[English]
I ask that it be referred to the Standing Committee on Justice and Legal Affairs.
This is an interim report on the issue of a victims bill of rights. Pursuant to Standing Order 108(2), your committee has considered the subject matter of Motion No. 168, a victims bill of rights, and has agreed to report it with recommendations.
In doing so, we ask for a response as soon as possible from the Government of Canada with respect to this important matter.
I bring to members' attention the Crane story which will be tabled with the report, which is a report on the first of the Braille libraries set up in Canada. I commend the reading of this marvellous story.
I would like to thank the members of the subcommittee, particularly the member for Bellechasse who, in my view and in the view of the committee, has done an exceptionally good job in preparing the report for the committee. I thank him for his good work.
[Translation]
This report deals with our review of Chapter XVII of the September 1996 report of the Auditor General of Canada, as it relates in particular to Human Resources Development Canada, the Canada Pension Plan and the CPP disability benefits program.
The report contains three recommendations, which are: first, that, as part of developing an official quality assurance program, the department establish performance indicators to help determine the extent to which program objectives were achieved. These indicators are to be included in the department's April 1998 progress report to the committee; second, that more information be shared with workers compensation boards, provincial social services and private insurance companies to increase the program's efficiency; and finally, that the department consider the possibility of intensifying its efforts with respect to rehabilitation to make the program more widely accessible.
Pursuant to Standing Order 109, the committee requests that the government table a comprehensive response to this report.
[English]
we draw the line?'' It is the third report of the Standing Committee on Human Rights and the Status of Persons with Disabilities.
We all know that privacy is understood to be the right to be left alone in our society, but in the technical age in which we now live there have been many changes. This report brings to our attention issues about which we should all know.
In accordance with the committee's permanent mandate under Standing Order 108(3), your committee has agreed to conduct a study on privacy rights and new technologies, report its findings with recommendations and, in accordance with Standing Order 109, the committee requests a government response if and when this government returns to work.
This report is the first report of the subcommittee on international financial institutions relating to the development and effectiveness of World Bank lending programs.
I would like to express my appreciation to my colleagues on the subcommittee.
This interim report begins the study of what can be done to ensure that World Bank lending and its programs meet the needs of the world's poor and satisfy the concerns of taxpayers in Canada and elsewhere in the developed world.
The committee requests that the government table a comprehensive response to this report within 150 days of its presentation to the House, in accordance with Standing Order 109.
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I would like to thank Santosh Sirpaul, clerk of the committee, and Margaret Young, researcher from the Library of Parliament, for their devotion to the task and the fantastic job they have done. I send my best to all the members of the committee for their devotion to the task as well.
[Translation]
Mr. Osvaldo Nunez (Bourassa, BQ): Mr. Speaker, with regard to the Bloc's minority report on the admission to Canada of temporary foreign workers, we agree with the main thrust of the majority report. However, we have some serious misgivings regarding this document. Unions were not invited to take part in the consultations. In addition, the report does not pay enough attention to the astronomical unemployment rates in Canada and Quebec, especially among young people.
We decry the fact that companies spend so little on manpower training. Moreover, companies should improve the work place environment, working conditions, and salaries to prevent highly skilled workers from leaving Canada for the United States. Finally, foreign workers should only be allowed in for a few years, not indefinitely. The regular immigration system should take care of the shortage of workers in the high tech industry.
(Motions deemed adopted, bill read the first time and printed.)
He said: Mr. Speaker, I have the pleasure to rise in the House today to present a private member's bill entitled ``An act to amend the Canada Transportation Act''.
The bill calls upon Parliament to allow for the appointment of a grain transportation administrator whose duties would be to monitor grain transportation performance and to apply a scheme of sanctions against those who fail to meet established service obligations.
The primary purpose of this bill is to ensure that grain transportation participants fulfil their obligations for receiving, carrying and delivering wheat and barley from western Canada.
(Motions deemed adopted, bill read the first time and printed.)
[Translation]
That the third report of the Standing Committee on Public Accounts presented on Monday, October 28, 1996, be concurred in.He said: Mr. Speaker, I would first like to inform you that I will be sharing my time with a colleague and that my motion is supported by the hon. member for Laurentides.
I am pleased to speak today to a theme that will play a major part in the next election campaign, that is, the integrity of this government.
Speaking of which, the report we are discussing under this motion deals with the famous family trust scandal, as you may recall.
What exactly was done in this matter? As chairman of the Standing Committee on Public Accounts, I must say that, unfortunately, our committee was not able to get to the bottom of what really happened.
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Let us put the facts in their context. On December 23, 1991, a date that sets off an alarm as to how a taxpayer can get an advanced decision on December 23, 1991. It quickly raises a certain question. So, two taxpayers were able, with Revenue Canada's permission and blessing, after asking the advice of the finance department, to transfer $2 billion in family trusts to the United States.
I said that this government would have to account for its morality or its integrity. We in the Standing Committee on Public Accounts wanted to shed some light on that issue. Since the very beginning, the Bloc members on this committee have asked that an independent inquiry be conducted so that Canadian taxpayers can find out what really happened on December 23, 1991.
Even though, as representative of the official opposition, I chair the committee, it has to be explained to people watching our proceedings that the official opposition does not have a majority on the committee. The Liberal majority on the committee literally gagged the Bloc members.
Mr. Speaker, could you ask the chihuahua from Vaudreuil to go yap outside the House?
The tabling of this new report by the Liberal majority on the public accounts committee about the family trust scandal is in keeping with the government's cover-up of a financial and tax scandal unprecedented in Canada.
The Standing Committee on Public Accounts had to shed light on the nebulous events surrounding the advanced ruling delivered on December 23, 1991, leaving the finance committee to deal with the technical aspect, that is to say, the tax changes needed.
Soon after that scandal was uncovered by the Bloc Quebecois, which followed up on the report of the Auditor General, which party raised that issue in the House of Commons? It was the Bloc Quebecois. This is a very good illustration of what we are going to tell Quebecers during the next election campaign: ``It was a good thing the Bloc Quebecois was there to uncover this scandal because if, instead of 54 members of the Bloc Quebecois, we had had 74 Liberal members out of 75, as we did in the 1980s during the Trudeau era, this issue would never have been raised''.
This is yet another good reason for Quebecers to elect a strong contingent of Bloc members to defend Quebec's interests and to point out inequalities and injustices in the Canadian federal system.
The day after this scandal came to light, several Liberal members of the committee were outraged by the actions of Revenue Canada and the Department of Finance. These recalcitrant Liberals soon went back to the party line of doing everything possible to protect the interests of those in very, very high places.
I ask those listening from the comfort of their homes to try to imagine, the day before they file their tax returns next May 1, that they have a way of hiding $2 billion. Are these ordinary taxpayers? Are these single mothers who are able to hide $2 billion tax free? No, these are not ordinary people.
An hon. member: Not even $100.
Mr. Guimond: Exactly, they would not even hide $100. For every hard won cent the average citizen earns, the government is right there grabbing half of it. The public will remember this during the next election, and the public knows that the Bloc Quebecois also defends the interests of the middle class and of disadvantaged members of our society.
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To justify its ineptitude and its lack of courage, the Liberal majority maintains that the committee found no element for which to cast doubt on the integrity of bureaucrats involved in the making of this premature decision. This is incredible. This is extraordinary.
Liberal MPs are being hypocritical and even naive in pretending to be able to pass judgement on the integrity of the bureaucrats involved. All of the Liberal MPs' actions during the committee meetings were a shameless attempt to bury the affair by trying to conceal the facts.
Numerous other examples make the list of inconsistencies, inexactitudes, lapses and differing versions even longer. From the outset of the committee's work, the Liberal majority, blatantly
manipulated by the government, prevented the public accounts committee from shedding light on the entire family trusts scandal.
The majority report is the crowning achievement in this blatant effort by the government to bury this scandal and to silence the truth in order to protect themselves. What we said during the 1993 election campaign, and will repeat during the next one, is that the Liberals and the Conservatives are like Tweedledum and Tweedledee. Put them into a hat and pull one out, there is no way to tell them apart.
Let us not forget that this family trust scandal happened in 1991, when the Conservatives were in power. Let us not forget that. We said to the Liberal majority: ``Why do you not let us bring this fully out into the light? You have nothing to gain, but do you have something to protect?'' Let us ask the question. Let us remember the 1993 election campaign, with its $1,000 parties at Senator Cogger's in Westmount, the fund raising parties attended by the present Prime Minister.
That is why, when campaign contributions are being examined, we say ``Look at who is contributing to your campaign fund, and then you will know whom you are beholden to''. We in the Bloc will be collecting funds for the next election campaign from ordinary people, $2 here, $5, $10 or $20 there. Our election campaign will not be funded by big business. Whom will we be answerable to after the next election? To the ordinary people who contributed to our campaign fund. We owe nothing to big business. Look at who is behind the funding of the Liberals, of the Conservatives. They are no different one from the other.
That is why with this dissenting opinion we, the Members of the Bloc Québécois, make the following recommendation, and I quote: ``That a special commission of inquiry be set up, independent of the government, with the mandate to shed light on all of the events surrounding the December 23, 1991 decision and the subsequent use of this tax loophole by other rich Canadian families''. That is what the Bloc Quebecois thinks.
To conclude, without a neutral investigation, free from all partisanship in the Liberal government, this scandal will never be brought out into the open. If the government has nothing to hide, no one to protect, nothing to feel guilty about, as it says, what is stopping it from putting such an commission of inquiry into place, one which will certainly absolve it of all blame? Or so the government has been telling us over and over for the past six months.
Once again, I must conclude that, unfortunately, the Liberal majority has gagged us in the public accounts committee, and again here today we are unable to tell Quebecers and Canadians what actually happened in this family trust scandal, where two rich families were able to transfer $2 billion to the United States without paying any income tax.
Mr. Réal Ménard (Hochelaga-Maisonneuve, BQ): Mr. Speaker, first of all, I wish to pay a glowing tribute to my colleague because he worked so very hard. He is the fiscal conscience of this party. Unlike the hon. member for Vaudreuil, he will be able to rest easy tonight because he did his job.
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The question I wish to put to my colleague is this: Could he explain, with his usual clarity and expertise, why the Liberals refused to shed more light on an appalling situation? Everyone in this House knows we are talking about the flight of capital, tax evasion and protection. Do members of parliamentary committees not have an obligation to report on these matters?
I want to ask the hon. member how our Liberal colleagues could be so lacking in integrity, transparency and a sense of values?
Mr. Guimond: Mr. Speaker, I want to thank the hon. member for Hochelaga-Maisonneuve for his very pertinent question.
When answering this question, we should consider that the names of the two contributors to the campaign fund were never released. The Globe and Mail reported the story. I am not going to repeat what it said, because we have no evidence.
However, we need only look at the main contributors to the Liberal and Tory campaign funds. When we see companies giving $500,000 and more, the reason is simple: you scratch my back and I will scratch yours. We always see the same donors, I agree, but these are people who are close to the Liberals.
My second point is that senior officials who were there at the time, including Pierre Gravel, the Deputy Minister of National Revenue, who was there in 1991, continued to work under the Liberal government as well. This means that to repudiate the decision made by Mr. Gravel in 1991 would have been tantamount to admitting it was a sign of incompetence to have kept someone like Pierre Gravel since 1993, when the Liberals came to power.
Mr. Jean-Guy Chrétien (Frontenac, BQ): Mr. Speaker, 18 months ago the member for Richelieu introduced a votable private member's bill providing a limit for contributions to campaign funds, knowing that certain individuals, groups or companies pour hundreds of thousands of dollars into a party'coffers or, not uncommonly, into two parties' coffers, to hedge their investment.
I was listening very carefully earlier to my colleague for Beauport-Montmorency-Orléans talk of the two prominent families, obviously well known, that sent over $2 billion to the United States without paying a cent in income tax. I would ask the member for Beauport-Montmorency-Orléans to take a few
minutes to tell us in the Bloc about this transfer of $2 billion to the United States tax free.
Mr. Guimond: Mr. Speaker, the question by my colleague from Frontenac is particularly relevant, but very complex. I will not be able in the next 45 seconds to provide an intelligent and comprehensible answer to this question. I make no claim to any expertise in taxation. So I think my answer would require a lot of details.
What we can say is that the folks who manage to transfer $2 billion worth of assets without paying taxes are not the folks who do their income tax at the kitchen table while they watch hockey. We are talking about billionaires who can afford the best tax lawyers in the country at $500 an hour. They are not ordinary folks who have a hard time and are fed up with paying income tax. Ordinary folks cannot afford a tax lawyer.
So, to answer the question, what is involved is tricks, tax loopholes, always above board. However, we might well ask whether something like this, which is legal, is also moral. Let us have a look at the government's morality.
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The Deputy Speaker: Resuming debate. With whom will you be sharing your time?
Mr. Guimond: Mr. Speaker, I only mentioned that I would share my time with one of my colleagues.
The Deputy Speaker: Would you please choose who it will be, my dear colleague.
Mrs. Venne: I believe you should choose, Mr. Speaker.
Mrs. Suzanne Tremblay (Rimouski-Témiscouata, BQ): Mr. Speaker, I move, seconded by my colleague, the hon. member for Quebec:
That you recognize the member for Berthier-Montcalm so that he may now be heard.The Deputy Speaker: As I was saying that the next speaker had to be designated, I noticed that the Bloc House Leader had risen. I thought she might indicate who had been chosen. She mentioned the member for Berthier-Montcalm, but I gave the floor to no one.
Under such circumstances I believe it is right to give the floor to the member for Berthier-Montcalm.
Mr. Michel Bellehumeur (Berthier-Montcalm, BQ): Mr. Speaker, thank you for recognizing me. I am certain the member for Saint-Hubert would have delivered an excellent speech. I will try to be just as good.
A moment ago I heard some Liberal members tell the member for Beauport-Montmorency-Orléans that it was all the Conservatives' doing. I believe we should set the record straight. Family trusts are the creation, a great big Liberal baby, of the Liberals under Pierre Elliott Trudeau, in 1970.
In 1970, Pierre Elliott Trudeau in his great wisdom created family trusts for 21 years to reward friends of the government, friends of the Liberal Party and other federal parties, since the main goal of family trusts is to avoid taxes and allow families to get richer.
Therefore, in 1970, the Liberal government of Pierre Elliott Trudeau, of which the present Prime Minister was a member, since the member for Saint-Maurice was in Pierre Elliott Trudeau's cabinet in 1970, created family trusts for 21 years.
What happened in 1991, 21 years later? The Tories, who were against family trusts in 1970, came into office with Mr. Mulroney as Prime Minister, and they decided to maintain the family trusts.
Really, 1991 was an exceptional year. I think that our viewers should pay attention to what is going to be said next, if they ever had doubts about the efficacy of the public service. I will tell them what happened on December 23, 1991, Christmas Eve, at about 11.30 p.m. Some public officials went in to work, to allow the Bronfman family, two wealthy families in fact, to transfer some $2 billion to the United States.
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The day before Christmas, some government employees came to Ottawa, went in to their offices at 11.30 p.m. and authorized multibillionaire families to transfer $2 billion to the United States without paying a single penny in taxes.
Do you know what kind of Christmas gift that represented for those families in 1991? It meant approximately $500 million, an amount which the Canadian taxpayers paid, donated to those multibillionaire families. What did the Tory government and the Liberals do meanwhile? They turned a blind eye. Because, as we all know, these families give to Liberals and Tories alike.
Fundamentally, these families are federalists. Whether the Liberal or Conservatives are in power is of no consequence to them. In any case, they manipulate them through their campaign fund. This is how they manipulate the big parties opposite, the parties that are funded by these big families. This is why the Liberal or Conservative government is so generous.
Here we have the biggest scandal of the century breaking out. We learned about this scandal, $2 billion transferred from Canada to the United States without any tax being paid. What did the government do? What did the Bloc Quebecois do? The Bloc Quebecois immediately condemned this action, especially when we know that the Liberal government is attacking the poorest. It makes cuts to unemployment insurance, to transfer payments. What must the provinces do, then, if they are stuck with cuts of $4.5 billion, like this year? They have to cut welfare, health care. It
is the federalists opposite, the Liberals opposite, who are primarily responsible for that.
We know that two families got $2 billion out of Canada. We know that the government seems to have trouble finding money for social programs. What did the Bloc do? It asked a parliamentary committee to examine the issue and to see whether or not the officials who met one Christmas eve to give a nice $500 million gift to two multimillionaire families in Canada, had not shown a lack of integrity.
It is obvious that, at the time, Liberals sitting on the committee agreed with the Bloc Quebecois. They were really astounded by that announcement, by that scandal, and they seemed to want to get to the bottom of the issue. They seemed to want to co-operate with the Bloc Quebecois, the official opposition, to examine the issue, so this would not happen again.
However, the members who had shown some resistance, who had dared voice their opinion before checking with the Prime Minister, fell back into line, saying there was no problem, everything was all right. But it is not all right to let this go on.
The committee had to determine if there was any interference by officials. Did they or did they not show any lack of integrity? These are the big questions the committee had to ask and answer. Instead, all the Liberal members of the committee spent the whole time trying to sidestep the issue, to avoid shedding light on this extremely important matter.
Did the committee have the power, the authority to shed light on this matter? Yes, it did. Had it made use of all its powers and all the parliamentary mechanisms available, it could indeed have shed light on the matter. Yes, it could definitely have pointed a finger at those responsible and provided a permanent solution to the problem.
What did the Liberal majority in the committee do? What were they instructed to do by the Prime Minister of Canada? They started by preventing the committee from fulfilling its mandate. That is what they did. They refused to use the investigative powers available to them. They would not let the committee hear the testimony of all the officials involved. They did not want the committee to hold more than two meetings to consider this scandal.
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It is the scandal of the century. Never before in Canadian history have such huge amounts been taken out of the country without the proper taxes being paid. The Liberal government across the way and its Prime Minister persist in wanting to protect the friends of the Liberal Party, those who put money into the party's campaign fund. I am sure that, on the eve of calling an election, the Prime Minister got on the phone to remind a few friends they had been spared in the family trust scandal, adding: ``I hope you will remember how good the Liberal Party was to you, because there is an election coming''.
That is how it works. They had all the facts, but chose not to act. They would rather let things be. They ran interference when Bloc members asked questions. Yet, $2 billion was taken out of the country. I would say that was pretty serious. What did the Bloc members on the committee do? They drafted a dissenting opinion to make it clear to the government they disagreed with the government's attitude on this issue.
Quite frankly, with respect to this issue, given how much money is involved, I think it is fair to say, seriously and honestly, that the Bloc Quebecois took a very effective approach on the issue and acted with professionalism in immediately blowing the whistle on this scandal and seeking to correct the situation.
There is no way that all aspects of an issue as important as this one can be considered in just two days. No way. This was not the first time that the Liberal government used such a tactic. The government did the same thing in the case of the Somalia inquiry. It did not give enough time to the commissioners and judges to get the real answers to the legitimate questions of Quebecers and Canadians.
The same is true in the case of family trusts, this outrageous scandal. Some Canadians and Quebecers had legitimate questions, but the solutions and answers to these questions could not be found in two days.
In a dissenting report, the Bloc Quebecois referred to some evidence and testimony before the committee. You cannot hear many witnesses in two days, but you can still take note of certain things.
Mr. Speaker, since my time is almost up, I would like to conclude by moving a motion.
I move:
That the House do now adjourn.[English]
The Deputy Speaker: Is it the pleasure of the House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Deputy Speaker: All those in favour of the motion will please say yea.
Some hon. members: Yea.
The Deputy Speaker: All those opposed will please say nay.
Some hon. members: Nay.
The Deputy Speaker: In my opinion the yeas have it.
And more than five members having risen:
The Deputy Speaker: Call in the members.
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[Translation]
(The House divided on the motion, which was negatived on the following division:)
Strahl
Szabo
Telegdi
Terrana
Torsney
Ur
Vanclief
Verran
Volpe
Walker
Wappel
Wayne
Whelan
Young
Zed-101
The Deputy Speaker: I declare the motion lost.
[English]
Mr. Comuzzi: Mr. Speaker, I apologize to the Chair for being late but had I been here in time for the vote, I would have voted with my colleagues.
Mr. Pillitteri: Mr. Speaker, had I been here, I would have voted with my colleagues in the government.
Mr. Abbott: Mr. Speaker, I move that the House now prorogue.
The Deputy Speaker: It was a good try but that cannot be done.
[Translation]
The Deputy Speaker: The hon. member for Berthier-Montcalm has five minutes left for questions and comments.
Mr. Bellehumeur: Mr. Speaker, I will be pleased to use the time left.
Earlier-I would appreciate it if hon. members would pay more attention-I was discussing the report of the public accounts committee and pointing out that my colleague did an excellent job. He looked at the inconsistency, the inaccuracy and the non-compliance of the committee in this-
The Deputy Speaker: I must tell the hon. member that there are five minutes left for questions and comments. It seems the hon. member is not the one who should have the floor. I now recognize the hon. member for Gaspé.
Mr. Yvan Bernier (Gaspé, BQ): Mr. Speaker, it is true that it is hard to concentrate when the House has just held a vote. I would like to see colleagues in the House exercise a little restraint.
For us in the Bloc Quebecois, it is very important just before an election is called that all Canadians and all members opposite, on the government side, feel directly concerned. They will be
accountable during the upcoming election campaign for having covered up the whole situation surrounding family trusts.
I think my colleague, the chairman of the standing committee, the hon. member for Beauport-Montmorency-Orléans, showed this very well. It is one of the loveliest ridings in the Quebec City area. I think the committee's hearings showed that the Liberals tried to cover this up.
I would like to ask a question of my colleague, who gave a brilliant speech. I would like him to explain again to the Liberals opposite the avarice behind what they were trying to hide.
Mr. Bellehumeur: Mr. Speaker, I am extremely pleased to reply to my colleague, the member for Gaspé, on this issue.
On a number of occasions, the Liberals were heard telling us in the House that the whole issue of family trusts, the scandal of the century, was not their fault. They were not the ones who did it, it was the Conservatives. To help the Liberal members opposite, because they are going to be asked about this during the upcoming election campaign, I would like them to recall that it was in 1970, when Pierre Elliott Trudeau was in office, that 21 year family trusts were introduced.
In 1991, the Conservatives took over. Having opposed the idea in 1970, they simply continued the family trust system.
What must be remembered is that, on December 23, 1991, the day before Christmas at approximately 11.30 in the evening, very industrious employees of the department headed up to Parliament Hill and went to their offices.
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Why? So that two rich Canadian families could move $2 billion out of Canada without paying a cent in taxes. Do you know what kind of a present this represents for these multibillionaire families? It represents a minimum of $500 million that Canadian taxpayers, the unemployed, single parent families and fathers who have trouble making ends meet at the end of the week because of taxes and the way the Liberal government is spending public money, all had to make up through the taxes they paid.
That is the scandal. And what have the Liberals done since 1993? They have covered it up. They have done everything to prevent us from finding out what really happened on December 23 at 11.30 in the evening. The Liberals took part in this cover up.
We in the Bloc Quebecois, as the official opposition and as watchdogs, asked questions here in the House. We wanted to get to the bottom of the matter once and for all in committee, and the member for Beauport-Montmorency-Orléans did an excellent job in this regard as chairman of this committee in really trying to get to the bottom of this cover-up by the Liberals, who did everything they could to prevent us from getting answers to legitimate questions everyone had about this scandal.
[English]
The Deputy Speaker: It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Shefford-Hyundai plant in Bromont; the hon. member for Brandon-Souris-Flooding.
Mrs. Sue Barnes (Parliamentary Secretary to Minister of National Revenue, Lib.): Mr. Speaker, I thank the members of the Bloc party opposite who called for an adjournment of this House. It gave us time to gather together to once again go over the same facts that we have already gone over in very public debates, not only here when debating a Bloc motion when we covered this ground, but also in a debate in the public accounts committee and a very public debate in the finance committee.
Instead of talking about innuendo and speculation and the Bloc's idea of what they are looking for, which is a problem, let us deal with the facts the committees had to deal with. The fact is Canadians can see through the transparency of the political process. We had not just one process which is normally accorded to an issue, but two processes with two separate House committees both of which have membership from all parties across this floor.
The primary spark of this debate was an issue and two rulings that came up when the Tory regime was in power, long before we were the government.
The auditor general has to be given credit for bringing this to the attention of the House and not the Bloc, which they would like to argue. The auditor general, not the Bloc, is the watchdog. The auditor general deserves the credit for doing his job. That credit was given to the auditor general in the third report of the public accounts committee.
The auditor general reviewed all the documents in the file. He witnessed this Liberal government's quick and decisive response to issues which originated out of a tax problem. Those were dealt with primarily by the expertise of the House finance committee and legislation was brought in to close any so-called loophole that could have existed.
There was another process in the public accounts committee to go over the Revenue Canada side. Recommendations were issued in the report of the Standing Committee on Public Accounts. The recommendations were acted upon by the revenue department, but not when the report of the Standing Committee on Public Accounts asked under recommendations; in fact the public accounts report congratulated Revenue Canada for having acted immediately on the issue being brought to the attention of the House by the auditor
general. We have a response. We have today an objective that is more political than substantial by the Bloc members of the House.
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I quote what the auditor general said at the Standing Committee on Public Accounts. ``I take comfort in the fact that the problem we raised was debated openly by parliamentarians and other observers. And at the end of the day, the Minister of Finance chose to amend the act and to clarify certain points which had created problems for us. I therefore consider this matter closed''.
Those are not the words of the government. Those are the words of the auditor general: ``I therefore consider this matter closed''.
Mr. Campbell: But not for the Bloc.
Mrs. Barnes: But not for Bloc members. They know what is the business before the House today. They get the Order Paper. We are going to spend time debating the motion and so be it. They are technically within the rules and so we will answer.
We acted quickly and thoroughly to ensure that events that occurred under the previous Tory government could not occur again. That is the basis. People in the country want good government. They do not want to hear about problems. They want to know what the solution is. Well, we have a solution.
We in the government are solution and future oriented, not going back into history to find more and more grievances to air just because we can get some coverage.
The official opposition heard the comments of the auditor general. Bloc members heard that he now considers the matter closed. They are now questioning the judgment of the auditor general, even though they went out of their way earlier in the debate and earlier in committee to praise the auditor general for raising the issue. They praise him when he raises the issue but question him when he says that the case is closed. That is the official opposition.
The official opposition said that the auditor general is the watch dog. We concur. The auditor general has the responsibility to oversee all events that take place here. That is why auditor general reports not only come before the public accounts committee but many other committees when he reports on specific activities within the domain of those parliamentary committees.
When we took power in 1993, the auditor general stated at that time there needed to be consistency of rules. We now have consistency of rules. We also agree that there has to be a transparency of process. What could be more transparent than two standing committee of the House holding public meetings with the press, witnesses, experts and people who have an interest in the problems able to be there. We are talking about the taxation policy of the country and the rulings of departments.
As taxation policies evolve, certain rules have been tightened, clarified and more and more consistency has been imposed. We now have a broad publication of rulings. All this was done before the age of everything being computerized and out in the public. Of utmost importance is the privacy of individual taxpayers. That is at the heart of the system of taxation which we know is the best in the world.
Bloc members must understand that 96 per cent of Canadians report their income voluntarily and pay their taxes. We are in tax season now with a deadline of April 30. We have one of the best tax collection systems in the world. We have one of the best departments in the world. It seems the integrity of all the people who work in that department is always being raised as an issue. Integrity is definitely not the issue. After the issue was drawn to our attention, the assistant auditor general, the person who had primary control of this file, testified not only before public accounts committee but he also before the finance committee.
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At the finance committee he said: ``We have seen no evidence of bad faith and we have seen no evidence of wrongdoing''. Before the public accounts committee the auditor general said on May 8, 1996: ``I have never had the occasion or the need to ever question the integrity of the senior officials at Revenue Canada''.
I go on to the Reform Party. Its members were on these committees. The Reform member for Capilano-Howe Sound said in the House: ``In spite of serious efforts on my part, in no case could I discover any evidence of wrongdoing''. The Reform Party, in the minority report that was tabled with part of the public accounts committee report, stated: ``We are in no way imputing motive and questioning the integrity of the officials involved''.
The only ones perpetrating the myth of a scandal is the Bloc opposition. It has no evidence of back up allegations but it persists because it is looking for some issue for the campaign trail. Instead of dealing with the orders of the day we will deal, for partisan purposes, with the Bloc. The government is not afraid to deal with that issue because it is already dealt with. We dealt with it with legislation. We dealt with it in committees and we have tabled reports.
What we have to do here is look at reality. Reality is that there was a taxable Canadian property definition. When people leave this country, what will they be taxed? It is a migrant taxation issue, which is a very technical area of the act. Decisions were made. Both reports stated that the decisions made were concurred in by
experts in the tax community. I will let the people in the finance committee deal with the process.
Somebody is trying to use some nice catch phrases-maybe if we say family trust-we can scare up a few individuals. I used to practice law. Trusts were set up every time somebody died and had a will. That is a form of trust. Thousands and thousands of people have family trusts. They are not rich folk. They are ordinary Canadians. We can use the trigger words that Bloc members hope will catch on, or we can do something about what was a legal problem and clarify it.
I do not know why we are talking about that because it is already done. We have already done our job. We know the system is now tighter. We know that Revenue Canada now publishes the rulings widely because of privacy concerns.
I am not even sure if the Government of Quebec has done that. I am pretty sure that it has not, even though its members talked about it. They should be coming up to where we have the problem. That is another matter. I will let that jurisdiction take care of itself.
The privacy concerns of taxpayers are something that the Bloc opposition at one point in the debate were not even concerned with because they wanted release of taxpayers' names. I can remember sitting in the public accounts committee and asking how Bloc members could do it, how they could go to the heart of the tax system wanting to release to the public names.
It took quite a few meetings before they finally withdrew that Bloc motion, but finally they saw the damage they were doing. Maybe it finally clicked in their heads that it was their constituents too who could have had their taxpayer files open just because somebody told them that this information would be released. We know that is wrong. We know that is absolutely wrong. Not only that, but I cannot imagine it.
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I read an article last week about tax cops in Russia who actually rap on people's doors. They do not have the good voluntary compliance within the tax system that we have. That could happen if we just throw out the rules. The Bloc's original motion asked us to release tax names, but the government stood very firmly and said that it would not do that, because it is not a permissible situation, nor is it in the Canadian public's interest.
We have very specific rules. Revenue Canada publishes the rulings for the guidance of tax professionals who need that clarification. This allows for consistency, which was not there when this original problem came up. It is even done when interpretations and decisions are published so those within the department and tax practitioners across Canada can know what the department rules. Revenue Canada takes the special step of releasing that identifiable information. The amendment is necessary so the names cannot get out and so identifying information cannot get into the public domain.
The heart of the matter is that the Bloc members do not want to listen, they do not want to learn. They want scandal. They are not interested in good government. They are not interested in progressive legislation. They are not interested in the sanctity of the taxation system. They are interested in cheap partisan politics. This is not the first attempt but at least the third attempt. There will probably be more because they will compound this in whatever way it can be utilized.
Perhaps the most important thing I could do today to assist us in this matter that has been raised by the Bloc is to move an amendment. I move:
That, the motion moved by the Bloc today be amended by deleting all of the words after the word ``be'', and by substituting therefor the words ``referred back to the said standing committee for reconsideration of the dissenting reports contained therein''.That is exactly what the Bloc members really want. They want an airing of their dissenting reports. We will comply.
I thank the hon. Bloc members for giving me the opportunity to go over this very old ground and to make sure the Canadian public understands there is a difference between people who complain and people who act, between people who stand for good government and a fair, equitable and transparent tax system and the people who just want to use partisan politics to go over an issue that auditor general has on more than one occasion complained. Case closed.
The Acting Speaker (Mrs. Ringuette-Maltais): The amendment is in order. We will be resuming-
[Translation]
Mrs. Tremblay: Madam Speaker, we would like a copy of the motion in French, please.
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The Acting Speaker (Mrs. Ringuette-Maltais): All hon. members have the right to table, in one of the two official languages, an amendment or a document. I will read the motion as it was moved and the hon. members can use the interpretation services.
Mr. Michel Guimond (Beauport-Montmorency-Orléans, BQ): Madam Speaker, I want to briefly point out four things to the Parliamentary Secretary to the Minister of National Revenue.
First of all, I would like to know if it is normal, or usual, for the employees of the revenue department to process in such a way the request of an ordinary taxpayer, an ordinary citizen, who wants to get some tax benefits. If a resident of mine, in the riding of Saint-Jean, Île d'Orléans, were to ask for an advance tax ruling,
would an army of civil servants be asked to work on next December 22? Is that normal? Is that acceptable? Is it what the people who are listening to us can usually expect? This is what I want to find out. I would like the parliamentary secretary, who has some contacts in the revenue department, to tell me if it is possible, normal and usual.
Second, I would like to know why the parliamentary secretary thought it appropriate to give us a lecture on ethics and transparency. I almost took out my handkerchief. She nearly made me cry. We are given lectures on transparency. I would like to know why, at the public accounts committee, the parliamentary secretary herself voted against the Bloc Quebecois proposal calling for an independent inquiry into the family trust scandal. Why did she, and not her neighbour, her grandfather or her grandmother, vote against this?
I want to remind Quebecers that it is a good thing the Bloc Quebecois was there to ask for this independent inquiry. Had Quebec been represented by 75 Liberal members, as it used to be in the Trudeau years, instead of 54 Bloc members, there would never have been a request for an impartial, independent inquiry not controlled by the government. Thank goodness the Bloc Quebecois was there. That was my second point.
The third point I want to make is a little more technical. The auditor general tells us that it is unusual for Revenue Canada to issue advance rulings on past transactions. Once again, if it is unusual, why was it done in this case? Why?
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Are there two kinds of justice or two sets of rules? If you want to transfer $2 billion in family trusts, either you can do it as a private citizen and Revenue Canada will harass you afterwards or you cannot do it. Why did Revenue Canada make an exception and issue advance rulings on past transactions?
Finally, I would like the parliamentary secretary to comment on the attitude of the Deputy Minister of Finance, David Dodge, who, after that meeting, chewed out the auditor general. It is another form of psychological torture. It is a way of criticizing him for unearthing this, for rocking the boat. What kind of attitude is that coming from one of the highest ranked government officials, Deputy Minister of Finance David Dodge, who literally lashed out at the auditor general in public, in front of private citizens and journalists.
Unfortunately, good manners prevent me from repeating in this House the exact words that were used on that occasion. I would like the parliamentary secretary to tell us if she finds such behaviour normal and acceptable.
Mrs. Barnes: Madam Speaker, I would like to thank the hon. member for his question.
[English]
It gives me an opportunity to say what a wonderful job he did chairing the public accounts committee during these debates. This is the gentleman, not the government, that controlled the committee. The questioner himself was the person who chaired the public accounts committee during the debate.
I thank him because that is the only committee chaired by the official opposition. I agree with the fact the official opposition chairs the committee.
The questioner is now saying his committee is not good enough and that there should be a public inquiry. He wants us to spend some more money and to forget we have had two public and transparent committees, one in the control of the hon. member asking the question. Again I thank him for the job he did chairing the committee.
I want to answer him directly. He raised by innuendo some speculation that there is perhaps something funny about giving rulings in December or just before Christmas. The hon. member was in the room when the testimony was given at committee. He knows Revenue Canada statistics show that issuing a great number of rulings in December is the norm because it is the year end and the last date for cutoff.
In past years we had floating years for corporations, but most business people in Canada understand that a great many corporations have January 31 as their cutoff for the year. It is changing in some respects, but it was the norm at the time these rulings were issued.
I will deal specifically with the member's question. I will give an example. Nineteen rulings were issued in the last week of December 1991. In 1992, 33 rulings were issued in the same period. In 1993, 42 rulings. In each of 1994 and 1995, 28 rulings were issued in that week.
In actual fact the bulk of of the rulings of Revenue Canada occur in the last quarter of the year. That is not unusual. To get to that point some work has to be done in advance.
The Canadian public needs to know that Revenue Canada is in a service business. We have clients who pay us taxes so we can do the work of good government as the Government of Canada. We require the funds but we also have committed to advance rulings which are not very useful if they are given after the fact.
When somebody comes to us with a problem and says ``here is what we need to do by this date so please give us an advanced ruling'', we work toward making sure we meet that deadline. That is common sense, that is good government and that is service.
Mr. George S. Baker (Gander-Grand Falls, Lib.): Madam Speaker, I congratulate the hon. member on the excellent speech she gave and want to ask her a question. Quel est le problème avec le Bloc?
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Why would the Bloc totally confuse the situation? Why would the Bloc talk about 1971? The Liberals brought in the 21-year rule which stated that at the end of 21 years the rich would pay. The Tories extended the 21-year rule indefinitely when they came to power. When the Liberals came back into power they closed it off completely. To add further to the confusion, could it be that Bloc members are just as interested as the Tories were in giving tax breaks to the rich?
Why would the Bloc on October 18, 1996 in the House of Commons refer to the tax agreement the Tories negotiated to change the estate tax and say that it supported a Senate bill? It supported entering into an agreement with the United States on estate taxes. It realized that some Americans were penalized by differences in legislation. It indicated that the bill did not specify how many millions or billions of dollars were at stake. It did not know which country, Canada or the U.S., would benefit the most from tax liberalization.
Why would the Bloc be supporting tax breaks that the Tories negotiated for the rich?
[Translation]
Why does the Bloc want to protect the rich? What is the problem with the Bloc?
[English]
The Acting Speaker (Mrs. Ringuette-Maltais): The hon. parliamentary secretary has 30 seconds to answer.
Mrs. Barnes: Madam Speaker, with 30 seconds to answer I can only say I have no idea what is in the minds of Bloc members. I know what the government does and I can make that choice.
Mr. Jim Silye (Calgary Centre, Ref.): Madam Speaker, I am hearing some interesting comments being thrown back and forth. The last Liberal questioner just does not understand the objective of the Bloc. The Bloc is not out to give tax breaks to the rich. The Bloc is out to tax the rich. It is exactly the opposite. It is complaining that billions of dollars are disappearing because they are hidden in family trusts. It wants to tax those people. It wants its share of the revenues.
How can a Liberal member who is listening to the debate say the Bloc wants to give tax breaks to the rich? This is what is wrong with the Liberal government. It is the spin it wants to give the thing. It is the perception it wants to create. Liberals are interested in perception, not reality. They are not listening to what the debate is all about.
It is a shame that a gentleman who is as good at communication and can express himself so eloquently would waste those God given talents on distorting the truth and the facts.
Nevertheless I am a member of the Standing Committee of Public Accounts. I was also present when the issue was debated there. As Reformers my colleague from the riding of St. Albert and I were very concerned about the issue. The Liberal spokesperson from public accounts who addressed the issue refuted what the Bloc members had to say. She did a reasonably good job of explaining the circumstances.
I find interesting now that it is relatively over, so to speak, her recollection of the facts: the events are now wonderful. She praises the auditor general when the chairman of the Standing Committee of Finance, who was present in the House today, openly criticized the auditor general for having the audacity to question the transfer of these trusts to the United States. That is the reality. He criticized the auditor general and now the Liberal spokesperson is praising the auditor general.
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Another fact conveniently distorted or interpreted different from the way I saw things happen was when this hit the newspapers and it was out there, the Bloc Quebecois did make a big issue out of this and raised family trusts. It was on family trusts from the very first meeting we had on the GST the first year it came here. It is an issue that it is very concerned about and very much interested in.
This issue comes to the forefront and lo and behold, the finance minister tried to pre-empt the responsibilities of the public accounts committee and take away its right to review the situation. He shoved it off to the Standing Committee on Finance where it wanted to review all of this and not have it under public accounts.
We know the public accounts committee is the one that is supposed to be looking at the comments of the auditor general and from that ask for witnesses and testimony. We felt that the Standing Committee on Finance could do what it wanted and we also looked into it.
In pursuing the issue I have some other facts I would like to present. Looking into it, trying to get to the bottom of it, trying to find out whether there were some tax dollars that should have stayed in Canada that ended up not being collected, those are honourable and good questions.
Imagine a system once they form the government in the new country of Quebec. They are going to publish names of taxpayers they are investigating. That is not right. That is not the kind of tax system I would like to have or a country I would like to be in. That is a private matter and is very confidential. On that issue I definitely disagree.
The chairman of the Standing Committee on Public Accounts in one of his questions earlier today was concerned about what kind of system we have where somebody asks for an advance ruling. I think that is good system. An advance tax ruling on a complicated
issue is a service that Revenue Canada should provide. It is a service that is very valuable and is used very often.
When some people are into very complicated financial transactions and the implications of moving funds around in trust to find out how the tax department would treat it, whether it would be taxed right away, deferred or not taxed at all, these are important elements to consider. Advance tax rulings are a process we in Canada, a lot of individuals and businesses, appreciate.
The actions of Revenue Canada on this issue are suspect for the reason, as I recollect the facts, that on the second ruling the department in all its documentation, in everything that was in the files prior to the last meeting, indicated it was not going to give a favourable ruling. It was to rule against this movement of assets, taxable properties, within a family trust
All of sudden it is reversed. Why? The purpose of the public accounts committee was to find out and ask witnesses. We still do not have a clear answer on that. We do not know why there was a reversal. Certainly it is its right to reverse it but when all the documentation, all the arguments and all the evidence as it builds a file and review a case are leading it in one direction, why all of a sudden is it changed?
The Bloc is asking good questions. Why is there special treatment here? Was there special treatment? Was there favouritism? Was this an order by a cabinet minister who said reverse it? Was it politically motivated? We tried to get to the bottom and we could not. The Standing Committee on Finance then made some recommendations and it theoretically closed the loopholes.
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What was happening that was wrong while the committee was doing this? While the Standing Committee on Finance was reviewing the issue, the Minister of National Revenue froze all other transactions of this nature, denying for six to seven months the rights of other Canadians to obtain advance tax rulings and to make transactions within trusts. It was done at the expense of other taxpayers.
It was something the Minister of National Revenue should not have done. She should have allowed the process to continue because if the decision was a good decision and if the decision had the facts to support the action from a tax point of view, it should have been a precedent which would have been available for other Canadians. It seemed to us in committee that the government was trying to hide it, push it under the rug and not let us get to the bottom of it. It was frozen.
Then the loophole was closed and we were told it is finished. However, like I say, there was a price to pay in doing that.
I would like it to be known that this transaction had with it a tax liability. The trust went to the United States. It went to New York state. We found out that the way the deal was made, the way the ruling came down, this could be allowed to happen but only if during the next ten years, from 1991 to the year 2001, if any of those assets were cashed in, if any of it was liquidated, the tax liability would be owing to Canada and Canadians would receive that money. Theoretically, as we are debating this issue today, if those individuals were to do anything to liquidate certain assets within the trust, the moneys would be taxed and the tax would be owing to Canada.
After the ten years the tax would be owing and payable in the United States, in New York state. However, these individuals did not do this to avoid paying tax. The tax liability is there. It is a question of whether it is payable to Canada or to the United States. Ten years from the date of the agreement the tax is owing to Canada.
As well, the tax rate in New York state on this trust would have been higher than it is in Canada. Therefore to argue that these individuals were trying to avoid taxes or trying to pay lower taxes is not true. I would like to let it be known that these people were just looking for ways to get their trust moved around.
Did this happen in such a way that there should have been an immediate tax liability on the assets payable to Canada? I do not know. I do not know the technicalities. I cannot say whether there should or should not have been. However, other Canadians should not have been denied the same rights while this was being looked at.
The public accounts committee went as far as it could, with good intentions. We were not quite satisfied with all the answers. There were minority reports filed.
With respect to the matters of tax liability, tax avoidance and tax concurrence there is an honour system in Canada. I am starting to get the sense that the government is becoming tougher and is not willing to trust Canadians. The government amended the Income Tax Act in the last budget, which is to come into force this year. Now we are going to be requested on our income tax forms to not only report our income, tax liability, how much was deducted at source and how much is still owing, but a year from now the government is going to ask all individuals to list their foreign assets. We will not only have to report our income and the liability on that income, we will have to report our foreign assets. Why? The government does not trust Canadians. It feels that some Canadians are hiding assets offshore and not paying tax on them when they are sold, not declaring their gain on the assets.
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Our system in Canada hires a lot of people. Revenue Canada has a budget of $2.2 billion, 44,000 employees. There are some darned
good auditors. Those auditors are the ones who should be looking at who is and who is not paying taxes on offshore assets. Why not do that?
If there is a problem with the business immigration plan and some immigrants are not following the system, audit more of them. We know that when a tax avoidance scheme or a tax shelter develops and the business community takes undue advantage of it, the auditors audit research and development grants until we find out what is legitimate and what is not and we find out that some people were cheating. That is how to solve it, not putting in the Income Tax that one must under penalty of imprisonment or under penalty of something else. That drawing and quartering is ridiculous. That is not the way we should be going.
Today something happened in public accounts that is all related to what we do as a committee. A very important issue was raised about generally accepted accounting principles and how government commitments are booked; the $961 million transition payment to the three Atlantic provinces; the $800 million commitment for the foundation for innovation.
Bloc members were ready to debate this. Reform was ready. The auditor general was at the committee along with the deputy minister. These people were kind enough to show up to discuss the issue so that I would either stop criticizing or continue to criticize the finance minister. There are seven Liberal members on that committee. Not one of them showed up and the chairman had to cancel the meeting. That is a shame and I do not think it is in order.
I feel I have contributed as much as I can to shed light on what happened on this issue.
[Translation]
Mr. Jim Peterson (Willowdale, Lib.): Madam Speaker, I would like to put a question to the hon. member. The Bloc Quebecois has decried throughout Canada what they call the family trust scandal.
Mr. Nunez: But it is true.
Mr. Peterson: It is not true. Both the Standing Committee on Public Accounts and the Standing Committee on Finance have held public hearings on this issue. Tax experts who had conducted an extensive review of this case told us that our public officials were fair and had the right to give what is called an advanced tax ruling. According to these experts, who hail from the private sector and work in this complicated and difficult area, our employees had the right to act as they did.
But despite all of this, I want to point out that, after being made aware of the situation, the government reacted very quickly. It agreed with the proposals made by the Standing Committee on Finance to create in Canada one of the toughest tax systems where immigration is concerned.
We have heard a lot of lies in this House and everywhere else about family trusts. Let my give you an example of a lie I heard today. Someone said that it was the Liberal government under Pierre Elliott Trudeau, in 1970, that came up with the idea of family trusts. That is not true. Family trusts have existed since the 17th century. They have always existed to help families, farmers, people-
[English]
The Acting Speaker (Mrs. Ringuette-Maltais): It being 5.30 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.