June 9, 1981

LIB

Cyril Lloyd Francis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

According to an agreement reached earlier, the vote stands deferred.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Nelson Andrew Riis

New Democratic Party

Mr. Nelson A. Riis (Kamloops-Shuswap) moved:

Motion No. 6.

That Bill C-57, to amend the Excise Tax Act and the Excise Act and to provide for a revenue tax in respect of petroleum and gas, be amended by deleting clause 7.

June 9, 1981

Excise Tax

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Marcel Joseph Aimé Lambert

Progressive Conservative

Hon. Marcel Lambert (for Mr. Blenkarn) moved:

Motion No. 7.

That Bill C-57, to amend the Excise Tax Act and the Excise Act and to provide for a revenue tax in respect of petroleum and gas, be amended in clause 7 by striking out lines 11 to 40 at page 9.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Marcel Joseph Aimé Lambert

Progressive Conservative

Mr. Lambert:

Mr. Speaker, I rise on a point of order. Unless I have missed something, I do not believe the Chair put motion No. 5. The vote will be on motion No. 4. If it is defeated, it defeats motion No. 5.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Cyril Lloyd Francis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

I am informed by the Clerk-

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Marcel Joseph Aimé Lambert

Progressive Conservative

Mr. Lambert:

My point is that the Chair has not put the motion.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Cyril Lloyd Francis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

The Clerk informs me that the vote on motion No. 4 will dispose of motion No. 5. since they are indentical motions.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Nelson Andrew Riis

New Democratic Party

Mr. Nelson A. Riis (Kamloops-Shuswap):

Mr. Speaker, essentially motion No. 6 is a continuation of a great deal of what we have heard in the last number of days with reference to the pricing of wines in an absolute way, the whole matter of indexing, and then the excise tax being placed on wine. In essence, the motion before us does away with the concept of indexing in terms of the excise tax as it applies to wines, and at this point suggests that an increase in the price of Canadian wines is not the appropriate step to take.

Before I discuss some of the details of this motion, I wish to talk about why this particular motion is before us with so many others. Over the last number of days there have been many references to the fact that we were debating 135 different amendments to this particular bill. Members opposite were criticizing us for putting forward so many amendments for discussion. They were asking us why on earth we had not brought in a fewer number of amendments and dealt with more of the specifics and, perhaps, some of the larger issues in this bill.

I want to make it perfectly clear that that is exactly what we had in mind when we deliberately went through second reading stage very quickly in order to get the bill before the committee. I would like to commend the chairman of the finance committee for calling a number of witnesses and for requesting and receiving a number of written briefs. But there was one very important aspect of that deliberation which was eliminated, and that was the opportunity for members of the Conservative party, the Liberal party and the New Democratic Party to come together to discuss what the 23 groups of witnesses presented to us as members of that committee, not to mention countless written breifs which were also presented to us. We eliminated this very crucial step. I suspect that had the government taken that initiative, had it shown that interest, in the next number of days we would not be discussing the vast array of amendments which we are discussing because the matter would have been resolved in committee. Saner heads would have prevailed, in that surely we would have agreed that

the points raised by so many of these delegations and witnesses before the committee were, in fact, legitimate. They expressed legitimate concerns. These were not people trying to avoid paying legitimate taxes to the Government of Canada.

Both opposition parties and members opposite indicated their willingness to ask questions of the witnesses, in terms of finding out what concerns were on their minds. A great many legitimate concerns and criticisms were articulated by the witnesses. Unfortunately, by and large, they were ignored by the government, with the exception of a few cosmetic changes being produced. But the substantive concerns were virtually ignored. That is why members of the Conservative party and ourselves, with a great deal of reluctance, brought in 135 amendments.

We felt the concerns raised by the witnesses were legitimate ones which needed to be addressed. More than ever before I was convinced that this bill is an ad hoc approach to taxation. Attempting to glean a few dollars here and a few dollars there is not the way to approach taxation in Canada in the 1980s. Surely, a reflection of the poor taste and lack of consideration of the government was the document which went to all members of the committee, which attempted to summarize the concerns of the witnesses. Again, as far as the principle is concerned, I commend the chairman of the finance committee for directing his officials to take the time to go through the various briefs, summarize them for us and then provide an appraisal.

Those members who have taken the time to read the appraisal will see that contained therein are comments of the most cynical nature. These were not constructive criticisms, but criticisms designed to make the witnesses appear foolish. These were criticisms designed to make the concerns of the witnesses appear simplistic and almost childish. That is hardly the way to treat serious briefs and presentations in this day and age, particularly when we hear a great deal about the alienation found in certain parts of our country.

When one looks at the various witnesses who appeared before the finance committee, such as representatives of the city of Medicine Hat, representatives of the Hobbema Indian Reserve, the Independent Petroleum Association, the Canadian Petroleum Association, the Federation of Alberta Gas Co-ops, the Energy Services Association of Alberta, and many others, one sees that they were essentially ignored. I do not think there is any question, even from members opposite, about the concerns and points of view which were expressed before the committee being ignored by the government. If that is not a slap in the face to those groups which I have mentioned, in this case westerners, it is little wonder that there exists in our country a cynicism toward the government, an attitude that this government simply does not care. This is why we are being forced to address 135 amendments. The government was not prepared to sit down and discuss ways and means of looking at a few changes to this bill. The government was prepared to simply ignore that process and force the opposition parties into the position of spokesmen for the various witnesses which appeared before the committee.

June 9, 1981

The particular motion before us identifies the problem associated with indexation. I do not feel that it is necessary to go through an elaborate and precise description of the hazards associated with indexing the tax on tobacco and alcohol in Canada. The point has been made by many members already that, in fact, this will be a factor which fuels inflation in our country, as opposed to combating it. This measure will give the government a vested interest in inflation, since it is one small step toward providing more revenues for the government as a reflection of inflationary practices. I am concerned about the effect of tying the excise tax to the CPI and what that means as a true reflection of inflation in the country and, therefore, the resultant increase in taxation. For example, if one province decides to increase significantly the price of wine, beer, tobacco or distilled spirits, then that will result in an increase in price across Canada. In other words, one province could dictate a significant increase in the CPI for that subgroup which would then reflect an across-the-board increase for that particular commodity.

If there is a significant increase in the price of a foreign wine or an imported spirit, for example, then it would fuel the CPI for that subgroup, which would result in a rise in prices across Canada. If the value of the Canadian dollar vis-a-vis the franc, or some other currency, drops, the price, if you like, of that imported commodity will increase. It will increase the CPI in that particular subgroup, which will then result in an increase in the price of alcohol and tobacco across the board for all Canadians.

What is happening in this country is that we are tying our increases in the price of alcohol and tobacco to what is happening in foreign countries and to what may be happening in one province of Canada. Surely this is not the intent of this particular piece of legislation. It is with that in mind that we in the New Democratic Party feel that this is simply not the appropriate step to take at all. If it is true, as the hon. member from Ottawa indicated this afternoon, that the need for this is to combat inflation, surely to goodness there is a better way to combat inflation than to index the prices of alcohol and tobacco.

We suggest, when we start looking at the increase in the prices of wine, beer and distilled spirits, that there is a great deal of discrepancy in the pricing of those commodities in Canada today. That is why we have mentioned in our motion that this would appear to be an inappropriate time to add another increase to the price of wine in Canada. We are not against increasing the price of wine; we are against increasing it in this willy-nilly way of adding a few cents to a gallon of wine or a few cents to beer or a few cents to distilled spirits. Surely the reason we are in this disastrous situation today is the kind of ad hoc approach to obtaining federal government revenues.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Walter David Baker (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Baker (Nepean-Carleton):

Nickel and diming.

Excise Tax

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
NDP

Nelson Andrew Riis

New Democratic Party

Mr. Riis:

Nickel and diming, as the hon. member says. Indeed, it is. What is required, to our way of thinking, is a comprehensive commodity tax review. I realize that was introduced in 1977-actually, it was 1975. It was abandoned or suspended in 1977 at a time when the interest rates and cost of living were not as high as they are today.

We suggest that we are well overdue for a comprehensive commodity tax review in Canada. We should take a look at the taxes we presently place on wines, for example. We should ask ourselves the question: should we be encouraging Canadian wine producers? Should we be using the taxation system to encourage more participation in the vineyard industry, more participation in the Canadian domestic wine industry? Should we be lifting the prices of those Canadian wines to achieve some social benefit? Should we perhaps decrease prices to encourage more people in the agriculture sector? We should ask the same questions in relation to the breweries and the distilled spirits industry?

Another question we should be asking ourselves is: should we be using our taxation system in a more creative way to accomplish certain economic and social ends? We in this party feel, of course, that we should. We should not simply tack on nickels and dimes during these times when our farmers could perhaps use some encouragement and when domestic producers of wine in Canada could also use some encouragement.

It is for that reason that we feel very strongly that this is not the time to increase across the board the tax on spirits, wines and beer, and it is certainly not the time to index these commodities.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
?

Some hon. Members:

Hear, hear!

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Marcel Joseph Aimé Lambert

Progressive Conservative

Hon. Marcel Lambert (Edmonton West):

Mr. Speaker, one of the reasons I think the hon. member for Kamloops-Shuswap (Mr. Riis) found difficulty with the fact that we were not able to consider the representations which had been made was the insistence by the government House leader that the bill be returned to the House by April 15 or April 16, and also the fact that we heard briefs until almost the eve of those dates. That left only the appearance of the Minister of Finance (Mr. MacEachen) himself, who tried to emulate the Great Sphinx of Egypt by saying absolutely nothing, and then saying that the government would take into consideration the representations which had been made and would declare itself at that time, if at all.

That is why I would say neither the representatives of the New Democratic Party nor myself, when I led our party in this particular consideration, were disposed to put any amendments before the committee. What would be the point? If one amendment were proposed, the government backbenchers would simply chew that amendment away and use up the time. They would have filibustered the one amendment which would have been put forward by either the New Democrats or ourselves, and it would have been a total loss.

I therefore stated quite clearly that it was not my intention to put any amendments in the committee, as we had done under the Bank Act, and we would put them in at the report

June 9, 1981

Excise Tax

stage. Neither our party nor Your Honour's is under any obligation whatsoever to consult with one another as to the nature of the amendments which will be proposed. For instance, in part IV of the bill, which is that tax on petroleum and natural gas revenue, every clause is marked for amendment by the New Democrats, and the same amendments appear under the name of my colleague, the hon. member for Mississauga Centre.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Stanley Howard Knowles (N.D.P. House Leader)

New Democratic Party

Mr. Knowles:

Etobicoke Centre.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Marcel Joseph Aimé Lambert

Progressive Conservative

Mr. Lambert:

It was the hon. member for Etobicoke Centre (Mr. Wilson). That is why we had that many amendments. There are, in effect, many duplications; but that was the result of what one could call the nature of the beast under that type of restriction on the committee.

So far as the amendments put forward by the hon. member for Kootenay-Shuswap and-

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Walter David Baker (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Baker (Nepean-Carleton):

Kamloops-Shuswap.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Marcel Joseph Aimé Lambert

Progressive Conservative

Mr. Lambert:

I will get those two ridings straightened out yet. There were also amendments put forward by my colleague, the hon. member for Mississauga South (Mr. Blenkarn).

First of all, we are against the increase in the tax on one. I referred to that the other night. We are also against the indexation of tax. Strangely enough, the formula which we wish to eliminate is the quarterly index.

In amendment No. 8, as it appears on the order paper, the government had advanced to six months. It had taken one step. The other night the minister replaced that motion, that amendment, in effect, by an amendment which calls for annual indexing. As I indicated the other night, it is not the question of merely placing a percentage tax, as the Parliamentary Secretary to the Minister of Finance (Mr. Evans) suggested. That is nothing. What it is, is a clear indication that there shall be an annual rest and that the tax shall be compounded by the factor of the annual CPI. That is the nature of the increase. This particular subgroup of alcohol and tobacco will pick up influences from all sorts of areas. Of course, the net result is that the excise tax in this particular area will snowball.

It is the snowballing of the excise tax without the consent of Parliament to which I object, and to which my colleagues say, "No, no, a thousand times, no!" That is what is wrong with this principle. In relation to taxation, it is a first attempt to impose the cost of living index on the formula of determination of tax with an annual rest. It will be applied on the alcohol and tobacco subgroup at this time. I suppose that is a popular target for taxation. The next one could be the tax on gasoline and diesel fuel. There are many other areas of tax where, by simply changing the formula of calculation, an indexation based on CPI could be imposed and the government would be the chief beneficiary.

I am almost repeating what I said the other day when I said that the government would be very interested in inflation at 100 per cent. The principle is wrong, Mr. Speaker.

I do not want to put on the record all the evidence given by the commissioners of the Liquor Control Board of Canada, the Distillers Association of Canada, the Brewers Association and the wine growers. I think this is a despicable move as it pertains to wine. Wine should be considered part of the agricultural industry. There is no reason why domestic wines should be taxed any more than milk is taxed.

The minister should take into account where the grapes are grown and what the revenues of the growers amount to. They are agriculturalists. No other country treats them as a source for the taxation of alcohol or puts them in the same category as those who distil alcohol for whisky.

Be that as it may, Mr. Speaker, there is a substantial increase in tax, by formula, from 25 cents to 60 cents. Indexation of the tax will greatly increase the price of domestic wines. Next we will see an excise tax imposed on foreign produced wines. We will experience all the difficulties arising out of the CPI or influences abroad, with regard to the cost of these beverages.

The same thing applies to the price of British tobacco. It will go out of sight. It is high enough as it is but it is a vastly superior product. This does not in any way try to protect the Canadian product which is a hot tongue burner at all times. I have smoked a pipe for over 40 years so I have considerable experience in judging quality and I am not overly impressed with our domestic product. In any event, I think the principle is quite wrong.

I should like to name some hon. members opposite who regularly attended the finance committee and were critical of the government's actions. They thought this was a pernicious principle. I see that the muzzles are on now, however, and they are not going to speak. You might say that they are-

-all puffed out ready to speak because their mouths are full.

Right you are, hon. member for Burin-St. George's (Mr. Simmons). You know, we can speak French as much as you can.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Roger Simmons (Parliamentary Secretary to the Minister of the Environment; Parliamentary Secretary to the Minister of State for Science and Technology)

Liberal

Mr. Simmons:

French or English, it doesn't matter.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Marcel Joseph Aimé Lambert

Progressive Conservative

Mr. Lambert:

Right. Their mouths are full, whether it be in English or in French.

I am not suggesting what their mouths are full of, either!

I would hope that these two amendments commend themselves to members of the House and that we could return to a beginning of sanity by adopting motions No. 7 and No. 8.

June 9, 1981

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
LIB

Cyril Lloyd Francis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Is the House ready for the question?

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
?

Some hon. Members:

Question.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT AND EXCISE ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink

June 9, 1981