Eric William KIERANS

KIERANS, The Hon. Eric William, P.C., O.C., B.A., LL.D.

Personal Data

Party
Liberal
Constituency
Duvernay (Quebec)
Birth Date
February 2, 1914
Deceased Date
May 10, 2004
Website
http://en.wikipedia.org/wiki/Eric_Kierans
PARLINFO
http://www.parl.gc.ca/parlinfo/Files/Parliamentarian.aspx?Item=b12fe3d4-0116-4a37-9593-42ddcdaf8346&Language=E&Section=ALL
Profession
economist, professor

Parliamentary Career

June 25, 1968 - September 1, 1972
LIB
  Duvernay (Quebec)
  • Postmaster General (July 6, 1968 - April 28, 1971)
  • Minister of Communications (April 1, 1969 - April 28, 1971)

Most Recent Speeches (Page 3 of 197)


December 16, 1971

Mr. Kierans:

I think there are certain elements in this bill which are the basis of creating even further problems for the Canadian people and the Canadian economy.

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
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December 16, 1971

Mr. Kierans:

They exist, not by some divine right but by the will of the people as represented by the members of this House, and I think their current intransigence and threats could easily lead to nationalization. If we were to eliminate all the concessions, depletion, accelerated depreciation, capital cost allowances exceeding actual funds invested by between 15 per cent and 33-1/3 per cent, and so on, the federal government could reduce the corporate tax rate to 35 per cent on all firms in all sectors of the economy without any loss of revenue. At the present time, 24725-39.'

Income Tax Act

the outrageously low effective tax rates in the resource sector directs investment into those low employment sectors and discriminates against investment in the heavier employment manufacturing and service industries. A corporate tax rate that would affect equally all branches of economic activity would not distort the investment decision-making process to the extent that is achieved by our present system.

If the government should agree that a 35 per cent corporate tax rate without concessions, without exemptions and without special immunities would yield the same revenues, I see no reason why this rate cannot be confined to wholly-owned or controlled Canadian companies. Every nation favours its own citizens in one form or another. We have only to cite the most recent example, the United States with its investment allowance, its 10 per cent import surcharge and its DISC program. Those programs do not favour Canada by any means. So far as I know, they favour American firms. If we were intelligent and sovereign, we could devise tax rates that would favour our own Canadian firms in the very difficult situation in which they find themselves. Let the corporate tax rate on foreign subsidiaries be whatever that rate is in the home country of that subsidiary. If the rate is 52 per cent, as in the United States-and it is that high because of all their tremendous objectives, their military efforts and their flights to the moon-let the rate for American subsidiaries in Canada be 52 per cent.

If the rate is 40 per cent, as in the U.K., the rate for U.K. subsidiaries in Canada ought to be 40 per cent. In no instance, however, should we allow that rate to be less than the Canadian rate of 35 per cent. On the basis of their existing initiatives the Americans could only say that we are in accord with their policies because we would be avoiding encouraging new American subsidiaries to locate in this country and we would really be acting within the spirit of their DISC program.

Similarly, we could enlist the entire Canadian entrepreneurial community in trying to reverse and turn around the trend toward increasing foreign ownership. This cannot be done alone by a Canada Development Corporation, or by half a dozen such corporations. This would require the united effort of all elements in the Canadian business and financial community.

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
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December 16, 1971

Mr. Kierans:

It has not been my experience that the company with the 50 per cent tax rate drives out the Canadian company with the 35 per cent rate. Rather, the trend of the last few years would be turned the other way around. I should simply like to say-

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
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December 16, 1971

Mr. Kierans:

I would be only a few more minutes, Mr. Speaker.

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Full View Permalink

December 16, 1971

Mr. Kierans:

If Canada stays with cheap taxes-and by cheap taxes I mean the oil and gas industry in pipeline and oil wells which pay taxes of less than 6 per cent of the

profits they earn; by cheap taxes I mean the mining industry in their metal mining operations which pay taxes on 13 per cent of the profits they actually make-and with this kind of policy, then the foreign ministers of finance who want these resources are going to like our tax policies very much. They can also use them to beat down developing nations in the world whose only possibility of ever taking off into industrial growth would be to obtain an adequate return when they come to sell their own resources so that they can industrialize even in the most modest way.

These ministers of finance know that the more we insist on selling our resources as we do in this way, we show our preference for taxing these kinds of exports at such phenomenally low rates and manufactured exports at much higher rates; as long as we are willing to do this they are willing to buy, and they know that every hundred million or billion dollars worth of our resources that they buy, that money coming into this country makes it that much more difficult for the Canadian manufacturing industry to compete, because our dollar goes up and Canadian manufacturing finds it more difficult to compete in the export markets that they may have, or to defend themselves against import competition at home.

When virtually every other nation in the developing, industrialized world follows a policy of conserving and reducing the drain on its industrial resources, by outrageous tax concessions accorded to no other sector of our economy we encourage the exploitation and sale of our resources. The official position of the Department of Finance has been and I quote:

There is no inherent reason why Canada cannot be a major exporter of raw materials and of manufactured goods at the same time.

This is demonstrably false, Mr. Speaker. You cannot have both. When each of our major trading partners-and we know since August 15 the emphasis they place on balancing their trade account-is searching for a balance in their merchandise trade with us, they will be striving to pay for the import of our raw materials with their manufactured goods.

An additional $1 billion export of energy to the United States, for example, would give us in this country $68 million in wages and salaries. But that balancing inflow on which Mr. Connally and Mr. Nixon are insisting in manufactured goods could mean that we are importing anywhere from $200 million to $350 million in their wages and salaries, depending on the industry. If it is the furniture industry, we would be exchanging $68 million for $330 million. If it is the textile industry, 26 per cent or $260 million on an average of their output is composed of wages and salaries. If it is agriculture, wheat or products like that-and I am at no time speaking of pulp and paper or wheat and fish and hydroelectric power, which are renewable resources; I am speaking of non-renewable resources and agricultural products-the average is 26 per cent. If it is pulp and paper, the average is again 26 per cent. So we are exchanging 6.8 per cent or $68 million out of $1 billion, for $260 million. We cannot have our cake and eat it too. It is some exchange! There may be a balance of trade in dollar terms, but there is no balance of trade in jobs or wages and salaries.

December 16, 1971

Topic:   GOVERNMENT ORDERS
Subtopic:   INCOME TAX ACT
Full View Permalink