December 10, 1979

?

George Albert Proud

Mr. Prud'homme:

Mr. Speaker, I did not vote because I had agreed last week to be paired with the Minister of National Defence (Mr. McKinnon).

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF THE HOUSE
Sub-subtopic:   ALLOCATION OF TIME TO CONSIDER COMMITTEE OF THE WHOLE STAGE OF BILL C-20
Permalink
LIB

James Alexander Jerome (Speaker of the House of Commons)

Liberal

Mr. Speaker:

The hon. member for Pontiac-Gatineau-Labelle (Mr. Lefebvre).

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF THE HOUSE
Sub-subtopic:   ALLOCATION OF TIME TO CONSIDER COMMITTEE OF THE WHOLE STAGE OF BILL C-20
Permalink
LIB

Thomas Lefebvre (Whip of the Liberal Party)

Liberal

Mr. Lefebvre:

Mr. Speaker, I have a point of order. I understand that, under the rule, the House order would now mean one full day's debate. As the budget will begin at eight o'clock tomorrow night, should there not now be some arrangement about what exactly comprises a full day's debate? Will it be part of tonight, part of tomorrow, and part of Wednesday? That does not seem to be very clear at the moment. Perhaps the government House leader, with the leaders of the other parties-

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF THE HOUSE
Sub-subtopic:   ALLOCATION OF TIME TO CONSIDER COMMITTEE OF THE WHOLE STAGE OF BILL C-20
Permalink
?

Some hon. Members:

Oh, oh!

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF THE HOUSE
Sub-subtopic:   ALLOCATION OF TIME TO CONSIDER COMMITTEE OF THE WHOLE STAGE OF BILL C-20
Permalink
LIB

Thomas Lefebvre (Whip of the Liberal Party)

Liberal

Mr. Lefebvre:

Would you mind if I have a couple of minutes? I speak to these experts on the back benches opposite

2206

December 10, 1979

Mortgage Tax Credit

who have only been here a couple of weeks. I should like to get an answer from the government House leader, if possible.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF THE HOUSE
Sub-subtopic:   ALLOCATION OF TIME TO CONSIDER COMMITTEE OF THE WHOLE STAGE OF BILL C-20
Permalink
LIB

James Alexander Jerome (Speaker of the House of Commons)

Liberal

Mr. Speaker:

Order, please. Perhaps 1 can indicate that the precedents are clear, that the day upon which the House embarks upon the business which is the subject matter of an order pursuant to Standing Order 75C does not count as the first sitting day. Therefore, one sitting day remains to be allotted at the close of the business of today. If an entire day is not used tomorrow for that subject, because of the budget tomorrow night, then some further hours would have to be spent. The number is not certain. Perhaps in the interval between now and the start of business tomorrow, the House leaders could decide whether they could come to some agreement on that account.

Pursuant to Standing Order 54 I do now leave the chair for the House to go into Committee of the Whole.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF THE HOUSE
Sub-subtopic:   ALLOCATION OF TIME TO CONSIDER COMMITTEE OF THE WHOLE STAGE OF BILL C-20
Permalink

INCOME TAX ACT


The House resumed from Wednesday, December 5, consideration in committee of Bill C-20, to amend the Income Tax Act to provide a tax credit in respect of mortgage interest and home owner property tax-Mr. Crosbie-Mr. Laniel in the chair.


LIB

Gérald Laniel (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Order, please. When the committee rose on December 5, 1979, clause 1 of the bill was under consideration. Hon. members might be interested in what 1 am going to say. Because the order that has been adopted tonight provides, "that, at fifteen minutes before the expiry of the time provided for government business on that day"-meaning the day on which we will complete consideration of committee stage of Bill C-20-"all questions will have to be put." The danger is that the committee might be placed in some difficulty unless hon. members plan the work of the committee ahead of time.

During the day 1 heard some hon. members say to others that no amendments had been moved in committee, while others affirmed that some amendments had been moved in committee. 1 must say officially that the Chair has no amendment in front of it and no amendment can be in front of the Chair unless it is moved. Because we can only have one amendment in front of us at a time, and vote on only one amendment at a time, all those amendments of which the Table might have received notice are not officially in front of us until we reach them and make a decision on them.

If, by any chance, hon. members debate the bill on clause 1 up to 15 minutes before the end of the time allowed, the Chairman will have no alternative but to put the question on clauses 1, 2, 3, the title, and the bill, and will in no way be able to receive amendments at that time.

I just make that suggestion and 1 hope hon. members will take it into account when planning the work of the committee.

On clause 1 -

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   AMENDMENT TO PROVIDE TAX CREDIT IN RESPECT OF MORTGAGE INTEREST AND PROPERTY TAX
Permalink
LIB

Lloyd Axworthy

Liberal

Mr. Axworthy:

Just to put your mind at ease, Mr. Chairman, 1 hasten to assure you that we intend to move several amendments to this bill. Any anticipation you might have of being able to go home early could be quickly discarded. We will be very glad to satisfy your request that changes be made to this piece of legislation.

Let me begin by observing that the Minister of Finance is unable to be with us this evening. I extend my sympathies to him, as I know what a difficult position he is in. He does not have an oil agreement, he does not have an agreement on pricing, and he does not have an agreement on most things that pertain to this government. We certainly understand that, in a moment of panic, he would flee the House very early, in the hope that he can arrive at some last minute negotiations.

By contrast, Mr. Chairman, I note the high rage and indignation he expressed previously about the fact that members of the opposition had not given him an opportunity to consider amendments. I am sorry he is not here to listen to and participate in this debate, which he has called one of the more important initiatives of his government. I suppose this is an indication of the priority the Minister of Finance gives to this bill. After he and his colleagues have flexed their muscles to deny totally the democratic rights and privileges of members of this House, he now feels sufficient disdain that he can leave even though, in his own words, this matter is of such great importance that he has reason to be elsewhere.

I welcome the presence of the Parliamentary Secretary to the Minister of Finance, knowing him to be a person of great reason and rationality-probably more so than the minister himself. However, we want to express our own concern that the Minister of Finance is not here because we believe that the amendments that will be brought forward are ones which will have serious consequences for this bill. It is unfortunate that the senior minister responsible for the legislation is not in his seat and therefore able to exercise his judgment as to whether the government is prepared to accept them or not.

One of the questions we certainly want to raise at the outset is whether we are going to be treated to the same sham performance we received previously, where the government is really not prepared to accept the amendments.

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   AMENDMENT TO PROVIDE TAX CREDIT IN RESPECT OF MORTGAGE INTEREST AND PROPERTY TAX
Permalink
?

Some hon. Members:

Oh, oh!

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   AMENDMENT TO PROVIDE TAX CREDIT IN RESPECT OF MORTGAGE INTEREST AND PROPERTY TAX
Permalink
LIB

Lloyd Axworthy

Liberal

Mr. Axworthy:

It would help if members opposite were able to restrain their own particular form of verbal pollution for a while so that we shall be able to get these amendments out and make our arguments. We are obviously debating the wrong bill. We should be debating certain game laws to keep those people in their seats, in their own particular wilderness experience, to be restrained so that those of us in this House who treat these amendments with a degree of seriousness are allowed to do our job. I would only ask some co-operation from members because what I say is important to them. I only hope

December 10, 1979

that through their behaviour in this House they might demonstrate how serious they are prepared to be.

In again examining the basic details of this bill, as has been expressed several times by members of our caucus, we have found a lot to disagree with, both in principle and practice. What gives us particular concern at this point in time is the statements made by the Minister of Finance.

What clearly is being demonstrated by the minister is that he does not know what his own legislation means. He has been so busy holding up his own gag routine he has failed to read the kinds of documents and papers prepared for him by his officials. He has made the most serious error any minister of finance can make, that is, the error of the sin of inaccuracy and misrepresentation about the intent of the bill. That may be all right if the minister is simply engaging in rhetorical flourish. However, when he is talking about the expenditure of $3 billion, a major change to the tax structure of our country, every Canadian has the right to expect the Minister of Finance at least to be precise and accurate in his statements, and not become so carried away with his verbal buffoonery that he ceases to tell this House exactly what the intent and purpose of this bill are.

1 would like to comment in part on some verbal excesses of which the minister was guilty over the course of this debate. For example, he has accused members on this side of not caring about the middle-class home owner. He made some fairly violent accusations that members on this side are bleeding hearts and that only he, the Minister of Finance, is engaged in the crusade to defend the rights of the middle-class home owner. In fact, quite the opposite is true.

By the statement made in the document produced by the Department of Finance, which the minister obviously has not had the opportunity to read, called "Government of Canada Tax Expenditure Account", it points out that in the area of housing and urban renewal there are tax allowances presently amounting to $7 billion that are available to middle-class home owners. The non-taxation of capital gains on principal residences amounts to $2.5 billion of tax expenditure deduction. That is an issue that was introduced as part of the tax program of previous governments. For the moment, the nontaxation of imputed income on rental value of home ownership adds up to $3.7 billion of tax expenditures. The tax deductions allowed on the Registered Home Ownership Savings Plan amount to $115 million.

In other words, in total contrast to the accusations made by the Minister of Finance, the opposite happens to be true. Middle-class home owners are treated with a high degree of preference in our present tax act. The argument of members on this side has always been that when providing for further relief of pressures due to the high cost of housing, those pressures should be assessed according to who is most seriously affected.

We have made the case time and time again, drawn from the government's own documents, this time from documents produced by Canada Mortgage and Housing Corporation, that by far the most significant need is being felt by renters,

Mortgage Tax Credit

particularly senior citizens and single parent families, with close to 50 per cent to 60 per cent of the people in that category paying over 30 per cent of their income for rent, which is a much higher proportion than the home-owning public.

Those are not figures manufactured in some sort of Fiberal think tank. Those are documents produced by the government itself, documents that obviously the Minister of Finance has either been unwilling or unprepared to read and to use as part of his own tax documents. When he says to us, "Why should we not be giving tax credits to a specialized group, we give them for children, and for family allowance," we say there is nothing wrong with that in principle, but surely it should be measured according to those who must experience the most severe need.

We also want to point out that, totally contrary to the statements of the Minister of Finance that somehow all those people, even those with the lowest income, will be eligible for some form of benefit under this tax act, again the contrary happens to be true. When I use figures that only 6 per cent of the elderly own their own homes and therefore are not eligible for any benefits, the minister scoffs. The fact is that 70 per cent of the elderly do not pay taxes and therefore are not eligible for any kind of either property or mortgage tax credit.

The Minister of Finance committed the cardinal sin for a minister with that kind of portfolio by not dealing with the facts, not exactly dealing with factual data that can be corroborated by proper analysis and assessment. He was so excited by his own flourishes that he was not prepared to do what a minister of finance should do, that is, at least be prepared to document his statements.

If there is any indictment that we must make of the Minister of Finance, and one that seriously threatens his credibility in terms of the budget tomorrow, it is that he is not prepared to talk about the honest facts. The minister is simply not prepared to talk about what is; instead, he relies upon the perambulations of his own fertile and colourful imagination rather than on the kind of facts and data that should be produced.

Perhaps the most serious challenge and criticism that we would like to introduce under clause 1 is the fact that the Government of Canada is now committing itself to an expenditure of $3 billion four years down the road, without any proposal or proposition to this House as to what the economic repercussions of that $3 billion of expenditure will be. These are the economic managers! These are the people who tell us that they are going to be the tough guys, the ones who are going to approach economic management with a high degree of competence and a high degree of reality. However, they are the ones who are committing the Government of Canada, and therefore the taxpayers of Canada, to an expenditure which will amount to one-third of the present deficit, without knowing where the money is coming from or whether the economic conditions will justify it. In fact, that proposal for spending $3 billion and adding substantially to the cost commitment of this government is being introduced at a time when we are being

December 10, 1979

, Mortgage Tax Credit

lectured daily by members opposite about the deficit problems, and when all kinds of forecasters are saying that four years down the road additional stimulus to the economy will not be needed.

While we are in a serious position now in terms of recession, we will be coming out of that recession two or three years down the road, and that added expenditure will simply add to the inflationary pressures. It will be far more serious when all the pressures as a consequence of these heavy expenditures are going to result in a heavier demand on housing. It will add 7 per cent to 8 per cent to the cost of housing. It will not stimulate construction of additional units, as might be the case if there were more selective targeting.

I would suggest to you, Mr. Chairman, that the $3 billion we are talking about represents almost three times the size of last year's CMHC budget under which close to 270,000 units of housing were produced, and of that number well over

150.000 were produced as a result of direct government stimulus. So we are spending $3 billion to get, on the average, some

20.000 units per year. Mr. Chairman, there are some people over there on the other side who pride themselves on their knowledge of economics. Do they think it is a "good bang for the buck" to be spending $3 billion to get 20,000 units, whereas we spent a billion dollars and got 270,000 units out of it? Do they consider that to be proper expenditure?

So, the first proposition we introduce is that it is essential the government should not commit itself automatically to a four-year expenditure. This is a point of view which has been supported by the hon. member for Peace River in the motion under Standing Order 43 he introduced last week. So it should be subject to review. The Secretary of State is also in agreement with the idea that there should be a sunset law applied to the mortgage credit program. We are in full agreement. We believe that a sunset law should be applied to this act so that, on an annual basis, Parliament would have an opportunity to review the expenditure and determine, in its wisdom, whether a commitment of money should be made. Each year a certain floor of expenditure would be established and under that floor we would have an opportunity to determine whether additional costs should be incurred by the government, whether economic conditions at that time permit additional expenditures to be made.

In these circumstances I should like to move the following amendment:

That Bill C-20, an act to amend the Income Tax Act to provide a tax credit in respect of mortgage interest and home owner property tax, be amended

(a) by striking out line 16 on page 1 and substituting the following therefor: "taxation year"

(b) by inserting the following:

Expiration and extension

1. (3) This section expires on December 31, 1980 unless, before that day an order in council is made to the effect that this section shall continue in force for another year.

Periodic extension

(4) Where an order in council is made under subsection (3), this section expires on December 31, 1981 unless, before that day another order in council is made to the effect that this section shall continue in force for another year, and the governor in council may in like manner extend the application of this act from year to year.

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   AMENDMENT TO PROVIDE TAX CREDIT IN RESPECT OF MORTGAGE INTEREST AND PROPERTY TAX
Permalink
LIB

Gérald Laniel (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Order, please. We are faced with a difficulty. The hon. member seems about to read further details of his amendment. But the committee is still on clause 1 and I can only receive amendments to clause 1. When we get to clause 2, members can move all kinds of amendments to clause 2. The amendment as to the effective date, or the proposal to reconsider the act some time after it is in force, relates to clause 3. We have to proceed in an orderly way.

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   AMENDMENT TO PROVIDE TAX CREDIT IN RESPECT OF MORTGAGE INTEREST AND PROPERTY TAX
Permalink
LIB

Lloyd Axworthy

Liberal

Mr. Axworthy:

I think you must have misunderstood, Mr. Chairman. This is an amendment to clause 1-to subclause (3) of clause 1. If you will look at the bill, you will see on page I there are clauses 1 and 2. We are amending subclause (2) of clause 1 and are adding a subclause (3).

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   AMENDMENT TO PROVIDE TAX CREDIT IN RESPECT OF MORTGAGE INTEREST AND PROPERTY TAX
Permalink
LIB

Gérald Laniel (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Very well. I have sorted out the amendment in reference to the clause.

The question is on the amendment.

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   AMENDMENT TO PROVIDE TAX CREDIT IN RESPECT OF MORTGAGE INTEREST AND PROPERTY TAX
Permalink
LIB

Lloyd Axworthy

Liberal

Mr. Axworthy:

Mr. Chairman, because of the interruption I had no opportunity to read the whole of the amendment. There are further subclauses I wish to move as part of the general amendment, as follows:

Consideration of motion

(5) A motion for consideration of an order in council referred to in this section shall be laid before Parliament not later than three days after the order is made or, if Parliament is not then sitting, within the first fifteen days next thereafter that Parliament is sitting, and each House shall, in accordance with the rules of that House, take up and consider the motion, and all questions in connection with the motion taken up and considered by that House shall be debated without interruption and decided not later than the end of the third sitting day next after the day the motion is first so taken up and considered.

Effect of failure to approve of order in council

(6) If, at the conclusion of the consideration of an order in council pursuant to subsection (5), both Houses of Parliament do not resolve that the order in council be approved, it shall thereupon cease to have effect. Effect of failure to resolve

(7) Failure of either House or both Houses of Parliament to resolve that an order in council referred to in this section be approved does not affect the validity of any action taken or not taken in reliance on the order in council prior to the conclusion of consideration thereof pursuant to subsection (5)."

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   AMENDMENT TO PROVIDE TAX CREDIT IN RESPECT OF MORTGAGE INTEREST AND PROPERTY TAX
Permalink
LIB

Gérald Laniel (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

The hon. member for Davenport.

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   AMENDMENT TO PROVIDE TAX CREDIT IN RESPECT OF MORTGAGE INTEREST AND PROPERTY TAX
Permalink
LIB

Charles L. Caccia

Liberal

Mr. Caccia:

Mr. Chairman, in speaking in support of this amendment I can think of more than one reason why the party supporting the government, the Progressive Conservative party, ought to support this amendment. The first reason which comes to mind is that the idea of sunset laws was actually propounded in this chamber at length by the President of the Treasury Board. It was he who actually encouraged the government of that time to consider this concept. If I am not mistaken, the former leader of the opposition supported the President of the Treasury Board very strongly on the idea of

[Mr. Axworthy.J

December 10, 1979

sunset laws when they were sitting on this side of the House and thinking perhaps this would be a good measure for any type of legislation which would have a long-range effect.

Having had this first great opportunity as the party in power to apply their own preaching and introduce this concept into this major piece of legislation, we on this side of the House are actually surprised that hon. members opposite would miss this opportunity. Were they asleep at the switch? Did the President of the Treasury Board forget all his preachings? Did hon. members opposite discover the realities of government, or did they just dump another of their highly held ideas once they crossed the floor to the other side?

In our view the proposal in this amendment should certainly be difficult for hon. members supporting the government to refute and reject, if they have any confidence and faith in the preachings of their leaders.

The second reason which comes to mind why this amendment ought to be supported is that Bill C-20, for the first time-at least in my memory-links municipal taxes to the federal taxation and fiscal system. It does it in a devious way, but nevertheless it establishes a link. It means, indirectly, that municipal taxes which can be deducted according to the principle of this bill would become in a way less of a concern for municipal politicians. They can turn to their constituents who are very much alarmed these days about high municipal taxes and say; "Why worry so much when you can deduct a portion of your municipal taxes, and if you are paying on a house you can eventually deduct it from your bill from Ottawa?"

Maybe a year from now, or later on, the Minister of Finance will begin to become worried about this link. He may notice that municipal politicians may be less concerned about keeping municipal taxes within certain bounds, since for the first time they can be partially deducted. A trend of this nature would be rather alarming, would it not? It would be alarming to see municipal politicians less on their toes in maintaining municipal taxes within the limits they have been able to keep them with some limited success so far.

This kind of link may have implications for the total fiscal picture in Canada. It may be a matter of concern for the Minister of Finance, and he may want, a year from now, to have the power, as so readily suggested by the amendment of the hon. member for Winnipeg-Fort Garry, to review the matter in the light of developments in the first year, in the second year or, for that purpose, in the third or fourth.

There are also other reasons why this bill should be reviewed at regular intervals. Some of them have already been given by speakers at second reading, and 1 will therefore review them very briefly.

It may well be that a year, two years, three years or four years from now, the government might re-think its position and come to the conclusion that perhaps it would be a greater stimulus to the housing industry to have a national rental assistance program or, for that matter, if this government is still in power-and God forbid-it may want to look at

Mortgage Tax Credit

alternatives such as a mortgage interest subsidy on renegotiated mortgages. It may see perhaps greater merits to the alternative of having a residential operating cost rebate, a mortgage interest rate write-down for purposes of new homes, or mortgage interest subsidies to the apartment construction sector. You name it, Mr. Chairman; there may be a number of reasons, and the measures I just mentioned placed together would, in our opinion, provide a greater stimulus to the housing industry than the one which is before us here today.

One could bring the thought even one step further. One could think for a moment about the losses of revenue which will take place as a result of this measure and the limited stimulus this measure would have. One could think for a moment about what the Government of Canada, through the federal system and with its powers, could do if it had this revenue coming in, as it has until now, and think of measures in the social field which it could implement instead. This is an aspect which really worries me very profoundly and prompts me to support, as I am doing now, this proposed amendment.

For instance, with the revenue we are going to miss-which the state is not going to receive when this measure comes into effect-we could introduce programs which are badly needed in this country and for which, according to the Minister of Finance, there are not enough funds. We could introduce a program to subsidize mothers who stay at home to raise children, or people who look after ill or elderly relatives. Surely this is a costly program, but if we can afford this, why can we not look at alternatives which we could also implement? We should look at other options and choices before proceeding with this measure or going blindly ahead, as Bill C-20 does, without any sunset provision.

Another example of how this money could be better spent might be in providing grants to improve day care facilities or to improve maternity benefits under the Unemployment Insurance Act to provide working women with benefits over a longer period of time. Perhaps we could better spend money by bringing old age pension eligibility down to the 60 years of age level gradually over the years, but fairly soon. This would result in job openings for the unemployed.

There is a long list of what could be done as alternatives which the government might be able to finance if we were not to forgo this revenue. This amendment would at least give us a chance to re-think the whole approach a year from now.

I would like to add to the list an increment price policy for the protection of unorganized working people and those on fixed incomes. If one is not organized these days, does not have a union for protection and works in one of the industrial centres across this nation without the benefit of a strong union, it is very difficult to make ends meet. An income policy for people who are gainfully employed and who are active and productive, but who are in the lower economic scale in society, would certainly be highly desirable, or the implementation of what in 1973 in that most excellent orange working paper on social security was called an income supplementation plan for the working poor.

December 10, 1979

Mortgage Tax Credit

We could also reinforce Canada Works and create jobs in areas where they are needed, and bring Canada Works back into those areas where it has been completely cancelled and create jobs in the centres in Ontario and in other parts of the country where Canada Works no longer exists. Complementary to that, money could be better spent on producing incentives for employers to hire the unemployed, the handicapped, and all those looking for a job but who, for some reason or other, cannot find it at present. We could expand that list ad infinitum. However, the concept remains the same. It is important that Parliament have such an opportunity, having evidently failed to convince the government this time around to reconsider its measure, having failed to make it realize that this is an expenditure that is way above the possibilities that members opposite would accept under normal circumstances. But having made a promise during the campaign, without realizing that because of 36 per cent of the voters they would come to power, they see the necessity of keeping at least one of the many promises they cannot keep. They have to go ahead this year, but at least a year from now let there be here an opportunity to have this amendment adopted by the very people who were once proposing sunset laws. 1 can see here the President of the Treasury Board who looks the other way and smiles sheepishly because he does not know what to say now that he is on that side. This would give the House an opportunity for a second thought approach to such a policy.

As we all know, and as has been so eloquently described by the hon. member for Winnipeg-Fort Garry and others who have preceded me, this is a measure that disregards social priorities in this country. Also, in terms of the industrial stimulus, in terms of economic advantages for the future, it gives a very limited return, as was explained in an earlier intervention.

Mr. Chairman, we all know who will gain from this kind of measure. We all know that the people who have already paid for their homes will not gain from this measure, nor will the people who rent apartments or houses, and people who have to pay rent or who have to pay for a house will pay one way or the other for higher taxes or for reduced services to make up for this lost government revenue.

Who will gain if we do not have a regular screening of this measure through the House, as a minimum rational concession that the government can make? Obviously the mortgage companies will gain, and so will the banks and the money lenders. We all know in advance that the effects of this measure will, in essence, boil down mainly to the following: the cost of mortgages will go up in all likelihood and so will the cost of houses, so that in order to save a dime on the income tax, those who will benefit from this measure will have to spend $1 more on mortgage interest. That is really not good economics and it does not make sense.

As many others have said, we would rather have selective policies and social policies which aim at target groups in particular need, rather than this kind of giveaway. Evidently we do not have a majority in this House and we have to

recognize the power of the governing party. Therefore we urge the government at least to accept this very reasonable amendment. There is nothing that the government need fear from having to come back here at regular intervals to scrutinize this measure again and to assess its pros and cons and its effect on the economy, to see whether or not it should be proceeded with for a second year, a third, and a fourth. That would seem to be a logical and non-partisan proposal which we submit to the government.

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   AMENDMENT TO PROVIDE TAX CREDIT IN RESPECT OF MORTGAGE INTEREST AND PROPERTY TAX
Permalink
PC

Gerald William Baldwin

Progressive Conservative

Mr. Baldwin:

Mr. Chairman, I have some sympathy with the principle advocated by the hon. member for Winnipeg-Fort Garry. Given the right circumstances, it might be a measure worth adopting. However, I want to point out to him its fatal defect. This is a tax measure, and as such I think it is quite improper to have a situation arise where a tax measure could be set aside by the other place.

The result of what the hon. member proposes might be the following. It is what is known as a positive resolution, and as such the bill would not continue in existence beyond the time stated unless the order in council was approved by both Houses. 1 point out to the hon. member that a situation might occur where this House, representing the people, might vote for the continuation of the measure, while the other place, not representing the public, and representing also-let us face the political fact-a considerable majority of the official opposition party, could vote against the measure and we would find that the other place would then be setting tax policy. I think even my friend, the hon. member for Winnipeg North Centre, who has a deep measure of affection for the other place which he manages to conceal quite effectively from time to time, would probably agree with me on this.

If this were in the form of a negative resolution so that the measure continued unless it was set aside by a motion of both Houses, then the hon. member would, I think, be in a much more reasonable position. No doubt the Department of Finance will find ways and means by which this would cause all sorts of problems for the department and the administration. I have always found that department to be most ingenious in performing the right degree of mental and financial acrobatics-at least it did so under the previous government. I think it is much more sensible now. So 1 am not concerned with that. I believe it is not a bad idea to review the situation once in a while, but 1 cannot support this amendment which might put the Senate in a position of setting aside a motion of this kind, which would be quite against the constitutional practices of this Parliament.

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   AMENDMENT TO PROVIDE TAX CREDIT IN RESPECT OF MORTGAGE INTEREST AND PROPERTY TAX
Permalink
LIB

Eymard G. Corbin

Liberal

Mr. Corbin:

Mr. Chairman, I rise on a point of order. I wonder if the hon. member who has just spoken would entertain a very short and simple question?

December 10, 1979

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   AMENDMENT TO PROVIDE TAX CREDIT IN RESPECT OF MORTGAGE INTEREST AND PROPERTY TAX
Permalink

December 10, 1979