Stephen Harper

[Royal Canadian Legion, June 3rd, 1994]

Mr. Speaker, this week the Royal Canadian Legion has been holding its convention in my city of Calgary.

We have all become aware of this due to the media concentration on the issue of head-dress regulations that arose at the convention. I probably would have voted on that particular issue differently than the legion, but frankly that is not the important issue.

What we should be focusing on is the focus of the convention; the 50th anniversary of the D-Day invasion and the unparalleled historic contribution of Canadian veterans to our society through their bravery in those dark days of World War II.

The greatest human rights victory of this century, perhaps of history, was the defeat of Adolf Hitler and the allies of the national socialists. The unbalanced focus of the press and so-called human rights commentaries this week have been quite frankly pathetic and an insult to veterans and veterans' organizations.

[Electoral Boundaries Readjustment Suspension Act, 1994, June 3rd, 1994]

Madam Speaker, I am rising today to speak to Bill C-18, which suspends the operation of the electoral boundaries adjustment process and to address specifically the motion that the government has brought forward to accommodate amendments that have come from the Senate study of the bill.

The purpose of Bill C-18 is, I think, to kill the electoral boundaries readjustment process. The Reform Party was opposed to that bill until now. However, I can say that with the amendments proposed by the Senate and those put forward by the government today, we can now support this bill.

As you know, Madam Speaker, we did oppose and have opposed vigorously Bill C-18. We were opposed to it to such an extent that at second reading closure was moved. We still have some concerns with this course of action, but I should begin by saying we can support this bill with the accommodations the government has made today.

Let us review Bill C-18 and some of the original problems that have been addressed. The House will recall that originally there was no demand from the public for this legislation, certainly no mention in the red book of any intention to bring in such legislation and no serious mention of the procedural concerns that had arisen when legislation such as this had been introduced previously in 1973, 1985 and 1992. Yet in late March, early April, the government came out with C-18 as their top legislative priority.

When the bill was rammed through the House with closure, it really did not present a lot of opportunity for meaningful public debate. We had begun to hear, and the Senate later heard, from provincial and territorial governments, from many academics and experts and from many individual Canadians, particularly from British Columbia, all of whom were condemning C-18 as not simply a bad bill and not simply an undemocratic bill, but an unconstitutional bill.

It was apparent that the bill had been prepared without consultation with Elections Canada. Mr. Kingsley, the Chief Electoral Officer, has stated in committee hearings that it has always been the practice of the governments of the day to consult Elections Canada when considering changes to such processes and it is what we would have expected normally on this occasion.

The mechanics of our electoral system are admired around the world and Elections Canada's advice, as we know, is frequently sought by other countries. Recently we played a role in the elections in new democracies in both South Africa and Ukraine.

The electoral process and its outcome affect all Canadians. The interests of all of Canadians must be served, not the interests of politicians, not partisan interests or political self-interest.

One of the biggest problems with the original bill was the lack of all-party consensus. The government had only the support of the Bloc Quebecois. It was opposed by the Reform Party, and I should add, opposed quite vigorously by the New Democratic Party and by the Progressive Conservative Party, although its opposition comes primarily from the Senate. We heard only within weeks of the passage of the bill that many elements of the Liberal Party were also opposed, as some members found out at their recent convention.

The reason I mention these other parties is that the support of parties, both major and minor, in this type of legislation is important for the operation of the democratic system. The support of the Bloc Quebecois is a different matter and I will address that in my later remarks.

While all this has been going on, the public hearings into the redistribution process have continued. The bulk of the dollars had been spent even before the bill was introduced and now eight out of eleven of the commissions have finished their public hearings; in Prince Edward Island, Nova Scotia, New Brunswick-

[Electoral Boundaries, May 26th, 1994]

Mr. Speaker, I am glad to hear the government supports the independence of the commissions which have now virtually completed their work at a cost of over $5 million.

Surely killing the process is not a serious priority for this government. Could the Acting Prime Minister assure the House that the only reason left for stopping this redistribution again would be to follow the suggestion of my party echoed by the Minister of National Revenue that the number of seats in the House of Commons be capped or reduced?

[Electoral Boundaries, May 26th, 1994]

Mr. Speaker, my question is for the Acting Prime Minister.

Yesterday the Senate approved amendments to Bill C-18 to ensure that riding redistribution takes place before the next election. However, the government leader in the Senate indicated that one of the problems with the current process was the lack of supervision of the independent, non-partisan boundary commissions.

Could the Acting Prime Minister explain what sort of supervision the government thinks is required? Why does the government not support the independence of the independent commissions?

[Budget Implementation Act, May 26th, 1994]

Madam Speaker, I am rising also to speak on these motions at report stage of Bill C-17, the Budget Implementation Act, particularly at this time motions dealing with sections 12 to 14, the fiscal transfers portion of the bill.

We are debating four motions, three of which I have moved, and I want to clarify my reasons once again for moving those motions. We have opposed the bill because of its omnibus nature. We insist upon having a debate on the floor of the House of Commons on each section of the omnibus bill because this should not be one bill.

I raised a lengthy point of order at second reading on this particular issue. I realize that the Chair ruled against it and I respect that decision which was based on precedent. I nevertheless reiterate that precedent is an unfortunate way to proceed here because we do have a new Parliament. We have a chance to right some of the wrongs and some of the questionable practices we have fallen into, in particular the practice in recent years of presenting omnibus legislation with respect to budgetary matters.

This particular section which I want to address in report stage today concerns fiscal transfers and specifically two areas: the CAP or Canada assistance plan and the PUITTA or Public Utilities Income Tax Transfer Act. We very reluctantly support these particular aspects of the bill, although my amendments are here to provide us with an opportunity for debate on this specific portion.

Let me first of all address section 12, that is the Canada assistance plan portion. The government is introducing through the budget a freeze to CAP transfer payments to the provinces at present levels for the immediate future.

Through this, the government projects savings of $466 million in the next fiscal year, 1995-96, and the budget has promised social security reform based on co-operative effort among federal and provincial governments.

This is an area where the government, although it is adopting some of the things we proposed, is really proceeding without a plan and causing friction with provincial governments. I would note that in spite of its promise of co-operation this is clearly not happening. The evidence for this was the refusal in April of some provinces to attend a scheduled briefing to inform them of the federal government's progress in the area of social security reform.

I caution the government against making the same mistake with welfare that it has already made with health care, that is getting into an area of provincial jurisdiction-welfare is clearly an area constitutionally of strict provincial jurisdiction-enforcing national standards through, in this case the Canada assistance plan and regulations, and then gradually decreasing funding levels; in other words cutting the provincial funding but not giving them the freedom to adjust to the changes to make their targets and policies appropriate to funding levels.

Obviously this is a formula for alienating the provinces. Along with cuts which decrease their spending power it will make it difficult for them to implement social policy now and could also impact their ability to implement proposed social policy reforms down the road.

We need national deficit reduction of course, but we need it in a plan. We need it with an agreement in these areas with the provinces rather than a dysfunctional partnership in which the federal government makes unilateral changes through transfer arrangements but leaves in place policies that were based on full funding.

Section 12 of the bill which freezes the current level into the future does, I would also note, perpetuate certain anomalies. It perpetuates the CAP discrimination that exists today with regard to the so-called have provinces, Ontario, Alberta and British Columbia, particularly Ontario and British Columbia where the unilateral and discriminatory reductions over the years in CAP funding have dramatically impacted upon those provinces.

I note, for example, that in Ontario the federal share of costs of CAP has decreased from 50 per cent to 29 per cent. This is one anomaly. Another is in the case of Quebec. This is an area that has been brought to my attention for not being clear in the bill.

In the area of CAP, Quebec operates under a bilateral tax abatement agreement with the federal government. I would call upon the government to clarify how exactly this freeze of transfers affects that agreement into the future.

Considering these problems, I want to congratulate the hon. member for Saint-Hyacinthe-Bagot for his amendment, Motion No. 12, which proposes the setting up of a parliamentary committee to review on a permanent basis the implementation of this policy. It is important, given the lack of a comprehensive strategy by the provincial and federal governments, to have such a committee, and I asked Reform Party members to support the motion tabled by the Bloc Quebecois.

I conclude with a comment on sections 13 and 14 that affect the Public Utilities Income Tax Transfer Act. These sections extend the freeze, basically a freeze of 10 per cent below the 1989-90 payment on these transfers to the provinces into the future.

I support this and our party supports this with even more reluctance than we support the CAP transfers. Of course the income tax transfers in this area to the provinces should be 100 per cent funded.

One should remember that the purpose of these tax transfers is to refund to provinces that have privately owned utilities the portions of tax revenue that are raised by the federal government. These are transferred back to the provinces where these private utility companies are located. In the case of Alberta, which receives a lion's share of these transfers, they are passed on to the customers of these utilities.

This is not a special payment. This simply ensures that there is not discriminatory taxation against provinces and against individual Canadians who happen to be customers of private rather than public utility companies.

While this should be fully funded, I understand the reason for the government's finding that at this time it cannot restore that but must continue the policy that was unfortunately established by the previous government.

We support that with some difficulty but we hope that will be reassessed some day when we do have a plan to get our fiscal House in order within a reasonable time period.

In conclusion, I would like to say on these amendments that we recognize the need for significant reform and some reduction of federal transfer payments to the provinces to balance the budget. These are not the best ways of proceeding. They are the ways the government has chosen. We are very concerned about the lack of an overall plan and strategy but are prepared to support them on an interim basis.

I would remind the House once again that I have moved certain amendments to allow this debate, but I would recommend to my caucus that we support the Bloc amendment to study particularly the operation of CAP transfer programs in the future.

[Budget Implementation Act, May 26th, 1994]

moved:

Motions Nos. 13, 14 and 15

That Bill C-17 be amended by deleting Clause 12.

That Bill C-17 be amended by deleting Clause 13.

That Bill C-17 be amended by deleting Clause 14.

[Bill C-18, May 6th, 1994]

Mr. Speaker, the minister knows that Bill C-18 in its present form will stop redistribution until after the next election.

My supplementary is for the same minister. The readjustment process has reached a point where, even if public hearings were cancelled, not a penny will be saved.

Is the government ready to accept the Senate Committee recommendations and allow the public hearings to go on in order that the commissions may submit their reports without undemocratic and unconstitutional intervention called for in Bill C-18?

[Bill C-18, May 6th, 1994]

Mr. Speaker, my question is for the government House leader. In spite of twice trying, the government House leader has been unable to persuade the Senate to pass Bill C-18 and stop electoral redistribution.

Yesterday a Senate committee passed substantial amendments to the bill. Will the government give serious consideration to these amendments, or better yet, withdraw its support for Bill C-18 and stop the waste of Parliament's time and money on this legislation?

[Supply, May 3rd, 1994]

Mr. Speaker, I do not know if I have enough time to answer both of those, but let me try.

The hon. member raised a couple of issues in terms of the recent expenditures of the Reform Party executive. It is a well known fact that I had indicated I was not happy with the structure of those particular expenditures and I had recommended to the council that it go about receipting any legitimate expenditures that our leader incurs. The executive council of the party I understand has in fact endorsed that kind of a policy.

The reason I said that was that we are here in the House of Commons, the Reform caucus, trying to get our current non-taxable, non-receiptable expense allowance that we all enjoy of $21,300 a year receipted. This is one particular expenditure. This type of expenditure should not occur. It should not occur in the Reform Party and it should not occur in this House of Commons where in addition to being non-receiptable it is also non-taxable.

I would hope that having gone though that particular controversy and kept our policy consistent as we did that we now have the support for the hon. member for the scrapping of that particular kind of non-tax allowance that we as members of Parliament all enjoy. I would expect to get that support.

The member also asked me more specifically whether Reform Party funds have a subsidy component. The answer in my view is that they do because of course they are funnelled through a tax credit system that all political parties enjoy.

We have urged that this government bring forward legislation to end that kind of special tax credit status for political parties in a number of areas. We have urged that we do this for all political parties. If the members of the government feel so strongly on that particular issue I would urge them to take action on it as soon as possible.

[Supply, May 3rd, 1994]

Mr. Speaker, I am rising today to speak to this motion by the hon. member for Calgary Centre on reforming, simplifying and making more equitable our income tax and other tax systems in Canada.

I originally had planned today to speak primarily on the issues of fiscal federalism in the few minutes that I have. In this country right now we are undergoing a series of studies and serious examinations of a number of policy areas that include social policy, not just transfers to individuals but transfers to provinces, and we have a budget that is impacting on a number of transfer programs to provinces, both this year and in future years.

All of those things are really proceeding in a number of different ways. There are intergovernmental negotiations going on. We do not have any details about that but we know it is happening. We have a social policy review. Of course we have budgetary policy and a review of the GST.

There is a wide number of studies into issues of fiscal federalism but there is no overall integrated approach to making the tax system fairer and more efficient between levels of government. That is the primary point I want to address today, some of the things that some organizations are putting out that could be done, some of the things that our various academics have proposed.

I have been sidetracked somewhat by an issue that I got into last week. It came up on the floor of the House yesterday. I want to digress and spend most of my time on that because it seemed after what was said yesterday in the House that it was a perfect opportunity to address this particular issue because it is really so relevant to the way taxes and the tax system are functioning in our country today.

I am referring to the mini controversy we have over the federal overseas tax credit. This is a tax credit that is available to Canadian workers who are working overseas for six months or more of the year, enduring hardship and separation from their families and work related expenses in that capacity. There have been recent stories, one in particular in Alberta Report , that draws attention to the fact that the federal revenue department is basically considering retroactively disallowing the use of the overseas tax credit by certain Canadian workers, much to their detriment.

This story appeared and has been on the scene. I know members of Parliament, not just myself but other members have been making inquiries into this particular matter for some time because this has been on the public record now for a couple of months. They are not getting very far with Revenue Canada I understand.

I am not a tax expert and I am not a lawyer. I would never claim to be for obvious political reasons. By implication neither am I a tax lawyer. But I did find this story quite interesting. Given the government's current unwillingness to address the issue I decided to raise it in the Commons in statements.

Yesterday in response to one of these gratuitous set up questions we have periodically, the Minister of National Revenue said I had erred in my statement and provided the House with some incorrect information and that there were in fact no legislative changes involved in this area.

What is wrong with that statement is that it has nothing to do with what I in fact said to the House or what the problem is here. Mr. Speaker, you may have seen the movie last year, The Firm . It was one of my favourite movies last year. In one particular scene-it is about tax lawyers-Gene Hackman plays Avery Tolar speaking to Tom Cruise who is playing Mitchell McDeer. He is teasing him about his upcoming tax law exam. He has a multiple choice question for the young upstart. He says: ``What is the difference between tax avoidance and tax evasion? Is it: (a) what the IRS says it is? (b) A good tax lawyer? (c) Five years in jail? (d) All of the above?''.

Just to Canadianize that we will substitute Revenue Canada for the IRS, the Internal Revenue Service in the United States, and I think the same applies here. The point I am making is that whether there have been legislative changes is too often irrelevant. Tax law in this country rarely has much to do with legislation.

We recently have been passing in this House tax changes that were brought in by the previous government, well over a year before its defeat in some cases. We have been passing those things. We have been agreeing to them on this side. We have no choice. They have been implemented for some period of time. Legislation has little to do with it and little to do with the question I raised.

The question I was raising was not a question of legal technicality or of the latest version of Revenue Canada tax rules. It has to do with the administration of the tax system in the country and the application of tax law which often leads to the second point I was raising, the far more important point, the whole issue of tax fairness and in particular issues of scope and timing.

Timing in this case is the whole issue of retroactivity of administrative and application changes in terms of the administration of the law. Scope is in terms of the application of this particular provision to some workers and not others, in particular this one provision that depending on how interpreted or how applied affects workers of foreign parented companies differently than workers of Canadian parented companies whether or not those workers are Canadian.

These are very important questions and I do not profess, nor did I in my statement, to know the right answer or what the correct policy should be. I do not know and I can understand that there are certainly legitimate costs involved in these kinds of working arrangements.

My point is that if we are going to administer a sensible, fair and improved tax system in this country it is important that we take these kinds of issues seriously and listen carefully. Neither of those things was reflected in the kind of answer that the minister gave in the House to this dilemma yesterday.

Specifically, whether or not one agrees with the overseas tax credit it is not difficult to understand the concept that fairness and retroactivity of application are two entirely different things. We should be very careful in retroactivity of either legislation or application especially when it involves substantive tax penalties for some people.

Second, it is also not hard to understand in terms of fairness that all Canadian workers should be treated as equally and as equitably as possible. I happen to believe that in the kind of new economy we are moving into capital, with the porous international borders we have and with the technical evolution we have and with many of the well run countries in the world, will do a pretty good job in the long haul of taking care of itself. I do not think it needs protectionist measures such as this.

I noticed that the revenue minister rationalized this measure as effectively a protectionist support for Canadian based companies. However, Canadian labour in the future is going to need not necessarily our help in the old sense of giving handouts but help in the sense of ensuring its full participation in this dynamic, capital driven economy. This kind of tax measure is a perfect example of one that is driven by needs, old kinds of protectionist, nationalist needs that are not consistent with the needs of Canadian workers.

Whether this particular tax credit is essential or well structured or not, I do not know. I do know that if a Canadian worker is participating in his economy, whether here or abroad, surely the application of that should not be based on the status of his employer. Canadian workers and Canadian labour should be the focus of those kinds of measures.

I see, Mr. Speaker, you are asking me to wind up. I did want to spend my time on that. I hope the government is listening and I hope it takes not just the big concerns that we have about the tax system but some of these smaller day to day tax problems that Canadians have much more seriously in the future.