Mr. Chairman, only a few minutes remain before six o'clock, and I would like to take this opportunity to comment briefly on the legislation now before us. I listened earlier to our hon. friend, the Minister of Finance, who was coming back to the House, and I had the feeling that had he had a choice between the proposals to initiate in the House, and especially during the preparation of his budget which is very much on his mind now, surely this measure would not have been his top priority. Having known the Minister of Finance for some years, I am convinced he had his mind on something quite different than this election promise. As he said himself over the last few weeks, his margin of manoeuvre is altogether narrow. Members opposite blame the previous government for the somewhat tight financial situation he was referring to, but by proposing this election promise of the Progressive Conservative Party the Minister of Finance is committing government revenues, because this will reduce government revenues by more than $2 billion over the next few years. The fourth year of operation at least entails a loss of revenue of over $2 billion.
1 am convinced that listening to the debate and getting acquainted with the proposal, Canadians were originally interested, but I see things differently. And there is a specific point with which I would like to deal. I wonder whether the Progressive Conservative government, when they took that political commitment to capture votes of course, thought more of it than of really helping the housing industry.
Furthermore, I am not sure whether the government has consulted with the provinces before proceeding with its plan. What I mean is this: in the proposal brought forward by the Minister of Finance and the government, we have two elements: the first one aimed at reducing the cost of interest. This is fine since it comes under the jurisdiction of the federal government as we are responsible to a very large extent for the interest rates in the country.
But as concerns the second element which proposes to reduce by way of a tax credit the property taxes paid at the municipal level, I have some reservations because that political party has consistently accused us, when we formed the government, of interfering with provincial responsibilities. None of my colleagues has discussed this aspect of the government's proposal. 1 wonder, Mr. Speaker, if the Minister of Finance
has actually reflected on this. They claim to be the advocates of provincial autonomy and they say that they do not want the government to interfere with the provincial jurisdiction but is this not what they are going to do in indirectly subsidizing property taxes? I think that the minister should have set himself another objective as you can easily suppose that the benefit of some $62.50, for instance, that will result from the implementation of this legislation when it is passed, if it does go through, might be very quickly diverted by the municipal authorities. We all know that municipal authorities are always short of money. We all know that they must continuously appeal to provincial governments to get some assistance. It is obvious, Mr. Chairman, that in the coming years, if this legislation is implemented, provincial and municipal governments will try to recover that money and this taxation field that we are virtually giving up. As home owners will be subsidized indirectly by us, some of them at least, the municipalities will be tempted to occupy that field. As all home owners will not benefit from this program you will tell me that municipalities may have to resist this temptation because if they raise the property taxes, these will apply to all citizens, whether or not they benefit from this tax credit, I would like us to reflect on this, and I would like to say two things in this regard: either we do not subsidize this part of the interest. Thus, we would only be subsidizing the property taxes and this would benefit all home owners who have to pay them. This would be a little less discriminatory. Or else, we do not concern ourselves at all with this part, and we only pay an indirect subsidy by way of a tax exemption for lower interest, since that is where we stand as a Canadian Parliament which is directly involved.
I would like us to reflect on this and I would like the Minister of Finance, when he is given the opportunity to speak, probably during this debate, to tell us whether he has consulted with the provinces on this aspect of the proposal and whether he has heard the opinion of the provincial finance ministers or municipal affairs ministers on this aspect of the proposal. It would be interesting to know their point of view, Mr. Chairman, because the municipalities are most certainly a creation of the provinces. As we have said, the provinces provided the municipalities with the authority to collect property taxes and they certainly have the responsibility and the right to do so.
Topic: GOVERNMENT ORDERS
Subtopic: INCOME TAX ACT