Mr. Speaker, I rise to speak to Bill , the Conservative government's budget. I am unfortunately the first person to rise after the tawdry, cheap events of last Friday in the House, the unparalleled, unprecedented, tawdry events of a government that is so desperate now to get its budget through it had to go down into the bowels of the House of Commons to look through dusty books, looking back to the 1960s and the 1970s, to find some sort of procedural trick that would allow it to pass the budget when it knew that most Canadians are opposing it. In the last few days we have seen the budget self-destruct, as many of the Atlantic provinces, Saskatchewan and many Canadians from coast to coast to coast have said very clearly that the budget is manifestly not in the interests of Canada.
Last Friday, with two minutes to go in private members' business, the House leader stood to try to conjure a trick out of his pocket and try to force through, what he called “a national emergency”, the budget, without a vote, not complete the debate only to force it through.
As members well know, the House refused that. However, the fact that the Conservatives would use such a cheap and tawdry trick to try to get their budget through I think belies the reality. The Conservatives acknowledge now that their budget does not have the popular support of Canadians. As a result of that, they had to resort to this trick.
What they used was a procedural trick to try to declare this a national emergency. The only emergency is the rapid and constant fall of the Conservatives in public opinion polls. We have seen in places like British Columbia, Saskatchewan and Nova Scotia that the Conservative vote continues to erode. Why does it continue to erode? Not only because of tricks like that, the trick of last Friday, a trick that manifestly failed, but also because their budget simply does not have credibility.
I will talk a bit about the situation that Canadians are really living through while the Conservatives are playing their little political games here in Ottawa. From there, I will talk about how the budget does not address what are very clear concerns, crises that are occurring in main streets across the country.
Instead, very clearly what we have is a Conservative budget, a Bay Street budget, the same as the Liberal budgets were, oriented toward corporate tax cuts and huge handouts, shovelling money off the back of a truck through the oil and gas sector. That seems to be the Conservative priorities. Canadians are living a much different reality.
Let us talk about the reality of most Canadians. Let us talk about average family incomes. Since 1989, Statistics Canada tells us, since the signing of the Canada-U.S. free trade agreement, most Canadian families have seen their income fall. They are earning less money now than they were then.
What we have seen under now more than 15 years of Conservative and Liberal economic policies is the wealthy are fabulously so. They are able to buy their 15th or 16th Lamborghini without any problem. However, most Canadian families are earning less. It is not just that they are working harder and longer weeks, and I will come back to those statistics, the bottom line is Conservative and Liberal economic policies have manifestly failed.
Let us look at the figures. The poorest of Canadians, the family with an income of less than $20,000 a year, those below the poverty line, have seen over this 15 year period the loss of about a month's income. What they used to earn in 12 months, they are living on 11 months' worth of income. We have seen a 10% fall in real income for the poorest of Canadian families.
The Conservative budget does absolutely nothing to address that catastrophic fall in Canadian income levels for the poorest of Canadian families. It is no secret, 300,000 Canadians will be sleeping in the parks and main streets of our country tonight, 300,000 Canadians who no longer even have the resources to have a roof over their heads. The Conservative budget does absolutely nothing to address the crisis in homelessness and the catastrophic fall in the incomes of the poorest of Canadians.
Let us go to the next group. Another 20% of Canadians, and let us call them the working class, are families earning less than $36,000 a year. They are now earning two weeks' less income than they were in 1989.
In other words, after 15 years of Liberal and Conservative economic policies, they have seen their incomes fall so that they are now living on 50 weeks of income, whereas they used to live on 52 weeks of income. They have actually lost two weeks of income and are trying to make ends meet with far fewer financial resources.
Let us continue on to the middle class. It is the same thing for families earning less than $56,000 year. They are now earning two weeks' less income than they were in 1989.
We now are talking about 60% of Canadian families who are struggling to get by on fewer and fewer financial resources. The Liberals did absolutely nothing to address this. They simply shovelled money at the wealthiest of Canadians. The Conservatives now are doing exactly the same thing.
Even higher income earners, the upper middle class, have actually seen no income improvement since 1989.
That is 80% of Canadian families who see stagnation or who have seen increasing impoverishment under the watch of those parties over the last more than 15 years.
Who has profited from the Canada-U.S. free trade agreement and NAFTA and from the Conservative and Liberal economic policies shovelling money at the corporate sector? There are unbelievable amounts of resources to give to the oil and gas industry and the banks, and to give in corporate tax cuts, but who has profited? Only one sector has: the wealthiest of Canadians. In fact, Statistics Canada tells us that it is the wealthiest 5% of Canadians who have seen their incomes skyrocket over this period.
What the people who are listening to us today or who read these remarks in Hansard say, what the people say certainly as we knock on doors in my neighbourhoods, is that they cannot understand why Ottawa does not get it. Why it is harder and harder to make ends meet, they say, and yet the government seems to want to favour the wealthiest of Canadians with corporate tax cuts? They say that the government does not seem concerned about ordinary, hard-working Canadian families. They ask that question.
We have seen the Conservative response. The Conservatives' response was a cheap conjuring trick to try to get their budget through before Canadians wake up to what an appallingly negative impact it will have on them.
The Conservative government erodes resources in health care. It does not do anything to open up doors to post-secondary education and training. It throws a few dollars here and there but does not address the underlying systemic problems in this Confederation, which has led to the fact that most Canadian families are falling further behind and most Conservative and Liberal economic policies are favouring that small proportion of Canadians who have everything they could possibly want.
What is wrong with this picture when the top 5% of Canadian income earners receive most of the attention of Conservative and Liberal governments? Those governments simply shovel money at them. What is wrong with this picture when ordinary working families are forgotten?
I have talked about the fact that income levels are actually falling while the Conservatives have this delusion that everything is just peachy-keen. They say that because they look at the job figures. The job figures from Statistics Canada actually prove the point: the jobs that are created today are not sustainable manufacturing jobs or family-sustaining jobs. They are part time and temporary jobs. They are jobs paying the minimum wage.
Every time the finance minister stands up and says that we have full employment, what he is actually saying is that we have full employment like most third world countries have full employment. Canadians are scraping to get by on minimum wage, part time jobs and whatever temporary contracts they can get. They are struggling to keep a roof over their heads. The finance minister does not recognize that the economic policy of the past 15 years has actually led to a steady impoverishment.
It is not because Canadians are not working harder and harder. The Community Social Planning Council of Toronto produced a study just a few weeks ago which indicates that for the average family raising children the annual number of hours worked went up by 200 hours, that is, the average family worked 200 hours more in 2004 than in 1996.
What this means is that the average Canadian working family is working five weeks more. Those families are trying to jam another five weeks of work into a working year. They are struggling. They are putting in an unprecedented number of overtime hours, yet their revenue levels are lower than they were in 1989. What a destruction of our quality of life. What a failure on the bottom line.
Canadian families have seen their incomes tank, yet they are putting in five weeks more of labour in a 52 week year. It is an annual average of 200 hours more worked in 2004 than in 1996. It would be even higher today. Overtime hours have gone up by over 30% and yet most Canadian families are earning less now than in 1989.
That is what is fundamentally wrong with how the Liberals and Conservatives have addressed economic policy for the past more than 15 and nearly 20 years. They simply do not understand the impact of their policies. They are economic illiterates. They cannot check the bottom line to see if the economic policies have actually made sense. They are shovelling money at the corporate sector with more and more corporate tax cuts when we already subsidize the corporate sector to an unparalleled extent through the subsidies we provide to medicare.
Our medical system now in place offers a competitive advantage that no American corporation can match, yet the corporate sector is continuing to request lower and lower tax rates when our subsidies already give them a very clear competitive advantage. What is wrong with this picture when the corporate sector fails to acknowledge that the hard work of Canadians from coast to coast to coast gives the sector a competitive advantage but that corporations have to pay their fair share of taxes in order for that competitive advantage to be sustained?
They cannot have their cake and eat it too. Corporate leaders need to be told that. They need to be told that they have to be responsible, and that since we are already subsidizing them to an unparalleled extent, with study after study showing that medicare is a huge competitive advantage when Canadian companies compete with American ones, they cannot at the same time have lower corporate tax levels than they have in the United States. They cannot have both. They have to make clear and responsible choices.
We have not seen those responsible choices from the Liberals. We certainly have not seen them from the Conservatives, and last Friday in particular attests to that, but things have to change and that is certainly why more and more Canadians are looking to park their votes with another political entity. We certainly are seeing a greater interest in new ideas. The NDP, of course, since its inception, has always been the birthplace of new and responsible ideas, whether they are economic or financial in nature or in terms of social policies.
Before I move on to the next portion of my presentation, I do want to say one thing. The ministry of finance actually charted NDP, Liberal, Conservative and even the Parti Québécois governments over a 20 year period. It charted and compared the actual year-end fiscal returns to the budgetary promises of each of those governments.
This was done by the federal ministry of finance, which we certainly could not say is an NDP ally in any way, but that long term study, the only long term study that has ever been undertaken on this phenomenon of what the actual fiscal period returns show, clearly proved that the NDP as a party and NDP elected officials as individuals are the best fiscal managers. The worst were the Liberals. No matter what their promises are, 86% of the time the Liberals actually run a deficit. The Conservatives were a little better, actually running deficits 66% of the time over that 20 year period.
The NDP projected surplus or balanced budgets most of the time, and most of the time we actually achieved that. There is no difference between the spin and the results, between the rhetoric and the reality. We actually perform better in terms of fiscal management than Conservatives or Liberals. No wonder Canadians are looking around now and taking a hard look at what political parties promise and what they actually deliver.
The NDP is the only party that actually addresses the economic reality of most Canadian working families and we are the best financial managers. Those are two reasons why we are seeing increasing interest in our party.
Before I move on to B.C. issues, I want to mention the catastrophic collapse of our manufacturing sector. We have trade policies from the government, like we did from the previous government, which do not address the fact that value added and manufacturing production is collapsing across this country. A quarter of a million family-sustaining jobs have been lost in the last few years under the Liberal watch and under the Conservative watch.
Let us look at some of the impacts of that manufacturing loss. In Nova Scotia, 20% of manufacturing jobs have been lost. In Quebec, 18% of manufacturing jobs have been lost. In Windsor, and we have had very eloquent testimony to this effect from the member for and the member for , we have actually seen 35% of manufacturing jobs lost.
Windsor is in crisis. Southern Ontario is in crisis. The minimum wage, part time jobs that the finance minister is offering do not in any way compensate for this hemorrhaging of manufacturing jobs.
In Toronto, over 100,000 manufacturing jobs have been lost. That is 21% of manufacturing jobs in Toronto. In Oshawa, it is 21%. In Thunder Bay, it is over 20%. We are seeing a hemorrhaging of manufacturing jobs across this country and there is nothing in the budget that addresses this crisis.
We have a variety of crises that have developed over the past 15 years under the Liberal watch. The Conservatives said they would take a completely new approach. Instead, they have taken exactly the same do nothing approach, a shovel money at the corporate sector approach, which has not addressed the catastrophic fall in manufacturing jobs. It has not addressed the very real erosion of family income since 1989 and the signing of the Canada-U.S. free trade agreement.
This approach does not address the homelessness crisis. It does not address the inability of most families to have their kids or adults move on to post-secondary education, apprenticeship and training. It does not address that crisis. It does not address the health care crisis. Instead of dealing with the underfunding of our public health care system, we have seen the Conservatives take exactly the same road as the Liberals and look to more privatization.
We know that in the United States more privatization means more costs and fewer benefits. The United States health care system costs twice the amount per capita that the Canadian system does and yet 60 million Americans at any point in one year will have absolutely no health care coverage whatsoever. It is a failed American model that the Conservatives are pushing, as the Liberals did before them.
As I come from British Columbia, I would like to move on now to the budget and what it does not do for British Columbia. The finance minister rose in this House and said that his Canada went from the Alberta Rockies to Newfoundland and Labrador. He completely excluded British Columbia.
I admire his honesty, because there is nothing in the budget that addresses clear Conservative promises to B.C. The Conservatives said they would deal with the leaky condo crisis. The Conservatives promised they would take action on that. Instead, they have left 60,000 British Columbia families with absolutely no support in the leaky condo crisis.
With softwood lumber, we have seen the complete disregard for softwood communities in British Columbia and elsewhere.
Regarding the pine beetle issue, the Conservatives promised and spun but they did not provide the funding. The Kamloops Daily News said the following just last Friday on the pine beetle, “When will [the government] come to the table and be a part of the solution?” For whatever reason, the feds just do not get it on the pine beetle. We have seen devastation throughout the interior of British Columbia. The government has done absolutely nothing to address that.
I could go on, with the World Police & Fire Games and a whole host of other issues such as the flooding in the Fraser River and the Skeena district of British Columbia. We have seen only $16 million offered up for the flooding even though we know that $22 million is required just to protect the city of Chilliwack alone.
I could go on and on but the reality is that the Conservative government just does not get it, which is why it tried to force this budget through by a conjuring trick last Friday.
Mr. Speaker, I am pleased to speak today to Bill .
As vice-chairman of the Standing Committee on Finance, the committee and I had the opportunity to study the bill in detail and we heard from numerous witnesses on some of the bill's more contentious issues.
For the past 16 months, one of my major grievances with the government has been its lack of vision. Since my time on Parliament Hill, I have never seen a government anger and disappoint all sides of the political spectrum the way this Conservative government has. It has not only managed to alienate its former supporters but it has also failed to endear itself to its adversaries.
At several points during its mandate, the Conservative government enacted piecemeal legislation that had not been well researched, developed or consulted upon. It has botched several files, most recently the Canada summer jobs program where hundreds of community organizations were left without funding. Even worse was the fact that these groups had no contacts and could not receive straight answers from the ministry because of government mismanagement.
First the Conservatives cut the program and then they reintroduced it but with less money. They received thousands of complaints and put more money into the program. At this point we still do not know which group is getting funding and how much. This is just another example of how far removed Conservative values are from the values of most Canadians. It took intense pressure from this side of the House, as well as protests from groups across the country, to get the government to backtrack on its ill-conceived plan and to reinstate funding to non-profit community groups across Canada.
I have spoken to the budget on several occasions and have highlighted all my preoccupations with the Conservatives, mainly that they lack any vision whatsoever and look only to immediate, political gain instead of long term goals for Canada. A perfect example of this are the green levy and the auto eco-rebate. Those are the only green initiatives contained in the budget and they were developed without any consultation with the automotive industry.
Encouraging Canadians to purchase fuel efficient vehicles is a step in the right direction, but an additional tax on certain vehicles is not the answer. In fact, it is a simplistic solution to a complex situation that instead requires a multi-pronged and careful approach.
According to testimony the committee heard from both industry and environmental groups, the proposed green levy and auto eco-rebate will fail to produce any meaningful change in reducing carbon emissions. These programs damage domestic automakers by placing $67 million worth of levies on domestic vehicles, which is about 80% of all the levies that will be collected. The transfer of $47 million in benefits to one company, which is 75%, for one vehicle that is produced offshore.
We should remember that when Canada imports foreign cars, greenhouse gases are produced by ships that cross the ocean to get them here. The more cars Canada imports, the more emissions the ships produce. Therefore, when the government offers a feebate benefit to only one foreign produced car, not only is it discouraging people from buying cars made in Canada, it is also encouraging increased emissions from a greater volume of imports which essentially cancels out the emissions difference the rebated cars produce.
Only three of the twenty-one eligible cars under the feebate program are made in Canada. While I do not want to give cars that are not fuel efficient an easy pass, I do think the government should not be punishing Canadian automakers at a time when our industry has suffered so many job losses in the last decade.
2006 marked the first time in 18 years that Canada had an automotive trade deficit. This was down from a $15 billion trade surplus only seven years earlier. In those seven years, Canada has gone from being ranked number four in auto assembly worldwide to being ranked number nine in 2006.
Companies such as Ford, Chrysler and GM account for eight out of every ten auto workers in Canada. However, with these measures in the budget, Canadian workers are being punished. These measures also damage the Canadian economy segment in vehicles. The $1,000 rebate for one vehicle, which makes up half of all rebates, undermines the ability of other dealers and manufacturers to sell equally beneficial subcompacts competitively on the same basis. Perhaps the biggest failure of these measures is that they fail to help get older cars off the road.
The majority of greenhouse gas emissions produced by Canada's on road fleet of cars are produced by older vehicles. There are significant differences between the amounts of emissions a 1990 model creates as compared to its 2007 counterpart. The Conservatives were better off putting more money and more energy into getting older cars off the road than they were by punishing new cars.
Recently, the finance minister has been quoted on committing another flip-flop by announcing that he would reconsider the way that the green levy and the auto ecorebate would function. This is a good sign, but it is too vague to have much meaning.
During the clause by clause of this bill in committee I put forward a motion to remove the clause dealing with these measures in order that the government would be able to rethink its policy on this issue, but without success. I only hope that the minister will stay true to his word and look at alternative measures to deal with the auto industry. These measures should not punish Canadian automakers which is currently the case, and should emphasize getting older cars off the road.
As I mentioned earlier, these vehicle feebates were some of the only green initiatives contained in the budget. The Conservative government is failing to protect the environment and Canadians are getting fed up.
The environment minister has attempted to douse the fires by putting together more piecemeal legislation but, guess what? That has also failed. By not consulting environmental groups the government demonstrated its arrogance and its ignorance on the issues of climate change and the environment.
One specific example that was raised during the finance committee study of this bill was in the crucial area of ocean conservation. The government has reduced the budget of the Department of Fisheries and Oceans by $105 million and has only allocated $18 million over two years to the conservation of oceans in our economic zones.
It is a sad statement when experts agree that it will take over $100 million per year to get Canada on track to meeting its international commitments in ocean conservation.
In 2005 the Liberal government announced the Canada's oceans action plan and had begun allocating money when a premature election was called. Since coming into power the Conservatives have mismanaged all environmental files, but perhaps they have done the most horrendous job of protecting Canada's oceans.
Canada has only protected less than 1% of our economic zone and with the Conservatives in power that figure will surely not improve. I cannot understand how the Conservatives can spend millions of dollars buying military equipment to protect Canada's Arctic region, but allocate practically nothing to protect the Arctic Ocean.
They can spend millions on patrol boats, but refuse to allocate money into protecting our oceans, which directly employ approximately 98,000 Canadians. Seafood exports account for about $5.5 billion of our economy, yet the government does not deem the oceans important enough to properly fund their conservation.
These measures contained in the budget have not endeared the government to environmentalists and we can forgive climate change experts for doubting the new found devotion to the environment. We can also forgive these same experts for going one step further and calling the government's environmental plan a fraud and sellout.
As I was saying, the Conservatives have not only raised the ire of the left, but they have turned their backs on their allies on the right. I am talking of course about the energy sector in Alberta and its dissatisfaction with the government's decision to tax income trusts. I suppose that when he came into power in 2006, the never imagined that the Liberal Party would come to the defence of so many energy corporations in Alberta and the way in which they want to structure themselves.
The and the delivered a low blow to investors and corporations when they blindsided them on Hallowe'en with a 31.5% tax rate on income trusts.
Several months ago, the Standing Committee on Finance tried to understand how the government calculated the so-called tax leakage in the income trust sector. After the committee was repeatedly denied access to these documents, it came to the conclusion that the government's decision to tax income trusts was based on imprecise data and was another case of mismanagement. Unfortunately, the Conservatives' mismanagement of the income trust matter cost Canadian workers $25 billion. These working people had found a high performance investment mechanism for their retirement. From one day to the next, the destroyed years of savings. And the government has the audacity to claim that this measure is part of its tax fairness plan. I do not see what is so fair about liquidating Canadians' savings or the consequences of this decision to the energy sector in Alberta.
Small oil companies are having trouble because of reduced access to capital. These companies are using all of their resources just to stay afloat. That means that they have less to invest in reducing greenhouse gas emissions and making their production systems more environmentally friendly. Moreover, the income trust decision is threatening our energy corporations. They are at risk of being taken over by foreign interests. Recently, we have seen a number of takeovers and takeover attempts by foreign companies, which will weaken the Canadian economy and reduce the government's tax revenues. Rather than help Canadian companies, the government has hurt our industry and has made an unprecedented number of foreign takeovers possible.
The Liberal Party proposed a fair solution to income trust taxation. It was a solution that experts, businesses and investors agreed on. Unfortunately, the government ignored our proposal, which was rejected by the Standing Committee on Finance. Then the Liberal members proposed adopting the Bloc Québécois' income trust amendment. The amendment would have extended the grace period from four years to 10. Thanks to Liberal support, that amendment would have been passed had the Bloc members not changed their minds and voted against their own proposal. This proves that the Bloc Québécois has no useful solutions to offer to Quebeckers and that it is not protecting Quebec's interests.
During a meeting of the Standing Committee on Finance, a Bloc member said:
|| Let's not forget that when we examined the report, the bill had not been submitted to us. We wanted to find the best possible solution. However, in the present context, what we really hope for is speedy passage of the bill so that the budget can be implemented as soon as possible.
In other words, the Bloc members are here for the sole purpose of protecting their own interests. An amendment could easily have been adopted to allow Quebeckers and all Canadians to benefit from a four- to 10-year grace period. After speaking out so vigorously against taxing income trusts, the Bloc members changed their minds. Moreover, they lack courage when real changes have to be made.
I doubt that the many people who have invested in income trusts in Quebec and Canada are pleased with the Bloc's about-face.
Another area where Canadians will be feeling the crunch from Conservative mismanagement is set to begin as the summer gets underway. With Canada's tourist season in full swing, a thriving section of our economy must deal with the elimination of one of its greatest selling tools, the visitor rebate program.
The program gave Canada's tourism industry a valuable tool to help it compete for global tourists. Once again, without any consultation with the tourism industry, the government eliminated the program. Only a small handful of developed nations do not have a federal sales tax rebate program for tourists. Thanks to the Conservatives Canada can count itself among these few. It is difficult to understand why the government wants to weaken Canada's tourism industry since so many Canadians are dependent on this industry.
After the special finance committee's hearing requested by Liberal MPs to study the visitors rebate program, and along with the help of industry stakeholders, the continued pounding of the government on its ill-developed decision finally convinced the to announce a federal foreign convention and tourist incentive program in Bill . That measure in the budget partially corrects the mistake made by the government when it first eliminated the GST rebate program, but it does not go far enough.
Why was the government determined to destroy a program that worked as it did with the Canada summers job program? The argument surrounding the GST rebate could not be timelier as summer is now upon us. I am glad to see some reversal by the government on this matter, but there is another set of seasonal problems for which the government must account.
As we know, summertime is also a season of festivals in Canada. My hometown of Montreal is host to an endless number of world renowned festivals which draw millions of visitors each year. Anyone who has seen the international jazz festival and the just for laughs festival understands how important festivals are to Montreal's economy. I wonder if the current has been to Montreal during festival season because her actions have led us to believe otherwise.
Just a few weeks ago, the presidents of Montreal's two largest festivals spoke out against the minister's lack of action to secure funding in time for the summer. Festivals are a huge economic boost to local economies across the country and the minister's inability to assure funding for these festivals is a complete failure on her part and on the part of the government. I cannot understand how the Conservatives can mismanage such an obvious and crucial file such as this one.
Art groups across the country have been criticizing the government for months about the disastrous underfunding of the arts. Cultural groups in the country have felt insulted and ignored by the government and it has caused well-known authors and artists to speak out. We cannot allow Canada's vibrant arts community to suffer under the Conservatives' ideological program cuts and mismanagement.
We have already seen them mismanage countless files by closing Liberal programs and then reopening them only a few months later under a new or different name, whether they wanted to take credit for these supposedly new programs or whether they just thought that no one would notice that they were gone remains unclear.
This began in September 2006 when the Conservatives cut a number of effective Liberal programs. The Liberal Party protested these ideological cuts, as did the public. Since then we have seen the government re-announce these programs under new names and pretend as if the Liberal initiated programs never existed.
Canadians deserve better than what the government has given them, ill-conceived, piecemeal programs that will not help Canada advance into the 21st century. The government is much better at photo ops and slander than it is at governing and our country is not any better for it.
Mr. Speaker, I am very pleased to have the opportunity to raise a matter that remains extremely contentious about the budget that has yet to be voted on and which presumably will be voted on within a short period of time.
It would not surprise anybody that I am rising on my feet to take this opportunity yet again to express the strongest possible feelings about the betrayal so far, and I underline so far, of the government in the current budget. This is about the promise made in the Atlantic accord which is most important and most advantageous to the people of Newfoundland and Labrador and of Nova Scotia. However, it is not missed on all Atlantic Canadians that the impact would affect the whole Atlantic region. The impact of this broken promise, of even the threat of the government cancelling the deal that was sealed in the Atlantic accord, is one that would be felt negatively if the government persists in cancelling the deal, or positively if the Atlantic accord is respected and upheld by the federal government. It is something that would impact on the whole of the Atlantic region.
One might ask why I would raise this yet again today. I have raised it again and again. The other New Democratic Party members from Atlantic Canada have raised it again and again. My leader has done so. A great many people who are in the public domain but not necessarily as partisan as we are have spoken out on the subject and have been of one view, which is that a very definite commitment was made in that accord in 2005. No matter how many different constructions the , the and the , the so-called political minister for Nova Scotia, put on it, it is actually, by the provisions in this budget, a deal that is broken, period, full stop.
The reason I rise on it again today is, as I have said every other time, it is never too late to fix something that every indication simply reinforces is something that has to be fixed. It has to be fixed because it is immensely important to the people of Atlantic Canada. I think there is some indication that Conservatives are beginning to understand that it needs to be fixed as well. It is seen as an astounding breach of faith, an obscene breaking of a promise that was in black and white, that was sealed in a deal, for which the government can offer no excuse or no acceptable explanation.
One dramatic moment in this saga was the decision of the member for to actually incur the wrath of his party to kick him out for indicating that he would be voting against the budget in its final form unless it fully honoured the Atlantic accord.
I see this as a moment of opportunity, another dramatic moment in this saga. I want to stand in my place and unreservedly thank the Premier of Nova Scotia for coming off the fence. I do not want to say that in a pejorative sense but rather to acknowledge that he made a decision. Holding his nose, he made it clear that he was very unhappy with what this budget did to Nova Scotia and to Atlantic Canada. I do not think any of us could totally fault him for saying that he was going to continue to try from the inside, in the back rooms, in the wheeling and dealing and negotiating back and forth between the , the and the premier, as well as their senior officials, to see that it is fixed. The premier also signalled, and I noted it here in the House, that he would be making a very different decision if he reached the point that he felt that there was no good faith, that there was no real attempt taking place to move toward a satisfactory resolution of this broken deal. That moment has clearly arrived.
We have made repeated attempts to say to the premier that we want to work across party lines to fix this broken promise. We have pleaded with Nova Scotia politicians of all political stripes to work across jurisdictions to fix this. I respect the fact that Premier MacDonald has now reached the point where he has felt compelled, and I am sure he did not arrive at this lightly, to publicly announce there is no movement or no resolution in sight. The moment has arrived where he recognizes that giving leadership to the people of Nova Scotia, in the tradition of his predecessor, former premier John Hamm, requires and demands he stand up, be counted and make it clear that he is pressing for every Conservative member in the House, representing a constituency in Nova Scotia, to vote against the budget unless it can be fixed.
My plea, once again, to the government and my words to the members on all sides are these. By working together, we can fix this, and it is in everybody's interests to fix this. This is one of those episodes. Some people may say that it is only Atlantic Canada, that they are four provinces, but they do not make up a huge population. They may say that they do not have as many people in all Atlantic Canada, despite the four provinces, as there are in the province of Quebec, or Ontario, or Alberta, or British Columbia. That is true, but we live in a federation. We have four provinces on the Atlantic side of the country that are very upset about this broken promise.
Some of us have hurled some harsh words to say that we understand what is going on. First, we understand that the made a very definite commitment, and he is breaking it with this budget. We understand that the is aware of that. He is from Ontario. We also understand that there has been a cynical, crass decision made that there are more votes to be courted, as we say in Atlantic Canada, more fish to be fried, by going after the more prosperous and populous provinces where there are more votes. Therefore, the decision was made to throw the Atlantic provinces overboard.
However, that is not good for the federation and it is not good for what plagues this land today, and that is a lot of disillusionment and cynicism about politicians and governments breaking their promises. This is one reason so much appreciation and respect has been expressed, within my own province but across the country, for the member for . He knew he would incur the wrath of his party by standing tall, standing firm, and if necessary, putting himself in that position. Even though he was told he would not be thrown out, within moments of standing up and being counted in the House last week, he was informed by his whip that he was out on his ear. I watched it happen behind the curtain.
The issue is, what needs to happen to fix this? As the member for has said so many times, it is quite simple. Just honour the deal. What is the problem? It is a legal deal. It is a negotiated agreement that has the effect of law, unless the government brings in this final budget measure, which tears it up and throws it away.
As Darrell Dexter, the official opposition leader in Nova Scotia, has again and again proposed that all of us need to pull together, all parties, all elected members, provincially and federally, to say that we stand in unison and in solidarity for the future of Atlantic Canada. To do that, we need to stand together and insist this deal be honoured.
The premier today indicated that he read the statement of the , which made it perfectly clear that the government was not working to fix it, despite a lot of talk by Conservative members of Parliament from Atlantic Canada, especially by the Nova Scotia Conservatives, who could not bring themselves to stand together with the member for .
Everyone was working hard to fix it, but what kept coming back from the , the and the officials was there was nothing wrong with what was happening. They have said that the deal is fully honoured by the budget, even though it is perfectly obvious that is not the case. On that side, it really seemed to be a case of one hand clapping.
Now the jig is up and the truth is out. I suppose I should applaud the fact the saw fit to tell the truth and acknowledge that, as far as he was concerned, for the sake of a few votes, he would not honour this deal. If we turn that around and look at the other side of that coin, what he is really saying is there are more votes to be had in other parts of Canada by throwing this deal overboard.
He wrote an op ed article, and applaud the fact that he actually told the truth. There is no interest and no indication that the government is serious about fixing the deal. In fact, the it does not even consider it a broken deal.
In part, here is what he said in his op ed article, which is a direct quote:
|| Our government is not in the process of making any side deals for a few extra votes. You cannot run a country on side deals. Equalization has been restored to a principles-based program for the first time in many years. That’s what all premiers asked us to do and that’s what all Canadians expect us to do.
The problem with that is a new equalization formula was brought in and in defiance of the Atlantic accord, the decision was made to bring that after the fact equalization deal down hard on the Atlantic accord, tear it apart and toss it aside.
It is true that the equalization formula is immensely complex and it hard for Canadians to fully understand. Let us be honest, it is hard for every member of Parliament to have a full grasp of all the complexities of that formula. However, what is absolutely clear is the , the and the Nova Scotia Conservative members and all Conservative members in Atlantic Canada, except the member for , hope the complexities of the equalization formula are such that Atlantic Canadians, and all Canadians, can be bamboozled into thinking that there is not a problem with the Atlantic accord being tossed overboard. The real problem is that we do not understand the equalization deal.
I think people understand the fundamental principles of the equalization deal. I think they also, with no difficulty whatsoever, can understand what is wrong with this picture. In the process of bringing in an equalization formula in the budget, on which we are about to vote, the government has decided to violate clause 4, which says that notwithstanding any new equalization formulas, the Atlantic accord shall be honoured.
One thing is for sure, no Canadian anywhere, with any sense of fairness, cannot understand what it means to decide to scrap the whole deal, in defiance of clause 4, and clawback funds that it was promised would not happen. Some will say, “There go the four Atlantic premiers, what's their problem”. Let me remind the House that it is not only Nova Scotia and Newfoundland and Labrador that have a problem with the budget and with the broken deals.
I will quote directly from an article that appeared this morning in CanWest News Service, which leads me to believe it probably landed in a lot of places across the country. The Premier of Saskatchewan has equally and eloquently argued the case for his province and his constituents province-wide. The premier said that he received a letter from the Prime Minister saying “there will be no more side deals”. Referring to the 's weekend letter saying there would be no deal with Nova Scotia, he said “It's becoming like Alice in Wonderland. It gets curiouser and curiouser”.
The reality is a similar deal was made, a promise was made, on the eve of an election. At the time, a lot of us thought, perhaps a bit cynically, that there was probably not much of a guarantee that the government would honour the deal. However, the government made the commitment in the light of day and in black and white. It is absolutely understandable that the people of Saskatchewan and the premier and the government of Saskatchewan are equally outraged that the Conservative government has ignored the commitment made with respect to the treatment of the revenues from Saskatchewan's resources as well.
What is not understandable is the fact that Conservative members in the House, knowing what the negative impact both economically and politically would be, could entertain the possibility of supporting the budget. This is causing a lot of anguish on the part of a lot of people not just from Atlantic Canada or Saskatchewan, but in all parts of the country. Further than entertaining the possibility of supporting this budget, Conservative members have made it quite clear they have no intentions of standing against the budget. At the end of the day, this causes a serious problem. This feeds into the sense of disillusionment that people feel. It is hard to perhaps imagine the degree of fury, the sense of wrath, being expressed in Atlantic Canada.
I do not think polling is a good basis for making public policy. However, I do think that when a dramatic number of people say they are outraged at what the federal government has done in the budget with respect to the Atlantic accord and promises made to the people of Saskatchewan, that it behooves the government of the day to consider this. All those people cannot be imagining that this is a grievance.
People are surprisingly forgiving, and I say that as a member of a party, which at the federal level, has never made huge breakthroughs. Sometimes it is disappointing that people are so forgiving of governments that break their promises. Again and again this has come up for mention in this debate over the last many months. It is amazing how people are sometimes prepared to be fairly forgiving and how that is sometimes detrimental to other political parties or politicians trying to earn people's confidence and their support and hopefully retain it.
This is very pertinent to the debate today. The last time the Liberal government, in a major shift of policies and with an absolutely devastating budget affecting Atlantic Canada, turned its back on Nova Scotia, the 11 Liberals representing Nova Scotia's interests in the House of Commons were defeated in the 1997 election. None of the members were prepared to stand up against a very harsh, punitive budget. I would have hoped people would have a bit longer memory and not opened the door for some of those very same members to come back in, but that is the democratic process and I accept this.
In wrapping up let me again appeal, through the premier of Nova Scotia, to all politicians of all stripes, provincial and federal, to stand together to get this job done.
What is the job? It is to fix the budget by honouring this simple, straightforward agreement, the Atlantic accord, and honouring the commitment made to the people of Saskatchewan, though not identical but along the same lines. Let us be able at the end of the day to say that Atlantic Canadians and the people of Saskatchewan are not second class citizens, and that this is a government that honours its commitments.
Mr. Speaker, I understand that the member for is seeking to rise on a question of privilege at about 1:55, so I am going to cut my comments off so that he will have the opportunity to do that before question period.
First of all, I am absolutely astounded that last week the government put a motion forward that “the question be now put”. In other words, let us close down debate on the budget. It must be understood that Canadians want to know what their parliamentarians have to say about important elements of the budget. We must consider the last round of controversy in this place having to do with the Atlantic accord and indeed not just Atlantic Canada but Saskatchewan as well.
Promises made, promises broken. This is a very disturbing pattern on behalf of the government wanting to shut down debate so that we do not have an opportunity to confirm to Canadians what the facts are. The Auditor General once said Parliamentarians have to have fact-based information on matters related to the taxation of Canadians. There are a number of examples touching on the budget which show frankly that the government has done absolutely everything to frustrate the tabling of factual information it continues to deny. There is no credibility here. There is no trust. The government is trying to shut down debate because it does not want Canadians to know.
When the did a poll about the budget and asked the question “Are you receiving a benefit from the current budget?” The last time I spoke at an earlier legislative stage of the budget the poll showed that 93% of the respondents said that the budget did not benefit them. What happened the very next day? The yanked the poll off his website. He did not want Canadians to see exactly what other Canadians were thinking. There has to be something about it when 93% of respondents to the finance minister's website said they would receive no benefit from the budget.
There are some Canadians who not only did not receive a benefit, but they received cuts, serious cuts. I do not have to go into the Atlantic accord or the Saskatchewan agreement. I know what it means to those provinces.
Some hon. members have stood up and laid it on the table and what does the government do? It says that is not the case, they have their choice, they can do this, or this, trying somehow to explain away what the premiers of those provinces have clearly said to the Government of Canada, that it broke its promise, a written agreement. Remember the line “broke your promise”. The , during the last election, put out a piece of literature which said, “There is no greater fraud than a promise not kept”.
I assume that the now is beginning to accept that he has committed a fraud because he has broken a promise. He said he would not raise taxes, but in the first budget he raised taxes. He denies that he raised taxes, but we all know that the taxes on the first tax bracket went from 15% to 15.5%. It is on the tax returns. Conservatives are arguing that the budget implementation did not pass, but every Canadian who filed a tax return for that year knows exactly what the tax rate was on the tax return.
I assume that the tax return provided by the himself is correct in terms of what the real rate is. So why would the Conservatives come in the House and deny that they raised taxes? It is a fact. They should say they did, but they had to do it to pay for the GST cut that they also promised.
Apparently, the value of the increased taxes that a taxpayer would pay through the increase in the tax rate from 15% to 15.5% on the first bracket works out to $400. Do we know how much we would have to spend to save on or to offset the $400 increase? For that 1% in GST, it would be $40,000. We actually have to spend $40,000 on GST taxable goods and services to save the $400 tax increase.
Who in Canada spends $40,000 on GST taxable goods and services? They are people who buy very expensive cars and houses, the major things. What does this do for someone who is living from paycheque to paycheque? What does it do for someone like that?
Obviously this is a very regressive move that the government has made. I would love to reduce the income taxes of Canadians rather than reduce the GST. It is a fairer way to do it. People who have a lot of money have more disposable income. They have greater latitude and control over what they have to spend it on, but not with regard to GST.
Deny, deny, deny: the credibility is not there. I do not trust the government. I do not believe that Canadians trust the government. Its word is not good. Credibility is the issue. The Atlantic accord shows it.
There is another thing. The Conservatives said they were going to have a good, responsible government that is open and transparent. Let us look at income trusts. My goodness, here is another broken promise.
Let me stop here and simply indicate that the Canadian Association of Income Trust Investors and their president, Mr. Brent Fullard, have been very active in representing the interests of those who are income trust investors. I have to say that I do not agree with absolutely everything that they have said and written. They have been getting very involved in the communications process with members of Parliament.
However, I can tell members that with regard to the broken promise of the government on income trusts they are 100% correct. They have given parliamentarians every opportunity to see that the decision taken to break that promise, to impose a punitive 31.5% tax increase on income trusts, which led to a $25 billion meltdown of the marketplace, means that people who owned income trusts lost $25 billion of their investment value. These are people who were saving for their retirement or who are in retirement. They were depending on the cashflow.
I have to say that this was so enormous that we could not believe it actually happened. I went to the finance committee and participated in the hearings in which the came before committee to explain the tax leakage. The government was saying that the corporation that pays dividends pays a certain amount of tax and an income trust does not pay any tax so it is awful.
The previous speaker, during private members' business, said that corporations pay taxes and income trusts do not pay taxes. We have to look at the tax burden of everyone involved in that transaction. When the corporation makes money, it pays corporate income tax, yes, and corporations also pay dividends, and those dividends are taxable in the hands of the investor. As well, there is a dividend tax credit to lower the burden of the double taxation. Thus, a corporation and the individual investors pay a certain amount of tax.
Income trusts as an instrument do not. An income trust organization does not pay tax at the so-called corporate level. The earnings are distributed to the investors. It is the investors who pay tax on the full amount at their own personal rate. Someone who already makes an awful lot of money is paying 47% on every distribution from an income trust. There is no corporation that is paying 47% tax to compare it to, so I do not know how the government ever figured this out. In fact, I would bet that the does not even know how it was figured out, because he could not even explain to the finance committee how he did it.
With regard to the finance minister's presentation, he showed a nice little chart that looked like a kindergarten chart and concluded that there was $500 million of tax leakage in 2006. Over six years, that would be $3 billion; if we multiply that one year by six, we get $3 billion. This is a terrible amount of money that we are losing on tax leakage.
The finance minister was the first to speak. All the people who spoke with him, the people the Conservatives brought in to pat him on the back, were all going on the basis of the information provided by the finance minister himself. However, on the second day, there were witnesses who wanted to bring another perspective to this.
The Canadian Association of Income Trust Investors, CAITI, was there, but there was one I really liked because it raised a very important challenge for all members of Parliament. That was HDR/HLB Decision. Its representatives came before us and said they had worked with the finance department step by step on all of the factors that one would take into account to determine what the leakage was or was not, but they found that there were three or four areas in which the government did something a little different.
Number one was that Parliament passed some legislative changes for tax law effective in 2007 and related to corporate taxation. The did not include those tax changes in his computations. The calculation is therefore wrong. The finance minister simply should have said that he made a mistake and that he should have incorporated the legislative tax changes in the determination of the tax leakage. Did he do that? No. He is still saying the same stuff. He is denying it. He will not admit it. He is not believable and he is not truthful on these matters.
The Auditor General says we need to have true, full and plain disclosure. We need to have openness so that we can debate these things honestly and make decisions based on information. The finance minister is playing some game with the House. Those are facts. They are not even debatable. This is objectively determinable. Legislative tax changes were not included in his calculation. He made an error. He should admit it and he should change it, but he did not and he will not and the Conservatives are trying to shut down debate because they do not want us to talk about it any more.
The last time I raised this in the House the finance minister was in his place and started to yell at me. He started to shout me down. He wanted me to shut up. That is not the way this place operates. If the finance minister is agitated by the truth, I am sorry, but he should also say that he is sorry for making calculations based on incorrect information.
What else did HDR/HLB bring out? It said the finance department does not include any tax revenue from income trust distributions where the holder of the income trust is a pension plan, an RRSP or a RRIF, a registered retirement income fund. The reason is that when an income trust makes a distribution to a person in a registered retirement savings plan or a pension plan, there are no taxes paid immediately. They are payable only when the money ultimately comes out and passes on to the investor. Thus, the government excluded any revenue component whatsoever with regard to distributions of income trusts to pension plans.
If we take that to its logical extreme, we would say that if every income trust was owned by a pension plan, the Government of Canada, according to the finance minister, receives zero revenue. He never receives a penny from day one to infinity. That is ludicrous. Obviously the money eventually comes. That has to be taken into account and the government did not.
At the finance committee meeting, members would have seen another chart by the minister in which he actually stated that the effective taxation rate of corporate energy companies was 6.2%. In the calculations, the government assumed that it was at the full corporate rate. It did not take into account all of the other machinations by which corporations that are capital spenders, et cetera, can defer taxes on all these other things. There is one other point, which I have forgotten. I think it had to do with exempt investors.
Those are three or four very good examples of where the 's calculation of the tax leakage was erroneous or absolutely had false assumptions. As a consequence, I would say, because I want to finish now to make sure that the member for gets his opportunity, that in regard to the income trust thing, I believe the government has made a very serious mistake. Two and a half million Canadians, most of them seniors, have lost $25 billion of their hard-earned savings for retirement.
There is another way to do it. The Liberals have proposed a 10% tax refundable to Canadians so that ultimately the tax is only paid by foreign investors, which is where the major leakage actually occurs and which the also denies.
I cannot believe this. We need the Auditor General to do a full enquiry into the lack of information and what the truth is with regard to income trusts so that parliamentarians can make the best decision possible.