Speeches | Jobs and Economic Growth Bill – Sixth Report of National Finance Committee Negatived

21 July 2010

Honourable senators, I, too, am happy to have the chance to participate in this debate. I echo what has been said about the excellent work done at committee by Senator Day and Senator Gerstein. I have had a number of experiences like this while I have been in the Senate where something special needed to be done, where there was a sense of purpose about an important issue and people came together and worked very effectively at a very high level. I hope that I speak for most of us in this house when I say that in all of our careers you do not often have that kind of experience. I appreciate having been part of it.

This all started because many senators on the other side said that we did not need to review this budget bill and should just press it through rather than causing delay and cost to the economy.

Do you know what I noticed day after day, hour after hour? Not too many Conservative senators over there were without ideas, statements or questions that they felt needed to be asked about those bills. I get a competing message here. On the one hand, they are saying we did not need to do it, and, on the other hand, there is lots of participation, good ideas and intensity on the Conservative side of that committee. Thank you very much to that side of the committee for helping us do the job that needed to be done, and I think it has been done very well.

When we started this process, when we started talking about splitting this bill and what was an omnibus tax bill and who out there in the public would know, I thought about how prorogation ignited a huge segment of the Canadian population. Somehow they began to understand this esoteric notion of parliamentary procedure — prorogation. It is also true that Canadians are beginning to understand this esoteric idea of an omnibus bill that somehow can hide things and put them through without people knowing. As a result of our work, Canadians did grow to know this.

In a more general sense, Canadians are also getting the idea and have the capacity to understand, value and appreciate their parliamentary procedure. Across this country, many people are deeply offended by what this omnibus bill meant to the legislative process, about what it means for the future, and about the dangers inherent in government trying to govern by bullying the parliamentary legislative system in a way that it does not deserve to be bullied.

As an example, I received a petition from CUPW in Lethbridge, Alberta. I am sure everyone who signed this petition will be known by our colleague from Lethbridge, Senator Joyce Fairbairn. I cannot present it officially because it was not presented to us quite properly. It was proper but not in the parliamentary procedure sense. I want to read something that all these people said: "All four provisions identified in committee as being inappropriate for inclusion in a budget bill should be considered individually and stand or fall on their individual merits, while the budget should be a budget, not a stalking horse for any odds and sods the government of the day chooses to tack on to a larger, unrelated bill." I do not think it could be said better. They said it very well, and there is a lot of support in this country for that kind of sentiment. Good for them.

Speaking as late in this debate as I am, and as much as this is one of the broadest smorgasbords of delicious issues that you could imagine in a debating process, the issues have been picked over and I will try to not duplicate what has been said. I will try to talk about a few things and a variety of issues and bring them together in a different way and add something to the debate.

A number of issues in here affect small- and medium-sized businesses in a detrimental way, in that they are either exacerbated or the problem is created or the problem certainly is not solved by this bill. I want to single out a few of them just to demonstrate, because I think it is a trend here. The government says it believes so strongly in small- and medium-sized businesses and the private sector and that it does not believe in taxes, that it hates taxes. Actually, when you begin to analyze, as we did for all these weeks, neither of those things are true in the government's actions.

We had a section on Employment Insurance. During our study, it became very apparent, particularly from the small- and medium-sized business association representatives, that the single worst thing that you could do to business out of a number of choices to impede their ability to invest, expand and create jobs is an employee tax. In fact, they referred extensively to the fact that the government is allowing EI premiums to go up over the next five years automatically. They say that is always a bad thing, but it is particularly a bad thing at a time like this when the economy, although it has recovered to some extent, is not recovering with real vigour and intensity. It is recovering in a way that is at least questionable. If it is to recover vigorously, we need to have small- and medium-sized business prepared to hire people, to expand their businesses and to do the research and development that inherently requires people. They are arguing that EI is an employment tax, that it is the worst thing that could be done to business, and this budget allows it to occur.

Senator Day referred to the fact that it appears that certainly the groups we heard from would bear out that the government did not give manufacturers what they wanted, which was an extension of the accelerated capital cost allowance. Instead, they brought in a selective or customs tariff reduction. Clearly the manufacturers would not mind having both, but their preference was absolutely for the capital cost allowance. Business made a very powerful case that not only is this more effective than the customs tariff, but it is actually cheaper than the customs tariff and is less interventionist because every business gets to make the write-offs and the decisions that would allow those write-offs to occur, and it is more broadly based and deeply rooted in the economy. Small- and medium-sized businesses made the point to government that that would be their choice. Government did not come through for business in that way.

Then we have this retroactive GST tax to which Senator Moore alluded. Again, it affects largely small- to medium-sized business and independent financial services professionals. These are people who are broadly spread throughout the economy. They are directly confronted by what is almost unheard of and incomprehensible — a retroactive tax. I said to one of the Conservative senators, "Not only have you figured out how to raise taxes, but you figured out how to raise them for 20 years in the past." That is pretty good for a government whose philosophy says it is deeply implanted in this idea of not wanting to have taxes.

The next item is intriguing. It was supposed to be called the airport travellers security charge, but the minister actually called it what it is, and that is the airport travellers security tax. What is that? It is a fee levied on all airports and air travellers. The government will increase that fee by about 50 per cent, I think. I am sorry, 52 per cent. I did not mean to shortchange it. It will be increased by 52 per cent. There are those who would argue that it is not a tax but a fee and will go to provide security. It is interesting that over one third of it will not go to provide security at all. A third of it will go to general revenues. If you have a levy or a charge that goes to general revenues, it is not a levy or a charge; it is a tax. The fact of the matter is that it has gone up 50 per cent. About $225 million a year for the next five years will be levied in this tax. It will not go to make airport travel safer. It will go to general revenues. The government says it does not like taxes. You can call them whatever you want, but a tax is a tax is a tax, and this is a tax and it has been increased significantly.

Not only that, but Canada will now have the highest international travellers levy in the world — number one in the world.

Senator Cordy: Higher than Tel Aviv?

Senator Mitchell: Absolutely. Maybe it will go to subsidize the $1.1 billion security for the G20 and G8 summits. Maybe that is what they had to do. I do not know. However, it will be the highest in the world.

One of the senators in the committee was very aggressive, as he can be. He was going at these witnesses and saying, "When you get off the plane, you know that you will be safe." Okay, so we need this tax, but you are not paying it for security. Not only that, but all those countries that are charging less — every last one of them, because they are all lower than us — are they not as safe? When you get on an American airline, is it not as safe? It does not charge as much for the international fee. Is Lufthansa not as safe? Is El Al not as safe? They all charge less, so there is not a direct relationship between what you charge and what you get in security. It has something to do with how you manage it, but I wonder if they call it a tax. I wonder if in those other countries it goes to general revenue or stays in security. I do not know. What I know is that it is very misleading to call it a levy and put it into general revenue.

It does not help Canadian business because as the tourist people said, we have a high dollar, which is hard on tourism. We still have a reaction to terrorism, which is hard on tourism because people, particularly Americans, are not travelling. We have a soft recovery in the recession. The travel industry has been hit on all fronts, and now they will be hit by this increased tax. One of the witnesses said that a 1 per cent increase in the fare for a ticket causes a 1 per cent drop in travellers, and a 1 per cent drop in travellers is a serious matter when it comes to people coming to Canada. In Alberta, tourism is the third largest industry, and it is being diminished by the failure of policies like this.

Then we get to Visa fees. A section in this bill sets up how they will be able to manage Visa, charge and debit cards fees more effectively. What they have said over and over is that it is just a first step and that what they really need is a reduction in the fees. Who is getting the fees now? Big banks are getting the fees. Who has to pay those fees? Small- and medium-sized businesses have to pay the fees. Why could the government not have done what really mattered, namely, reduce the fees right now? Why would it not do that? What set of interests did the government pick? It has picked big business over small- and medium-sized business. That seems to me to be absolute anathema to the government's fundamental values.

When you add all those things up, this budget is not all that good for small business, creating new jobs, hiring people, et cetera. I wanted to point that out for a different point of view.

Another section that has been alluded to deals with credit unions being made into national banks, which is probably not a bad idea. We certainly all like competition and growth. There is the issue of who then takes care of the smaller local community markets where credit unions have been so important and significant for so many years in the development of communities. With that aside, there is probably a strong argument for growing credit unions to go national one way or the other, but here is the rub. The testimony from witnesses was that when a credit union goes national, the liability — that is, the assets held by that credit union — will now come under CDIC, the Canada Deposit Insurance Corporation. It becomes a federal liability. If that bank ever goes down and someone has to pick up and pay off your $100,000, then that liability is no longer a provincial liability, where the credit union was; it is a federal liability.

I immediately thought that they would transfer the premiums paid by those institutions and the growth on those premiums, which are the insurance funds, to cover that CDIC-like insurance at the provincial level. Do you know what they said? They said no. What kind of business would take on a liability and not take on the asset to help cover that liability if it existed? It is incomprehensible. There was no explanation for why they would do that. It was impossible to understand why they would do that, but that is exactly what the Government of Canada will do. I sat back and thought that if they can do that, I can finally understand what kind of psychology drives us to a $57 billion deficit. It is not a big leap. It says something about the ability to manage and understand these complex issues, and I do not think they do.

All kinds of people have been talking about how the bill will reduce the scope of environmental assessments. We know that. It means that review of the climate change effects of major projects can and probably will be excluded. It means that this legislation is excluding broad swaths of projects. All of the stimulus program projects have been excluded from climate change, just like that, in a sweeping decision in this legislation.

Finally, to emphasize Senator McCoy's point, at a time when the world is going after Canada for some of its environmental image and its environmental reputation, we need to do something about strengthening that. We cannot do that just with the ads you see on bus stops in Ottawa and the newspaper ads in the National Post; you have to do much more than that. You have to be serious, and you have to be right. When you start to erode environmental assessments, you are neither serious nor are you right about that important issue.

Mr. Waxman, a very powerful Democrat, just said that he was going to oppose the extension of the Keystone bitumen pipeline to the United States, which hurts Alberta. Fifty members of Congress stood up two weeks ago and said they were opposing the purchase of oil sands oil — they did not call it that — to the U.S. We have a problem, and this will make it worse.

The argument has been made by government that they had to change the environmental assessment because it delays projects and hurts the economy, but the testimony was that it does not delay projects. There is very little evidence that environmental assessments delay projects. Land claims delay them; interest rates going up delay them; oil prices going down delay them; labour shortages delay them. All kind of things delay them, but environmental assessments are not likely one of those things. Those changes are there because it is a question of who gets the money, and that will be bigger business.

As for AECL, Senator Ringuette made a good point. We are talking about $8.5 billion to AECL over decades. Even if you put that into today's dollars, it is $19 billion, yet the government in a single year gave $15 billion or $20 billion to the auto industry to save the same number of jobs. They are not necessarily high-tech futuristic jobs. They are worthy of saving, but AECL is looked at differently. It is difficult to understand. Maybe it is the politics of the issue.

When you look at the figures, no one is talking about the revenues that have been collected by AECL over all the years for the services they perform, for the power plants that they have sold, for the isotopes that they have sold, for the securing of waste and so on. It is very unfortunate that this government will privatize AECL without any indication of a plan for what to do to keep our hand in it, to provide leadership, to provide the kind of government activity and involvement that is required to make this type of product — CANDU reactors and other reactors — sell in a complex international energy market.

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