiatives in Canada, that it release Canadians and allow them an opportunity to invest some of their hard earned dollars to ensure that they can enjoy a relatively good quality of life in the future.

We would suggest that the government take very seriously the call for a national highway program and that it increase the proportion of gas taxes that are currently returned to the provinces for highway spending from the current 5%, which is the lowest of any industrialized country, to about 15%.

This is an area of utmost importance. While there is some need for new spending in some of the traditional areas such as health care, and the farm crisis and the highway system need to be addressed, the government should not engage in new spending programs, including the child care initiative in which some Liberal backbenchers want to engage.

At a time like this in Canada, when we have never faced more fierce global competitiveness issues, we need to take time to step back and evaluate what is happening in other countries. Other countries are dramatically using innovative tax policies to create levels of economic growth. Other countries are reducing and maintaining lower levels of government spending and lower levels of debt to create the economic environment that will ensure growth.

Other countries are taking on regulatory burden. One of our suggestions is that we have a regulatory budget to allow elected members of the House to debate the merits of individual pieces of regulation so that we do not see a continued growth of regulation by stealth.

This is my last speech of this millennium in the House. I would hope in the future, in the next millennium, that we would take more seriously the competitiveness issues facing Canadians and that we would actually lead the global environment to create a better environment, instead of simply following and playing catch-up, as the government seems want to do at this time.

[Standing Committee On Finance, December 16th, 1999]

Mr. Speaker, it is with pleasure that I rise in the House to speak on the prebudget consultation report.

Today is December 16, 1999. There are 14 days left in this century, a century that was to have belonged to Canada. It is important at this time that we reflect on what is occurring not just within our borders but around the world.

The rate of global change facing Canadians is unprecedented. The challenges facing Canadians and the potential opportunities available to Canadians have never been greater. How are we doing in this environment? The Liberals say that the fundamentals are strong. The ex-patriot Canadian economist John Kenneth Galbraith once said that one should beware of governments who claim that the fundamentals are strong. That is an important bit of advice to heed at this time.

In this new globally competitive, interconnected environment the fundamentals are not simply esoteric statistics or unimportant numbers. These are not distant trivia that we can afford to ignore. We cannot afford to ignore what other countries are doing to create environments for economic growth.

Let us look at those fundamentals the government boasts about. We have an unemployment rate that is 70% higher than that of the U.S. We have the highest personal income tax rates of any country in the G-7. We have the second highest corporate tax rates in the OECD, of those 31 countries. Last year we were third highest but we are now second highest. Germany, a social democratic country of the same brethren as the New Democratic Party in this country, saw fit to reduce its corporate tax burden and create federal levels of economic growth and opportunity in Germany.

For the first time in the history of our country, our level of personal debt on average in Canada is $43,200. For the first time that is surpassing the average disposable income of Canadians. In fact, we have the fastest growing levels of personal debt of any country in the G-7. While the government boasts about being in the black, Canadians are in the red to a greater extent than they have ever been in the past.

Personal disposable income in Canada has dropped by 8% since 1990. During the same period of time Americans have enjoyed a 10% increase. There has been a widening of the gap by about 10% in terms of personal disposable income between ourselves and our neighbours to the south.

The fastest growing economic engine is in the U.S. We have an opportunity being a country that borders the U.S. to benefit from that growth, but not if we continually focus on the policies of the past and ignore the opportunities to build policies based on the realities of the future.

Let us look at some other fundamental areas. Productivity growth rates in Canada have been lagging behind those of the U.S. In Canada the equities markets on the Toronto Stock Exchange have had a relatively anemic growth compared to the robust growth in the U.S. During the same period of time the TSE was required to grow by 100%, the Dow Jones Index in New York grew by 300%. As Americans are getting richer, Canadians are getting poorer.

Under this government since 1993 there has been a 10 cent drop in the Canadian dollar relative to the U.S. dollar. The Prime Minister's response was typically erudite, that it would be good for tourism. The logical corollary of his argument would be that if we were to reduce the dollar to zero, we could become the greatest exporting nation in the world. That logic simply does not work. Most Canadians realize it is impossible to devalue our way to prosperity.

The brain drain issue is a very important fundamental. It involves the choices being made by some of the best and brightest young people in Canada. According to the report by the Conference Board of Canada last summer, the number of people leaving Canada and seeking opportunities in the U.S. has grown from 16,000 people per year a few years ago to 96,000 people per year.

We see a very disturbing trend, the devouring of corporate Canada. At the end of the 20th century, which was a century that was supposed to belong to Canada, it is important to pause and think about some of these things. It is sad that at the end of the 20th century Canada no longer really belongs to us. That is largely due to the fact that the government fails to accept some of the market driven realities of a globally competitive environment.

I will give the House an idea of the impact of the devouring of corporate Canada. Back in 1994 the value of U.S. acquisitions of Canadian companies was $5.6 billion. In 1998 the Canadian corporate value purchased by Americans had grown to $16.1 billion. This year it is $25.6 billion. That is no accident. It has a lot to do with the reduction in the value of the Canadian dollar.

Let us look at some of the causes of the reduction in the Canadian dollar, that 10 cent precipitous drop and decline in the take home pay of Canadians since 1993. A lot of that has to do with tax issues.

Back in the 1970s and 1980s Canada was able to maintain approximately the same level of economic growth as the U.S. During the same period of time we had a positive yield in that our interest rates were marginally higher than those of the U.S. yet we were able to maintain that similar level of economic growth and prosperity.

However in the 1990s and particularly since the election of this government, we have seen a gap between the currency values of the two countries and for the first time in a long time Canada has a negative yield. We have lower interest rates in Canada. We are using monetary policy to compensate for some of the weak fiscal policies of this country.

Part of the reason the Bank of Canada needs to do that is that for the first time ever as a percentage of GDP in Canada, we are at 38% of our GDP in taxes. Compare that to the U.S. which is at 28% of GDP in tax revenues. It is not sustainable. Effectively we are heading toward a government that simply will not be able to continue the devaluation of the Canadian dollar. The Bank of Canada will not be able to continually use that mechanism. We need strong fiscal mechanisms and levers to be implemented now.

Some of the victims of this devouring of corporate Canada include the Canadian icon MacMillan Bloedel, Poco Petroleums Limited, MetroNet Communications, JDS Fitel, Club Monaco, Noma Industries, Newcourt Credit, Midland Walwyn, Peoples Jewellers and Shoppers Drug Mart. Shoppers Drug Mart, Canada's drug store, is now owned by KKR, Kohlbert Kravis and Roberts out of New York. This is not a good trend for Canada.

It is very easy for us to do what the Liberals typically do in this kind of situation and that is to try to demonize America, to try to demonize the free market system and to try to somehow create a bogeyman in the people who are logically taking advantage of the situation that exists here. The fact is that in a globally competitive environment, the responsibilities lie with each government to create the levels of economic growth and opportunity for their companies and individuals to succeed and compete globally.

In that kind of environment the government is clearly failing. It is exposing the nape of Canadian investors, Canadian business people and Canadian individuals to the ferocity of global competition without providing the economic growth levers and productivity enhancement initiatives that they need.

This is in stark contrast to the previous government that had the courage and vision to implement a free trade agreement that this government has embraced and accepted as being good policy in retrospect. The previous government not only had the courage to eliminate the manufacturers' sales tax which was impeding growth and impeding the ability for Canadian enterprises to compete and succeed globally and replace it with the GST, it also deregulated financial services, transportation and energy. All of these are policies that this government embraces. All of them are policies that have been credited by economists as having been largely responsible for the ability for this government to eliminate the deficit.

If we look at what the achievements of the government have been, the only thing the finance minister can point to is the elimination of the deficit. If we accept, as most economists accept, that the elimination of the deficit was largely due to the structural changes made to the Canadian economy by the previous government—

[Standing Committee On Finance, December 16th, 1999]

Mr. Speaker, my second question for the newly minted member for Saskatoon—Rosetown—Biggar is a very simple one.

One thing I do respect about the New Democrats is their consistency and sense of values and commitment to those values over a period of time. That stands in stark contrast to the Liberals.

The hon. member was quite right in pointing out that while he is opposed to the GST and would like to reduce the GST, so were the Liberals of similar persuasion before 1993. Let me suggest that a potential replacement for those revenues may be gained from a hypocrisy tax. If we were to have a hypocrisy tax that would be levied on politicians who break red book promises, perhaps that would be one way to help replace revenue from the GST.

I would appreciate his erudite views on my proposal for a hypocrisy tax which would serve two functions. First it would force Liberals to keep their promises for a change. Second, it would raise those revenues to reduce the GST, as the hon. member feels is important.

[Standing Committee On Finance, December 16th, 1999]

Mr. Speaker, it is a privilege to ask the hon. member his first question as a member of the House. I congratulate him on his discourse today.

My question for the hon. member is quite a simple one. He has referred to the heritage of the social democrat movement. In keeping with that, I would like him to reflect on the current realities incumbent in that movement and what is happening in both the U.K. and Germany with governments committed to corporate tax reform and reduction.

The chancellor of the exchequer in the U.K. has moved to lower corporate tax rates and capital gains taxes. The finance minister in Germany reduced corporate taxes in the last budget. Does the hon. member join his social democrat friends in other countries?

In fact the economist for the Canadian Labour Congress who recently spoke to the finance committee acknowledged that the greatest level of economic growth of any type of tax reform would come from reducing corporate taxes.

Does the hon. member agree with his social democrat friends that Canada needs to reduce its corporate tax burden?

[An Act To Give Effect To The Requirement For Clarity As Set Out In The Opinion Of The Supreme Court Of Canada In The Quebec Secession Reference, December 14th, 1999]

Mr. Speaker, my question for the leader of the New Democratic Party is very simple. She listed a number of very convincing arguments on why this is bad legislation and why the government is playing meanspirited politics with the national unity issue to advance its own short term goals at the expense of the long term interest of Canadians.

Having articulated so forcefully why this is bad legislation, how could she possibly be supporting the legislation?