CONTENTS
Friday, February 25, 1994
Bill C-14. Motion for second reading 1841
Mrs. Dalphond-Guiral 1851
Mr. Gagnon (Bonaventure-Îles-de-la-Madeleine) 1852
Mr. White (Fraser Valley West) 1852
ORAL QUESTIONS
Mr. Martin (LaSalle-Émard) 1855
Mr. Martin (LaSalle-Émard) 1856
Mr. Martin (LaSalle-Émard) 1857
Mr. Martin (LaSalle-Émard) 1857
Mr. White (Fraser Valley West) 1859
Mr. White (Fraser Valley West) 1859
Mr. Leroux (Richmond-Wolfe) 1859
Mr. Leroux (Richmond-Wolfe) 1859
Mr. Martin (LaSalle-Émard) 1861
Mr. Harper (Simcoe Centre) 1863
Bill C-14. Consideration resumed of motion for second reading 1865
Mr. Harper (Calgary West) 1865
Mr. Bernier (Mégantic-Compton-Stanstead) 1884
1841
HOUSE OF COMMONS
Friday, February 25, 1994
The House met at 10 a.m.
_______________
Prayers
_______________
GOVERNMENT ORDERS
[
English]
Hon. Sergio Marchi (for the Minister of Finance) moved
that Bill C-14, an act to provide borrowing authority for the
fiscal year beginning on April 1, 1994, be read the second time
and referred to a committee.
The Speaker: The hon. Parliamentary Secretary to the
Minister of Finance and a brand new father, I might add.
Mr. David Walker (Parliamentary Secretary to Minister of
Finance): Mr. Speaker, because of the birth of my second child,
I have not had an opportunity to speak in the House at length, so
I would like to congratulate you on your election as Speaker. I
am probably the last member of the House to do this formally,
sir, but I would like to congratulate you on your new position. I
also congratulate your colleague, who has now taken the chair,
and thank you for making things go so smoothly in the first
weeks of this House. Thank you again.
I welcome the opportunity to speak at second reading of Bill
C-14, the borrowing authority bill. I urge the House to proceed
with this legislation as quickly as possible so that new
borrowing authority will be in place at the beginning of the new
fiscal year.
(1005 )
Before speaking directly to the measures in the bill, I would
like to put this legislation in its proper context. The amount of
borrowing authority requested in the bill is directly connected to
the financial requirements set out in the budget presented earlier
this week by the Minister of Finance. The information required
to deal with the financial aspects of the bill is set out in the
budget.
It is extremely important that this bill be passed as quickly as
possible. Without borrowing authority early in the new fiscal
year, there will be severe constraints placed on the government's
financing program. Essentially the government would be
limited to using section 47 of the Financial Administration Act
which restricts funding to short-term funds.
No bond issuance will be permitted except to funding
maturing issues of which there are very few in the first quarter of
1994 and 1995. Any delay in the passage of this important bill
beyond the end of the current fiscal year therefore could prove
costly to the government and Canadian taxpayers, and would
expose the government to the additional interest rate risk
implied by higher short-term funding.
With the large financing program, delaying bond financing
will also be potentially disruptive of the capital market which
could result in higher debt servicing charges. It is critical that
borrowing authority be secured as soon as possible after the
budget.
In granting the borrowing authority requested in this bill, hon.
members should keep in mind that the budget takes strong action
to bring government finances under control. The measures
announced in the budget are an essential part of this
government's action plan to revitalize Canada's economy.
We do not put forward this request to borrow money lightly.
We know there are real costs involved in adding to the country's
debt burden. That is why we have taken real action by proposing
the most substantial spending reductions by a government in the
last 10 years.
As well, in charting Canada's fiscal course in this budget we
have relied on cautious, prudent projections of economic growth
for this year and next. Consequently the deficit projections are
much higher than those given to the House last April.
The economic projections presented in the budget are based
on a consensus of private sector forecasts and are in stark
contrast to the overly optimistic, some might say unrealistic,
expectations of growth presented in some previous budgets,
expectations that have resulted in deficit forecasts that were
wrong by tens of millions of dollars.
For our part we have served notice that we are committed to
changing the way government does business. One aspect of this
is the use of prudent projections of economic growth to generate
budget numbers that Canadians can trust.
The 1994 budget actions, coupled with the moderate
economic growth we are projecting, will reduce the deficit from
$45.7
1842
billion in 1993-94 to $39.7 billion in the coming fiscal year. A
further drop to $32.7 billion is expected in 1995-96. As a
percentage of Canada's economy, the deficit will fall from 6.4
per cent of gross domestic product for this year to 4.2 per cent of
gross domestic product in 1995-96. Looking further ahead, the
budget sets the deficit on a path to meeting the government's
interim deficit target for 1996-97: 3 per cent of GDP or some
$25 billion.
In setting this course of responsible deficit control, the
government has put the emphasis on actions that will support
economic renewal and confidence. Most important, we have
emphasized reductions in government spending. Net
expenditure cuts will total $17 billion over the next three years
and while we have proposed some measures to increase
revenues there are $5 in spending cuts for every $1 in new
revenues.
The 1994 budget sets in motion the most comprehensive
fundamental change in decades. However, change is not always
comfortable. It is not always easy and is tempting to attack. This
change is vitally needed because it focuses on three essential
goals that directly answer the priorities expressed by Canadians
during our first ever series of public budget consultation
conferences.
Canadians said they wanted action to restore our country's
economic vitality and to create the jobs so many people
desperately need. This budget addresses those needs.
We are accelerating regulatory reform and GST reform
because Canadians told us they want government to get off their
backs and relieve them of the dead weight of over-regulation
and red tape. Canadians also told us they want a government
committed to lowering taxes that stand in the way of hiring and
growth. Therefore, we will roll back UI premium rates in 1995
to their 1993 levels. This will save industry almost $300 million
a year. Due to this action there should be some 40,000 more jobs
in the economy than could otherwise be expected if premiums
were allowed to rise.
(1010)
The budget also funds new strategies to promote small
business and technological innovation, key engines of a
successful economy in today's global arena.
We are acting to get the banks working better to provide
finances for small businesses. We are also reforming the way
government approaches science and technology. We are taking
steps to give small business access to technology and to allow it
to afford dedicated engineering support. We will be developing
a strategy for the information highway and we will be issuing a
policy paper on science and technology so that we can work with
Canadians to develop a clear statement of government priorities
in this crucial sector.
During our consultations, Canadians also said they want
reform of our social security system to ensure it is fair,
compassionate and affordable, a reform that delivers incentives
for work and creates jobs and opportunities.
That reform has been launched by the Minister of Human
Resources Development. The budget takes important steps to
begin meeting this challenge. The link between the length of
time a person works and UI benefits is being strengthened.
Assistance is being enhanced for those with dependents. These
and other actions will reduce the costs of the program by $2.4
billion next year. This will allow us to bring UI premiums down.
The consultations also delivered a third blunt message.
People told us to get government finances under control and
make government more effective, cost conscious, and less of a
burden that undercuts job creation and entrepreneurship.
The government understands that these are obligations we
must accept, not options. The budget reduces the deficit with
this in mind. Using prudent economic assumptions, the actions
in the budget set the deficit on a clear path to bring it down to the
target we set out in the red book of 3 per cent of Canada's
economy in three years.
The budget also includes freezing both public service and
parliamentary salaries for a further two years. I must say as a
personal aside that this is the first announcement I have given to
my family, including my wife who is in the hospital and
watching this, that in fact my salary has been frozen for another
two years. I hope she takes it in good spirit.
Defence spending will be cut by nearly $2 billion more. That
is in addition to the $1.7 billion saved by cancelling the EH-101
helicopters over the next three years. Subsidies for businesses
and grants and contributions to interest groups will also be
reduced.
The government will reduce the operating budget of the
government departments by $400 million in the next fiscal year
with savings rising to $620 million annually in 1995-96 and
beyond. Total savings and cuts in government operations will
rise from $468 million in 1994 to $1.6 billion in 1996-1055 97.
[Translation]
Grants and contributions paid by the government, including
international assistance and grants to small businesses, will also
be reduced to achieve $253 million savings during the fiscal
year starting next April. These savings will reach $409 million
the following year.
The government also undertook a vast restructuring of our
social security system in order to improve it and make it better
suited to the needs of the time, while making sure it remains
affordable.
1843
Within this framework, we have major objectives in two
areas: unemployment insurance reform and social security
transfers to the provinces.
[English]
The new rules will strengthen the link between work history
and the ability to collect benefits, and will enhance benefits to
those with lower incomes and those who are supporting
dependents.
Federal transfers to provinces currently total some $40 billion
annually with some $14 billion of that related to social security
programs. The budget calls for a two-year period of
predictability and modest growth in these transfers.
During this period the federal government will co-operate
with the provinces in setting reforms and testing new
approaches with extensive public consultations and input along
the way.
(1015 )
However, the budget makes it clear that social security
transfers will be no higher in 1996-97 after reform than they are
this year. This will save the federal government at least $1.5
billion in 1996-97.
The challenge of the deficit is not only one of spending, it is
also one of revenues. The government knows that Canadians
believe taxes are already too high and we agree with them. Our
priority as a government is to stimulate the economy to create
growth which will help curb the deficit and allow us to reduce
taxes in the years ahead.
The tax and deficit relationship is a two-way street. A higher
deficit will lead to higher taxes, while a lower deficit will lead to
lower taxes. To reduce the deficit now some revenue increases
are necessary. The government has decided that the fairest way
to raise revenue is to broaden the tax base and to bring greater
equity and fairness to the tax system.
The $100,000 lifetime capital gains exemption will no longer
be available for gains realized after budget night. For
individuals, the full value of employer paid life insurance
premiums will be taxable. The income tax credit provided to
persons over the age of 65 will be income tested. I should note
that only one senior in four will be affected by this change.
A number of changes are also being proposed to the corporate
tax system to make it fairer and to better target the tax assistance
made available to certain businesses. They include: a reduction
in the GST tax credit and the business income tax deduction for
meals and entertainment expenses; the elimination of certain tax
preferences aimed at small business that are enjoyed by some
large private corporations; a change in the tax treatment of
certain security transactions by financial institutions; and the
elimination or reduction of certain regionally based investment
tax credits that have not been cost effective in attracting new
investment. The proposed changes will add $575 million to
federal coffers in 1994 and almost $1.4 billion the following
year.
In bringing down this budget the government is pursuing a
balanced approach, weighing a number of concerns and
targeting a number of goals: to create jobs; to stimulate
economic growth; to reduce the deficit; and to encourage the
long-term financial viability of the social programs that define
this country.
There are some voices that might call for a different balance,
some views which are focused on one issue or another instead of
the complete picture. This government asks them to think again.
As the Minister of Finance put it during his address; for those
who would have us spend more, Canadians deserve to know
where the money would come from. And for those who demand
we cut more, Canadians deserve to be told the extent to which
that would hurt growth, hurt jobs, hurt the less fortunate. It is
with this in mind that we have asked the House for authority to
borrow the funds we require in Bill C-14.
I would now like to go into some detail as to the elements of
this bill. Like borrowing bills in recent years, this bill contains
three basic elements: authority to cover financial requirements
for 1994-95; exchange fund account profits; and a contingency
reserve. In total, the government is requesting authority to
borrow $34.3 billion for the 1994-95 fiscal year.
In addition, there is a provision for an additional borrowing
authority of $3 billion to provide for borrowings conducted in
this fiscal year under section 47 of the Financial Administration
Act.
I would now like to touch briefly on the main provisions of
this bill. First, there is the provision for $30.2 billion of
authority to cover our anticipated requirements for borrowing to
meet the net financial requirements set out in the budget.
Second, there is provision in the bill to cover $1.1 billion of
exchange fund account earnings which give rise to additional
Canadian dollar borrowing requirements. This is because these
earnings, although reported as budgetary revenues, are retained
in the exchange fund account. They are not available to finance
ongoing operations of the government.
Third, there is a $3 billion reserve, the same amount requested
in borrowing authority bills in the last six years. This reserve
provides for unforeseen contingencies such as foreign exchange
transactions, seasonal swings in borrowing requirements and
delays in passing the future year Borrowing Authority Act.
(1020 )
There is also a provision to cover the funding of bills issued in
1993-94 under section 47 of the Financial Administration Act,
up to a cap of $3 billion. Without this clause these refundings
1844
would be charged against regular 1994-95 borrowing authority,
even though the money was raised in 1993-94 fiscal year.
Members should note that the provision cannot be used to
generate additional borrowing authority for 1994-95. Next
year's borrowing authority is only increased by the amount of
section 47 borrowings actually transacted in 1993 up to a
maximum of $3 billion.
There are some minor technical provisions in the bill that
more clearly link fiscal year borrowing authority with fiscal
year borrowing requirements. One provision provides that
1994-95 borrowing authority may only be used after the
1994-95 fiscal year begins. Another provision stipulates that
the borrowing authority covers the full fiscal year beginning
April 1, thereby ensuring refunding authority for the securities
maturing in fiscal year 1994-95.
Until this bill is passed we may continue to use any amount of
the non-lapsing reserve provided for in the Borrowing
Authority Act, 1993-94. This bill when passed will cancel all
borrowing authority remaining from fiscal year 1993-94. Also,
it will deduct from the basic amount of borrowing authority
sought any borrowing authority for 1993-94 that is used in
1994-95. This prevents any use of the 1993-94 non-lapsing
reserve effectively adding to borrowing authority in 1994-95.
As background information I would like to review the
government's debt operation in the current fiscal year up to the
end of January. At this point in the domestic debt program about
$25 billion in new net market debt has been issued. Of this total,
$21 billion was in the form of marketable bonds, $5.5 billion in
treasury bills, and $925 million in real return bonds.
The real return bond program was first announced in October
1991 and is a modest and cost effective diversification of a debt
program. The bonds offer investors a real rate plus an inflation
compensation component.
I would like to report to the House on last fall's Canada
savings bond campaign. That campaign with bonds bearing an
interest of 4.25 per cent had total sales of $5.4 billion. After
taking into account the Canada savings bonds that matured or
were redeemed in that period, net purchases of new bonds
amounted to $842 million.
Regarding foreign currency debt, outstanding Canadian bills
increased by U.S. $2.7 billion to $4.7 billion at the end of
January. These are short-term U.S. dollars denomination bills
which are issued from time to time in the U.S. market to fund
Canada's foreign exchange reserves. In addition, a yen 80
billion bond issued in 1986 matured in July 1993.
In January the government launched a U.S. $2 billion
five-year floating rate note. This issue will be used to pay down
outstanding Canada bills thereby diversifying the source of U.S.
dollar funding of Canada's exchange reserve. It will not increase
the level of reserves or Canada's overall indebtedness.
In summary, the bill is straightforward and contains no
unusual provisions. All the information needed to deal with it is
before the House in the budget, the main estimates, and related
documents.
I therefore urge the House to proceed with this legislation as
quickly as possible so that new borrowing authority will be in
place at the beginning of the new fiscal year and the
government's regular borrowing program can proceed as the
fiscal year begins.
Borrowing authority is a normal part of the operations of the
government. I urge all members to support this bill.
[Translation]
Mr. Pierre Brien (Témiscamingue): Mr. Speaker, I suppose
I should welcome this opportunity to speak to the Budget but I
cannot say I approach this task with a lot of enthusiasm, because
there is little to be satisfied with, especially when we have a
situation whereby the end of the next fiscal year, we will have a
deficit of at least $40 billion. I said at least, and I will get back to
this later on.
(1025)
We now have a bill before the House to provide borrowing
authority. I would like to take a few moments to discuss this,
because a substantial part of the debt or the interest on the debt is
paid abroad. That is the most problematic aspect of the debt, and
it is something that is not always clearly understood. Interest
paid to Canadians is fed into the economy, so this is a lesser evil.
Not so in the case of interest paid abroad.
Take, for instance, someone who borrows $1,000. Mr.
Speaker, suppose you were to lend me $1,000. You can see my
credit is good, and I pay back the loan as agreed, so you are
satisfied. If I want to borrow another $1,000 next year, there will
be no problem. However, if you notice I have trouble meeting
my payments so that you are not sure you will be paid back, you
will start having second thoughts about the matter.
If later on, I want to borrow money again, you will say: Fine,
but I want a better return on my investment. Interest increases
according to the risk involved, according to a basic financial
principle.
That is what we are seeing today in the case of Canada, and
that is why although interest rates on short-term loans are low,
rates on long-term loans are not going down.
1845
We must borrow to service the debt. The financial markets
want a certain yield, and that is why our long-term interest rates
are not going down as much as we would wish, which prevents
us from investing in a vigorous economic recovery.
For all these reasons, the government will have to put its
financial house in order, which is not the case in this budget.
This year again, the government failed to act.
I remember how I reacted to last year's budget. It was a
disaster. The government postponed many important decisions
for another year. Under the circumstances, it was decided to let
the future leader of the Progressive Conservative Party and the
government make these decisions. This year, with a new
government, a newly-elected government with wonderful
objectives and nice campaign speeches, we expected a more
vigorous approach. It did not happen, and I will give some more
details later on.
I heard an analyst give a very good explanation of the
situation this week on the Radio-Canada program Le Point. She
said that the government must put its financial house in order as
soon as it comes to power. During its first or second year. The
government failed to do it the first year, and we can only hope it
will not let us down next year. This is a serious matter.
The longer a government is in power, the harder it gets to
make budget cuts. I remember talking to someone who had been
a member of the Quebec cabinet, and he told me: Pierre, when
you are elected, you have about six months to do some real
house cleaning, because after that it becomes extremely
difficult. I found that illuminating.
I hoped that in its first budget, the government would have
done more. Spending cuts are not as significant as they would
have us believe. The famous five-for-one rule, which says for
each dollar of additional revenue, we cut five dollars in
spending, should be changed to read: ``We will cut five dollars
in our spending estimates''. This is not the same, because as we
can see in the budget votes, expenditures are not going down.
We are now at around $122 billion, and it will be like that for the
next three years. Granted, in real terms-these figures are
nominal values-there will be some reduction in real value.
I will also mention a few positive aspects of the budget. I
looked around and found one I want to mention particularly,
which is the decision to introduce a permanent program that will
allow first-time homebuyers to use RRSP funds to purchase a
home. It is a positive measure that was supported by our party
and the Reform Party and by Liberal members as well. In fact
many people wanted to see this become a permanent measure,
and that is now the case. Bravo! That was a good decision.
Another good decision was to roll back unemployment
insurance premium rates to $3, but not until 1995. It is a good
decision for next year.
That was the good news.
I admire my Liberal colleagues who must spend 20 minutes
discussing the positive aspects of the Budget. I admire them
because personally, I could do it for only two or three minutes.
That is quite an achievement, Mr. Speaker.
(1030)
Now, on to the deficit. I looked up a number of figures, not to
give you a personal history, but to give you a history of the state
of our public finances since the year of my birth. In fiscal year
1971, the government recorded a deficit of $379 million.
Let me quickly give you some figures. In 1972, the deficit
stood at $614 million; 1973 was a positive year; in 1974, the
deficit stood at $672 million and this is when things started to
snowball. In 1975, the deficit increased to $1 billion. By 1978, it
had surpassed the $10 billion mark. The situation improved
slightly in 1979 and 1980, when the deficit fell from $16.2
billion to $11.5 billion. One could have thought that we were on
the right track, but no, the deficit continued to spiral upward.
The deficit in 1982 was $14.9 billion. By 1983, it had
increased to $29 billion, with no relief in sight. The situation
improved slightly during the mid 1980s, but the upward spiral
continued in 1992 and 1993. The extremely high deficit, which
stood at $34 billion for the 1992 fiscal year, increased to $40
billion for the 1993 fiscal year. This year, it will stand at $45
billion, while projections for next year put the deficit at $40
billion.
It should be noted that the projected deficit for this year was
not $45 billion, but rather $32 billion. Talk about a forecasting
error! If a person in the private sector were to make this kind of
mistake, he would certainly be out of a job. Of course, you will
say that the government was indeed defeated and turfed out of
office. However, I sincerely hope that my Liberal friends will
deliver on their promises.
I want to talk a little about this year's $45.7 billion deficit.
After the elections, the Minister of Finance lost no time
announcing to us that the deficit would be worse than
anticipated. You may recall that during the election campaign,
our leader, Mr. Bouchard, spoke of a $40 billion deficit for this
year during a very lively debate on the CBC. His comments
created quite a stir during the campaign.
Once in office, the Minister of Finance announced that the
deficit was larger still, around the $46 billion mark, somewhere
between $44 billion and $46 billion. One has to understand that
of these $46 billion, close to $4 billion are non-recurring
expenditures, that is expenditures which the government will
not have to incur next year. Therefore, we are really talking
about a deficit of $41.7 billion or $42 billion.
1846
In addition, I have not taken into account the fact that the
government will be making more prepayments this year, which
will allow it to post more expenditures to this year's budget.
Since they are blaming the deficit on the Conservative
government, they might as well make it as large as possible,
while they are at it. Then they can say next year: ``See, we
reduced the deficit from $45 or $46 billion to $39 billion''.
Reality and the facts prove that this is not quite the case. This
budget takes the deficit, which is hovering at about $42 billion
tops, and reduces it to a projected $40 billion. And what are the
real facts? Well, it is highly likely that the real deficit will not be
much lower than last year. Given that the economy is expected to
grow this year, this is cause for some concern.
When I look 10, 15 or 20 years down the road, I try to imagine
what the country's financial state will be and the outlook looks
very gloomy. How much interest will we be paying on the debt?
Will 50 cents of every tax dollar be going to pay the interest on
the debt?
It should come as no surprise to you that young people are
very cynical about the political process and about the future.
How can they be confident? Their future is being mortgaged big
time! They wonder how we are going to get out of this mess and
puts things right. It should come as no surprise to you either that
a growing number of Quebecers have expressed doubts about the
federal system which has created this unresolvable debt crisis.
This year, in its budget, the government has shied away from
making the hard choices, preferring to postpone matters for
another year. It amazes me that budgets always seem to paint a
rosier picture of the future.
(1035)
With the Tories, forecasts were always for five years and
invariably, the graphs showed the deficit miraculously
dropping, by the fourth or fifth year, to very reasonable levels. I
do not know how they managed to do that, but they did.
Now, the Liberals and their Minister of Finance are telling us
that, for the sake of transparency, forecasts will be on a
three-year basis. But again, things start to look up only in the
second or the third year, never the first one.
This budget should be telling us what is going to happen
during the first year. We will see. So much is unpredictable or
very hard to predict. How can the Minister of Finance make
reliable forecasts over three years when major consultations are
ongoing in areas such as human resources and the GST for
instance? If financial guidelines are not in place, how can he
predict with any accuracy what is going to happen in terms of the
economy? One can wonder.
Somehow I get the uneasy feeling that this alternative to or
improvement on the GST could be used to generate additional
revenues to even things up. As for consultations on human
resources, financial criteria seem to have been clearly
established already. What is the use of consulting then, if the
goals of the reform have already been set? Take unemployment
insurance for example. This budget provides criteria and
guidelines in that area. Is all the work done by this committee,
all its distinguished members and all the people who will be
consulted be for nothing? I am afraid that they might work hard
for nothing, that decisions have been made already.
About this year's deficit, I would like to add this: it is a
record. Never in the history of this country has a higher deficit
been forecasted, never. The past cannot vouch for the future and
I certainly hope that it will be the case here because it would be
catastrophic.
In the past, the Department of Finance has had some difficulty
forecasting economic performance, and that is putting it mildly.
Now, the Minister of Finance is telling us: ``We are going to use
much more realistic forecasts for a change''. Let me say a few
words on these forecasts.
In his financial forecast, he has announced more realistic
growth rates and interest rates. One area where his forecast is
questionable however is inflation. In that regard, he has failed to
listen to all the economists who have provided him with
forecasts. They were all around 2 per cent, but the Minister of
Finance chose to use a rate of 0.8 because that was just what he
needed. A 2 per cent rate is much more realistic, especially if
slight economic growth is expected. Whether we like it or not,
growth always causes some inflationary pressure, and 2 per cent
inflation is not too terrible. But no, he chose to use 0.8 per cent.
That particular figure is questionable.
But there is one which is even more questionable. You know,
when you make forecasts, you use a long mathematical
equation, one perhaps as complex as for equalization. You put
numbers in, then say: ``Let us change the figures to get more
realistic results''. But there is a major mistake, a major flaw in
this equation. The government expects a 1 per cent growth in the
economy or economic activity to generate a 1.2 per cent increase
in public revenue during the first year. I find that hard to believe.
In the seventies, at a time when revenue did grow slightly, a 1
per cent growth in the economy could make public revenue
increase by as much as 1.5 per cent. Things changed drastically
in the eighties. Now, when the economy grows by 1 per cent,
public revenue increases by a mere 0.5 per cent. Last year, it
actually decreased. Why would there be an increase this year, as
the minister is announcing? I am having a very hard time
figuring how and why the Minister of Finance, who is so
concerned with transparency, can keep such a parameter in his
mathematical model.
He may have changed some figures, the figures for growth
rates and interest rates and used more realistic figures in the
model, but he did not change the basic figure.
1847
(1040)
That is why I can tell you right away that, if the Minister of
Finance does not review this question, he will never achieve his
objective of bringing the deficit down to 3 per cent of GDP
within three years, because he overestimates revenue growth.
We can see it in his approach, in the fact that there will be no
major deficit reduction this year; he is banking on economic
growth to do his job for him but it will not happen.
A very simple explanation is to look at the size of the
underground economy. We do not need to go very far. We only
have to walk around in our ridings and look around us to realize
the extent of people's involvement in the underground economy
and how much this economy represents. According to the most
conservative estimates, it is at least 8 to 10 per cent. But it is
probably a lot closer to 15 to 20 per cent. If we put it at between 8
and 20 per cent, Mr. Speaker, it is already enormous. The
government loses billions of dollars to the underground
economy every year.
The minister includes these billions of dollars in his revenue
growth forecasts as though this phenomenon did not exist. The
underground economy is very difficult to estimate and very
complex. One must work with aggregates such as the money
supply and that is very difficult.
It seems that the Department of Finance has done a study on
the underground economy but it refuses to publish it. Why?
Because it might have to include it in its forecasts, which would
make this exercise much more difficult.
I heard the Minister of Finance say that if things did not go the
way he wanted, he would make every effort next year to bring
the deficit down to the level he wants. I told the people around
me to get ready for a budget statement sometime this year,
because the minister will have to take this phenomenon into
account and he will then have to redo his calculations and make
new choices.
The minister does not talk about it much but he did something
that was rather wise. He kept much bigger reserves than his
predecessors, about $2.5 billion, and that was wise. Last year,
his predecessor kept reserves of only $300 million and he would
have needed much more. The Minister of Finance is to be
congratulated on that score, but even this reserve will not be
enough to offset losses due to the underground economy, that he
continues to include in his revenue growth forecasts.
When they say they will cut spending, they go all out, Mr.
Speaker. They were saying two for one at the beginning. The
Minister of Finance told us before the holidays that, for every
additional tax dollar collected, he would cut $2. He was told that
it was not enough, that it would not make a big enough impact in
the budget. Now he says that, for every additional tax dollar,
they will cut $5. How come next year's expenditures will be
slighter higher at around $122 billion, when at least hundreds of
millions of dollars in extra taxes will be collected?
I cannot figure out how they arrived at that figure. We should
have been closer to $118 billion or $119 billion in expenditures.
They did not make real cuts; they simply lowered the forecasts
made by their predecessors. That is a rather complex but
fascinating exercise. If we compare budgetary votes, which are
the most significant measurement, with operating expenditures
in nominal terms-even including inflation, which is hard to
take out-, we can see that there are no major cuts.
I was reading an article by Claude Picher of La Presse, who
wrote on budget day, ``Tonight, when Mr. Martin will tell you
that it is impossible to put government finances on a healthier
footing without increasing taxes, you can quote some
government expenditures,'' and he gave the following
examples: National Capital Commission, $90 million; Canadian
Intergovernmental Conference Secretariat, $7 million; Human
Rights Commission, $18 million; Offices of the Information and
Privacy Commissioners of Canada, $6 million; International
Development Research Centre, $117 million, and so on. There is
a whole bunch of them.
This government never agreed with our proposal to
systematically review all government spending, let alone the
whole tax system.
(1045)
I feel like saying this to the Minister of Finance: It is funny, in
the budget he said that he would refer the issue of family trusts
to the Standing Committee on Finance, which is already
overloaded, for consideration, at the suggestion of my
colleague, the Official Opposition's finance critic. How come
that is the only one of my colleague's suggestions that he took,
and that he is trying to embarrass him by saying that it is his own
suggestion?
My colleague suggested much more; he suggested setting up a
committee to examine all public spending, item by item, and to
deal quickly with the matter of family trusts. He said so many
times. But no, instead they choose one small element, family
trusts, to refer to a committee for study. That is not what we
wanted; we wanted to look into the whole tax system, the
government's tax expenditures and its uncollected tax revenue.
The minister had fun telling us that there was already a
minimum corporate tax. I am eager to talk to him about it again
so that he can explain to me how it works. I am not sure that his
officials agree with him that it really exists, far from it. And then
he listened to a suggestion from a fellow member. My colleague
made several suggestions to him, and all have fallen into
oblivion. He is trying to distort what he said by telling us that it
is what the opposition wanted. We wanted much more than that,
we wanted a lower deficit.
1848
We wanted and expected-and that is my next point-the
government to do much more for the economic recovery-much
more. We expected more from a Liberal government which
talked constantly about jobs, jobs, jobs during the election
campaign. The Prime Minister repeated that everywhere he
went.
Let us look at the predicted unemployment rate. Even with the
infrastructure program next year, it will go down only 0.1 per
cent. How come? This infrastructure program will generate
many temporary jobs, Mr. Speaker. We must not think that the
municipalities will be able to continue doing the work at the
same rate forever after. And there is a maintenance cost
associated with it. But it will not be enough. Those people will
not stay on the labour market. We must take additional action so
that after a year or two or three, we have a sounder economic
support structure.
It is true that the government alone cannot create
employment, but it must still at least create a more favorable
climate and send a signal. Cutting its spending further would
have been a clear signal and made people say, ``The government
is doing its part, so we can give it a little more credibility. We
will do more too''. But that is not the case, it is the status quo.
They talked to us a lot about small and medium-sized
businesses and the Bank Act during the election campaign, and
where is it in the Budget? A series of words: the government will
consider, a parliamentary committee will review, the banks are
considering, means will be developed, etc., etc. We will study,
analyze, recommend, we will see, we will analyze and probably
nothing will be done. Nothing will be done.
How is it that for unemployment insurance, they were able to
put a reform on the table quickly and in other fields, they will
have to analyze and consider? Clearly, the main point in the
finance minister's budget is to get money from people on UI. It
is very clear; that is the main point in his budget. He was not able
to examine other spending more thoroughly, for lack of time and
imagination. That is why many people have trouble
distinguishing this government from its predecessor when it
comes to their budgets. Except for the colour of the documents
and of the book behind it, not much is different. It is very
disappointing.
I will come back to another cut that could almost be called
savage which they made. I will quote a sentence from the red
book: ``We will reduce public spending by abolishing
unnecessary programs, tightening procedures and eliminating
duplication, all in co-operation with the provincial
governments''. ``Co-operation with the provincial
governments'': that is something we can read in many places in
the speech from the throne and the budget and the red book and
many other statements.
Where is the elimination of administrative overlap in this
budget? We could even include inter-departmental overlap
within the same level of government.
(1050)
When I say overlapping, I am referring to two different types:
interdepartmental and intergovernmental. Nothing was done
about this. Studies presented to the Bélanger-Campeau
Commission in Quebec estimated that these overlappings cost
$2 to $3 billion annually. Over a ten-year period, they amount to
somewhere between $20 and $30 billion. Yet nothing was done.
The government cuts $400 million in the operating expenditures
of the federal administration. This is a very minor cut. It is like
doing surgery for terminal cancer. This is very disappointing.
Yet, this is what the red book said. Indeed, there is no mention
of a timetable. But I doubt very much that the government will
succeed. It should send a signal. Let us not forget that this
government will probably soon have to deal with a referendum
in Quebec. It will have to show that they can reduce this
overlapping. They have not even started doing so. How very
disappointing!
As regards jobs, aside from the infrastructure program, the
other major initiative announced to promote job creation is
simply unbelievable and beyond logic. Indeed, the government
says that the $3.07 rate for UI premiums is bad for the economy
and will therefore lower that rate to $3.00 at the beginning of
1995. But let us not forget one thing: who set the rate at $3.07 in
the first place? The same government, last December, when it
decided to take out $800 million to finance its infrastructure
program. Now it is telling us that this rate is bad. The
government is telling us that it will lower that rate and create
40,000 jobs in the process. But using the same logic, it means
that 40,000 jobs were lost this year because of the government's
initial decision. The infrastructure program may create 60,000
to 65,000 jobs, but there will only be a net gain of 20,000 to
25,000 jobs, and not 100,000 as seems to be implied in various
government documents.
There is inflation. You do not hear much about it regarding the
economy, but there is a lot of verbal inflation when it comes to
quoting figures and numbers. So, this is the other major
government initiative: next year it will correct this year's
mistake. But the government will not admit its mistake. Rather,
it says that the rate was bad for the economy, without ever taking
the blame or even apologizing to Quebecers and Canadians by
saying: Look, we made a major error in judgment when we
decided to set that rate.
In terms of helping small and medium-size businesses and
promoting research and development, Quebec is not getting its
fair share, while in Canada as a whole, we do much less than our
major competitors to promote R and D. I thought the
government would send a clear message that, from now on, this
would be one of its priorities; that it would start investing a lot
this year in these programs and that it would do even more in the
future. But this sector is not even defined as a priority. If it is not
considered as such in theory, how can it possibly be perceived
as a priority in reality? I heard someone say in this House that
people should phone their bank managers and ask them to be
1849
more co-operative with small and medium-size businesses. I
am not sure that this approach will bring about very good
results.
The government had said that it would amend the Bank Act to
help those who have funds invested in small and medium-size
businesses. But it did not do it. Instead, the joint committee on
industry and finance will examine the issue. I do not feel lost
here because I was studying before coming here and I feel I am
still at school because we are always told that this or that issue
will be looked at. In school, I sometimes felt that the work was
useful, but I am not always convinced it is the case here. I feel
that decisions are made before studies or reviews are
undertaken.
I want to point out another important issue. In their red book,
the Liberals talked about tax fairness. In their budget, they say
that all classes will be affected: the rich, the poor as well as the
middle class. Everyone will have to make sacrifices. But it
would be an understatement to say that I am outraged by the
measure affecting senior people. I find it very hard to accept that
a senior is considered a rich person if his or her annual income is
$26,000 or more.
(1055)
Between $26,000 and $49,000, they gradually lose their age
credit. These people are being told to contribute $490 million
over the next three years, while during that time, according to a
conservative estimate, we could get at least $350 million
annually by taxing family trusts. That is one billion over three
years, and twice the amount we will get from senior citizens.
As you know, and as you will see in the weeks to come, they
are very sensitive about this. Senior citizens who depend on
their pension cheque for their income have so little that they
want to keep the age credit. They spent all their lives working
hard, and now they are under the gun. Did this generation of
senior citizens put us in the financial situation we are in now? I
doubt it. Pitting one generation against the other is certainly not
my intention, but the odds are it was probably the generation
between theirs and mine that put us in the financial mess we are
in today.
However, the generation that holds the reins of power, the
so-called baby boomers, has decided to cut spending on senior
citizens. I can only hope they will be just as eager to take these
cuts when it is their turn. Quite frankly, I do not like this.
This reminds me of another measure in the budget, which is
about abolishing the capital gains exemption on the first
$100,000. Many Canadians have taken advantage of this
exemption. At one time it was $500,000. Today, people in my
generation are being given a signal that they will not have this
tax incentive to become part of the upper middle-class or the
wealthy class.
We are prepared to do our fair share to pay off the debt, in
addition to whatever we will be asked to do in the future.
However, it is just not true that today's wealthy Canadians are
being affected by this measure. Many Canadians have already
used the exemption, and in fact, capital gains that have accrued
since 1985-86, for instance, will not be taxed. So this measure
applies starting today or rather the day before yesterday. It will
not produce a lot of revenue, and certainly not as much as the
Minister of Finance indicated in his forecast, and we are going
to monitor that very closely.
People already expected this to be retroactive and were doing
their transactions before the budget, because of all the advanced
publicity. These types of mesures do not always identify the
groups that are affected. About the fiscal fairness that will be
needed to fight the underground economy, I think there is a false
perception among members opposite that we can deal with the
underground economy by modifying the GST. They keep
harping on the GST, but the GST was merely the last straw and
not what created the underground economy in the first place.
There is a whole set of measures that make people feel they are
not getting their money's worth, and that is what drives people
into the underground economy. They have the impression they
are getting a fair deal this way.
The government keeps saying it will change the GST, and this
may make matters even worse, depending on how they do it. We
will watch this very closely, but they will have to take a much
broader approach to this problem, an approach on tax reform
that will cover the range of measures that provide the
government with tax revenue.
There is nothing in this budget to restore fiscal fairness. The
government will not meet the objective of the Minister of
Finance to bring the deficit down to 3 per cent of GDP, because it
is not sending a clear signal that the issue is fiscal fairness. I find
that very disappointing.
In concluding, I want to evaluate the three objectives
mentioned in the budget of the Minister of Finance. First: to
build a framework for economic renewal to help business
succeed and to turn innovation into a more effective engine of
Canadian economic growth. That sounds wonderful, but I could
find no indication of this in the budget. In the budget the
government says it will evaluate, analyse, recommend, study,
and so forth. That is it, Mr. Speaker. I am still looking. We may
find it in future budgets. So that was the first objective in this
year's budget.
The second objective. To put in place a responsible social
security system that is fair, affordable and dapted to the needs of
Canadians. I thought this was more or less the mandate of the
Human Resources Committee, but we can see that the budget
1850
defines the financial parameters. It says we must meet these
objectives while working within current financial constraints.
Here again we can wonder to what extent the objectives will be
reached, given the cuts in unemployment insurance.
(1100)
The third point, and this is a major one, is: improve public
finances to allow the government to concentrate all its energies
on helping Canadians adapt to a demanding and changing world.
If improving public finances means ending the next fiscal year
with a deficit of more than $40 billion, this is a failure. This
point by itself deserves a zero mark.
To conclude, the government is boasting that it is bringing to
life the commitments of the red book. it says that this budget is
the red book. Now, people say that there is nothing in this
budget, and that makes us realize that the content of the red book
was in effect zilch, nothing and no hope.
I thank you for your patience, Mr. Speaker, and I will
conclude by saying that I am deeply disappointed by this budget.
The Speaker: It being 11 o'clock a.m., pursuant to Standing
Order 30(5), the House will now proceed to statements by
members, pursuant to Standing Order 31. The Chair recognizes
the hon. member for St. Catharines.
_____________________________________________
1850
STATEMENTS BY MEMBERS
[
English]
Mr. Walt Lastewka (St. Catharines): Mr. Speaker, I rise in
the House today to congratulate Brock University on its 30th
anniversary. The university is central to the Niagara Peninsula
and is an excellent centre of higher learning.
The theme for Brock University's 30th anniversary is: ``Big
enough to matter and small enough to care''. The university
certainly lives up to this theme. The business, the arts and
teacher education programs have excellent national reputations.
The new school of entrepreneurship is a unique, progressive,
small business initiative. The university remains small enough
to provide personal time and attention to students throughout
their important education years.
I welcome all members of the House and all Canadians to visit
Brock University for its open house on Sunday, March 6. Special
mini workshops, demonstrations and other events will take
place at the university that day.
Again I congratulate Brock University on its 30th
anniversary.
[Translation]
Mr. Philippe Paré (Louis-Hébert): Mr. Speaker, yesterday
the Prime Minister informed this House that the matter of the
closure of the Collège militaire royal de Saint-Jean was not
raised in the Liberal caucus. This college is the only
francophone military college in North America. If in fact the
matter was not raised in caucus, then I condemn all Liberal
members from Quebec for not defending the interests of the
province and for not defending the French fact in the armed
forces.
The closure of the only French-language military college in
Canada will mark the end of a 50-year-long struggle for
francophone equality in the Canadian armed forces.
* * *
[
English]
Mr. Jake E. Hoeppner (Lisgar-Marquette): Mr. Speaker, I
rise in the House today to share the concerns of my constituent,
Betty Maxwell, of Neepawa, Manitoba, who comments: ``The
government has given us a middle of the road budget and with
the economic traffic we have that is a very dangerous place to
be. We have a budget that is long on rhetoric and short on
substance''.
Instead of attacking government spending with serious cuts it
is actually increasing spending. If this increased spending only
brings unemployment down one-tenth of 1 per cent in the first
year, it confirms that previous governments by overspending
$500 billion have put us at this rate of unemployment.
This budget is very reminiscent of those of previous
governments with rosy predictions and miscalculations that
Canadians have never been able to rely on. With optimistic
forecasts for growth and lack of deficit reduction, it is back to
the old philosophy of counting the chicks before they are
hatched.
* * *
Ms. Shaughnessy Cohen (Windsor-St. Clair): Mr.
Speaker, I take this opportunity to draw the attention of the
House to the outstanding achievements of a constituent of the
riding of Windsor-St. Clair.
Chris Lori is captain of both the two and four man Canadian
bobsled teams and is representing Canada this weekend in
Lillehammer in the four-man bobsled events. Chris has been a
member of the national team since 1985 and was overall World
Cup four-man champion in 1990. In the 1992 games in
Albertville, France, he came within .04 seconds of a bronze
medal in the four-man event.
1851
(1105)
The dedication of both Chris and his team mates, Sheridon
Batiste, Chris Farstad, and rookie Glenroy Gilbert, will stand
them in good stead this weekend as they face off against the best
in the world.
On behalf of the people of Windsor-St. Clair I wish Chris,
his team and all Canadian Olympians who will be competing in
the final two days of the Olympics the best of luck. I
congratulate them in advance for their outstanding
achievements.
* * *
Mr. Murray Calder
(Wellington-Grey-Dufferin-Simcoe): Mr. Speaker, the
Canadian National Railway has applied for abandonment of a
rail line in my riding known as the Meaford subdivision, 33
miles of track between Collingwood and Barrie.
There are two private companies willing to purchase the line
but will not because of an Ontario NDP labour law known as bill
40. The future of this rail line and the jobs that depend on it are
being jeopardized by this regressive Ontario labour law.
When the tracks are torn up they are rarely put back down, and
some more of Canada's heritage dies.
* * *
Mr. Glen McKinnon (Brandon-Souris): Mr. Speaker, on
January 22 I was arrested and released on bail by the Brandon
Crime Stoppers Association. My charge was allegedly making
the Progressive Conservative Party of Canada look like a
luxurious outhouse known as a two-seater.
I am currently released, providing sufficient bail is raised.
Money is raised by such fund raising events to rally the public,
the police and the media in a collective campaign against crime.
Anonymous tips lead to arrests of suspects and these cash
payouts for valuable information are funded by volunteer
contributions and fund raisers.
Crime Stoppers is an extremely cost effective organization.
Since 1985 in Manitoba over $1 million in contraband has been
recovered and $3.5 million in personal property.
I commend the volunteers associated with Crime Stoppers
and encourage all members of the House to support, promote
and contribute to their local Crime Stoppers program.
[Translation]
Mrs. Madeleine Dalphond-Guiral (Laval-Centre): Mr.
Speaker, in addition to making disparaging remarks about the
small region of Lac-Saint-Jean, the Prime Minister reminded us
yesterday of how his education tour of Canada made him
discover what Canada was really about.
What country is he talking about? Does the Prime Minister
not realize that francophone communities outside Quebec are
facing assimilation? These communities still have to fight to
preserve their language and culture while often not even having
access to post-secondary education in French.
The people of Quebec have no problem with going outside the
province when they want to learn to speak English, but they
know full well that true French education is only possible in a
francophone environment.
What the Prime Minister is proposing for the students of the
Collège militaire royal de Saint-Jean is a sprinkling of classes
in French in a completely anglophone environment. That is the
picture of Canada the Prime Minister is painting for
francophones.
* * *
[
English]
Mr. Chuck Strahl (Fraser Valley East): Mr. Speaker, the
Reform Party has come under criticism for presenting petitions
on behalf of constituents calling upon Parliament to hold a
referendum on bilingualism.
I inform the House that a total of six Liberal members have
also presented these petitions. They are the members for
Dauphin-Swan River, Simcoe North, Winnipeg St. James,
Leeds-Grenville, St. Catharines, and Moncton from whom two
petitions were received.
I remind the House whether or not members agree with the
petitions' subject matter, members of all parties are duty bound
to present the petitions of their constituents. To use the tabling
of these petitions to suggest that Reform is in any way
anti-Quebec or anti-French is entirely incorrect. The practice
leads to needless antagonism and public misunderstanding.
It is an unfortunate demonstration of traditional politics, the
kind of politics that divides the House and the nation, the kind of
politics that the Reform Party wants to change.
* * *
Hon. Warren Allmand (Notre-Dame-de-Grâce): Mr.
Speaker, last week the Minister of Justice gave us excellent
1852
briefings on the new gun control administration and in
particular on the requirements for the safe storage of weapons
and ammunition.
We were told that it is just as important to secure the storage
of ammunition as it is to secure firearms. On the other hand, we
also learned that approximately 3,000 firearms were stolen or
lost in the last reported year.
(1110)
In these circumstances I urge the minister to amend the law to
require a firearms acquisition certificate for the purchase of
ammunition. This would make it more difficult for those with
stolen or illegally acquired weapons to use those weapons.
Experience shows us that the more we restrict the availability
of guns and ammunition, the fewer crimes are committed with
guns and ammunition.
Right now it is easier to buy a box of bullets than it is to buy a
case of beer.
* * *
Mr. Harold Culbert (Carleton-Charlotte): Mr. Speaker,
the House is a place for discussion and debate of issues affecting
all Canadians.
The government has agreed to allow a debate on euthanasia.
Although there are various opposing views, I believe it is
important for all members of the House to respect the current
legislation governing euthanasia.
The House must set the standard of respect for law and order
for our youth and for all citizens of our beloved Canada. I ask all
members of the House to remember and to honour the current
legislation respecting this issue.
* * *
[
Translation]
Mr. Patrick Gagnon
(Bonaventure-Îles-de-la-Madeleine): Mr. Speaker, I found
out that our Minister of Foreign Affairs is going to Washington
to meet with his counterpart in the Clinton administration and
that the Leader of the Opposition is also travelling to that city. I
realized why when I read an article in the November 29, 1993
issue of
Maclean's magazine. The Leader of the Opposition is
quoted in this article as saying:
[English]
``I think Americans are very independent''. He goes on to say:
In economic terms, Americans believe in individualism, every man for
himself. What I love about Americans is their sense of liberty.
When the Leader of the Opposition is in Washington will he
be talking about sovereignty or the annexation of Quebec into
the United States?
* * *
[
Translation]
Mrs. Maud Debien (Laval East): Mr. Speaker, it is now the
Prime Minister's turn to take credit for Myriam Bédard's wins,
and in a political debate no less. He says that the Canadian
Forces made a positive contribution. Mr. Speaker, some
contribution!
The large number of Canadian military personnel in Biathlon
Canada were ready to do anything to control her, even if it meant
destroying her, according to a journalist from the Gazette daily
newspaper. These are the same people who draft her contracts in
English only. That is the Prime Minister's brand of
bilingualism!
These are the same people who put roadblocks in the path of
this athlete from Quebec and damaged her skis in Albertville.
Does the Prime Minister know about this?
Does the Prime Minister want other examples of this positive
contribution? Why does he not consult with his minister before
saying such things?
* * *
[
English]
Mr. Randy White (Fraser Valley West): Mr. Speaker, a
terrible injustice in my riding of Fraser Valley West has been
brought to my attention by one of my constituents, Sandra
Wingrove. Ms. Wingrove is publicizing her name so that others
might avoid the pain she and her eight-year old daughter
recently suffered.
A young offender who lives in the same federally subsidized
housing complex has sexually assaulted Ms. Wingrove's
daughter. This child molester has been convicted twice of sexual
offences and yet is still allowed to live in the complex with his
mother. One must have children to qualify to live in the complex
and now it seems one must be willing to expose them to this
continuing danger.
Convicted child molesters must not be allowed to access our
children. Again we see another case in which the criminal
justice system has let us down. Yet the government does
nothing.
* * *
Mr. Andy Mitchell (Parry Sound-Muskoka): Mr. Speaker,
I rise in the House today on behalf of the constituents of Parry
Sound-Muskoka to offer best wishes to 21-year old Sandra
Lynes of Utterson.
1853
Sandra, the daughter of Pat and Kelly Lynes, was one of two
Ontario athletes chosen to represent Canada in alpine skiing at
the Paralympics in Lillehammer, Norway, March 10 to March
19.
The 18-member Canadian team has been training hard in
Alberta and British Columbia while preparing for the
Lillehammer event. Sandra will be competing in the downhill,
super giant slalom, giant slalom and slalom.
If Sandra's two silver medals at the 1992 Paralympics in
Albertville, France are any indication, her international
competitors are in serious trouble. Congratulations and best
wishes, Sandra. We are proud of you.
* * *
(1115)
Mr. Paul Szabo (Mississauga South): Mr. Speaker, the
economic reality in Canada today is such that in many cases both
spouses of a family must work.
However, when a spouse decides to enter the workforce where
day care service is necessary, the net earnings of that spouse are
materially depleted due to the cost of day care. In fact, the net
income generated is often not reflective of the value of the work
done. As such, many working spouses would not require much
incentive to leave their jobs to work in the home.
Today we need to address the acute shortage of affordable day
care. We need to make it easier for a parent to personally care for
young children. We need to create job opportunities. We need to
provide opportunities for all Canadians to accumulate
retirement income. We need to promote economic independence
for all and we need to recognize the economic value of a spouse
working in a home.
Accordingly, I will be introducing a private member's bill
which will permit a working spouse to pay a salary to the other
spouse for managing the family home and caring for dependent
children. This would allow that spouse to pay into CPP and buy
RRSPs. We need to recognize the value of the woman in the
home.
* * *
Mrs. Elsie Wayne (Saint John): Mr. Speaker, where in the
government's budget is there any hope for the people of Atlantic
Canada, especially the unemployed? Where in the red book does
it say seniors will have to pay more taxes?
The Liberals promised jobs, jobs, jobs. They promised to
consult the communities that were possible targets for defence
cuts. They promised to replace base jobs. What happened to the
promises? They were not kept in my part of the country.
The Prime Minister is taking a tour of Atlantic Canada but he
is leaving out New Brunswick. Is that because he is afraid to
come to New Brunswick, Paul? I have to say to you, Paul, these
were not the promises that you made to the people of New
Brunswick.
This budget hurts those who can least afford it. The Minister
of Finance got a new pair of boots I understand from the Prime
Minister. I am awfully sorry that he has used them to kick the
people of New Brunswick.
The Speaker: I know that the hon. member sort of slipped in
the first name of one of our members here and of course I know
that will not be done too often.
_____________________________________________
ORAL QUESTIONS
[
Translation]
Mr. Michel Gauthier (Roberval): Mr. Speaker, ``the cream
of the crop of francophone officers in the armed forces will be
assimilated if young francophones opt for RMC in Kingston''.
These words were spoken, not by a nasty Quebec separatist, but
by Mr. Terry Liston, the former Commander of CFB Valcartier
and the current Vice-President of MIL Davie.
How can the Minister of National Defence, who says he is sick
of Quebecers, claim to be the great defender of the French fact
within the Canadian armed forces when according to those in the
know, those who have been there, his plan to shut down the
Collège militaire de Saint-Jean will unquestionably lead to the
outright assimilation of francophones?
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, in the
interview I gave to a Canadian Press reporter two days ago, I did
not say that I was sick of Quebecers. What I said was that I was
sick and tired of Quebecers like the Bloc Quebecois members
sowing the seeds of dissension among Canadians during
question period here in the House of Commons.
Mr. Speaker, in light of the cuts to our defence budget, we can
either choose to keep all three colleges, even though we do not
need this many institutions to train officers, or we can choose to
centralize operations in one institution and Kingston's Royal
Military College has the best facilities for this purpose.
[English]
I have been watching with some great alarm the remarks of
people in Quebec, prodded by the members on the other side on
this particular issue. They are not doing the people of Quebec
and Canadians a great service by inflaming what is becoming an
argument that is emotional and is not based in reality.
1854
(1120)
French is now taught at Kingston. Forty per cent of the
students at Saint-Jean are in engineering. They have to finish
their education in English and French at Kingston because it is
too expensive to have two or three courses in engineering.
We already have in reality a bilingual college at Kingston.
The facilities are much better. If the facilities had been better at
CMR de Saint-Jean, we would have centralized everything
there.
[Translation]
Mr. Michel Gauthier (Roberval): Mr. Speaker, I would like
to inform the minister that if he is sick and tired now of Bloc
Quebecois members, he is in for a rough ride. We have four
years ahead of us to put questions to him and we will continue to
do so until we get some answers from him. I am sorry, but we do
not intend to stop.
How can the minister seriously think that we will believe him
when he says the French fact will be protected in Kingston, when
according to Mr. Liston, who has firsthand knowledge of these
matters, people have been saying for ten, maybe even twenty
years now, that RMC in Kingston will become a bilingual
institution. This is impossible, given that Kingston is located in
the heart of traditional loyalist country. Does the minister really
expect us to believe him?
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, the
hon. member is discounting the changes that have taken place in
Canada outside Quebec since the passage of the Official
Languages Act twenty-five years ago.
[English]
There has been a great change in the rest of the country as a
result of the passage of the Official Languages Act put forward
by a Liberal government 25 years ago.
When the hon. gentleman starts inciting those comments and
starts talking about Kingston, I would ask when the last time was
that he went to Kingston, Ontario. Kingston, Ontario is a very
sophisticated urban centre that is very sensitive to the duality of
languages in this country.
I would invite him to go to RMC and see the French language
instructors, see the French language students and ask them if
they feel that Kingston, Ontario is inappropriate.
[Translation]
Mr. Michel Gauthier (Roberval): Mr. Speaker, once again I
feel I must reassure the minister. I did visit Kingston, Ontario,
and the military college as well only three months ago.
How can the minister justify his own statements and those of
the Prime Minister to the effect that the problem of the
integration of francophones in the Canadian forces has now been
resolved and everything is fine, when someone like Mr. Liston,
who is in the know and has experienced the situation firsthand,
states the following, in referring to former staff college
colleagues: ``In the armed forces, they prefer francophones
whose allegiance lies elsewhere than with Quebec''.
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, the
hon. member is quoting one former officer. Perhaps after this
one-week recess, I will have found 20 or 30 former officers who
disagree with the comments of the officer who was quoted
yesterday and again today.
[English]
In other words, this is a typical case. I am not sick of the Bloc
as individuals. Many of them are very nice. I am sick of their
arguments. We have been listening for 25 years to these kinds of
arguments. They can be selective. They can find one person to
criticize this. I will find 30 who support us.
[Translation]
Mr. Gilles Duceppe (Laurier-Sainte-Marie): Mr.
Speaker, my question is for the Minister of National Defence. I
will not quote an individual but an internal report of his
department, National Defence.
This report of which we obtained a copy and which was
quoted in Le Devoir this morning shows us that merging the
military colleges into a single institution will attract fewer
students from the nine provinces and the territories, reduce the
intake of francophone officers and reduce the level of
bilingualism in the officer corps.
How can the minister seriously believe that he can protect the
French fact in the armed forces when a study by his own
department shows the exact opposite?
(1125)
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, first,
this is a report of the former minister, Marcel Masse.
Some hon. members: Oh, oh!
Mr. Collenette: This is not a report of the Department of
National Defence; it is a political report directed by the former
minister.
Mr. Speaker, the hon. member forgot to quote one thing.
[English]
He forgot to quote, again selective quotes, from the report. I
will quote the first section dealing with the question of one of
three colleges. The committee states that it believes that the one
college system is the most likely alternative to the three college
system. Does the member know why? It is because it is the
1855
cheapest, the most effective and because of the facilities we
have at Kingston. He conveniently forgot that.
[Translation]
Mr. Gilles Duceppe (Laurier-Sainte-Marie): Mr.
Speaker, I would ask the Minister of National Defence how he
can explain that between 1990 and 1994, the percentage of
bilingual francophone officers rose from 60 to 67 per
cent-these are not separatists' figures, figures are the same in
French as in English-while among anglophones during the
same period, the proportion of bilingual officers declined from
18 to 17 per cent.
Does the minister still agree with the Prime Minister, who
said yesterday that the situation had changed a lot in recent
years, while studies from his own department show the exact
opposite once again?
[English]
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, there
has been some discrepancy in the last few years because of the
massive downsizing of the military put in place by the former
government. It took $14 billion out of the budget from 1989
right through to 1997. We have added an additional $7 billion
worth of cuts. Obviously there will be variations of the nature
that the hon. member mentioned.
I want to tell the member that by 1997 anybody aspiring to the
lieutenant-colonel rank of the military will have to be bilingual.
That means we are putting on notice anglophones who want to be
generals or chiefs of staff that they have to be totally and
absolutely bilingual.
We have been improving the situation in the last few years.
The college was opened in 1952 for the simple reason that, yes,
there was a disparity in terms of the language preference of
officers. However, because of the events of the last 25 years, the
Official Languages Act and the appreciation in the rest of the
country of the duality of Canada with respect to the French and
English language and culture, there has been a great
improvement. That improvement will continue even with the
centralization in Kingston.
As for the last comment, I certainly agree with the right hon.
Prime Minister because he had it bang on yesterday with what he
said. He embarrassed those members. They will find it tough to
go home on the weekend and face the people of Quebec after the
blow that he dealt them yesterday.
* * *
Mr. Chuck Strahl (Fraser Valley East): Mr. Speaker, my
question is for the Minister of Finance.
A Globe and Mail report today shows how the minister
overstated the Tory deficit for 1993-94 and understated his
deficit for 1994-95. This creates the illusion that the deficit is
shrinking but in fact the real deficit is growing.
This seems to be a blind spot for successive finance ministers,
both federal and provincial, who tend to blame their current
deficit problems on a previous government. Canadians are
growing tired of that.
Will the minister explain why he has misrepresented the facts
again about the size of the deficit to the Canadian people?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional Development
-Quebec): Mr. Speaker, I am a little surprised at the question. I
can understand perhaps why the Globe and Mail showed such a
lamentable lack of understanding of the accounting principles
by which the Government of Canada operates, but I would have
thought that perhaps the hon. member opposite would have.
Let me just go through this. That editorial talks about
destabilization claims: ``$2.4 billion stabilization claims
already received from the provinces''. We are required to
provide for those liabilities once they are known, which we have
done. A $250 million provision for the helicopter cancellation is
entirely in accordance with public sector accounting principles.
The reductions in the defence budget will save $7 billion, thanks
to the actions of the Minister of National Defence. The
voluntary departure incentives are known, and when one knows
of a liability one must record it. On the acceleration of the
income tax refunds, surely the hon. member would not say that
we should delay those refunds and give the money back to
Canadians simply to not have that money come into this year's
effort.
(1130 )
What we have done is exactly in accordance with the
recommendations of the public accounts committee and exactly
in accordance with the Auditor General's recommendations. I
am sure the hon. member opposite would rather have us follow
the dictates of the Auditor General than the dictates of the Globe
and Mail.
Mr. Chuck Strahl (Fraser Valley East): Mr. Speaker, if the
minister follows all the dictates of the Auditor General we will
all be much happier, I am sure.
However, we have another concern. The finance department
largely with the same group of economic forecasters as with the
previous government missed the mark last time by about $10
billion in the budget projections.
Can the minister assure Canadians that this group of
economic forecasters will not be out by a similar amount in this
upcoming budget?
1856
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec): Mr. Speaker, there are really two
answers for the member.
First, as a partial answer to the hon. member, at the request of
the deputy minister and senior members of the Department of
Finance an outside accounting firm is essentially looking at the
forecasting methods of the department.
However, there is something else. It really is not fair to blame
the existing forecasters within the department. The department
essentially takes a consensus of the economic forecasts within
the country. What the previous government did was take the
median line optimistic forecast to do its forecasting. In this
budget we chose to take the median line pessimistic forecast of
the consensus of economic forecasters.
* * *
[
Translation]
Mr. René Laurin (Joliette): Mr. Speaker, according to the
information given by the Department of National Defence, a
portion of the staff and students of Saint-Jean will be
transferred to Kingston. These changes are over and above the
relocation of teachers and several courses given in French in
Saint-Jean.
Since the Minister talked about costs a few minutes ago, what
will be the costs, first, of reorganizing the College in Kingston
in order to increase its capacity and, second, of enabling it to
fulfill its new role and new mandate as a bilingual teaching
institution?
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, the
transfer will not cost much more.
[English]
Simply, the facilities at RMC were built many years ago in the
early part of this century and were designed for a much larger
armed forces. There is all kinds of room to centralize the three
colleges at Kingston. We may have a slight problem in terms of
dormitories, but we feel that can be arranged with some of the
other facilities in and around the Kingston area perhaps by
moving some of the senior students out into apartments.
However, that will not be a great cost.
Comparing that cost with trying to centralize everything at
Collége militaire royal de Saint-Jean, that would be prohibitive.
We are in the business of trying to save taxpayers money, not
just for people in Ontario but for people in Quebec and for all
Canadians because this government governs on behalf of all
Canadians from coast to coast.
[Translation]
Mr. René Laurin (Joliette): Mr. Speaker, is the Minister
telling us that the decision to close the Collège de Saint-Jean
was taken hastily, without even knowing the financial
implications of the reorganization of the College in Kingston?
[English]
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, there
have been studies in the department for a number of years on the
need to consolidate a number of facilities. We have done this
with other bases across the country. The colleges are no
exception.
I said in French a few minutes ago that the report quoted is not
a report of the department. It is a report which was
commissioned by the former minister who had a fixation about
Quebec getting its fair share of the pie. It is true there has been a
lower proportion of expenditures on defence in Quebec as a
result of historical trends. However, we tried. We admit that.
An hon. member: Not enough.
Mr. Collenette: It is in the budget documents. We are not
lying. The fact is that after the changes we announced this week
in the budget, the proportion of defence spending in Quebec
goes up 3 per cent, more than many of the other provinces in the
country.
* * *
(1135 )
Mr. Myron Thompson (Wild Rose): Mr. Speaker, my
question is for the Acting Prime Minister.
In reference to the question I asked yesterday regarding a
Canadian representative who vacations in Arizona, it is reported
that the various Challenger flights back and forth from Arizona
to accommodate this person's vacation schedule cost taxpayers
$707,000 since the beginning of the year.
Will this government act to end this irresponsible use of
government jets?
The Speaker: The question is set in fairly general terms. It
was directed to the Deputy Prime Minister. I would presume that
one of the ministers, perhaps the Minister of National Defence,
would like to address himself to that.
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, if the
hon. member had read the defence document in the budget he
would have noted that we intend to look at ways we can divest
ourselves of the Challenger aircraft to transport the Prime
Minister and the Governor General for security reasons without
1857
having these continual complaints from the opposition about
using these aircraft.
If we can do it more efficiently, we will. I do not think it is
appropriate and part of our parliamentary tradition to criticize
the Governor General or Her Majesty the Queen in the House of
Commons. I hope he will not be raising these questions this
summer when Her Majesty the Queen visits Canada and we
transport her around.
Mr. Myron Thompson (Wild Rose): Mr. Speaker, I do not
believe anyone is questioning any individual. As representatives
of the Canadian people we have the right and should question the
spending of tax dollars. That is what I am doing.
No one is questioning the need for security. The issue is that
of the abuse and privilege demonstrated by the use of these
government jets as a holiday shuttle service.
Will the Acting Prime Minister or this government rein in the
flights of these snowbirds?
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, again
a member of the Reform Party from western Canada has taken a
very indecent shot at the head of state, the Governor General.
That is to whom he is referring.
It is well known that the Prime Minister and the Governor
General have to take these flights for security reasons. To call
the Governor General a snowbird, somebody should demand an
apology on behalf of the Governor General.
The Speaker: The Chair of course is always prepared to
entertain questions if they are of a broad enough nature, but
when the inferences get a little bit too localized, hon. members
should try to phrase their questions in such a way that they bring
in a broader perspective. I would ask all hon. members to please
do that.
* * *
[
Translation]
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot): Mr. Speaker,
this morning, under the headline ``Cheap tricks for tawdry
ends'', the
Globe and Mail made two allegations: First, the
Minister of Finance has knowingly inflated the deficit of last
fiscal year; second, a close analysis of government spending
shows that the deficit for next year will not decrease, but will
increase from $41.7 billion to $43.7 billion because of the
measures announced in the most recent budget.
When will the Minister of Finance stop trying to delude the
Canadian people? When will he stop covering up the fiasco in
our public finances, which his budget is only making worse?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec): Mr. Speaker, I think the President of
the Treasury Board answered this question yesterday when he
said that the spending increase this year results from the debt
increase left to us unfortunately by the previous government.
Now, let me answer the first question which is identical to a
previous one, but I understand how these things work. I just
want to add that the editorial in the Globe and Mail also talks
about the $2.4 billion stabilization claims received from the
provinces. Unfortunately, in accordance with accounting
principles, we are required to pay those liabilities once they are
known. The same thing goes for the $250 million provision for
the cancellation of the helicopter contract, which we dealt with
in accordance with private sector accounting principles. With
regard to the significant savings arising from the defence cuts,
which amount to $450 million, we now know that we have to
include them in this year's figures.
(1140)
On the issue of accelerating income tax refunds, the truth is
that we have to include that money in this year's budget since we
are in the process of accelerating the refunds. We have followed
to the letter the measures recommended by the Auditor General.
I know full well that the critic for the Bloc Quebecois wants us to
follow the dictates of the Auditor General, because he is always
quoting him, and that is exactly what we have done.
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot): Mr. Speaker,
how can the Minister of Finance, who travelled throughout
Canada saying that he was going to reduce the deficit, explain
that, according to the Globe and Mail experts, other specialists
and our own figures, next year's deficit will be the highest ever
recorded in Canada, at almost $44 billion?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec): Mr. Speaker, all I can do is
acknowledge the fact that we will have a record deficit of $45.7
billion this year, thanks to the previous government so well
represented by my colleague. As I just said, between the
expertise of the Globe and Mail and that of the Auditor General,
we will choose the expertise of the Auditor General.
* * *
[
English]
Ms. Val Meredith (Surrey-White Rock-South Langley):
Mr. Speaker, my question is for the hon. Secretary of State for
Training and Youth.
On February 7 two hon. members asked questions regarding
native self-government and policing on reserves. Later that day
1858
the hon. secretary of state told CBC television: ``Reformers are
racist for asking such questions''.
I want to know whether this is a policy of the government to
label people who ask legitimate questions as racist, or merely a
policy of the hon. secretary of state.
Hon. Ethel Blondin-Andrew (Secretary of State (Training
and Youth)): Mr. Speaker, it is not the policy of the government
to label anyone racist, but it sure would be welcomed by the
government to have members on the other side show full support
for the inherent right to self-government and all other
aspirations of aboriginal peoples.
Ms. Val Meredith (Surrey-White Rock-South Langley):
Mr. Speaker, we do have policies on self-government for the
native people.
The hon. Minister of Indian Affairs and Northern
Development had the courtesy yesterday of offering an apology.
Will the hon. secretary of state follow suit and offer the same to
this House today?
Hon. Ethel Blondin-Andrew (Secretary of State (Training
and Youth)): Mr. Speaker, I will not offer my apology to
members opposite because I believe that the questions I stated in
my comments to the press were taken out of context by the hon.
member.
* * *
(1145)
[Translation]
Mrs. Monique Guay (Laurentides): Mr. Speaker, this
morning, we learned that the Minister of Finance recognized
yesterday at a meeting with representatives from the Front
d'action populaire en réaménagement urbain that he had failed
to keep his word by not providing any funds for social housing in
the budget.
Would the Minister be willing to keep his word and reconsider
his decision in order to restore the funds allocated to social
housing?
Mr. Ronald J. Duhamel (Parliamentary Secretary to
Minister of Public Works and Government Services): Mr.
Speaker, I would like to thank the member for her question. I
think my colleague does not realize how serious a commitment
this governement has towards social housing. We said
repeatedly before this House that the governement had, for
instance, committed $2 billion to maintain existing housing. I
think that $2 billion is a substantial amount of money and so is
the $2 million which is to be allocated to the Residential
Rehabilitation Assistance Program. It is the same with other
ongoing commitments which are going to be maintained.
Therefore, there is nothing to reconsider. We have already made
a serious commitment and we must go on from there. Of course,
any positive comments and suggestions will be welcomed and
carefully looked at in all fairness.
Mrs. Monique Guay (Laurentides): Mr. Speaker, to my
great regret, I must admit that our friends opposite lost their
social awareness when they left the Opposition benches.
How can the minister maintain that the budget meets social
housing needs, when the mayor of Montreal stated yesterday
that all the mayors of major Canadian cities agree that the
federal government cannot withdraw from its commitment?
Mr. Ronald J. Duhamel (Parliamentary Secretary to
Minister of Public Works and Government Services): Mr.
Speaker, of course, each and every city and each and every
mayor would like to have more. Of course, we will never be able
to meet all existing needs. However, we must recognize that
there is a commitment. We must admit that substantial amounts
of money are allocated to social housing.
Your definition of social housing is probably different from
ours because the commitment is there and the money is
available.
* * *
[
English]
Mr. Jean-Robert Gauthier (Ottawa-Vanier): Mr.
Speaker, my question is for the Minister of Citizenship and
Immigration.
Deep concern was expressed by constituents of mine about the
presence in Canada of one Hussein Sheik Abdiraham, a former
minister of defence of deposed Somali leader, Siad Barre. In
1991 soldiers massacred hundreds of protesters opposed to that
regime in Somali.
I would like to ask the minister of immigration to tell the
House whether he has new evidence of wrongdoing by Sheik
Abdiraham and, if so, are there sufficient grounds for a removal
order to deport him under the Immigration Act regarding
persons who have committed serious offences prior to coming to
Canada?
Hon. Sergio Marchi (Minister of Citizenship and
Immigration): Mr. Speaker, I would like to thank the hon.
member for his question and the interest he and other members
have shown.
In his question, he alluded to the fact that the Immigration Act
has a section which permits the government to remove senior
officials and persons of any government that were part of serious
human rights violations and atrocities. The government has
confirmed that the Barre regime was one of those governments.
When the story broke on this individual I instructed my
officials to collect the information from Nairobi where the
application originated. We have now compiled the necessary
information and I have instructed my officials to immediately
write a report which will trigger an immigration inquiry before
1859
an independent adjudicator. As the member knows, anyone who
is found to have violated the act or broken any laws will be the
subject of a removal.
* * *
Mr. Randy White (Fraser Valley West): Mr. Speaker, my
question is for the Deputy Prime Minister.
In a previous Question Period I asked the Deputy Prime
Minister what was the purpose of a $200,000 consultant study on
parliamentarians' compensation since the government had
announced its policy previous to that. The answer provided was
that the government needed more information.
I was surprised to see a letter in my office yesterday on
letterhead reading ``Commission to Review Allowances of
Members of Parliament''.
When the Deputy Prime Minister stood in the House to defend
the need for a $200,000 consultant study, was she aware that the
commission was going to be studying the very same topic?
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada): Mr. Speaker,
the commission the hon. member spoke about is required to be
set up after each election.
The government met the requirements of the law in setting up
the commission. I am sure the study that the hon. member refers
to will be a very useful input into the work of the commission.
Mr. Randy White (Fraser Valley West): Mr. Speaker, it
seems to me that the government's talk about jobs, jobs, jobs is
more about perks, perks, perks. We have been spending
$200,000 to date.
I would like the Deputy Prime Minister to advise the House
what the cost is of studying the study, that is the cost of this
commission to be put in place. I would also like to know if there
is any limit to the number of studies the government plans to
conduct on the same issue.
(1150)
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada): Mr. Speaker,
in the first place, the consultant study that he spoke about was
commissioned and started by the previous government.
Second, the commission which my hon. friend is complaining
about is one that has to be set up after each election, according to
a law passed by Parliament. The government cannot ignore a
decision of Parliament to set up such a commission after each
election.
My hon. friend asked for the cost of this. This is a detailed
technical question which he probably should have put on the
Order Paper. In order to respond to him in a full and courteous
way, I will take his question as notice and get him the
information as soon as possible. In future I suggest that he check
on the requirements of the law before asking that type of
questionable question.
* * *
[
Translation]
Mr. Gaston Leroux (Richmond-Wolfe): Mr. Speaker, my
question is for the Solicitor General. Based on documents tabled
by the federal prosecutor for the Rutland district, in Vermont,
the CBC alleged yesterday that, in 1992, arms dealers, two of
them from Kahnawake, supplied 700 to 900 automatic weapons
to organized crime in Canada. These guns were used to commit
major crimes in Montreal, Toronto, and Vancouver.
Can the Solicitor General tell us whether he plans to intervene
in Mohawk territory and seize all the illegal weapons located
there, and which are used by organized crime in Montreal,
Toronto and Vancouver?
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada): Mr. Speaker,
according to the same report, police forces, including the
RCMP, have already seized about one hundred weapons which
had been supplied by that same network presently standing trial
in the United States.
It is because this government is quite aware of the problems
connected with major smuggling networks, dealing not only in
cigarettes but also in firearms, that it launched an
anti-smuggling action plan only three months after it came to
power. We intend to enforce the law everywhere in Canada and I
am confident that the RCMP took all appropriate measures in
this instance.
Mr. Gaston Leroux (Richmond-Wolfe): Mr. Speaker, I
appreciate the Solicitor General's answer. In support of his
comments, and in view of the numerous crimes which were
committed lately, could he give us at least one recent example of
an arrest and prosecution case for possession of illegal arms on
Mohawk territory?
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada): Mr. Speaker, I
wonder why the hon. member keeps on raising the Mohawk
issue instead of asking questions on criminal activity in this
country. If he were really interested in fighting crime across the
nation, he would use different wordings in his questions.
1860
[English]
Mr. Art Hanger (Calgary Northeast): Mr. Speaker, my
question is for the Minister of Citizenship and Immigration. I
ask this question believing that Canadians deserve to know on
what the government bases its policies.
On the 14th of this month the minister of immigration said I
was incorrect in concluding that the Economic Council of
Canada report argues for a 1994 immigration level of
approximately 180,000 immigrants, 70,000 fewer than the
government intends to accept.
Could the minister please cite for me the exact number of
immigrants the Economic Council of Canada study recommends
be accepted into Canada in 1994?
Hon. Sergio Marchi (Minister of Citizenship and
Immigration): Quite gladly, Mr. Speaker. The Economic
Council of Canada suggested the approximate 1 per cent figure.
It also advocates a gradual approach toward that 1 per cent, and
that is what I had cited before and is what I cite today.
Mr. Art Hanger (Calgary Northeast): A supplementary
question, Mr. Speaker. Certainly the Economic Council of
Canada report cites a 1 per cent figure, I believe over a 25-year
span. Perhaps the minister should dedicate more time to
studying his portfolio and less time to just talking about it.
(1155)
Will the minister agree to stop misleading the people by
suggesting that he has specific evidence on which he bases
immigration policy? Will he agree to cede to the will of the
overwhelming majority of Canadians instead of the desires of a
few special interests?
Hon. Sergio Marchi (Minister of Citizenship and
Immigration): Mr. Speaker, I try to study as much as I can. I do
not claim perfection nor does this side claim a monopoly on
virtue.
Mr. Gauthier (Ottawa-Vanier): Speak for yourself.
Mr. Marchi: I have been asked to speak for myself.
Some hon. members: Oh, oh.
The Speaker: I am sure that is precisely what the hon.
minister is going to do.
Mr. Marchi: Mr. Speaker, we do not speak for a few, select
numbers of special interest groups. I find that statement
offensive. We speak and we decide and we make policy based on
the national interest. We did not hide our immigration policies
anywhere. They are found in the red book; the red book was
distributed across the country and we got a tremendous national
majority government as a result.
Consequently we proceed in the national interest. I have cited
a number of reports. The member continues to cite the C.D.
Howe report, or used to, and it was quite specific in saying that
at the very worst, net immigration is neutral to the economy. We
are not misleading, we are simply using the facts and evidence
before us to build a case.
* * *
Mr. John Harvard (Winnipeg St. James): Mr. Speaker, my
question is for the Minister of National Defence.
Bristol Aerospace is one of the largest employers in my
riding. It employs hundreds of well trained men and women.
After this week's budget, however, fears were raised that severe
job losses would occur at Bristol as a result of possible changes
to the CF-5 repair program for the military. This is of great
concern to Bristol employees, it is of concern to me and I know it
is of great concern to the minister of defence.
Can the minister tell the House what discussions he has had
concerning this matter and can he offer some encouraging news
for Bristol employees this morning?
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, it is
well known that we have had to cut back in a number of areas. As
a result we do not need the original number of CF-5s to be
refurbished. Most of them have either been completed or are in
the workshops at Bristol in Winnipeg. We have had some
discussions with Bristol Aerospace to see what our future
requirements would be, to see what kind of arrangement we
could make. We do not anticipate any immediate job losses.
However, I do have to underscore to the hon. member and the
people of Winnipeg that our needs will not be as high as before
the cuts in the budget last week.
* * *
[
Translation]
Mr. François Langlois (Bellechasse): Mr. Speaker, my
question is for the Minister of Canadian Heritage.
The Professional Institute of the Public Service of Canada
recently made public a report detailing the shameless waste of
public funds in the management of the Canadian Museum of
Nature. Glaring cases of contract antedating and contract
splitting as well as many other irregularities, especially with
regard to management salaries, were reported. This has
prompted the Institute to ask the minister to intervene.
Can the minister indicate whether he intends to intervene to
put a stop to this case of mismanagement and how exactly he
plans to do that?
1861
Hon. Michel Dupuy (Minister of Canadian Heritage): Mr.
Speaker, I have spoken to the Auditor General of Canada who, as
far as I am concerned, is the best-informed source. He assured
me that this museum would be undergoing a special audit in a
matter of months. So, when we have all the facts, as audited by
the Auditor General of Canada, we will be in a position to judge.
(1200)
Mr. François Langlois (Bellechasse): Mr. Speaker, I think
that the hon. minister should also maintain a direct, open and
honest dialogue with the officials of the agencies involved.
In light of this new example of mismanagement, does the
minister still contend to have clean hands? Will he do the
responsible thing and intervene to force another agency, namely
the National Capital Commission, to stop meeting behind closed
doors and show more transparency?
Hon. Michel Dupuy (Minister of Canadian Heritage): Mr.
Speaker, I am not sure this is a genuine supplemental, as we are
moving to another subject, the National Capital Commission.
I am well aware of what is going on in the agencies in my
jurisdiction. I am in constant contact with them and I frequently
meet with the heads of these agencies to ensure that public funds
are well spent and that programming is both serious and useful.
I have had the opportunity to talk about public consultations
with the Chairman of the National Capital Commission. I was
pleased to hear him assure me that, in the coming months,
consultations would intensify to make sure that all the concerns
of the people in the National Capital Region are taken into
consideration when the Commission makes a decision.
* * *
Hon. Jean J. Charest (Sherbrooke): Mr. Speaker-
Some hon. members: Hear, hear.
Mr. Charest: Mr. Speaker, I am not deluding myself, it will
not last.
My question is for the Minister of Finance who, I notice, tends
to systematically blame the previous government, whereas the
Prime Minister promised during the election campaign not to do
so.
We heard today that he artificially inflated the deficit for
partisan purposes. However, since he seems to be saying in his
answers that he follows departmental rules, I would be curious
to see if the Minister of Finance would share with this House the
analyses done by his department on the impact of his budget on
employment.
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec): Mr. Speaker, when Reform members
asked me practically the same question, I offered to sit down
with them and, of course, with Bloc members to share all our
analyses and all our information, so that we can work together
on solving our financial problems.
I would be pleased to share with the hon. member our
information on the impact of our measures on employment
because we are very proud of them; they will really have a
significant impact on employment, in comparison with the
previous government's record.
[English]
I would like to say one thing in closing. All members of the
House must be very happy to finally see the Conservative caucus
united.
The Speaker: I am sure all hon. members would want this
exchange to continue, but you have instructed your Speaker to
terminate questions. We will now go to the next order of
business.
* * *
[
Translation]
Mr. Ronald J. Duhamel: Mr. Speaker, I was so eager today to
reply to the question I was asked that I made a mistake. Instead
of $2 million, I should have said $100 million over two years. I
am sorry for the mistake. And I should also have mentioned the
$120 million that will be spent on other social housing
programs.
[English]
The Speaker: I am not sure that was a point of order.
Mr. Myron Thompson (Wild Rose): Mr. Speaker, earlier in
Question Period I attempted to question the expenditures of the
highest office in the land. I would like to know if I could be
provided with the standing order that does not permit that. If
there is a proper way of doing it I would like to know because I
wish to do it in the proper manner.
The Speaker: The hon. member will have the information at
his disposal. My clerks will get the information that is needed
for him.
Hon. Jean J. Charest (Sherbrooke): Mr. Speaker, I want to
raise a point of order in relation to question period.
1862
You and other members of the House will have noticed that
twice I rose in my place to try to get your attention to put a
supplementary question to two questions asked of the Minister
of Finance.
(1205 )
I know members of the House would want to remember it has
been a practice during question period that if there is a
supplementary question to a main question and another
supplementary asked by another member, the Speaker
recognizes that.
Given the circumstances of the particular role in the House
where there are independent members who may want to pursue a
matter further, Mr. Speaker, you and the House may want to
consider the practice of allowing members to ask a further
supplementary question so that Parliament and question period
can fulfil their true role of getting to the bottom of a matter and
drawing from the government the basic information Canadians
are seeking on a specific issue.
I wanted to raise that matter on one specific point of order. I
will stop here, but I do have another point of order I want to raise
in relation to an answer the Minister of Finance gave to my
question.
The Speaker: With regard to the point of order the member
raised, I am sure all hon. members would realize the Chair is
always guided by the House. I would imagine on every question
posed the Chair could recognize a member saying:
``supplementary''.
The Chair is trying to be as fair as possible in the distribution
of questions. I am sure the hon. member, who is a veteran of the
House, will realize where it is possible for the Speaker to
accommodate members I will do my utmost to do so and see that
they are recognized.
[Translation]
Mr. Alfonso Gagliano (Saint-Léonard): Mr. Speaker, as
regards the point of order raised by the hon. member for
Sherbrooke, I want to say that I have been here for close to ten
years and it was never the custom to recognize a second or a
third supplementary question. A question is asked and then
followed by one supplementary.
Also, if the hon. member reads the January 18 issue of
Hansard, he will see that not only members from the three
recognized parties asked questions during Question Period, but
also independent members.
I suggest that hon. member for Sherbrooke come here
frequently. I am sure he will get his share of opportunities to
rise.
[English]
The Speaker: A point of order was raised about the questions
as we have them. We now have a committee on House affairs; it
is presently meeting. I am sure all hon. members would want to
avail themselves of appearing before the committee if they have
changes that could be inaugurated.
I would also ask hon. members to refrain from making any
comments about attendance in the House. I know that many
times it is inadvertent. I would hope all hon. members would
take that into consideration.
[Translation]
Mr. Gilles Duceppe (Laurier-Sainte-Marie): Mr.
Speaker, in the past-I have been here for three of four years
now-, I did not notice that such practice was in effect. As
regards the plight of the hon. members sitting close to the
curtains, we also had to live with this situation in the past. It is
hard on the legs, but good for the health.
[English]
The Speaker: I would like to terminate this particular point
of order. Does the hon. member for Sherbrooke have another
point of order that he would like to raise?
Hon. Jean J. Charest (Sherbrooke): Yes, Mr. Speaker, I
have another point of order. While I am on my feet I notice my
friend from the Bloc rose for a second time to reiterate his point.
I find interesting all this talk of a new Parliament and the
previous government being defeated because of the way things
were. All I hear from them in terms of our practices in the House
is that what is being applied to us was the old system.
So much for the change, the new Parliament and the will to do
things differently.
(1210)
My point of order relates to the Minister of Finance who in his
reply offered to make information available to me. His reply was
unclear in terms of what he exactly was committed to do. I was
asking a specific question.
The Speaker: Order, please. I do not think that is strictly a
point of order. I am sure the hon. member could get this
information simply by-
Mr. Boudria: That is not a point of order.
The Speaker: Order. The hon. member will realize it is not a
point of order. I am sure this information can be elicited in other
ways.
There being no other points of order, we will proceed to the
next order of the day.
_____________________________________________
1862
ROUTINE PROCEEDINGS
[
Translation]
Hon. Marcel Massé (President of the Queen's Privy
Council for Canada, Minister of Intergovernmental Affairs
and Minister responsible for Public Service Renewal): Mr.
Speak-
1863
er, pursuant to Standing Order 32(2), I have the honour to
present the report of the Canadian Transportation Accident
Investigation and Safety Board Act Review Commission.
[English]
* * *
Mr. John Richardson (Perth-Wellington-Waterloo):
Mr. Speaker, I have the honour to present the first report of the
Special Joint Committee on Canada's Defence Policy.
This report requests the additional powers for the committee
concerning the televising of its proceedings and the power to
create subcommittees.
The Senate adopted the report at its sitting yesterday
afternoon. If the House gives its consent I intend to move
concurrence in the report later this day.
Mr. Charest: There is no consent, Mr. Speaker.
The Speaker: There is no consent but the report can be tabled.
Mr. Riis: Mr. Speaker, there have been discussions among the
parties. Considering that our Olympic hockey team is to start
playing its semifinals in about 90 minutes from now, I think you
would find unanimous consent for the following motion:
That, notwithstanding any standing order and the usual practices of the
House, the order for second reading of Bill C-212, an act to recognize hockey as
a national sport, be called immediately after routine proceedings; and
That the House proceed to dispose of the bill immediately at all stages,
including consideration by committee of the whole, without debate or
amendment.
The Speaker: Is there unanimous consent?
(1215)
[Translation]
Mr. Robichaud: Mr. Speaker, consultations are under way
and we are not ready to give consent before we hear the result of
these consultations.
[English]
The Speaker: There is not unanimous consent at this time.
* * *
Mr. Don Boudria (Glengarry-Prescott-Russell): Mr.
Speaker, I have the honour and privilege to present, pursuant to
Standing Order 36, petitions with regard to the serial killer
board game.
The petitions I am tabling today, along with others tabled
previously, total some 105,552 signatures, all of them calling
for a ban on the importation of this product into Canada.
[Translation]
Allow me to salute the particular contribution of one of my
constituents, Mrs. Lina Cléroux, who collected on her own
several thousand signatures in order to ban the serial killer board
game. Today, I have the honour and the privilege to table those
petitions. The grand total of signatures to date is 105,552.
[English]
Mr. Ed Harper (Simcoe Centre): Mr. Speaker, it is a
privilege for me today to present a petition from Brenda Smith
of Wasaga Beach in my riding requesting our action on the
distribution of killer cards. I am pleased to add it to the petition
which has just previously been endorsed.
Mr. Walt Lastewka (St. Catharines): Mr. Speaker, I rise
today to place before this House a petition co-ordinated by Holy
Cross High School in St. Catharines and signed by almost 3,000
of my constituents in the surrounding areas.
As you know, Mr. Speaker, I have spoken in the House before
about the harm to society of serial killer cards. The petitioners
state that they support the efforts of Mrs. Debbie Mahaffy in her
quest to have the importation of killer cards seized at the
Canada-U.S. border to stop their distribution in Canada.
The cards published by Eclipse Comic Books, the True Crime
Trading Cards and other publishers feature the crimes of serial
killers, mass murderers and gangsters. We do not want these
cards in our communities.
The petition continues: We abhor crimes of violence against
persons and we believe that killer trading cards offer nothing
positive for children or adults to admire or emulate but rather
contribute to violence. Therefore the undersigned, your
petitioners, humbly pray and call upon this Parliament of
Canada to amend the laws of Canada to prohibit the importation,
distribution, sale and manufacture of killer cards in law and to
advise producers of killer cards that their product if destined for
Canada will be seized and destroyed.
May I reiterate my support for this petition which I table in the
House today and thank the member for
Glengarry-Prescott-Russell for his assistance and support.
Mr. Andy Mitchell (Parry Sound-Muskoka): Mr. Speaker,
as is my duty as member of Parliament for Parry
Sound-Muskoka, I am tabling a petition in relation to the
Official Languages Act signed by several of my constituents.
My tabling of this petition in no way is an indication of my
position on this issue.
1864
[Translation]
Mr. Plamondon: Hypocrite. You are a hypocrite.
The Acting Speaker (Mr. Kilger): Order, please.
Mr. Plamondon: You too are a francophone.
The Acting Speaker (Mr. Kilger): Order, please.
Mr. Boudria: Be quiet.
The Acting Speaker (Mr. Kilger): Order, please.
Mr. Plamondon: Get up and go talk to your caucus.
The Acting Speaker (Mr. Kilger): Order! Order.
Mr. Plamondon: I have had enough of this.
The Acting Speaker (Mr. Kilger): Order, please.
(1220)
Having clearly heard what a member told another, and
recognizing the Chair's responsibility to maintain mutual
respect among members, I would invite the member for
Richelieu to withdraw the word ``hypocrite'' he used against one
of his colleagues.
The member for Richelieu.
Mr. Plamondon: Mr. Speaker, I agree with you, the word
``hypocrite'' should be banned from this House. But while I am
willing to withdraw it, I would like to remind-
Mr. Boudria: No way. Without any conditions.
Mr. Plamondon: There are no conditions, Sir, I withdraw it
entirely. But I would like to remind the members that the Prime
Minister, not the present one, but Mr. Mulroney, used that word,
you can check the Chair's records, against the member for
Shefford, Mr. Lapierre, who was then the Bloc Quebecois House
leader. At that time, the Chair judged it to be acceptable. The
Prime Minister had called Jean Lapierre ``hypocrite'' and
``insignifiant''. It appears that these words were found
acceptable in the context they were used.
Personally, I find it unacceptable and I want to retract and
apologize to the member for using it. But I want him to
understand that what prompted me to do so, is that we do not
accept that petitions dealing with official languages be tabled
while saying: ``I am tabling them but I do not support them''. He
should either agree or disagree. I like people who tell the truth.
The Acting Speaker (Mr. Kilger): I appreciate that and we
respectfully accept the fact that the member for Richelieu has
withdrawn the comment he made regarding the member for
Parry Sound-Muskoka. I do not care to hold a debate on this
issue.
[English]
Mr. Mitchell: On a point of order, Mr. Speaker.
I do not think it is totally fair that the member, although I do
appreciate the fact that he withdrew his inappropriate statement,
in his additional comments is still leaving an impression in the
House that is not accurate for a number of reasons. I want to
make this-
The Acting Speaker (Mr. Kilger): Order. As I stated
previously, I will not allow the House to engage in debate on this
matter. The Chair asked the member for Richelieu to withdraw
his comment. He has. It has been accepted. We will now move
on. Were there any other petitions?
Mr. Mitchell: Point of privilege. The hon. member who made
some comments and withdrew certain of them made reference to
the contents of a petition and a comment that I made. In neither
case was he aware of its contents nor were they accurate. His
statements about something that he had not read, nor did he
repeat it accurately-
The Acting Speaker (Mr. Kilger): Order. That is a matter of
debate.
[Translation]
Mr. Peterson: Mr. Speaker, this may not be the best time to
ask for the unanimous consent of the House, but since I was not
here earlier to present the report of the Committee of Finance, I
would like to ask for the unanimous consent of the House to
present the Committee's third report.
[English]
The Acting Speaker (Mr. Kilger): Members have heard the
hon. member for Willowdale. Is there unanimous consent?
Some hon. members: Agreed.
* * *
(1225 )
Mr. Jim Peterson (Willowdale): Mr. Speaker, I have the
honour to present the third report of the Standing Committee on
Finance. In accordance with the order of reference of Monday,
February 14, 1994, your committee has considered Bill C-9, an
act to amend the Income Tax Act, and has agreed to report it
without amendments.
May I say, as the chair of this committee, that I am very
grateful to all members, including the opposition members, for
the hard work and the co-operative spirit they have brought to
these very difficult chores.
* * *
[
Translation]
Hon. Fernand Robichaud (Secretary of State
(Parliamentary Affairs)): Mr. Speaker, I would ask that all
questions be allowed to stand.
1865
The Acting Speaker (Mr. Kilger): Shall all the questions be
allowed to stand?
Some hon. members: Agreed.
[English]
Mr. Riis: Mr. Speaker, we are seeking unanimous consent
today and it is going very well. When I sought unanimous
consent I know the Bloc gave unanimous consent, as did the
Reform Party and the representatives of the Conservative Party,
but my friend, the secretary of state, indicated that consultations
were ongoing.
Could he explain what he meant by that as to whether or not
those consultations will take forever, a few weeks or a few
hours?
The Acting Speaker (Mr. Kilger): I do not think that is a
point of order. The secretary of state has already addressed that
question. If people want to continue that debate behind the
curtains or elsewhere in those negotiations I would encourage
that. At this time we will proceed to orders of the day.
_____________________________________________
1865
GOVERNMENT ORDERS
[
English]
The House resumed consideration of the motion that Bill
C-14, an act to provide borrowing authority for the fiscal year
beginning April 1, 1994, be read the second time and referred to
a committee.
Mr. Stephen Harper (Calgary West): Mr. Speaker, I am
rising today to address Bill C-14, an act to extend to the
government borrowing authority for the next fiscal year,
borrowing authority in the order of $34.3 billion with a
contingency for an additional $3 billion.
For those who have trouble grasping some of these numbers,
and I think that is probably most Canadians, I will just spell it
out. We are talking here initially, to put it in number terms,
34,300,000,000.00 dollars and cents. That kind of money, to
give it some practical significance, would be enough to
eliminate the GST and then pay it back twice to all Canadians. It
would be enough to halve the income tax. It would be enough to
pay old age security for an entire year without any additional
revenue sources.
This is the highest planned borrowing. As far as I know, it is
certainly the highest planned deficit on which this is borrowing
based in Canadian history. We have had higher deficits in the
end, but this is the highest we have ever had to begin with.
I will not waste a lot of time in telling the Chair that I will be
opposing this bill on that ground. It is safe to say that every
member of the Reform caucus and I will be opposing it for like
reasons.
In my speech and in the speeches of other members of my
party who will follow today and subsequently, we will not
restrict our comments merely to the borrowing aspect, but we
will comment on and evaluate the general budgetary policies of
the government from which are flowing these tremendous
borrowing requirements.
This of course all comes from the red book which I think is
widely becoming known now, upon presentation of the budget,
as the red ink book.
(1230)
[Translation]
The Liberal Party talked about its red book throughout the
election campaign. But now we see what a red ink book is all
about. With this bill, we will be increasing the national debt of
our country by more than $34 billion. Over the next three years,
we are talking about an increase of at least $100 billion.
[English]
That is a lot of money.
I want to make my remarks on four particular categories. I
will start by evaluating the stated targets in the budget and give
an evaluation of those. Second, I want to look very carefully at
the economic assumptions and the projections behind the
targets. Third, I want to look at where we are headed financially
and economically, particularly on the issue of this bill, the
borrowing authority, the debt. Finally, I would like to
summarize in some detail by looking at what the market is
saying and where the government may be going.
In his budget speech the minister spoke about achieving
targets rather than having illusions and falling short. I want to
evaluate some of those targets and the data used to obtain them.
Let me make a general comment. The government, unlike the
previous government, has provided some measurable targets. It
has also provided in the short term more realistic data than were
provided by the previous government. It is better data that are
much easier to evaluate.
However, to summarize, the targets are very soft; the action is
somewhat overstated; the achievement is not at all clear. The
minister has spoken of a two-part budget and of course we have
no long term or even medium term financial projections in this
budget. We have only an empty third year column in which we
are told we will reach the target. That is a general comment.
Let me go back to previous experience on this matter. In April
1993 the former Progressive Conservative Party and
government brought down its final budget. In that budget it
promised to balance the books in six years. This would mainly
be achieved through spectacular economic growth.
The House will recall that at the time the budget only laid out
projections for five years. It showed that by fiscal year 1997-98
1866
we would have a deficit of about $8 billion and extrapolating the
economic projections we reached a budget balance in fiscal year
1998-99.
In the specific projections that were made we had this
tremendous prediction of an average rate of growth of almost
4.5 per cent per year until the end of the century. We had rapidly
declining unemployment rates which would fall to about 7.5 per
cent by the end of the century. We had spectacular falls in
interest rates, both nominal and real, and of course we had an
income tax system that would generate all the spectacular
revenue increases that these assumptions implied.
The former Conservative budget of 1993 called for a deficit in
fiscal year 1994-95 of $29 billion. In the election campaign our
party said, and I want to give a realistic evaluation of this
situation, that the Conservatives were grossly underestimating
the seriousness of the problem. We said that the Tory plan would
not reduce the deficit. In fact we said that the Tory and the
Liberal plans were pretty much identical in macroeconomic
terms.
This is not the first time when one political party, the
Conservative Party, talked like born again right wingers about
the seriousness of the deficit and how this had to be stomped out
at all costs and the Liberal Party talked about jobs and social
democratic priorities.
(1235 )
Of course in reality the numbers that they were proposing
were very close. When one extracted out of the Conservative
projections the unrealistic assumptions, one found that one
reached a target of about 3 per cent of GDP by the end of the
century. That was the real Conservative target in that budget
although they did not say that. The Liberals said this was
excessively harsh and that they would do things differently. We
Reformers said this was not good enough, the deficit was more
serious than either of these parties was saying.
Interestingly, if I look back at some of our own studies, and I
can take some credit and blame for this, I see that the trend we
had established in our evaluation of the likely deficit for fiscal
year 1994-95 was $31.2 billion. We were told that we were
excessively pessimistic, that we had grossly overstated the
problem.
Now we have the revelations of the past few months about the
doctoring of the books that occurred in the later days of the last
Parliament. We are now admitting, and the government is
admitting, that we are looking at a trend deficit figure, with no
policy adjustments, of $41.2 billion or exactly $10 billion above
the Reform Party's estimate of how serious this problem was
only a year ago; $10 billion above what we thought one year ago,
we who were most concerned about this and were labelled
hysterical about our evaluation of the situation.
This is one of many signs of the very serious and rapid
deterioration we are now about to enter upon if we do not get a
handle on this problem.
Just as an aside, why did the Reform Party so underestimate
the deficit for 1994-95? I would like to comment on that as the
finance minister has made some reference to it in the House. He
has said that we had unrealistic growth assumptions. In fact we
did not have unrealistic growth assumptions. Our growth
assumptions for last year were modestly above what transpired.
Our growth assumptions in the longer run were not over
estimates. In fact they are lower than the growth assumptions
that the government is presenting today.
What happened was that we had overestimated the ability of
the tax system in general to extract revenues from economic
growth. Last year we had a dramatic collapse in the revenue
GDP ratio which indicates a significantly lower revenue
potential that is now recognized. We had a collapse of over 1.5
per cent of the ability of the tax system to extract revenue from
growth in the gross domestic product.
That is something I will be talking about more. It is now a
recognized problem. It was not at the time. It is indicative once
again of the underground economy, smuggling, tax avoidance
and the impact of sustained recession are problems we are
beginning to understand better.
Let me move on to the second issue I wanted to address. We
talked about the targets the government set. Let us now talk
about the specific economic assumptions and projections that
the government has made in saying it will reach these targets by
the end of the third year.
This government, and I want to be fair here, unlike the
previous government has not spectacularly exaggerated its
estimates. Its record is mixed. It is better than the previous
government but there is still a lot to be desired.
I am going to talk about some subjects: economic growth
projections, unemployment projections, interest rate
projections, revenue projections and the efficiency of the tax
system. I wrote most of what I have to say today prior to reading
the Globe and Mail article this morning.
(1240 )
Economists all over the country are in the process of studying
the budget, of examining these tables and estimates very
carefully. I should say that in the last two or three days it is
increasingly obvious that some of the deficiencies in the
assumptions of this budget are being exposed.
Let me mention a few, not all, because there is going to be
more debate about this in the upcoming days. First, the
government's most positive feature in its planning, job creation,
is definitely not exaggerated in the budget. Unemployment is
projected to fall to only 10.8 per cent in 1995, with modest job
recovery thereafter.
I think it is probably accurate. It is a very interesting
projection coming from a government that says that creating
jobs is the major priority of the budget, and continues to insist
there is
1867
somehow a link between jobs and debt. That somehow, if the
government spends money, if we continue to run these deficits,
we will create jobs. The budget indicates what we in the Reform
Party are saying is correct. The longer these deficits stay high
the longer job creation will stay low.
I can be a little more critical when it comes to its projections
for economic growth. The government has forecast 3.0 per cent
economic growth for 1994 and 3.8 per cent economic growth for
1995. It has avoided making explicit projections for the period
after that but its documents as well as the minister's responses
earlier this week would indicate that it expects growth in the
order of 3.8 per cent to continue in years 1996 and after.
The basis of these growth projections is said to be in median
or even below median assessment of the forecasts of private
sector economists and forecasters. This is said to be a brand new
approach to budget planning. This is not the case. This is not a
brand new approach. The previous government also cited
private sector forecasters in making its own more exaggerated
and unrealistic growth projections.
What is similar here and what needs to be pointed out, if we
are going to rely on the projections of private sector forecasters
is that it would be useful to have some additional information,
such as who are the private sector forecasters that are being
sampled in these kinds of growth projections, precisely what
kind of adjustments have they made to their own economic
models in light of recent evidence, and most important, if that is
your only basis of forecasting, what is in fact the record of some
of these private sector forecasters in terms of their own
evaluation of economic growth and other economic variables.
I would like to mention that in a recent article in the Financial
Post entitled ``Deficit and Jobs Cloud Optimism'' private sector
forecasters were quoted as saying that their projections for the
next fiscal year were the following: for 1994 the median
projection was 3.5 per cent, but for the years thereafter the
average median forecast was 3.2 per cent which is considerably
below the government's forecast.
Our position has been that budgetary planning should be
based on very firm conservative budgeting principles. Those
principles are the following: That we should select the lesser of
two different pieces of information, the lesser of the forecasts
that are out there among evaluators and recent economic history
and experience. It would ensure a very conservative planning
path over an entire economic cycle and is the approach we have
used to estimate growth paths and recessionary deficits.
Using this, let me convey to the House the planning forecast
that we have been using. As I say the Minister of Finance has
inadvertently misrepresented this.
The planning forecast we have been using for the past several
months, since the minister's statement in November, has been a
forecast of 3.0 per cent for 1994. That is in agreement with the
government. However, we suggest that the second and
subsequent year forecasts are optimistic rather than
conservative. We have projected those growths to range in the
area of about 3.2 per cent on average as predicted by private
sector forecasters.
(1245)
The third issue I want to look at is the interest rate issue where
the statistical games being played are much more serious. They
certainly involve more distortion and potentially much more
danger for the government. That is the assumption on interest
rates.
Using the rate on 90-day commercial paper as its benchmark,
the government is saying that short-term rates will be about 4.5
per cent in 1994, rising modestly to 5.0 per cent in 1995. Longer
term interest rates, with the 10-year rate on government bonds
as the benchmark, will fall from 1993-94 to 6.4 per cent and will
continue to fall in 1995 to 6.1 per cent and staying thereabout
thereafter.
In our view once again we should be using a conservative
approach that would look at some of the forecasts out there-I
suggest that these are exaggerations of the forecasts-as well as
the clear market data which exist on interest rate expectations.
There is in the marketplace an elaborate term structure for
interest rates and an elaborate set of variables on which the
market forecasts present and future interest rates.
Looking at that data we can see they reflect the government's
short term forecasts. We see that interest rates are expected to
rise gradually in the short end over the next few years. The
reason for that is quite straightforward.
There is general concern about inflation, particularly if we are
going to have recovery. That is reflected in interest rate
projections. More significantly, there is no clear sign in the
marketplace that long term interest rates are going to fall
dramatically. Long term interest rates have had a pattern of
falling and rising in recent years with the inflation pattern we
have had.
At present the 10-year rate on government bonds has been
ranging between 6.8 and 6.9 per cent. There is no sign of a
decline in real medium term and long term interest rates. Maybe
there will be but certainly for an organization that is
experiencing the kind of debt levels we have here, we would not
want to underestimate the possible debt charges as a way of
balancing the budget.
This is the most serious deficiency. Other speakers
particularly from the Bloc Quebecois have commented on the
overestimation of the revenue forecasts. That is something
serious. For a government that finds itself with a half a trillion
dollar debt which will rise rapidly even under its own
projections, to underestimate the potential debt charge on that is
a very serious
1868
and imprudent planning assumption, particularly when that
deficit on average has a term of about two and a half years. It is
now a very short term debt.
To concentrate that debt on the front end, while we face
referendums and other economic and political uncertainties in
this country, makes us vulnerable to rises in interest burdens. In
our own case, as I have said, in our forecast of interest rates we
have suggested we should look at the term structure.
We can take factors such as the overestimation of growth rates
into the second and third year and the underestimation of
interest rates at the long end into account. These factors alone
would have an effect of adding half a billion dollars to the
planning assumption for 1994-95 and at least $1.5 billion to the
planning assumption for 1995-96. Because these imprudent
assumptions are concentrated in the area of interest and debt
charge, we can assume that any such understatement will
compound rapidly into the future.
(1250 )
While these assumptions are somewhat of an improvement
over the previous government, once we get into the second year
in particular-and the government says those can be extended
indefinitely into the third year-the overall pattern is not that
different.
We have growth forecasts below those of the Conservatives
but well above market forecasts and well above recent historical
experience. We have interest rate forecasts that are identical to
what the Conservatives proposed. And we have the most
dubious of all assumptions which is the tremendous revenue
generating capacity of the tax system, even though we continue
to have one of the highest tax burdens in the industrialized
world.
Where are we headed if we take all of these things into
account? Our assessment is that we are probably headed for a
very modest deficit reduction this year. It will be lucky to come
under $40 billion. Our assessment is we will certainly not be
achieving a 3 per cent debt to GDP ratio in 1996-97.
Based on this budget we will not achieve all the things the
government wants: rapidly falling deficits, modest to high
economic growth, extraordinarily low inflation, nominal and
lower interest rates, et cetera. It is a very optimistic pattern by
the time we get to the second and third year and there is very
little to suggest it will be achieved.
In all honesty I would suggest to government members that if
the government felt this were achievable, it would have
published the figures. The fact it has decided to leave the third
year column out of most of the tables is no accident.
The minister says he does not want to be hoisted with his own
petard. Those were not his exact words but in other words, he
does not want to repeat the mistakes of the Conservatives. He
does not want to repeat the mistakes of making these forecasts,
putting them on paper and then having them not come true.
Therefore, rather than provide us with conservative or prudent
forecasts he provides us with no forecast whatsoever and says
that way he will not be held up on this.
On top of this another good question which should come out
of all this is why is there a second stage to this budget if it will
already achieve its objectives?
That is another reason I asked the minister to admit that the
projections show the deficit will not fall below $30 billion. If he
could achieve this objective and if it was based on realistic
assumptions, there would obviously be no need to hide them.
Furthermore, there would be no need to announce a second stage
in the 1995 budget. Clearly, some of these excuses are wearing
thin.
My personal view is that the government would be advised to
provide the House with realistic information and to suggest that
perhaps these targets are not going to be achieved. That is a far
better way to do it than to play a shell game with the numbers.
I will comment a little more particularly on some of the
critical ratios that are going to be affected by this borrowing bill.
I recommend to the House once again chapter 5 of the 1993
Auditor General's report. It identifies five critical ratios in
terms of evaluating federal fiscal policy. These are a set of
operating ratios: Overall spending to revenue; program
spending to revenue; deficit financing to revenue; as well as
some more macro-ratios: the deficit to GDP target; and the debt
to GDP target.
Commenting briefly on the operating revenues the former
government was so fond of using, under this budget the
operating ratios are forecast by the government to improve very
modestly on the way they have been trending. With adjusted
projections based on more realistic assumptions those ratios
will be flat at best and they are at very high levels.
In terms of the deficit-GDP ratio, in spite of what the
government says, with the actions strictly contained in this
budget that ratio will be around 4 per cent of GDP by the time we
hit 1996-97.
(1255 )
The debt-GDP ratio is a very critical one. It is the level of our
debt relative to our ability to pay. The debt-GDP ratio is forecast
at about 75 per cent for 1995-96 and flattening. Our calculations
suggest this debt-GDP ratio will be closer to 76 per cent in the
subsequent fiscal year and will be rising. This is the most
critical ratio of all because ultimately this is the ratio on which
the long run ability of the federal government to sustain its
spending and financial policies is based.
1869
Let me repeat for the benefit of all members the criteria on
some of these variables contained in the Maastricht treaty in
the negotiations for the European Community. The government
is fond of quoting 3 per cent. Where did this 3 per cent concept
come from? We are told that 3 per cent of GDP is a reasonable
interim target. Why? We are told it is because that was the target
used by the European Community in the Maastricht treaty. By
the way, the European Community targets were not achieved
but those targets were a 3 per cent deficit to GDP ratio and a
60 per cent debt to GDP ratio, 60 per cent of all national debt
to gross domestic product. It was gross, 60 per cent gross.
Excluding the provinces and the municipalities, under this
budget the federal government alone will have a public debt
ratio of 75 per cent. It will be a net ratio, not a gross ratio. The
government is well short. If it were to meet the Maastricht
targets it would be expected to run a significant surplus in the
upcoming financial years, not move toward a mere 3 per cent
target.
Let me also talk about the size of the borrowing because it is
important as well. The deficit is projected by the government to
be in the order of $39.7 billion. Government members and
others fondly point out that this borrowing bill is only asking for
$34.3 billion more or less. They say our borrowing requirement
is less than the actual deficit and therefore is not as serious and
we should not worry about it. We have these non-budgetary
transactions that are generating surpluses and if we take those
into account we are in much better shape.
I caution government members very carefully against using
that logic. I would call it Kim Campbell logic. Kim Campbell
made some reference to this in her leadership campaign.
The surpluses on the non-budgetary transactions mainly
concern pension and superannuation accounts. In spite of their
cash surpluses in recent years these accounts have had very
serious actuarial liabilities. Far from there being a solution in
these non-budgetary accounts, they are a completely separate
problem in addition to the deficit and debt problems we face and
will have to be addressed in the future.
There are significant actuarial liability problems. To suggest
for a minute we can borrow from the non-budgetary accounts in
order to finance or reduce our deficit and thereby solve the
problem is completely false. It is an extremely dangerous
suggestion for anyone to send out to financial markets.
I want to give a blunt summary of my reading of this budget,
not just an economic one but a political one. The government has
provided small cuts in this budget. It has provided smaller
taxation measures. It has provided a very, very modest fiscal
stimulus program. Most important, it has deferred major
decisions about the budget and fiscal policy to subsequent years.
Let me comment generally on some of those points.
The government talks about having reduced expenditures
much more than it has increased taxes. There are $5 of spending
cuts for every $1 of revenue increase. There are five cents of
spending cuts for every one cent of revenue increase. The budget
has effected very small magnitudes. They are measured against
planned expenditure levels. We all know that can be a highly
distorted pattern because we then say we are not going to spend
something we never really spent.
(1300)
On top of that, if we actually look at the figures, at the end
product and not these ridiculous cumulative measures, and take
into account that a large portion of these measures was actually
Conservative policy, the government will have reduced its
planned spending by less than $6.5 billion by the end of the third
year. The actual discretionary increases of revenue are less than
$1 billion. These are very small magnitudes. We can compare
that with an expected $25 billion gain in revenue from economic
turnaround. The measures in the budget are absolutely dwarfed
by what is expected to occur in the economy.
Then there is the fiscal stimulus program. I do not know how
the government categorizes these, but there are 15 or so new
spending initiatives in the budget, the major one of which is the
infrastructure program. It is also a small package by any
standards. I do not have to comment at length on the deferring of
major decisions to subsequent years. We have had 18 studies.
I am sometimes amused by the rhetoric used by politicians.
The minister said that we were taking action directly, that we
were constituting a study or a committee or a commission. This
is a very interesting concept of immediate action. The bottom
line is that the deferral of decisions will cost $100 billion in new
debt and associated service charges over the planning period.
In doing these things, particularly the small cuts, the smaller
taxation measures and the fiscal stimulus, the budget is actually
very close to the concept President Clinton had in mind though
his magnitudes were much bolder. There is not an identical
problem in the United States but a similar and serious problem.
The congressional process in that country caused a much
more sensible budget package to emerge. It included some of the
expenditure reduction measures and, in the case of the United
States in which there is more tax room, some tax increases. The
congressional process eliminated the stimulus program which
was, as it will be here, an absolutely ineffective use of additional
money to convince people the government is doing something.
What has happened in the United States has been a relatively
high success. Growth in the United States is beginning and has
been in the past several quarters to significantly outflank
Canada's growth. On top of that its job rate is improving. Its
unemployment rate is falling. Its budgetary deficits although
still serious are dropping very dramatically. I point to the
1870
congressional process which listened to opposition parties, the
Republicans, and which produced a much better policy.
On that last point let me just make another summary of the
budget, a political summary. As deficient as the budget is there
are some improvements. The improvements are not in the
dollars. They are the improvements in the philosophy embedded
in the budget.
The finance minister may have spoken like a New Democrat,
but many of the measures are in the direction of Reform Party
policy. I look at what the government has done to old age
programs, the direction in which it is moving. I look at the
direction on unemployment insurance which I think is very
sound. I look at the direction on industrial subsidies, the
direction on social programs and transfers to the provinces. The
fact of the matter is that these are just directions and with one or
two exceptions the dollars involved are not significant.
The government is laying the groundwork in the budget-and
that is what the market expects-to shedding its election
campaign pledge and moving toward adopting real budgetary
measures in the subsequent year. That is what the market hopes.
The market hopes that these UI cuts are a sign from the
government of a much more serious attitude toward the big
spending programs. The government is hoping that it will get
some breathing room.
I would suggest that buying time is a very dangerous way to
proceed. We know what buying time has done to us in the past. I
was with the Conservative Party in the mid-eighties when its
members decided to buy time. We know what happened both to
the their budget as well as to their party.
(1305 )
In summary, the budget has weak goals. The goals are not
clearly attainable. There is some exaggeration in the
expectations. It is somewhat better than before but still
exaggeration. More than anything the government is taking a big
gamble with everybody's future by putting off these decisions.
I would suggest that politically this gamble is not likely to
work. It will probably benefit the opposition in political terms.
Let me also point out that if it does not work out it is going to
benefit members of the Official Opposition more than anybody.
It is going to benefit their ultimate goals which will be hinged on
the economic performance of the country much more than they
will be hinged on the religion of official bilingualism.
I hope the government remembers that. I hope it takes very
seriously the concerns expressed in this debate and in the
debates in the months to follow, not only as we complete this
budgetary process but as we begin the next one.
The Acting Speaker (Mr. Kilger): Could the hon. member
for London West indicate to the Chair whether she will be
sharing her time or in fact using the full 20 minutes?
Mrs. Sue Barnes (London West): Mr. Speaker, I will be
sharing my time. I consider myself privileged. I am deeply
grateful to those in the urban riding of London West who put
their trust in me. I pledge to do my utmost to justify this trust.
I wish to acknowledge and thank warmly my family and all
those colleagues and friends who support me in these exciting
days. As the mother of three young children it would be
impossible to carry out my responsibilities without their
encouragement and assistance.
In this Chamber I feel the privilege of serving Canada and my
constituents, and to serve truly I pray for humility and decry
arrogance, for humility leads to wisdom, the wisdom to listen
and appreciate, to try and understand as well as to be
understood.
This is the start of my journey, a journey that may not be easy.
It will certainly be bewildering and sometimes treacherous. I
will strive for the courage, faith and courtesy to face squarely
these unusual times of changing conditions and share a vision of
a strong Canada with Canadians across our country.
Let there be no doubt that together with all members of the
House I will not shrink from responsibility so that one day I can
look back and take pride in my modest contribution to this
chosen homeland of mine.
I came to this country at the age of 5, having been born on the
beautiful Mediterranean island of Malta. I am the first Maltese
born Canadian to sit as a member in the House. I am very proud
and thankful to be a Canadian.
At the commencement of the 35th Parliament each of us
brings along an agenda that embodies a vision of Canada. Mine
is a vision of freedom and opportunity based on tolerance and
equality, a vision that rejects discrimination and extremism and
every shade of injustice, a vision that gives us the assurance of a
glorious Canada with all its democratic institutions at our
disposal. We are fortunate in this land to have progressed well in
many of these goals but our work is yet unfinished.
The primary concern of my constituents is the rebuilding of
our Canadian economy and jobs for the present and jobs for the
future. I am heartened that the government, true to its
commitments, has already taken the initiative to translate our
promises into action and charted its direction for choices in
co-operation with the provincial governments. I hope the entire
range of economic institutions and groups will co-operate in
this great venture for the realization of our pressing objectives
of deficit reduction and growth.
1871
What we need for our deficit reduction and for facing the
economic challenges of the nineties is a simultaneous
commitment to increase economic growth and to regain control
of our finances. Our budget addresses squarely these
requirements.
In tackling the issue of growth one of our main thrusts will be
where the backbone of job creation is: the area of small
business. Small and medium sized businesses have accounted
for 85 per cent of all new jobs created in Canada since 1979. In
my riding of London West there are over 1,000 small businesses
and many are struggling.
(1310)
The government through the Minister of Finance introduced a
plan for growing small businesses. It is evident the government
will take the necessary measures to address the basic problems
facing the small business industry.
The Minister of Finance has announced the establishment of a
Canada investment fund to provide venture capital for
innovative companies. There will be a Canadian technology
network to help small businesses gain access to new
technologies. A task force will be established to work with
banks to develop a code of conduct for small business lending.
Another booster for small business will be the replacement of
the GST, a program that in addition to dampening growth by
fuelling the underground economy has been an expensive
administrative nightmare. I also believe it is time to harmonize
our provincial and federal taxation.
The industrial competitiveness of the nation today more than
ever before is influenced by its capabilities in science and
technology and by its research and development efforts.
OECD comparisons of science and technology expenditures
as a percentage of GDP find that countries with a positive
balance of trade in high growth industries are those that make
substantial investments in research and development.
The budget has now strengthened R and D in Canada. We must
encourage technology partnerships among Canadian
universities, research institutions and the private sector which
emphasize the commercial application of research and
development.
The Drake-Siebens Research Institute, the John P. Robarts
Research Institute, the University of Western Ontario,
University Hospital and an industrial research park in my riding
all are eager to share in the value added jobs that can result from
these linkages.
It is especially important to tap the talent and energy of the
young minds of a generation that is now facing over 17 per cent
unemployment. We must ensure that there is a relevant
transition of these young minds from their schooling to their
workplace. New youth internship and apprenticeship programs
are being launched under the budget.
Our world has undergone tremendous changes and the time
has now come for a re-examination of a whole basis of social
and economic policy. The world has become highly
unpredictable both politically and economically. Nevertheless
there is one common feature, a growing interdependence
between countries, an interdependence that is unavoidable and
is strengthened by a process of world economic globalization.
The conclusion of the Uruguay round of the GATT further
reduced tariff barriers. The political obstacles formerly imposed
by the cold war are no more. Market based economies
unconstrained by ideological divisions between east and west
are gaining wide acceptance, all of which reinforce the
globalization process and present us with a tremendous
potential for new markets and ventures with east European
countries, the new republics of the former Soviet Union, China
and the Pacific Rim.
Our jobs and future prosperity will depend upon our ability to
get access to these new markets and to sell our products and
services abroad. Let us start establishing the links to the future.
It is important to remember that one in five jobs comes from
trade.
As a developed society we have to realize that in shaping our
domestic economic policies we must consider the inevitable
changing international economic order fuelled by the process of
globalization. We must focus on the agents of this globalization
process and deepen our understanding of the implications on
domestic economic policies in general and trade policies in
particular.
At the same time we must ensure that Canadians affected by
these changes are supported by the government in coping with a
different economic order. Let there be no doubt that for
Canadians this will be a challenge but should not be seen as an
obstacle to our economic evolution.
I would not be true to myself if I end my maiden speech
without touching the subject which has been lingering in the
minds and hearts of many Canadians. Much has been said and
written about unity.
[Translation]
In 1867, the English and the French communities decided to
join together to form a confederation whose existence is now
firmly established and which must be perpetuated. The other
communities also contributed in an essential way to the
development of our country and allowed Canada to become what
it is now: a country admired by the entire world. For the nations
that it welcomes, cultural diversity is a source of wealth and
renewal.
Canadian unity is an established fact and must not be
questioned.
1872
It is our strength, our pride and a guarantee of stability and
better future for all Canadians.
Preserving that unity is absolutely crucial to all Canadians
being able to meet together the challenges of the next century.
(1315 )
[English]
As the member from a progressive English speaking riding in
the heart of southwest Ontario, I want to say that my Canada
includes Quebec.
[Translation]
Quebec is a part of Canada.
[English]
I know in my heart that we are one. I know in my mind that we
should stay one. Let there be no doubt that whatever tomorrow
brings I will stand for a strong and united Canada.
[Translation]
Mr. Réal Ménard (Hochelaga-Maisonneuve): Mr.
Speaker, I would like to make a brief comment because I liked
the speech of the hon. member very much. First, she sounded
very sincere, and second, she is the first member of Maltese
descent. I congratulate her.
Despite the ring of truth and sincerity in her speech, as well as
her enthusiasm-something all new parliamentarians have in
common-she will certainly agree with me that Canada is a
country in which Quebec will democratically choose to stay or
will decide to leave. The guarantee we must have from that side
of the House or the other side is that as democrats-and there
can be only one type, no doubt-the result of the referendum and
the choice of Quebec will be respected.
Personally, I can tell you that should Quebec decide to remain
within the Canadian federation I would respect that decision, but
I am committed to working democratically for the other choice.
I thank the hon. member for her speech, which was really from
the heart.
[English]
Mrs. Barnes: Mr. Speaker, I thank the hon. member for his
comments. I would always support the hon. member's right to be
an elected member of this House and to give his viewpoint.
I am speaking from my riding and as one who did vote in
favour of the Charlottetown accord and also from my heart when
I say that I believe Canada is a nation that is for all of us.
I was very fortunate as a young girl to have lived in the
province of Quebec for a short time. I regard Quebec as part of
my country. I want the silent majority across this land to know
that we are inclusive. We are not two solitudes. It is my wish that
we are one. I think it is very important economically that we
grow more together, help each other and provide the necessary
cohesiveness across this land so that we can go beyond.
This is a country that has told us clearly that it does not want
to involve itself in constitutional debate. They need this country
to get back to work. That is why I am here. I do have a very
heartfelt wish for unity in this country and I will express it but I
will also respect other members to deliver their messages.
I am hopeful, though, that my message as an English speaking
Canadian will go out to members who represent constituents in
Quebec and that they hear my message as an anglophone in
Ontario. I am studying French and these were very difficult
words for me to say in French. I do not understand everything
but I want members to know that I am trying.
Ms. Margaret Bridgman (Surrey North): Mr. Speaker, I
commend the hon. member on her maiden speech. I thought it
was very well delivered and from experience, once done, it gets
a little easier every time.
I would like to focus on trade and the hon. member's
comments in relation to world markets, globalization, and
bringing that down to an interprovincial trade concept. There is
a tendency to think that our east-west linkage across Canada is
deteriorating economically, that it is becoming more a
north-south kind of thing, and that social issues are the binding
factor from an east-west point of view.
Would the hon. member address a few comments from a trade
point of view in relation to the interprovincial trade barriers.
Mrs. Barnes: Mr. Speaker, I thank the hon. member for her
questions.
I think it is very important to realize that this government is
working toward breaking down interprovincial barriers because
it is very important that we trade with each other as well as with
the rest of the world. In my riding I am most concerned that the
small businesses that have the expertise and the talent access
these new markets, not only outside of our country but across
our country. We are working toward that very rapidly. I hope
these barriers come down so we can have better employment and
better mobility for jobs across this land.
(1320)
Mr. John Richardson (Perth-Wellington-Waterloo):
Mr. Speaker, I commend the previous speaker from London
West for her fine maiden speech. I enjoyed it thoroughly.
Today I ask my fellow Canadians, one and all, to think calmly
and clearly upon the budget that has been placed before this
House. We are indeed fortunate to have such a well thought-out
1873
and balanced financial plan presented to us as the basis of our
operations the next fiscal year.
This balanced approach will lead to a fundamental reform of
our system, create jobs, continue to care for those in need, and
begin the process of reducing the debt to the target of 3 per cent
of gross domestic product.
As the finance minister said in his speech, now is not the time
to move away from our values but is the time to return to them. I
see it. We have kept our commitment to the Canadian people as
outlined in our campaign platform entitled Creating
Opportunities, now simply known as the red book.
This budget is about jobs. It takes action to support the job
creation now, while at the same time it builds the foundation for
solid growth and quality, lasting jobs for the future.
This will be achieved through working toward three major
goals.
First, building a framework for economic renewal to help
Canadian business succeed and to turn innovation into a more
effective engine for economic growth.
Second, ensuring a responsible social security system that is
fair, compassionate and affordable, a reform that will create jobs
and opportunities for all Canadians.
Third, restoring fiscal balance to government so that it can
devote its full energy to helping Canadians adapt to a world of
challenge and change.
This government is dedicated to restoring fiscal
responsibility. This budget exemplifies that commitment by
planning deficit reduction from $47.7 billion in 1993-94 to
$39.7 billion in 1994-95 and down to $32.7 billion in the
1995-96 fiscal year.
Over the three-year period outlined in the budget the
government will implement $5 of spending cuts for every $1 in
revenue increase. This is the only path to successful deficit
reduction. Canadians can no longer afford to shoulder an
ever-increasing tax burden. This budget acknowledges that fact
that while also recognizing the increase in spending today is
simply increased taxes for tomorrow.
In terms of these spending cuts, this is the most significant
budget in years. Measures in the budget result in gross savings
of $3.7 billion in 1994-95, rising quickly to $13.6 billion in the
1996-97 fiscal year. During the entire three-year period gross
savings total $28.6 billion.
These cuts are not illusions. For instance, defence spending
will be 7 per cent lower in the 1995-96 year compared to this
year. Business subsidies will be almost 9 per cent lower in the
1995-96 fiscal year. The cost to government will decline. The
cost of the unemployment insurance program will be reduced by
more than 10 per cent. In the end, total program spending will be
virtually frozen over the next two years and will decline as a
percentage of our economy.
As I mentioned earlier, by applying prudence in making
economic assumptions the actions set in this budget set the
deficit on target of achieving our stated goal of a 3 per cent GDP
of deficit by the year 1996-97. The response I have received
from constituents regarding this budget has been most positive.
Business persons were pleased with the rollback of the
unemployment insurance premium rates to the $3 level. This
initiative will save business nearly $300 million a year. This
money can be reinvested in business to stimulate employment
and create much needed consumer demand.
(1325)
They also like the support for small business that came from
the formation of the Canada investment fund to provide venture
capital for small business and the Canadian technology network
which will provide access to new technologies.
I have talked to small business. These operators were pleased
to hear that a task force would be established to work with the
banks for which at this moment they have great mistrust. We
hope that the banks by working with our task force will allow
small business people to regain faith in the national banking
system, because they seem to be shut out by the great banks of
this country, and to develop a code of conduct for lending to
small businesses.
Farmers and small business people alike were happy that the
$500,000 capital gains exemption was retained, and for good
reason. Over the past month I had the good fortune to meet with
many farmers in my riding about this issue. I agreed with their
thoughts on this matter and I am pleased that when they decide
to retire, they will be provided with the security for which they
have worked so hard.
Many patients and dentists were pleased that the speculated
tax on the employer health paid insurance program was not on
the budget. Constituents entering the housing market for the
first time and the realtors who assist them were overjoyed with
the news that the home owners plan would be made permanent.
As well, local charities in my constituency were delighted
with the opportunity to raise more funds through the lowering of
the threshold of the 29 per cent tax credit from $250 to $200.
What about the many constituents without vested interests in
any particular area? Were they covered in this budget? Simply
put, they were in full agreement with the manner in which the
deficit was reduced and handled. Canadians concerned about the
deficit told me, and these are the facts, that the finance minister
and his pre-budget consultations were the most important thing
that has happened as far as they were concerned. That the
government was ready to act to swiftly cut the deficit was
another big point that my constituents reported to me by phone.
1874
However, they specified they were glad it was done through cuts
and not taxes. Simply put, that is the kind of budget they got.
As I outlined earlier, the 1994 budget works to cut the federal
deficit while holding the line on taxes. It also works to increase
job opportunities and provides capital for business. At the same
time it is a budget that is becoming widely accepted by
Canadians as a fair and honest approach to dealing with the
challenges facing this country.
How did the government manage to do this? Actually, it was
quite easy. It listened to Canadians and for the first time in
Canadian history the federal budget was developed through
public consultations. From the feedback I have received the end
result of these consultations was quite clear. The 1994 federal
budget is good for the people of Perth-Wellington-Waterloo
and I strongly believe it is good for Canada.
[Translation]
Mr. Réal Ménard (Hochelaga-Maisonneuve): Mr.
Speaker, I felt I had to put a question to the previous speaker,
who is a fellow member of the National Defence Committee,
because I share his concerns.
I would appreciate his views on the following. If you asked
me the difference between the economies of the 21st century and
the economies with which the hon. member probably grew up,
considering the slight chronological gap between us, I would say
that a few years ago, it was possible for countries to attract
investment, which meant that people would invest $200,000,
$200 million or $50,000 in a region, and this would create jobs.
(1330)
Today, we have the kind of economies where that is not the
case. Take, for instance, the hon. member's riding, where
companies like Alcan can invest 50 or 100 million without
creating a single job. In today's economic context, massive
investments do not help create jobs. I think there is a
fundamental difference between the economies of the 1960s and
1970s, and what will happen between now and the end of this
century.
The difference between government members and the
opposition is that, try as we may, we find it hard to accept that.
Hon. members on all sides of the House agree that we must
reduce the deficit. Where we disagree is on how to get
Canadians back to work. This is crucial.
The infrastructure program has its merits, although we should
not forget that Prime Minister Bennett proposed more or less the
same program in the thirties during the Depression, when for the
first time, the government was asked to intervene on a large
scale in public works.
All the analysts who looked at this proposal agree that at best
it would create between 40,000 and 45,000 jobs, which makes
this a very modest and conservative program.
Since I know this is a very real concern, and I realize the hon.
member represents a riding where there is a lot of
unemployment, I would like to ask him whether he sees any
reasons to be optimistic and whether he could share these with
me and perhaps make me share his optimism, since I have an
open mind. What reasons do we have to believe that with this
kind of budget, Canadians will be able to get back into the labour
market?
[English]
Mr. Richardson: Mr. Speaker, I thank my hon. colleague
with whom I work on the committee. He has placed on the table
many very fruitful ideas for our discussions. I welcome further
discussion on those items.
Anyone in a professional business knows we like to talk in
exact terms. Everyone knows that a budget is just an estimate of
income and an estimate of revenues. Other areas impact on that.
In the political realm we are dealing with moving a large
institution, dans ce pays le Canada. Our country is so large it has
this inertia to overcome because we have had so many years of
bad employment and slow growth.
The budget created a sense of stability for the people and gave
small nudges to the economy. We were hoping that once the
inertia could be moved-it is a big boulder, a big thing to
move-we can break it and find ways to make it move slowly.
I believe that we are in a stage, as the hon. member mentioned,
where many dollars invested do not create the same kind of man
hours that they did in the past. We would be foolhardy to think
that would be the case.
Simply with enough effort we will probably work at getting
job creation going. That is the idea behind this. There was
stimulus. We were stimulating the patient, hoping to see some
revival, some reactivation within the body of our country that
would get the country moving again; that the growth rates would
reach the targets and exceed them.
[Translation]
Mrs. Monique Guay (Laurentides): Mr. Speaker, today, I
want to tell the Minister of Finance how disappointed and
concerned the government's budget has left my constituents.
I can still picture the finance minister putting on the
workboots he was given by the Prime Minister. What a show!
What cynicism on the part of the Liberals! The 30 per cent of
workers who do not have a job in my riding will not put their
workboots on today, nor tomorrow, for that matter.
1875
The members opposite had promised job creation measures.
(1335)
They went on and on, saying that it was their number one
priority. Where are those measures? Where is this plan for
economic renewal they have been touting around?
People in Laurentides can now judge for themselves the
Liberals' lack of action in the job creation field. The
government is falling back on its infrastructure program, totally
inadequate as it is to put the unemployed back to work. What
lack of realism!
With the number of jobs which will be created in my riding,
hardly a few hundred according to a quick calculation, it is
obvious that workboots dealers in the Laurentians will not be
raking it in.
For workers, it is discouraging to see the government do so
little against unemployment. The federal government invests
peanuts, and then sits down, hoping for this supposed economic
recovery to happen. However, economists agree that this
recovery, if there is one, will not bring about the creation of a
high number of jobs.
The people opposite are quite aware of this. But they prefer to
wait, to stand by, instead of taking action. This new government
must not have anything new or original to offer to the 1.6 million
unemployed in our country, but a lot of talk and no action.
To people in my riding, the Liberals are not much different
from the Conservative government, a government which was
rejected, or I should say ejected, because of its inaction and its
unacceptable decisions. The message given on October 25 does
not seem to be working, unless members opposite have chosen
to ignore it. You promised jobs to the unemployed. But what
have you done in that area? Do you really believe that your are
fully and truly honouring the commitments you made before
October 25? I do not think so, and neither do my unemployed
constituents. They are asking for positive action that will give
them hope and let them see light at the end of the tunnel. They
just want this government to resolutely show its will to help
them and put them back to work. We cannot say that the finance
minister's budget is very convincing in that regard.
The government's attitude toward the unemployed follows a
strange sort of logic, one that these people will have trouble
swallowing. The Liberals are saying: ``We are creating or will be
creating jobs''. But, in actual fact, they are doing very little in
the short term. As for the long term, nothing is planned at the
federal level. There is no vision in this budget.
First, there are no jobs, and this directly affects the people
who want to work. Second, the government turns around and
makes a 2 per cent cut in UI benefit rates on the backs of the
unemployed, victims of the incapacity of the people opposite.
Third, labour is told: ``From now on, you will have to work
longer to qualify for these lower benefits''. Low and
middle-income workers in my riding, several of whom are
seasonal or contract workers, have just been dealt three stiff
blows by the Liberals.
My fellow citizens who were working hard and were always
looking for long-term employment instead of makeshift jobs are
going to have to work magic and pray God or providence to get
the additional unemployment insurance stamps they need.
Regarding the benefit rate which is being increased to 60 per
cent for individuals with modest incomes who support children,
an aged parent or other dependants, all those concerned are
anxious to know how the federal government will determine
who should belong to that category of recipients.
I can see from here UI officers asking applicants whether their
children are really dependants and requesting written proof. I
can see them conducting enquiries to determine whether there is
a common-law spouse or another income-earner in the
applicant's household. In Quebec, we have had our ``boubous
macoutes''. Are we about to witness the emergence of a new
breed of macoutes, the federal Liberal macoutes?
(1340)
These measures will affect many single-parent families,
often headed by women. I sincerely believe that, by establishing
classes of beneficiaries, the government is fostering a climate of
distrust that will lead to significant social tensions. It can be
concluded that, as far as unemployment insurance is concerned,
the Liberal budget is far from brilliant.
Another aspect of this budget a lot of people from my riding
contact me about is the tax credit available to people aged 65 and
over. Seniors do not accept this unfair decision. The minister
tells us that this reduction will affect only 25 per cent of senior
citizens, who built this country. It is outrageous to hear from the
members opposite that our seniors with a $25,000 net income
are rich people. This decision affects once again middle-income
taxpayers and 800,000 seniors in my riding, in Quebec and in
Canada.
The minister appears to have picked a target that was easier
and especially less influential that the family trust lobby. What
an unfair and irresponsible choice on the part of the Liberals!
True, these seniors do not contribute to the Liberal Party coffers
to the tune of $45,000 a year.
An hon. member: That is it.
An hon. member: The cat is out of the bag.
Mrs. Guay: I would now like to address the issue of social
and co-op housing that the government has just washed its
hands of. In this regard, they are following in their predecessors'
1876
footsteps. The Tories have been kicked out but their policies are
still here in this House.
An hon. member: Right on.
Mrs. Guay: We, in the Bloc Quebecois, have been demanding
social housing since the beginning of this session. Local
organizations also put a lot of pressure on the Liberals. Alas, the
government has remained insensitive to the needs of the poorly
housed. This refusal to improve housing conditions for the
poorest is unacceptable.
What happened to the nice promises made to the poorly
housed and to local organizations during the election campaign?
Why did the Minister of Finance write this last September to a
coalition of organizations advocating co-operative and social
housing: ``No doubt a Liberal government will help finance
co-operative and non-profit housing''? In the same letter, the
minister added that it was up to the federal government to ensure
that over a million Canadian households are housed decently
and affordably. Does the minister remember what he said? It was
a smoke screen. It was a lie!
Other members opposite engaged in pre-election
opportunism. The present Minister of Foreign Affairs was an
ardent defender of social housing. He loudly proclaimed that the
real power was in Cabinet. Where is this famous power today?
Did he try to influence the government in favour of social
housing? Looking at the budget, we must conclude that the
Minister of Foreign Affairs has no clout or that social housing is
no longer worth it, or maybe both conclusions are true.
The Deputy Prime Minister and the Minister of Human
Resources Development were also fervent defenders of social
housing. What happened to them? They have disappeared into
the luxury of limousines, Challenger jets and ministerial pomp.
That makes you quickly forget about the poorly housed.
What is the other advocate of the poorly housed, the member
for London East, doing now to get his government moving on
this issue? After such trickery, there is no need to look very far
to see why the people are disillusioned with politicians.
(1345)
The government made a choice. It chose to say no to social
and co-operative housing. In saying no to the 1,200,000 people
who are poorly housed, the Liberals are also saying no to many
positive aspects associated with multiple-dwelling units.
The social and co-operative housing industry creates jobs in
the construction industry and generates spinoffs for
construction companies and suppliers of building materials and
residential fixtures. It stimulates consumption at
neighbourhood stores.
From a social standpoint, the construction of social and
co-operative housing generates enormous benefits. Clean,
well-heated and well-lit units have a positive effect on the
health of the occupants. Health care costs are therefore reduced.
People who live in co-operative housing are not isolated. In the
long run, social housing helps to lower the cost of social
services.
Social housing provides senior citizens with the sense of
security they have a right to expect. The Liberals have turned
their backs on these positive effects. However, the Minister of
Finance has forgotten that there will be a price to pay for this
rejection and all of us will be paying it, directly and indirectly. I
call this governing without vision and without a sense of
humanity. And this is completely unacceptable to me.
I wonder what response the Prime Minister will get in
Shawinigan where nearly 41 per cent of households spend over
30 per cent of their income on housing. The situation has grown
desperate. Poverty is gaining a toehold in Quebec and in Canada.
A total of 1,200,000 Canadians live in substandard housing
conditions. In Quebec, the housing crisis is even worst, with
44.3 per cent of rental household, compared to 37.1 per cent in
Canada. In Quebec and in Ontario, 194,000 households spend
more than 50 per cent of their income just on rent. In Canada,
583,000 households are in the same situation.
In some cities, the problem is even more dramatic. In
Montreal, one in five rental households, 19.1 per cent, must
spend 50 per cent of its income on rent. Twelve thousand
households in Ottawa, 26,645 in Toronto, 22,095 in Vancouver,
and 4,940 in Halifax set aside more than half of their income for
rent.
Behind these figures are single individuals and lone-parent
families, which are increasing in numbers in our society. The
people living in the worst conditions are young Canadians
between the age of 15 and 24, pre-retired individuals 55 to 64
years old and individuals over 65 years old. The Liberals have
abandoned these people. There are children in these households,
members of the next generation, living in poverty. In Canada,
child poverty affected 1,210,000 children in 1991. The Liberals
have abandoned these children too. I strongly believe that we all
have to take stock and ask ourselves if children must be left
destitute in unhealthy housing.
I would be remiss in not mentioning the homeless.
Homelessness has reached unbelievable proportions. More and
more people find themselves without shelter, mostly women but
also an increasing number of young kids. Natives living in urban
areas, of which there are 15,000 in Montreal, are among the
worst hit people. To all you poverty-stricken people, the federal
government says: no! It is telling you that you can keep living in
substantial housing or in the streets. It is telling you that you
must continue to cut on food, clothing, and basic care. The
government is telling you that you do not exist. Such contempt is
unbelievable!
1877
(1350)
By opting out of new public housing programs, the federal
government has badly damaged the social fabric of our country.
With the federal contribution decreasing from $113 million in
1989 to zero dollar nowadays, it is obvious that Ottawa has
willingly and voluntarily decommitted itself from such
programs. The Minister of Finance is well aware of the situation
and is depriving people of their fundamental right to a decent
and adequate housing.
What is even more upsetting is to see that because the
members opposite are so insensitive to the needs of people who
have inadequate housing, Canada Mortgage and Housing
Corporation is considering a rent increase of 25 to 30 per cent
for social housing. What a shameful idea.
The government is saying to the less privileged: Give us more
money and we will use it to provide housing for other destitute
people. That is how mean this government is. I firmly believe
that the minister could have eliminated the waste and trimmed
the fat of the government in order to find some money for the
people who have inadequate housing, instead of making the
underprivileged pay for the housing needs of other
underprivileged people. The minister should be ashamed of
himself.
Quebecers and Canadians of all backgrounds, the
underprivileged, the poor who live in awful conditions and the
elderly all feel betrayed by this Liberal budget. While they do
everything they can to stay in the black, to make ends meet, the
government does not do its homework, does not take its social
responsibilities, and lets the poor live in substandard housing.
In conclusion, we now see the real face of this government
which, before October 25, was talking about a better and a fair
society, where individuals would regain their dignity and their
pride. The government has shown its true colours. The members
opposite are acting like robots, like cold and uncaring people.
The government has betrayed those who longed for a better
future. This budget is a shame.
[English]
Mrs. Georgette Sheridan (Saskatoon-Humboldt): Mr.
Speaker, I would like to acknowledge the eloquence with which
the hon. member put forward her comments. I believe she is
speaking from her heart when she outlines the problems of the
people in her riding, the people of the province of Quebec and to
some extent in other parts of Canada. However, I would like to
tell the hon. member that the concerns she has are shared by
people throughout the country in terms of the need for social
programs and so on.
I come from the province of Saskatchewan which has a
population smaller than the city of Montreal. We have farmers
who are struggling and small businesses that are closing down.
The Liberal government is more than aware of these concerns.
We had this kind of national perspective in mind when the
budget was so closely designed in conjunction with the human
resources development plan. It is a plan that links the monetary
means to put into practice solutions to the problems that the hon.
member raises.
It is very easy to criticize a strategy, especially in the early
days. It has not even been a week since we have heard the budget
plan. I would ask the hon. member to at least give it some time
before she starts tearing down what I see as very positive steps
on the road to recovery.
I see a certain inconsistency. One of the criticisms made was
the laughing at-perhaps that is too strong a word-or at least
not having total faith in having criteria for getting a UI benefit
based on whether one has so many children, whose children they
are and so on. I also find inconsistency in the cries I hear from
the Bloc for fiscal responsibility. I would say it is only realistic
in this world that before one gives out money one finds criteria
according to which that money ought to be allocated.
I would hesitate to add that this inconsistency is not dissimilar
from a party that can sit as the opposition with a clearly
separatist agenda. It is the same kind of thing that makes some of
the arguments a bit fragmented.
(1355)
Our vision on the other hand is a national vision that offers
goals for all parts of Canada. Part of being in a confederation is
to give from one part to another part where the needs can best be
met. Sometimes that means one part of the family ends up with a
little less than the other.
Coming from Saskatchewan I can assure the hon. member that
the only way the people in our province have survived is by
putting our shoulders to the wheel and helping our neighbours
when they need the help most. I would encourage the hon.
member and her party to use the same strategy when looking at
this country.
Finally, I would ask the hon. member to use her talents, her
abilities, her eloquence to work with the government to address
the very legitimate concerns she has raised. There is no question
there are people in the country who are suffering and I feel that
the budget and the plan put forward by the minister of human
resources to re-examine the social programs addresses that
squarely. Any assistance that the hon. member can give the
government in putting those matters forward would be more
than welcomed.
[Translation]
Mrs. Guay: Mr. Speaker, as you know, for three months now,
I have been using every opportunity to promote social housing.
Poor people need a place to live and cannot wait for the
government to some day decide to act. They need help now, not
in a year or two. There are already 1.2 million people in Canada
1878
who live in inadequate dwellings. This is unacceptable.
Something must be done to help these people.
Exactly two weeks ago, I participated in a demonstration
organized by FRAPRU, a group which supports and helps people
living in inadequate dwellings find social housing units.
FRAPRU includes all kinds of non-profit associations. Four
hundred people participated in the demonstration.
An hon. member: And there were no Liberals.
Mrs. Guay: Of course not. Did you know that not even one
member of the Liberal party was present at this event, which was
an important one for all these people.
I guess I will have to keep using every opportunity to raise this
issue. I also want to thank the hon. member. I do hope that she
will be able to convince the Liberal Party to take positive and
concrete action, instead of only using rhetoric as has been the
case so far. The government will spend $2 billion, but not on
social housing. Nothing is provided for cooperative housing.
This is merely a residential rehabilitation plan for owners. It is
impossible for a poor person who lives in an inadequate
dwelling to own a property.
Therefore, I ask that representations be made by everybody on
behalf of these poor people, so that the government will provide
funding to help those living in inadequate dwellings and to
really promote social housing.
Mrs. Anna Terrana (Vancouver East): Mr. Speaker, I want
to thank the hon. member for her comments. I represent a riding
which badly needs social housing. I must say that I have been
very active in this area and I believe the government has done a
lot. I had the opportunity to meet many foreign visitors who
came to see what we had done, including in terms of social
housing units, and to be among those who were able to make a
difference in this area, in Vancouver.
I certainly understand the hon. member, but we must not
forget that Canada is a vast country with a small population. The
money has to come from somewhere.
As you know, a consultation exercise on all social programs
will take place, and social housing will of course be included in
that consultation. I think that work in this area started a while
ago.
(1400)
As you know, housing is very costly and the federal and
provincial governments both help pay housing costs for those
who live in social housing units.
I hope that once the study and the consultation process is
completed, we will be able to pursue these programs. In the
meantime, the $2 billion provided in the budget are strictly to
help those who already live in social housing units.
I will continue to fight for social housing, because it is
something very important. I am told that there are 8,000 people
in my constituency who do not live in decent dwellings. I know
that there is a need, but I also understand that funds and
opportunities are limited.
Again, I will keep fighting and I hope that the hon. member
will do the same, so that together we can do something and
hopefully get additional money.
Mrs. Guay: I thank the hon. member. I am well aware of her
constituency's problem because I have been studying the
situation in all constituencies for the last three months.
However, I think that we could take immediate action when it
comes to public housing. Cuts could be made in family trusts,
for example, but that is something we do not want to talk about
and especially do not hear about. The slush fund, of course! That
is the reason. It would take courage to proceed with those cuts
and I hope the hon. member has enough influence on his caucus
and on his party to make sure that the cuts are made in the right
places and not where the money is badly needed.
Hon. Marcel Massé (President of the Queen Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal): Mr.
Speaker, it is with great pleasure that I rise today to participate
in the debate on the borrwing bill to impliment the budgetary
masures announced at the beginning of the week.
[English]
It is not only a pleasure for me to have this opportunity, but it
is a great honour because officially this is my maiden speech in
the House and my first formal opportunity to address my
constituents from this place.
[Translation]
That, Mr. Speaker, is why I would ask you and my colleagues
to allow me, briefly, to thank the voters of Hull-Aylmer, who
supported me in my campaign and did me the honour of electing
me to represent them in the House of Commons and speak on
their behalf. I thank them sincerely for their support, and assure
them that I will do my very best to live up to the confidence they
placed in me.
I would like to take this opportunity to tell them that, as a
member of Parliament, I intend to act in the best interests of all
the voters in my riding, and not only of those who voted for me.
As we all know, the historic riding of Hull-Aylmer is on the
Quebec side of the Ottawa River, just across from the nation's
capital. It has a population of 87,700; this number can be broken
down as follows: 76,2 per cent are francophone, and 14,1 per
cent are anglophone. Portuguese is the mother tongue of 2 per
cent of the people in my riding.
I may add that 60 per cent of the people speak both official
languages fluently.
1879
[English]
Over 25 per cent of the workforce is composed of civil
servants. Although I am a newcomer to active politics, I am no
stranger to government and the workings of our democratic
institutions.
As a career public servant I have had the opportunity to work
closely with many governments of different political stripes. I
have indeed been fortunate to have had the opportunity to
observe up close how governments function. It is in large part
because of this knowledge of government that I started to feel
increasingly uneasy in the last few years about the way in which
the country was being managed. I felt that the hackneyed,
disjointed and visionless approach of the previous Conservative
government was no longer working.
(1405)
[Translation]
Canada and its public institutions are now at crossroads. It is
urgent that our institutions, especially government ones, change
radically and quickly if we do not want our country to be left
behind by others. What is at stake here is that we do not become
a small marginalized country with rigid structures, while other
countries enthusiastically embrace the future.
In the Liberal Party, I found people who think the same way I
do and who are determined, as I am, to be part of a government
that is aware of its primary responsibility of fundamentally
restructuring the state machinery in order to put it back in the
service of the people so that they can regain both confidence and
hope in their government.
Like other countries' governments, the government of Canada
must tackle head-on the need to change fundamentally, because
of the many forces that are in play in the world: a diminishing
role for the state in modern societies, an expansion of
international institutions, an increase in international
competitiveness, developments in communication and
information technologies, and an increase in the education level
of people, who demand, rightly so, a greater participation in the
decision-making process.
However, the need for reform also stems from a deep
dissatisfaction by a good portion of the electorate regarding the
effectiveness of government authorities. This dissatisfaction
leads to a gradual loss of confidence in political leaders and the
institutions. And this loss of effectiveness is obvious in a
number of areas of the government apparatus. We occasionally
see it as well in politicians who, once elected, forget their
commitments to their constituents, and in elected
representatives when they start acting mainly for narrow
partisan reasons or showing favouritism.
We sense it also in our government institutions, tied by their
own red tape, in organizations designed more to help those they
employ than those they are supposed to serve. We can see it in
outdated or inefficient government programs which might
duplicate the work of other levels of government. Finally, we
see it in the power struggles between levels of government
seeking to protect their authority, their bureaucratic interests or
their administrative preserves, regardless of the superior
interests of their citizens.
[English]
The resolution of problems such as these requires us to set
truly farsighted goals for ourselves. This is what our party has
done.
At the heart of everything is a need to restore confidence in
both the people and the institutions of government. We have to
do this in the context of the imperative of the fiscal crisis which
has given rise to some of the tough medicine contained in the
budget and which will continue to condition the policies of this
government throughout its mandate.
However, the goal of getting government right is not simply to
save money. This initiative is animated by a much wider vision
of the need to rethink and redesign government in response to
profound forces, both external and internal, of which
expenditure restraint is only one. Our intention is that the
process of reform will be shaped by an evolving vision of the
role of the federal government in society, of its relationships
with its key partners and the part which its public service should
play within that framework.
To reach these results we must proceed in a coherent way.
Other governments have tried to deal with some of the problems
I just mentioned with a random hacking at programs and
services and costs of government. Problems of this breadth
cannot be solved through an approach such as that.
Therefore one of our first objectives must be to try to define
more clearly where each level of government can make its best
contribution. If we can do this we should be able to improve the
climate of federal-provincial relations in this country.
(1410)
In addressing this matter we will be forced to ask some basic
questions. Is government doing too much? Can government
truly be asked to take on every issue and attempt to arbitrate,
compensate or replace? Should government pull back and do
less, leaving more scope to the individual, the private sector,
communities and the voluntary sector?
A second objective must be to ensure that our programs are
targeted as much as possible to the highest priority needs of our
citizens and our country. We have to set priorities and we have to
transfer resources from less productive to more productive uses.
We have to make choices. In doing so we must see that as far as
1880
possible we place the needs of the most disadvantaged groups in
our society first.
Our third objective must be to refashion the programs of the
federal government in a way that makes them more responsive
to clients and more service oriented. We have to see that clients
are substantively involved in the exercise to ensure that we look
at the programs from their perspective, not just from that of
administrative convenience.
Where federal programs touch those of other levels of
government we have to achieve greater harmony and eliminate
instances of duplication or waste of other kinds. Clearly an
ongoing quest for greater efficiency and higher levels of
productivity and performance must go hand in hand with these
other goals.
Our fiscal situation is such that we simply cannot afford to see
taxpayer funds misused or wasted. In all of this we have to bear
in mind that the impact of the federal government depends
enormously upon the public service. We need to preserve the
best features of that service, encourage change where it is
necessary, help the loyal people who work within it to adapt, and
support them in the transitions that will be required. We must
maintain Canada's reputation for having one of the best public
services in the world.
The task of reforming government extends beyond the world
of programs and public servants. It also imposes responsibilities
upon those of us at the political level. Thus another objective
must be to reassert some old-fashioned values such as integrity,
reliability and accountability.
Our government has taken a number of steps already to
reinforce these values. We have staked out a policy position in
the red book. We have stuck to it in our throne speech and in this
budget. We have encouraged Canadians to watch our
performance and hold us to account for what we do. We intend to
be consistent, accountable and honest in our dealings with
Canadians. Old virtues and values need to be restored to public
life.
The final objective associated with getting government right
is to see what measures can be taken to encourage citizens more
effectively to participate in decision making and to place
relationships between citizens and government on a more
positive footing.
Both at the political level and within the public service we
hear continuous rhetoric about the need to consult more, to
participate, to build a greater sense of partnership with the
electorate, and so on. Most reform initiatives never get beyond
that rhetoric. We have to do better. What practical steps can be
taken by both politicians and public servants to achieve this
goal?
I would like Canada to be seen as a leader among other
countries in this sphere, open to new ideas and willing to
experiment with new approaches.
[Translation]
So, it is obvious that the budget that was just tabled in this
House is only a piece, but certainly a major piece, of a much
bigger puzzle. It is only a step in the huge reform process that
seems essential to us, and I would like to briefly remind you of
some of these proposals.
(1415 )
[English]
The budgetary provisions will strengthen both the economic
and the social union of the country. The deficit reduction plan
laid out in the budget calls for a reduction in spending of $17
billion over the next three years. There is $5 of net expenditure
restraint for every dollar of net revenue enhancement, a measure
that will contribute dramatically to getting the deficit under
control and allow us to reach our deficit target of 3 per cent of
gross domestic product.
[Translation]
This budget fulfils our promise to tell the provinces what they
can expect of the federal government for the next few years.
They had told us that in order to plan their services they needed
to know what the transfers would be. We listened to them.
Unemployment insurance premiums are really employment
taxes. Their high cost is often a deterrent to job creation. We
have therefore decided to solve this problem by lowering these
premiums to create jobs now. This measure will translate into
$300 million savings for industry; $300 millions which they will
be able to invest in job creation.
Various measures are geared to helping small businesses, a
sector crucial for our economy, specifically we will create a
Canada Investment Fund to provide venture capital, set up a
Canadian Technology Network to help small businesses gains
access to new technologies, and expand the network of Canada
Business Services Centres to concentrate access to government
services in a single point.
Our national infrastructure program supports job creation. We
have negotiated agreements with all 10 provinces and this
means that the way is now clear. The projects can start to create
real and productive jobs in all parts of the country. We will also
set up apprenticeship training programs for young people to give
them the opportunity to get a first an crucial work experience.
[English]
Measures in the budget also address important social issues.
Full funding for the national literacy program is being restored.
A centre of excellence for women's health is being created. The
Canadian race relations foundation will finally be established. A
prenatal nutrition program for low income pregnant women is
being launched, as is the aboriginal head start program.
1881
The budget also reinstates the law reform commission and the
court challenges program.
I will not at this time, unfortunately, dwell on every single
initiative outlined in this budget. The Minister of Finance on
Tuesday, hon. members will agree, did an excellent job of that.
Let me, however, mention that as part of our re-examination of
the role of government I have been asked by the Prime Minister
to review all federal boards, agencies, commissions and
advisory councils. Once again, this is not an exercise simply to
reduce expenditures. There are no predetermined targets for
savings. The objective is to determine whether their raison
d'être is still valid and whether they are consistent with current
needs and priorities.
I would like to emphasize this point. The purpose of this
review and all others that will be undertaken is not like it was
under the previous Conservative government, a scorched earth
approach to public policy. Any cuts, rationalizing or
streamlining that results from reviews are intended to ensure
that all of our activities and programs are delivered with
maximum efficiency and meet the real needs of real people.
Likewise, it is in the same spirit and in the same context that
the Prime Minister has asked me to proceed with the program
review to assess the continued relevance and effectiveness of
federal programs and services. In this review, we will identify
options and resources for future programming geared to our
changing society and the changing expectations and needs of
Canadians.
(1420)
It is my intention to see that as result of this program review
our resources, both human and financial, are directed to the
highest priority requirements and to those areas where the
federal government is best placed to deliver services.
I spoke earlier about the need for governments to co-operate
and co-ordinate their activities. With this in mind, the Prime
Minister has also asked me to work with the provinces to
achieve a better alignment of roles and responsibilities and, as a
result, a more efficient and affordable federation. This should
allow governments to reduce overlap and duplication while
improving the delivery of critical services.
[Translation]
Of all the measures announced in the budget, I am particularly
interested in those concerning the renewal of the public service.
I know the federal public service and I can assure you that it is a
credit to our country.
[English]
The government naturally needs and relies on the public
service to help make the government's objectives and plans a
reality. All Canadians must realize how fortunate this country is
in having a world respected non-partisan public service, made
up of dedicated men and women, which daily in hundreds of
communities right across the country ensures the essential
services to all of us.
To be the best and to maintain a position as the best, it is
necessary for any institution to continually renew itself.
Renewal includes questioning some of the basic assumptions
which have guided our operations for years, even decades. It
means constantly seeking better, faster, more effective and more
efficient ways of delivering services. It means creating and
recreating an organization that is sensitive to and responds
appropriately to the needs of clients, in this case the Canadian
taxpayer.
[Translation]
The public service is well aware of this requirement. We have
to recognize the fact that it was able, over the last five years, to
make difficult and comprehensive changes to its operations and
methods. It is obvious that a transition period like the one it is
going through right now is not only stimulating and motivating,
but also a source of great tension.
I want to emphasize that the salary freeze announced in the
budget will allow us to avoid massive lay-offs. The President of
the Treasury Board has indicated that the government is
determined to guarantee a high level of job security to federal
public servants.
[English]
It is also important to view our decision to freeze wages in this
context. First, it is evident from the other provisions of the
budget that the public service is not being singled out for
different or harsh treatment. In fact, in 1993 close to two-thirds
of all employees under major wage settlements in Canada were
subject to either a wage freeze or a decrease in their wages.
Second, the Prime Minister, the President of Treasury Board
and I have been very clear about our determination to form a real
partnership with civil servants. Everyone will agree that the
climate has changed, that we have made genuine attempts to
change our relation with the public service. This is not a replay
of 1984 when the previous Prime Minister talked gleefully about
giving public servants pink slips and running shoes.
The process of renewal of the public service has begun and
will continue as all of us co-operate on forging a new definition
of government, its role and purposes.
We are calling on all the members of this House, other levels
of government and particularly on Canadians in every walk of
life to join with us in finding new, innovative and more effective
approaches to program and service delivery. United in our
determination, we can steer this country toward horizons of
harmony, social justice, tolerance and prosperity.
1882
[Translation]
I say it again, these budgetary measures are only the first step
in redefining the social and economic union that makes Canada
an example for the world to follow, an example where
differences are respected and the most vulnerable in our society
are protected.
[English]
This was the wager of the Fathers of Confederation, a risky
wager, a courageous wager and one that each generation of
Canadians must win anew through a collective act of faith and
imagination.
(1425)
It falls to this generation of Canadians to preserve, indeed to
fight to defend the precious legacy of previous generations so
that we can pass on to our children not a damaged country, not a
shrunken country, not a poorer country, but a greater, wiser,
more generous country.
[Translation]
To those who are ready to give up on this country and who lack
the creativity and stamina to reinvent a society of which the poor
and the hungry of the world can only dream, I say no.
In the dying days of this century of unprecedented change, we
have a responsibility to demonstrate that a small group of people
that have come from all countries and cultures around the world
can live in peace and harmony, in a spirit of mutual respect, and
garner strength and courage from the sharing the experience of
their vulnerability.
[English]
To those who would tear away the human face of this country
and rob us of the right to be different, I also say no. Canadians
have always been innovators and pioneers. Unlike our great
neighbour to the south, we have resisted the temptation to
homogenize our society. We have made room, often imperfectly
and at the price of fierce struggles for diversity and for
difference. This is what the world must learn to do and we must
lead the way.
[Translation]
The challenge this government must meet is not any different
from that of many other countries. A budget is not a simplistic
deficit reduction exercise. Our mandate for change must result
in fundamental reform, and this budget is but a first step in that
direction.
[English]
The Acting Speaker (Mr. Kilger): I did let the minister go a
little longer than his 20 minutes, in part as it was his maiden
speech and in part largely from my reading of the good sense of
ongoing co-operation and goodwill by members from all
parties.
Now I would hope that the minister will allow the Chair to
fulfil the opportunity for members opposite to have a full 10
minute complement to ask questions or comments which
obviously will take us slightly beyond the 2.30 adjournment
time.
Mr. Myron Thompson (Wild Rose): Mr. Speaker, my
congratulations to the hon. minister on his maiden speech and
congratulations on your election and appointment to your high
office.
Throughout the speech I heard several times the word waste
and also the word essential. I have jotted down four items. I
would like the minister to comment on whether he considers
these items essential or non-essential. If he feels they are
non-essential, would he consider removing these from the
present expenditures and putting this money either toward more
job creation or toward the poverty stricken children in our
country according to the Minister of Human Resources
Development?
The first thing I have on my list are the Challenger jets, which
should not surprise anybody, MPs pensions, the blue cars that
the cabinet ministers run around the hill in and the $4.5 million
museum that is going to be constructed in the Prime Minister's
riding.
I ask the last one based on the idea that we presently fund 12
museums to the tune of $268 million. They cannot support
themselves and I would question that one. I would like the
minister's comments, please.
[Translation]
Mr. Massé: Mr. Speaker, I thank the hon. member for his kind
words at the beginning of his remarks. I would like to point out
something, in terms of principles.
(1430 )
[English]
There is no doubt that any government in the modern world now
must be extremely careful in the way it allocates its
expenditures because the days of the fat cats have disappeared.
No longer will we face a time when governments, whether
municipal, federal, provincial in Canada or elsewhere in OECD
countries, have enough free money that they can afford to waste
a cent of it.
Voters in all OECD countries have expressed very clearly in
recent years that they are much more aware of what
governments do, that they watch governments much more
carefully and that they will not permit their governments to be
wasteful.
On the question of principle I must say I agree entirely with
the hon. member. It is always in the application of principles
that reasonable people disagree. There may be a large number of
actual expenditures where we on this side of the House feel there
is full justification for spending the taxpayers' money and where
members of the other parties in the House may indicate different
priorities. I believe this is democracy.
We have to offer to voters in our country a number of choices,
as I think we did quite clearly in the red book. We have to ask
1883
them to vote for parties that offer very different priorities in
terms of their expenditure plans in particular. We did that.
We not only indicated our intention to bite a few extremely
difficult bullets in terms of expenditures such as in the case of
defence, but we had the courage to do this year in the budget
what governments in the last 30 years have not had the political
courage to do, namely to cut infrastructure expenditures that had
become unnecessary because we had finished the second world
war and were moving into a period in which international
relations were very different.
I take this example of military expenditures because it
involves literally over the years billions and billions of dollars;
in fact $7.4 billion over the next five years. It is much more
important for a government to have a clear idea of its long-term
views and priorities so that it can make reductions in
expenditures or reductions in waste that will permit the country
to meet its long-term need for fiscal responsibility and to better
use its money.
In the various items the hon. member mentioned there may be
ways of reducing waste. I would fully agree with him that we
should reduce that waste to an absolute minimum. In the budget
we saw in terms of the large numbers and in terms of the difficult
decisions that we have agreed and we have taken the right
decisions.
[Translation]
M. René Laurin (Joliette): Mr. Speaker, listening to the hon.
minister responsible for the public service, one gets the
impression that he is a new politician with definite and
unquestionable experience, that he is a very articulate man who
should bring about changes, at least as far as renewal of the
public service is concerned.
The minister alluded to the importance he attaches to the
public service, to the importance he attributes to public servants
who support the work of members of Parliament, ministers and
Parliament as a whole. I think he is right because none of us
could work effectively if we could not count on public servants.
The minister knows what he is talking about since he himself
was, until very recently, until his election, a senior public
servant. That is why I believe that he knows what he is talking
about.
However, I am surprised that nothing in this budget reflects
this appreciation of the Public Service. There is no tangible
evidence in the budget. Although the vast majority of public
servants helped to elect this new government, and it is public
knowledge that the Public Service supported the federal
government, they could at least expect some appreciation of the
services they provide. What they got is a slap in the face.
The budget does not contain a single measure that would
communicate to these people the government's recognition and
appreciation of the work they do every day to support its
operations.
I would like to know if the minister is planning any statements
in the near future about Public Service renewal and if he will
finally demonstrate that proposals will be followed by concrete
action. Instead of coming down harshly on the people who are
important to us, perhaps the government should start a dialogue
and agree on ways to improve morale and maintain the level of
professionalism and fairness in the services they provide.
[English]
Mr. Massé: Mr. Speaker, it is a great pleasure to answer that
type of intervention. Certainly I feel at ease when dealing with
questions on the public service.
[Translation]
I greatly appreciated my hon. colleague's opening remarks. I
must say that, when you are familiar with the civil service, you
often get a much better feel for the kind of problems it faces. In
recent years, the Government of Quebec has imposed a number
of wage freezes and cuts that civil servants did not take too well.
I can understand that. When, as a civil servant, I was seeing
the wage gap widen between the public and the private sector,
especially at the senior levels, I too found it hard to take.
In the context of the last budget, I think that it is important to
see that, with this wage freeze, we are in fact protecting the job
security of our civil servants. It was a hard move to make, but
given the context, it was clear that cuts were required not only in
government programs, but also in operating budgets.
To compensate for wage increases, we would have had to
reduce the number of employees in the Public Service.
Considering, as I said, that two thirds of private sector
employees either had no increase or a negative increase, we
determined that the sacrifice asked from federal civil servants
was not disproportionate, as compared to those who are seeing
their military base close down in Atlantic Canada or those
affected by the decision to withdraw from the KAON project in
British Columbia or to reduce the level of activity or close
military bases in the Prairies and in Ontario.
Under those circumstances, while I agree entirely with my
colleague on the principles of good management for a public
service, I must say that I fully support the decision made in this
budget to freeze wages.
The Acting Speaker (Mr. Kilger): There is very little time
remaining, barely one minute. I would ask the member for
Mégantic-Compton-Standstead to put his question as briefly
as possible so that the minister can answer quickly and we can
then proceed to adjourn.
1884
Mr. Maurice Bernier (Mégantic-Compton-Stanstead):
Mr. Speaker, I will try to be as brief as possible to allow the
minister time to respond. I put the question to him, since he is
the Minister of Intergovernmental Affairs and this is the area
that concerns me at the moment. The minister spoke at length
about government efficiency and wondered if the state got too
involved. Many people do in fact believe that the state
intervenes too much in their lives. Many people also feel that
there is too much government.
I would like to hear the minister's views on the role of the
federal government in its relations with provincial
governments. I am thinking here in particular about the Quebec
government and the whole question of overlap. What does he
intend to do about this?
The Acting Speaker (Mr. Kilger): The minister's views, but
briefly please.
Mr. Massé: Mr. Speaker, the hon. member of the Opposition
has presented me with a challenge in giving me some 30 to 45
seconds to talk about the role of governments and the
elimination of overlap.
Consequently, I will only address the policy issues. There is
no doubt in my mind that the government or public sector has
grown too big in recent years and that it tried to provide too
many services, a large number of which could have been
provided more efficiently by the private sector. Our three levels
of government-federal, provincial and municipal-must act
more responsibly in fiscal matters and review all their services
to the population so that we can finally offer the same quality of
service for much less.
The division of responsibilities among the various levels of
government is clearly something we need much more time to
discuss, since it is a fundamental issue. However, I fully agree
with the hon. member that we should reduce overlap as much as
possible, as it is expensive and unnecessary.
The Acting Speaker (Mr. Kilger): I want to thank the
minister and all hon. members present for their co-operation.
[English]
I would also take the occasion as we go into a week of recess
to wish you all a good week with your families, friends and
constituents. We look forward to your speedy return.
It being 2.40 p.m., this House stands adjourned until Monday,
March 7, 1994 at 11 a.m pursuant to Standing Orders 24(1) and
28(1).
(The House adjourned at 2.40 p.m.)