44th Parl. 1st Sess.
March 22, 2023 01:00PM
- Mar/22/23 9:27:33 p.m.
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Madam Speaker, I want to tell the story of Marcel Rheault and Mireille Morin, the owners of the Rheault Distillery in Hearst, Ontario, which produces Loon Vodka. They cannot raise their price any more to be competitive. A 6% tax hike is something that is really going to hurt them and their product, which has won many awards for its quality. It is for people like Marcel and Mireille that we need to adopt this motion this evening.
I am very pleased to rise and talk a little bit about the situation in Winnipeg. We have a lot of local brewers and distillers in the province of Manitoba. I think especially of Crown Royal, but there are many beer makers in Manitoba, such as Half Pints, Barn Hammer, Torque and Little Brown Jug. I could go on; there are a number. Manitobans are pleased to support their local brewers when they reach into the fridge for a beer at the end of a long week, if that is their choice. We want them to be able to continue to do that and continue to support local economies when they do. However, the fact of the matter is that many producers, particularly smaller producers, are in a tight spot when it comes to an increase in the excise tax.
The excise tax is not based on a percentage of their revenue or of their profit; it is a certain amount they have to pay for every unit sold, so when it goes up, it really has an impact on their business model. Also, because that increase in the rate of tax is tied to inflation, we are seeing that be a particularly high increase this year.
I think it was always a problem having a tax tied to inflation, a tax levied at an absolute rate, which is raised at the rate of inflation. It is something that was raised in 2017-2018 when the Liberals first brought this in. People asked, “What if we have a period of extraordinary inflation?” They said, “Well, that is not likely to happen. Inflation has been very consistent.” Of course, we know that major events can change the course of an economy, and Canada, along with many other parts of the world, has certainly been experiencing that. We have had a major event with the pandemic and there are major events happening as a result of climate change. Those are having an impact on the economy.
As we see inflation go up, we should not see the government exacerbating the problem of inflation by having an automatic increase in the tax, which is not to say that no taxes can increase, but it is appropriate to have a debate and a vote in Parliament in order to have that happen. What we are seeing now is the fruit of a decision to take Parliament out of the equation and have those taxes increase automatically at the rate of inflation instead of increasing them deliberately by a choice of Parliament in the face of difficult economic circumstances.
As my colleague for South Okanagan—West Kootenay pointed out earlier, quite rightly, there are other issues with the excise tax. New Democrats support the idea of a more gradual ramping up of the excise tax in order to help smaller brewers and smaller producers be more competitive when they are trying to carve out a space for themselves in what is a very competitive market with a lot of established, large players. That is not exactly what the motion calls for tonight, but I think that is part of the larger conversation we might be able to have more readily in this place if the excise tax were not already on an automatic escalator.
It would mean that government would have to come back to this place every year if it wanted to see the excise tax go up, and that would create opportunities for parliamentarians, like New Democrats, who are interested in a fairer excise tax structure for smaller producers, to raise those issues at that time. Today, then, we are doing this in the context of an opposition day motion, because otherwise there is no natural opportunity to be able to discuss this kind of thing.
I do think there is a real argument to be made about the particular economic circumstances we find ourselves in for Canadians who enjoy the odd beer and who are already facing increasing costs on groceries, rent and everything else. They do not need an added increase in the excise tax on their beer.
There is an argument to be made for small businesses that are going to be distressed by having to pay these additional costs and worrying about whether they can raise their prices in order to pass that on to the consumer without just getting shut out of the market.
I also think there is a more general and principled argument about the role of Parliament in approving taxation, where we can have great debates in this place about what the appropriate rate of taxation is on various things, and I am sure that we can find at least as much disagreement as we find agreement on that. I think it is important that this debate come to this place and that increases in taxes are approved.
I would say this is just the other side of the coin of another measure that I do not personally support, which is indexing income tax brackets to inflation, too. I think that governments and legislatures, particularly, have a responsibility to evaluate the circumstances and make decisions, in a particular time, about what is appropriate.
If that is a change in tax brackets, that is something that should be deliberately debated and about which a very intentional decision should be made. When it comes to something like the excise tax, likewise, that is something that should be debated and there should be an intentional decision about it.
I think this mechanism of an automatic escalator is problematic because it removes people's democratically elected legislators from the equation when we are having important debates about what an appropriate rate of taxation is.
I am a member of the finance committee, and I was certainly very happy to see in the finance committee's pre-budget consultation report a recommendation to freeze this planned excise tax increase, so that lets us know that it is not just coming from one party. It takes a majority voice on a committee in order to issue a recommendation, and I think the government should take very seriously the fact that coming out of one of the most senior committees of the House of Commons was a recommendation not to proceed with this tax hike.
I think they need to look at the extent to which the excise tax will be increased because of the extraordinary period of inflation we have been living through over the last 12 months. This was not the kind of usual inflation that was normal in the Canadian economy prior to the pandemic. I do not believe this is what the government of the day foresaw. It is certainly not what Canadians foresaw when this automatic escalator was put in, and I think it is reasonable to recognize that the situation calls for a different course of action.
That is why I am pleased to rise in support of the motion, alongside my other New Democratic colleagues.
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- Mar/22/23 9:43:33 p.m.
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Mr. Speaker, I feel I would be remiss if I did not take a moment to acknowledge what has happened in the House with the member for Don Valley North. Obviously I am not in a position to speak to the veracity of the claims that have been made in the media, but I think this is an important reminder of the very real personal and professional impacts the debate we have been having on foreign interference in elections can have.
It is an example of why it is important that we have a public inquiry, so we can have a proper airing of the kinds of accusations being made in the media, in many cases now by anonymous sources, and so that folks in the Chinese-Canadian community know that those claims are being considered by someone who has access to the full evidence and has the power to clear names where names should be cleared. That is why it is important that we have nothing short of a public inquiry.
On the question that was posed, it is a good point that while it is a relatively small increase in some ways, that argument does not really pass muster because it is a big impact on the bottom lines of these smaller producers of beer, spirits and wines. At the end of the day, if it is not that big of an increase, which is what the government is saying, then it is not that big a loss for it to bypass it.
We know that other government revenue has grown a fair bit because of inflation. This is not the place to do it. If the government wants other revenue, we know there are companies, such as Loblaws, frankly, that can afford to pay more in tax. The government should be looking at them, not smaller producers of beer, spirits and wine, to raise revenue.
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- Mar/22/23 9:47:00 p.m.
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Mr. Speaker, I already said my piece on the other matter.
In respect of the member's question on the motion that we are dealing with this evening, I would say that there is definitely a debate to be had about that proper balance. My point is that an automatic escalator makes it harder to have that debate, and it does not cause a debate to be had of necessity when those taxes go up.
Let us have those debates and let us make those decisions here on the floor of Parliament. An automatic escalator actually deviates from that very path of having a debate about the right balance in this place.
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- Mar/22/23 9:48:05 p.m.
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Mr. Speaker, I would not say the federal budget is in a surplus situation. I think we are still going to see deficits. The 6% increase to the tax is due to the fact that we have an automatic mechanism to escalate the tax.
I think this is wrong. We as parliamentarians need to have debates and make deliberate decisions about tax increases. In the current environment, we are in a period of extreme inflation compared to previous decades. I do not think now is the time to have an exceptional tax increase on these products.
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- Mar/22/23 10:11:54 p.m.
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Mr. Speaker, I rise on a point of order.
I think we should recall that at one time in the House of Commons there was a period without questions and comments. It was not until the McGrath committee report of the 1980s that Parliament adopted the practice of having questions and answers after comments.
If we look at certain provincial legislatures, like the legislature in Manitoba, they do not have the practice of questions and comments. The McGrath committee found that parliamentary debate would be far better if members were asked questions after their speeches. It was due to a very deliberate attempt to improve the quality of debate, by the McGrath committee in 1989, that we have questions and comments.
Unless we are going to study the issue and change our Standing Orders, I do not think members should go back on an important reflection of members at that time. It has been the tradition, up until now, to have meaningful debate in the chamber by having questions and comments, and that is what members are doing. Whether they are leaving the chamber or whether they are just stupefied, which I can believe with some members on the Conservative bench, and they choose to stay in their place—
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- Mar/22/23 10:14:16 p.m.
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Mr. Speaker, I just have a question. Was the time between the end of the speech and the beginning of Q and A interrupted by other business of the House?
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- Mar/22/23 10:17:10 p.m.
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Mr. Speaker, I just want to reassure my colleague that I did not say that it was true; I asked if it was true.
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