44th Parl. 1st Sess.
March 4, 2022 10:00AM
- Mar/4/22 10:33:16 a.m.
- Watch
- Re: Bill C-8
Mr. Speaker, my colleague gave a brilliant speech about the federal government's proposed interference into provincial jurisdictions.
Not only would this create a precedent, but it also seems as though the way the tax is designed, how it will be applied and collected, will not do much to help with the housing shortage.
I have to wonder whether the federal government should be using other methods, such as Quebec's proposal to try to address the housing shortage. What would my colleague suggest?
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- Mar/4/22 10:48:02 a.m.
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- Re: Bill C-8
Mr. Speaker, earlier, my colleague from Joliette said that an amendment proposed by the Bloc Québécois to Bill C-8 was rejected.
What does my colleague from Cowichan—Malahat—Langford think of our proposal that the federal government consult the provinces before infringing on areas under their exclusive jurisdiction?
The Bloc Québécois is very concerned about housing. We have made a lot of suggestions, but we think that the exclusive jurisdiction of the provinces over taxation must be respected.
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- Mar/4/22 12:43:15 p.m.
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- Re: Bill C-8
Mr. Speaker, I thank my colleague who so ably talked about the federal immunization campaign. I notice that the federal government is far from being immunized against encroachments into areas of provincial taxation.
Under the Constitution, taxation was originally the direct jurisdiction of the provinces, and the only area of taxation for which jurisdiction and the spirit of the Constitution are still respected is property tax.
With respect to taxing unoccupied housing, does my colleague not think that before the federal government starts taxing in areas of jurisdiction that are exclusively provincial, it should get the provinces' consent first?
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- Mar/4/22 1:17:08 p.m.
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- Re: Bill C-8
Mr. Speaker, it is always a pleasure to see you, especially since we will be closing out the week together. Thank you for recognizing me.
Today, we are debating Bill C-8, which contains a number of budget measures, which we support for the most part. The Bloc Québécois is a party that proposes and supports measures that are in Quebec's interest.
This bill includes several standard elements and funds allocated under agreements with first nations, which we must endorse. Generally speaking, because these measures are useful, we will vote in favour of this bill.
However, there is a big hole in the bill, as there is nothing to address the housing crisis. The pandemic has changed people's habits. Some sectors in the market are facing severe shortages and, as several colleagues mentioned, the cost of renting or buying has increased considerably.
The economy will reopen, and immigration will resume, because Canada will accept newcomers and foreign students. That makes us happy. However, that is going to put pressure on the housing market in Quebec and the provinces.
As we have said repeatedly, the federal government has almost completely disengaged over time. From 1960 to 1995, it worked with Quebec and the provinces. For example, it supported the construction of about 25,000 new housing units. These past 20 years, however, there has been nothing. I am not saying it is any one party's fault. Both the Conservatives and the Liberals are to blame for doing nothing, and now we have a major housing shortage.
The government has since launched the national housing strategy and plans to help build 6,000 units per year, but that will not do much to alleviate the shortage I was just talking about.
The program numbers are convoluted because they include provincial money, private sector money and other sources of funding. Not only is this program less generous than what the Liberal government would have us believe, but it has been complicated for Quebec.
We lost a good two-and-a-half years negotiating. Housing falls under the jurisdiction of Quebec and the provinces, which we confirmed when we examined the bill in committee. Nevertheless, the Liberal government insisted on trying to impose its conditions, which shows the federal spending power. The federal government holds the purse strings, and so it has the provinces on a string.
Now it has come back to haunt them. Prices are rising and everyone is concerned about it, so the government is looking for a magical solution by creating a new tax on unused housing. This is a fiscal microaggression, an expression I am sure our NDP colleagues will appreciate. It is a small tax that will generate only $100 million in revenue. That is a small amount, and it is really easy for people to get around paying it. I am no tax expert, but I predict that people from other countries who have a house in Canada will start sending their children here on vacation for a few days so that they do not have to pay this tax.
This is also a one-size-fits-all tax. I am an economist and, during my career, I often looked at CMHC reports and expert reports on the housing market. Experts in the field study the housing market one segment, province, region or metropolitan area at a time, and yet this government is proposing a one-size-fits-all tax that will be the same everywhere, without any of the distinctions that a competent individual would make between the different markets. Sometimes, I feel like I am the only one here who understands that Montreal is not Vancouver and Saint‑Colomban is not Halifax. That is a problem.
Despite all that, this tax infringes on the last big area of taxation over which the provinces have exclusive jurisdiction. Patrick Taillon, a professor at Université Laval and recognized constitutional expert, testified about this before our committee. He said, and I quote:
With this tax, the federal government is, for the first time in the history of Confederation, at least, to my knowledge [and he knows a lot about this], encroaching on a form of taxation thus far left, and rightly so, in the hands of local authorities at the municipal and provincial levels. I am referring to the property tax.
He said that the federal government had shown wisdom in leaving this in the hands of the provinces. I would argue that the federal government had already lost much of its remaining wisdom when it comes to respecting provincial tax jurisdictions, and now with Bill C-8, it has none left at all. The government is fully treading on provincial jurisdictions.
This is a serious first step, because it will require infrastructure. When the value of a property or an asset is assessed, it has to be taxed as a percentage. This requires officials and infrastructure, mainly at the municipal level. That is a big problem.
This shows us once again that the federal government cannot help but interfere in the jurisdictions of Quebec and the provinces at the slightest temptation and any time there is a crisis, especially one that it has partially or fully caused.
History shows that whenever the federal government decides to take a little foray into the provinces' tax fields, it is often a one-way trip, and Quebec ends up footing the bill. That is how it is, and I think it is extremely serious.
During the election campaign, the city of Saint‑Colomban held a fantastic debate hosted by its mayor, Mr. Lalande, whom I salute. The mayors have told us that all towns and cities in Quebec need more tax revenue and that they need to look after their infrastructure. Some municipalities are having infrastructure problems because of climate change.
These mayors were telling us that they cannot rely on property tax revenues alone. That is all our cities have left, but the federal government is poking its nose in. Of course, the government will tell us that it is a small tax of just $100 million, but it is about the principle.
At committee, Mr. Taillon pointed out that this tax might very well be unconstitutional. On top of that, it will be ineffective. I am very familiar with tax systems, and this one will not get the job done. Not only is it a mistake, but it also shows a lack of respect for the fiscal jurisdictions of the provinces, for the Constitution and for our municipalities, which are asking us not to allow anyone to set foot in their tax field.
The Bloc Québécois proposed an amendment. There have been some major tax collection agreements. That is how Quebec got its own tax return. The other provinces get their tax base defined by the federal government. In the past, there have even been tax rental agreements, where some provinces rented their tax base to the federal government through a bilateral agreement. Some provinces did that, while others said no. Typically, Quebec was against that. Ontario did it and then withdrew, but it was done through a bilateral agreement.
In Quebec, we asked for common sense and respect for the Constitution, for Quebec and for historical precedents. We told the government that if it wanted to tread on our jurisdiction, then it needed to ask us ahead of time, and the provinces that were unwilling could establish their own policies. Quebec is capable of establishing its own housing policies, especially since housing is under Quebec's jurisdiction.
Unfortunately, I have to blame the table for not allowing this amendment. The Bloc Québécois still thinks that this would have been a solution for allowing willing provinces to consent to the federal government using this tax. Unfortunately, this was refused. The fact remains that we need co-operation, which is missing from this clause from Bill C‑8.
I will close by quoting Mr. Taillon.
In short, if co‑operative federalism means anything, the very least the government can do is consult the provinces and negotiate agreements to implement this policy, in keeping with the spirit and letter of the Constitution. The co‑operative mechanism should not, for that matter, allow the federal government to exert any authority over property tax.
I would have said it myself, but it was said so well at the finance committee.
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- Mar/4/22 1:28:01 p.m.
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- Re: Bill C-8
Mr. Speaker, my constituents and I certainly are worried about the price of gas and the price of many other things.
This is further proof that we must accelerate the energy transition. Naturally, someone who has no need for gas or whose gas consumption is decreasing is less affected by this price increase.
Unfortunately, the price of oil is being affected by geopolitics and the war in Ukraine. However, we should be wary of using geopolitics or crises where people are suffering as an excuse to produce or export more dirty oil from western Canada.
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- Mar/4/22 1:29:33 p.m.
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- Re: Bill C-8
Mr. Speaker, I agree with my colleague that more health care funding is needed. I think that the government needs to unconditionally increase health transfers to cover 35% of system costs.
I do want to make a small correction. I am very concerned about the federal government interfering in provincial jurisdictions and, in many respects, I do not agree with the NDP's proposed funding method, which would involve even more interference in Quebec's jurisdictions.
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- Mar/4/22 1:30:45 p.m.
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- Re: Bill C-8
Mr. Speaker, what I find funny is that the Liberals are telling us that it was in their platform.
I am stunned that they have not read their own platform, because I can assure them that we would have noticed. Nothing is more permanent than a temporary little tax. This will have long-lasting effects and will likely be expanded.
We should all be as concerned as my colleague from Joliette.
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Mr. Speaker, I really enjoyed reading my hon. colleague's bill. It is very interesting. The intention is sincere, and it could be impactful. Kudos to my colleague, and I thank him.
This bill talks about concentration in the economy and the importance of diversifying the economy. As we know, having an extremely concentrated economy primarily in the provinces that produce very polluting resources has an important impact not only on those provinces, but also on the rest of the country and Quebec.
The first thing we need to talk about is the environment. We all know that one Albertan produces six times more greenhouse gas emissions than a Quebecker. One Saskatchewanian produces seven times more than a Quebecker. That is substantial.
Next is resilience. A poorly diversified economy is less resilient in the face of stress, recessions, geopolitical uncertainties and pandemics.
There is also dependence. Anytime too much of the economy is focused on a single resource or group of resources, that creates dependence.
Conservative members like to say that Quebec and other provinces depend on equalization. However, the greatest example of dependence in this country is Alberta's dependence on oil. I will give an example. I had a lot of fun looking at Alberta's old budgets. I like public finances. There are normally very few surprises in the public finances of the provinces, but Alberta was pleasantly surprised this year.
Based on last year's projections, Alberta was expected to run a deficit of almost $11 billion for the 2022-23 fiscal year. All of a sudden, a $500-million surplus is announced. The Alberta government appears to be a genius at managing public funds.
The difference between the two Alberta budgets is that royalties on what they very affectionately call “bitumen” have increased by almost $8 billion. That is what magically covered nearly 70% of the province's deficit. Note that if Alberta had a value-added tax, a sales tax like most industrialized countries that know how to tax properly, like Quebec and the other provinces, like Europe, there would no longer be a deficit.
Yes, those provinces need to diversify their economy.
Beyond that, the market concentration can be calculated. Without getting into any detail, there are concentration indicators, such as the Herfindahl-Hirschman index. When we look at the concentration of Alberta's exports, the index is six times higher than that of Quebec, Ontario and the Canadian average, depending on the year. The most recent reliable statistics that I have date back to 2017. They are a few years old, but when we were debating the situation in Ukraine, the member for Wellington—Halton Hills did not hesitate to refer to a report from 2015 to say that we needed to produce more. I do not think that it will bother anyone that I am using data from 2017, but as an economist, I can say that the basic gist remains the same.
Yes, we need to diversify the economy.
Since I have been a member of the House, I have heard a lot of talk about diversification, in particular from those sitting next to me. Is there a problem with western Canada's public finances? Let us diversify and produce more oil. Is global warming a problem? Let us produce more oil and hope that, in 70 years, when the oceans have risen by three centimetres, we are able to sequester greenhouse gas emissions. That is pretty obvious.
On a more serious note, I would say that the Conservatives even used the war in Ukraine to try to justify the construction of pipelines that will take 10 to 15 years to complete. We are not talking about Keystone XL; we are talking about forever. They are trying to sell us that. It is serious.
I am a relatively new MP. In passing, I would like to say hello to my constituents in Mirabel and thank them for electing me six months ago. Parliament is a rumour mill. We hear things in the halls and secrets in the cafeteria. It would seem the Conservatives are thinking about putting oil in Canada's food guide.
It seems that this would resolve the problem of diversifying our diet. However, they do not agree at all. Some are wondering if it will be in with the fruits and vegetables. Others are wondering if it will be in with the meats and alternatives. I think it will end up with the dairy products because some people will put oil on their cereal in the morning. Since there is a leadership race, this question will likely be settled in September, or at least we hope so.
Let us come back to serious matters. This is an interesting bill that says that within 18 months after coming into force, the ministers concerned will meet with stakeholders. It says that they will have to make recommendations and reflect—it is a smart process, we admit it—that the report will have to be tabled in the House and brought to the attention of members, and that the process will have to be repeated every five years.
However, let us make sure that these reports do not end up like all the other reports, including the IPCC report. The government shows interest for a day and then throws it in the trash.
The same thing happened to the report of the commissioner of the environment. The commissioner blamed the government. We then asked questions in the House, but to listen to them talk one would believe that the commissioner was congratulating them. They need to do something else with these reports other than say that diversification will be paid for with more oil.
I, too, would like to see major research being conducted in Alberta. I have several university friends there, and I know that some research is already being done. I, too, want to see excellence, but this must be financed with something other than royalties.
Alberta must become less dependent. Their public finances indicate just how vulnerable Alberta is. When the price of oil goes up, everything is good; when the price of oil goes down, things are very bad. When things are good, they want more of it; when things are bad, their solution is to have more. Alberta and oil, it is like nicotine. When you miss it, you smoke more; when you smoke more, you cannot stop.
In the process that will lead us to reflect on this bill, I hope that we will find ourselves in a situation where we are constructive, forward-looking and do not continue to invest in an industry of the past. We must look ahead more than 10 years and stop relying on an industry in decline. Canada's history shows us that it has not always been easy. In former times, with the Pearson government, Canada's policy focused on buying Canadian.
We know they are very interested in the price of oil. Well, they were selling us their oil for more than the global price. That profit margin enabled them to develop the western oil sands, which cost a lot more to exploit than conventional oil because of the three processing stages.
In 2009, the Harper government said it would eliminate inefficient oil subsidies, whatever that means. Anyway, it does not matter what it means because the government did nothing. Since the 2015 Paris Agreement, our banks have invested $609 billion of our money, our savings, in non-renewable energy projects, in oil. That is a total of $609 billion, including $84 billion for coal. This is the 21st century, but we are investing in coal. It feels like we are back in the days of old locomotives.
There are solutions, in particular industry-led ones. This has to be a two-way street. The Bloc Québécois has made a lot of green finance proposals because the transition must be financially worthwhile. We need to ensure that the big capital is going to the right place, that investors have an incentive to invest, and that effective price signals are sent. We can use taxation, a savings tax. Transparency in the banking system is lacking. I want to know if my bank is investing my money in dirty oil. I will then make my own decision, but I want to know.
We are talking about maybe working on the fiduciary duties of pension funds, which invest our pensions for 20, 30, 40 or 50 years, when this industry is expected to be on the decline. We are talking about norms, about norms from the Task Force on Climate-related Financial Disclosures, or TCFD, about other norms that could be applied to Crown corporations, and so on.
There is a lot to think about. There is a lot of work to be done. We need to get a lot of people around the table. I read this bill with great interest and I hope that it will produce something constructive for the future of people in western Canada.
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