Mr. Langlois (Meganlic):
Mr. Chairman, I do not intend to take too much of the time of the house on this matter. However, I do want to register my opinions concerning the new tax measures which the minister has brought before the house and the opportunity which they afford the government to recover some of its financial losses and to bring in any future measures they may contemplate.
There is one aspect of this whole matter which I should like to make clear, namely, that the Canadian people are wondering what is going on and what it is all about. They are more and more perplexed as the days go by and less and less enlightened about the situation as we try to struggle out of this financial strait-jacket. However, there is one thing of which the people are sure, that they have been following the guide lines set down by successive Canadian governments according to which they should invest in their own country and work as honest, submissive and good-natured citizens. This they have done.
We have stressed upon them the importance of economizing, of constructing homes and of contributing to the building of a great
nation. They have done so on the say-so of the Liberal administration and the preceding Conservative one. However, they woke up to the fact that they have been following the guide lines to the letter and that any mistakes that have been made have originated from this place and not from themselves. A great majority of them have been living on credit and those who have not found themselves without a cent to spare and with very small salaries on which to live. They have no means of counteracting the financial difficulties which beset them and cause them anxiety and insecurity. Yet they also know that they have followed to the letter the guide lines set down by the successive Canadian governments. They know that no one else can be blamed for the mess in which the country finds itself today but those who have their hands in the cookie jar.
What will the government tell the people who are the victims of its financial policies? Canadians are no farther advanced today than they were 30 years ago. In fact they have suffered a set-back. Well, you can fool some of the people all of the time and you can fool all of the people some of the time but you cannot fool all of the people all of the time. I believe this is what we are trying to do. The minister says the government is going to impose a 3 per cent surcharge on income tax for two years. I do not believe it will be for two years any more than I believe there will be a reimbursement of the corporation tax in two years. The government will say the people are used to it and while they will not put on another tax they will leave this surtax as it is. I feel certain that is exactly what is going to happen.
[DOT] (3:10 p.m.)
We seem to blame the municipalities, the provincial governments and everyone else for contributing to the high cost of living in this country. However, we forget to look in our own backyard. The minister knows quite well that the 3 per cent surcharge on corporations will affect consumer prices within one or two months after it is imposed. The cost of producing an article is reflected in the selling price of that same article. This is a vicious circle because what you collect on the one hand you have to give on the other in order to try to maintain stability. The surcharge on personal income will have the same effect. The only difference is that salaries go up by the stairway and the cost of living goes up by the escalator. There seems to be an imbalance here.
March 8, 1968
The Conservatives have criticized these measures but have not given any indication of how they would solve the problem. I just have to look back to 1957 and 1958 and the great visions of that time to realize how, since 1962, they have become the nightmares of the past. In 1959, when the right hon. member for Prince Albert was leading the Conservatives, he used to say that the country had a stable economy. I believe that is the situation today. I believe the financial problems can be blamed on the fact that certain financiers have been itching to speculate. I say that you are to blame for not putting them in their place. We are going to have to face up to this problem.
Last night on a television program a member of the government, a member of the official opposition and I were discussing the new proposals introduced by the Minister of Finance. I was asked exactly where the government could have picked up the revenue lost as a result of the defeat of Bill No. C-193. You do not have to be a wizard to do that. If the public accounts committee had met more often we would have been able to examine expenditures more carefully. I am not criticizing the fact that $400 million in waste or extravagance was found by the Auditor General. This amounts to about 5 per cent of the total expenditures on administration. I believe that every company finds that about 5 per cent or 10 per cent of its budget is being wasted. If we do not check this now, it will not be $400 million next year but $800 million. While we may not be able to regain the money lost we could at least reduce expenditures for the next year.
The Glassco commission did great work and its report cost a lot of money. The report has collected quite a lot of dust up to now. I am convinced if we search through that report we will find many recommendations that have not been implemented. I told one member yesterday that one statement in the Glassco report was that the federal government could save some money on the quality of paper used. The saving could amount to $1.5 million per year. I am quite certain that since the report was tabled there has not been a change in one sheet of paper used by the government. The hon. member for Lapointe and the hon. member for York-Humber during the question period this morning indicated their dissatisfaction with the disposal of certain assets from Expo. The hon. member for Lapointe stated that a loan had been made to Great Britain in 1946 carrying an
Income Tax Act
interest rate of 2.5 per cent. The deferred interest alone on that loan amounts to $85 million. The minister should see if he can collect some of that money instead of choking the Canadian taxpayer.
There is another $100 million in guaranteed reserves in the chartered banks of Canada, which is interest free. The government could collect another $5 million there which would be a help. The federal government is also aware of the hidden reserves in the chartered banks. If they are hidden reserves they are hidden profits, but the minister does not tax them. Can the minister indicate to me any other Canadian corporation that could legally have hidden reserves or profits and not pay income tax on them? Why have sour milk for one and sweetened milk for the other? If we are going to make people contribute to the expense of running the country we should not make one group contribute and allow others to go free. I would not think that the minister has very many alternatives, but if the Auditor General were given additional staff to make investigations perhaps he could find that more than $400 million had been wasted. I ask the minister to tighten things up a little bit and try to stop these leaks.
When the Bank Act was passed last spring the chartered banks were permitted to raise their interest rates on loans from 6 per cent to 7J per cent. This affected the cost of living. The argument at that time was that the finance companies were lending more than the chartered banks. I do not believe there has been much change in that respect. I have not seen any finance companies in any great difficulty since then. The only direct result one has been able to ascertain has been that the cost of living has gone up. When someone says that the way to solve the problem of inflation is to have more unemployment in Canada, then I say that is stupid. You will not solve the problem of inflation by having a higher rate of unemployment. The problem will only be solved by having more respect for the Canadian people and the Canadian economy.
[DOT] (3:20 D.m.)
We contribute greatly to external aid. This is good if we can afford it. But before we become involved with NATO, NORAD and such organizations or worry about the Chinese in China or Africans in Africa the minister should concern himself with the welfare of Canadians in Canada. He will have his hands full finding solutions to our own problems. This might hurt his campaign a little,
March 8. 1968
Income Tax Act
but I think he has a responsibility to the Canadian people. The function of the Canadian government is to take care of the business of Canadians and to solve the problems confronting the country in accordance with the needs and desires of the people. When that is done we can worry about a little external aid. In my opinion we should cut some of our present external aid. The minister should not use the excuse of a critical financial situation to squeeze the taxpayers a little more. The taxpayers are not in a position to be squeezed any more. They are going to start kicking, and I do not blame them.
Some radio commentators have been saying that perhaps le Ralliement is going to support the government on this measure, but as far as I am concerned they had better check their notes again. We have stated very clearly that we are against this tax, as we are against any other form of taxation. In my opinion the vote taken the other day had nothing to do with the tax itself, but so far as members of this party are concerned we are going to oppose this measure brought in by the Minister of Finance and we will continue to oppose such measures. I suggest that these commentators should get their facts correct because they can count on opposition from the members of this group on this vote.
I am trying to indicate to the government that although the minister tells the people to tighten their belts because we have to control inflation, measures such as this, as he knows very well contribute directly to rising costs and to inflation itself. As long as he maintains this attitude inflation will get worse.
The methods we have been using are those of the nineteenth century. They are methods that have led from one disaster to another. Therefore I suggest we should think about changing these methods to see whether or not there are other ways to meet the problems that face us. It seems that the government is reluctant to accept any simple solution, and the reason for this is that the situation today is complicated by their own manoeuvring.
This government reminds me of the scientists of the nineteenth century, which was about the poorest century in the matter of scientific development in the history of the world. For example, if your ideas did not accord with the members of L'Academie des Sciences you could be burnt at the stake. You just had to conform. The same thing applies to this government. They have developed their own spider's web. If somebody offers a simple solution that deals basically with the problem
the government will not accept it. They claim that the economists will not approve.
I have my own reservations about economists, Mr. Chairman. There are economists both in the eastern bloc and in the western bloc, but each group of economists has different ideas and solutions for tackling the same problem. In this house there are perhaps half a dozen economists and they do not agree about the same problems. They talk about hypotheses, and I have my own hypothesis in this regard. In the field of medicine doctors, whether they be in the U.S.S.R. or in the United States, tell us that the heart is on the left side of the body. That is a proven fact. But economic theories are as different from each other as black from white. That is why I doubt those theories. We should adopt an orthodox approach to our economic problems. We should just use common sense.
At the present time we are just the tail end of the United States economy as a result of the Viet Nam war. We know that when the President of the United States barks, we wag. Some day we must be independent. We must be able to stand on our own feet, depend on our own people and our own natural resources, and solve our own problems. Instead of being a tail light on an automobile we must be a headlight and see where we are going. When that day comes the Canadian people will have more confidence in the institution of parliament and their elected representatives. But it will not come until we change our methods and cease applying pressure to the Canadian people that they as well as us do not like. On behalf of the people we are going to oppose such pressures.
[DOT] (3:30 p.m.)
Topic: WAYS AND MEANS
Subtopic: INCOME TAX ACT