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EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, December 12, 1996

.0911

[English]

The Chairman: Good morning, everyone. We don't have a typed agenda this morning for two reasons. The main reason is that the staff just hasn't had time because of many other things that have been coming at them. The other reason is that it's a very brief agenda anyway.

We have three items, unless you have something additional, and we will do them in this order, with your concurrence. The first is a request for a supplementary budget to facilitate the work of this committee and the subcommittee on reproductive technologies. There are a couple of figures involved here and I'll walk you through in a moment. The second will be Mr. Dhaliwal's motion related to Bill C-71, the one we put over the other night. At that point we'll probably go in camera on the issue of the child study report. It would be customary to do that last item in camera.

Are there any other items you want to add?

Mr. Martin (Esquimalt - Juan de Fuca): Mr. Chairman, last Tuesday night when we were speaking of motions we were going to put forward with respect to the tobacco legislation, you said that today was a good opportunity to do that.

The Chairman: Yes, if you wish.

Mr. Martin: I gave our clerk a copy of a motion I was putting forward, which was that we ask the government to put the tobacco taxes for cigarettes back where they were as of January 1994.

The Chairman: Do you have a copy of that? Can you get something on paper?

Mr. Martin: I did put one on Tuesday. I can certainly do it again.

The Chairman: Okay. Under new business we have Keith. Is there anything else?

Let's proceed. On the budget item I'll just ask the clerk to walk you through.

[Translation]

Mr. Dubé (Lévis): Wouldn't it be appropriate, since they both relate to Bill C-71, to consider together this motion and the one put by the Reform Party?

The Chairman: Yes.

[English]

Yes, because his item is one of the public items, and we would deal with it before going in camera. As I see it, we would deal with the budget, Mr. Dhaliwal's motion, Mr. Martin's motion, and then go in camera.

I will ask Pierre Rodrigue to tell us what we're doing here.

The Clerk of the Committee: These are simply working budgets for witnesses' expenses. This would cover witnesses' expenses for the tobacco bill, which we have just gone through, and the subcommittee on Bill C-47 on reproductive technologies. The total amount would be $41,925.

.0915

Mr. Murphy (Annapolis Valley - Hants): I so move.

Mr. Volpe (Eglinton - Lawrence): Is the number you just gave us for the subcommittee?

The Clerk: It's for both of them.

The Chairman: Let's be clear that this has nothing to do with a travel request. This is the operation of those committees here, receiving witnesses and that kind of thing.

Motion agreed to

The Chairman: We're going to go to the motion that Mr. Dhaliwal moved on Tuesday night, which you have.

Go ahead, Antoine.

[Translation]

Mr. Dubé: Neither Mrs. Picard nor I will speak about this at length. We believe that it is an initiative which just delays the negative impact of this provision on the sponsorships secured by sports and cultural organizations. We can't be in favour of that. We'll therefore vote against the motion. I would like a vote by role call.

[English]

Mr. Martin: Mr. Chairman, I'd like to know from Mr. Dhaliwal what he considers to be a period of time.

Mr. Dhaliwal (Vancouver South): Mr. Chairman, as you know, many groups came forward, sports and cultural groups that are funded by the tobacco industry. As someone who came from the business world, one thing that always made me very angry was when government brought in a law without being sensitive to existing plans and programs. These events are organized a year ahead of time, and many of them said their events would be cancelled if they couldn't secure other funding.

I strongly believe they will be able to secure other funding and their events will go on, but we need to give them some time. I'm not saying three years or two years. I'm saying it's not unreasonable to tell them that they will have a year to secure other funding, that they should go out and work and prepare so that a year from now they will have time to make plans and find other sponsors.

It's not easy finding other sponsorships, and they need some time. We heard that today. I'd hate to have all those events across the country.... In Montreal we heard how important these cultural and sports events are. I heard in Vancouver how important these cultural and sports events are. And they are. They attract tourism and they are great events. I'd hate to see the tobacco industry pull all their money, which they have the opportunity to, and many of these events be cancelled. I want to give the sports and cultural events an opportunity to go out and replace that funding, not just say, bang, as of tomorrow none of this can happen.

As a businessman I was always very offended that government was never pragmatic. You need to be pragmatic. You need to say that these people have planned these things ahead, so we have to give them some transitional time. I'm not saying a long time, but I'm saying maybe a year, and we have to leave that open to the minister. They can say that it will come into effect after the second year in terms of the funding part - only in terms of the funding part, to give them time to get funding from other sources.

Mr. Martin: If Mr. Dhaliwal would like to make an amendment to replace ``a period of time'' with ``one year'', then I think that would be very reasonable and would lend one to support the motion.

Mr. Hill (Macleod): Along the same lines, ``transitional provisions'' is a very loose phrase. We're saying first off ``that the Minister of Health consider proposing'' and then we're talking about ``transitional provisions''. That doesn't talk about funding. It doesn't talk about the fact that this could end up with the government spending money.

.0920

Then in terms of the very wide open period of time, surely we could tighten this up. We won't handcuff the minister, but we will make it very obvious what this committee is proposing. Otherwise this is absolutely insupportable.

Mr. Volpe: Mr. Chairman, we started the debate on this the other night. I felt at the time, and I think members around the table agreed, that this was something we couldn't consider, given all the other decisions we had made.

To address both your concerns and Mr. Dubé's, I'll speak putting on my hat representing at least the government position. What this amendment suggests is that the minister consider the contractual obligations that would already have been entered into and the time parameters of those contractual obligations so that the legislation wouldn't have a negative impact on the contractual obligations.

Now, the wording, if I interpreted it correctly, is looser than what Dr. Martin would want specifically. If this is going to have any kind of an impact, it would serve as an invitation to both the minister and the cultural groups to look at what specific contracts are in place. If you say one year, you might actually give people more space than they need, and if you say less than that, you might be giving less than what they need.

So the recommendation is loose enough to be able to give the minister an opportunity to invite those communities and those groups to come forward with the actual paper in hand so that we don't do what was attempted the other day, which was to negotiate in committee or via the media on what should be an amendment to capture everybody's interests, when we might have been talking about only one or two.

The spirit in which this amendment is taken is essentially to consider all the things that were said but come up with a specific issue that addresses particular cases. I think the wording does do that without tying the minister into a specific time, a specific item, and without impinging upon the principles in the legislation that this committee approved the other night.

What it does is it says now that we've done that and we've established the principle of the bill, we've accepted the recommendations of the legislation. We're all reasonable people around the table. We're trying to accomplish a health goal. But in the process, let's understand that what we want to do is make sure the road is cleared as we do this. That's what the health committee is proposing to the minister and to the House in a secondary report.

From my perspective, that's all this does. It doesn't tell the minister to do A and it doesn't tell him to do B. It doesn't say that the Indy race in Montreal or the Benson & Hedges event in Toronto or the one in Vancouver is the one to have, or whether it's the theatre group in New Brunswick or Just for Laughs in Montreal. Show us. Specifically what are those contracts? If you have them, make your case. You have probably a month to do it.

If somebody does make a case with the paper in hand and we see that it's an official contract, then this committee, if it adopts this motion, says Minister, please take a look at those facts without compromising the principles of the bill that we proposed the other night.

[Translation]

Mrs. Picard (Drummond): As far as I am concerned, I think that right now, nothing justifies such a proposal, since it hasn't been demonstrated that sponsorships, as they are now, could increase tobacco consumption, particularly among young people.

.0925

Most sports or cultural events organizers came to tell us that, if nothing is found to replace those sponsorships, financing will be very difficult to arrange in the present situation. It's not easy to find sponsors who are willing to finance 95% of the cost of these events. If these organizations don't find any funds, they are going to disappear, unless the government replaces the 95% financing they get through sponsorships. If the government does not give them any support, it's just too bad, these organizations are going to disappear.

There is nothing else available right now. There are no other ways. They already need a year to find the additional 5% funding they need for the event to take place.

The government should have further consultations with these groups and consider another strategy. There will be time over the holidays to do so. We'll be gone the all month of January. The Department's officials should have further consultations with these groups during that time.

Mr. Volpe: Mrs. Picard, it's about the same thing we suggest in the motion. We propose a series of contracts. If there are about 350 cultural groups in the country which are sponsored by tobacco companies, we want them to give us some evidence of that. Are they really sponsored through contracts? If so, these contracts are of course valid over a period of time. We suggest honouring these contracts by replacing them with something else. It's quite another matter to decide who should be responsible to replace the financing those cultural groups get right now. I don't think that the committee has the mandate to determine how they are going to finance their activities once the present contracts have expired.

If we want to follow business practices, we can agree that there are obligations which have to be honoured. At the same time, we have to agree that this committee, as well as the minister and the Department, already have, in principle, the support of Parliament to protect the public health. With all due respect, Mrs. Picard, we should not forget that we are talking about a legislation which deals with the public health, particularly, with the health of young people.

Those cultural groups and other organizations which set up events with some social value have a secondary role. This is not what we are after.

I could therefore support this motion because it gives the minister, this committee and Parliament the opportunity, and I stress the word opportunity, to consider the main objective, that is the health of young people and of the public at large, in the context of present obligations which are not going to last forever.

Mrs. Picard: Mr. Volpe, health...

.0930

[English]

The Chairman: I have other speakers in this order: Antoine, then John, then Pauline.

Before doing that, just let me appeal to you. I don't think we should reopen the whole debate about whether or not there should be sponsorships. That decision was made on principle in the House, in the principle of the bill; it was made in committee.

The decision here - and whether or not we like the other decisions that were made is irrelevant to what's here now. We have a child health study that we have shafted about 14 times already, and this is our last kick at it. We can spend the next hour debating this motion, have no time for the child health study and leave it over another two or three months, or we could go to this motion fairly quickly.

I don't want to cut off debate, but may I suggest that because we'd like to get to the child health study, we use an economy of words and we be very disciplined about what we're talking about.

The only issue in this motion is not whether there should be sponsorship; it's whether there should be a tobacco bill. The only issue is whether there should be a phase-in period, and at some point we're going to vote yes or no on the very narrow question, should there be a phase-in period?

So, in fairness, would you address yourselves to that question? If you want a phase-in period, tell us why and then vote for it. If you don't want a phase-in period, tell us why and then vote against it.

Mr. Szabo (Mississauga South): The motion is whether we should consider a phase-in period.

The Chairman: I understand that, Paul, but what I'm saying is -

Mr. Szabo: But for the record, Mr. Chairman, if we vote on this thing, I don't want to have to be asked today to vote on whether we have one; it's whether we should consider having one, and there's a big difference for me.

The Chairman: Paul has much more precise language than I do. I generally say what's on my mind, and he has a way of making sure it's in exactly the right words and then saying it. But I submit to you that if you don't want a phase-in, you won't vote for it. That was my point. Do you want to vote to ask the minister to consider if you wouldn't want one? That was my real point there. Anyway, without getting into the semantics, decide what side you're on - but on what side of this issue, not the larger issue of tobacco bills and sponsorships. The issue is very specific, about whether we should recommend to the minister that he consider a phase-in or not.

Could I appeal to you to keep to that? Antoine, John and Pauline.

[Translation]

Mr. Dubé: I would like to remind you that we, the official Opposition, agree with the bill's objectives. What we don't agree with is mainly the provision dealing with sponsorships.

The intent of the motion that was put on the floor is good, but as the representatives of the Reform Party are saying, it covers many issues and could even potentially be applied by the minister in a way that would run contrary to stated objectives. I am not saying that's what he wants to do, but there are provisions to deal with tobacco consumption that should be implemented immediately.

I do not doubt the minister's good intentions, but given the way this is worded, it's not limited to sponsorships. Even if it were, I would still think that it creates a rather delicate situation, because the bill has not yet been passed. When it has, after we come back at the end of the holidays, it will still have to be debated in the Senate and receive Royal Assent at a date which is yet unknown.

I understand what you want to do. I am not saying that you are wrong, but it seems to me that what you propose is very difficult to implement. Even if the motion were more specific, the fact that it could not be fairly applied to everybody would prevent us from voting in favour.

In any case, let me remind you what Pauline said. As far as we are concerned, it has not been clearly established that sponsorships... I'm not talking about advertising, because I agree that advertising does increase tobacco consumption, but the motion is not restrictive. It's too broad, and there is no compensation. Therefore, I cannot agree. End of discussion.

[English]

The Chairman: I have a comment that will hopefully clarify the issues involved here. I intervene here somewhat because I had floated this idea the other night, and as an individual member of the committee I'm very partial to the idea. I have two bits of clarification that may help. One is in response to Antoine. If this recommendation went forward, of course the minister could consider it at various times. My own hope is that he would consider it before the bill has completed its stages before the House and let us know what his intentions are. This brings me to my second point.

.0935

This is not a tribunal where we're about to decide whether to hang the minister or give him an award. It's not that specific kind of a decision. It is a decision to make a suggestion to a minister who, technically in terms of his mandate, can ignore everything everyone says to him as individuals or as a committee. Ours is a recommendation.

I've never believed in government by script: Minister, you will cough here - that kind of nonsense. I happen to believe that the present Minister of Health is quite an intelligent man, and I happen to believe, generally, that people who become ministers of health are intelligent people. If they get a message from a committee saying, would you consider this, I don't think you need to write it out as, would you consider it at 2:01 a.m. in the morning when you're in a good mood and after you've had four coffees? I don't think you need to get into that kind of detail.

I think the minister will understand exactly what the message says. The committee has said, by God, maybe there's a reason to have a look at this whole idea of phase-in, and let him scratch his head about whether it should be one year or 13.5 months or whatever.

It seems to me that he doesn't have to be very bright to figure out what we're trying to say to him here. I believe if we're going to put forward a motion, it ought to be a general one, which sends to him the general signal that this is an issue based on what we've heard in committee. This is an issue we'd really like him to have a look at before he closes the door on this whole issue.

I have in this order John and then Keith.

Mr. Murphy: Just quickly, Mr. Chair, I see this of course as a health issue, and I think what we're doing is responding to what we heard from our witnesses. We listened. It's a broad issue. It relates to advertising, and it's broad enough that the minister can consider a number of options. From my perspective, if we limit the minister with certain provisions here, if he considers doing this, neither he nor his officials will be able to negotiate with the different groups that came forward to talk with us.

I think we should leave it in the broad sense because it leaves more scope for imagination and interventions by the minister and staff. So I support the way it's going.

Mr. Martin: I'm sympathetic towards Mr. Dhaliwal's pragmatic rationalization of what he's put forward. However, it can't be supported in its current format, in my view, unless it's tightened up to very specific time lines. Mr. Dubé expressed everything else I was going to say, so that's it.

The Chairman: Are you ready for the question? You have the motion. I'll ask those with a position on the resolution to indicate as the clerk calls the question.

Mr. Dhaliwal: As the mover of the motion, can I have a final say to try to convince my colleagues to support this motion?

As the mover of the motion, let me say that I understand. I think we discussed the health of it and how important it is, and I still believe in that, but this is about showing we still have sensitivity to the concerns expressed over the three days in which people came forward in the hearings we've had.

I think we need to give the minister some room. If we're very specific on it, I think we may not be able to achieve what we want to do, which is being sensitive to the many representations we've had by the different groups that came forward. I think that's what this motion really reflects.

All of us believe very strongly in the bill, and the very principle of the bill, and that we should work and do everything we can to stop people from smoking. I believe it strongly, as you've heard me in this meeting. I'm a non-smoker. I think we should even have specific targets.

I hope you'll support it in that the general spirit is to give a direction, but not handcuff the minister where he wouldn't be able to help this committee. That's why I urge my colleagues to support this motion.

.0940

Motion agreed to: yeas 6; nays 4

The Chairman: Thank you, Harb.

We have two issues before us: the child health study and Keith's motion. I want to deal with both, and we shall. It's up to you to decide the order.

My preference would be, while we're in public, to deal with Keith's motion and proceed. But we can't take a long time on that because we have to do something on the child health study. If you want to have a talkfest on Keith's motion, I'll need your commitment that you're prepared to stay an extra hour or so, because we have to do the child health study this morning.

The alternative is to do the child health study first and come back to the motion. I'm easy either way.

Mr. Dhaliwal: Let's move Keith's motion. I think we can get it out of the way, Mr. Chairman.

The Chairman: Okay. Keith, do you have a motion?

Mr. Martin: The motion is that this committee request the minister to bring the tobacco taxes back to where they were as of January 1994.

The Chairman: What minister?

Mr. Martin: The Minister of Health.

The Chairman: No, he doesn't deal with taxes at all. We're going to need a motion, because first of all, the Minister of Health has nothing to do with taxes.

Mr. Martin: Well, that we ask the Minister of Finance to bring the tobacco taxes back to where they were as of January 1994.

The reason for that is the single most important factor in consumption of cigarettes, and if we propose to -

The Chairman: If we want to get into a debate, we have to have a motion. As near as I can read it, the motion is that the committee recommend that the Minister of Finance consider restoring the tobacco taxes to the January 1994 levels - that's the essence.

Mr. Volpe: I have a point of clarification, please. Maybe the clerk can help us out here. I realize committees can do virtually anything they want, but would it be in order for a recommendation from the health committee to go to a minister of another department? I want to consider what Dr. Martin is saying carefully, but I don't want to squander the time of the committee if in the end they say mind your own business.

The Chairman: You might want to put it in more general terms - that the committee notes the desirability of doing so and so, or that kind of thing.

Mr. Martin: I would suggest, since it's my motion, Mr. Chairman, that we request the Minister of Finance - or if that's not possible, request the Minister of Health to request the Minister of Finance - to bring the taxes back to where they were as of January 1994.

The Chairman: Keith, you put the committee in an awkward spot, in that you have the whole committee scrambling now to find wording for your motion. If the chair were curt this morning, it would say: I don't hear a motion that's in order, so we'll move on.

The clerk, who's more experienced at this than you or I, is still attempting to find out the right way to do this, and whether we can as a committee....

Joe raised a very good point about making recommendations to a minister who's not within our mandate. Here it is right here, I think.

Mr. Martin: I did put one in on Tuesday night in writing, Mr. Chairman, for the record.

The Chairman: Okay. What is the motion you put in writing on Tuesday night?

Mr. Martin: The motion is that we as a committee request the Minister of Health to bring the tobacco taxes back to where they were as of January 1994.

The Chairman: The chair finds that motion to be out of order.

Are there any other motions?

Mr. Martin: Why is that out of order, Mr. Chairman?

The Chairman: For the reasons you just heard a moment ago. The Minister of Health doesn't deal with finance matters. He doesn't deal with taxes.

.0945

Keith, I'm not playing a game with you. It's simply that if members of the committee, in fairness to the rest of us, are going to present motions, they ought to know what's in order and what's not in order and have the motion worded before they come here, given that it's not a spontaneous thing. You've known since Tuesday night. I was hoping....

Mr. Martin: That one I did put in writing on Tuesday night, Mr. Chairman.

The Chairman: Yes, you did. I just heard it. Now what I heard was that you're moving that the Minister of Health.... I ruled the motion out of order because the Minister of Health doesn't deal with taxation.

If you've got another motion, we'll deal with it. If not, we'll go on to the other issue.

Mr. Martin: I request that we as a committee request that the Minister of Finance....

The Chairman: The clerk is in a dilemma as to whether that one's in order.

Mr. Martin: Well, I put this forward on Tuesday, Mr. Chairman, and if it's out of order today, then it should have been out of order on Tuesday. I would have hoped that the clerk or the chairman would have ruled at that time that it was out of order, so I could have made the appropriate changes.

The Chairman: Keith, in fairness, you can row with us all you want - we're politicians - but don't involve the staff. The term ``Minister of Health'' was not in the resolution you put forward on Tuesday night. It was not.

Mr. Martin: The motion I put forward on Tuesday night, Mr. Chairman - at that time it was not deemed to be out of order. That's why I assumed it was going to be acceptable for today.

The Chairman: I'm sorry, Keith. Again, in fairness to us all, stop jumping to all kinds of conclusions. There was no motion put forward Tuesday night. What happened Tuesday night...Harb put forward a motion, and then after that, some comment was made from people to my left, and I said sure, if there are other resolutions, please.... But there was nothing put on the floor. The rest of the committee was not aware of any other resolutions, save the one put down by Harb. Am I correct on that? Is that correct?

Mr. Martin: No. I did state, Mr. Chairman, very clearly what that motion was, and I put it in writing.

The Chairman: Well, do we have the minutes of the other night? I'll ask the clerk to speak on this, please.

[Translation]

Mr. Dubé: I was here and he did put it forward. I can vouch for that.

[English]

The Chairman: I understand that, but I asked the clerk to make a comment. Then I'll hear Antoine.

The Clerk: You did put the motion in writing. I did receive it. To be quite honest with you, the minutes for that meeting are not done, obviously. It was a very long meeting, and I don't have the motion with me.

The Chairman: Okay. I would suggest....

Mr. Martin: If I could find a better road here that might clarify this, so we can just deal with this right now in a way that's acceptable to the majority of the people here, once and for all.... Would it be acceptable if I word this such that we as a committee ask that the Government of Canada put the tobacco taxes back to where they were as of January 1994? Is that in order?

The Chairman: When I asked the clerk whether it was in order, his answer was ``read this''. Section 108.(2) of the Standing Orders says:

Mr. Martin: Which means that this is in order.

Just for the record, Mr. Chairman, I am not in any way impugning the hard-working staff of this committee in any way, shape or form, and I appreciate all the hard work that they do for this committee.

The Chairman: No. Nobody felt you were.

All the chair was asked to do was to be in order, and the way I read this one, we can report on all matters relating to the operation of a department or departments that we are assigned from time to time by the House. Finance is not a department that relates to our mandate. It's not something that has been assigned to us. If it was a tax matter, it would have to be dealt with by the Department of Finance, unless it was particularly assigned to us. That's my understanding.

.0950

Mr. Martin: It certainly relates to this bill, particularly since the bill has to do with tobacco and consumption. Cost is a significant aspect of that, and the bill relates to it. The minister is already increasing the tobacco taxes.

The Chairman: Paul, I'm going to recognize you in a minute.

In fairness, Keith, it can be said that anything that costs money.... Finance and Revenue have a role in this. It's a taxation role, and obviously that taxation role can relate to tobacco products at one time and to agricultural products at another time. So your argument could be extrapolated to mean all committees should be able to deal with all matters at all times, and that's not what the Standing Order says. It says we ought to be confined to matters relating to those departments for which we have a mandate. The only department for which we have a mandate here in this committee is the health department.

Paul, you have a point?

Mr. Szabo: Mr. Chairman, it occurs to me that the reduction of the excise taxes on tobacco was announced by the Minister of Health, in the first instance by Diane Marleau in her tobacco strategy. Fundamentally, though, the issue is that the health aspects are inextricably linked to the cost of the product, etc. That's part of the strategy.

I wonder if the committee would consider the issue in the same context as the motion we've just dealt with: that the government consider restoring taxes to the January 1994 levels as part of its tobacco strategy. That indicates we are attempting to deal with it from the standpoint of a tobacco strategy as opposed to the standpoint of financial or fiscal responsibility.

The Chairman: Again, Paul's comments are helpful, and I apologize for interrupting him, but technically, what happens every time....

You remember what happened when the government put the tax up by 70¢. There were simultaneous announcements. The tax announcement is made by the Minister of Finance. The Minister of Health may refer to it and so on, but the tax announcement is made by the Minister of Finance, as was done at the time Marleau brought in the initial strategy, because it's a Finance matter.

Paul's suggestion, while worth considering, I don't think helps the situation, because the motion we've just passed is different. It is not a finance motion. The motion we've just passed asks the minister to consider a matter relating to implementation of a health bill, which doesn't cost the taxpayer a cent. It's consideration of a health bill. That's what we did here.

Your motion now asks the Minister of Finance to do something. My understanding is this committee can't do that directly. If through some wording we can find a way to do it indirectly - ``recommend to the House'' or something like that....

Somebody's working on it, are they? Maybe what we ought to do is get the wording of this one, go on to the health study and come back, unless somebody has some wording right now.

Mr. Martin: If the clerk has a suggestion, but I don't see why we cannot, as a committee, request the Government of Canada to consider raising the tobacco taxes back to where they were as of January 1994.

The Chairman: The answer is because it's not in order. I just read the citation. That's why we can't do it.

Mr. Martin: That doesn't make any sense to me, with all due respect.

The Chairman: A lot of my rulings don't make any sense, but they're based on the advice I get from other people I don't understand sometimes. I'm telling you I just read the citation, and we can only deal with matters in terms of departments for which we have a mandate, and we don't have a mandate for Finance.

Mr. Martin: Even though it relates intimately to the issue we're discussing today? Even though the government is raising -

The Chairman: I'm sorry. You're debating the ruling, so if you want to pursue, I'll have a motion that the chairman's ruling be upheld and we'll go on, because this childishness has gone on long enough.

Mr. Szabo: Mr. Chairman, in the tobacco bill of 1971 there were penalties prescribed that we could comment on and make recommendations on, and that's in the purview of Justice. So I think there's a contradiction in terms of what we can deal with. I think there's some overlap of jurisdictions here, because that's what makes government run efficiently.

Mr. Martin has raised an issue that I would like to talk about in terms of attitude towards the excise tax as an element of tobacco strategy. It's useful and relevant, and we should help him find out how we can talk about this rather than why we can't.

.0955

The Chairman: Here's a way to go at it. If the motion said that the committee recommends that the Minister of Health consider the advisability of restoring the tobacco taxes to the 1994 levels as an element in his tobacco strategy....

Mr. Martin: That's fine.

The Chairman: Andy.

Mr. Scott (Fredericton - York - Sunbury): If I understand the motion, it's to suggest that the Minister of Health consider the advisability of restoring the tax on tobacco to the -

The Chairman: - pre-1994 levels.

Mr. Scott: I'm not sure how one interprets ``consider the advisability'', but I think it would have the impact in my region - probably more broadly than just in my riding - of forcing down the price of cigarettes. I know the intent, but the reality is we'll see trucks back with cigarettes in them.

The argument in response to that has always been to step up enforcement, do a better job of restricting contraband and so on. If somehow that could be guaranteed, that would be wonderful. Many other things that we decide to do are conditional on other things happening that we don't control. My experience is that if the taxes go up to where they were, we're going to have the same problem again. I want the record to show clearly that in my constituency that will cause the price of cigarettes to go down, because of the availability of contraband. That was the case and that will continue to be the case.

The Chairman: Okay.

Mr. Murphy.

Mr. Murphy: Mr. Chairman, I agree with what Andy's saying. I understand that the officials expended a fair amount of time and effort to find a balance on the price so that we wouldn't get into the situation of smuggling contraband. In pushing the taxes up I think we are flying in the face of what I thought was good advice in terms of keeping a balance here. So I'm not sure we're doing something that will be advantageous in reducing smoking by our population.

The Vice-Chairman (Mr. Dhaliwal): Next are Keith, Madam Picard and Mr. Hill, in that order, and Mr. Volpe. I don't want to spend a lot of time. I think some good points have been made.

Mr. Martin.

Mr. Martin: Contrary to the previous chairman's remarks about this being a childish issue, the fact is that with the tobacco tax roll-back, there has been a dramatic increase in consumption, particularly among children, with 250,000 kids picking up cigarettes every year.

There are two competing issues here. One is smuggling and one is consumption. If you want to address the consumption issue, the single most important thing you can do is increase the cost, which means increasing the taxes. However, that can lead to an increase in smuggling, which happened before. How do we address that?

What worked in 1992, under the Conservative government, is that they put an export tax on cigarettes. That export tax of $8 a pack decreased smuggling in tobacco by 60% to 70% within six weeks. But the government caved in because of pressure from the tobacco companies that they were going to withdraw from Canada. That's what happened. After that, consumption went up.

How do you address the smuggling issue? You put the export tax on and you enforce the law. If you don't enforce the law, all you're doing is.... The smuggling conduits have a number of different products. Tobacco is only one of them, as we know. There's drugs, alcohol, weapons, people and tobacco. If you merely drop the taxes to decrease smuggling, all you're doing is removing one of those products. You do nothing to decrease the smuggling conduits, which continue to smuggle the other four illegal items across our borders.

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So to address smuggling, deal with the export tax and enforce the law. That's how you're going to address the smuggling issue. In terms of consumption, the best way is to put the taxes back where they were.

The Vice-Chairman (Mr. Dhaliwal): Madam Picard.

[Translation]

Mrs. Picard: Mr. Chairman, I think that raising this issue is totally irresponsible. Most of the smuggling was done in Quebec and the result was an increase of tobacco consumption by young people. If we restore taxes at the 1994 level, it will be completely counterproductive.

I saw children getting contraband cigarettes. The smugglers came in the school yards. That's how our young people started to smoke.

During that time, I saw children who never touched a cigarette in their life start buying a pack for $1 in the school yard. There indeed was an increase in tobacco consumption at that time. I totally disagree with this proposal. If you came from an area where smuggling had such devastating effects, you would not put it forward.

[English]

The Vice-Chairman (Mr. Dhaliwal): Thank you, Madam Picard.

We have Mr. Hill, Mr. Volpe and then we'll conclude, I think, and get on to a vote.

Mr. Hill.

Mr. Hill: Keith has already mentioned the export tax, which is a significant component of this issue. The other issue is the differential between the U.S. and Canadian prices. As long as the differential exists, there will be smuggling, so the real issue for me is to make sure our American neighbours do exactly what we do.

As they move towards stricter and tighter tobacco control, we will walk away from the smuggling problem. Taxes are anathema to me as an individual. That's not the way you handle social problems, but it's very clear that price is significant for youth. It's absolutely clear, and there is no argument about this. The price, however, must be in line with our neighbour. That's the issue.

The Vice-Chairman (Mr. Dhaliwal): Thank you very much.

We'll ask Mr. Volpe to conclude and we'll put it to a vote afterwards.

Mr. Volpe: Dr. Hill, I think this is the one time we really do agree on something. I was here in 1992 when we had the big debate about the export taxes. The export taxes had the net effect of being counter-productive to the taxes that were being applied domestically. As a result of the imposition of the $8-a-carton export tax, American cigarettes became much cheaper than their Canadian counterparts. It caused the substitution of Canadian brands with American brands.

It did nothing for the elimination of contraband, because there were shipments coming out of factories being sold in certain locations where taxes did not apply, and then finding their way back into the regular marketplace.

In this regard, Madam Picard is absolutely right. The centre of that activity was the area around Montreal, and we found an influx of cheap or low-cost cigarettes, especially for children and young teenagers.

The literature, analyses and economic impacts related to tobacco use talk about a gradual increase in price, tax being a component of that price, so as to discourage contraband and smuggling, but we're not at that stage of the game. Yes, we acknowledge that for a variety of reasons the tax was reduced and it eliminated smuggling and contraband. So we had the trade-off, and we're back where we started from.

What I think Dr. Martin might want to keep in mind is that this initiative, this legislative initiative that has restarted this discussion, also has in place a gradual increase of taxation to produce precisely the impact that Dr. Martin would propose.

Last night we saw another province sign on to increase the taxes so as to make a package of cigarettes less attractive from an economic point of view, but not yet attractive enough to induce illegal or contraband behaviour that would be counter-productive.

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Secondly, and I stress the word ``gradual'' because in his statement in the House I think the minister indicated that with the cooperation of the Minister of Finance, the Department of Revenue and the Solicitor General, what would take place is a gradual increase in the tax so as to give the enforcement officials an opportunity to put in place all the mechanisms necessary to ensure that the theory of increasing prices of tobacco for consumers would have the practical application and result desired.

Dr. Martin, there was an indication of $50 million for the next five years precisely for that end: first, in the revenue department to ensure that officials were capable of enforcing the mechanism; and second, in the Solicitor General's department to ensure that the enforcement components of this legislation would be effective from the point of view of eliminating contraband and smuggling, if it were to start developing.

That's why the word ``gradual'' is so important. If we went immediately back to the pre-1994 levels, I don't think you have the mechanism in place just yet to ensure that you would get the desired effect. We'd be exchanging one problem for another, or we'd be adding a problem to the one we're trying to resolve.

So on the basis of what you're asking, I think the basic principle of your motion is already being dealt with. I don't think you'll find many people around the table who disagree with the principle of your motion, but as you saw with an impassioned intervention by our colleague, Mrs. Picard, the principle, unless it has all the appropriate mechanisms associated with it, doesn't produce the effect that you and I think we all want.

On the other hand, the minister's statement and the legislation, so far, provide for consideration of your motion and the principles inherent in it. If you're asking this committee to tell the minister to accelerate the process, that's one thing, but if you're going to suggest through this motion that it's not being done, I think that's inaccurate.

The Vice-Chairman (Mr. Dhaliwal): As the mover, Mr. Martin, you may have the final say on this. I hope you'll make it very quick.

Mr. Martin: I will make it very brief, and I thank everybody for their interventions.

There are a couple of things. The mechanisms for dealing with the smuggling have been in place for years, but the government doesn't want to deal with it because of where this is taking place - the aboriginal reserves - and the sensitivity of that. So it's not a question of having the mechanisms; it's a question of the will.

Second, on tobacco consumption, people are not going to be smoking American tobacco. As we all know here, they're smoking Canadian tobacco that's been smuggled back into Canada. Canadians and Americans, interestingly enough, consume their own tobacco, which is quite different in taste.

Third, if we decreased tobacco taxes so rapidly by 50% overnight, why can't we put them back up? In not doing that we're significantly compromising the health of hundreds of thousands of children, half of whom are going to die prematurely. I think that is utterly inexcusable, and if there's anything within our power that we can do to change that, I think we ought to do that, and what I proposed here will change that.

The Vice-Chairman (Mr. Dhaliwal): Thank you, Mr. Martin.

Motion negatived

The Vice-Chairman (Mr. Dhaliwal): Thank you very much.

[Proceedings continue in camera]

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