Mr. Speaker, during my previous speech I spoke about the serious issue of tax fairness for northern people. As I indicated, the other issue that I wanted to speak to in this discussion regarding northern issues is the need to change the way that we are funding northern territories. We have had an expert panel reporting on how to change the funding formula for the territories, and I had just started in on this when my time was up on Friday.
I will just repeat that we have identified four key issues that stand in the way of the north achieving its full potential.
The first is a new fiscal arrangement with Ottawa, one that truly reflects the needs of the Northwest Territories. The current fiscal arrangement cannot continue. Not only is it inadequate but in many ways it acts as a disincentive to the Northwest Territories moving forward.
My territory is very much controlled by this august Parliament, unlike the other provinces and regions of this country. This Parliament really does play such an important role in what happens in the north. As a northerner, I have railed against that for my whole life. I have felt, in some ways, the inadequacy of my citizenship, living where I do in the north. Certainly, part of it is the way that the Government of Canada deals with northerners.
As such, we all hope that as the resources of our territory are extracted and developed, they will mean more self-determination for us as citizens of the north. There is no question about that. If our resources simply get taken and we end up, at the end of the day, with what we have now, that would be a tremendous letdown and a tremendous failure of the Canadian system which is to recognize that we are all equal across this country and that we all have equal political rights.
The federal government provides about 70% of the funds for the Northwest Territories, but that really does not make the NWT a have region because this government, not the northerners, owns the vast riches of the territories. Nearly as much goes to Ottawa in royalties, in land sales and in corporate taxation. Nearly as much goes to Ottawa right now from the Northwest Territories as comes in to the Northwest Territories.
With a proper fiscal regime that would put our resources on the same level as other provinces where governments collect considerably more royalty revenues, we would be in a positive situation in the Northwest Territories. We would be ahead of the game.
The Government of Canada has chosen to subsidize businesses that develop in the north at the expense of royalties and taxation that could make the difference between us being a have and a have not province. Province is a term I use somewhat lightly because we are a province in waiting. In the 's letter to the NWT, he wrote:
The Conservative Party of Canada agrees unequivocally with the principle that northerners should be the primary beneficiaries of the revenues generated by resource development in the Northwest Territories similar to other jurisdictions in Canada. We also agree that the transfer of authority over lands and resources from Canada to the Northwest Territories (devolution) is the next logical step in the political development of the Northwest Territories.
Northerners would really like to know when this is going to happen and how this is going to happen. If this is the mandate of the Government of Canada, will it say it very clearly to its new emissary, Mr. Harvie Andre?
In 2004-05, public accounts showed that the federal government took in over $270 million in royalties and resource revenue from the Northwest Territories and the amount is growing every year. That amount went up quite a bit last year as well. Those figures have not come out, but that is because our second diamond mine is now into production. At the same time that does not include the corporate taxation that goes with that.
In comparison, the Northwest Territories public accounts showed only $3.5 million in corporate income taxes in that same year. This goes back to a problem that we have just like every other province or political region in the Northwest Territories and that is, if we set our corporate tax rate a little higher than anyone else, then of course the corporations are all filing somewhere else.
We have bounced around over the years because where we had huge surpluses, we lowered the rate and then everyone followed us down and then we balanced out. Then we raised the rate and then we got nothing. That is a fundamental problem with the tax system in Canada which should be addressed by the federal government. There should be some federal-provincial understanding on corporate taxation to avoid this kind of loophole, to avoid this kind of competition that takes the money out of the hands of the provinces and the regions.
People in the north simply want a fair deal from Canada in how our interests are treated. Whether it is on taxation or funding for government programs and services, we actually want to benefit and build our territory on the resources that we have. We want to make that happen for Canadians for the future. I hope in the future that the government will do much better than this budget in dealing with northern concerns and issues. The improvement has to take place.
Mr. Speaker, it is a pleasure to speak on Bill .
When looking at a budget, the challenge of any government is to balance a budget that is going to ensure economic productivity and competitiveness and ensure people have money in their pockets. It should try to find a balance, that yin and yang between being able to have a productive dynamic economy and having the resources to provide the social programs we enjoy. As well, ensuring that individual Canadians have the maximum amount of money in their pockets and that governments do not waste money is the challenge of any budget.
The fundamental question of this budget is whether it meets that test. Does it enable our country to have a productive, dynamic economy and also provide the resources to allow us invest in the infrastructure we require in order to have a productive economy? Does it enable us to have the resources to provide for the social programs that all Canadians enjoy? I would argue that this budget fails on all of those counts. I will go through the reasons.
If we look at the global context, we can see in the future a greater amount of competitiveness in the world from giants such as India and China. They are on an economic juggernaut that will increase as time passes. It is up to us to change, modify, improvise and become more dynamic in order to stay ahead of those countries. If we fail to do so, we will suffer.
Right now Canada stands at eighth or ninth in the world in terms of economic productivity. That is okay, but we can do better. I am going to outline ways in which this budget fails as well as solutions for how our country can improve its productivity, for the reasons I mentioned.
This bill deals with a number of income tax measures. I am going to go through them in a second. I also want to say that the fundamental aspects of a balanced budget that will be useful are that the budget is indeed balanced, that there is responsible spending, there is debt reduction and there are tax reductions so that we will have a competitive international tax rate. I have mentioned the reasons why we ought to do that.
I also want to mention one of the profoundly disappointing aspects of this budget. Canadians would be very interested and very disappointed, I think, to know that this budget by the present government actually increases the taxes on the most vulnerable in society, the poor and the lower middle class.
How does it do that? The government increased the lowest tax rate that exists in our country. It also reduced the basic personal exemption. The government argues that the balance to that is the dropping of the GST, a consumption tax, but does a consumption tax really benefit the middle class and the poor? Dropping a consumption tax like the GST benefits primarily the rich, because in order to benefit from that, one has to spend. The more one spends, the more one benefits.
The people who are struggling to survive do not spend that much; ergo, they do not benefit as much. When government takes money out of the pockets of Canadians, it hurts Canadians selectively. Therefore, the wisest thing the government could have done in terms of productivity and of fairness, I would argue, would have been to drop the lowest income tax rates and increase the basic personal exemption. That puts real money in the hands of Canadians.
There is a reason why this budget is so peculiar and particular in certain areas, why it cherry picks certain benefits and does not deal with global tax reductions for individuals, particularly the poor and middle class. The reason is that this is a cynical budget. It is a budget that is designed to curry favour with the electorate. Naturally all political parties want to do that, but to do that by cynically parking one's brains at the door and not implementing solutions based on fact, reason and science is irresponsible.
Instead, the government and this budget are engaging in irresponsible behaviour because the solutions are based on cynically trying to curry favour with the public and putting forth woolly-headed solutions that sound good on the one hand but are not very effective. I gave the example of the GST cut. On the surface it sounds very exciting and good, but unless one spends a whole lot of money, which means one is rich, it is not really going to benefit the rest of Canadians. The fact is that Canadians with low or modest incomes are struggling hard these days. The increased tax burden on them is irresponsible.
One of the tax benefits the government has introduced in this bill is something called the Canadian employment tax credit. On the surface, that sounds wonderful. It is $1,000, but in reality, if we read carefully, we see that it is a tax credit for those who are working. Those who are unemployed and those who are really struggling, the most vulnerable, cannot access this. In fact, those who are working and making minimum wage or close to it do not pay very much in the way of taxes, so this kind of tax credit is not of as much benefit to the most vulnerable in our society at all. It does not help them at all.
What would be smarter? Earlier this year, I introduced something called the Canadian low income supplement, for which I have a private member's bill that will be introduced in the House in the next little while, a bill saying that a person who makes $20,000 or less will receive a cheque for $2,000, tax free. That number will decline to zero in a linear fashion, down to $40,000.
Why? Because this is real money in the hands of those who need it the most. A tax credit for those who do not make much money is utterly immaterial, because either they do not pay tax or the tax is so small that it does not really amount to much. When we so-called help those who are of modest means, we give them $50 a year.
Also, my bill does not apply only to people who work. It applies to people who do not work and who are on fixed incomes. For example, all of us here know seniors in our ridings who are living on fixed incomes. They have given their lives to our country and are living on a very tiny amount of money. The amount of money in my bill, the $2,000, is real money, tax free, in their hands. It will enable them to live and put food on the table. If people are younger, this will enable their children to have various benefits. If people are older and retired, it will enable them to pay for medications that are not covered, as well as a host of other challenges our seniors face day in and day out.
The Canadian low income tax supplement that I introduced earlier this year is something that the government ought to adopt. I hope Canadians who are listening will put pressure on the government, because this would mean real money in the hands of the most vulnerable in our society. It is fair, equitable and humane. It will help those in our society who are most impoverished.
Let us look at another couple of tax measures that are in this bill. One is the Canadian textbook credit of $500 annually, a credit for textbooks for students. On the surface it sounds good, but how does it actually materialize and get into the hands of a student? The tax credit is multiplied by the lowest income tax bracket. Therefore, this tax benefit is actually worth only $77.50. That is right. This $500 tax credit is worth only $77.50 in the hands of students. That, as we know, will not pay for even one single textbook for most courses in post-secondary education.
The next issue is the transit tax to reduce greenhouse gas emissions. We know that the government's so-called clean air act has been an absolute bust full of hot air. What would be a series of solutions that would actually reduce greenhouse gas emissions? I will give members a few.
If we take a look at greenhouse gas emission reduction, we will see that it is tied to our burning of fossil fuels, so the question is, how do we reduce fossil fuel consumption? I have a few suggestions.
Perhaps the simplest way of doing that is tied to how we build our homes. We lose an incredible amount of energy in our homes. We know that the technology exists today to build our homes more efficiently and substantially reduce our consumption of fossil fuels. China is making buildings that produce 70% less greenhouse gas emissions than buildings of a similar size in North America.
What the government can do is go back to adopting the EnerGuide program that it so callously cut because it was so-called Liberal. It may be something that we introduced, but the reality is that the EnerGuide is a good program. It enables people to have the tools, resources and know-how to provide and implement those changes in their homes that will reduce the consumption of fossil fuels and, therefore, the production of greenhouse gas emissions.
I have another couple of suggestions. As we know, cars made before 1986 produce 37 times the number of greenhouse gas emissions produced by a car made after 1996. That is absolutely staggering. By removing from the road one car built prior to 1986, we are actually reducing by the equivalent of removing 37 cars made after 1996.
The government should provide a tax break or eliminate the GST for anybody who takes a 1986 car off the road and buys a car made after 1996. It would be simple and easy to do. In effect, this is an example of tax shifting. The should take a look at it. Frankly, it ought to be in this bill. It would enable us to shift the tax and encourage people to adopt actions that are more energy sensitive and environmentally sensitive.
Another issue is the Canadian children's fitness tax credit. This is a $500 tax credit for a parent, but again, it is only worth $77.50 because it is multiplied by the lowest tax rate. A parent would actually receive $77.50, not $500. The purpose behind this tax credit was noble: helping parents get their kids to become more active. We know that childhood obesity is at epidemic proportions in our country. How do we deal with this issue?
It would be smart to do two things. First, as I have argued repeatedly in the House, and in fact we passed it in this House in 1998, would be a headstart program for children. It could be adopted in the following way. The should call together all the ministers of health and the ministers of education from across Canada and tell them they should be providing this program for all children up to and including grade 3. Parents would be allowed to go into the class once every two weeks for two hours, if they wanted to, and they would deal with issues such as physical education, literacy and nutrition. Parents would be working with their kids on these three important things.
Literacy and physical education would be used, along with proper discipline, proper care and nutrition. This would have a profound impact on the lives of these children. The pillars and benchmarks would be laid for a solid individual in the future. Prior to the age of 8, neurons in a child's brain are actually quite malleable. They change. What a child experiences at that time could have a positive or negative impact on their future. It would be a smart move if the worked with his counterparts across the country to implement a headstart program.
The other thing that could be done is the implementation of a mandatory physical education program in schools, up to and including grade 11. Mandatory physical education would be very helpful in getting kids physically active during the course of the day.
As I said, it is very important that a budget such as this deal with productivity. I am going to outline a few solutions we could implement that would dramatically improve our productivity and enable us to be really competitive with those giants at our heels right now, particularly India and China.
First, we could reduce the basic personal exemption. Second, we could reduce the lowest tax rate. Third, we have to make sure that we reduce the tax rates on businesses so they are competitive across our country. Ensuring that we have a competitive business tax regime is extremely important.
With respect to surpluses, we should implement the one-third, one-third, one-third rule. One-third would be debt reduction; one-third would be spending on critical areas, which I will mention in a second; and one-third would be tax reductions for businesses and individuals.
With respect to investment, it is very disappointing that the government did not continue the research and development investments that my party made over the last five years. Rx and D is an absolutely integral part of our ability to be competitive. Therefore, I have no idea why the Conservative government chose to dramatically decrease research and development investment. This is one of the pillars of a vibrant and productive economy. Some of that money ought to be going to universities and colleges. Some of it should be used to encourage the private sector to reinvest profits into businesses.
The government should work with the provinces to harmonize the PST and GST to ensure that provincial sales taxes are not applied to business inputs but into their businesses.
The PST in some provinces is exempt from business inputs and in others it is not. The federal government could work with the provinces to ensure there is no PST or GST on business inputs, which would enable companies to make the investments they require.
On education, let us enable our students to get the higher education they require. With costs escalating, I find it reprehensible that individuals in our society are barred from accessing higher education because of the amount of money in their pockets. A fundamental tenet of our country is that everyone has the equal opportunity for success, not equal outcomes but an equal opportunity to be the best that they can become.
The fact that tuition fees have escalated so high and, quite frankly, have become a barrier for some people to access the education they require, is something the government should put its full effort into with its provincial counterparts.
In infrastructure, the government should be adopting the cities agenda that we started. The cities agenda is extremely valuable in ensuring that investments and monies that we have at the federal level will be driven at the municipal level for the needs of local communities. We did that. The agreements were hammered out with the provinces and municipalities and the Federation of Canadian Municipalities was very happy with that. I implore the government to continue with the program.
As the House knows, there are greater barriers to trade east-west than there are north-south. My province of British Columbia has signed a landmark deal with the province of Alberta to dramatically reduce and almost remove the barriers to trade between British Columbia and Alberta. There is no reason that the federal government cannot take a leadership role with the provinces to do this.
How would it work? The , the and the should work with their provincial counterparts to call a trade council together where we put forward the trade barriers, eliminate those that are unnecessary and useless and we move on. It is a major restriction.
I will give one example, which is labour. The fact that somebody who is trained in Ontario cannot work in British Columbia or that somebody trained in B.C. cannot work in Newfoundland is ridiculous. The fact that we are all trained in the same country and yet our skills are provincial specific is an absurd situation. It is a major restriction to labour mobility and a major drain on the ability of our country to be economically competitive. I encourage the government to work with its provincial counterparts to do that.
When we were in government we started the smart regulation initiative, which took a ruthless look at the regulations. We started hacking away at and removing all those regulations that were unnecessary. The groundwork is there. The minister should take a look at this, continue with the smart regulation initiative and reduce those barriers to trade.
My last point is on the issue of immigration. With our changing demographics we know that the ratio between the retired population to worker population is increasing. We can do two things. First, retire the mandatory age of retirement. If the 65 of today is the new 50, why on earth do we not allow people who are 65 and above to work? It is absurd given the demographic changes that we require. These are smart, productive, willing people who want to work. They would be a boon to our economy.
Second, with respect to immigrants, many of the immigrants in our country are working on the margins because they may be here illegally. However, to ensure we honour the law but also enable these people to become integrated into our society and not live at the margins, we should give these people an opportunity to come in from the cold, apply for a worker's permits, give them a two year permit and renew it a couple of times. If they are law-abiding, pay their taxes and are employed, we then give them the chance to become Canadian citizens.
I have provided the government with a series of solutions and opportunities that it can take which would enable our country to be more productive. I am sure the government will find widespread support from across Parliament to give effective solutions to the benefit of our great people.
Mr. Speaker, I am very pleased to speak to Bill , an act to implement certain provisions of the budget tabled in Parliament on May 2, 2006. As we all know, the Bloc Québécois supported that budget.
I am especially pleased to speak to Bill here today because several measures in this bill are quite similar to measures that the Bloc Québécois has been proposing for many years. Consider, for example, the tax credit for public transit passes. I seem to recall that one of our colleagues already proposed in this House a private member's bill that was very similar. Another example is the textbook tax credit. For some time, the Bloc Québécois has been calling for the elimination of taxes on all products and services related to books. This has been done in Quebec. This encourages access, not just to textbooks, but to all literature, regardless of target audience, since we must start somewhere.
Finally, the tax break for microbreweries—in fact, the government has extended it to all breweries—is completely in line with what the Bloc Québécois has been proposing. The Standing Committee on Finance also looked at this issue several times. Bill finally contains this provision, which we have wanted for quite a while now.
There are also provisions to help the next generation. This has been a major concern of the Bloc for quite some time. We even organized a symposium together with the Union des producteurs agricoles on the next generation of farmers. It is important, therefore, to have provisions in the act that facilitate the intergenerational transfer of businesses, although I will have a chance later, of course, to say that much more could have been done in this regard and in other regards as well.
In addition, there are provisions to help apprentices and tradespeople acquire the tools they need. Other provisions help out family fishing firms. Finally, a whole series of tax measures help to strengthen small business, which is the real economic backbone of Quebec. The Bloc Québécois will obviously, therefore, support these measures.
In general, much still needs to be done, but we have a few steps here in the right direction and the Bloc Québécois will vote in favour of Bill .
I would like, first, to describe the bill because it contains a host of provisions. It is important for the people listening to us to understand the full scope of what is in this bill. Basically, there are five main groups of provisions.
The first is a whole series of tax provisions for individuals. Here we find the tax credit for apprentices and tradespeople, an increase in the non-refundable credit for people receiving a pension, the establishment of a public transit tax credit, and an increase in the refundable credit for medical expenses. This first group is aimed, therefore, at individuals.
The second group extends benefits already given to farms to fishing firms as well. The fishing sector is in serious difficulty at the present time. These benefits are therefore very important to us, especially in regions such as the Gaspé, the Lower St. Lawrence and the North Shore. So as I was saying, the second group extends certain provisions previously available to farms to fishing firms as well.
There are various measures dealing with capital gains, the transfer of a business to other members of the family and agribusiness tax benefits.
A third main group of provisions in has to do with various tax measures for businesses including, among others, the abolition of the surtax on the revenue of Canadian corporations and an increase in the amount a small or medium-sized business can earn if it wants to benefit from a tax credit.
A fourth series of legislative changes pertains to lowering the tax rate on capital gains of Canadian banks.
The last series of measures aims to lower the excise tax on the first 75,000 hectolitres of beer brewed in Canada in order to stimulate the growth of this sector and microbreweries in particular. This is an emerging sector that has had significant growth in recent years.
This sector has been growing in the regions also. For example, in the Joliette region, the Alchimiste microbrewery was experiencing difficulties because taxation by some of our European and American trading partners benefited their microbreweries. In the Canadian tax system, no distinction is made between a major brewery—such as Molson or Labatt—and microbreweries.
We will see that the minister has somewhat changed his tune from his initial announcement. It is interesting to note. We will all have the opportunity to comment on the reasons that led the minister to apply this measure not just to microbreweries but to breweries in general, as requested by the Standing Committee on Finance. The lower excise tax will also apply to major breweries as well.
I would now like to come back to the first series of measures: tax measures for individuals. The first measure for individuals introduced in this notice of ways and means and in Bill implements a mechanism allowing apprentices and tradespeople to deduct expenses for certain tools. Deductible expenses may not exceed $1,000 or 5% of the apprentice's annual income, whichever is greater. It also allows tradespeople to deduct up to $500 of the cost of certain tools.
Next, the bill implements indexation of the tax credit for apprentices and tradespeople. The maximum non-refundable credit for some people receiving pension income will double from $1,000 to $2,000. It also creates a $1,000 non-refundable tax credit for employment income starting at $250 for 2006 and increasing to $1,000 in 2007.
It creates a non-refundable tax credit for public transit. To be eligible for the credit, taxpayers must supply a receipt or proof of purchase of a long-term public transit pass. Obviously, this does not apply to daily or weekly passes because we want to promote the use of public transit and relieve congestion on our roads. We could also have talked about meeting the Kyoto protocol targets or helping meet them, but because that word has become taboo for this government, we thought it best not to mention it.
This bill also creates a tax credit for textbooks of $65 per month of full-time study and $20 per month of part-time study. The refundable medical expense supplement will be increased from $767 to $1,000 and continue to be indexed to the cost of living. In addition, the bill will reduce the threshold for deducting medical expenses to the 2005 level. It will then continue to be indexed.
This first series of measures for individuals, some of which are better than others, aligns with what the Bloc Québécois has been proposing over the past few years.
The second group of provisions extends the same tax benefits currently enjoyed by fishing businesses to agricultural businesses as well. Thus, tax measures such as forward averaging when transferring a family business that includes agricultural capital property will also apply to fishing businesses.
The third group of provisions has to do with corporate taxation. The business limit under which Canadian and Quebec small and medium-sized businesses can seek a reduced income tax rate is being increased from $300,000 to $400,000. This will reduce the tax rate for small and medium-sized business from 12% in 2007 to 11.5% in 2008 and 11% in 2009. This measure will allow small and medium sized businesses to generate the liquidity they need for future investments.
This bill will eliminate the 1.2% surtax targeted for Canadian controlled private corporations in 2008, with a subsequent reduction of 0.5% planned for corporate income tax in 2009 and 1% in 2010. As a result, this will translate into a corporate income tax reduction from 22.2% in 2006 to 19% in 2010. These measures should encourage investments, although a generalized tax reduction such as this does not automatically lead to increased investment, as we have learned in recent years.
The corporate tax rate was some 28% in the early 1990s, but has fallen to 22.2%. Despite that, the rate of investment last year was not as high as expected, and Canada has moved down in the ranks in terms of productivity. We are currently ranked 15th or 16th, although we ranked much higher just a few years ago.
These measures are necessary, but are not enough to ensure that the Canadian and Quebec economies regain their former productivity. This is important, as we all know, especially considering our aging population and the knowledge-based economy.
The fourth group of provisions amends the tax rate for banking institutions. A single tax rate will now be applied on the taxable capital surplus of financial institutions, and the threshold at which financial institutions start paying tax is being increased. Previously, banks were taxed according to a sliding scale. For example, corporations did not have to pay tax on surplus capital of $0 to $2 million. Between $2 million and $300 million, the tax rate was 1% and for higher amounts it was 1.25%.
The new legislation amends the tax scale whereby a 1.25% rate will apply when taxable capital exceeds $1 billion. In future, we will have a uniform tax rate at a tax level that is quite interesting, especially for small and medium-sized banks, as I was saying.
The last group of provisions has to do with reducing excise duties on beer brewed in volumes up to 75,000 hectolitres. This new measure amends the Excise Tax Act and the Excise Act, 2001, by implementing a sliding scale based on the number of hectolitres brewed.
As I mentioned earlier, prior to this amendment all breweries, no matter the amount brewed, paid a fixed duty according to the volume of beer brewed. This new measure is favourable to microbreweries. In addition, and this is rather surprising, major breweries will also benefit from the reduction in excise tax payable on the first 75,000 hectolitres produced. I am almost certain that some of these major breweries exerted pressure on the government to have this measure apply across the board. Nevertheless, what is important to us it that it will benefit microbreweries and allow them to compete with American and European microbreweries in particular.
I would now like to comment on our position on these provisions. With regard to the first group, concerning taxation of individuals, as I mentioned, we have been calling for a tax credit for tradespeople's tools for some time. These workers often have to pay for their tools out of their own pockets even if employed by a garage or shop. It is quite a significant expense for them. In our opinion, this tax credit will be a tremendous help, particularly for apprentices who not only have to upgrade their tools but also purchase a basic set of tools.
The second measure pertains to public transit. I mentioned that a non-refundable tax credit is being proposed by the government. I have two comments in this regard. We would have preferred a refundable credit because quite often, people who use the bus, subway or public transit are not well off, do not pay income tax and thus cannot benefit from this measure. Consequently, we feel they could have gone one step further by providing a refundable tax credit.
Naturally, we do not believe that the overall number of users of public transit in Canada and Quebec will increase solely because of this measure. We need much more, particularly in light of the fiscal imbalance, to ensure that municipalities and transit commissions to have the necessary means to provide good service at affordable prices. Once again we support this measure in view of attaining the Kyoto targets.
What about the elderly and other segments of the population such as individuals receiving disability pensions, for whom these benefits represent their main source of income?
We in the Bloc Québécois have always maintained that older people should receive special treatment. Obviously, we would like to go much farther than that. Specifically, we are calling on the government, as we have done for a number of years, to ensure that all older people who qualify for the guaranteed income supplement receive it. A few years ago, we noticed that tens of thousands of people who were entitled to the supplement were not claiming it, because they did not know the program existed. Unfortunately, this is still true. At the time, Marcel Gagnon, the member for Champlain, travelled across Quebec. We were able to locate many people who did not think they qualified for this program. Unfortunately, many people still are unaware that they qualify.
As for the tax credit for textbooks, I repeat that we are not opposed to this measure, but we would have thought a refundable tax credit would be preferable, because students, especially full-time students, usually work only during the summer and therefore do not pay income tax, because they do not have sufficient income. They will therefore not benefit from this measure. I know that students can carry this credit forward, but they are purchasing books now. It therefore would have been preferable to have it now.
I know that the was interested in the suggestion my colleague from made at a meeting of the Standing Committee on Finance to look into this. In my view, it should go further.
As well, we are calling for the abolition of the GST on books. Once again, this is vital for us, especially when we are talking about a knowledge-based economy.
Now, if we look into the second main group of provisions—new measures for fishing businesses—as I have mentioned, we are in favour of the new measure aimed at introducing the same types of forward tax averaging in the fishing industry as for farm businesses. However, we think that this benefit could have been more widely accessible. The measure proposed by the government applies to transfers between people in the same family. We think that the government could have gone further and extended the measure to intergenerational transfers outside the family.
As to the third series of provisions, corporate taxation, as I was saying, we fully support increasing the amount of revenue that would allow small and medium-sized businesses to have access to a lower tax rate. In fact, that was part of our 2000 election platform. The Bloc Québécois will stand up for measures that strengthen our SMEs, especially in Quebec, where the economy is made up of small and medium enterprises.
We are aware that competition exists among different countries and jurisdictions with respect to taxation. We must therefore also reduce the corporate surtax.
However, in the case of oil, there is no danger of relocation because companies cannot transfer the oil supply to China or Mexico. Therefore, we think it makes sense to maintain a surtax for oil companies and to abolish rapid amortization in the oil sands, where all investments can be written off in one year, instead of 25% per year, as is the case for conventional oil and gas. We think that is abusive.
I mentioned the fourth group of provisions, which has to do with taxation of banks. Obviously, the proposed measure benefits all banks, but it could also have an impact on the smaller banking institutions. I would like to remind the House that, as we have said in relation to Bill , we have been trying for many years to increase competition in the banking sector, which is extremely concentrated. Five big banks control nearly all of the activity and do not really offer consumers any choice. The proposed measure will most likely have a positive impact in this respect. Let us hope it does.
I would like to conclude by saying that we are very pleased with the measure to reduce the excise tax for microbreweries. I am certain that the entire microbrewery sector, particularly in Quebec, will benefit from this new measure. Might I remind the House that we have been asking—
Mr. Speaker, this is our last opportunity to put on record the concerns of Canadians about the Conservatives' budget. It is very important to realize that today we are talking about the last stage, the final touches of the first budget the Conservatives brought in following the election. A lot of water has flowed under the bridge since that time. One would think from listening to today's debate, especially after listening to the Bloc, that we are dealing with a very specific set of tax credits that would benefit people and therefore what do we have to complain about.
That is correct.
Ms. Judy Wasylycia-Leis: My colleague the member for said that is correct.
It is more important than ever for us to tell Canadians what the Conservatives want us to pass today. They want Bill to get through the House, into the Senate, and then to receive royal assent so all is finished and done.
Today we are deciding on whether or not the Conservative budget should be given any kind of support and treated with any sense of credibility and integrity.
I remind members and all Canadians who are watching that we are dealing with a budget that was an absolute missed opportunity for the vast majority of Canadians who are struggling to make a living. Canadians want to provide for themselves and their families. They want to contribute to this great country. They have much to offer by way of talent, energy and expertise but are being denied from doing so because of the regressive and repressive policies of the current government, and the governments before it, that keep working families down, that do not lift them up and encourage them to contribute.
This holiday season it is more apparent than ever what kind of a Canada the Conservatives and the Liberals together are creating. It is important for us to remind Canadians that there is an alternative, that there is hope, that there are other ways to approach the way budgets are done and the way this country is ruled and regulated.
The New Democratic Party has always said when it comes to budgets that they are a road map. They are an indication of where a government wants the country to go. We look at this budget in terms of how it would build a better future for everyone in our society.
We have always said it must be a balanced approach. We are not here to suggest all extra revenues should go into spending programs. We are not here to suggest there should never ever be a tax cut to anyone in our society. Nor are we here to suggest that no money should go against the debt. We are here to say that a good budget, one which we were hoping the Conservatives would have brought in, would actually balance those competing demands and would ensure that all areas were recognized and treated responsibly. That means addressing the shortfall in those programs that actually help people make a difference. It means redressing the 13 years of the tightfisted, budget cutting, meanspirited ways of the Liberals.
A good budget would ensure that a portion of any surplus, not all of it, not the whole kit and caboodle, but a portion of it went against the debt.
A good budget would look at the income distribution in this country, at which groups are trying to make ends meet, and ensure that where possible some tax relief went in the direction of people who need it the most.
What did we get with Bill ? A budget that basically ignored all of the needs of Canadians in terms of health care, child care, housing and the environment. It gave more tax breaks to the wealthy and big corporations, and in the aftermath of the budget the government put every penny that was left in terms of surplus against the debt.
Canadians did not get the balance they were looking for. They did not get the good government they thought they were getting when the Conservatives were lucky enough to form the government of this country. Much as Canadians are very skeptical about Conservatives, after 13 years of Liberal rule, they were certainly looking forward to some sort of change and had some optimism about the future, but they were sorely disappointed. We have to continue to find ways to address those concerns.
Let me also say that since this budget, as I mentioned at the outset, a lot of water has flowed under the bridge, lots and lots of water. Included in the list of things that have flowed under the bridge is $1 billion worth of cutbacks that have hurt Canadians in very many ways. It is something that has to be addressed in this context because we are talking about a budget and we are talking about the future.
When the Conservatives had a chance to redress some of the wrongs of the Liberals, to right things and to bring balance, they chose to follow the Liberal path of letting the surplus build up, not announcing it and dealing with it before the final days of the end of the fiscal year. Consequently they put $13 billion against the debt and at the same time cut $1 billion out of programs and important areas for Canadians. I want to reference a couple of them, because we need to go back and persuade the Conservatives to right a few wrongs.
The first has to do with literacy. As I have said over and over again, how could a government, if it is concerned about giving people the tools they need to contribute to this economy, cut the very ground out from under those people? How could it destroy the very things Canadians need in order to gain the skills to participate fully in this world?
Time and time again, the Conservatives have suggested that the cutbacks to literacy were all administrative.
It is true.
Ms. Judy Wasylycia-Leis: The member for said it is true. Unfortunately, he has been given a bill of goods by the human resources minister, because it is absolutely not true. The government has proceeded to cut the heart and soul out of programs that actually deliver services to Canadians.
I want to reference about 200 letters, all of them handwritten, from individuals who have benefited from programs that provide literacy and numeracy training. I want to read a couple of them so that my friend from and his colleagues will have a better appreciation of just how hard people are being hit by the Conservatives' actions.
In this first letter, the writer is referring to the Luxton adult learning program.
This program (the Luxton Adult Learning Program) means that I am able to keep my job at the Health Sciences Centre in Winnipeg. In August 2004, I was granted the privilege of an interview after many years of trying to gain employment into their many different medical secretary fields. I attended the University of Manitoba and Herzing Career College as a mature student. After searching for years on Winnipeg's adult literacy programs, I found the Luxton Adult Literacy Program. It was the right and beneficial program for me. Let me explain.
After graduating with a diploma in hand from Herzing Career College in 1986, I worked for sole proprietors, small clinics and the Misericordia General Hospital. I did not need my grade 12 or the GED program at that time. Therefore, the Luxton Adult Learning Program was not a concern to me....
Life hardships and experiences played the role of hindering my success at obtaining employment at the Health Sciences Centre....
The environment is at a children's school, and the instructors are mature adults like myself and other students. Every student comes into the program for their own private reasons, which are kept confidential....Every student learns at their own pace of learning....It is a secure, safe environment and offers a professional environment to learn. Most every student feels the same way.
This person accessed the adult literacy program at a school in my riding. As a result of that, she was able to go on and get a job, secure employment, and gain the confidence to participate in all kinds of ways offered by our society, which had been denied to her up until that point.
Many others have expressed the same thing. Here is one from April:
I am in this program for my reading, writing, spelling and math. I am doing good on all of it but I hope to get better on all of it. If this program was not here I would feel bad because I need the help I am getting in this program.I need the program to help me on all the things I need help on.
Let me read a couple more:
My name is Elsie and I am nineteen years old and I'm writing this letter to you because I want you to know what it means to me to come back to school. When I was a young teenager in high school I had a hard time. I didn't have many friends and a lot of people there were so mean to me they would tease me and bully me around all the time. It got to me to the point that I just dropped out. I thought that it would be ok for me not to have the education that I should have had when I was younger, but one day I tried to get a job and I was told that I didn't have the education that was required for that job. So that's when it hit me that I needed education. If it wasn't for the program Literacy, upgrading, and the funding from the government, then I don't know what I would do. It means a lot for people like me to be able to come back to school and be able to get the education that we need. I feel a lot better knowing that I can get the education that I need. I feel like a new person and that I would be able to get a good job and have a stable home for my family.
I could go on. There are hundreds of those letters, all written personally. They are all real stories of real people who are being hurt by the government's cutbacks.
If there is anything I could do today at this time of dealing with budget matters it would be to try to persuade the Conservative government to go back and look at what its cuts to literacy programs actually meant and did. If there was administrative stuff that could be cut out of the program, so be it. The member for does not seem to get that what the government did was not just cut extras and things that were not about direct services; it cut into the very heart and soul of programs that helped people help themselves.
Another good example is in the area of women's funding and women's programming. The Conservatives said that they are cutting away any extra administrative costs, that they are taking the money that was going into administration and putting it in the hands of people, into the hands of women.
In reality, that is a good cover for a cutback that is directed at an important group in our society who should be fully participating and cannot because of systemic discrimination and a whole variety of factors. They are not people who want a handout from the government. They want to access these programs that help them to become full participants in our society. That is what is wrong with the cutbacks in the Status of Women file.
It is ridiculous for the minister, as she did yesterday when the huge demonstrations took place, to suggest that she is not hurting women. She is hurting women. The government is hurting women's groups that are providing services to help women deal with some very difficult situations.
I think about my own riding of Winnipeg North. The North End Women's Centre has done so many projects to help women who are at the very bottom and are almost giving up completely. The centre helps them get on their feet and start again. One of those projects is Money & Women, to help women get ID so that they can access a credit union or a bank. It helps women figure out how they can avoid being ripped off by payday lenders. That is an important service.
Why does the government continue to cut back the heart and soul of this country in terms of our values of caring and compassion?
I want to touch on an issue that was part of this budget and it is the money that was gleaned out of the system by the NDP when the Liberals were in power in their minority year. It is money that was approved by Parliament for education, housing and the environment.
While we have been going through this debate, the Conservatives have taken great delight in all this money they are expending in these areas, without mentioning that the money that has been put in those areas is the money that happened as a result of NDP pressure during the Liberal minority government.
The only new money in this budget for education and housing is a result of the bit of money we were able to win from Parliament as a result of the minority situation. We expected that money to not only flow, which the Conservatives allowed to happen, but we also expected that there would have been something in addition, that the Conservatives would want to build on those initiatives which actually help people access important programs that make a difference, whether it be education services or affordable housing.
Let us be clear that what we need to do is not simply take credit for other people's hard work. I do not care who gets the credit for this, but the Conservatives should not simply sit back, say they have put money into trust funds and now they can rest on their laurels and not do anything. The fact of the matter is there are many communities that are desperately in need of some support, particularly in the area of housing. It makes no sense to anyone why the government would simply take that money, put it in a trust fund, wash its hands of it and say it is over.
I can reference a local situation. Folks in the House will know about Gilbert Park, a housing project in northwest Winnipeg which was on the news very recently. A fire was started by young kids who tried to put a child with a disability into the burning building. It made the news. The community is working hard to overcome some very difficult situations, but it really needs a federal government that is willing to partner with it to renovate the houses people live in and build the kind of community that will prevent that kind of delinquency on the part of young people.
We are talking about a housing project where almost 50% of the population is under the age of 18. Can anyone imagine? This is a community that is living in almost abject poverty and half of the population is kids. There is no money for crime prevention programs, cultural programs or women's program because the government, like the government before it, believes that if it gives more tax breaks to corporations and the wealthy it will trickle down and somehow, somewhere Gilbert Park will reap the benefits. It does not work that way. It just does not happen. It defies all logic and has no basis in fact whatsoever.
We need a government that balances the need to be fiscally responsible by ensuring every year some money goes against the debt. That we support. We need a government that is willing to take some of the surplus dollars and put them into communities and programs that actually help people overcome problems, many of which are beyond their own individual responsibility and control.
That is the role of government in the final analysis. That is the essence of what we are here for. We are here to ensure that people are given the supports they need to help themselves. If we fail that, then we have misunderstood our responsibilities, we have denied Canadians their right to access a good parliamentary process, and we will have in fact only ensured that we are negligent in the final analysis.
It may be too late to stop this bill given the fact that the Bloc are supporting the Conservatives, but I would urge the government to look at real people, real issues and the reality of Canadians, and start to turn these situations around.
Mr. Speaker, I am pleased to speak to Bill , which is the second bill to implement certain budget provisions.
What concerns me is the government is not speaking to its own bill. A budget is important to Canadians and there are many important provisions in the legislation. A lot of work has gone into it. It is as if there is no need for the government to explain to Canadians what happened as it went through committee, when various witnesses were heard. Surely, some witnesses must have had some input into the various provisions.
Let me remind hon. members about some of the proposals in this second bill to implement certain provisions of the budget.
One of the proposals is the new Canada employment credit. I wonder if there was any questions about whether anybody would slip through the cracks. All of a sudden we have an income tax system which has some principle and some balance to it. It is a progressive tax system where the ability to pay is taken into account. We understand that some Canadians do not even make enough money to pay any income tax.
Another proposal in the legislation is the textbook tax credit. I do not know whether there will be any input with respect to this.
With regard to the transit pass tax credit, I have to wonder if there was any input on this. This credit is linked to the whole issue of our environmental policy with respect to greenhouse gases, smog emissions and the like and to get people to be more cognizant of their options to make a contribution. Individuals have a contribution to make. The Conservatives have not risen to reinforce why they think this proposal is one of the best ways to go and what it adds in terms of the whole scheme of our environmental policy.
What about the new deduction of tool expenses for tradespeople? Who is left out with respect to this deduction? I know some people have been left out because they do not qualify under the definitions. Did they go before committee?
How can we make an informed decision and vote on a bill if members do not defend it and show how the budget and the budget bill address the needs of the most number of Canadians possible?
There is also the exemption for scholarship income received in connection with enrolment in an institution, which qualifies a student for the education tax credit. How many people qualify for that exemption? What else has been done to ensure that those who cannot afford to go to university get to go? I understand it is important to promote excellence, but have we also balanced the need to promote access and affordability?
Another proposal in the legislation is the children's fitness tax credit. I do not know very much about it. It is a modest amount. I am not sure whether there were some concerns about it.
With respect to the pension income credit, the government has subsequently come up with a scheme of pension splitting. This will help certain Canadians. Canadians with a pension income in excess of about $35,600 will be able to split with a partner or a spouse who has less income. However, it does nothing for people with a pension income of less than $35,600. This does nothing for people who do not have a partner.
We are shifting the burden of taxation here and I am not sure of the objective of the government. I have not heard from any Conservatives. They have not spoken to the bill. They have not explained why these things are happening. They have not told Canadians their vision. How do the Conservatives see this unfolding? I cannot explain it.
Another proposal in the bill is the extension of the $500,000 lifetime capital gains exemption and various intergenerational rollovers to fishers. I certainly understand this proposal with respect to the fishery because it is a very important area. I would have hoped somebody from the Conservatives would have spoken about why this was necessary, why the extension of the exemption, and how it translated into meeting the objectives of the Government of Canada on behalf of Canadians, particularly in this sector.
We also have the apprenticeship job creation tax credit. Apprenticeship training has been a priority of every government since I have been here. It is extremely important, but I do not know whether we have done enough on the apprenticeship side. I would have hoped somebody from the Conservative government would have made the case on behalf of those who were seeking to build on their skills so they could be contributing members to society. We did not hear any of that, and I am not sure why.
We have the reduction in the current 12% small business tax rate from 11.5% for 2008 to 11% thereafter. I am not sure whether Canadians understand what a small business is compared to another type of business. However, we do know one thing. Historically, small businesses have contributed to employment growth at a much greater rate than non-small businesses. How will this translate? Are there benchmarks and targets and what does it do for small business either in reinvestment or in further expansion and job creation? Those are important issues to Canadians. Not one Conservative stood and talked about why this was important, how it translated in terms of the vision for Canadians for economic growth, sustainable development and other issues. No interest whatsoever was expressed by Conservative members, and I do not understand it.
We also have the increase to $400,000 from $300,000 of the amount that a small business can earn at a small business tax rate effective January 1, 2007. As a chartered accountant, I know the $300,000 was there a long time ago. We have the magnitude of dollars, the expansion of businesses and start-up costs for businesses. The ability to get a sustainable business going is important.
I am concerned about what is not in this budget bill nor the first one, and that is new dollars for the health care wait times guarantee. It was one of the five promises in the throne speech of the government. In today's media Canadians will be able to read how the minister said that we were operating in a vacuum, that they had no idea how it worked and how to get there, but they would study it and maybe figure it out. How can they make a promise during the election campaign to do something about which they have no idea?That is totally irresponsible.
It is about time some Conservative members stood in this place, spoke about the budget and stood the test of scrutiny of questioning by hon. members of other parties to ensure they know what they are talking about. There is no evidence of that right now.