CONTENTS
Wednesday, February 9, 1994
Mr. Leroux (Richmond-Wolfe) 1099
Mr. Gagnon (Bonaventure-Îles-de-la-Madeleine) 1100
Mr. Chrétien (Saint-Maurice) 1100
Mr. Chrétien (Saint-Maurice) 1101
Mr. Chrétien (Saint-Maurice) 1101
Mr. Chrétien (Saint-Maurice) 1101
Mr. Chrétien (Saint-Maurice) 1102
Mr. Chrétien (Saint-Maurice) 1103
Mr. Harper (Simcoe Centre) 1103
Mr. Chrétien (Saint-Maurice) 1103
Mr. Harper (Simcoe Centre) 1103
Mr. Chrétien (Saint-Maurice) 1103
Mrs. Gagnon (Québec) 1103
Mrs. Gagnon (Québec) 1104
Mr. O'Brien (London-Middlesex) 1105
Mr. White (North Vancouver) 1107
Mr. Chrétien (Saint-Maurice) 1107
Mr. White (North Vancouver) 1107
Mr. Bernier (Mégantic-Compton-Stanstead) 1107
Bill C-213. Motions for introduction and first readingdeemed adopted 1108
Mr. Harper (Calgary West) 1108
Bill C-3. Consideration resumed of motion for secondreading 1109
Mr. Mills (Broadview-Greenwood) 1109
Mrs. Tremblay (Rimouski-Témiscouata) 1113
Mr. Harper (Calgary West) 1117
Mrs. Tremblay (Rimouski-Témiscouata) 1118
Mr. Lavigne (Beauharnois-Salaberry) 1118
Mr. Harper (Calgary West) 1131
Mr. Harper (Calgary West) 1134
Mr. Gagnon (Bonaventure-Îles-de-la-Madeleine) 1135
(Bill read the second time and referred to a committee.) 1137
Bill C-9. Motion for second reading 1137
Mr. White (Fraser Valley West) 1142
1097
HOUSE OF COMMONS
Wednesday, February 9, 1994
The House met at 2 p.m.
_______________
Prayers
_______________
STATEMENTS BY MEMBERS
[
English]
Mrs. Dianne Brushett (Cumberland-Colchester): Mr.
Speaker, during World War II the Government of Canada issued
victory bonds as a means to pay for our war effort. Patriotic
Canadians bought the bonds and thereby saved their children
and grandchildren a legacy of heavy debt.
Today a new generation of patriotic Canadians is offering its
financial support to pay down this country's debt.
This government could issue a debt recovery bond and sell it
domestically to Canadians. We could set an attractive rate of
interest and use the entire subscription proceeds to pay down the
debt. Our first priority would be the discharge of our foreign
debt obligations.
We owe it to our children to give them a debt free Canada. A
debt recovery bond will appeal to both the patriotism and
financial self-interest of Canadians. It will have the added
benefit of providing taxes on the bond's interest for our federal
treasury.
* * *
[
Translation]
Mr. Benoît Sauvageau (Terrebonne): Mr. Speaker,
Éco-Équipement Inc. is a company that was recently
established in my riding. It is preparing to do research in
wastewater treatment.
This study, which is conducted in co-operation with Agropur,
the École polytechnique of Montreal as well as two government
agencies, the Department of Environment of Quebec and the
Centre québécois de valorisation de la biomasse, is aimed at
developing wastewater treatment in the agri-food industry.
This biological dephosphorization project at the cost of
$860,000 over two years will allow, among other things, to
reduce discharges of phosphorus, thereby complying with the
new environmental protection standards.
I commend the instigators of this major initiative, who are
showing a strong desire to develop a more performing
technology while remaining aware of environmental laws and
responsible towards them.
* * *
[
English]
Mr. Jim Hart (Okanagan-Similkameen-Merritt): Mr.
Speaker, I rise to pay tribute to a prominent family in the
Okanagan-Similkameen-Merritt riding. With today's rapid
development and technological advances we rarely stop to think
about those people who shaped our communities in their
formative years.
Each year the South Okanagan Historical Society awards the
pioneer award to a family that has made a great contribution to
the development of the Okanagan. This year the Goodman
family of Osoyoos, B.C., was recognized for service to the
community that dates back to the early years of this century.
Decades ago Les and Dais Goodman were involved in
farming, road building, education, development of parkland and
other activities of leadership and involvement. Still today their
children and grandchildren carry on this family tradition of
dedication to the community.
I ask the House to join me in congratulating the Goodman
family for its invaluable contribution to the development of the
south Okanagan and this great nation.
* * *
Mrs. Brenda Chamberlain (Guelph-Wellington): Mr.
Speaker, I recently received a letter describing a Guelph
constituent's ordeal of sexual abuse. Surviving sexual abuse is a
day to day struggle often faced with pain, guilt and grief.
Fortunately many have the support of family and friends. All
survivors need our support.
Survivors of sexual abuse who decide to pursue their ordeal
through the courts should be treated with compassion and
respect.
1098
All Canadians pay a great price when we deal with the effects
of sexual abuse. For example, many young offenders are
victims. Unfortunately too often it is a cycle that continues
from generation to generation. Our justice system must
recognize and respond to the needs of both the victim and the
offender.
I urge the Minister of Justice to recognize that our decisions
must reflect a system that is just and fair.
* * *
Mr. Stan Dromisky (Thunder Bay-Atikokan): Mr.
Speaker, on behalf of my constituents in Thunder
Bay-Atikokan and all the young Canadians who aspire to
achieve levels of superior performance in their respective
athletic endeavours, I wish to congratulate Thunder Bay's John
Lockyer on becoming Canada's champion ski jumper, an
outstanding athlete who has earned international respect and
acclaim.
(1405 )
However as the only member of Canada's national ski
jumping A-team John will not be competing in the winter
Olympics in Lillehammer, the first time in winter Olympic
history that Canadian ski jumpers will not be participating.
The Canadian Olympic Association must be encouraged to
re-examine its new regulations which without doubt will
prevent many of our champions from entering future games and
which also give the appearance that the true purpose and spirit of
the Olympic Games are lost.
* * *
Mr. John Murphy (Annapolis Valley-Hants): Mr.
Speaker, in the peaceful Annapolis Valley of Nova Scotia, Greg
Jodery was brutally beaten to death. His killer was convicted of
manslaughter and sentenced to a mere four years.
Supposedly the court found that actions of Jodery's killer
were mitigated by the victim's own violent behaviour. These
charges were unsubstantiated and it was too late for Greg Jodery
to speak for himself.
A community is hurt and outraged. This crime still cries out
for justice. As representatives of the people we cannot be silent.
Justice must be done for Greg Jodery. If not, our system will not
deserve Canada's respect.
* * *
[
Translation]
Mrs. Pauline Picard (Drummond): Mr. Speaker, on January
7 of this year, Celanese Canada Inc., a textile company which
has its plant in Drummondville, in my riding, announced a $2.5
million investment to reduce by 25 per cent its emissions of
acetone into the atmosphere.
It should be noted that Celanese Canada Inc. was already
complying with all government standards for environmental
protection and that this initiative resulted solely from its health,
security and environmental protection policies.
Celanese Canada Inc. is an example to be cited when talking
about sustainable development and companies which are
responsible within their community. I take this opportunity to
congratulate the company.
* * *
[
English]
Mr. Charlie Penson (Peace River): Mr. Speaker, from
February 19 to March 4, 1995 the city of Grand Prairie will host
the Canada Winter Games. I am proud to say that Grand Prairie
is in my riding and is the most northerly city ever to host the
Canada Winter Games.
This important event will bring together more than 3,200
athletes, coaches and officials who will participate in 21
different sports.
The games are held every second year, alternating between
winter and summer. They are a training ground for future
Olympians. The games are also a celebration of culture and for
this reason Grand Prairie will be proud to display the many
facets of our Canadian and northern heritage.
The theme of the games is Iskoteo, which is a Cree word for
fire. The fire is in our sky with the northern lights. It is also in
the spirit of the people who rise to challenge the climate and the
power of the land.
* * *
Mr. Joseph Volpe (Eglinton-Lawrence): Mr. Speaker, the
peace process in the Middle East is promising for all those
advocating peace and normalcy. Families with soldiers missing
in action on both sides dare to hope.
Mrs. Miriam Baumel, one such parent charged with renewed
vigour when Messrs. Arafat and Rabin shook hands last fall, has
been pressing the issue of soldiers missing in action with foreign
governments and international organizations. Today she met
with Canadian parliamentarians.
Her son and other Israeli soldiers have been missing in action
in Lebanon since 1982. British parliamentarians have
committed to raising the matter with Syrian and Iranian
officials. A U.S. congressional delegation has gone on a fact
finding mission in the area. Mrs. Baumel has just come from a
meeting with members of Congress in the United States.
1099
I note the Geneva convention makes the country where MIAs
were last seen in action responsible for their whereabouts. That
country, Syria, is a signatory to that convention.
I urge the Minister of Foreign Affairs to address the issue
vigorously with Syrian authorities and with Mr. Arafat himself
so as to make the return of MIAs part of the peace package.
* * *
(1410 )
Mr. Paul Steckle (Huron-Bruce): Mr. Speaker, I rise in the
House today to wish all of the country's athletes, especially two
young and talented Canadians in the figure skating pairs
discipline, the best of luck in the 17th Winter Olympics in
Lillehammer, Norway.
Lloyd Eisler and Isabelle Brasseur are the reigning world
pairs champions and are looking to become the first gold medal
winners in pairs figure skating since Barbara Wagner and Bob
Paul in 1960.
Here we have an example of two Canadians, Lloyd Eisler born
in my riding in the town of Seaforth, Ontario, and Isabelle
Brasseur, born in Kingsbury, Quebec, in the riding of
Richmond-Wolfe, working together to become the best they
can be.
As much as Eisler needs Brasseur, Canada needs Quebec.
Instead of trying to divide the country, let us work together to
make a strong and united Canada.
I invite the member for Richmond-Wolfe to come to my
riding after the Olympics to meet the people and take part in
what hopefully will be a gold medal celebration.
* * *
Mr. Gurbax Singh Malhi (Bramalea-Gore-Malton): Mr.
Speaker, thank you for giving me the opportunity to suggest to
the Minister of Finance to try to keep tax increases to the
absolute minimum.
Canadians are losing faith in their taxation system and are
protesting by refusing to pay. The underground economy and
refusal to pay GST and income tax are indications that
Canadians are being taxed to death.
The last federal administration steamrolled public confidence
and left the economy flat.
The Minister of Finance has shown he is very sensitive to the
wishes of the Canadian taxpayer. I urge the minister to keep
taxation to a minimum to help small business and Canadians as a
whole.
[Translation]
Mr. Gaston Leroux (Richmond-Wolfe): Mr. Speaker, in
addition to all the horrors mentioned in the last report of the
Auditor General, we learned last week that the operation of the
other House cost Quebecers and Canadian taxpayers more than
$43 million last year. Moreover there were only 47 days of
proceedings during the session and, of that total, 29 days over a
four-month period, from February to May 1993.
This means one million dollars per day of work or $150,000
per federal riding and these already have representatives in the
House of Commons.
If we were to ask the constituents of Richmond-Wolfe if
such spending of public funds is appropriate, I can say right
away what their answer would be. They tell us, their
representatives, that those funds should be invested in the
economic recovery and in job creation.
It is the duty of all members of this House, and especially
those of the Official Opposition, to examine all votes and
appropriations of the other House in order to put an end to this
shameful waste.
* * *
[
English]
Mr. Allan Kerpan (Moose Jaw-Lake Centre): Mr.
Speaker, last week, after the longest criminal trial in
Saskatchewan history, two defendants were acquitted of 32
charges related to sexual abuse involving 15 children in the town
of Martensville. Another defendant was found guilty on eight
charges.
There is a lot of anger right now, but stronger than that anger
is the determination our neighbours hold on to, a resolve to do
whatever we can to prevent these violent injustices from
occurring.
The ugly reality of child abuse in our society demands a
response from us as leaders. We must discover and expose the
roots of this moral flaw.
Victims' rights must receive a much higher priority in our
justice system. Nothing can ever compensate for the pain
inflicted on all those concerned, but we can and should always
strive to protect our innocent from destructive elements in
society. We must challenge the ugly face of such anti-social
behaviour.
1100
[Translation]
Mr. Bernard Patry (Pierrefonds-Dollard): Mr. Speaker,
reading the various reactions from across the country to the
anti-smuggling program announced yesterday by the federal
government, one might tend to believe that it is a regional
problem affecting only Quebec.
I would like to point out that these measures, which we very
reluctantly accepted in view of their health implications, had
become unavoidable and necessary. I do believe that the other
Canadian provinces should learn from Quebec's unfortunate
experience, stem the emergence of civil disobedience and
prevent the accompanying criminal activities.
With a contraband rate of 33 per cent, some provinces can ill
afford to ignore this plague which is no longer a regional
problem.
* * *
(1415)
Mr. Patrick Gagnon
(Bonaventure-Îles-de-la-Madeleine): Mr. Speaker, I would
like to stress an important measure undertaken to ensure
economic recovery in Quebec. Last Monday, the Minister
responsible for the Federal Office of Regional Development and
the President of the Privy Council, along with their Quebec
counterparts, signed a federal-provincial agreement on the
National Infrastructure Program.
Pursuant to this agreement, our government will be able to
renovate local infrastructures. This is a positive step towards
jobs creation and economic recovery. Needless to say, it will
help to promote economic development in Quebec and
throughout Canada.
The projects to be undertaken under this agreement, worth
almost $1.6 billion in Quebec only, will give new confidence to
our business people, our workers and all Canadians.
Ever since it was elected, the Chrétien government has
worked relentlessly to create the right economic climate in our
country.
The agreement signed this week with the Quebec government
is evidence of our commitment to a sustainable economic
recovery. As you can see, Mr. Speaker, federalism does work.
[English]
Mr. Nelson Riis (Kamloops): Mr. Speaker, it has been well
known for years that American lumber producers want access to
our raw logs so those logs can be processed in the United States.
They plan to harass and hassle our softwood lumber exporters
until we cave in to their demands.
We were told that the FTA would end this continual
harassment. It did not. We were then told that NAFTA would end
this harassment. It did not. We were told that special
Canada-U.S. trade panels would rule on these disputes in an
effort to settle any differences. The panel ruled but ruled in
favour of Canada.
Now Mickey Kantor, the U.S. trade representative, says the
U.S. will launch an extraordinary challenge to this ruling
because the Americans think the panel decision was wrong.
They plan to attack the credibility of the panellists.
The previous government caved in to virtually every
American initiative. I wonder if the new government will now
act differently.
Will the Minister for International Trade tell the Americans to
back off? The panel ruled, the U.S. lost. Surely the Minister for
International Trade will not stand by as Americans push us
around in one more step toward eventually getting full access to
Canadian raw logs.
_____________________________________________
1100
ORAL QUESTION PERIOD
[
Translation]
Hon. Lucien Bouchard (Leader of the Opposition): Mr.
Speaker, my question is directed to the Prime Minister. Five
days after the massacre at Sarajevo's central market, the 16
members of the NATO council are meeting today in Brussels to
examine an American proposal that would force the siege of
Sarajevo to be lifted within ten days. Just now there was a news
release announcing: ``Today NATO member countries agreed to
send an ultimatum to the Bosnian Serbs, threatening them with
airstrikes if they fail to withdraw their heavy artillery from the
region around Sarajevo within the next 10 days''.
I want to ask the Prime Minister whether this information is
correct. And also, since these decisions must be made
unanimously, whether Canada supported sending an ultimatum
to the Serbs.
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker,
we agreed with the proposal to create a 20 kilometre zone around
1101
Sarajevo, within which any arms controlled by the Bosnian
Serbs and the Bosnian Muslims would be under the control of
the United Nations. We agreed with this ultimatum.
According to the last reports I saw, Mr. Rose, the military
officer in charge of the forces in Sarajevo, said that an
agreement had been reached a few minutes ago with the Serbs,
who agreed to place their arms in the Sarajevo area under the
control of the United Nations. I understand that the Muslims
will do likewise, which means that if the ultimatum is accepted,
there will be no need for airstrikes in the region.
Hon. Lucien Bouchard (Leader of the Opposition): Mr.
Speaker, I see that it is not quite clear what steps were taken by
the Serbs following this ultimatum.
May we ask the Prime Minister what the terms of the
ultimatum are? Exactly what will happen to the Serbs should the
ultimatum be rejected?
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker,
in resolutions that were passed in August and renewed on
January 11, we said-and we supported this condition-that if
the siege of Sarajevo were to continue, airstrikes could be used
to help liberate the city.
(1420)
After the terrible carnage on the weekend, the 16 NATO allies
decided to send an ultimatum and create a 20 kilometre
demilitarized zone around Sarajevo. Apparently both the
Muslims and the local Serbs are prepared to accept this
condition, which means that airstrikes would be unnecessary, if
what I saw in the report is true.
Hon. Lucien Bouchard (Leader of the Opposition): Mr.
Speaker, this means there has been a major change in Canada's
position regarding airstrikes, because I understand that until
now, Canada had accepted the principle of airstrikes at close
range only for self-defence, to guarantee the safety of its
peacekeepers. I understand that in this case, the government has
decided to support the principle of an airstrike against a belli-gerent force in order to lift the siege of Sarajevo.
In that case, I would like to ask the Prime Minister what
guarantees he obtained to ensure that Canadian peacekeepers
would not be adversely affected as a result of the ultimatum.
[English]
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker,
when we were in Brussels a month ago we were very concerned
about the Canadian troops that were on the other side of the line
in Srebrenica. The situation has evolved naturally there. The
Bosnian Serbs have accepted the Canadians being replaced by
the Dutch before the end of this month.
The situation there is progressing normally. According to the
news I heard a few minutes ago, the Serbs have agreed to accept
the ultimatum in relation to Sarajevo so there will be no need for
a strike. We have accepted to protect the civilians in Sarajevo
and, in order to avoid a repetition of the massacre of last
weekend, we gave that ultimatum to the military forces in the
area.
* * *
[
Translation]
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot): Mr. Speaker,
an official spokesman for the finance department was quoted in
today's newspapers as saying that it would be difficult for his
department to bring the Canadian government's annual deficit
down below $40 billion. We now understand why they inflated
the budget deficit forecast before the holidays.
My question is for the Prime Minister. Does this surprising
statement mean that the government has admitted its impotence
and does not intend to tackle spending or tax evasion by
corporations and wealthy taxpayers?
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker, I
think the hon. member should be a little more patient. He will
get his answer in a few weeks when the finance minister tables
his budget.
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot): Mr. Speaker,
I got an unsatisfactory answer, as I often do during question
period.
Instead of letting his finance minister make irresponsible
statements on Canadian and American interest rates that led to
his being called the stand-up comic of Canadian politics by the
Globe and Mail, would the Prime Minister tell us what his
government's intentions are? Would he tell us if his government
will deal with extravagant spending and the scandal of family
trusts and other loopholes?
[English]
Hon. Douglas Peters (Secretary of State (International
Financial Institutions)): Mr. Speaker, I am very pleased to
report that the Minister of Finance is not a standup comic and
neither am I.
We are very serious about the deficit question and are very
serious about the pledge in the red book to get the deficit down
to 3 per cent of GDP in the third year of our mandate.
What was stated in the press was that a number of forecasters
had said that it would be difficult to bring the deficit down below
$40 billion this next fiscal year, 1994-95. That indeed will be
difficult without changes, but as the Prime Minister said we
have a budget coming up.
1102
Mr. Preston Manning (Calgary Southwest): Mr. Speaker,
my question is for the Prime Minister.
Yesterday the Prime Minister acknowledged that the cigarette
smuggling problem is most serious in Ontario and Quebec. The
commissioner of the RCMP confirmed that over 70 per cent of
smuggled Canadian cigarettes pass through the three Mohawk
reserves between Cornwall and Montreal.
(1425)
Is the government prepared to acknowledge today to the
House that the successful implementation of its action plan on
smuggling will require not only a national effort, but a special
and concentrated effort to re-establish the supremacy of
Canadian law on those three Indian reserves?
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker,
this is exactly what I have said for two weeks and I will repeat it.
The law of Canada will apply in every part of the land.
Mr. Preston Manning (Calgary Southwest): Mr. Speaker, I
have a supplementary question.
Most of us believe that only a small number of Mohawks are
actively engaged in the smuggling operations on these reserves
and that the majority of the residents resent and oppose the
presence of these operations.
Has the government attempted to communicate and consult
with rank and file members on those reserves to enlist their
support for reasserting the supremacy of Canadian laws against
smuggling, against money laundering and the illegal
importation and storage of arms?
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada): Mr. Speaker, I
had a telephone conversation on Sunday with the chief of one of
the reserves. Shortly after Question Period I am meeting with
the chiefs of all three reserves. I will be seeking their
co-operation to work with the RCMP to eliminate smuggling on
the reserves, around the reserves and everywhere in Canada.
Mr. Preston Manning (Calgary Southwest): Mr. Speaker, I
have a further supplementary question. I appreciate meetings
with chiefs, but there is a difference between meeting with
chiefs and rank and file members.
I am wondering whether the Prime Minister agrees that the
re-establishment of democracy on these reserves is a
prerequisite to re-establishing the supremacy of law. Has the
government considered instituting a formal democratic process
on these reserves whereby rank and file Indian people would
have an opportunity to indicate by secret ballot which measures
they believe would be successful in re-establishing the
supremacy of Canadian law?
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada): Mr. Speaker,
it is my understanding that the chiefs in question are
democratically elected by the residents of the reserves. The
people on the reserves will likely think the Reform Party
leader's suggestion is a strange form of democracy if he wants
the government to march in and impose his version of
democracy on them.
The Speaker: Colleagues, I wonder if we might concentrate
perhaps in this Question Period on shortening up our preambles.
It would facilitate matters a great deal.
* * *
[
Translation]
Mr. Michel Gauthier (Roberval): Mr. Speaker, I am quite
willing to cut my preamble short, but I would like the Prime
Minister to listen as this question is directed to him.
Some hon. members: Oh, oh.
The Speaker: Order, please. The hon. member for Roberval
has the floor.
Mr. Gauthier (Roberval): Mr. Speaker, one of the
components of the government's action plan to combat
smuggling calls for stepped up RCMP enforcement. Scarcely a
few hours after the action plan was unveiled, we learn that shots
were fired in Valleyfield as an RCMP patrol moved in on what
appeared to be a shipment of contraband cigarettes.
Given the danger associated with police enforcement in this
area, can the Prime Minister tell us if special measures will be
taken to protect the lives of police officers who will be
confronting heavily armed groups?
(1430)
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada): Mr. Speaker,
the hon. member seems to have changed his tune.
For weeks, he has been calling on the RCMP to intervene and
now that it is doing so, he wants the force to withdraw. That is
not how the RCMP operates.
Mr. Michel Gauthier (Roberval): Mr. Speaker, I have
another question for the Prime Minister.
Can the Prime Minister tell us, in other words, why he is
refusing to meet in person with the chiefs of native reserves,
considering the high risk situation and the need for him to obtain
assurances that the lives of police officers who may have to
confront heavily armed smugglers will in fact be protected?
1103
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker,
I wish to point out to the House that the RCMP met last Friday
with the three chiefs in question. They held rather lengthy and
substantive talks, the outcome of which was reported that very
same evening on television. The Minister of Indian Affairs is
still in contact with them and today, they will have a meeting
with the Solicitor General who is responsible for the RCMP.
Therefore, I do not think that my presence would help matters
any further.
I believe that our ministers are capable of carrying out their
duties and that the Prime Minister must intervene only when he
has no other choice. Right now I think that the Minister of Indian
and Northern Affairs and the Solicitor General are doing an
excellent job.
* * *
[
English]
Mr. Ed Harper (Simcoe Centre): Mr. Speaker, my question
is for the Prime Minister and was inspired by Mr. Ian Craig from
the riding of Scarborough-Rouge River.
As the lone opposition member from the province of Ontario,
I am very concerned that the Prime Minister has negotiated a
cigarette deal with the premier of Quebec at the expense of
Ontario.
Yesterday the premier of Ontario, Bob Rae, stated: ``All this
does is put pressure on the rest of us to literally fall into line with
a policy that... was declared unilaterally by the federal
government and one province''.
On behalf of the people of Ontario and the premier, how can
the Prime Minister possibly justify creating a series of
provincial dominoes of which Ontario is just the first and which
has no choice but to match the tax cuts of Quebec?
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker, I
must be doing something right when I have the tobacco
companies mad at me as well as the NDP in Ontario.
I am very surprised at the statement of the hon. member
because Premier Rae knows the truth. On December 13 we
started to discuss matters with provincial officials in Ontario
and Quebec. I have spoken with Mr. Rae many times. I talked
with him again on the telephone on Friday night. On Sunday he
sent his officials, led by his chief of staff, Mr. Agnew. They
spent Sunday with Mr. Shortliffe, people from my office, people
from the police and so on. They knew all the facts, the whole
package. We discussed what should be and what should not be in
the package.
To go on TV last night and say that we had made a deal without
talking to them I think was very cheap politics.
Some hon. members: Hear, hear.
Mr. Ed Harper (Simcoe Centre): I have a supplementary
question, Mr. Speaker. The premier of Nova Scotia also
expressed his disagreement with the Prime Minister yesterday.
In fact the majority of premiers are strongly opposed to this tax
reduction.
Why has the Prime Minister chosen to listen to the premier of
Quebec while ignoring other affected premiers?
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker, I
said in the House yesterday that the person who convinced me
about the reduction of the tax was the head of the RCMP of
Canada, who said that if we want really to cure the problem
quickly we have no choice but to take the wind out of these sails.
(1435 )
I have done it. To try to make it a question of Quebec and the
rest of Canada is not right. The problem is in Ontario which has a
premier who wants to keep his head in the sand and not face
reality.
Some hon. members: Hear, hear.
* * *
[
Translation]
Mrs. Christiane Gagnon (Québec): Mr. Speaker, a survey
conducted by the Quebec Office for the International Year of the
Family as part of the Tax and the Family Forum showed that 80
per cent of Quebecers believe that the government should do
more to develop child care services.
In the absence of the Minister of Finance, I will direct my
question to the Prime Minister. Mr. Prime Minister, in the
context of the International Year of the Family, does the
government intend to make available to the provinces the
financial resources required to go ahead with developing child
care services?
The Speaker: Order. Please address your questions to the
Chair if at all possible.
Hon. Sheila Copps (Deputy Prime Minister and Minister
of the Environment): Mr. Speaker, let me start by saying that
we recognize the results of the survey. We also recognize that
the people of Quebec have always been leaders on the issue of
child care.
Having said that, in the Liberal Party's red book we stated that
first and foremost we must see a three per cent growth in the
economy. We want the economy to grow another three per cent
before putting into place a system to triple the number of day
care spaces made available every year. So, 50,000 spaces will be
created in each year once the economy starts to grow at a rate of
three per cent, and we will thus obtain 150,000 spaces over three
years.
1104
Mrs. Christiane Gagnon (Québec): Mr. Speaker, my
supplementary question is for the Minister of National
Revenue.
As we know, some taxpayers get to deduct entertainment
expenses such as business luncheons and golf games. Can the
minister tell this House when the government will make the
necessary tax changes to allow taxpayers, generally women, to
deduct child care expenses as business expenses?
Hon. David Anderson (Minister of National Revenue): Mr.
Speaker, I can understand the hon. member's concerns. This is a
matter of financial policy. I will take it up with the hon. Minister
of Finance and get back to her as soon as I have an answer.
* * *
[
English]
Mr. Jim Silye (Calgary Centre): Mr. Speaker, my question is
for the Solicitor General.
Yesterday the Prime Minister stated quite clearly that Canada
is one sovereign nation, has one set of laws and these laws will
be enforced equally in every part of the country.
These statements notwithstanding, there remains a
widespread perception across Canada that there are differing
provisions for the enforcement of law depending on whether an
infraction occurs on or off a native Indian reserve.
Could the Solicitor General advise the House whether the
guidelines to be used by the RCMP in enforcing the
government's action plan on smuggling differ depending on
whether the infractions occur on or off a native Indian reserve?
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada): Mr. Speaker, I
want to repeat and confirm what the Prime Minister said earlier
in this question period, that the law will be enforced everywhere
in Canada and that is the case. I am happy to say it again here.
Mr. Jim Silye (Calgary Centre): Mr. Speaker, I would like it
to be a bit more specific. There is a general perception out there
that there are two sets of laws, one on a native reserve and one
off a reserve. I would like to have clarification on that.
I have a supplementary question. Does the Solicitor General
propose-can you hear me, Mr. Speaker?
(1440 )
The Speaker: I cannot hear the question being put because
there must be noise up here someplace. I know it is not me.
Mr. Silye: Mr. Speaker, does the Solicitor General propose
any alterations to guidelines issued to the RCMP for enforcing
the government's action plan on smuggling with respect to the
enforcement of smuggling laws on Indian reserves?
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada): Mr. Speaker,
the government has been in place for only three months.
I can say that during this period the only guidelines I am
aware of is that the RCMP should do its duty, as it always has,
and enforce the laws of Canada everywhere in the country. This
is what it is doing.
* * *
[
Translation]
Mr. Stéphane Bergeron (Verchères): Mr. Speaker, my
question is for the Minister for International Trade. While
successive judgements confirm the Canadian position in the
interminable conflict on softwood lumber, the United States
announced yesterday that it intends to appeal the decision of the
panel established under the free trade agreement. We thought
that this decision of the panel would end the dispute which has
already cost Canadian producers about $500 million.
Does the minister intend to take this matter up with the
American authorities to end the harassment of Canadian
softwood lumber producers and does he intend to convince the
American trade representative, Mr. Kantor, to end once and for
all this conflict which has already gone on too long?
[English]
Hon. Roy MacLaren (Minister for International Trade):
Mr. Speaker, I have met on several occasions with Mr. Kantor
about the matter the hon. member raises. As he probably knows,
two panels have recently reported in Canada's favour in the
softwood lumber case. The possibility is now open to the United
States to issue what is called an extraordinary challenge.
I have taken each occasion of my meeting with Mr. Kantor and
with U.S. officials to say that we see no basis whatever for an
extraordinary challenge.
[Translation]
Mr. Stéphane Bergeron (Verchères): Mr. Speaker, what with
agriculture, western wheat, magnesium, beer, steel and now
softwood lumber, does the minister not agree that the American
strategy is clear, namely to use every possible recourse to
prevent our companies from having access to their markets?
[English]
Hon. Roy MacLaren (Minister for International Trade):
Mr. Speaker, under both the FTA and the NAFTA there have
1105
been problems of continuing export harassment by the United
States. When we decided to continue our consideration of
NAFTA we sought solutions to these problems of continuing
harassment.
It is for that reason we put in place trilateral groups to work
out agreements on anti-dumping and on subsidies so that these
opportunities for the United States to continue its harassment of
Canadian exports are either reduced or eliminated.
* * *
Mr. Pat O'Brien (London-Middlesex): Mr. Speaker, my
question is for the Minister of Citizenship and Immigration.
Several of my constituents have told me of the difficulty
experienced by many immigrants in trying to understand the
functioning of the Canadian government and its many agencies.
Obviously this problem is exacerbated when these newcomers
do not speak English.
In order to minimize the sense of isolation felt by many
immigrants, will the minister in the upcoming public
consultations address this issue and will he undertake to have
better co-ordination among all levels of government regarding
this important matter?
Hon. Sergio Marchi (Minister of Citizenship and
Immigration): Mr. Speaker, I would like to thank the member
for his question. I took note of the statement by the member on
January 31 with respect to the same issue.
While members of the Reform may laugh, it is very important
the member underline the role that settlement plays when we
have set levels of immigration. We cannot divorce the two if we
want to guide a coherent immigration policy.
I can assure the member that over 300 organizations have
entered into contractual agreements with my department to
improve those settlement deliveries. In fact one entitled Host
was piloted in the member's very own riding.
(1445 )
I can assure the hon. member and the House that the specific
subject of settlement will be an integral part of the consultation
process. The subject will also be the focus of an expert panel to
ensure that we are maximizing our settlement programs and
seeking modifications where they are needed.
Mr. Grant Hill (Macleod): Mr. Speaker, my question is also
for the Minister of Citizenship and Immigration. Should our
immigration numbers be based on first, a percentage of
Canada's population or, second, the country's current economic
conditions and needs?
Hon. Sergio Marchi (Minister of Citizenship and
Immigration): Mr. Speaker, when we announced the levels we
talked about a balanced approach. If one is to consider a number
of different variables I am not sure we should put more emphasis
on one or the other.
We need to have a balanced approach that serves the interests
of our country, that serves the interests of families and family
reunification, that serves the interests of job creation and
investment as we have done through the increase of independent
skills and business workers.
The other slant of immigration policy has to do with
maintaining a tradition of keeping our obligations to those who
seek assistance so there is a humanitarian aspect to immigration.
Only when we have a balanced approach do we have a good
healthy immigration policy.
Mr. Grant Hill (Macleod): Mr. Speaker, an interesting
response, considering I put the same question to my constituents
last weekend with very interesting results.
My supplementary question is for the same minister. Would
he undertake to put this question to all Canadians through an
approved polling process and table the results in the House?
Hon. Sergio Marchi (Minister of Citizenship and
Immigration): Mr. Speaker, we have just been through the most
exhaustive consultation process. It is called a national election.
The last time I checked the Prime Minister had won a decisive
national mandate. Immigration was part of the red book.
On top of that we have announced an unprecedented
consultation process which will not only talk to organizations
and experts but also allow Canadians to have their say in
developing the policy because after all this is their country as
well.
* * *
[
Translation]
Mr. Philippe Paré (Louis-Hébert): Mr. Speaker, my
question is for the Minister of Foreign Affairs. Even before
initiating the vast public consultation process, and before
setting up the parliamentary committee in charge of reviewing
the Canadian foreign policy, the minister has indicated that cuts
are to be expected in international development assistance.
Considering that development aid through NGOs represents
barely 10 per cent of all Canadian aid, and that the minister
indicated that he would rely more on NGOs, can he tell us what
proportion of the aid he intends to provide through NGOs in the
future?
Hon. André Ouellet (Minister of Foreign Affairs): Mr.
Speaker, I must say that the hon. member's question is
premature. He has every reason to support the initiatives of
non-governmental organizations, which are making exemplary
contributions throughout the world. I can assure him that we will
do our very best not only to maintain, but perhaps even to
increase the percentage going through NGOs.
1106
However, I cannot be more specific today. Like everybody
else, we have to wait to see the budget of the Minister of
Finance. In this regard, all Canadians will certainly be
concerned by the fact that the government must, while being
just and fair, curtail the budgets of all its departments and
agencies, including the Canadian International Development
Agency.
Mr. Philippe Paré (Louis-Hébert): Mr. Speaker, does the
minister intend to pursue the previous government's policy and
continue to tie development aid to human rights?
(1450)
Hon. André Ouellet (Minister of Foreign Affairs): Mr.
Speaker, I assure the hon. member that this issue remains a
priority for our government. It is one of several aspects which
the Canadian government must consider in its diplomatic
relations throughout the world. Of course we must raise this
issue whenever we can, but isolating countries which do not
share our views will not necessarily help our position with their
leaders.
* * *
[
English]
Mr. David Chatters (Athabasca): Mr. Speaker, my question
is for the Minister of Foreign Affairs.
In July of last year Canada's representative on the UN's
Economic and Social Council voted in favour of granting roster
status to the non-governmental organization called the
International Lesbian and Gay Association, which is an
umbrella group representing a number of organizations,
including the North American Man-Boy Love Association. This
organization promotes sexual freedom between men and boys
and opposes age of consent laws and other restrictions which
deny men from having sex with boys.
I would like to ask the minister if his government endorses the
decision of Canada's representative on the UN committee that
voted in favour of granting status to this umbrella group.
Hon. André Ouellet (Minister of Foreign Affairs): Mr.
Speaker, I want to thank the hon. member for giving me notice of
his question. I want to tell him that when Canada, the United
States and western European countries voted in favour of giving
consultative status to the ILGA, they were not aware the North
American Man-Boy Love Association was affiliated with the
International Lesbian and Gay Association.
I am now informed that corrective action has been taken.
Mr. David Chatters (Athabasca): Mr. Speaker, I have a
supplementary question. I would like to ask the minister if he
would instruct Canada's representative on the UN committee to
rescind our endorsement of this umbrella organization.
Hon. André Ouellet (Minister of Foreign Affairs): Mr.
Speaker, it is important to realize that the goal of the ILGA in
seeking consultative status at the UN was to raise the issue of
human rights abuses against lesbians and gay men.
Irrespective of the affiliations of which we were not aware, we
believed it was important that corrective measures be taken and
this was done to our satisfaction. I also understand it is to the
satisfaction of other countries who supported the same
resolution.
* * *
Mr. Bob Speller (Haldimand-Norfolk): Mr. Speaker, my
question is for the Minister of Agriculture. I want to assure my
colleagues in the Reform Party that it deals with an issue of
importance not only to my riding but to many farmers across the
country.
In the red book we promised a system of whole farm support
that would help Canadian farmers who are in distress. I wonder
if the minister could guarantee that the programs we set forward
in whole farm support will have the broadest range of public
input and public say on this issue. I wonder if he could also bring
the House up to date on the status of that program.
Hon. Ralph E. Goodale (Minister of Agriculture and
Agri-Food): Mr. Speaker, I appreciate the question. Under the
previous government and in conjunction with provincial
governments a process is under way to review and revamp
Canadian farm income safety net programs. That process
resulted in a conference last week in Winnipeg involving the
federal government, the provinces, farm organizations and
others aimed toward developing a consensus on farm safety net
programs.
There was a great deal of support at the meeting for the
concept of the whole farm program that we had described in our
red book, a program that would be GATT consistent and market
neutral and financially sound, affordable and effective.
Unfortunately we had less agreement concerning the exact
details of such a program or programs.
On the hon. member's point about the broadest possible
consultation, he and others can be completely assured of that as
we work toward the final development of this concept. I would
also want to include in that consultation all members of the
House of Commons who would be interested in this very
important subject for agriculture.
1107
(1455)
[Translation]
Mrs. Pierrette Venne (Saint-Hubert): Mr. Speaker, in its
report the Baird Commission recommended prohibiting
research on altering human embryos. The public wants research,
as well as the application of new reproductive technologies, to
be subject to very strict controls.
Will the Minister of Justice and his government propose
amendments to our criminal laws in order to prohibit research
on altering human embryos?
[English]
Hon. Allan Rock (Minister of Justice and Attorney
General of Canada): Mr. Speaker, as the hon. member knows,
the royal commission made some 300 recommendations in a
very extensive report after an extended period of study. We have
all those recommendations under consideration, primarily in the
Ministry of Health.
But it is true to say that some of the recommendations had to
deal with amendments to the Criminal Code to create new
offences to reflect societal values. I can tell the hon. member
that we are studying those in particular. We will take great care
in assessing the recommendations to distinguish between
reasonable, permissible and desirable research on the one hand
and not permissible conduct on the other hand.
That is the challenge. Those studies are under way and we will
report to the House in due course.
[Translation]
Mrs. Pierrette Venne (Saint-Hubert): Mr. Speaker, there
are many recommendations in the report, some 300 in fact, but
all 300 do not concern the Minister of Justice.
Does the minister agree that it is urgent to table during this
session a comprehensive piece of legislation on new
reproductive technologies, taking into account of course the
scope of the federal jurisdiction?
[English]
Hon. Allan Rock (Minister of Justice and Attorney
General of Canada): Mr. Speaker, I can assure the hon. member
that we are studying the recommendations with a haste that
reflects their urgency.
* * *
Mr. Ted White (North Vancouver): Mr. Speaker, my
question is for the Prime Minister.
Under the agreement recently negotiated with the provinces
by the Minister of Finance, Quebec will receive $3.7 billion in
equalization payments-that is 47 per cent of the total-while
B.C., Alberta and Ontario receive nothing.
The formula used to calculate the size of the equalization
payments is said to take into account the ability of individual
provinces to tax their residents.
Since the Prime Minister wants all taxation to be fair and to
close all loopholes, how can he approve of such a large payment
to Quebec when the tax rate for corporations in Quebec is only
6.9 per cent, while it is between 15 per cent and 17 per cent for
corporations in the rest of Canada.
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker,
the formula is a very complex one and every component is
incorporated. If we extract one we can come to all sorts of
conclusions.
This system has been established for a long time and it is now
guaranteed in the Constitution.
Mr. Ted White (North Vancouver): Mr. Speaker, I have a
supplementary question for the Prime Minister.
It would appear that because corporations in Quebec are
paying income tax at a rate approximately one-half the rate
being paid by corporations in the rest of Canada, that the people
of B.C., Alberta and Ontario are subsidizing businesses in
Quebec.
Could the Prime Minister confirm that equalization payments
to Quebec would be much lower if corporations in Quebec paid
their fair share of corporation income taxes?
Hon. Douglas Peters (Secretary of State (International
Financial Institutions)): Mr. Speaker, I am pleased to answer
the hon. member's question.
The details of the equalization payments are based on the
ability of taxation standards among the provinces. They do not
relate to tax rates. They relate to the ability to pay taxes
including property taxes, corporate taxes and all sorts of other
taxes. It is a very complicated formula. I will be happy to supply
the member with it if he would like to look at it. It is a very fair
basis, as the Prime Minister said, based on the Constitution.
* * *
[
Translation]
Mr. Maurice Bernier (Mégantic-Compton-Stanstead):
Mr. Speaker, the Department of Agriculture and Agri-Food
decided to slaughter a Highland bull imported from the United
Kingdom because, according to the department, this animal
might suffer from the so-called mad cow disease. However the
maximum incubation period for that disease is eight years, and
this bull, which was considered to be of unique genetic value in
the world, had been in Canada for 12 years.
1108
(1500)
My question is for the Minister of Agriculture and Agri-Food.
Since the incubation period does not justify killing the animal,
whose commercial value is upwards of $40,000, why was the
department so intent upon getting rid of it?
[English]
Hon. Ralph E. Goodale (Minister of Agriculture and
Agri-Food): Mr. Speaker, the problem in Canada with BSE
disease in cattle in the last number of months is a very serious
one. It is very troubling to livestock owners. They obviously
recognize the problem of not dealing with the disease but also
recognize the very traumatic consequences that flow from the
kind of control measures which are necessary to deal with the
disease.
It is not a happy situation but it is one officials in my
department have been approaching very seriously and
conscientiously. Our control measures have had the complete
support of virtually every major livestock organization in the
country as well as the veterinary medical associations,
provincial departments of agriculture, international trade
officials and our world trading partners.
It is not a happy circumstance but we have tried to deal with it
in a very conscientious and, to the extent possible,
compassionate way.
_____________________________________________
1108
ROUTINE PROCEEDINGS
[
English]
Hon. Charles Caccia (Davenport): Mr. Speaker, pursuant to
Standing Order 34, I am honoured to present, in both official
languages, the report of the Nordic Council's Parliamentary
Conference on the Arctic held in Reykjavik, Iceland, on August
16 and August 17 last year.
In this report the delegation to the council recommended and
found acceptance to a number of recommendations which I will
not read in their entirety. I will select from them the most
important, namely the importance of co-operation among
Arctic states and other parties engaged in the Rovaniemi process
and the elaboration of an Arctic environmental protection
strategy in accordance with agenda 21 of the United Nations
Conference on the Environment and Development.
[Translation]
Mrs. Shirley Maheu (Saint-Laurent-Cartierville): Mr.
Speaker, pursuant to Standing Order 34, I have the honour to
present to the House, in both official languages, the report of the
parliamentary delegation to Sao Paulo, Brazil, from July 16 to
July 19, 1993.
(1505)
[English]
Mr. Ron MacDonald (Dartmouth): Mr. Speaker, pursuant to
Standing Order 34, I have the honour to present, in both official
languages, the report of the Canadian delegation of the
Canada-Japan Interparliamentary Association to the second
annual meeting of the Asia-Pacific parliamentary forum held in
the Philippines on January 14 and January 15.
The recommendations that came out of this meeting are of
great interest to Canada. The fact that the Canadian Parliament
decided to participate even before this Parliament was formerly
struck certainly indicates the importance that this government
and this Parliament place on economic matters in the
Asia-Pacific region.
* * *
Mr. Tom Wappel (Scarborough West) moved for leave to
introduce Bill C-213, an act to amend the Canadian Security
Intelligence Service Act.
He said: Mr. Speaker, this is a very specific bill to amend a
particular section, section 52, of the Canadian Security
Intelligence Service Act. It would provide that the
recommendations of the Security Intelligence Review
Committee are to be implemented unless overruled by the
minister concerned.
In that event the minister would be required to report to
Parliament the reasons for overruling the decision of the
committee and if the reasons were secret the minister would be
required to report to Parliament why they are deemed to be
secret.
(Motions deemed adopted, bill read the first time and
printed.)
* * *
Mr. Stephen Harper (Calgary West): Mr. Speaker, I am
pleased to present petitions with a total of 1,286 signatures
mainly from the city of Calgary.
The petitioners request the government to bring in legislation
to toughen the Young Offenders Act along the lines of the
principles of the former juvenile delinquents act. The petitions
are signed in memory of Ryan Garrioch, a young boy in my
riding who was murdered in a school yard.
I would urge the government to consider carefully these kinds
of recommendations.
1109
Mr. Jack Frazer (Saanich-Gulf Islands): Mr. Speaker,
pursuant to Standing Order 36, it is my duty and honour to rise in
the House to present a petition duly certified by the clerk of
petitions on behalf of the constituents of Saanich-Gulf Islands
and the surrounding area.
The petitioners humbly pray and call upon Parliament to enact
legislation providing for a referendum of the people, binding
upon Parliament, to accept or reject two official languages,
English and French, for the government and people of Canada.
Ms. Judy Bethel (Edmonton East): Mr. Speaker, pursuant to
Standing Order 36, I am presenting a petition from the residents
of Edmonton asking the government to ban the sale of the serial
killer board game and similar games in Canada.
This petition, gathered by the members of St. Matthew's
Parish, has the marks of children on the back. It is for the sake of
these children and all the children of Canada that I support this
request.
Promoting violence which these games do is not in the best
interest of children. Protecting a safe environment for our
children is as important as freedom of speech and it justifies the
action proposed in this petition as reasonable in a free and
democratic society.
Mr. Jim Hart (Okanagan-Similkameen-Merritt): Mr.
Speaker, I rise under Standing Order 36 of the House to present a
petition on behalf of some concerned constituents of my riding
of Okanagan-Similkameen-Merritt.
This petition requests that a referendum be held to accept or
reject the official languages of Canada.
(1510 )
This petition is duly certified by the clerk of petitions. The
petitioners feel that the current official languages policy of
Canada is divisive and also very expensive under the current
financial restraints.
It gives me great pleasure to present the petition this
afternoon.
Mr. Philip Mayfield (Cariboo-Chilcotin): Mr. Speaker, I
am honoured to rise in the House to present a petition from the
residents of Horsefly, British Columbia.
My constituents are firmly opposed to any reduction in postal
service and postal personnel in rural communities as well as to
the closure of rural post offices.
My constituents call upon Parliament to ensure that rural
communities which have already been badly affected by the
reductions will recover the complete postal services to which
they are accustomed.
Mr. Gary Pillitteri (Niagara Falls): Mr. Speaker, pursuant
to Standing Order 36, it is a pleasure for me to present a petition
signed by the residents of my riding of Niagara Falls.
The petitioners are asking for amendments to be made to our
laws prohibiting the importation, the distribution and sale of
killer cards. They would like to advise the manufacturer of these
killer cards that their products, if destined for Canada, will be
seized and destroyed.
* * *
Mr. Peter Milliken (Parliamentary Secretary to Leader of
the Government in the House of Commons): Mr. Speaker, I
would ask that all questions be allowed to stand.
The Speaker: Shall all questions be allowed to stand?
Some hon. members: Agreed.
* * *
[
Translation]
Hon. Fernand Robichaud (Secretary of State
(Parliamentary Affairs)): Pursuant to our Standing Orders, I
want to inform the House that tomorrow, February 10, and
Friday, February 11, will be allotted days.
_____________________________________________
1109
GOVERNMENT ORDERS
[
English]
The House resumed from February 8 consideration of the
motion that Bill C-3, an act to amend the Federal-Provincial
Fiscal Arrangements and Federal Post-Secondary Education
and Health Contributions Act, be read the second time and
referred to a committee.
The Acting Speaker (Mrs. Maheu): When Bill C-3 was last
before the House there were four minutes remaining in the
question and comment period to the speech by the hon. member
for Lethbridge. Since he is not in his place we will resume
debate.
Mr. Dennis J. Mills (Parliamentary Secretary to Minister
of Industry): Madam Speaker, I am pleased to have an
opportunity to stand and speak on Bill C-3 today because I
believe the bill speaks to the very value system the nation
represents.
1110
I want to begin by telling members of the House a short story
about an experience that I was involved in about four years ago.
It took place in Quebec City. I met a great Canadian artist from
Quebec by the name of Richard Séguin. I went to a concert of
Richard Séguin's; it was the first time I had heard him sing.
I came away from that event moved by the talent, the energy
and the real greatness of this Canadian artist.
When I arrived home to Toronto I went down Yonge Street. I
went into some of the popular record stores to try to buy a tape of
Séguin because I wanted some of my friends to listen to him.
After about six record stores on Yonge Street, in the back corner
I finally found one cassette of Richard Séguin. ``Journée
d'Amérique'' was the name of the cassette.
(1515)
I guess it was about a month later that I had lunch with him in
Montreal. I told him the story about how it was so incredible that
while this artist sold 100,000 tapes, records or albums in the
province of Quebec and was so well known, in downtown
Toronto in the largest record stores, it took six stores and in the
back corner of one store I found one cassette.
He said that sort of exemplifies some of the frustrations and
some of the reasons why many of us in Quebec ask ourselves
what is in Canada for us. He is a great artist and sells a large
number of tapes in Quebec but outside Quebec he is known to
very few people.
Just as Canadian artists from Quebec are not well known
beyond their borders, there are a lot of things done through the
Government of Canada that are not well known in the province
of Quebec.
I am not standing here today trying to suggest that there are
not frustrations or discrepancies coming from Quebec or, for
that matter, from many other provinces. It is very important that
on a bill such as this all of our constituents, no matter what
region of the country they are from, should all understand what
equalization is all about.
It is especially important today because this is the first
Parliament in our history in which Her Majesty's Loyal
Opposition represents a point of view which wants to dismantle
Canada, wants to separate from Canada.
My community hears about a bill like Bill C-3, in which
through equalization we transfer moneys from the have
provinces to the have not provinces. We are talking about an
agreement that was signed last week supported by all the
provinces and the Minister of Finance. We are talking about a
deal that goes the next five years. The basic essence of this bill
entitles seven of the ten provinces to fiscal transfers from three
provinces, B.C., Alberta and Ontario. They are funds with no
strings attached so that they will have the same standard of
living, a national standard, a national tax base, the same access
to services right across the country.
(1520 )
The Quebec portion of this transfer over the next five years,
the period of this Parliament, is $70 billion. That means that we
as Canadian taxpayers will be transferring from the have
provinces to Quebec and the other seven provinces a large sum
of money. I want to deal specifically today with the $70 billion
that is being transferred to the province of Quebec.
I want to say at the outset that by constitution this is an
entitlement which I have no quarrel with. I support it happily but
it is in the face of that transfer that I have great difficulty in
understanding why members opposite would want to walk away
from that type of environment where we try to create national
standards and national programs so that the constituents of their
ridings can have access to the same services as the constituents
of my riding.
We tend to think that this is the only thing that happens in this
particular bill, that it is just a matter of transferring money. It is
more than that. It allows the provinces to basically make their
own decisions. Each of the provinces can make their own
decisions as to how they want their communities, their people of
that particular province served. It is not a condition where the
Government of Canada is imposing a very specific directive on
that money.
The provincial members of Parliament are the sole directors
of how those funds will be spent. It is no business of this
Chamber. The only thing that is the business of this Chamber,
the Government of Canada, the Parliament of Canada, is to make
sure the formula is implemented and the cheque is transferred.
I have talked to a few people, not only in my riding, but other
friends that I have from the province of Quebec and many
Canadians, not just in Quebec but all across Canada. They are
not aware of this equalization bill. They are not aware of the
extent or the numbers of dollars that are involved.
That is what led me as we were preparing for Bill C-3 also to
look into some of the other Government of Canada activities that
take place in the province of Quebec. I am skewing or I am
pushing my argument a bit toward the province of Quebec today
because we do not have representatives from the other provinces
saying that they want to separate, that they want to tear the place
down.
I for the life of me cannot understand why this is going on, this
notion of wanting to run away from this partnership, from this
value system, where we all share on a national standard. We
cannot just think of this bill as I mentioned earlier. We have to
think of the presence of the Government of Canada in many
other areas.
I would like to cite a few of them. One of the highest profile
projects in the province of Quebec is the James Bay project.
There is a perception out there that it is primarily a provincial
project. As I was preparing today I did a short overview, a
glance, a summary of some of the Government of Canada
1111
expenditures from 1986 to 1991 in the James Bay project. Did
you realize, Madam Speaker, that in that one project the
Government of Canada, through Indian and Northern Affairs,
Canada Mortgage and Housing, Transport Canada, Industry,
Science and Technology, Employment and Immigration,
Secretary of State, Health and Welfare, Energy, Mines and
Resources, Environment Canada, Fisheries and Oceans, Justice
and the Solicitor General, contributed $607 million toward
James Bay?
(1525)
I am not standing here saying that we should not be doing
these things. These were decisions made by this Chamber and by
members of Parliament who fought for their constituents,
whether it be for job creation or to make sure that the economic
viability of the province was there, but what I cannot understand
is after all of this sort of federal presence, this Government of
Canada work and presence, why Her Majesty's Loyal
Opposition wants to separate.
That is a question that many of my constituents have. I
thought that today, because we were debating this bill, it would
be a time to reflect and a time for all of us on this side to revisit
the whole exercise of examining the Government of Canada
presence in the province of Quebec. It is incumbent upon all of
us to make sure that all of our constituents and all of their
constituents know just what services are provided and where we
fall short.
I am not suggesting for a second that the situation is perfect. I
think that Richard Séguin has a legitimate beef. When we talk
about Canadian artists I believe Richard Séguin is a Canadian
artist. When we listen to English radio stations all we hear is
English radio programs. Those are Canadian airwaves. Why can
we not have Séguin on every radio station in Canada the same
way we have Anne Murray or Blue Rodeo on every radio station
in Canada?
I am not standing here saying that there are not some
legitimate concerns, but what I am concerned about is the fact
that we are not communicating to the people who live and work
in the province of Quebec all of the Government of Canada
presence that is there for them. The Government of Canada
presence through programs and services, whether they be in
industry, through the Department of National Defence, through
the historic sites that are supported by the Government of
Canada, through the Department of Tourism, all of these points
of presence are something that we have to make known to the
people of Quebec. If they should want to walk away from that
they should at least know what the whole story is all about.
I am convinced that once the total and accurate story has been
told there will be some Quebecers who may now be thinking
more in the separatist mode who might change their position. Is
it possible? I hope so.
I feel the more the members opposite become exposed to
some of the Government of Canada work that is done in the
province of Quebec that some of them might be a little less
antagonistic toward the whole notion of Quebec within Canada.
(1530 )
I stand here today recognizing and supporting totally Bill
C-3. I hope that all members opposite will communicate to their
constituents that we on this side of the House are supporting this
bill with firmness. We are not in any way, shape or form
questioning it, but we are asking ourselves if we are
communicating. Usually when someone has a resentment
toward a particular institution or a particular operation of
government, there are legitimate reasons like waste or
duplication. I accept the fact that we must work at correcting a
lot of those flaws that are in the system.
Those flaws that are in our system right now were created by
many institutionalized bureaucracies around here. Those
frustrations, believe you me, are the same for many people. We
have the same feeling in downtown Toronto for those
duplications and institutionalized bureaucracies and units that
are no longer serving the end user in the way they were
originally intended to serve the end user. But we do not say okay,
let us throw up our hands and quit. The purpose of our presence
here today is to make sure that we fix those things that are no
longer serving the public.
I hope that the message of the bill can be told to the people of
Quebec. In the last five years close to $50.7 billion was
transferred; in the next five years it will be close to $70 billion.
That, along with all the other Government of Canada presence in
the province of Quebec, I believe should mean something. Let us
hope with a good communication plan over the next little while
it will shift the attitude and cause a different approach from Her
Majesty's Loyal Opposition.
[Translation]
Mr. Paul Crête (Kamouraska-Rivière-du-Loup): Madam
Speaker, I thank the hon. member for Broadview-Greenwood
for his speech, because finally he got into the substantive issue.
The people of Quebec all know what is in this bill; for 25
years, we in Quebec have been debating this situation of money
from the federal government that fluctuates from year to year.
For us the time for plumbers is over; for us now is the time for
architects.
1112
We do not care that you wanted to give us fish with a law like
that. We want to be able to fish. What we want is to control
things ourselves and have a free hand to run our own show. For
that, what is most important to us is to have a government that
raises taxes giving services to the people for the taxes it raises.
Now, because of the problem with Canadian federalism, to
begin with, whereby the federal government has the right to
raise taxes in areas it does not control, we have this fantastically
hypocritical situation where the federal government says that it
is giving us money back. It is not giving us money back; it is
collecting our taxes and distributing them differently and for
125 years we have fought it because it never suited us.
That is why we in Quebec decided that there was no longer any
point in coming here to fight with federalist members. Thus
Quebecers elected sovereigntists because, as I was just saying,
they no longer want to change the plumbing; they want to change
house.
What I also wanted to tell you is that there are still problems
with this bill, because from the time a ceiling was set, the
following perverse effect has been created: Quebec's payment is
60 per cent of what it would be without the ceiling. When the
federal government was run without the present level of deficits,
we could afford this reduction, setting aside the basic problem
with the federal system.
(1535)
Since the federal government has no more money because it
mismanages ours, not only Quebecers' money but that of all
Canadians, it set a ceiling. With the ceiling, Quebec's share is
decreasing systematically.
I quite agree with what the hon. member said about Richard
Séguin-I know him well, and also his twin sister, who is a great
singer; they are about my age and we have the same dream-we
want to control our means of development so that our future can
turn out as we want.
[English]
Mr. Mills (Broadview-Greenwood): Madam Speaker, I do
not think the hon. member is reading the bill accurately. The fact
is the money being transferred to the province of Quebec is not
coming from the province of Quebec. It is coming from other
taxpayers in regions of the country that happen to be blessed
with natural resources or other economic advantages. As part of
a constitutional agreement and through entitlement the money is
taken from those advantaged provinces and regions and put into
the province of Quebec so that there is a national standard for all
citizens.
For the hon. member to suggest that the taxes are coming from
Quebec and going back into Quebec is not accurate. That is the
point I was trying to make. The whole area of fiscal transfers and
transfers of Government of Canada service needs a full
examination.
If the hon. member's remarks were to be picked up in his
community right now they would not be accurate. The hon.
member should be saying to his constituents that they will in
fact be receiving from advantaged provinces over the next five
years close to $70 billion in equalization payments. That would
have a much different effect on his constituents and their
attitude toward Confederation than if he said they are just
reshuffling their own money.
At least the hon. member did agree that this is the essence of
the whole discussion which has to go on in the next little while. I
for one am not going to shirk away from my responsibility to
talk about the Government of Canada's presence in the province
of Quebec, not just where it failed but also the good things it has
done for the province.
In this debate it is very important that the separatist members
make sure they put the facts on the table and not twist them.
[Translation]
Mr. Pierre Brien (Témiscamingue): Mr. Speaker, I was
deeply shocked, I must say, by the previous speaker's comments
because I think they show a profound ignorance of the whole tax
system, of the way government revenue is collected, as well as a
mathematical oversimplification. I even wonder whether he
understands the overall purpose of federal transfers and how
they work. He should be looking at established programs, at
what has happened in the education and health sectors to find out
what is going on and recognize the strong tendency behind it.
Equalization enables us to measure the capacity of a province
to collect revenue. It is this factor that determines whether a
province is defined as rich or poor. He should take into account
the fact that many decisions made by the federal government,
particularly Quebec's non-involvement in research and
development, has led to Quebec being seen as a province that
does not have the same capacity to collect tax revenue. Other
actions by the federal government prevent Quebec from doing
this.
(1540)
We should not act in isolation. If he wants to do it, I can do it
with him. I have before me figures on defence spending.
Quebec, with 25.5 per cent of the population, only receives 17.4
per cent of spending, an annual shortfall of $565 million. The
hon. member should not indulge in fiscal oversimplication.
If we look at the whole picture, as we did during the election
campaign when we had all the data, he would be surprised to see
how unfavourable federalism is to Quebec from a fiscal point of
view. We do not get our fair share given all that we pay and what
we get in return.
Saying that equalization is a gift is an outrageous attitude.
Quebecers also pay taxes here.
1113
Mr. Mills (Broadview-Greenwood): I did not say that.
Mr. Brien: It is an outrage to suggest it is a gift. I refuse to
accept it and I challenge him to come and debate the issue during
the referendum campaign in Quebec in the same forums I will
attend, so that Quebecers and Canadians can look at the real
figures and get the whole picture.
[English]
Mr. Mills (Broadview-Greenwood): Madam Speaker, my
remarks will be very short.
I have said on more than one occasion in the House that there
is not a region that does not have some legitimate frustration
with the Government of Canada, and Quebec is no exception.
The House must thoroughly examine the last 20 years of the
presence of the Government of Canada in the province of
Quebec and its attempts to try to make life meaningful and
productive just as it does in every region of the country.
Members of Her Majesty's Loyal Opposition should realize
that not only do we have members in our caucus from the
province of Quebec who represent a voice for Canada in that
province but for many years before that there were members
from Quebec who would disagree with the approach these
members are taking today.
[Translation]
Mrs. Suzanne Tremblay (Rimouski-Témiscouata):
Madam Speaker, I would like to associate myself with my
colleagues to vigorously protest against the fact that the
government does not limit itself to technicalities regarding
equalization in Bill C-3.
What should have been done is a comprehensive review of
federal transfer payments to the provinces, including
established programs financing through which the federal
government makes contributions to health and post-secondary
education; the Canada Public Assistance Plan through which the
federal government makes contributions to the provinces' social
assistance programs and welfare services; and all the other
programs governed by federal-provincial arrangements.
This piecemeal approach the government is taking will leave
the door open to unpleasant surprises when the time comes to
renegotiate the other bilateral arrangements. This approach does
not give us a complete picture of all the cuts to come.
In fact, the trends are worrying. Federal contributions to
transfer programs as a whole are in free fall. In Quebec alone,
federal transfer payments have dropped from 28.9 per cent of
the gross revenues of the province in 1983-84 to 20.1 per cent in
1993-94, and they should account for a as little as 15.8 per cent
of Quebec's revenues by 1997-98.
Fiscal transfers no longer meet the objective they were
intended to meet, although this objective was entrenched in the
1982 Constitution to promote equity among the regions. It is
common knowledge now that attaching limits to equalization
and established programs financing makes have-not provinces
poorer and have provinces richer.
(1545)
The federal government's withdrawal from various transfer
programs is proving to be very expensive for Quebec. It is clear
that the federal government wants to reduce its deficit at the
expense of the provinces, and including Quebec.
Since the Bloc's position on equalization was already
explained at some length by the two previous speakers for the
Official Opposition, I would like to address two areas where
Quebec did not receive its fair share: research and development
and established programs financing.
Why is spending on research and development so important
for the economy? Why talk about research and development in a
debate on equalization? Simply because research and
development constitutes a so-called structural investment, an
investment that helps create a modern and competitive industry
that generates high quality, well paying and permanent jobs.
Through its productivity and growth, industry has a positive
impact on the entire economy of a country.
The federal government is a very important player in research
and development. In fact, it provides two types of funding for R
and D activities: internal funding and external funding. Internal
spending covers all R and D activities funded and conducted by
the federal government. These expenditures are recurrent in
nature. As for external spending, this covers all R and D
activities which the government finances but does not conduct
itself. This type of spending is random in nature since it can
easily be shifted elsewhere in subsequent years.
In 1989, the federal government funded nearly 30 per cent of
all R and D activities in Canada. Between 1979 and 1989,
Quebec received only 18 per cent of federal spending in this
area, while Ontario received 50.1 per cent, which works out to
$4.6 billion for Quebec and $12.5 billion for Ontario.
In a study dealing with the equity of R and D financing,
Pierre-Étienne Grégoire applied four criteria to determine
under-funding or over-funding of R and D in the provinces.
These criteria are as follows: demographic weighting;
economic weighting, which reflects support for regional
economic activities; significance of regional R and D activities,
which reflects support for new technology in the region; and
significance of R and D involvement by provincial
governments.
Accorded to these criteria, Quebec and Alberta are
under-funded across the board. The study concludes that the
provinces benefitting most in terms of regional development
and economic growth are Newfoundland, Prince Edward Island,
Nova Scotia, New Brunswick, Ontario and Manitoba;
Saskatchewan and British Columbia benefit in terms of regional
development;
1114
and Quebec and Alberta do not benefit, either in terms of
regional development or economic growth.
Finally, Quebec and Alberta are the only provinces with a
negative balance for internal spending on research and
development.
If we consider the amounts paid under established programs
financing, Quebec and the poorer provinces are paying a very
high price for the policy adopted by the federal government.
Established programs financing was introduced in 1977.
Initially, the government indexed the per capita contribution and
prorated this indexed contribution according to the population
of each province. However, starting in 1982, the federal
government gradually withdrew from financing this program by
reducing the per capita increment.
We must realize that across-the-board cuts per capita are felt
more severely by the poorer provinces, and this situation
becomes even worse with the ceiling on equalization payments,
since the provinces no longer receive additional equalization to
make up for the lost revenue caused by federal cutbacks.
(1550)
Since 1982, cuts in established programs financing have
meant a loss of revenue for Quebec, which amounted to $1.8
billion in 1993-94.
Let us consider the impact of federal disinvestment on
post-secondary education, especially at the university level. It
is generally agreed that basic requirements in terms of training
and skills will increase because of economic globalization and
the ensuing need to specialise.
In its third report, the Conseil de la science et de la
technologie predicts that by the year 2000, 64 per cent of all jobs
will require post-secondary education. The government's
withdrawal from funding our universities leads to
under-funding of institutions that will be increasingly hard
pressed to play the active role one expects them to play in this
frenetic race to be competitive. Peter J. Nicholson,
vice-president of the Bank of Nova Scotia, defines
competitiveness as follows:
[English]
``The ability to produce goods and services that meet the test
of international markets while citizens earn a standard of living
that is both rising and sustainable over the long run''.
[Translation]
An economic study conducted at the request of the
Organisation nationale universitaire, which deals with the
consequences of disinvestment in higher education and was
published in 1993, provides some significant figures in this
respect. For instance, a 40-year old worker who graduated from
high school earns about $23,000 while a university graduate
earns $43,000. If we extrapolate what these would earn in the
course of their working lives, the university graduate receives
additional income that mainly benefits governments, thanks to
the current tax system. In Quebec, progressive tax rates allow
the state to take an average of 53 per cent of the income of
university graduates and 33 per cent in the case of high school
graduates.
The study concludes that this sizable difference reflects a
potential loss to the State of over half a million dollars every
time a high school graduate decides to enter the labour market
instead of going on to earn a bachelor's degree.
In the short term, the government saves money by
disinvesting in higher education but, in the long term, these
so-called savings result in a loss, and as the organization says,
when the government wants to save money in the short term and
decides to withhold one dollar from its funding of higher
education, every dollar not invested will, in the long run, cause
the government to lose $10 in tax revenue. The substantial
reduction in tax revenue will, sooner or later, have to be
compensated by a corresponding increase in the tax burden for
all taxpayers. Unfortunately we will never be able to
compensate for the net loss in human capital to our economic,
social and cultural development. Basically disinvestment means
that human potential and creativity remain untapped, and the
loss to society is immense.
Of course disinvestment also has a negative impact through
the resulting drain on unemployment insurance and welfare.
According to the Bureau de la statistique du Québec, in 1992,
the unemployment rate was 14.3 per cent among high school
graduates, while during the same period, university graduates
experienced an unemployment rate of 5.8 per cent, despite the
recession.
There is also a very significant cost in terms of social
assistance, and the government's disinvestment in funding for
university education will increase the number of people who
will need social assistance later on.
(1555)
According to Statistics Canada, in 1986-87, 52.2 per cent of
welfare recipients were people who had only partially
completed their high school studies, whereas 2.4 per cent were
university graduates.
We could talk for a long time about the negative impact on the
economy of the federal government withdrawal in the field of
post-secondary education, but all these figures do not say
anything about the loss of human potential resulting from this
disengagement of the federal government.
1115
After participating in this exercise, my party and myself
come to the following conclusions. First, Quebec is far from
getting its share in the research and development sector. This
loss results in a very heavy price for our province, since R and
D is an extremely dynamic sector of a country's economy. I
want to point out that, overall, between 1979 and 1989, Quebec
received $8 billion less than Ontario for that sector alone. In
fact, Quebec's economy will feel the adverse effects of this loss
for a long time to come.
Our second conclusion is that tax transfers are no longer a
reliable source of financing for Quebec and for all the have-not
provinces. Cuts imposed by Ottawa deprive Quebec of
important revenues. If at least those cuts helped reduce the
deficit, they would provide some benefit, but we are well aware
that such is not the case. In fact, the federal government forces
the poor provinces, including Quebec, to pay for its
mismanagement.
The third conclusion which can be drawn is that all the cuts
made to the tax transfer system have the effect of increasing the
fiscal burden of the poor provinces, that select club to which
Quebec belongs. In 1992-93 Quebec lost $2 billion under the
established programs financing alone, yet the law forces the
province to maintain national standards regarding the quality of
services to which the federal government contributes less and
less.
Sovereignty has become more necessary than ever for
Quebec. All the measures taken by the federal government to cut
these tax transfers to provinces destabilize Quebec's finances.
To make things worse, the federal government is not even able to
control its deficit.
I want to quote Mr. Jean Campeau who, when he came to my
riding during the election campaign, said: ``There was a time
when Quebec wondered if it could afford to leave Canada. Now
Quebec knows that it can no longer afford to remain part of
Canada''.
Mr. Ronald J. Duhamel (Parliamentary Secretary to
Minister of Public Works and Government Services):
Madam Speaker, I want to thank my colleague for her speech. I
have several questions for her. First, I would like her to explain
to the House and to those listening to this debate the difference
between sovereignty and separation, because I do not really see
any difference between these two concepts. I have to say that
when I talk to Canadians, not only those outside Quebec but
those in Quebec as well, they have some difficulty
understanding the concepts. I think that when the hon. member
uses the word ``sovereignty'' or ``sovereigntist'', it is simply to
hide the true objective. That is my first question.
As for my second question, I greatly appreciate that the hon.
member has taken the time to explain her position, but is she
prepared to concede that this is only one viewpoint? I find it
amazing that in all the years that have gone by, nothing good has
been done for Quebec as far as transfer payments are concerned.
What you are doing, Madam, through you, Madam Speaker, is
the same thing that the Reform party did today. It was dishonest
when it tried to make Canadians believe that out of a total of
nearly $8 billion in transfer payments, Quebec received $3
billion, or 47 per cent of the total. What they neglected to
say-and they know this-was that Quebecers account for 60
per cent of those who receive equalization payments.
(1600 )
Is the hon. member not trying to do the same thing, namely
choosing situations that promote her aims, namely separation?
She is trying to make Canadians, and in particular those who live
in Quebec, believe that it is unhealthy to be a part of this
beautiful country, that it is impossible to sit down and negotiate
new agreements that would satisfy their requirements. I find that
astonishing.
I was surprised to see the hon. member do the same thing as
Reformers who must be getting a little nervous. They are trying
to make the voters believe that Quebec receives more than its
fair share. They are claiming that Quebec receives 47 per cent of
transfer payments whereas in actual fact, it accounts for 60 per
cent and more of the population receiving such payments.
I wonder if the hon. member would care to respond to my
comments?
Mrs. Tremblay: Madam Speaker, I thank my hon. colleague
for his questions.
It is very interesting to see that, in spite of the official position
of your party-it is true that the red book has become a thing of
the past but still-you seem to be in favour of a referendum
debate. Good, welcome to the club!
I do not want to spend too much time explaining the difference
between sovereignty and separation, but the hon. member seems
to have understood that sovereignty is a legal right. Sovereignty
means that as a nation, we can negotiate our own treaties, make
our own laws, levy our own taxes. Separation flows from
sovereignty; once we have achieved sovereignty, we will be able
to say, to put it simply, that we are separate. One is a legal
reality, the other a consequence. Sovereignty is a legal status,
and separation its consequence.
There is one important point I should make though. This
House may not be aware of this, for we are continually portrayed
as playing the poor, but the truth of the matter is that this has
never been the attitude in Quebec. We Quebecers are proud
people. We prefer to stand, even on a broken leg.
What I am getting at is that the federal government is taking
nearly 23 per cent of its revenues from the pockets of Quebec
taxpayers. On the other hand, between 1963 and 1993, federal
departments have made less than 18 per cent-17.9 per cent to
be exact-of their investments in Quebec. For 30 years-not
one mind you-we never got more than 17.9 per cent of federal
investments. This type of investment have a structuring effect. It
1116
creates steady employment, steady jobs that make insecurity
disappear.
Instead, what you are giving us is unemployment and welfare,
and we have had enough. This House and Canadians from coast
to coast must understand once and for all that we are sick and
tired of being told that we are lying to the people. We will not
stand for that any more.
[English]
Mr. John Harvard (Winnipeg St. James): Madam Speaker,
I am very glad we can have some lighter moments in the House,
even after listening to some nonsense from separatists.
The previous speaker's comments relating to equalization
payments were replete with data, numbers, all kinds of figures
suggesting how the province of Quebec was getting the shaft in
Confederation. I would invite the previous speaker from the
Bloc to go beyond equalization payments. I can assure her there
is a lot more to Canada and a lot more to equalization payments
than sharing in the national wealth. It has to do with Canadians
sharing in the entire cultural life of the country, sharing in its
full experiences. That is what Canada is all about. It is not just
raw numbers and raw figures as the Bloc suggests. I would invite
these people to look beyond these narrow figures, which I
suggest are placed in a context that really makes for a bogus
argument, a bogus presentation.
(1605)
I would also say this. Yes, all of us are ignorant. One would
think after listening to the Bloc that the only thing Quebecers are
concerned about is how they are being shafted in Confederation
and their preoccupations with the Constitution. I do not pretend
to be an expert on Quebec but I know there is much more to that
province and certainly much more to Quebecers than any
concern about the Constitution and certain financial
arrangements.
I would also say the same thing about people who come from
the other nine provinces. We do not know enough about Quebec.
We ought to learn a lot more.
I really appreciated the comments of the member for
Broadview-Greenwood. We can do a much better job of telling
the Canadian story. I have always been a critic of the CBC, even
though I worked there for 18 years. In a way the CBC enforces or
perpetuates the two solitudes. We have an English language
network and a French language network and neither comes
together which is very unfortunate.
I would like to see many more exchanges, French language
programs appearing on the English television network and vice
versa-
[Translation]
The Acting Speaker (Mrs. Maheu): I am sorry but time has
run out.
Mr. Crête: Madam Speaker, I rise on a point of order. Would
the House allow the hon. member for Rimouski-Témiscouata
to reply to the hon. member?
The Acting Speaker (Mrs. Maheu): Unanimous consent
from the House would be required to allow the hon. member to
answer.
[English]
We need unanimous consent to permit a response from the
hon. member for Rimouski-Témiscouata. We are a minute over
our time.
Mr. Keyes: Madam Speaker, I rise on a point of order. I
believe you will find that the next speaker may be the member
for Winnipeg-St. James.
The Acting Speaker (Mrs. Maheu): Thank you, but I still do
not have unanimous consent for the member to continue.
Mr. John Harvard (Winnipeg St. James): Madam Speaker,
I was not expecting to speak at this time, but I certainly welcome
the opportunity to talk about the equalization program.
As I said yesterday, the equalization program as we know it
embodies some of the great ideals and great values of
Canadians. I cannot think of a much greater ideal under our
democracy than sharing one's wealth, sharing one's resources. It
is an ideal and a value that all of us cherish. It recognizes that
there are those provinces and those people who perhaps have it a
little better than others. It may not always be that way.
It had been my experience that the province of Ontario was the
fat cat province. We always looked on Ontario as rich, with
plenty of people, the home of manufacturing, the leading
province, certainly the leading English speaking province. We
expected Ontarians to share some of that wealth with the rest of
Canadians. It was always very laudatory on the part of Ontarians
that they wanted to do that. They wanted to share their resources
and their wealth.
(1610)
In the last three or four years things have not been going so
well for Ontario. In relative terms it is still a rich province but it
has not been doing as well as in the 1940s, the 1950s, the 1960s
and the 1970s. At certain periods of our national life some
provinces contribute to other provinces that are not doing so
well. That is why I am a very strong supporter of equalization
and of this equalization program.
It was pointed out by one of the Reform speakers yesterday,
and I appreciated his comments, that the proposal put forward in
the bill by the finance minister gives the program an element of
certainty. We are going to know for the next five years what this
program is all about. We may not be totally happy with the floor
1117
or the ceiling that is set but as least we know for the next five
years where we are going with respect to equalization payments.
Right now it is in the $8 billion range and the projections under
the five-year figures put it at about $10 billion.
Let me say one other thing as I talk about equalization and this
element of caring and sharing under it. There are others in our
society that could learn a lot from the government about
equalization.
What comes to mind is the National Hockey League. We know
there are a number of NHL cities in the country that are scared to
death they will lose their NHL franchises. The city of Winnipeg
where I come from is one. Even though Edmonton has won five
Stanley Cups and in the last 15 years has been one of the most
prosperous and talented teams in the NHL there is even concern
about the Edmonton Oilers moving. In fact Mr. Pocklington who
owns the team has been trying for more than a year to move it. I
do not think Quebec City is in a much different situation.
What I am getting to is that the NHL does not have
equalization. I suspect the NHL is run by a bunch of right
wingers who believe in dog eat dog, everybody for himself and
take whatever you can. That is what they have been doing. But it
certainly works against the best interests of smaller cities. There
is no doubt that if the NHL does not deal with this problem, if it
does not put a cap on players' salaries or if the NHL does not
deal with some of the financial problems, smaller cities like
Winnipeg, Edmonton, Calgary and Quebec City will not be able
to keep that financial pace. They will ultimately lose out and
those franchises will move to larger markets in the United
States.
I bring this up only because there are others in Canada who
can learn a lesson from equalization. I cannot imagine this
Canada without equalization. I cannot imagine not helping the
province of Newfoundland, or the province of New Brunswick,
or my home province of Manitoba.
My province geographically speaking is smack dab in the
middle of the country but we are in terms of wealth a have less
province. I do not say have not. I do not like that term. I say have
less. However, thanks to equalization and other transfer
payments of one kind or another, Manitobans can expect a
certain standard of living, a certain standard of services thanks
to a vision that our forefathers had a long time ago. I am very
proud of that.
(1615)
In conclusion, I want to say that I am very glad the
government has re-enunciated its commitment to equalization.
We know where we are going for the next five years. It is very
important. We have heard this from a number of government
agencies, not only from provinces. They want to know where we
are taking them. They want to know where they stand. I think
that is very reasonable.
I support Bill C-3 and I hope we can move forward with it
very quickly.
Mr. Stephen Harper (Calgary West): Madam Speaker, I
thank the hon. member for Winnipeg St. James for his
comments.
The hon. member made a terrible mistake. He discussed
hockey in the middle of a political speech. Whenever we do that
we run the risk that the conversation will quickly turn away from
politics and stay strictly with hockey.
The NHL has a form of equalization. It has the annual draft
which has the effect of redirecting players to teams that perform
poorly and I should add, redirecting players away from the areas
of the NHL to some of the smaller urban centres in Canada that
produce a lot of the hockey talent. Arguably there is a form of
equalization that is overequalization and quite detrimental in
that case to our interests. It is somewhat like what the member
for Lethbridge alluded to yesterday when he talked about
overequalization in some of our programs here.
I would just like to ask the member for his comments on one
question. I am curious about his perspective. Under equalization
levels for this year, 1994-95, the per capita top up for the
province of Manitoba is $849 and for the province of
Saskatchewan $552, his province and the neighbouring
province. This is a tremendous difference. I have looked at
statistics from Statistics Canada and I see that Saskatchewan
residents have a lower personal income per capita than
Manitoba. This seems to me to be a bizarre result and one that is
in favour of his province.
Does he think there are problems in the formula? Maybe some
time down the road we should study the formula and come up
with a more fair one that is easier for people to understand and a
little more clear in the kinds of results it produces. I would be
interested in his views on some of the particulars of the
equalization program.
Mr. Harvard: Madam Speaker, I appreciate the comments of
my hon. friend from Calgary West. I am glad he supports the
principle of equalization. I did overlook the matter of drafting in
the NHL. However when it comes to straight financial
arrangements there is no equalization.
With respect to Manitoba's share under the equalization
program, my good friend from Calgary is suggesting that
perhaps Manitoba is not treated as well as Saskatchewan. I am
not prepared to give an evaluation right here and now about that.
Earlier today in question period the Prime Minister pointed out
that this is a very complicated formula.
1118
I would like to say this to my friend from Calgary. I do not
think that equalization can be all things to all people. It cannot
be the panacea or the answer for every fiscal problem faced by
the federal government or by the provinces.
(1620 )
I would just point out one thing to my hon. friend. When it
comes to western stabilization or the famous Crow rate, western
farmers share in that program to the tune of $700 million,
somewhere in that neighbourhood.
That is a program for western farmers. We are all in favour of
it. As far as I know, people in Newfoundland do not share in it.
People in Nova Scotia do not share in it and so it goes. People in
Quebec do not share in it.
What I am getting at is that while perhaps equalization does
not take care of every difficulty that we have in this
Confederation, we do have other programs. If the speaker is
asking whether we should not revisit the formula that is used
under equalization, no, I would not bury my head in the sand. If
that is what he is asking it is fine and dandy with me.
[Translation]
Mrs. Suzanne Tremblay (Rimouski-Témiscouata):
Madam Speaker, I want to thank and congratulate the hon.
member for Winnipeg for his speech on hockey-it is my
favourite topic-but we will now move on to something more
important. I found out that he worked for the CBC, which is my
other topic. This honourable organization did such a good job
that the two solitudes have grown further apart with each
passing year.
This afternoon, the Prime Minister reminded us that
somebody else had his head in the sand; the hon. member just
told us that he does not have his head in the sand. I must
conclude that this government is going from coast to coast in a
submarine to hide from reality in this country. This country is
two countries. That is what we have been trying to say since we
came here, and we must stop suppressing this reality. There are
two countries: Canada and Quebec. We came here to speak for
Quebec and to defend its interests. In addition we were
presented with Official Opposition status on a silver platter. We
will also look after Canada because we want the country to be in
good shape when we leave. We do not want a heavier debt
burden and we want our share of a country that can stand up. We
do not want to leave in a wheelchair.
[English]
Mr. Harvard: Madam Speaker, all I want to say is that the
Bloc suffers from double vision and I suggest it should see a
doctor.
[Translation]
Mr. Laurent Lavigne (Beauharnois-Salaberry): Madam
Speaker, I listened closely to the previous speaker. He criticizes
Bloc members, and the province of Quebec, for focusing on
money and on how poor we are and how we do not get our fair
share of the equalization pie. But if this gentleman paid us a
visit, he would see the effects of not getting our fair share of
equalization payments for research and development and
regional development. What is the outcome? Unemployment.
Let him go and tell Quebecers on unemployment or welfare
what a great and beautiful country Canada is. When one is
hungry, unemployed or dependent on welfare, one does not care
much about this great and beautiful Canada. That is why
equalization transfers are important. We must get our piece of
the pie.
Quebec hands over to Canada over $28 billion a year in taxes,
but we are left with the crumbs. This has drastic consequences in
the daily lives of the people of our country, which is Quebec.
That is why we are not afraid to claim what Quebec is entitled to.
We are not indifferent to the Canadian deficit and $500 billion
debt, as it has daily consequences for all people living in this
country. Speeches such as the one delivered earlier should not be
allowed.
[English]
Mr. Harvard: Madam Speaker, of course we have serious
problems in the country, including the good province of Quebec.
I would not suggest for a moment that we overlook some of the
serious human problems that arise from unemployment and
other difficulties we have in the economy.
(1625 )
All I was trying to suggest in my earlier remarks was that one
cannot measure this great country, this Confederation, in
financial terms alone. There is a lot more to this country than
raw data, raw figures and raw numbers. The Bloc is rather
myopic in this and perhaps cannot see through the barrier that it
has placed in front of it, but if it would try to evaluate this
country in a more wholesome way and take into account all the
elements that make up the country it would come to a much more
positive assessment of Canada.
Mr. Herb Grubel (Capilano-Howe Sound): Madam
Speaker, the Reform Party supports the principle of Bill C-3 as
was noted by the two Reformers who spoke on the subject before
me. Reformers, as well my constituents, believe that it is
important to preserve and cultivate the humanitarian instincts of
Canadians that drive us to want to help those who find
themselves in financial or other difficulties.
My two colleagues have noted two criticisms of Bill C-3. One
is its planned increases in the level of transfers while the
government is beset by very serious financial problems. All
spending needs to be curtailed. Interprovincial equalization
payments ought not to be exempted.
1119
The second criticism was that the government has been
carrying the principle of equalization too far. If Bill C-3 does
what it is designed to do there is no need to use other spending
programs to favour provinces with low income and taxation
capacity.
These two objections to Bill C-3 are valid. I would like to add
an additional one which involves the very nature of the
equalization program as it functions now. My criticism is based
on my academic research and understanding of the problems
which are caused by subsidy programs of all sorts. It is also
based on messages which I have received from my constituents.
Finally I should note that the criticism is based on the same
kind of reasoning which underlies the recently announced
government review of all social programs in Canada. These
programs have failed to deliver on the promise which underlies
their design. They have blunted incentives, increased
unemployment, trapped people in poverty and made them
dependent upon government support. These are almost identical
words to those used by the Minister of Human Resources
Development in the House.
In addition, the programs, not the innocent victims who have
reacted to the incentives created by the government, have
contributed much to the present fiscal crisis of the country. I
believe the compassionate people of Canada are fully in favour
of helping others who have fallen on hard times. However, many
Canadians have told me they also insist their aid be conditional
upon efforts being made by the unfortunate to change their own
lot. Some, like those with permanent handicaps, cannot and are
not expected to do so. For those the support is happily given on a
permanent basis. For others, however, the aid must be limited
and conditional.
It is well known that the interprovincial system of
equalization payments was designed to create greater equality.
However, when the program was designed it was hoped that such
transfers would be temporary because the federal government
simultaneously started a substantial program for regional
economic development.
Since the beginning, regional economic development
programs have been beset by difficulties. There have been
experiments with a variety of models and with locating
responsibility for their administration in different ministries.
During the 1980s I was the academic director of a research
project on the Canadian service industries undertaken by the
Fraser Institute and financed by what was then the department of
regional industrial expansion. One of the prime motives for the
study had been the realization that the spending of billions of
dollars on infrastructure and megaprojects, as well as direct
subsidies to industry, had not narrowed the income gaps
between the have and the have not provinces.
(1630 )
The fact that over 70 per cent of all Canadians are working in
the service sector had awakened interest in the possibility that
perhaps more development per dollar could be obtained by
support of service industry projects than the traditional
investment in structures and machinery.
I mention this study of the service industries to illustrate the
problems which regional development programs have
encountered, problems which in the view of many have been so
severe they made the programs an almost complete failure. The
reasons for this failure are quite clear now.
Historically regional disparities in income in Canada and all
industrial countries of the world were due to different
endowments with natural resources. The maritimes enjoyed one
of the highest levels of income in Canada at a time when rich
fisheries and coal were the primary base of the income of people
and regions. Later the fertile plains of the prairies gave that
region one of the highest incomes in the country.
For at least the last 70 years, however, the wealth of nations
has been increasingly based on the accumulation of human and
knowledge capital rather than natural resources.
Just look at the per capita income of Singapore and Hong
Kong, tiny geographic regions with zero natural resources.
Singapore does not even have enough water for its people. Some
estimates suggest that as much as 60 per cent to 70 per cent of
the wealth of modern industrial states consists of such
intangible human and knowledge capital.
Unfortunately for regional development prospects, human
and knowledge capital are most productive only in large
population centres, where the so-called agglomeration
economies generate the high productivity that underlies high
personal incomes. In these centres, the proximity of people
lowers transportation and communication costs, allows
increased specialization and creates other productivity
increasing benefits like competition in markets for labour and
goods and services.
For this reason, in Canada and all industrial countries,
megacities with high population densities have the highest
incomes and outlying areas are further behind the more remote
they are from the urban centres.
According to this view of the role of human and knowledge
capital and the economics of agglomeration, the solution to
regional income inequalities lies in the movement of people
from outlying areas to the centre. Such movement, which in
Canada until the 1960s had been gradual and low cost, permitted
higher incomes to be earned by the migrants and, more
important, it raised the income of those remaining behind.
1120
Just imagine incomes in the fishing industries in the
maritimes or the farm sector in the prairies if the population
of these regions were perhaps half its present level. The
adoption of the best production technology, regardless of the
effect on employment, would permit the smaller number of
workers in these industries to enjoy higher levels of
productivity and income. No one knows at what population
levels emigration would have ceased. It is clear that eventually
it would have equalized incomes in the centres and outlying
regions, where income is broadly defined to include such
intangibles as the quality of rural life and the cost of congestion
in cities.
The tragedy of many post-war government policies for
Canada was that they disregarded the decreasing role of natural
resource wealth in the increasing role of human capital and
cities in economic development.
The income equalization program being extended by Bill
C-3, the regional development programs and the payment of
unemployment insurance benefits to workers in seasonal
industries like fishing have severely retarded outward migration
from remote regions with low incomes. The natural adjustment
which market forces were generating gradually were
short-circuited by these policies.
(1635 )
The policies undoubtedly were well intentioned but basically
flawed, unfortunately. They have had several unfortunate
effects. To finance the transfers and fruitless development
efforts in the outlying regions the productive areas had to be
taxed more heavily. Extra payroll taxes going to the
unemployment insurance funds have raised labour costs and
discouraged employment.
The disincentive effects of such taxation on investment, work
and risk taking retarded the growth in the entire country's
income and wealth. The lower rates of economic growth which
started more or less with the initiation of these regional
assistance programs in turn retarded the increase in government
tax revenue. They therefore contributed significantly to the
financial crisis and the need for the redesign of social programs
that will be discussed in the House in upcoming months.
Equally unfortunate has been the impact of the policies on the
people in the outlying regions. I find it most distressing to see
videos of workers in the maritime fishing industries and of
farmers in the prairies who have lost their jobs and are afraid of
losing their homes and possessions. Perhaps more important, as
the Prime Minister kept noting during the election campaign,
these people have lost their dignity. They have become
dependent upon government handouts, the generosity of the
House.
The predicament which these people find themselves in is not
of their own making. They are the victims who simply have
acted rationally in their response to the incentives created by
government policies.
These people deserve better. They deserve that the
government and this House initiate a review of the existing
programs for regional assistance and development. The
government has already announced plans for a major review and
redesign of social programs affecting individuals. Regional
assistance and development programs should be included
explicitly in such a review.
I have my own views on the insights which such a review
might produce. Abstracting from all political considerations,
Canada needs to restore market incentives for migration, the
only fundamental and lasting solution to the problem of regional
inequalities that does not also create dependence and a loss of
dignity. To create these incentives all present forms of regional
transfers must be phased out. Such phasing out should be
gradual but certain.
In place of current programs we need to have programs that
are both economically efficient as well as consistent with the
compassionate nature of Canadian society. Financial transfers
to regions and provincial governments must be limited to
situations where incomes are reduced to events beyond the
control of those affected.
Outstanding examples are the disappearance of fish stocks,
bad harvests or low world prices for certain products. The
payments must be limited to the duration of temporary adverse
influences on incomes. In the case where incomes are lowered
by permanent changes in conditions, financial support must be
conditional upon the adoption of policies that bring about real
adjustment to the new environment.
People who are asked to make payments to help others should
have a right in deciding on how this money is being spent. Many
people believe the proposed characteristics of regional
assistance programs must also be incorporated into social
programs serving individual Canadians if the country ever
wishes to restore the government's fiscal health and at the same
time maintain a sound social security net for those in genuine
need. They also agree that the sooner such a review is
accomplished and acted upon, the better.
For these reasons I recommend that the government append
Bill C-3 to mandate such a review. In addition I recommend that
the government send a message to the recipients of the
equalization payments suggesting that future transfers will be
made conditional upon real adjustment needed to equalize
regional productivity and income.
(1640)
Mr. Ronald J. Duhamel (Parliamentary Secretary to
Minister of Public Works and Government Services):
Madam Speaker, I enjoyed my colleague's presentation in the
sense that he had obviously thought very carefully about what he
was going to say. Clearly what he has said reflects the fact that
he studied it for some time. Although we may have some differ-
1121
ences on how this major problem he has underlined might be
approached, I respect what was said.
What bothers me certainly is not the approach he has taken or
the content of the address. But today there were two remarks
made by members of the Reform Party which bothered me a
great deal.
Looking at the transfer payments it is correct that Quebec gets
47 per cent of the transfer payments, but there is the additional
bit of information that Quebec represents roughly 60 per cent of
the people who get transfer payments.
I am wondering why his party would want to give the
impression, which I got and I am not from Quebec, that Quebec
was being favoured. We heard from Quebecers today, our
friends the separatists-some of them are friends-who feel
they are not getting enough.
Another thing that bothers me is there seemed to be a
suggestion that Manitoba was being favoured by this formula. I
am from Manitoba. If that was the suggestion I am offended,
unless I can be clearly shown that it is true.
Now correct me if I am wrong. I am one of those members of
Parliament who accepts the fact that he could be wrong. It seems
to me that yesterday one of the hon. member's colleagues said
the Reform Party would reduce the amount of transfer
payments. If so, by how much and what would be the impact on
Saskatchewan and my home province of Manitoba?
Mr. Grubel: Madam Speaker, I welcome the opportunity to
respond to some of the points the hon. member has made. I do
not obviously know all the reasoning behind the statements
made by my colleagues, but I can attempt to give an answer.
The people of my riding are reacting to the fact that a province
like Manitoba which according to Statistics Canada has a higher
per capita income than Saskatchewan receives more per capita
in transfers than Saskatchewan. This simply does not make any
sense to people who are no experts in this complicated formula
the Prime Minister referred to.
Using the same idea with respect to Quebec, 47 per cent of the
benefits are going to Quebec. It has 60 per cent of the
population. I am sure the hon. member would like to look at the
statistics in light of the per capita income. The per capita
incomes of that 40 per cent of the population receiving transfers
is way below those of Quebec.
This has to be seen in the light of the complicated formula but
also using some intuition. The income of Quebec is only
fractionally below that of the average. That is why it is receiving
this money. The statement about 47 per cent of the total transfer
going to Quebec was not made in any disparaging way. It was
made, as far as I remember, in response to a challenge that
Quebec is not benefiting from this program.
My constituents certainly are asking why a province with such
a high income is receiving 47 per cent, even though it has 60 per
cent. This is the formula but I am returning to the point that the
hon. member had made on how difficult all this is to understand.
(1645)
I apologize about the third point that somebody said transfer
payments should be reduced. I do not know who said that and in
what context. I do not really wish to presume that I could answer
that question for the hon. member.
[Translation]
Mr. Pierre de Savoye (Portneuf): Madam Speaker, I
appreciated the hon. member's presentation, but I am
particularly puzzled by some points in it. First, he says that if
transfer payments had not been so high, people would have
emigrated because of the lower payments. Perhaps they would
have tried something else and found new resources where they
were to ensure their economic vitality.
Also, I would point out that if Quebec receives transfer and
equalization payments, the total it receives from Ottawa is the
same as what it sends to Ottawa, about $28 billion.
Unfortunately the money comes back in the form of transfer and
equalization payments, when it could come back as normal
federal spending, such as Ontario receives.
Thus Quebec wants to break free from this system. Many
times we proposed the way to do it. Perhaps that could satisfy
our member of the Reform Party. Does he have an opinion on
that?
[English]
Mr. Grubel: Madam Speaker, I am pleased to hear probably
for the 15th time now that hon. members from the Bloc are
insisting that we hear repeatedly the story that Quebec is getting
a raw deal in the extent to which it is sending money to Ottawa
and the extent to which it is receiving money. I really have no
more comment to make on this. It is a very complicated issue
and that is why there is a dispute over the merit of this case.
However on the substance of what I tried to say, I would point
out that if in the 1960s we had not retarded the incentive for
outward migration from some of the outward lying regions of
Canada, the process which had gone on for the preceding 50 or
60 years would have continued.
The hon. member is an economist and realizes there would
have been increased capital per worker and increased natural
resources per worker remaining behind. Therefore the incomes
would have gone up. Maybe more resources would have been
discovered. Then outward migration would have slowed down.
In the end we would have had a solution making everyone happy,
those who were moving as well as those remaining behind.
1122
We have destroyed this welfare maximizing process through
our programs and I urge that they be re-examined.
[Translation]
Mr. Benoît Serré (Timiskaming-French River): Madam
Speaker, I would first of all like to thank the member for
Capilano-Howe Sound for his comments. However, I must tell
you that I do not share his opinions. To avoid any confusion, I
would say to the hon. member that, although I am seated on this
side of the House and speak French, I am not a Bloc Quebecois
member. I am one of the millions of francophones outside
Quebec who consider Canada, including Quebec, as their
country.
Nevertheless, Madam Speaker, I have one thing in common
with my colleague here from the Bloc; like him, I am puzzled
too. From the beginning, since this House opened, I have heard
the Reform Party with its far-right agenda telling us that we
should not spend money to help the regions, we should not
subsidize small business. Implicit in that is that people are poor
through their own fault, because they want to be poor.
I also deplore the debate on equalization turning into a battle
between Quebec and the rest of Canada. Very little is said about
the other provinces like New Brunswick and Newfoundland. I
think that the equalization program is unique; it helps define us
as Canadians.
(1650)
It is a program whereby the richer regions help the less
well-off regions. I am from northern Ontario and I can tell you
that our unemployment rate is probably higher than anywhere in
Quebec. In some regions like Kirkland Lake, for example, it is
40 per cent.
That being said, I do not care whether my money is used to
help people in Quebec, New Brunswick or Newfoundland. That
is what Canada is all about.
In the morning, the people in the Reform Party tell us that we
absolutely must keep small rural post offices open, and I agree
with that because it is a kind of regional development. We can
keep our small post offices open because people elsewhere in the
country subsidize them and I fully agree with that.
What I do not understand is that in the morning, they ask us to
do it, but in the afternoon, they tell us to cancel these programs. I
would like to know what the Reform Party really wants on this.
[English]
The Acting Speaker (Mrs. Maheu): Unfortunately the
period allocated to questions and comments has terminated. We
will have to continue debate.
Mr. Ron MacDonald (Dartmouth): Madam Speaker, the
debate that is going on today is important. It actually strikes at
the very heart of what type of country we live in.
Many times we engage in debate that has a very narrow
interest across the country. This one certainly has not. I have
indicated at other times when I have spoken in the House,
specifically in opposition, that we have grown differently. We
are a different state than our neighbours to the south and we are a
different state than our two founding nations, both Britain and
France.
We have decided to do something a little different. We are
unique. We have believed as a nation-it is a founding principle
of our nation-that there is some sort of collective ownership of
the resource that is Canada.
We have structured programs through successive
governments and have said that we believe in this great nation,
Canada, which maybe one day has a disparity in the east, in
Quebec or the west, that somehow governments have a
responsibility to commit themselves to free market enterprise
but at the same point in time to ensure that there is a
redistribution of wealth in this great country.
Indeed I can go back to the time of Confederation. Atlantic
Canada at that point in time was a have region in this country. It
was one of the wealthiest. Some would say that we have never
looked up since we joined Confederation. Some others would
say that perhaps in the short history of this country-we are not
an old country-these cycles perhaps are very small.
During the course of our short history we have believed that
central governments have a responsibility to redistribute wealth
in this country. We believe fundamentally with regard to those
who because of the exploitation of a natural resource or certain
trading patterns or routes exhibit great growth and personal
wealth, employment and tax revenue that somehow there is a
responsibility of government to redistribute that wealth.
We have formalized that in our Constitution. We have federal
legislation that is called equalization. The equalization
payments are the most visible sign of that fundamental principle
of sharing and collective ownership of resource in this country
that the federal government does.
Under equalization, the federal government has transferred
some of the taxes that it takes to the less fortunate provinces to
try to ensure that those provinces have the resources necessary
to offer programs that their citizens deserve, indeed demand,
programs of national standards so that within this great country
we do not have very different applications of our economies.
1123
It has worked very well. Indeed I hear sometimes from the
province of Quebec, from some of the members who are here
from the Bloc, that Quebec has been shortchanged.
That is up to debate. Sometimes in Atlantic Canada we
believe that we have been shortchanged and that it is not just
simply a matter of always wanting equalization. Perhaps it is a
matter of fundamental government policies that allows each
region of this country to develop its resources and its labour
market so that some day we can all be contributors to the
national economy instead of takers from the equalization pot.
Sometimes we are fighting over scraps. I would much rather
see policies enacted by provincial governments that allow for
the freer movement of goods and services and people, that
allows for various regions of this country to develop their
economies so that the people can develop to the fullness of their
potential. That day is not yet upon us. Equalization is indeed
important. I remember just a few years ago in this place when
the government of the day was different. It was the Conservative
Party, which is now down to two members in this place. That
government saw the the role of the federal government in
redistributing wealth a little differently. Every penny it could
save, every dollar of its own debt it could transfer to the
provinces it saw as a victory. Then hopefully it could go the
public and say: ``Look how well the economy has been
managed''. Through the restraints it put on equalization,
through its interpretation of some of the clauses we saw the
numbers of dollars that the provinces expected to get from the
federal government jump wildly.
(1655)
I think it was three years ago that I rose in my place and
questioned the Minister of Finance and the Prime Minister
because that small, beautiful province of Prince Edward Island,
whose minister of finance was preparing a budget, was given
information by the federal government of the day that it could
expect so many dollars in equalization under the formula for the
previous year. At the last moment, two days before he tabled his
budget in the P.E.I. legislature, the federal finance officials
called and said: ``Sorry, we have reinterpreted some of the
provisions and now you are going to get millions of dollars less
in equalization''.
What did that do to little Prince Edward Island? The treasurer
was going to be reporting a surplus in his budget. Can you
imagine a surplus in this day and age? That surplus was turned
into a deficit.
In my province of Nova Scotia the minister of finance, a Tory
at the time, and I guess they did not even talk among themselves
because he was caught quite unaware, found out he was going to
get $72 million less. The province had already spent the money.
Therefore, there was a pressing need from the provincial finance
ministers and treasuries to put some order into what they could
reasonably expect to receive from the federal government.
This bill puts some order in it. It is a five year plan wherein we
tell the provinces: ``We cannot give you everything you might
want, but we are going to give you some certainty. We will tell
you what our plan is and we will guarantee that we will not
deviate from that plan in a way that negatively impacts on your
fiscal ability to conduct your affairs in your own province''.
That is a plus. I do not think there is a premier of any of the seven
provinces that receive equalization who would not get up an
applaud this very positive measure.
There is another area that the bill does not address but it is
equally important, called the EPF, established programs
financing. These are programs that the federal government gets
into to again try to equalize opportunity around the country.
These are programs that fund our health care system in Canada
and fund post-secondary education.
I told one of my colleagues from the Reform Party who called
me a socialist Liberal, the other day-I thank you for the
compliment by the way-that if it was not for EPF to the
provinces across Canada that as the son of a coal miner from
Cape Breton who not through any fault of his own but because of
the working conditions of the day saw more pay days than he
saw pay cheques, I would not have been able to afford to go to
university. In some of the poorest provinces if it was not for the
established programs financing, the EPF, we would have
different systems of health care right across this country.
Those Liberal policies of days gone by just like equalization
were corrupted by the previous administration. The result was
that provinces that had programs of national standard dictated
primarily by the federal government, as in health care, found in
every single year, in every federal Tory budget that came into
this place that they could expect less and less.
In a place like Newfoundland if you receive $12 million less
for post-secondary education where in the name of goodness are
you going to pick that up on your limited tax base in that
province? In a place like Nova Scotia, Saskatchewan, Manitoba
or Quebec, when a federal government unilaterally cuts because
it has mismanaged the economy like the Tories did and says that
it is not going to be participating at the same level as it did last
year, tell me where those provinces pick it up. They do not.
One thing we said during our campaign and the Prime
Minister has also said we will work on is once again to put some
certainty into the levels of EPF, establish programs financing.
We cannot give them everything. We have a huge deficit and a
huge debt but we will put some certainty so that ministers of
health and ministers responsible for post-secondary education
in each of our provinces will be able to sit down and with some
1124
certainty know that they are not going to get the royal shaft in
the next federal budget that comes down from the federal
government. That is exactly what we need.
(1700)
I want to give some statistics. I am not going to criticize
members of the Bloc Quebecois for their political beliefs. That
is what freedom of expression is all about in the democratic
process. We will have great and hopefully historic debates in
this place about the issues they wish to put forward. However the
reality is that many of the fractures we currently see in our
country are recent ones. They can be traced back to a sense of not
being listened to, a sense of betrayal by many regions of the
country in their dealings with the federal government.
The province I come from does not want handouts. I would
desperately love to stand in this House some day and complain
that we are getting too much money and that it should go
somewhere else.
My role as a member of Parliament is not just to represent and
try to build a strong Nova Scotia. It is to try to better Canada. It
is to try to ensure that we pass policies and programs which
allow each and every one of our citizens, no matter who they are,
no matter what their language, no matter where they come from,
whether they are native born or immigrant, to participate to the
fullness of their potential in this great country. That is what we
are all here for.
Over the last number of years we have seen the erosion of the
regime where we did transfer and did believe in collective
ownership of the resources and riches of Canada. I want to give
some sense as to why we are seeing fractures in the east and
maybe in Quebec, but certainly in the west. They say that federal
governments have not listened to them.
The federal Conservative government, in a number of
successive budgets, possibly three or four, changed the
established programs financing formula which is another form
of equalization. It said it would participate on increases using
the consumer price index, CPI minus one, CPI minus two, CPI
minus three. What did that mean?
To a province like Nova Scotia it meant that if health care
costs went up by 5 per cent the federal government no longer
was giving out 50 cents on the dollar on that increase. The
benchmark if it was the previous year was 50:50, but any
increase over that would only be cost shared on a formula that
said cost is consumer price index minus 3 per cent.
If the consumer price index was 5 per cent and the health care
costs went up by 5 per cent there was not full sharing on that 5
per cent. Full sharing was received on 2 per cent which meant
that the poorest provinces had to find within their limited tax
bases a way to fully recover the 3 per cent increase. It was 100
per cent on those dollars, no 50-cent dollars.
What has it meant? It means under the old formula the
province of Quebec will be the first province to no longer see a
transfer in cash for hospital expenditures. It will be the first. It
means that over the course of its 10-year program in health care
alone the federal government had withdrawn on full funding
50:50, to the tune of $29.998 billion. In 1989-90 as a result of
the government's formula where it rejigged what participation
meant, it meant that the health care system in the provinces lost
$1.107 billion.
What does one do in British Columbia? It is hard enough to
deal with that if it is a so-called have province such as Ontario,
which is not really a have any more because of the New
Democratic government and its policies. But Alberta and British
Columbia are finding it tough enough. What about the
economies where there is deep recession and even depression?
What about education? As a result of this rejigging of EPF,
this fundamental tenet of Canadian federal-provincial relations,
in post-secondary education, during a 10-year period the
Conservative policies will have cost $12.109 billion out of
federal government participation on post-secondary education.
What does that mean? It means in the poorest provinces, the
smallest provinces we have already started to create a society
where it does matter where one lives and it does matter what
one's tax base is, because the province of Nova Scotia has now
seen transferred over nine years of Tory government a huge
amount of the federal mismanaged debt. It is down sitting on its
desk now. The same can be said for Newfoundland, Quebec,
Manitoba and Saskatchewan. That is what it has done. Therefore
the pressures on us now have been caused by intentional fiscal
policies.
(1705)
I do not think we can right all the wrongs of the past and I am
not suggesting for one second that we could. I wish we could, but
I do not think we can. What we can do is work with the
provinces. We can tell them we are not going to give them the
shaft every time they turn around at budget time. We are
prepared to sit down and work with them. We understand that a
dollar saved at the federal level by reducing transfers for these
necessary programs is not really a dollar saved when looking at
the impact on these smaller provinces.
I do not know what the Minister of Finance will come down
with but I know our government will uphold the commitment it
made to Canadians and to the premiers during the election
campaign. We will not do what the previous government did and
come in and lay waste to the equalization programs and
established programs financing.
1125
I do not think there is an issue that grips Canadians more
today than whether or not our health care system can survive.
There is a funding crisis and a utilization crisis in our health
care system. Surely the way we deal with that is not to continue
with the policies of the past government. We must deal with
it co-operatively and recognize that the federal government got
us into these programs and the federal government cannot be
allowed to abandon them.
We also believe in fiscal responsibility. We have to look at the
finances of Canada not just at the finances of the federal
government. The finances of our provinces, the territories and
our municipalities all impact on whether or not we are able to
grow and prosper or whether or not we will be weighed down by
debt. Our federal government has indicated it is prepared to deal
with that.
In every one of the economic policies we pursue as a
government, no matter how scary the deficit might be, no matter
how many special interest groups may scream, whine and
threaten, we will always, always, always make those economic
decisions based on the impact on every average Canadian. That
is different. That should give some hope to the unemployed. It
should give some hope to the people in the poorest regions. It
should give hope to some of the have not people in the have
provinces who need training, who need to be put back to work,
who want to be taxpayers instead of tax takers.
We may debate whether or not it is enough, but this is an
initiative that stops the slide of federal dollars into the
provinces. This initiative sends out a signal and a sign to the
provinces that there is a new gang in town. This is a new
Parliament. We are prepared to work with each and every one of
the provinces to ensure that the priorities of Canadians are
expressed and fulfilled not just by the federal government but by
our provincial legislatures as well.
I applaud the government but I also let it know there are some
on this side of the House, now that we are government, who still
believe we have a fundamental responsibility to stand and speak
for the people who elected us. To date the ministers seem to have
listened. I know the Prime Minister has.
I know that many on this side of the House and on the other
side as well will be vigilant in ensuring the government fulfils
the commitments we have all collectively made to our
constituents.
[Translation]
Mr. Pierre de Savoye (Portneuf): Madam Speaker, I greatly
appreciated the presentation by the hon. member of the
government party. I think he painted an interesting picture of the
crisis in which the previous government had plunged the country
for nine years, I would, however, like to have his reaction to or
views on some of my concerns which he touched on.
Earlier on, we had the opportunity to discuss transfer
payments. At that time, I expressed a number of reservations
and received some answers.
Now we are looking at the issue of established programs
financing. Regarding this matter, we know that if the trend
continues, as the hon. member mentioned, then in a few years
time, Quebec will no longer be receiving any funding at all.
Eventually, a number of provinces would see their share also
reduced to zero.
(1710)
In 1977 the federal government made a commitment to the
provinces in the area of established programs financing. At the
time the commitment was based on the formula that the hon.
member mentioned a while ago. On the strength of this
commitment, each province set up its own health care and
post-secondary education programs.
Over the past ten years or so, the government has gradually
reneged on its commitments. At the same time the taxpayers in
each province must continue to pay their full share of taxes. The
money that the taxpayer was giving to Ottawa was not being
reinvested in his or her province, as the federal government and
the provinces had agreed it would be in the late 1970s.
Could we not call this a misappropriation of funds? I will ask
the hon. member to comment on this point in a few minutes. The
fact remains that under the present circumstances, this approach
would seem to be the safer bet. I would like to repeat what the
hon. member said.
[English]
We want to put a certainty into the EPFs. We do not have that
at this stage and have not had it for the past 10 years.
[Translation]
The best guarantee we could have that the provinces are
receiving their fair share is if the taxpayers in each provinces
remit directly to the province, and Quebecers to Quebec, the
money which is now sent directly to Ottawa and which is not
fully reinvested, and less and less in each provincial health care
system.
I will conclude with a question for the hon. member. Does he
not think that each province should have exclusive jurisdiction
over health care?
[English]
Mr. MacDonald: Madam Speaker, the proposal the member
puts forward certainly is debatable. I do not have the figures
here for transfers to the province of Quebec. Looking at tax
revenues going out and transfers going in, I would suspect that at
least recently Quebec has not been hard done by, nor has Nova
Scotia. At some point we will be net givers. I hope that at some
point the province of Quebec will be a true have province
according to the fiscal definitions.
1126
If the question is would it not be better if Nova Scotia just
collected its own taxes and kept everything it collected, I would
like someone to tell me how it is going to decide what 32 per
cent of hospital beds should be shut down in that province. I
would like somebody to explain which universities will have
to close and how people with my type of background will be
able to get a university education.
The reality is that not each province at any given point in time
is able to pay its way on all these programs. Equalization is not
there as a handout; it is supposed to be a hand up. It is supposed
to allow the provinces, dealing strictly with equalization, to
have enough resources to try to build the infrastructures within
their economies so that they can be competitive. It is not meant
to keep them in poverty; it is meant to try to take them out of
poverty.
When dealing with established programs financing I would
caution my colleague to be very careful. My understanding is
that those provinces which get EPFs, at least the seven that get
equalization, are getting more than what they would get if they
just kept their own tax base.
The question is not whether it is better to be sovereign. The
question is whether we can work together as a nation with all our
component parts to ensure that if the principles are no longer
valid then there will be a debate on it. If the principles of a
universally funded health care system are not valid and
assistance to post-secondary institutions is not valid then let us
have a public debate on it, and not necessarily here.
Let the Canadian people speak. We would find that the people
in the Gaspé, the people on the greater northern peninsula and
the people from the plains of Saskatchewan might jump up and
say: ``What are you trying to do to our country?''
The question is not whether or not we should have these
programs. The question is whether or not we are able to afford
them and whether or not the federal government as the senior
partner in Confederation is prepared to work with each
individual province to ensure that these programs continue.
I want to speak about EPFs and health care in the province of
Quebec. The government in Quebec has done some very neat
things in dealing with trying to keep the escalating costs of
health care from going through the roof. Other provinces should
look to Quebec to see what it has done.
(1715)
I remember reading an article. One of the major costs of the
escalation of health care is that every community has an out
patient service and in order to properly staff an out patient
service, look at the number of people on average coming
through and determine how many doctors have to be there, what
equipment has to be there, an anesthesiologist, a surgeon on
duty, all of those things, and it is based on volume.
Some people say as many as 80 per cent of the visits to an
emergency unit can be handled by a GP. They can be handled by
a nurse or a nurse practitioner. Because we have become used to
it being free perhaps it is over used. Perhaps it is abused.
The province of Quebec decided not to deny anybody health
care but make alternate health care facilities available. If I were
in Montreal and walked in needing stitching of a cut on my hand
it would agree to do it but it would cost me a few dollars because
it is not an emergency service. If I went across the road to the
clinic I would be covered under the health care program.
That has saved the Quebec health care system tens of millions
of dollars. There are efficiencies that we can look at. The federal
government must lead in sharing these good examples as the
province of Quebec has done.
I was in London, Ontario, at St. Joseph's Hospital, and
London decided it had to better manage the health care budget it
had in that hospital. It came in with a new management called
total quality management, TQM. Within a year not only did it
have better and happier staff in the hospitals, not only did it
handle more people in a more efficient manner but it saved about
13 per cent of its budget. It was a large budget. It had not even
intended when it set out to try to save money.
In health care, in post-secondary education, we have to lead
the way. There are fewer dollars here. We have to lead the way in
rationalization of services, both in the health care and in the
post-secondary educational system.
I would leave my hon. colleague with this comment. I would
ask him, and maybe he has figures to the contrary, to check with
his party's research bureau to find out whether the province of
Quebec, at this point at least, has a net output of taxes or a net
input of taxes. If he could find that out I would be pleased again
to debate the issue.
Mr. Jack Ramsay (Crowfoot): Madam Speaker, we have
heard much about the transfer of wealth of Canada to the
provinces.
If we look at our debt and our deficit and the borrowing we
have to do we are not transferring the wealth of Canada, one
might say, we are transferring the wealth of other countries we
borrow from and the people of Canada from whom we have
borrowed.
We have seen the Liberal government of past years plunge our
country into a debt situation of approximately $200 billion. We
have seen the Conservative government more than double that in
the last nine years until we are now sitting in a situation looking
at a $500 billion debt. We are plunging into debt by another $40
billion approximately and we have paid interest on that debt of
$40 billion in the last year.
1127
I would like to ask the member, if he has time to respond to
the question, if he feels we can continue in this way in view
of the plunge into debt we have experienced over the last 20
years.
An hon. member: Is there unanimous consent to continue?
The Acting Speaker (Mrs. Maheu): I am sorry, time has
expired.
[Translation]
Mr. Paul Crête (Kamouraska-Rivière-du-Loup): Madam
Speaker, it is not an easy task to explain the equalization process
so that our voters, the people of Canada can assess this thing, but
I think that it is important that we do so. It is one of the
responsibilities that fall upon us as politicians.
As a preamble, I would like to quote the statement the
Minister of Finance made on January 21, 1994, when he
unveiled the details about the renewal of the equalization
program for five years.
(1720)
He said this: ``This is a key program to reduce disparities
between provinces in terms of their revenue raising capacity''.
He also said: ``I have indicated to my colleagues that I will
proceed with this renewal in a financially responsible way,
taking into account both the needs of the citizens in each
province and the need for the seven provinces that receive
equalization payments to enjoy the necessary stability for
planning''.
This is a little arid, but it is important to understand what this
statement implied.
Equalization payments are calculated using a method
prescribed by federal legislation which takes into consideration
the overall capacity of each province as well as local
governments to raise revenues through taxes and various dues.
This includes personal income tax, corporate income tax, sale
taxes in general, taxes on fuel, tobacco products and alcohol,
fiscal levies on natural resources, property tax and many more
not so far-reaching taxes.
Each year, the fiscal capacity of the provinces is compared on
the basis of their individual estimated revenues if the same tax
base and tax rate were applied in each case. This requires a
standardized tax system known as representative tax system in
which provincial governments' revenues are divided up based
on 33 different revenue sources, each having a base
representative of those actually used by the provinces. The size
of the tax base is then calculated for each province and, using the
average provincial tax rate from each source, the revenues of
each province is calculated for each source separately and
globally.
An hon. member: Very simple.
Mr. Crête: Very, very simple indeed.
The standard of equalization is the per capita revenues
resulting from the application of the representative tax system
in five provinces, namely Ontario, British Columbia,
Saskatchewan, Quebec and Manitoba. In 1993-94, the standard
was $4,731. Together with equalization come floor or minimum
payment level provisions protecting each recipient against a
sudden annual drop in equalization payments.
Bill C-3 would renew the equalization program for another
five years, from April 1, 1994 to March 31, 1999. The maximum
payment level would be maintained at the 1992-93 level. Note
that the Department of Finance plans to maintain this ceiling for
the five years covered by the bill. This will limit the growth of
the payments made to the provinces.
The Department of Finance also planning statutory changes to
the tax bases used in the equalization formula. The complexity
of the process hints at its inefficiency.
Bill C-3, An Act to amend the Federal-Provincial Fiscal
Arrangements and Federal Post-Secondary Education and
Health Contributions Act, can be considered from various
angles.
First, one could wonder about the actual impact of the goals of
this piece of legislation. Let us not forget that equalization was
established to compensate a major shortcoming in the Canadian
federal system, in which the federal government has the power
to spend tax revenues without authority over provincial areas of
jurisdiction.
Equalization was instituted in the federal system based on the
proceedings of the Rowell-Sirois commission. Since then,
equalization has prevented Canada from breaking up, but it has
created negative effects of its own which, among other things,
have contributed to the loss of faith of the people in the tax
system governing them.
Not being able to establish a direct link between the
government levying taxes and the one providing services makes
it difficult for the Quebec and Canadian taxpayers to assess fully
how each level of government is carrying out its
responsibilities.
The main negative effect however has certainly been the
introduction of a ceiling on the amount that can be paid to a
so-called have not province. This ceiling thwarts the initial goal
of equalization by widening the gap. Quebec will have to assume
60 per cent of the cut imposed on recipient provinces, solely
because of this ceiling.
(1725)
Let us recall the basic objectives set by Quebec's finance
minister as the basis for provincial transfer reform, in order to
adjust to the financial and budget realities of the 1990s.
1128
These basic objectives are: to better balance government
responsibilities against tax revenue; to improve the
redistribution of wealth in Canada; and to enhance Canadian
public sector efficiency.
Mr. Bourbeau, Quebec's finance minister, is known as a
passionate federalist. But he went on to say: ``I nevertheless find
it difficult to accept that the federal government has decided to
maintain the ceiling provision of the equalization program''.
The finance minister of Quebec and his critic in the National
Assembly agree on this. Poorer provinces will, paradoxically,
help to trim the federal deficit.
I think this provides compelling evidence that the federal
system does not work. Only an extensive reform of the overall
transfer program structure can correct the present situation.
This reform should be based on the following elements: no
cuts in real terms and per capita to provincial transfer payments;
no national standards incompatible with Quebec's specific
situation; non-interference by the federal government in areas
of provincial jurisdiction, which is a well-known cause of
inefficiency. This reform must be aimed at a better
redistribution of revenue among the provinces, particularly in
terms of equalization payments. The equalization ceiling must
be removed.
This bill clearly shows that Canada's Liberal government paid
no attention whatsoever to the message delivered by the people
of Quebec, who elected 54 members of the Bloc Quebecois.
Quebecers no longer want to be dependent on a system that
encourages them to stay poor. The current system is an incentive
to inefficiency.
In spite of all this, the federal government has decided to deal
with equalization as if it were business as usual. If I were a
member of the majority defending Canadian federalism, I would
oppose maintaining the ceiling provision of the equalization
program for the sake of equity within the Canadian federation.
Unfortunately I did not hear many members opposite say the
same thing.
But, as a member of Quebec's national community that has
pursued self-sufficiency for 50 years, I know that maturity
entails specific responsibilities and powers that will allow
people to determine their government's effectiveness.
Nevertheless, the removal of the ceiling is a cure the current
system cannot do without.
To determine if the equalization system meets its objectives,
we should check if it has corrected economic, social and cultural
inequalities among the various parts of Canada since its
implementation. Unfortunately, that is not the case. If you
compare unemployment rates, the exodus of young people from
various regions of Quebec in the last 20 to 30 years, the system
is a failure as all indicators clearly show.
Furthermore, the imposition of a ceiling does not meet the
objectives of the equalization program. This program makes it
difficult for taxpayers to assess its effectiveness. That is one of
the main reasons why voters distrust politicians like us as well
as the process itself because Canadians cannot tell if the money
they invest in taxes comes back to them in the form of adequate
services. The people we pay our taxes to are not necessarily
those who deliver services and I think this is an important
shortcoming that should be addressed.
Taxes are collected by the federal government. The federal
government then transfers the money to the provinces who, in
turn, distribute it among their various programs, while the poor
taxpayer must determine the effectiveness of this and that and
find out what is going on.
All this to say that, by tabling Bill C-3, the government has
demonstrated that it has set aside the real changes expected by
Canadians. While waiting for a comprehensive reform package
we are asking it to at least remove the ceiling.
(1730)
Mr. Ronald J. Duhamel (Parliamentary Secretary to
Minister of Public Works and Government Services):
Madam Speaker, I listened carefully to what was said by the hon.
member, and I have a pretty straightforward question.
I also listened to what was said by the hon. member's
colleagues, who had nothing constructive to say about the
equalization program. They said it made Quebec poorer, that it
was no help at all, and that it was clumsy and cumbersome and
harmful. But could they not find anything positive to say about
it? Nothing at all? Nothing.
Thank you, I don't think I need an answer after all.
The answer is clear. Now it will be up to Canadians and
Quebecers to decide whether my question and the answer I got is
right: the whole thing is no good.
Now that really sounds responsible. That sounds like a team
that is going to make something of this province. Well, I am not
impressed.
Mr. Crête: Madam Speaker, I would like to say to the hon.
member-if he has children he will understand-that we have a
situation where a group of people or a region is a like a child that
grows up. When Quebec entered Confederation, it was looking
for some form of security, and it helped to found the Canadian
Confederation.
As the years went by, it realized it had no control over the way
the house in which it lived was run and that, once past
adolescence, it was not treated as an adult. But at some point,
you have to go from adolescence to adulthood.
Equalization gave Quebec a chance to survive at least for a
couple years? We never said it did not. What we are saying is
that the system undermines Quebec's desire to be autonomous.
1129
The equalization system treats us like children who have to be
told what to do.
Quebec will no longer stand for being treated like this by
societies other than its own.
We have taken charge of our economic development,
especially since the sixties when we created instruments like the
Caisse de dépôt et de placement, which we had to wrench from
the federal government. Otherwise we would have no control
over this area today. We nationalized electricity at the expense
of outside authorities as well. Little by little, we reached the
conclusion that we had to get out of this system.
I think that Quebecers, especially since 1968, have tried a lot
of things: we tried a federal Liberal government, with 74 Liberal
members, and we did not get what we wanted. We tried ``le beau
risque'' with the Tories, and we did not get what we wanted.
Now the people of Quebec have decided to clarify the situation
with Canada, and that is our role here, as representatives of the
Bloc Quebecois, elected by 50 per cent of the population of
Quebec.
[English]
Mr. Nelson Riis (Kamloops): Madam Speaker, I am pleased
to participate in the debate on Bill C-3 at the second reading
stage where we are called upon to discuss the principle of
legislation. There will be ample opportunity in committee to
examine some of the critical questions that members have
raised, but here we are talking about the principle of Bill C-3,
which refers to equalization as a concept.
I listened with interest while some people suggested they did
not like the idea of equalization. To me this is somehow
speaking against motherhood. It is fundamental. It is enshrined
in our Constitution. It has been a Canadian way of life since
1867, formalized in 1957, where we formed the Canadian
family.
We acknowledge that from time to time there are parts of
Canada where economically things are thriving more than in
other areas, but there has always been this generosity of spirit,
this willingness to assist and co-operate. If province x seems to
be doing better for the moment it will share some of its wealth
and prosperity with some other parts of Canada that perhaps are
not experiencing that same prosperity or wealth. This seems to
me to be what Canada is all about.
(1735 )
Essentially Bill C-3 extends the principle of equalization for
another five years. We will be seeing the $8.5 billion we will be
spending in equalization payments this year go from the have to
the have not provinces. It will expand over the years at about 5
per cent annually to reflect the realities of Canada. We feel that
in principle this is something we endorse. When I say we I am
referring to my colleagues as New Democrats. That is what we
are talking about today, the principle of this legislation.
That does not mean we do not have some questions and some
concerns that we want to raise, but I want to put it on the record
because I know my constituents would like to know who is
getting what. When the three have provinces of British
Columbia, Alberta and Ontario decide to share their wealth with
the rest of Canada it breaks down as follows: the Northwest
Territories will receive about $910 million; Prince Edward
Island will receive $164 million; Nova Scotia will receive $880
million; New Brunswick will receive $995 million; Manitoba
will receive $854 million; Saskatchewan will receive $522
million, which I am sure my hon. colleague here will be pleased
to hear; and Quebec will receive $3.8 billion. It seems to me this
is an equitable effort in distribution.
I listened with interest to some of my friends from the Bloc
who feel, for a variety of reasons, that this is not appropriate. I
look forward, particularly in committee, to hear the ways and
means they will select to make this, in their mind, even more
equitable.
As a British Columbian, we are pleased to participate in this
sharing program. We are pleased to extend a hand, to share the
wealth that is generated in British Columbia with other parts of
the country. I know that my colleagues will be pleased if I say a
few things about what is going on in British Columbia.
Recently the province of Alberta went through some very
painful exercises provincially to deal with some of the economic
realities that confront that part of Canada. We have seen other
provincial governments take very serious steps at addressing
their fiscal realities, one might say in some part of the country
brutal steps when it comes to dealing with various social
programs.
We have not had to do that in British Columbia. Not only are
all of our social programs intact but expanding. Education and
health care will see a 3 per cent increase this year. Since
November 1991 we have seen an increase of 91,000 new jobs.
We have seen economic growth this past year of over 3 per cent.
Exports were up by more than 16 per cent last year. Housing
starts are up more than 10 per cent. Retail sales were up by
almost 9 per cent in 1993. This, however, is an important one,
the level of business confidence. This is a good barometer, a
good litmus test to see how the world is feeling about a
particular area of the country. Capital investment intentions
were up 6 per cent for 1992-93, four times the national average.
In other words, the business community has confidence in the
economy of British Columbia and are prepared to invest their
money.
I have a booklet here that just goes on and on, pages and pages
of all the positive initiatives being taken by the provincial
government. I want to simply refer to one interesting graph.
There is a lot of talk about the global economy and how we must
be part of it and how the future is our ability to participate
globally. It points out that for Canada as a whole about 80 per
cent of exports go to a single country, the United States of
America. This has been a reality from the very beginning and
something that we simply acknowledge as a fact of life. Good-
1130
ness, why would not the majority of our trade be with such a
large neighbour to the south with such easy access?
This is why some of us have had difficulty understanding why
the past government and now this government is so anxious to
increase that unless the ideal would be to have 90 per cent of the
trade with the United States. When entering into the FTA and
NAFTA the explanation was that this would provide even more
trade, increased exports and so on to the United States.
(1740 )
We have to ask ourselves where in the world would we find a
country that says that if we put 80 or 90 per cent of our eggs in
one export basket it is a wise policy. Perhaps there are some. I
am not aware of any. Perhaps some of my colleagues would be
able to share their views on that with me. From British
Columbia's perspective, 49 per cent of exports from that
province go to the United States. One of the major areas is
softwood lumber.
What is the major area of harassment in terms of the FTA and
NAFTA? It is softwood lumber. Even in the one major export
B.C. has to the U.S., with it being 49 per cent of our trade, we
have had nothing but trouble since day one. The FTA and
NAFTA have done nothing to relieve that continual harassment
and hassling.
Mr. Milliken: What a burden for you, Nelson.
Mr. Riis: My hon. friend wishes to get into the debate a little
later as well I hear.
What I am saying is that we are happy in British Columbia.
There are all sorts of reasons for the prosperity and that people
from all across Canada are moving to British Columbia to take
up residence.
An hon. member: Good government there.
Mr. Riis: Part of it is because of the good government.
Some hon. members: Oh, oh.
Mr. Riis: Part of the reason is the good government. We
constantly hear that international investors and so on are very
concerned about the government of the day, particularly about
its fiscal responsibility and so on. We can ask the question
rhetorically. Which provincial government has been best able to
control the deficits of their province?
Mr. Milliken: Ontario.
An hon. member: Saskatchewan and B.C.
Mr. McClelland: Alberta.
Mr. Riis: The answer is British Columbia. There is no
question. My friend says ``Alberta''. I have watched Mr. Klein
at work and how he is approaching this along with how
wonderful he is doing.
Mr. Milliken: Slash and burn. Tell us about Bobby Rae.
Mr. Riis: My cheek is bulging. I said that with my tongue in
my cheek. What Mr. Klein is doing is a typical Conservative or
perhaps Reform approach to the world. We will see how that
works out in the next few months.
We tried a different approach in British Columbia. We tried
what I would call the real New Democrat approach of can we
bring that deficit under control without emasculating the social
programs. Yes, we have. As a matter of fact I do not think there
is an economist in Canada who can say that is not taking place.
Anybody who understands the financial markets would say it is
not taking place.
To be fair, it is not only because of Mike Harcourt and the New
Democrats. There are other reasons but I just wanted to make the
point because hardly anybody ever makes it these days so I felt
some obligation to raise it in the House.
Mr. Harvard: Get on the subject, Nelson.
Mr. Riis: We have to see Bill C-3 in a number of contexts.
What other programs has the federal government involved itself
in of a similar nature?
My colleague earlier referred to the EPF, the established
programs financing, where for health care and post-secondary
education the federal government contributes about $11 billion.
The Canadian assistance plan or CAP as it is referred to has $7
billion where the federal government shares in the development
of a variety of social programs.
The whole area of tax points has to be included as well as a
whole host of shared cost programs. Almost $12 billion last year
was involved with a sharing program between the federal and
provincial governments. In our province, the program that
comes to mind is the forestry agreement, FRDA. It is a very
helpful investment program where both provincial and federal
governments work in co-operation with the private sector in
British Columbia and invest in the future of the forest resource
and ensure sustained development in the years ahead.
The federal government in its wisdom decided it would not do
that any more. It would pull out of this program. Recognizing
that forestry is our number one export in Canada, the federal
government abandoned the ministry of forests and is moving out
of its contributions to the FRDA program. It is a very regressive
step.
One has to raise this issue. Recently when the government
introduced the infrastructure program, it said that every
province would have a certain allocation. The allocation in
British
1131
Columbia was $220 million. This was done on a population
basis essentially plus or minus 5 per cent depending on the state
of unemployment in a province. In other words here was an
effort at some equalization. Often this takes place in federal
programs.
(1745 )
The question I would raise is that if we have a whole program
for equalization in which we try to create a relatively level
playing field in terms of the ability of provincial governments to
provide services and having relatively similar revenue systems
in place as well, is it necessary when we take that step on such a
massive scale as we are doing with this legislation to also have a
whole set of other equalization programs in place? Is not one
good one enough?
We have to look at this within that context and say we are
dealing with equalization with Bill C-3, but what about all the
other areas in which equalization is also attempted? To see the
value of this legislation, whether it should continue, whether it
should be expanded, whether it should be reduced or maintained
as is, I think we have to see it in that context and we do not have
enough information here. Perhaps in committee we could ask for
that and then have a more serious discussion there.
I guess this is my complaint section during my presentation. I
hear other provinces complaining that they do not get enough,
that they have this size of population and so on. Over the years I
have never been able to identify a single federal program in
which the province of British Columbia gets its fair share. There
might be one some place. I have yet to find a single one that is
based on our population within Canada.
An hon. member: Good weather.
Mr. Riis: My friend says ``good weather''. Yes, perhaps we
get good weather and we are happy for that. However, I am
thinking of things more to do with the federal government at this
point. I know it lays claim to all sorts of things but the weather of
Canada would not be one.
Is there a single federal program in which the government
participates with the Government of British Columbia in which
the people of British Columbia get their fair share? I could
present a long list with the figures of where we do not. I do not
believe that is necessary. I simply want to make the point.
Even within that climate, even recognizing that I do not think
there is a single federal program in which British Columbia
receives its fair share, at least based on population, we still do
not begrudge the fact that we are going to be participating in this
equalization program.
In all my years as a member of Parliament and in all the
discussions I have had with my constituents and others, I have
never heard anybody complain about the willingness to share. I
hear a lot about getting the short end of the stick, or getting
skewered or all sorts of other fancy names we could put to that in
terms of our fair share regarding the federal government.
However I will let that stand for the moment. There will be
other opportunities to raise this.
I simply want to say in closing that I appreciate having the
chance to participate in this debate. However I do not want to get
into the Reform Party schtick of saying: ``Mary Bloggs from this
town asked me to raise this question''. I have been asked to at
least raise the question on behalf of the city of Vancouver in
terms of what it perceives to be an unfairness. It certainly is not
unique to the city of Vancouver or unique to any particular city.
It is regarding immigration policy.
The federal government establishes its immigration policy.
The minister of immigration indicated the other day a new set of
quotas or limits on the numbers, acknowledging that a major
share of those immigrants end up in the greater Vancouver area.
Then it is left to the school boards and the taxpayers of
Vancouver to the pick up the necessary language training and
and so on, at least to a certain extent.
The government is asking for some consideration. With the
reality of immigration in certain selected parts of Canada,
should there not be more attention given by the federal
government to acknowledge that and to assist and co-operate in
terms of providing the appropriate services for new Canadians?
To be fair, I acknowledge that there are programs that work
toward that end but when it comes to English language training
or teaching English as a second language, particularly in our
school system, the costs are becoming over burdening.
I simply want to conclude by saying that I have been pleased
to participate in this debate. I look forward, particularly at
committee, to see a more thorough examination of the some the
points raised by my hon. friends and I look forward to third
reading debate some time the future.
Mr. Stephen Harper (Calgary West): Madam Speaker, I
certainly enjoyed the presentation by the hon. member for
Kamloops. I noticed that he touched upon a few Reform themes
like the issue of double equalization that occurs in some federal
programs. He touched upon issues like western alienation, the
effect of these programs upon his province and the effect on the
inter-relationship of this with the equalization program. I
acknowledge these. I do not want to say that he is a good
Reformer but I certainly acknowledge these as rays of wisdom
breaking through like the sun on the British Columbia flats.
(1750)
Having said that, I would like to ask him about one particular
comment that he made on the relationship between fiscal policy
and the present economic growth situation. He was anxious to
credit the current government in British Columbia with this, but
it is fair to say that we have had a period in Canada over the past
generation in which governments, federally and provincially,
have grossly mismanaged their finances. One of the areas in
which relatively good fiscal performance occurred was in the
province of British Columbia. Corresponding to that we have
seen rather healthy economic growth in British Columbia at a
1132
time when other provinces are struggling with their deficits and
debts at much more significant levels.
I wonder if the hon. member would acknowledge that there is
this long-term relationship between deficit, debt and low
economic performance and whether he would give credit to
British Columbia governments over the years for having
avoided to a fair degree that kind of trap.
Specifically in the case of this bill, would he recommend that
perhaps in re-examining equalization in the future we look at
whether the fiscal performance of these governments should be
a factor in the kinds of equalization transfers that go to them?
Mr. Riis: Madam Speaker, I appreciate the question from my
hon. friend.
I want to clarify one point that he made, or perhaps add
clarification. I do not think he was saying that the Social Credit
government actually managed the state of the province well.
That is not my view.
We will all recall that when the New Democrat government
took over office in British Columbia it brought in one of the
more internationally recognized accounting firms to evaluate
the books and it found the whole place a complete financial
disaster. We will start from that and then go on, much the same
as this government is finding the Conservative situation
regarding the whole country.
I will acknowledge the point that we have seen a general
understanding that it is important to get the debt and the deficit
under control in British Columbia for some time.
There is probably no province in which that has been
demonstrated more clearly than the province of Saskatchewan,
if my memory serves me. There seems to have been a pattern.
This is an interesting pattern, although I do not want to take up a
lot of the time of the House by talking about it. It just seems
natural that people change governments. They elect another
government, either a Liberal or a Tory government and it turns
the whole place into a financial disaster. Then it gets tossed out
and in comes the CCF or the NDP again. It gets everything in
order over a period of time. This just plays itself out.
That is a reality and just the way things go in that province.
Mr. Harvard: You would not make a very good historian.
An hon. member: That is the history of Saskatchewan and
B.C.
Mr. Harvard: What about Ontario?
Mr. Riis: Part of getting the fiscal house in management in
the province of Saskatchewan and in the province of British
Columbia has been the recognition that we have to get the debt
and deficit under control as well. No question about that.
Mr. Milliken: Ask Bob Rae.
Mr. Riis: Let us ask Clyde Wells. I am just using this as a
good case study. We want to look around the world and ask
where governments seem to work. They seemed to work under
CCF and NDP governments in Saskatchewan and under the NDP
government in British Columbia.
An. hon. member: What about Yukon?
Mr. Riis: ``What about Yukon'', somebody asks. Yukon is the
same.
I am not saying that New Democratic governments always
work super well everywhere, just like I do not think anybody
here would say the Tories or Liberals-Reform has a short
record so far-essentially work everywhere. I am saying that we
have to look around for models of excellence in which people
actually have done the job well. I am saying that British
Columbia is doing it well, just like the New Democratic and
CCF governments in Saskatchewan have done well over the
years.
I want to acknowledge the point made by my hon. friend. To
do this properly one must manage debt and deficit.
How do you do that? Ralph Klein is trying one approach. It
does not seem to be working. The Tories before him I guess tried
that. He is trying some more cut, cut, hack, hack, seeing if that
works. So far it has not worked.
I was here for the nine years that the Progressive
Conservatives were in office and they said they tried that
approach. The situation has never been worse in this country. We
have over a half trillion dollar debt. Obviously the people of
Canada want to try something totally different.
(1755)
The province of British Columbia is doing it a bit differently.
It has cut back on all sorts of unnecessary government spending.
It also acknowledges that there is something called government
investment. It is investing in a variety of areas such as the
development of high tech firms, training highly skilled
technicians, putting money into scientific research and
development through to production. In other words, it is
recognizing that there is government money to put into
investment and government money to put into simply spending
and that has to be cut. It has done that.
1133
As a result I am pleased to say that probably within another
two years there will be a balanced budget in that province, the
only province in Canada. I say that the proof of the pudding
is in the eating. I am not saying that everything that it has ever
done has been perfect. We would not say that about any
government. However, when it comes to managing the economy
it seems to be working better than any place else in Canada.
I say to my hon. friend that I think his question was good. It
was not really a question, I guess. It was simply would I agree.
Largely I would agree.
To tie equalization in in terms of the fiscal management of
provincial governments, I think that was the question, is worth
some merit. Perhaps it is the kind of thing I would like to see
discussed more in committee to see what the implications of that
would be, particularly for some of the very poor parts of Canada.
I do not want to name those provinces, but I think there would be
some provinces that would have a very difficult time without
substantial equalization in a whole variety of programs. It
probably is sufficient for my hon. friend to say that they are
doing a good job.
[Translation]
Mr. René Canuel (Matapédia-Matane): Madam Speaker,
since the beginning of this debate on Bill C-3, several experts
have tried to prove with figures that equalization was not
necessarily fair, and I am sure it is not.
Coming from a remote area, from one of the poorest ridings, I
see farmers forced to sell their land, I see our trees sold without
any processing, in short I see serious problems. I am not
prepared to say that equity from sea to sea applies to my riding.
However I wish to focus on education. Therefore I will deal
more specifically with transfers to education. In a country like
Canada and in a future nation like Quebec, it is essential that we
devote every effort to manpower training. I spent my life in
education and I know that without proper training it is
unrealistic today to expect a decent standard of living.
Education and training are the keys to economic, social and
cultural development. They are also the keys to our success,
nationally and internationally. Our labour force must be
upgraded on a continuing basis if we want to meet the challenges
of today and especially those of the future.
The federal government started to grant money directly to
universities in 1951, although education was officially a
provincial matter. At that time, and justifiably, Quebec strongly
opposed that move.
In 1961 the federal government transferred to Quebec 1 per
cent of corporate income tax in order to allow the province to
give its educational institutions equivalent grants.
The cost sharing arrangements for post-secondary education
were revised in 1967. The federal government agreed then to
transfer to the provinces 50 per cent of the operating costs of
post-secondary education institutions. These agreements then
took the form of tax point transfers and cash payments to all the
provinces. In 1977, these agreements were merged into one
program called Established Programs Financing.
(1800)
Previously advanced education was accessible only to a
privileged few. Education was reserved for a minority. At that
time, the only university for all of the Gaspé Peninsula, the
North Shore and the Lower St. Lawrence was Laval in Quebec
city. The ordinary people of our regions, whom we called the
poor, did not have access to that institution. It meant that only
some people, part of the elite, could go to college and the others
had to stay home because they could not afford it. What did they
do? They became welfare or unemployment insurance
recipients.
Be that as it may, after World War II, there was a mass
communication explosion; our planet was about to become a
global village. It was no longer possible to deny the people their
right to a better education and better training. All young people
wanted to study and our system quickly overflowed, to such an
extent that in 1967 we had to create the CEGEPs, general and
vocational colleges.
At that time, Quebec's Department of Education said it could
not meet the demand. That year, only ten CEGEPs were created,
but others followed. Progress was not to stop there. We had to
build or expand universities to meet the demand and
governments invested considerable amounts in that area.
Another major factor at that time was the fact that people wanted
to get good training in vocational sectors.
What triggered the whole process was the coming home of
soldiers after World War II. We had to find jobs for them. We had
to put them back in the labour market. But before anything else,
if they were to have a real opportunity to succeed, they had to be
trained. We created a country-wide network of technical
schools which were merged with the CEGEPs during the 1960s
and 1970s. Only a few schools still remain independent.
Furthermore, the adults who were already working wanted
advancement so they also wanted access to higher learning. The
demand for education increased unbelievably. All this led to the
development of a sound education system across the country,
thus raising the general level of education. In some specific
areas, it increased very rapidly.
1134
Another very important aspect of this revolution that swept
North America, is the fact that women were admitted in
colleges. Before that, only men had access to higher education.
Thanks to the efforts made by Quebec in the area of education,
there are now more women than men enroled in higher
education establishments. And so it should be.
In spite of its many successes, our education system still
needs to be improved, and for that, the help of the federal
government is essential, especially as regards post-secondary
education. In my riding, we only have one CEGEP and no
university. The slightest tuition fee increase closes the door to
post-secondary education for some of our young people,
depriving them of the necessary training to face the challenges
of the next century.
Each dollar we do not invest brings our young people, and our
adults too, closer to having to depend on unemployment
insurance and welfare. Every year, in my riding, the rates go up.
Is it what this government wants? Is it what we want,
unemployment and people on welfare? It is not possible to go
back in 1994. By investing less in post-secondary education, do
we think that we can continue to develop this country and get out
of the economic problems it is going through?
(1805)
Certainly our education system is not perfect, but it is highly
defensible, especially in Quebec. Like any system, it must
continue to be improved. We cannot improve it by cutting its
funding.
We have let parents and teachers have their say in our
education system. Now it is up to us in the government to follow
through on the right to speak which we have given them. Parents
are speaking up and so are students aged 16 to 20. They are
afraid of unemployment. Today, I speak on their behalf.
Can we again go back on this point?
We must bring the debate back to the real issue. Do we want a
better future for our fellow citizens? Do we want to give our
desperate young people a real chance? Do we want Canada and
Quebec to continue to enjoy a good standing among developed
nations? If that is what the government wants, it cannot cut
transfers to the provinces, especially for post-secondary
education. Our future depends on it. Furthermore,
post-secondary education is in provincial jurisdiction. In
Quebec, we need all the available resources.
I want to speak out here against the principle of a ceiling on
equalization. For Quebec, it means a loss of hundreds of
millions of dollars over the next five years.
I am speaking against Bill C-3 because it extends the ceiling
on equalization payments. On the contrary, we need a complete
reform of all transfer payments to the provinces.
The cuts made by the federal government in established
programs financing reduced the federal share of funding of
health and post-secondary education programs in Quebec from
45 per cent in 1984 to 32 per cent in 1993. Government spending
on research and development is much lower in Quebec,
whatever the criterion used.
It is unacceptable to let this government darken our future by
depriving us of money that we send in taxes which should be
used to educate our youth and adults. It is too important for the
survival of Quebec and the riding of Matapédia. As long as we
pay taxes, we must get this return. It is too important for the
young people and adults in my riding. Madam Speaker, you can
be assured that I will demand it.
Mr. Stephen Harper (Calgary West): Madam Speaker, I
listened closely to the speech by the hon. member for
Matapédia-Matane. If I understood correctly, he was speaking
not only about the treatment of Quebec in Canada, but also about
the way his region is treated by the province of Quebec. We find
that to be a very interesting point.
(1810)
Does he believe that in the case of federal programs such as
the equalization provisions in this bill, if the federal government
were to change the formula, the Quebec provincial government
would be encouraged to spend some of the equalization funds it
receives in the poorer regions of the provinces. I think that is the
aim of programs such as this. Does the hon. member believe it is
important that the provincial government spend equalization
funds in his region, and not only in the large urban centres such
as Montreal or Quebec?
Mr. Canuel: Madam Speaker, I want to thank my hon.
colleague who appears to be highly sensitive to the plight of the
regions. It is true that very often when we think of Canada, we
think of large cities. Large urban centres are often represented
by several members, and sometimes by several ministers. That
is why I say that federalism has proven to be a failure for regions
such as mine, and most likely for regions such as his.
Basically, federalism has proven to be an even greater failure
in the regions. It has failed throughout Quebec, but especially in
the regions. True, equalization and transfer payments are
supposed to help the poorer regions. However, I have only one
voice and compared to that of Toronto, Vancouver or Montreal,
the voice of regional members is not heard because they
represent a much smaller number of people.
When I decided to run in my riding, it was for a very special
reason, namely to heighten the awareness of city dwellers of the
poverty in our regions. We have a great deal of talent. We have
tremendous human capital, but as we all know, when people
leave to attend large universities, they do not return. On this
point, I agree completely with my hon. colleague. We need to
focus more on the regions and give them as much as possible.
1135
Because, when towns cease to exists, cities decline and
eventually disappear.
I want to thank my hon. colleague and let him know that I am
very sensitive to his concerns. I agree that more has to be done
for our regions.
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot): Madam
Speaker, I would like to congratulate my colleague from
Matapédia-Matane for an excellent speech, and especially for
talking about Quebec and Canada's rural communities.
I had the privilege and the opportunity to be associated with a
great event held in February, 1990, in Quebec, which was called
the États généraux du monde rural. What came out of this
general assembly for rural communities, which lasted for over
three days, but took more than a year to prepare, is that we do not
do enough for rural areas in Quebec and in Canada. We always
tend to consider government programs, taxation and even the
Constitution in terms of the needs of the cities rather than the
needs of rural areas.
I would like to congratulate him for that, and to build on his
arguments about federalism versus rural communities.
Nowadays, we hear about a concept called subsidiarity, which
goes a bit like this: if you expect good results from government
policies, you would not be needing extremely centralized
measures undertaken by a cumbersome bureaucracy, or a
paralysed government, but rather massive decentralization.
During the debate on Quebec sovereignty, and where Quebec
attains its sovereignty, we might also have to talk about
subsidiarity, to draw the people, especially the rural population,
closer to power.
(1815)
Mr. Patrick Gagnon (Parliamentary Secretary to Solicitor
General): Madam Speaker, I would also like to make a few
comments on the speech made by the hon. member representing
Matapédia-Matane, which is the riding next to mine.
The hon. member more or less wanted to make a case when he
squarely put the blame on federalism for the hardships and
problems encountered in remote regions.
However, I would ask him to take a look at policies
implemented by recent provincial governments in Quebec, not
only the Liberal one in office since 1985, but especially the Parti
Québécois before that. I do not think that the federal government
is necessarily the one to blame; the province is also responsible
for the situation in rural areas.
In any case, more and more young people and business people
return to the regions to get the local economy going again. I
believe that to get regional and local economies going again, we
must invest more in individuals, and not necessarily in states.
Whether it is the state of Quebec or Canada, I think we should do
more for small business people.
Over the years, especially under the Conservative
government but also under the Parti Québécois before, not
enough was done to help small businesses, for example with
loans. It is mainly because of government agencies, or because
of the lack of co-operation of financial institutions, that we
were not able to improve the situation of small businesses and,
consequently, the quality of life in rural Quebec. But it is wrong
to say that the federal government is the only one to blame.
An hon. member: Yes, indeed it is wrong.
Mr. Gagnon (Bonaventure-Îles-de-la-Madeleine): It is
absolutely wrong, because some positive attempts were made by
the federal government to get regional economies going again,
for example with the Federal Office of Regional Development.
Quebec has been talking about the one-stop concept for years,
but I would like to hear the Bloc Quebecois tell us exactly why
federalism was so bad for rural economic development.
I think that by talking about sovereignty and by making it an
obsession in the eastern part of Quebec, we jeopardize the future
of our young people and our remote regions. I do care for my
region; I am first a Gaspésien, but I object to this claim that
federalism is to be blamed for our high unemployment rate.
Mr. Canuel: Madam Speaker, how can federalism not be at
fault since, over the last few years, our ridings have been
represented by federalists at the provincial level? Indeed,
whether at the provincial or federal level, there are only
federalists. Also, the unemployment rate in our region is at 21
per cent and is constantly increasing. If that is not a failure, what
is it?
Our young people are all leaving. If provincial or national
federalists are not to blame, after all the Parti Québécois is not in
office, then whose fault is it? It is not the Parti Québécois, nor
the Bloc because we just got here. We will improve things, but
we need time to do that.
[English]
Mr. John Solomon (Regina-Lumsden): Madam Speaker, it
is my pleasure to participate in the debate on Bill C-3. My sense
of the bill is that it has assisted the provinces of Canada in
stabilizing their budgetary plans over the next five years. I have
an attraction toward supporting the bill, in particular as it
applies not to just to all of our country but as it applies to
Saskatchewan where I come from.
(1820)
What has happened in Saskatchewan over the past 10 or 12
years is nothing short of a disaster. I will go back a bit to
describe what Saskatchewan was like between 1971 and 1982.
At that time Saskatchewan was governed by a New Democratic
Party government led by Premier Allan Blakeney. The NDP was
the only government of the day in Canada that had 11
consecutive balanced budgets. These balanced budgets were not
done for the sake of balancing the budget, but they were the
result of good planning on behalf of the premier, the cabinet and
the
1136
government and ensuring that the priorities of the people came
first.
In spite of the balanced budget the province of Saskatchewan
had the lowest overall tax rate in the country. Saskatchewan had
hundreds of millions of dollars in revenues from the resource
industries. We had the only children's dental program for
children 18 years of age and under in the entire world. We had a
prescription drug plan for all of our citizens.
We had a very significant initiative not only in health care but
in the economic sector as well. People were working. The farm
economy was well attracted to the government in terms of the
type of agricultural programs we undertook. We pioneered
agricultural programs such as land bank and farm start which
encouraged young people to stay on the farm and get into the
farming sector.
After 11 years we basically came out of the 1970s to 1982 not
only with 11 balanced budgets, our people working and good
social programs for the population, but also with a heritage fund
of about a billion dollars. Our final budget in 1981-82 provided
a surplus of $139 million on the operations side.
In 1982 an event took place in Saskatchewan which to this day
and for probably a generation or two will be remembered. That
is the date of the election, April 26, 1982, when Grant Devine
and the Conservative government came to power. They had won
the election on the basis that they were a Conservative
government, that they were fiscally responsible and that they
were going to do all these great things for the province of
Saskatchewan.
They had 10 consecutive deficit budgets in their nine years of
power. They went from a $139 million surplus on the operations
side to $8 billion in debt. We went from a $3 billion crown
corporation capital debt in 1982, which was a self-liquidating
debt like a mortgage on a house, to after nine years of Grant
Devine and the Conservative government ruling the province, to
a crown corporation capital debt of not $3 billion but over $8
billion coupled with the significant problem of having all of our
profitable crown corporations privatized. There were no
revenues to pay off this $8 billion capital debt.
In 1991 the people of Saskatchewan had enough. They
defeated the Conservative government and elected another NDP
government. We are not just faced with this massive $16 billion
debt for less than a million population. We are also faced with a
savage attack by the national government in terms of reduction
in equalization payments. As a result of Mr. Mulroney and the
former Conservative government we have lost on average about
$252 million a year in equalization payments. That was the
punishment Saskatchewan received even though we had a
like-minded Conservative government at the provincial level.
That was the reward. It was more of a punishment than a reward.
This shows very clearly that Saskatchewan had the ability to
run its own finances, to introduce progressive social programs,
to produce jobs for its people. When it had a plan in place under
the NDP we progressed from that to where we became basically
almost a bankrupt province in 1991. Part of that was because of
the established programs financing and other equalization
programs that were cut back. The majority of it obviously was
because of the Grant Devine government.
(1825)
The point I want to make with respect to Bill C-3 this evening
is that this bill addresses some of the hardship under the former
government in the sense that it re-establishes some of that lost
revenue on an annual basis. It does not make up all of it, but
establishes an upward trend to providing us with more of our fair
share in more ways than one.
The other reason we had big deficits in terms of losing our
equalization payments in the 1980s was because the
equalization formula that was negotiated with the former
governments, two Tory governments provincial-federal
negotiating in the 1980s, took away the ability of the province to
raise revenue through resource taxation. The way it punished
Saskatchewan was that for every dollar we raised in terms of
additional resource revenue we would have the equalization
payments reduced dollar for dollar.
In the event where prices for potash and oil increased as a
result of world prices, our price sensitive royalties would gather
more revenues to the province, but we would lose for every
dollar we gained on the equalization payments from the federal
government. It was really a catch 22. We were handcuffed as a
province in terms of managing our own finances.
I am pleased to see in the bill some progress toward taking the
handcuffs off. It has not resolved all of the things we would like
to see in Saskatchewan, but what has been resolved is this very
distressing problem with respect to resource taxation. It has
provided a change in the equalization formula which will
address the problem known as a tax back in determining
equalization entitlements for Saskatchewan and I understand for
Newfoundland and Nova Scotia as well. Saskatchewan will
receive some long-term benefits.
There will still be a very light handcuff on the Government of
Saskatchewan to increase its revenues with respect to resources
and not be affected with respect to equalization, but the good
news is there is an about face in terms of the total disregard for
provincial autonomy when it comes to resources and this bill is a
positive move in that step. That is one of the reasons I support it.
1137
As important I believe is that governments must have a plan.
It is not good enough to come to this Parliament on a daily basis
and have an agenda for today. What is important is that we as
the Government of Canada and the provincial governments
have a long-term plan-a medium term plan, a daily plan, a
weekly plan-some idea as to where they are going in the next
five years.
Under the Romanow government since 1991 they have put
together a five-year plan which will provide a balanced budget
for the first time since 1982 in the 1995-96 fiscal year. We are
very proud of that in Saskatchewan. It has been very difficult. It
has not come without a great deal of sacrifice, an increase in
taxes and reducing some of the benefits. Our options were very
limited.
Bill C-3 in my view is a good move. I do not think it is going
far enough for the province of Saskatchewan, but I am satisfied
that it is a step in the right direction. As a result in principle I do
support the bill.
The Acting Speaker (Mrs. Maheu): Is the House ready for
the question?
Some hon. members: Question.
The Acting Speaker (Mrs. Maheu): Is it the pleasure of the
House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mrs. Maheu): All those in favour of
the motion will please say yea.
Some hon. members: Yea.
The Acting Speaker (Mrs. Maheu): All those opposed will
please say nay.
Some hon. members: Nay.
The Acting Speaker (Mrs. Maheu): In my opinion the yeas
have it.
I declare the motion carried.
(Bill read the second time and referred to a committee.)
* * *
(1830 )
Hon. Douglas Peters (for the Minister of Finance) moved
that Bill C-9, an act to amend the Income Tax Act, be read the
second time and referred to a committee.
He said: Madam Speaker, I would like to take this opportunity
to lead off the debate on the second reading of Bill C-9. This bill
proposes to implement a number of amendments to the Income
Tax Act that were announced by the previous government in
December 1992 and April 1993.
The previous government introduced legislation, Bill C-136,
last June to provide statutory authorization for these measures,
but the bill died when Parliament was dissolved and election
writs issued. For these measures to have legal effect new
legislation must now be passed by this Parliament. The
measures in Bill C-9 address a number of areas.
Allow me to list them: first, the unemployment insurance
premium relief for additional jobs created by small business in
1993; second, the extension of the home buyers plan through
March 1, 1994 which allows individuals to withdraw funds from
their RRSPs to purchase homes; third, changes in the rules for
instalment tax payments that will require more high income
filers to make quarterly payments while allowing other low
income filers to pay only once a year; fourth, certain tax
measures to support small business, scientific research and
development, oil and gas exploration and labour sponsored
venture capital investments.
Let me be clear at the start in explaining why we are going
ahead with this legislation. We have no obligation to the
previous government, a government that was resoundingly
defeated by the Canadian electorate last October. Our mandate
from the electorate is based on a different vision. It is a vision
that offers hope to Canadians that we can work together and deal
with the difficult legacy that we inherit. Our mandate rests on a
clear commitment to create a different and a better future, a
prosperous Canada in which everyone has a chance to
participate in building the country and a chance to share in the
rewards.
That being said, it is essential that the government always
reflect the sense of fairness and common sense of Canadians.
This is the test we have applied to the unfinished legislative
business before us today. Simply put, these tax measures were
introduced some time ago. Many were announced more than a
year ago and some have fully run their course and are now
expired. Many were said to be effective immediately when
announced by the previous government and many thousands of
Canadians took it at its word.
These individuals have relied on these announcements when
making important decisions. Many have, for example, used their
RRSPs to buy and build homes and I am sure everyone in the
House agrees that buying a home certainly represents a major
commitment to those involved. Other Canadians have relied on
these announcements when making significant investments or
hiring new employees.
The commitment these taxpayers have made is for the most
part irreversible. The actions that have been taken are concrete
and represent real investments of hard earned savings. We are
not dealing simply with plans that some people have for future
actions. Consequently, if we were to walk away from this
situation many people would be put in a very difficult situation,
1138
an unfair situation. The trust that Canadians have in their
government, a trust that we must always strive to keep and
enhance, would be dealt a powerful blow.
However, we do not approach this question as prisoners of the
previous government's actions or inactions, to put it more
precisely.
(1835)
We have carefully reviewed the measures in this legislation
and believe we can support them in their own right.
One of the measures in the old legislation has been dropped.
The previous government had proposed paying the GST credit
only twice a year to low income Canadians. For our part we
choose to continue paying this credit every quarter to those who
qualify during the period the GST remains in force, which will
hopefully not be too long. The government is committed to
replacing the GST with a fairer and more efficient tax. The
House of Commons finance committee will be examining
options over the next few months on the matter.
As for the other measures, our primary criticism generally is
that they represent only a small piecemeal effort by the previous
government to deal with a large and pressing need in this
country to strengthen the economy and to create jobs. The
approach to economic management by the previous government,
a combination that might be called slash and burn on the one
hand and ineffective tinkering on the other, needlessly
prolonged a painful economic downturn and spread intolerable
levels of distress and suffering over this whole country.
For our part we believe we need a long-term process of
reform to government policies and programs that is, to quote my
colleague the Minister of Finance, creative, compassionate and
constructive.
I am confident the upcoming budget will set in motion a
process of re-evaluation and reform that will result in
meaningful, significant steps to bring this country back onto a
path of job creation and economic growth shared by all.
I ask my colleagues and my hon. friends opposite to consider
this legislation not as an indication of the approach this
government takes to economic management. Rather, this is
simply a question of parliamentary housekeeping and the
discharge of a trust we in this House owe to all Canadians.
With this in mind, let me outline briefly the measures of the
bill. First of all there are measures that affect individual
taxpayers. One is an extension of the home buyers plan by one
year through March 1, 1994. As I mentioned before, to renege on
this program would cause undue and unfair difficulties to many
thousands of Canadians.
As well the legislation provides that starting next September
certain higher income Canadians will have to make quarterly
instalment payments on their taxes. This measure will affect
those people whose tax payable is $2,000 or more than the total
tax withheld at source. In Quebec where we collect only the
federal tax, the figure is $1,200. At the same time some 300,000
low income filers will be excused from quarterly payments and
required to pay only once a year.
Some member may argue that these measures are yet to take
effect and thus could be allowed to die without undue hardship
to taxpayers. I would counter by pointing out that these changes
represent a small but real improvement in the income tax
regime.
Most Canadians pay their taxes either every time they receive
a pay cheque or quarterly. Therefore it is only fair to set the same
requirement for those Canadians who have substantial income
which is not taxed at source and effectively receive a special
benefit. At the same time we support the premise that low
income filers, many of them elderly, should have their tax
payments simplified.
Another area addressed by this legislation is one of the few
attempts by the previous government to foster job creation. The
December 1992 economic statement announced a one-year
program of relief for unemployment insurance premiums for
increased employment by small business. This program has
come and gone unnoticed by the 1.5 million unemployed in this
country. Nevertheless a number of small businesses have taken
the government of the day at its word and we shall honour that
bargain as a matter of public trust.
The same considerations also apply to the other measures
targeted at small business. These include first of all the
temporary small business investment tax credit for the purchase
of eligible machinery and equipment from December 2, 1992 to
December 31, 1993.
(1840 )
Second, the extension of the small business financing
program to the end of this year, allowing small businesses in
financial difficulty to refinance up to $500,000 of debt at low
interest rates.
Third, the removal of any limits on holdings of small business
shares in RRSPs and RRIFs.
Fourth, the extension of the 35 per cent investment tax credit
available to small Canadian controlled, private corporations for
eligible research and development expenses.
In addition, this legislation will give effect to some general
improvements in the tax credit incentives offered to encourage
Canadian research and development. As well, it removes the
annual limits on the investment tax credits. This limit,
introduced by the previous government in 1987, reduced the
effectiveness of the ITC incentives for rapidly growing firms,
one of the engines of job growth in this country.
1139
The bill also assists resource companies by allowing 100 per
cent of the first $2 million of oil and gas development
expenditures to flow through directly to shareholders and be
deducted by them. As well, it gives these companies more
flexibility in managing their affairs by removing the mandatory
reduction of the Canadian exploration expenses.
Finally, this bill will put in place new, more flexible rules for
investments in labour sponsored venture capital corporations.
In conclusion, let me reiterate the position I put forward
earlier. The government has no quarrel with the underlying goal
of our predecessors in announcing these measures. No party in
this House or in the previous Parliament is against job creation
in principle. The issue however is which parties are for job
creation in practice. That issue was put to the voters and the
voters provided a clear answer. We do not hold out the measures
in this bill as any solution to the challenge of job creation, but
we do recognize the attempt. Of equal importance, we recognize
the commitments made by small business people, by new home
buyers and by others who have relied on these proposed
measures.
It is with these thoughts in mind I urge members of the House
to support the bill.
[Translation]
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot): Mr. Speaker,
I am happy to have this opportunity to speak to Bill C-9.
As our colleague just mentioned, Bill C-9 gives concrete
expression to measures announced by the previous government
in the Economic and Fiscal Statement of December 1992 as well
as in the last budget it tabled before being litterally swept out of
office in the last federal election.
This bill will be considered in the Standing Committee on
Finance, at which time the Bloc Quebecois plans to examine
each provision, even though the government considers certain
provisions as mere formalities. With regard to those measures
that we see as very positive, such as the extension of the plan
allowing individuals to withdraw funds from their RRSPs to buy
a first home and those relating to labour sponsored venture
capital corporations, an item by item examination of Bill C-9
will give us an opportunity to make recommendations to the
government, if applicable, to extend further this kind of
programs. I think that this is one of the functions of the Standing
Committee on Finance.
Having said that, no great revelation emerged from my review
of this bill because I was familiar with the actions of the
previous government. Like my hon. colleague though, I have
realized that the last budget tabled by the Conservative
government was full of short-term measures, measures to
mitigate a catastrophic economic situation they were largely
responsible for. Think for instance of the recession which took
unprecedented proportions after the first quarter of 1990,
making the rate of unemployment in Canada climb from a little
over 9 per cent to 12 per cent. Think of youth unemployment
also. Released just recently, the latest statistics on the last
quarter of 1993 indicate that unemployment is affecting 17.5 per
cent of young Canadians under the age of 25.
(1845)
Take the inactivity rate in Quebec, for example, because we
know that situation better. This is the unemployment rate plus
the people who are no longer looking for work because they are
so discouraged by the economic measures of the previous
government that they have given up. In five years the inactivity
rate has gone from about 19 per cent to nearly 25 per cent in
Quebec.
These are the devastating effects of Conservative policy. In
Bill C-9, in the last budget, we find some piecemeal, partial,
weak measures to lessen the blow and bandage the wound which
they themselves created.
That said, I would like to give an overview in the next few
minutes-I will not take too much of your time-but in the next
few minutes, I would like to give the reasons for this mess, the
causes of the catastrophic state the economy is in, so that the
present government will not repeat the same mistakes.
The economic situation which we have been in since the first
quarter of 1990 is the combined result of three main factors. The
first of these is very bad management of the government's
finances. The second is the Conservatives' monetary policy and
the third, the international economic climate which has
worsened the disastrous economic situation and the sorry state
of Canada's finances due to the Conservative government.
I do not think that we have to review the first of these factors,
the government's finances. Canada's public finances have
become a cause for great concern since about 1986, even
extreme concern.
I would remind the government that it was when the Liberals
were in power before that we started to have problems with the
government's financial management. I will just give you a few
figures in the hope that the new Liberal government will not
repeat the same mistakes that it made when it was in power from
1970 to 1984. I would remind you that the present Prime
Minister of Canada was Minister of Finance during that time. I
would remind you that from 1970 to 1984, the annual federal
deficit as a percentage of gross domestic product rose from 0.3
per cent to 8.7 per cent, a record since unmatched. The Liberals
set the record when they were in office before.
1140
We are hoping and taking the opportunity of this debate on
Bill C-9 to warn you against reverting to this mismanagement
of public funds.
The second cause of our disastrous economic situation, the
second legacy left us by the Conservatives, is the anti-inflation
policy.
When you say that in less than a year and a half the gap
between Canadian and American short-term interest rates went
from about 1.5 to over five points at times, it is obvious that,
sooner or later, it would impact on investments and, in turn, on
economic growth and job creation.
The dogmatic anti-inflation policy followed by the former
Governor of the Bank of Canada was a major factor in the ailing
economy that led, in Bill C-9, to a few fragmented stopgap
measures.
We therefore warn this government against making the same
mistake by adopting a dogmatic anti-inflation policy that goes
too far to bring inflation under control without trying to
maintain a balance between long-term price control and
short-term job creation.
We also hope, after thoroughly reviewing Bill C-9 to learn
from it as you can see, that this government will subject all
programs, expenditures and tax measures such as those in Bill
C-9 to extensive scrutiny. Because, after studying this bill and
consulting senior officials from the finance department, we
found out, that no cost-benefit analysis has been done, that no
serious, objective review is done every time new tax measures
are planned like those the Conservatives left us in June 1993.
(1850)
The Auditor General is very clear on that. He said that out of
16 federal programs accounting for $124.5 billion, only two
have been seriously evaluated. Therefore, I urge the government
not to make the same mistake in the next budget. It is important
that every measure proposed in a budget be fully analyzed, that
they be subjected to a thorough cost-benefit analysis.
Fourth, I hope the government will propose something other
than palliative measures-similar to those inherited from the
previous government-like the ones in Bill C-9. I am hoping for
real programs of job creation, not Mickey Mouse programs. I
would like to see real measures to create long-term jobs,
measures which would raise the quality of manpower and
improve its capacity to face the globalization challenges. I hope
the government will fulfil the expectations concerning training,
the expectations of the Quebec Government, and that it will put
an end to overlappings and inefficiencies in this area.
This is another piece of friendly advice to the government
from the Bloc Quebecois. I hope the government will not repeat
the mistake of the Conservatives and try to attack social
programs. That too seemed clear in the red book that is being
waved at us virtually every day on the other side of the House.
By the way, I believe it is improper to produce exhibits in the
House. I would have to check, but I think I read that somewhere.
It was clear in that red book-I remind you that Mao also had
one -that social programs would be protected and that future
budgets would also allow for the creation of social housing. It
seems that the Minister of Finance has forgotten those
commitments.
Let us hope that the government will not repeat the mistakes
of the Conservatives who tried several times-and they were
taught a costly lesson-to reduce social programs, to reduce
senior citizens' pensions, and to practically eliminate-as they
did in their second last budget-social housing.
It is hoped-and that was shown to me by Bill C-9-that the
government, when tabling its next budget, will try to really
reduce its extravagant spending. There are also real measures
that can be taken to fill the taxation gaps, and I will give you
some, because I have the feeling that people here tend to forget
these things, even from one day to the next.
There are major gaps in the Canadian tax system. It has been
said repeatedly since the morning of October 26 and even
before, during the election campaign. I will give you two or
three more examples in order to refresh your memory and that of
the minister of Finance, who is preparing his next budget which,
according to rumour, is to be tabled on February 22.
Here are some examples of these scandalous situations.
Taxpayers in Canada who get their income mainly from
capital-so, they are not workers, but people who are able to
invest in stocks, bonds and elsewhere-are taxed at an average
rate of 9.9 per cent. The basic rate for workers, for those who toil
to earn a living and who cannot afford to speculate, is at 29 per
cent. Why are there such inequities?
Here is a second example. In 1987-because since then the
Department of Finance has stopped conducting these analyses
and, all above, publishing them; people in the federal system are
hiding them because they are ashamed-in the middle of an
economic growth, there were 90,000 Canadian companies that
made $27 billion worth of profits without paying any income
tax.
(1855)
The Bloc Quebecois has often mentionned the scandal of
family trusts during question period. The Minister of Finance,
as the Prime Minister and all the members of the Liberal Party,
decided to laugh at the whole issue of these tax loopholes and to
discard, with language well known to this House, the family
1141
trust problem even though it costs the federal government
between $350 million and one billion dollars a year in tax
revenues.
Last weekend, I read an article by Yves Séguin, who is
certainly not uninformed about taxation whether in Quebec or in
Canada, and he estimated that in Canada, tax loopholes alone-I
am talking here about grand-scale tax evasion by Canadian
corporations-represent a loss of revenue of approximately 2.5
billion dollars.
When the government presents its budget, when it evaluates
all tax measures and when it modifies or reviews the whole
Canadian taxation system, we hope that the Minister of Finance
will keep in mind that there are blatant tax inequities in our
system and, most of all, that he will not touch middle-class
income, social programs or those people who have been carrying
an ever-increasing tax burden since 1984, that he will not copy
the previous government which, need I remind you, was erased
from the federal map.
Contrary to what the Tory government did in its last budget, I
hope this government will present true tax incentives in order to
promote economic recovery in Quebec and in Canada and to
reinforce corporate and individual competitiveness because
globalization is something everyone speaks about in this House,
something everyone has been talking about since 1984 under
Tory management, but it is more than a mere concept.
Globalization means we have to face the best in the world, the
best industries, the best workers, in a world that is getting
smaller by the minute. My former boss at the Union des
producteurs agricoles used to say that globalization would
transform our planet into a global village. Therefore, the United
States are not our competitors any longer; our competitors are
now the most efficient workers in the world. They are the Pacific
Rim countries and the developing countries because in the area
of mass production, their competitive effectiveness is superior
to ours.
So we hope this government will not repeat the errors by
applying stop-gap measures instead of real ones which would
reinforce corporate competitiveness and worker productivity in
Canada.
We hope that this government will change its mind and restore
the full meaning of the Canadian equalization program, which
we had the opportunity to debate yesterday and today, with
respect to Bill C-3, by eliminating the ceiling it imposed on
payments to the provinces. My message is the same one we
delivered yesterday and are still sending today: this ceiling
completely changes the nature of the equalization objectives.
For the benefit of my friends in the Reform Party, I will
digress for a moment. I have the feeling that they cannot read,
although I hope they can write; but I do know for a fact that they
cannot read; how else could they refuse to understand the basic
principles of equalization? Since yesterday, they have been
saying things about Quebec and the Canadian equalization
system that are totally biased, harmful, and even vicious.
May I just remind all the members, before I make my point,
that this system is here for a good reason and that it originates in
the Rowell-Sirois report, which I urge all the members of the
Reform Party to read and study; there are close to two dozen
copies of the report in the Library of Parliament. It provided the
basis for the Canadian equalization system, together with a nice
Canadian dream neither my colleagues nor I believe in any
longer. It said that the redistribution of wealth among all
Canadian provinces was the cornerstone of federalism.
(1900)
The aim of equalization is to make sure that even the poorest
provinces, the have-not provinces-these are the principles of
fiscal federalism, I did not invent them, they stem from the
Rowell-Sirois report and subsequent ones-are in a position to
have sufficient revenues, including equalization payments from
the federal government, to deliver approximately the same level
of quality public services as the other provinces.
Equalization payments are calculated according to two
factors. The first one is the ability of provinces to raise tax
revenues on the municipal and provincial levels. This taxation
capacity is then compared to a national average calculated using
five Canadian provinces. If the taxation capacity of a province is
inferior to $4,800 per person, if I remember the latest
calculations, equalization will provide the rest.
Since the total amount of equalization payments is calculated
on a per capita basis, it is obvious that Quebec, with seven
million people, receives more. Quebec is a have-not province
with regard to its capacity to raise tax revenues. When you
multiply the per capita rate by the population of the province, it
is obvious that Quebec receives more money than Manitoba,
Saskatchewan and most of the provinces which ``benefit'' from
equalization. This is not a hand-out. This is the principle of
federalism in action. And if the members of the Reform Party
are federalists-unless they have had a change of heart and have
become sovereigntists in their respective provinces, but I will
assume they are federalists until further notice-then they are
out of line when they point a finger at Quebec for receiving more
than its fair, equitable share, or so they say, a share based on the
federal system.
A second point before getting back to the main subject. I
would suggest that my colleagues from the Reform Party as well
as some of my Liberal colleagues ask the Library of
Parliament-they have economists, tax experts and other
specialists working there; I can even send a memo on their
behalf if they do not know how to go about making such a
request-to dig out for them all the expenditures and types of
expenditures the federal government has made in each province
as well as the per capita share. They will realize one thing:
Quebec may, on the one
1142
hand, be receiving 3.6 or 3.7 billion in equalization payments
but, on the other hand, it has been losing support for the past ten
years in areas such as research and development, transportation,
agriculture, federal department investments in Quebec- I
would appreciate that they wipe that smile off their faces and
just check the figures. At any rate, we will keep bringing them
up in this House throughout our mandate, over the course of the
four years we will be spending here together.
A third point on equalization. My colleagues from the Reform
Party come mainly from the Prairies, from Western Canada. Let
me remind them -and I know this for a fact-that each and
every year since 1984-85, the three Prairie Provinces have been
receiving between $2.5 and $5 billion from the federal
government mainly in support of the grain sector.
Back in the days when I sat on foreign trade and stabilization
committees of the Canadian Federation of Agriculture as a
representative of the Union des producteurs agricoles, the UPA
was saying that Prairie grain growers were hard hit by the global
economic situation. They have also been hit by several droughts
since 1984. We understood their situation and never criticized
the federal government for making ad hoc payments to help
them out.
(1905)
We have never blamed them for the fiscal federalism that
Quebec is being blamed for through equalization. So I would ask
them to show a little more respect for Quebec when we are
talking about it and not to make harmful analyses on
equalization and what Quebec gets from it. This is all I wanted to
say on equalization.
To go back to my advice to the government, I would suggest to
the Liberal government, in the light of the disastrous economic
situation the Conservatives have imposed on us since 1990, not
to revert to the dogmatic anti-inflation fight advocated by the
previous government, as it seems determined to do.
I was very surprised and shocked to hear, before the holidays,
that the finance minister was holding a press conference with
Mr. Thiessen, John Crow's right-hand man and principal
advisor at the Bank of Canada. I was very disappointed because
it indicated to me, barring evidence to the contrary, that the
current finance minister and even the current Prime Minister of
Canada have long advocated a monetary, inflation-fighting
policy maintaining a better balance between long-term price
stability needs and short-term consistent job creation needs. I
believed in them at one time.
I was very disappointed to see that the finance minister, in a
pre-holiday press conference with the new Governor of the
Bank of Canada, announced that, like his predecessor, he would
wage a relentless fight against inflation. We do not have
anything against fighting inflation per se but we are totally
opposed to a relentless fight because, since 1990, we have lived
through the outcome of such a relentless, dogmatic fight against
inflation.
If the Liberal government is telling the truth about long-term
job creation and economic recovery, and if the Liberals were
telling the truth when they were in opposition and challenging
John Crow's policy, this government should not renew this
obsessive anti-inflation policy. Things are going rather well at
the moment, in the sense that there has not been a surge in
interest rates such as that caused by the Conservatives'
anti-inflation policy in the early 1990s. But-this piece of
advice is also directed at the hon. members opposite-as soon as
the economy picks up, and I hope there will be strong economic
growth in the next few months, there will certainly be upward
pressure on prices. There is no doubt that if the Bank of Canada
pursues its policy of controlling inflation at all costs and tries to
keep it at two per cent, the chances of having a truly sustained
recovery are reduced.
A mere review of Bill C-9 showed Bloc Quebecois members
the carelessness and the incompetence displayed by the previous
government. We do hope that you will not make the same
mistakes. We also hope that this review of Bill C-9 will help you
find a better solution.
Madam Speaker, we would like to see the Finance Committee
do a clause-by-clause review of Bill C-9. As I said earlier, we
would like to do an in-depth analysis, as the government did
according to the hon. member, but in this case it would be a
non-partisan exercise done by the Finance Committee. If we
have the opportunity to do so, there are already two measures
contained in Bill C-9 which we would like to see in the budget to
be tabled soon. First, the clause on venture capital corporations
for workers. Second, the extension of the Home Buyers' Plan,
which enables taxpayers to use their RRSPs to buy a property for
the first time.
(1910)
Madam Speaker, this concludes my comments. I thank you for
your kind attention.
[English]
Mr. Randy White (Fraser Valley West): Madam Speaker, I
am quite happy to be able to speak to Bill C-9 because it has
some significant issues in it that should be addressed.
The bill has some nine amendments in it but they affect 21
additional sections within the act. This tells us that the
complexity of the Income Tax Act today makes all of those
things necessary.
1143
I would make one note. It is unfortunate that changes to one's
income tax may be implemented by many things today. Even
a press release can effect changes to one's income.
Unfortunately without the proper legislative steps prior to
implementing changes, the tax system becomes quite volatile
and can be manipulated very easily.
I must start out by confessing to the House that I have mixed
feelings about rising to address this bill. It enacts measures
introduced by the previous Conservative government in its
December 2, 1992 economic statement and its April 26, 1993
budget. These are obviously not new to Canadians.
On the one hand it would seem to be only prudent that we
support what is generally referred to as a housekeeping bill.
Much of what this bill enacts has already been policy for the past
year or more and we are now just getting around to proclaiming
it law. I would not pretend for a minute that it would be anything
but irresponsible of us to oppose these measures merely on
principle. On the other hand, I wish to make it clear that there are
some principles here to which I am strongly opposed, as is my
party.
The Income Tax Act has become an unwieldy monster
symbolizing I suggest what many Canadians see is the problem
with government in general: there is just too much of it.
As an accountant, Madam Speaker, I can assure you I am
familiar with the act. I have studied it, worked with it and, yes,
like everybody else, have had my problems with it in my day. I
have burnt a lot of midnight oil in April trying to figure it out.
I want to assure my fellow accountants across this country
that I am not advocating putting them out of work, but the act
must be changed. It is time the average Canadian had a chance to
understand not just the principle behind taxation but the
mechanics of it as well.
The last attempt by the Conservative government to introduce
tax reform led to an income surtax, an alternate minimum tax,
tax deductions, tax credits and the complicated GST, all of
which have further confused matters. It does not have to be this
complicated.
Let me illustrate my point with a personal experience I had
that I believe shows how this entire process has become
symptomatic of a larger disease that is big government today.
When I first began to look at Bill C-9 I was in my constituency
office in Matsqui, British Columbia. My assistant had a copy of
the bill here in Ottawa and I asked him how large it was. The
answer was 68 pages. I thought 68 pages of amendments, how do
I go through this in a week and try to figure all of it out. I asked
him if he could find some kind of explanatory summary. He told
me he had asked the Department of Finance for the summary and
had received one very quickly. There was only one problem, the
so-called summary of a 68-page document was 78 pages long.
(1915 )
These are the kinds of little stories to which even those of us
who are new to Ottawa have become immune. The people who
have sent us here, the people who have to struggle through the
tax forms every single year, the people who pay our salaries, are
not immune to these little stories. They are sick and tired of
them quite frankly. I believe that was one of the strongest
messages sent to this House last October.
We could help our deficit problems by addressing the vast
amounts of money this country wastes on sustaining an army of
tax accountants and tax lawyers which is what one needs to
interpret the Income Tax Act.
We could dramatically reduce costs for individuals'
businesses and governments by simplifying the system. We
should make it a priority. I would encourage the Liberal
government to make it a priority. The Reform Party has it as a
very high priority.
I would like to make it clear that there are some good aspects
to this bill that we would like to see the government continue or
improve on in its up and coming budget. For instance, section
146.01, the home buyers' plan, is a good example of that. I think
members heard that from the previous speaker as well.
Young people today cannot afford to buy homes because they
are paying too much tax. While total incomes per capita have
increased 170 per cent in the last decade, total direct personal
taxes have risen by 235 per cent.
How are we doing with respect to other countries? Canadian
government revenues as a percentage of gross domestic product
increased from 24 per cent in 1950 to almost 43 per cent in 1990.
Six years ago, the tax burden in Canada was approximately 20
per cent higher than that of the United States. In 1992 it had risen
to 25 per cent and it is projected to increase to 30 per cent by
1997. It is not just young people who are feeling the tax burden.
It is all Canadians today.
The home buyers' plan which allows those savings for a home
withdrawn from an RRSP to make a good down payment is a
good idea. It not only puts the dream of home ownership within
the grasp of more people but it provides economic spinoffs all
the way down the line.
Sue Bennett, one of my constituents from Langley, British
Columbia, has sent me some information on the plan. I would
like to go through it briefly. A poll released in September 1993
by the Canadian Real Estate Association confirms that the
homeowner buyers' plan has been a big success.
The poll done by Angus Reid was conducted in five major
Canadian cities. It found that four of five buyers who used the
plan said it was an important factor in their decision. It was
especially important for 86 per cent of the first time buyers.
Accountants usually take it. If it is very close, we have to say it
does not average. However, nearly half the people said it would
have been unlikely they would have been able to buy their home
1144
without the plan. The plan helped a significant number of home
buyers surveyed, 22 per cent of all first time buyers and 17 per
cent of buyers generally.
Repaying their RRSPs is a high priority in this country.
Eighty-one per cent of the respondents said that it is important
to repay. Fully 88 per cent said that they would repay at least at
the rate required by the plan and only 4 per cent said that they
would not repay and would declare their withdrawals as income.
Therefore the impact of the plan is there. It is a positive plan.
Home ownership was seen by 84 per cent of those surveyed as
being at least somewhat important to retirement planning.
Fifty-four per cent said that it was very important. Owning a
home was rated by far as the most important source of income
for retirement.
The Department of Finance has already reported that the
numbers have been impressive. There were nearly 200,000
participants to the end of July 1993. It is significant.
Housing starts, as any economist will tell you, are a reliable
indicator of the overall health of our economy. The housing
industry directly employs as we know general contractors,
carpenters, electricians, plumbers, dry wallers and real estate
people among many others. Indirectly it benefits many other
segments of society including, yes, even accountants. We are
encouraged by such measures as the home buyers plan and, as I
said, we are hopeful the new budget will include an extension of
this popular program. Let us put more Canadian carpenters and
plumbers back to work.
(1920)
We in the Reform Party support a taxation policy that has as
its principle objective the raising of funds to pay for government
programs. If we look at the history of the act that is what it was
originally intended to do, collect taxes ideally, and that would be
done in an orderly, simple fashion.
Somewhere along the line we have lost the original intent of
the tax system and we have allowed it to become a tool to
influence people's behaviour. I am speaking now of social
reform creeping into a piece of the financial legislation. That is
not only inappropriate, it does not work. We propose working
toward a simple, visible and proportional system of taxation.
The Minister of Finance announced in a December 20 press
release that a proposal by the Conservatives to pay the GST
rebates twice a year instead of quarterly has been dropped from
Bill C-9.
At a briefing earlier this week the minister's department
informed me the reason the proposal was dropped is because it
was found to be more economic sleight of hand on the part of the
previous government and that it would have made the deficit
look a little better to the Canadian public. To reject that type of
sleight of hand is a sound decision and I am encouraged by it.
I have mixed emotions. I am extremely concerned by the new
government's lack of commitment to change the way it handles
its economic affairs; no concentration on the debt or the deficit.
We sit here today perhaps to give assent to an amendment
proposed by the last government. I therefore cannot help but be
cautious in my optimism. All of us in this House should not need
reminding of the resounding message sent to the last
government on October 25. We cannot allow ourselves to slip
into those ways even in the slightest way.
I call on the government today to assure us it will give reform
of the Income Tax Act the priority it deserves. This will show the
opposition parties that the government is making good on its
promise of the new way of doing business. It will send a strong
message to the provinces that they should follow the federal
government's lead. Most important of all, it will show the
Canadian people there really is hope for a new way of running
government. We cannot let fear of media or any other kind of
pressure inhibit our effort to reform. We have to try.
In closing, I would like to take a moment to remind my
colleagues in the House that there is a big, fast moving, exciting
world out there beyond these walls. Even with my brief
experience in this House, I am often amazed at how this simple
fact gets lost in the daily shuffle of papers that this institution
sometimes seems to be.
I would like to leave you, Madam Speaker, and my colleagues
with a final thought. Failure is not fatal but in these times failure
to change may be. Let us simplify. Let us be fiscally prudent and
responsible.
[Translation]
M. Pierre de Savoye (Portneuf): Madam Speaker, I listened
with great interest the remarks of our colleague of the Reform
Party. It is obvious that Quebecers and Canadians as a whole
have to deal with a level of taxation which is definitely very hard
to support for the population, those who have a job and even
those who do not have a job, given all the consumption taxes.
I remember preparing my first income tax returns years and
years ago. It was a plain sheet printed on both sides and very
easy to fill out. You would arrive in no time at a result that was
not too frightening. But ever since, with all those schedules you
have to deal with in order to be allowed various deductions, the
whole process has become very complicated. There are so many
1145
calculations to be done and, in the end, the amount you have to
pay is often horrifying. Which goes to show that more is not
always better.
(1925)
There is a saying in English: No taxation without
representation.
[English]
With that level of taxation, people have been represented to
death. I think they gave their verdict about that in the last
election.
[Translation]
The fact is that the government is still facing a deficit and has
been for many years. It tried several solutions, but also
systematically raised taxes. We could very easily draw the curve
of tax raises and realize that as taxes were increased, the deficit
went up. So, if there was a new tax hike coming, we could almost
predict by how much the deficit would go up even further.
Perhaps we should find another way of using tax solutions to
avoid increasing the deficit. You see, Madam Speaker, every
time someone is paying taxes, they have less money left in their
wallet. And if there is less money in their wallet, they are less
able to buy things. However, some say that in order to have a
recovery, the consumer must buy things. I hope the government
will not take any more money from consumers, because they
will be even less able to buy things.
Of course, we can also talk about expanding the tax base. And
if we tax new fields, we will be in a situation where goods and
services will become more expensive because, ultimately,
businesses or individuals who will be taxed will try to
compensate by raising prices. And we will perpetuate the
situation that we have experienced for many years, here in
Canada and in Quebec, that is an inflation one of the main
components of which was our short-sighted vision on taxation.
If the government tried to make money now by raising taxes, it
would very quickly bring Quebec and Canada back into a
situation where they would have an even greater deficit.
I would like the hon. member to respond and would be curious
to hear his comments.
[English]
Mr. White (Fraser Valley West): Madam Speaker, much of
what the hon. member said is so close to my philosophy I am
wondering if maybe he would like to move over and talk about
it.
It is very true about the complexity of this system. The system
has become so complex that I do not think this government, nor
did the Conservative government, knows the effect of a
transaction when it changes the Income Tax Act. When we stand
in the House and ask the questions: ``Just how much does that
cost'' or ``How much revenue will you receive'', they are
estimates. They are estimates that can be out anywhere from
$100 million to a billion dollars. The system is so complex today
that there is no logic, rhyme or reason as to exactly how much
money one gets from changes in this act.
Just one other comment on the long-term effects. I think that
is one of the real symptoms of the problem in the Income Tax
Act. Today it is typically used as a quick knee-jerk reaction to
try to try to resolve a problem. You are going to see that in the
excise tax with the cigarette smuggling situation.
What we have to do is to get governments to start looking
longer term. We do have to simplify the system. That is how to
make it effective.
(1930 )
Mr. Ronald J. Duhamel (Parliamentary Secretary to
Minister of Public Works and Government Services):
Madam Speaker, I want to ask my colleague a couple of
questions very quickly.
I am not sure whether or not members of the Reform Party
oppose the broadening of the tax base. I stand to be corrected,
but I understand they would prefer not to have any more taxes
added to those which exist.
Do Reform members oppose the broadening of the tax base?
Do they oppose blocking the loopholes certain groups enjoy by
transferring money to other countries where there are certain
advantages? Apparently some wealthy families are able to
shield income. There are corporations making money and not
paying taxes and wealthy Canadians who have paid no taxes.
There is the black market economy where people avoid paying
taxes. Are they suggesting to the Minister of Finance and this
government that they should not move in that direction, that
they should ignore those particular measures? I am very much
interested in the response.
Mr. White (Fraser Valley West): Madam Speaker, the major
concern of Reformers is that broadening of the tax base to the
government means more taxes. If the member is asking whether
Reform thinks there should be more taxes on the individual, the
answer is no, no, no. That will be heard more than once in this
House.
I do not think the member's definition of broadening the tax
base necessarily means equity in the tax system. My opinion is
that once again it is going to come out of the pockets of the hard
working, middle income earners and we will be watching for it.
Mr. Morris Bodnar (Saskatoon-Dundurn): Madam
Speaker, the hon. member in his speech talked about tax and the
most recent question was with respect to the broadening of the
tax base. I would still like to know from the hon. member
whether the privileged people in this country who have avoided
tax for many years and accumulated not just some moneys but
fortunes should continue to be exempt under the guise of no
increased taxation.
1146
Mr. White (Fraser Valley West): Madam Speaker, I am
having difficulty understanding who the privileged few are in
this country.
This party is for a fair tax system, a simple tax system. The
definition of privilege to the government is something similar to
that of broadening the tax base. When I see its definition of
privilege and broadening the tax base the member will get the
answer.
Mr. John Bryden (Hamilton-Wentworth): Madam
Speaker, I have been following this debate and I do not quite
understand what the reply was. Perhaps I can define the question
again or take a third try at it.
I would like the hon. member to tell me whether the Reform
Party is for or against closing tax loopholes. Does he feel that
the closing of tax loopholes is a broadening or an addition to the
taxes?
The Acting Speaker (Mrs. Maheu): I am sorry but the period
for questions and comments has expired.
(1935)
[Translation]
Mr. Pierre Brien (Témiscamingue): Madam Speaker, before
I start my speech, I would like to comment on what was said by
the hon. member for the Reform Party about simplification. Of
course there is a case for simplifying the entire tax system, and I
am referring to income tax returns as well as tax shelters, but I
do not think we can agree on everything, and there are other
options that should be considered very carefully.
Bill C-9, An Act to amend the Income Tax Act, has an aspect
that may be somewhat odd, I suppose, for members on the other
side of the House. In fact, we are legislating measures that arise
from the last budget. I am not sure, and I did not go through
Hansard to see what the reaction was to these measures when
they were announced, although it might be interesting to do that,
but now, they have no choice, and neither do we. These measures
must be enacted. This legislation will implement measures
which in fact businesses were able to take advantage of all last
year. Legally, these measures had not been adopted, but they
will be in the weeks to come, which will more or less finalize
what was announced in the last budget. These are very technical
aspects.
However, there are also some principles involved, and we
could do a repeat of last year's budget debate, but we cannot
really affect the outcome. The fiscal year will end in a few
months, and by that time we will have a new budget, in a matter
of weeks even, and there are rumours it might be in less than two
weeks. At that time we may have something more interesting to
discuss.
Nevertheless, there are a number of comments we would like
to make about the last budget and the measures arising from that
budget, in a final attempt to influence what will be in the next
budget, and especially in next year's budget, because the
Minister of Finance is already saying they will not have time to
put everything they want in this year's budget and that it will
have to wait until next year.
Whether that is the real reason, who knows? I think they are
hoping for a strong economic recovery and that they are
overestimating the positive impact of economic growth on the
deficit, despite all the nice speeches by the Minister of Finance
and despite his good intentions. He said that he would not repeat
the mistake of the past, the mistake of the Conservative
government in overestimating evenues. We can see from last
year's budget that spending was grossly underestimated, and the
Liberals say they will not do that. As far as revenues are
concerned, I can tell you that we will be watching closely.
The dozen or so measures contained in this Bill were
announced in the December economic statement and in the
budget last May. The rest is made up of changes to the wording
of the law. All that is very complex, given the number of areas
covered by the Income Tax Act, and with time we even get
conflicting clauses, but I will come back to that.
These measures were meant, to a great extent, to stimulate
small and medium sized businesses. That was really the target
sector. There was also something for research and development,
and finally measures concerning exploration for natural
resources.
That budget had extended for another year the use of
registered retirement saving plans for home buying. This is a
good measure which we hope to find again in this year's budget
for application next year.
I heard some members say that representations were made by
some of their constituents showing that this particular measure
had a positive impact. Obviously this is a kind of measure which
is easy to evaluate, and that is interesting.
I will conclude, not on the basis on my speech but on that of
the proposed measures, that the government will have to do
better in the future.
(1940)
Last year's budget was very disappointing. It seemed as
though the government wanted to preserve maximum flexibility
so that the next Conservative Party Leader would have the
leeway to adapt it at will. Maybe that was not a good idea. I do
not believe that, in these difficult times, we can postpone for a
year, not even for a few months or weeks, our fight against the
deficit nor efforts towards better management of public funds. It
seems we have wasted a year and that is very disappointing.
What do we expect from the next budget? A decrease in
expenditures, naturally; but we also hope it will propose a
complete tax reform. We have heard nothing along that line yet.
We feel as though we were preaching in the wilderness. We
1147
cannot wait for the government to announce even a slight
intention of addressing that issue, of reviewing our very
complex personal and corporate tax system. Such a measure
would increase the confidence of Quebecers and Canadians
alike in their taxation system and thereby, their confidence in
their representatives and institutions.
We expect a simplification of the process. As my colleague,
the member for Portneuf said: very few people can prepare their
own income tax return. It is not an easy task to read the Tax
Guide; even the one you receive with the short form is quite
exacting. Just think of the elderly; it is not easy for them. Even if
we prepare specific short forms for senior citizens, it remains
too complex.
There are many measures that could benefit people who,
unfortunately, do not understand them. They do not know that
they apply to them. They are ill-equipped to use the tools they
are told could be of benefit to them. They hear about them from a
friend or a colleague, but more often than not, they ask an
expert, such as an accountant, to prepare their income return for
them. These people do not tell them what they should do to
improve their financial situation and personal planning. It is
very complicated and that is the reason why very often new tax
measures bear more heavily on the middle-class since it is
having a difficult time adapting rapidly to changes or even
understanding quickly the tax system.
Those who can benefit fully from it are the most wealthy,
which causes people to say that the system is unfair. You do not
have to go very far. We all have heard, at one time or another,
someone in our riding say that the system is unfair, that the rich
pay less taxes. Even if there is a trend, statistics show that, on
the whole, it is not true; of course there are exceptions, and even
a few are already too many. They create a lot of discontent.
Let us look more closely at the dozen of provisions contained
in the bill. The first one is interesting to look at and study from
the following point of view. On this side, we often talk about
overlapping jurisdictions. But we forget to mention
interdepartmental co-operation, a very complicated issue. The
Auditor General mentioned it and pointed at a lot of things that
could be improved. The government is doing something with
one hand and doing something else with the other that reduces
the effect. In last year's budget, this first measure said that
unemployment insurance premiums would be reduced as a way
to create more jobs and to encourage businesses to hire more
people. This year, it was already announced that unemployment
insurance premiums would go up at the beginning of January. In
the same year, they give with one hand and take with the other.
People have trouble getting a clear message from that. There is
something very contradictory. In the same fiscal year, there was
a change of government, but the policy orientation is hard to
grasp. I am the first one to say so. Why did they do that? We
suppose that they took the money to finance the infrastructure
program. That may be a reason or it may be to finance something
else as well. But I have trouble understanding why with all those
resources and so many competent people around, we find
ourselves in situations where contradictory measures are taken,
not by the same government but by the same level of
government. To be sure, we can understand that in some cases
the federal and provincial governments act differently, since
they do not always share the same policy orientation, but it is
very hard to accept the same level of government acting in a way
that contradicts itself.
(1945)
There are also temporary investment tax credits for small
business. The temporary nature of this measure-
Madam Speaker, would you please ask hon. members to-
The Acting Speaker (Mrs. Maheu): Order, please. If the
hon. members wish to pursue a conversation, I would ask that
they do it outside the Chamber. The hon. member for
Témiscamingue may continue.
Mr. Brien: Thank you, Madam Speaker. Our friends would do
well to listen. When the subject is taxation, we have the
impression that they are no longer listening, that they are
afraid-
Mr. Duhamel: I am listening.
Mr. Brien: Indeed, there are some-and they deserve full
marks-who listen closely.
Mr. Duhamel: We listen quite religiously.
Mr. Brien: Indeed, and I am even expecting some questions.
Let us continue. Another measure, one of a series of very
technical measures, is the extension of the small business
financing program under which a small business in financial
difficulty may refinance its debt. This measure, which provides
for a different tax treatment, is very interesting for businesses as
well as for financial institutions.
Another measure provides for the abolition of the penalty tax.
How ineffective can this be. The penalty tax on excess small
business properties held by RRSPs and registered retirement
income funds is repealed from October 31, 1985. It is not
important to understand the technical aspects of this measure-
[English]
The Acting Speaker (Mrs. Maheu): Order. Could members
please, if they must speak, do it outside the Chamber. I have
trouble hearing what the hon. member is saying.
1148
[Translation]
Mr. Pierre Brien (Témiscamingue): Thank you, Madam
Speaker. I am happy that you have trouble hearing me as it
shows there is at least one person listening besides my
colleagues, or two persons I should say.
The technical reason for this measure abolishing something
retroactively to 1985-not the technical reason but the actual
principle-is that it could not be implemented in real life. It was
too complex to manage. It took eight, almost nine years to put in
place this measure and the revenue department could not make it
work. It is very hard to understand. Why did we wait so long and
what happened to the money given to debtor businesses that
could not be recovered? All this remains to be seen and we will
ask questions when this bill is reviewed by the finance
committee.
Another measure that we wish to see extended further in the
future is the home buyers plan. This is a valuable measure with a
stimulating effect on the construction industry. It allows
individuals to buy a home, which is desirable. The bill provides
for tax incentives and ways of doing things in terms of taxation
which are very positive. When we talk about reform, we are not
suggesting that everything about the present tax system is
wrong. Some aspects of it are more positive than others, and this
is one of them.
Two measures regarding flow-through shares and exploration
expenses were included in an attempt to repair the mistakes
made by the Conservatives when they axed the flow-through
shares program. The Quebec government had jumped on the
band-wagon and I can tell you that it had disastrous
consequences in my region.
In 1987, the unemployment level was about 7 per cent in
Abitibi-Témiscamingue. Today, we would call that full
employment. In the beginning of the 1980s, full employment
was fixed at about 4 per cent, but we must adjust this figure.
After two recessions, one in the beginning of the 1980s and the
second one ten years later, the unemployment level is now
higher. Our economy was thriving. There was indeed abuse. As
with everything else, there are some who take advantage of good
policies. That is what happened and that is why we had to make
drastic cuts.
A popular expression applies here: we threw out the baby with
the bathwater. It could have been possible to correct the
situation with a few technical amendments. We tried to make up
a little for this. These measures are interesting, but a lot less, and
it is not the main concern of the Association des producteurs et
des exportateurs. I can tell you that the former incentives and
flow-through shares plan were much more interesting than these
measures.
There is another measure that must not be considered only in
this light because one has to dig a little to put it in perspective. It
is important since it is closely related to a suggestion made by
the Bloc Quebecois, and which, hopefully, the government will
study one day.
(1950)
It provides for a maximum annual investment tax credit. This
credit will be eliminated. Before, businesses could use this
credit up to a maximum of 75 per cent. They could reduce their
benefits by 75 per cent, so why not totally eliminate them and
not to have to pay any tax?
It will now be possible. This has to be considered along with
another measure from the previous year, namely a capital tax to
ensure that most businesses pay a minimum of taxes. Where
there may a problem, although we have to be careful and
examine this issue in a much more technical and thorough
fashion, it is with this capital tax of .02 per cent which applies
only to a capital amount of $10 million or more. Do businesses
with a capital of $5 to $10 million deserve this break? This is a
good question which we must ask ourselves. It must at least be
raised, but it should be examined and I hope it will be when the
Finance Committee will look at this piece of legislation.
The other two measures were aimed at promoting research
and development, and at ensuring the payment of tax
instalments. The amount has been raised to help more people.
This bill is exactly identical to the one tabled by the
Conservatives following their budget, except for the change to
the GST refund. I do not object to the fact that it is so similar to
the previous piece of legislation. What I am saying is that there
is only one change. There will still be four quarterly payments,
which is a good thing, and which also enabled the previous
government to change somewhat the record keeping and
underestimate the deficit. Now, it has the opposite effect with
the new government, which uses it to slightly overestimate the
deficit.
This is certainly not a major change. Some like the idea of
four payments, others would prefer two, but in terms of public
finances as a whole, this is of no consequence. It is essentially a
cosmetic change.
Finally, there are two things about taxation and fiscal policy
that bother me. These measures often target small businesses.
Earlier, I heard an hon. member talk about the importance of the
people and of the rural communities. I urge him to carefully
consider the situation of the small and medium sized businesses,
because there must be some in his riding too.
These businesses have a lot of trouble dealing with a very
complex tax system. If the system is complicated for the
individuals, it is even more so for small and medium sized
businesses, who completely rely on an accountant or an analyst
of their acquaintance for advice, even though it is not always in
their best interests. They are told about temporary one-year
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measures, but they are unable to assess quickly enough the
benefits they can derive from these measures.
They do not take full advantage of the measures. The
government should put in place a simpler mechanism, easier to
understand, particularly in the area of research and
development. There is not enough R and D done in the private
sector in Quebec and in Canada. With all the economic changes
that are occurring, the level of R and D in the private sector will
have to increase. The government will have to encourage these
people to get into R and D. However, they need about eighteen
months before there are any significant results. I can tell you,
Madam Speaker, that we have excellent tax incentives, the best
in the world in some areas, but they are not well understood by
businesses and they are very difficult to use.
Obviously, pharmaceutical companies understand them well
and use them well. They are doing very well in Quebec. But in
other areas, companies are not even aware of the tax incentives
that exist. The Department of Industry, Trade and Commerce
has a program, the Department of Finance has another program,
there are just too many programs. Businesses have trouble
finding their way through the maze of programs. They have to
look at all the possibilities and it takes time. It is not only the
GST that costs businesses a lot of money. There is also the cost
of trying to understand all the government support programs. It
can be very difficult, particularly for small and medium sized
businesses.
I am about to conclude. Fiscal measures should always be
evaluated as to their fallouts and costs before being announced.
In economic jargon, it is simply called a cost-benefit projection.
Then, results can be made public. This is rarely done and it is
easy to understand why. When facts are published, the people
can evaluate how good their government is. Thus, I hope that for
the sake of openness this government will do more than its
predecessor on this. The Minister of Finance has often promised
to do it and his colleagues should press him to deliver.
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To conclude, we will carefully monitor these measures and
the upcoming budget. That is when it will truly start. And if this
government does not want to end like the previous one, it should
take a completely different approach.
Mr. Ronald J. Duhamel (Parliamentary Secretary to
Minister of Public Works and Government Services):
Madam Speaker, I wish to thank my colleague for his speech.
First, I want to assure him that our approach is totally different.
I have four quick questions for him. First, since some
Canadians took certain decisions in response to budgetary
measures announced by the previous government-I insist on
that point-I would like to know if, yes or no, the Bloc
Quebecois agrees with the Bill.
Second, you heard the members of the Reform Party say in
this House that they oppose all taxes. They said: ``No taxes, no
taxes, no taxes,'' even for wealthy corporations or individuals
who benefit from tax shelters. I would like to know the position
of your party on that subject.
Third question, I would also like to know whether the Quebec
income tax guide and forms to be filled out are really different
and more complex than the federal ones. I take that question at
heart and no doubt you know the answer.
Finally, the member spoke about small and medium-sized
businesses and indicated that one of the things that bothered
them-and I want to make sure my colleague understands this
last question since it is probably the most important-was the
complexity and large number of regulations and so on. But he
did not mention access to capital. At home, in St. Boniface, that
great place at the geographical centre of Canada, we are mostly
interested in access to capital for small and medium-sized
businesses.
Maybe he can make very short comments on my four
questions, answering by yes, no, or maybe.
Mr. Brien: Madam Speaker, I would like to thank the hon.
member for St. Boniface for his questions and especially his last
point, which I will comment, but only after I have answered his
questions in sequence.
First of all, the hon. member asked whether we agree with this
bill. As a matter of fact, it will pass at second reading whether
we agree or not. We will support the principle of this legislation,
but we will examine the bill clause by clause in committee and
ask very specific questions. Third reading will come afterwards.
That is the way it goes. This bill will be referred to the Finance
Committee, a committee which always has a busy schedule, but
it will only be one more piece of legislation on a heavy agenda.
Now he wants to know what our position is compared to the
Reform Party's. I think I see what he is getting at. Do we
consider that reducing tax shelters is different from raising
taxes? I think that was the thrust of his question.
There could be a difference, except that, on the whole, we are
collecting more revenues. One day, we will have to agree on a
definition of tax increase. Traditionally it means increasing the
consumption and income taxes. Can we say, however, that
reducing tax shelters and fiscal incentives is in effect a tax
increase? This is debatable, but the results are the same: more
revenues for the government.
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In some instances, we will agree with a given tax shelter; in
others, we will not. We will study them one by one.
If we compare the tax returns for Quebec and for Ottawa, we
see that they are both complex, because there are two
governments involved. That is very important.
In Quebec, Mr. Yves Séguin tried very hard to simplify the tax
returns, but there is still a lot to be done. We often talk about
administrative overlap, but there is one thing that drives people
crazy. Let me assure you that Quebec's sovereignty will have a
great benefit in people's daily life, if only for the fact that they
will only have one tax return to fill.
Overall, the figures may not change much, but it would be a
lot simpler. The individuals will feel better, as will the
businesses, and that will be a great step forward, one we have
never been able to take so far.
We will not have to hear a lot of rhetoric about harmonization
all year long, without ever achieving it.
In closing, I want to speak about access to capital. I tell the
hon. member that we will have to see what the government will
do. The federal and the provincial governments tend to offer
more and more assistance programs to businesses, including the
business development centres. There are even regional
investment funds. We hear people talking about putting more
pressure on financial institutions, but what will happen?
[English]
The Acting Speaker (Mrs. Maheu): It being eight o'clock
p.m., the House stands adjourned until tomorrow at ten o'clock
a.m., pursuant to Standing Order 24(1).
The House adjourned at 8 p.m.