CONTENTS
Tuesday, February 28, 1995
Motion moved and agreed to 10111
Mrs. Brown (Calgary Southeast) 10112
Mr. Mills (Red Deer) 10112
Consideration resumed of motion 10115
amendment to the amendment 10123
Mr. Mills (Broadview-Greenwood) 10124
Mrs. Stewart (Brant) 10129
Mr. Speaker (Lethbridge) 10137
Mr. Speaker (Lethbridge) 10138
Mr. Mills (Broadview-Greenwood) 10141
Mrs. Dalphond-Guiral 10143
Mr. Chrétien (Saint-Maurice) 10145
Mr. Chrétien (Saint-Maurice) 10145
Mr. Chrétien (Saint-Maurice) 10146
Mr. Martin (LaSalle-Émard) 10146
Mr. Martin (LaSalle-Émard) 10146
Mr. Martin (LaSalle-Émard) 10146
Mr. Martin (LaSalle-Émard) 10147
Mr. Martin (LaSalle-Émard) 10147
Mr. Martin (LaSalle-Émard) 10147
Mr. Martin (LaSalle-Émard) 10147
Mr. Martin (LaSalle-Émard) 10148
Mr. Martin (LaSalle-Émard) 10148
Mr. Gauthier (Roberval) 10148
Mr. Martin (LaSalle-Émard) 10148
Mr. Gauthier (Roberval) 10148
Mr. Martin (LaSalle-Émard) 10148
Mr. Axworthy (Winnipeg South Centre) 10149
Mr. Martin (LaSalle-Émard) 10149
Mr. Axworthy (Winnipeg South Centre) 10149
Mr. Martin (LaSalle-Émard) 10149
Mr. Mills (Broadview-Greenwood) 10150
Mr. Martin (LaSalle-Émard) 10150
Mr. Martin (LaSalle-Émard) 10150
Mr. Scott (Fredericton-York-Sunbury) 10151
Mr. Martin (LaSalle-Émard) 10151
Mr. Chrétien (Saint-Maurice) 10152
Mr. Chrétien (Frontenac) 10152
Mr. Martin (LaSalle-Émard) 10152
Consideration resumed of budget motion, amendmentand amendment to the amendment 10153
Mr. Mills (Red Deer) 10166
Bill C-37. Consideration resumed of motion forthird reading 10174
Motion agreed to on division: Yeas, 146; Nays, 79 10174
(Bill read the third time and passed.) 10175
Consideration resumed of motion, amendment andamendment to the amendment. 10175
Mr. Gagnon (Bonaventure-Îles-de-la-Madeleine) 10176
10107
HOUSE OF COMMONS
Tuesday, February 28, 1995
The House met at 10 a.m.
_______________
Prayers
_______________
ROUTINE PROCEEDINGS
[
English]
A message from His Excellency the Governor General
transmitting estimates for the financial year ending March 31,
1996, was presented by the President of the Treasury Board and
read by the Speaker to the House.
Hon. Arthur C. Eggleton (President of the Treasury Board
and Minister responsible for Infrastructure, Lib.): Mr.
Speaker, I would also like to table in support of the estimates
part I, the government expenditure plan.
In addition, I will table with the Clerk of the House on behalf
of my colleagues part III of the estimates consisting of 78
departmental expenditure plans. We distributed these
documents to members of the standing committees to assist in
their consideration of the spending authorities sought in part II
of the estimates.
* * *
The Speaker: I have the honour to lay upon the table the
expenditure plan in relation to the 1995-96 estimates for the
House of Commons.
* * *
[
Translation]
Mr. Peter Milliken (Parliamentary Secretary to Leader of
the Government in the House of Commons, Lib.): Mr.
Speaker, pursuant to Standing Order 36(8), I have the honour to
table, in both official languages, the government's response to
several petitions.
[English]
Hon. Arthur C. Eggleton (President of the Treasury Board
and Minister responsible for Infrastructure, Lib.): Mr.
Speaker, today I presented the 1995-96 main estimates for the
Government of Canada.
[Translation]
They are the second main estimates of the 35th Parliament
containing the expenditure plans of the government for the next
fiscal year.
[English]
They reflect the government's commitment, as the Minister of
Finance outlines in the budget, to restrain spending, streamline
operations and change fundamentally what government does
and how its programs and services are delivered.
(1010 )
The main estimates lay out details of $164.2 billion in total
planned budgetary expenditures for the next fiscal year. This
includes $116.2 billion stemming from existing legislation and
$48 billion in expenditures for which we are seeking
parliamentary authority.
The main estimates are the first step in carrying out the
expenditure plan set out in the budget.
Yesterday we heard the Minister of Finance announce an
expenditure plan amounting to $163.5 billion in 1995-96. As I
mentioned, the main estimates that I have tabled today total
$164.2 billion for 1995-96.
The difference between these two figures is explained by the
fact that the main estimates do not include the impact of the
proposed legislation that is needed to implement some of the
budget expenditure cuts that the Minister of Finance talked
about yesterday, nor do they include some other technical
adjustments which are set out in part I of the estimates.
Program spending in the budget which excludes the cost of
interest on the public debt will decline to $114 billion in
1995-96. It will go down to $107.9 billion in 1996-97, down
10.8 per cent from $120.9 billion in 1994-95. This is as a result
of the program review and previous budget measures.
10108
[Translation]
The budget cuts spending. It demonstrates that we will
continue to reduce the deficit and continue to meet our fiscal
targets.
[English]
The budget focuses on the need to cut government spending
and to improve the economic climate so that job creation can
flourish. The program review is a central part of the budget and a
key element in our jobs and growth agenda. The government
launched the review to pinpoint the programs and services that
are no longer useful or that could be delivered more efficiently
or effectively by others.
We have seen the results in the budget reducing the federal
role in some areas and highlighting the programs and services
that other levels of government or the private sector could
provide.
By 1997-98, and this is important, departmental spending
subject to the program review will decline by some 19 per cent
relevant to 1994-95 which is very key in our meeting our deficit
target of 3 per cent of GDP in three years and of course going
beyond that.
I will give some examples of how the government is
implementing the program review in an environment of
declining resources. First, the government will focus on its
essential responsibilities. For example, Transport Canada will
concentrate on developing policy and legislation and setting and
enforcing standards for safety and security. As a result some of
the department's activities such as its air navigation services
will be commercialized. In addition, transportation subsidies
will be reduced or eliminated and the remaining operations will
be made more efficient.
Second, the government is reducing federal and provincial
overlap. For instance, Fisheries and Oceans Canada will
negotiate the transfer of its freshwater programs with the
provinces and concentrate on conservation and the sustainable
use of the fisheries and oceans and other resources.
Third, the government will use new technology to become
more efficient. As an example, Environment Canada will
automate its atmospheric environment services. The department
will also be looking into providing weather services in a more
effective and efficient fashion.
Fourth, we are promoting self-reliance by shifting away from
direct subsidies to business. The regional agencies will move
from direct subsidies to providing loans with more emphasis of
course on small and medium size enterprises.
Fifth, the government will recover its costs by charging or
increasing service fees to those who benefit directly from them,
a move that is fair to taxpayers in general. Such charges include
fees for immigration, agricultural inspection, drug testing and
drug certification.
Sixth, we will merge similar programs for more efficiency.
For instance, Fisheries and Oceans Canada and Transport
Canada will take steps to integrate the coast guard and fisheries
surveillance fleets.
What I have just outlined shows that we did not shy away from
tough decisions. We are focusing on the key functions of the
federal government and we are going to get them right.
(1015)
Inevitably the transition from trying to be all things to all
people to offering Canadians fewer but high value programs and
services will mean a smaller federal workforce. As a result of
reshaping the government and the transfer of some functions to
other sectors, the government will reduce the public sector
workforce by as many as 45,000 jobs over the next three years.
That is the largest workforce reduction by the federal
government since it returned to peacetime operations after the
second world war.
[Translation]
I have announced a program of options that will help
employees to move successfully to new lives outside the Public
Service. This program, which is comparable to private sector
plans, will be fair to employees as well as fair to the taxpayer.
[English]
It will allow us to make the program changes and meet the
fiscal targets in the budget. For the remaining programs and
services the government will provide services that balance the
interests of taxpayers with those of the clients who are receiving
them. It will seek cost effective ways to deliver quality
programs and services that improve service and efficiency
where it can.
Across the government, departments and agencies are
responding to the challenge of innovation. The results of the
program review and the initiatives I mentioned demonstrate that
government is intent on being more efficient and focusing its
energies and resources where they are most needed while living
within its means, and that means what Canadians can afford. We
have a very dedicated professional public service I know can
deliver those services.
The government is committed to fiscal responsibility. We will
continue to manage changing priorities by reallocating
resources. The overhaul of the expenditure management system
that I announced recently will help departments adjust their
programs to operate with their reduced resources. It will also
provide parliamentary committees with the information that
they require to carry out their mandate to examine the future
year expenditure plans and priorities of the various departments
and agencies.
10109
[Translation]
Our ultimate objective is to deliver quality programs and
services with the resources Canada can afford. These Estimates
are evidence that we are on the right track.
Mr. Richard Bélisle (La Prairie, BQ): Mr. Speaker, the
minister has just tabled the 1995-96 Main Estimates. The Main
Estimates represent a total of $164.2 billion in expenditures.
The minister explained that program spending in the Budget will
decline from $120.9 billion in 1994-95 to $114 billion in
1995-96 and $107.9 billion in 1996-97, a reduction of 10.8 per
cent.
Where will the $13 billion in program spending saved over a
two-year period be applied? It will be used mainly to finance
rising debt charges which during the same two years will
increase by nearly $9 billion, assuming that the economy is in
good shape, inflation is practically zero and interest rates
remain at reasonable levels. What we have is an increase of 20.7
per cent in debt charges over the next two years, almost twice the
reduction in program spending announced by the minister.
Nearly 75 per cent of all these efforts, of all these program
cuts will merely go towards servicing the debt, which will cost
us more than $50 billion in charges in 1996-97.
In 1994-95, debt charges represent 33.6 per cent of budgetary
revenues. In 1996-97, these debt charges will represent 36.6 per
cent of budgetary revenues. Make no mistake, despite program
review and previous budgetary measures, the debt marches on.
Program review merely transfers billions of dollars from
Canadian citizens to investors who finance a debt that is
increasing steadily.
(1020)
The minister also said that by 1997-98, departmental
spending subject to the program review will decline by 19 per
cent relative to 1994-95. What the government did not say is
that most of the money saved will be used to finance the cost of
servicing the debt, as I said earlier.
The government keeps telling us it is reducing overlap
between federal and provincial levels. In fact, the government is
transferring the debt and the bills without transferring the
corresponding authorities and tax points.
For instance, the Department of Fisheries and Oceans will
divest itself of its inland waters programs. In fact, this has been
going on for some time in Eastern Canada. Why not transfer
authority over the fisheries outright, as requested by the
provinces concerned?
The government has not withdrawn from areas under
provincial jurisdiction or transferred the corresponding tax
room to the provinces. There are still two departments of Health
and two departments of Human Resources Development
responsible for social programs in each province.
If the government had withdrawn from areas under provincial
jurisdiction, it could have saved billions of dollars more on its
operating expenditures, while at the same time eliminating
costly overlap on the federal side.
The government wants to promote autonomy by eliminating
direct subsidies to business. These subsidies, which total $3.8
billion today, will still add up to $1.5 billion in three years' time.
Why not get rid of them now, since the business community and
business groups, including the Conseil du Patronat du Québec,
have been asking the government to abolish them outright?
The government also intends to charge fees for a number of
government services. On paper this sounds great, but will
charging every adult who applies for immigration to Canada a
fee of $975 really reduce the deficit? Charging people this
amount when they come here seeking a better life strikes us as
mercenary, to say the least.
The budget proposes a 30 per cent reduction in dairy subsidies
over the next two years. Quebec, which receives 50 per cent of
these direct subsidies, will bear the brunt of this measure.
Farmers in Western Canada whose subsidies are cut will receive
compensation but not in Quebec.
We are also told that 45,000 positions in the public service
will be cut in the next three years and yet this is barely enough to
slow down the debt rate. The government says it is determined to
be fiscally responsible, but the debt keeps growing as it did
under Wilson and Mazankowski.
Why were positions not targeted for cuts in departments and
organizations where there is an overlap with the provinces? A
significant proportion of staff cuts will, in fact, be made in
departments like National Defence and Transport, where there is
no overlap with the provinces.
If the government was really serious about flexible
federalism, it should have demonstrated its intention, when
tabling the budget, to withdraw from areas of provincial
jurisdiction. By remaining in these areas, it retains the right to
impose its standards and its regulations.
Much greater cuts should have been made now, but more
judiciously, so that less would have to be cut in the future and the
deficit could be eliminated completely by 1997-98. This way,
the cost of the public debt would not represent nearly 50 per cent
of program expenditures as it will in 1996-97. The cuts planned
for next year in transfers to the provinces and the cuts that will
have to be made to programs in two years' time will hurt, but,
unfortunately, they will serve only to maintain the cost of the
public debt below $50 or $55 billion dollars at that time.
Difficult decisions are always put off until later.
The main estimates for the Office of the Auditor General are
down by 5.2 million dollars, a little over 10 per cent. The bulk of
10110
this reduction, $4.4 million, results from the review of
government programs, whereas program review is one of the
cornerstones of government operations. Is this not somewhat
paradoxical?
The budget of the Auditor General is cut when the role of this
department is expanding, and the government is telling us that
the Auditor General will publish as many as five reports a year.
The existing legislation will have to be amended, in any case. It
provides that the Auditor General may publish one annual report
and three supplementary reports. Let us give the Auditor
General the funds he needs to do his job, instead of cutting his
budget as his role expands.
(1025)
[English]
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, I noted in
the statement by the President of the Treasury Board that he
says: ``What I have just said shows that we didn't shy away from
tough decisions'' and ``this government is committed to fiscal
responsibility''.
The government thinks it is just a case of more taxes, more
taxes, more taxes. Then it says: ``We're going to do some cutting
all across the board''. However, on looking at the estimates we
find the spending of the government is going up again for the
second year in a row. Of course the previous government did it
every year before that.
Every year spending goes up. The government says it is
cutting. It is cutting the programs it delivers to the people of
Canada because the amount of interest paid on the national debt
is getting out of control. That is why when we add the two
together, spending goes up.
Let us get the job done. Let us get the budget balanced and let
us stop the growth of interest during the first three years of this
Liberal government. It is going to cut services to Canadians
from $120 billion down to $108 billion. However the interest on
the debt will go from $38 billion to $51 billion, which more than
offsets all the cuts that are going to be made. That situation is
going to continue. Spending will go up and services to
Canadians will go down.
Mr. Silye: In their last year they will spend more money than
in their first year: 158.7 to 158.
Mr. Williams: Mr. Speaker, we also find out about the great
commitment for looking after social programs. The government
is going to cut social spending by 7.3 per cent. If we look at the
cultural programs, it is going to cut them by 6.9 per cent.
Let us get the priorities straight here. Surely we should be
protecting the core of social programs and the cultural programs
should be set aside until we get the deficit under control. Surely
these are the types of things that a prudent manager would be
focusing on in a government that is trying to do the difficult job
of balancing the budget.
I noticed the Auditor General's budget is going to get cut by
10 per cent. He manages his department responsibly. He says he
can do with 10 per cent less. He is the one that points out all the
waste and mismanagement right across government. Surely if he
can cut by 10 per cent, every other department could get cut by
10 per cent.
That is what the Reform Party has been saying all along.
There are cuts; there is waste; there is mismanagement that can
be done away with in departments without cutting social
programs.
We find there are some increases however. It is not just cut,
cut, cut all the way. Enterprise Cape Breton Corporation in
eastern Canada gets an increase of 69 per cent, from $10 million
to $17 million. It seems a little difficult to explain why one
particular area, one particular minister in one particular
department can receive an increase of 69 per cent when
everybody else has to do with a little less.
The minister tells us he is going to transfer the freshwater
management of fish to the provinces. We thought: ``This is
going to be great. Now we are going to see some downsizing in
the department''. However, in the Department of Fisheries and
Oceans, spending goes up from $775 million to $896 million, an
increase of $121 million in spending as it divests itself of its
responsibilities.
Mr. Hermanson: There are no fish.
Mr. Williams: And there are no fish. However we do have
123 executives in that department. As we transfer and divest the
responsibilities, the proposal does not call for any decrease in
the number of executives. We have to get this straight. We start
cutting at the top before we get down to the bottom.
We have talked about the other place that spends a lot of
money. I see the estimates are going to give them even more
money this coming year. It is a small increase but nonetheless it
intends to spend more money in that other place. We have said to
start at the top. Start with MPs' pensions. Start with the House of
Commons, the Senate and so on.
(1030)
There are a lot of unemployed people in this country. We need
to help people create jobs and we find that $427 million is going
to be spent on our Canadian identity. We would much rather
spend this kind of money creating private sector jobs and
reducing taxes than spending it to protect our Canadian identity
that in many cases has withered away through the multicultural
programs that we spend hundreds of millions of dollars on.
10111
Last fall the President of the Treasury Board said that we
would have to wait until the budget was announced before he
would give us a report on the money we spend on special interest
groups. I did not hear anything in the budget yesterday about
special interest groups. Another half a billion dollars of
government money is being wasted. We could have cut in that
area rather than cutting back on the core social programs.
We have a bad record on megaprojects. The Lloydminister
heavy oil upgrader cost over $500 million and was supposed to
be a great deal. We bailed out of that a couple of months ago and
sold our $500 million interest for $42 million. Not good
business. With the Regina heavy oil upgrader we walked away
from our loan guarantee at a cost of $125 million. Hibernia, the
biggest one, is now going to cost $5.8 billion. This government
is going to put in $3.6 billion, 62 per cent of the cost and we are
going to have 8.5 per cent of the equity.
We have major problems in the way this government runs the
finances of this country. When we go through these estimates we
are going to find many things. We are going to tell Canadians
about the waste, the mismanagement, the protection of jobs at
the top and the elimination of jobs at the bottom. We have to tell
Canadians what this government is doing. Over the next few
months we will be raising these questions at committee.
Hon. Arthur C. Eggleton (President of the Treasury Board
and Minister responsible for Infrastructure, Lib.): Mr.
Speaker, pursuant to Standing Orders 81(4) and 81(6), I move:
That the main estimates for the fiscal year ending March 31, 1996 laid upon the
table on February 28, 1995 be referred to the several standing committees of the
House as follows:
Since the list is rather lengthy, I would ask that it be printed in
Hansard at this point without being read.
The Acting Speaker (Mr. Kilger): Is it agreed?
Some hon. members: Agreed.
[Editor's note: List referred to above is as follows:]
To the Standing Committee on Indian Affairs and Nothern Development
Indian Affairs and Nothern Development, Votes 1, 5, 10, 15, L20, L25, L30, 35, 40,
45, 50 and 55
To the Standing Committee on Agriculture and Agri-Food
Agriculture and Agri-Food, Votes 1, 5, 10, 15 and 20
To the Standing Committee on Canadian Heritage
Canadian Heritage, Votes 1, 5, 10, 15, L20, 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75,
80, 85, 90, 95, 100, 105, 110, 115, 120, 125, 130, 135, 145 and 150
To the Standing Committee on Government Operations
Canadian Heritage, Vote 140
Governor General, Vote 1
Parliament, Vote 1
Privy Council, Votes 1, 5, 10 and 35
Public Works and Government Services, Votes 1, 5, 10, 15, 20, 25, 30, 35 and 40
Treasury Board, Votes 1, 5, 10 and 15
To the Standing Committee on Natural Resources
Natural Resources, Votes 1, 5, 10, L15, 20, 25, 30, 35, 40, 45 and 50
To the Standing Committee on Environment and Sustainable Development
Environment, Votes 1, 5 and 10
Privy Council, Vote 30
To the Standing Committee on Foreign Affairs and International Trade
Foreign Affairs, Votes 1, 5, 10, 15, 20, L25, L30, 35, 40 and 45
Public Works and Government Services, Vote 45
To the Standing Committee on Finance
Finance, Votes 1, 5, L10, L15, L20, 25, L30, 40 and 55
National Revenue, Votes 1, 5 and 10
To the Standing Committee on Fisheries and Oceans
Fisheries and Oceans, Votes 1, 5 and 10
To the Standing Committee on Health
Health, Votes 1, 5, 10, 15, 20, 25 and 30
To the Standing Committee on Human Rights and the Status of Disabled Persons
Justice, Vote 15
To the Standing Committee on Industry
Atlantic Canada Opportunities Agency, Votes 1, 5 and 10
Finance, Votes 45 and 50
Industry, Votes 1, 5, 10, L15, L20, 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75, 80, 85,
90, 95, 100 and 105
Western Economic Diversification, Votes 1 and 5
To the Standing Committee on Justice and Legal Affairs
Justice, Votes 1, 5, 10, 20, 25, 30, 35, 40 and 45
Privy Council, Vote 40
Solicitor General, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45 and 50
To the Standing Committee on Human Resources Development
Human Resources Development, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45* and 50
To the Standing Committee on Procedure and House Affairs
Parliament, Vote 5
Privy Council, Vote 20
To the Standing Committee on National Defence and Veterans Affairs
National Defence, Votes 1, 5, 10, 15 and 20
Veterans Affairs, Votes 1, 5, 10, 15 and 20
To the Standing Committee on Public Accounts
Finance, Vote 35
To the Standing Committee on Transport
Privy Council, Vote 15
Transport, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45 and 50
To the Standing Joint Committee on Official Languages
Privy Council, Vote 25
To the Standing Committee on Citizenship and Immigration
Citizenship and Immigration, Votes 1, 5, 10 and 15
To the Standing Joint Committee on Library of Parliament
Parliament, Vote 10
10112
(Motion agreed to.)
* * *
Mrs. Jan Brown (Calgary Southeast, Ref.): Mr. Speaker, I
rise before this House once again to present the 17th petition in
this course of action undertaken on behalf of constituents who
wish to halt the early release from prison of Robert Paul
Thompson. April 11, 1995 is the date set for the parole hearing.
The petitioners I represent are concerned about making our
streets safer for our citizens. They are opposed to the current
practice of early release of violent offenders prior to serving the
full extent of their sentences.
The petitioners pray that our streets will be made safer for
law-abiding citizens and the families of victims of convicted
murderers.
(1035 )
Mrs. Rose-Marie Ur (Lambton-Middlesex, Lib.): Mr.
Speaker, I wish to table a petition signed by constituents of
Lambton-Middlesex and duly certified by the clerk of
petitions, pursuant to Standing Order 36.
The petitioners pray and request that Parliament not amend
the Criminal Code as proposed in Bill C-41, the human rights
code, the Canadian Human Rights Act or the charter of rights
and freedoms in any way which would tend to indicate societal
approval of same sex relationships or of homosexuality by
including the undefined phrase of sexual orientation.
Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker, pursuant
to Standing Order 36, I have the honour on behalf of constituents
of Vegreville to table three petitions in the House today.
In the first petition the petitioners request Parliament to
support laws which will severely punish all violent criminals
who use weapons in the commission of a crime. They also
request Parliament to support new Criminal Code firearms
control provisions which recognize and protect the rights of
law-abiding citizens to own and use recreational firearms. They
request Parliament to support legislation which will repeal and
modify existing gun control laws which have not improved
public safety or have proven not to be cost effective or have
proven to be overly complex so as to be ineffective or
unenforceable.
I present this petition on behalf of my constituent, Stan
Chevraux, and the people who signed the petition.
Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker, in the
second petition, the petitioners request Parliament to oppose
any legislation that would directly or indirectly redefine the
family, including the provision of marriage and family benefits
to those who are not family with family being defined as those
individuals related by ties of blood, marriage or adoption, where
marriage is the legal union of a man and a woman.
Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker, in the
third petition, the petitioners pray and request Parliament not
amend the Canadian Human Rights Act or the charter of rights
and freedoms in any way which would tend to indicate societal
approval of same sex relationships or of homosexuality. This
includes not amending the Canadian Human Rights Act to
include in the prohibited grounds for discrimination the
undefined phrase of sexual orientation.
Mr. Bob Mills (Red Deer, Ref.): Mr. Speaker, I present a
petition today signed by 30 people, 21 from my constituency.
Although the petitioners and I do not have the same beliefs, I
present to Parliament today on their behalf a petition that calls
upon Parliament to amend the Canadian Human Rights Act to
prohibit discrimination on the basis of sexual orientation.
I believe in complete equality with no special status to any
group.
Mr. Jim Abbott (Kootenay East, Ref.): Mr. Speaker, it is my
pleasure to present to this House a petition containing
approximately 3,900 signatures.
The petition is almost presented late because the petitioners
pray and request that Parliament reduce government spending
instead of increasing taxes and implement a taxpayer protection
act to limit federal spending.
It is interesting that out of an area population in the town of
Golden which only has 2,371 households, four women went
around and collected 2,500 of the 3,900 signatures on this
petition. There was a tremendous amount of pressure on the
government. The reason I say it is almost presented late is that
unfortunately, although the tax increases were limited, they
were nonetheless there.
Mr. Dick Harris (Prince George-Bulkley Valley, Ref.):
Mr. Speaker, pursuant to Standing Order 36, I am pleased to
10113
present two petitions today. The first petition was circulated by
Mrs. Barbara Gobbi of my riding of Prince George-Bulkley
Valley and contains a number of names.
The petitioners pray that Parliament ensure that the present
provisions of the Criminal Code of Canada prohibiting assisted
suicide be enforced vigorously and that Parliament make no
changes in the law which would sanction or allow the aiding or
abetting of suicide or active or passive euthanasia.
I am pleased to say that I personally support this petition.
Mr. Dick Harris (Prince George-Bulkley Valley, Ref.):
Mr. Speaker, the second petition was also circulated by Mrs.
Barbara Gobbi of Prince George and contains a number of
names.
The petitioners humbly pray that Parliament enact legislation
which will protect the unborn children of this country. The
petitioners humbly pray and call upon Parliament to do so.
Here again I personally support this petition.
(1040 )
Mr. Bob Ringma (Nanaimo-Cowichan, Ref.): Mr.
Speaker, I am pleased to present two petitions, both on the
subject of firearms control.
The first petition asks that Parliament support laws that will
severely punish all violent criminals who use weapons in the
commission of a crime. It also asks to support new legislation
that recognizes and protects the rights of law-abiding citizens.
It further asks that legislation be supported that will repeal and
modify existing gun controls which have not improved public
safety or have proven not to be cost effective.
The second petition on the same general subject area asks
Parliament not to enact any further firearms control legislation,
regulations or orders in council.
Mrs. Diane Ablonczy (Calgary North, Ref.): Mr. Speaker, I
have the honour of presenting four petitions today on behalf of
the citizens in my riding of Calgary North.
The first petition is asking this government not to increase
taxes. The citizens who signed this petition feel they are already
overburdened with taxes and are asking that the burden not be
increased.
Mrs. Diane Ablonczy (Calgary North, Ref.): Mr. Speaker,
the second petition is from people in Calgary North. They ask
that the government not change the Criminal Code to allow
assisted suicide.
Mrs. Diane Ablonczy (Calgary North, Ref.): Mr. Speaker,
in the third petition citizens are saying no to spousal benefits
being extended to same sex couples.
Mrs. Diane Ablonczy (Calgary North, Ref.): Mr. Speaker,
in the last petition, 105 citizens of Calgary North protest the
inclusion of sexual orientation as a prohibited ground of
discrimination in the charter of rights.
I am pleased to say that I will be representing my
constituents' views on these issues to this House over the
coming months.
Ms. Roseanne Skoke (Central Nova, Lib.): Mr. Speaker, I
have three petitions pursuant to Standing Order 36. On behalf of
72 constituents in Nova Scotia and New Brunswick, I wish to
table a petition with respect to the subject matter of GST and
income tax.
Ms. Roseanne Skoke (Central Nova, Lib.): Mr. Speaker, the
second petition is presented on behalf of 26 constituents of
Digby county, Nova Scotia.
The petitioners pray that Parliament ensure that the present
provisions of the Criminal Code of Canada prohibiting assisted
suicide be enforced vigorously and that Parliament make no
changes in the law that would sanction or allow the aiding or
abetting of suicide or any activity designed to terminate human
life.
I concur with this petition.
Ms. Roseanne Skoke (Central Nova, Lib.): Mr. Speaker, the
third petition contains 107 signatures. Twenty-five signatures
are from Edmonton, Alberta and 82 signatures are from Nova
Scotia, including Digby county.
The petitioners pray and request that Parliament not amend
the human rights code, the Canadian Human Rights Act or the
charter of rights and freedoms in any way that would tend to
indicate societal approval of same sex relationships or of
homosexuality, including amending the human rights code to
include in the prohibited grounds of discrimination the
undefined phrase of sexual orientation.
I concur with this petition.
Mr. John O'Reilly (Victoria-Haliburton, Lib.): Mr.
Speaker, pursuant to Standing Order 36 it is with great pleasure
that I rise today to present a petition signed by 1,025 people
from such places as Minden, Haliburton, Eagle Lake,
Wilberforce and Bobcaygeon in the riding of
Victoria-Haliburton.
10114
It draws the attention of the House of Commons to gun
control. It asks Parliament not to pass into law any of the
government action plans for firearms control which deal with
the registration and prohibition of firearms and to find other
and better means to reduce the incidence of violent crime in
Canada.
* * *
[
Translation]
Mr. Jean-Paul Marchand (Québec-Est, BQ): Mr. Speaker,
I rise on a point of order with respect to Question No. 93, which I
tabled in this House on October 19. There are two parts to this
question. Not only did it take three months to get a response, but,
when I finally got it, last Friday, it was only half an answer. I am
still awaiting the other half.
What I got was a short paragraph of two lines telling me to go
and find it myself. The response was: ``Look it up yourself''. I
went, in fact, to see for myself. What is in the library is a sort of
dog's breakfast. Moreover, it is not even up to date. My question
concerned federal government properties in Quebec in 1994,
and the information I had to look for dated back a number of
years.
(1045)
I wonder how such flagrant disregard for the rules of this
House is tolerated. How is it such long delays are permitted?
How is it possible to provide incomplete answers and abuse
members' privileges? Is this the result of budget cuts or is this
another attempt to deny us access to information? Is silence the
watchword?
I want information and I cannot get it.
Mr. Peter Milliken (Parliamentary Secretary to Leader of
the Government in the House of Commons, Lib.): Mr.
Speaker, the hon. member for Québec-Est has raised this
question on several occasions, too often, I must say.
He got a good answer. On Friday, I tabled in the House a 1,450
page answer to his question. Apparently, he has not read it all.
As for the second part of his question, those 1,450 pages
contained the answer. It is as follows: ``The Minister of Public
Works and Government Services has not identified any riding in
particular. However we have a copy of the 1992 real property
holdings directory, which includes a list of federal real property
in the province of Quebec and the rest of Canada and can be
obtained from the Library of Parliament or through a member of
Parliament''.
This information is available to anyone. It can be obtained
from the Library of Parliament. There is no need to prepare an
answer to be tabled here in the House when a copy of the same
information is available at the Library just down the hall.
The hon. member can go there himself; there is no need to
table such a document here in the House given the expense
entailed in making copies.
Mr. Loubier: Oh, oh.
Mr. Milliken: As the opposition finance critic, the hon.
member for Saint-Hyacinthe-Bagot should bear in mind the
costs-
The Acting Speaker (Mr. Kilger): Order, please. I heard the
parliamentary secretary's answer. Let us now get on with the
other questions.
[English]
Mr. Milliken): Mr. Speaker, I wanted to answer the point of
order first.
Question No. 116 will be answered today.
[Text]
Question No. 116-Mr. Cummins:
With regard to Dr. Paul LeBlond, Joe Scrimger and David Brander-Smith
(members of the Fraser River Sockeye Public Review Board inquiring into the
government's management and enforcement on the Fraser River), (a) what benefit or
remuneration did Paul LeBlond receive from the Departments of Fisheries and
Oceans, Environment and Transport from the more than $1 million in contracts
received by Seaconsult Marine Research Limited since 1984, (b) what benefit or
remuneration did Paul LeBlond receive as a member of the fisheries and oceans
Fisheries Resource Conservation Council, (c) what reports has Paul LeBlond
undertaken on behalf of the government in addition to the demanning of lighthouses
and cancellation of weatherships, (d) what submissions or proposals have been
submitted to the Department of Fisheries and Oceans and its Institute of Ocean
Sciences by Joe Scrimger in 1993 or 1994 and (e) what remuneration did David
Brander-Smith receive as director of the advisory board for fisheries and oceans
Institute of Ocean Sciences and what recommendations and advice has the board
given during his term as a member of the board?
Mr. Peter Milliken (Parliamentary Secretary to Leader of
the Government in the House of Commons, Lib.): I am
informed as follows:
(a) The Departments of Fisheries and Oceans, Environment
and Transport have no information on this subject.
The financial information requested is privy to the company,
Seaconsult Marine Research Limited, and the parties contracted
by them, and therefore the company or Dr. LeBlond should be
approached directly for any clarification of these details.
(b), (c) and (d) The information requested can be found in the
answer to Question No. 85 tabled February 24, 1995.
Please note that Dr. LeBlond has also assisted Natural
Sciences and Engineering Research Council of Canada
(NSERC) staff to provide input into a Department of Fisheries
and Oceans survey on the use of research platforms by co-ordi-
10115
nating input from the university research community. These
activities were not remunerated; they were done voluntarily.
(e) The director's advisory board for the fisheries and oceans
Institute of Ocean Sciences (IOS) was established in 1991, at
which time David Brander-Smith was appointed chairperson.
The board has conducted an extensive review of IOS programs,
defined core programs, and assisted the director with
prioritization of the program and development of information
exchange with stakeholders. Recently, the board has been active
in providing advice on coping with program reduction strategies
and budget reductions. The board is composed of individuals
from commercial, recreational and native fishing interests,
university, other government, environmental and oil and gas
sector representatives. The objective of this board is to provide a
vehicle for allowing stakeholders an opportunity to input to the
development and direction of the department's ocean science
program. During the time that Dr. Brander-Smith was
chairperson, November 1991 to November 1994, the board
provided advice in the following key areas:
Program priority determination for the institute stressing the
identification of scientific excellence and productivity,
separating core activities from other activities, as well as how
well programs address key priorities;
Development of a strategy and implementation of a critical
program review (peer review/client review) of IOS;
The need for an external scientific review of programs;
Identification of key IOS clients and contacts and intensified
consultation with those clients seeking feedback on client
perceptions and needs, and identifying ways of improving
service and developing more formal information sharing
arrangements;
Development of a communications program aimed at sharing
information on program activities with clients, the public and
within and between government departments;
Strengthening IOS use of partnerships and networks for
co-operation, information sharing and communication; and
Placing high priority on initiatives to encourage efficiency
and effectiveness, as well as developing innovative sources of
funding.
The remuneration portion of this question has been answered
in the response to Question No. 85 tabled February 24, 1995.
[English]
The Acting Speaker (Mr. Kilger): The question as
enumerated by the parliamentary secretary has been answered.
Mr. Milliken: I ask, Mr. Speaker, that the remaining
questions be allowed to stand.
The Acting Speaker (Mr. Kilger): Shall the remaining
questions stand?
Some hon. members: Agreed.
The Acting Speaker (Mr. Kilger): I wish to inform the
House that pursuant to Standing Order 33, because of the
ministerial statement, Government Orders will be extended by
22 minutes.
_____________________________________________
10115
GOVERNMENT ORDERS
[
Translation]
The House resumed from February 27 consideration of the
motion that this House approves in general the budgetary policy
of the government.
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ): Mr.
Speaker, I am pleased to rise again today, the day after the
budget, to state the official opposition's views on the budget
brought down yesterday by the Canadian Minister of Finance.
The budget before us consists of the usual downloading of the
deficit by the federal government onto the provinces, which
harms not only the very poor, persons on social assistance, the
unemployed, students and senior citizens but also, as of next
year, will also harm all Quebec and Canadian taxpayers, all the
while- and this is the most unacceptable part-sparing big
business, banks which are given a further reprieve,
notwithstanding a minimal increase in the taxes they must pay
this year.
Businesses and banks benefit from federal tax breaks as well
as from the government's subsidies while everyone everywhere,
the provinces, the most destitute people, taxpayers, as of 1996,
will pay more and more for the laxness and incompetence of this
government.
(1050)
This budget entails first of all a decentralization of the federal
deficit, a decentralization of the federal bill starting with cuts in
federal transfers for post-secondary education, health and
welfare.
This government is definitely proceeding in an underhanded,
harmful way in 1995. There will be no cuts in 1995. It is easy to
see why, this is the referendum year. There will be no cuts so
Quebecers will be led to believe that this government is doing a
10116
fine job. Because it is the referendum year, the true picture is not
being given; they hide the extent of this government's failure in
1995. But as of 1996, look out, then we will feel it, then it will
start to hurt. The Minister of Finance is asking us to go above
and beyond tightening our belts, he is asking us to tighten them
to the last notch and to avoid taking deep breaths.
In 1995, the federal axe is going to lop $2.5 billion off of
federal transfer payments to the provinces; in this year, Quebec
alone will be hit by a drop of over $700 million in transfer
payments. Worse yet, with the referendum campaign safely
behind them, the federal government will cut $4.5 billion in
transfer payments in 1997; for Quebec alone this will mean a
drop of approximately $1 billion.
Where are we going to get the money to make up this
shortfall? There is only one taxpayer in Canada and Quebec, and
he or she will have to absorb this shortfall. The tax hikes in this
budget which purportedly contains no tax hikes are hidden,
deferred and devious. And the provinces are forced to swallow
the bitter pill.
The Minister of Finance does not talk about what will happen
after 1997-98. But we know what he has up his sleeve, because
year after year-and he is carefully hiding this from Quebecers
in this referendum year-his government will remain as
voracious, as money hungry and spendthrift when it comes to
public funds as it is at present in a structure that is out of sync
with Quebec's and Canada's socio-economic realities. Time and
time again, taxpayers end up footing the bill for the Minister of
Finance's lax approach and downloading to the provinces.
Quebecers will ultimately pay and will continue to pay
because, what is left unsaid, what the federal government does
not want to advertise, is that, although it downloads $7 billion in
transfer payments up-front, the federal machine remains the
same.
Have any departments been abolished? No. We will still be
stuck with the Department of Health, the Department of Human
Resources Development and all other departments that cause
duplication and overlap, for which the Minister of Finance is
proposing to stiff the provinces with the bill. The tax bill that
Quebecers and Canadians will have to pay in the next few years
will actually increase, despite the downloading of part of the
deficit onto the provinces. Quebecers, Ontarians and everyone
in the country will pay more because the federal government has
given up some of its financial responsibilities.
What this amounts to is that, as of next year, Quebec
taxpayers-because I am addressing them in particular
today-will pay dearly in the year following the referendum.
They will pay dearly if they do not create a real country, a
normal country, a country which will assume total control for its
public finances and will take the measures needed for recovery,
a country totally committed to the plan, instead of a government
that slowly demolishes its plan by arbitrary decisions, such as
arbitrary cuts to transfer payments.
Quebecers will pay dearly if they do not make the choice this
year that is in their best interests, which is sovereignty, a choice
in favour of efficient budgeting and resource allocation. The
situation is being hidden from them.
(1055)
Nor are they being told that in 1997-98, despite all of their
sacrifices and all of the tax hikes they were subjected to at the
hands of the Quebec or federal government, the federal debt will
still be $625 billion. Moody's has the federal government's
rating under review because of the size of the debt in the
mid-term and the government's lack of control over the
situation.
The decision Quebecers must make is becoming increasingly
clear, and became even clearer yesterday. Staying within the
federal fold in the years to come pretty much boils down to this:
fewer and fewer federal services and benefits; more and more
offloading of deficit problems onto the provinces, which will
ultimately result in tax hikes, because it is the same taxpayer;
more bad news year after year; a reduction in the Quebec
government's ability to do something about job creation, to put
in place a plan to revitalize the economy, bring about more jobs
and growth in all regions of Quebec, because we do not know
what will hit us next with federal decisions. This is the scenario
in 1996 if we stick with the status quo and stay in the federal
fold.
Quebecers have a choice to make, a choice that will be
instrumental in encouraging economic growth and employment
and putting an end to the slump for which the federal
government is to blame.
Not only is the Minister of Finance offloading his
responsibilities onto the provinces, but he is still taking aim at
his favourite targets in a feeble attempt to improve the state of
Canada's finances. These targets are students, those on social
assistance, the ill and the unemployed. He is still targetting the
unemployed, as if they had not already paid enough since this
government came to power, since this government broke its
promise to help them and create jobs.
Already this year the Minister of Finance planned to cut
unemployment insurance by $2.4 billion. Next year, he was
going to cut another $2.4 billion, and now he has added a further
10 per cent cut, to the tune of $1.5 billion, on top of the billions
in cuts already announced. Is this a pro-employment position?
Is this the concern for the neediest members of our society that
the red book promised? The famous red book that we heard
about for months on end and that they have now forgotten.
All the talk about creating jobs does not square with what we
see in this budget. As far as job creation is concerned, the only
program set up resulted in precious few jobs, 45,000 temporary
jobs was the figure mentioned, and yesterday the Minister of
10117
Finance decided to cut the $200 million remaining in the
program. Jobs, jobs, jobs-is this what they meant?
My colleague from Rosemont pointed out to me this morning
that the government's forecasts show unemployment in Canada
holding steady at about 9.5 per cent over the next few years. The
government has deliberately, for these forecasts are produced by
the government, forgotten all about job creation. It even goes so
far as to predict that unemployment will settle at around 9.5 per
cent over the next few years. Do you know what that means for
Quebec? It means an unemployment rate of 11 per cent that will
not change as long as we stay with the status quo.
We went over the budget carefully and found a lot of things,
one of the more astonishing being that this record
unemployment rate will be achieved and maintained without
any increase in productivity. And a good thing, or maybe not. If
there had been an increase in the productivity forecast for the
next few years, the unemployment rate would probably climb to
13 or 14 per cent in Quebec and in Canada.
(1100)
At the same time, we must be increasingly productive,
improve our performance, for with the globalization of trade,
the new GATT agreement and the World Trade Organization,
this will be essential if we want to hold our own and capture a
greater share of international markets. But the Minister of
Finance does not forecast any increases in productivity.
This budget is already bad news in terms of employment,
especially since the Minister of Finance tells us in his
projections that in the next three years and even after that-his
projections stop after a while because he is certain that we will
realize how bad things are in Canada-, the unemployment rate
in Canada will stay 4 per cent higher than in the U.S.
By conscientiously basing his projections on such data and
turning his back on measures to promote long term jobs, the
minister spells disaster. While the minister picks on the
provinces by shifting onto them the burden of these odious large
scale tax reforms, while he picks on students, welfare recipients,
sick people and perhaps seniors-he is now putting in place a
committee to review all old age security programs-, this
government is maintaining undue privileges for big business
and the very wealthy.
As far as business is concerned, the Minister of Finance took
the trouble to denounce business subsidies in one paragraph,
saying that these subsidies distort competition and that they no
longer have their place in the new international order, that they
result in unfair competition among nearby businesses, or at least
among Canadian businesses. He strongly denounces these
subsidies and then what does he do? He cuts these subsidies by
60 per cent over three years when, in the opinion of the Quebec
employers council, headed by Ghislain Dufour, who is certainly
no lefty, he should have eliminated these subsidies completely
and quickly. Although he agrees with this analysis, the Minister
of Finance will maintain $1.5 billion's worth of direct business
subsidies in 1997.
By then, the government will have cut social housing by more
than $307 million. What compassion, what social conscience
from this government, which talks about jobs, jobs, jobs, about
the most disadvantaged, whose rhetoric is worthy of that of the
NDP in its good years, but which, in fact, is worse than the
Tories, if not very close to the Reform Party.
If at least the Minister of Finance and his government had
been smart enough to slash half of the $3.8 billion in subsidies
now available to business and redistribute this amount equitably
among R&D efforts in Canada to improve business
competitiveness and social housing, we would have understood
and applauded this better distribution of resources. Instead, not
only does he maintain large direct subsidies, but he also slashes
social housing and pursues the shameful reforms he started last
year.
The same goes for tax reform; preferential treatment is left
untouched. In 1991, several thousands of big businesses did not
pay a single cent in tax to the federal government, thus depriving
the federal treasury of hundreds of millions, if not billions of
dollars in lost revenue. These thousands of big businesses,
which still make profits despite the downturns in the economy
since 1990, will continue to avoid paying their fair share of
taxes. There is nothing in this budget which resembles a
minimum tax, precisely so that these large businesses can still
enjoy all kinds of roundabout ways to avoid paying their fair
share.
As far as tax agreements are concerned, as the Auditor
General himself pointed out and as we have been saying for a
year and a half, there are now 16 countries considered to be tax
havens, which help those businesses refusing to do their
corporate duty and pay their fair share to the federal treasury.
These tax havens help such businesses divert hundreds of
millions of dollars by reporting fictitious losses by phoney
businesses and deducting them from revenues, thus diverting
money from the federal treasury.
(1105)
No changes were made to those tax havens. Quebecers and
Canadians are asked to tighten their belts to the last notch, but
nothing is done about such outrageous things. Do you not find
anything wrong with that picture? I know you cannot answer,
Mr. Speaker, but there is something wrong.
Yesterday, the finance minister-I do not know whether he
had a horn to honk but he should have had one on hand-said
that businesses, big businesses in particular, were contributing
10118
more in terms of taxation and that banks were finally going to be
paying taxes to the federal government.
As regards banks, the poor banks, over the next two years, the
minister plans to impose a temporary tax, not a permanent one,
on them to appease public pressure. Because the public was
saying: ``We pay. Since 1984, that is all we have been doing:
pay, pay, pay. We undergo cut after cut, while banks make
profits and pay no taxes''.
To respond to this public pressure and give the impression that
social justice matters to him, the Minister of Finance plans, over
the next two years, to collect a whopping $100 million from
them. One hundred million dollars from all Canadian banks. Just
to give you an idea of the order of magnitude here, the Royal
Bank of Canada, this small bank, generated a record $1.2 billion
profit this year. How much we will collect from this bank over
two years? No wonder that interest rates went down slightly
today. You scratch my back and I will scratch yours.
Where businesses in general are concerned, the Minister of
Finance said that they will be contributing to put our public
finances on a healthy footing. See how they will do so. Through
a 1.5 per cent tax increase. Since businesses already pay $18
billion to the federal taxman, this will bring their contribution to
approximately 17 or 18 per cent of the tax pie. The money filling
the federal coffers really comes from the taxpayers.
The business sector will pay an additional $260 million in
1995-96, $270 million in 1996-97 and $280 million in 1997-98.
The amount was indexed to give the impression that it had
actually increased. Did you know that not only this effort
represents a 1.5 per cent increase in the ``tax burden'' because
businesses may seek ways to avoid paying it, but it is ten times
less than the effort asked from the unemployed this year. Ten
times less. And they tell us it is fair. There is something very
wrong with this government. It is not the first time I tell you this,
but I do think it is profoundly unfortunate. It makes me very
uneasy.
The same deceitful practice, or just about, was applied to tax
treaties. The Minister of Finance said he was acting on a request
from the official opposition. Yesterday, the finance minister
literally laughed in our faces. He laughed in our faces because he
is not planning to eliminate the unjustified privileges enjoyed by
the wealthiest of Canadian families-I am referring to family
trusts-until 1999.
This reminds me of the story of the police officer who gives
thieves two hours notice that he will be coming over to arrest
them. By 1999, some family trusts, not all, because we never
said all family trusts were bad, but those used as powerful tax
planning instruments by wealthy Canadian families, will have
been transferred in other instruments, instruments that the
minister has left untouched in this budget. Any tax that should
have been recovered on the capital gains made on these trusts
every year will be lost. In coming up with such things, the
minister is laughing in our faces.
(1110)
As for duplication and squandering, it will continue. It will
continue because the federal government is not withdrawing
from areas of provincial responsibility. The Minister of
Intergovernmental Affairs himself indicated that the federal
government would continue to have its say in all areas of
provincial jurisdiction. It will continue to pry into these areas,
while at the same time contributing less and less.
Duplication and overlap will continue because, as I
mentioned earlier, those federal departments where there is a
problem will remain. When has a department ever been
dismantled? Never. How can one say that duplication and
jurisdictional overlap will be reduced and that the federal
system is undergoing a major overhaul when nothing has
changed?
This brings me to these wild layoffs in the Public Service.
There are two ways to trim an organization that is too fat, which
is what the federal public service is, in the opinion of the official
opposition. There are two ways to streamline: the good one and
the bad one.
This government is going about it all wrong. I can still see the
Minister of Intergovernmental Affairs-I could have cried when
I saw him-sitting comfortably at his desk, typing away on his
computer, deciding how many jobs to cut in each federal
department and crown corporation. Not for a moment did he did
think of going to talk with those concerned. Not for a moment
did the minister think that behind these figures on his computers
there were real people. Not for a moment did he stop and think
that these people have duly elected union reps, representatives
from the Public Service Alliance of Canada, with whom he
could have got together to discuss his plans.
It is obvious that the public service needs to be restructured. It
is obvious that it is too large. It is obvious that manpower
reductions are required, but there is no need to make wild,
inhumane cuts, as contemplated by the Minister of
Intergovernmental Affairs, and without any guarantees. There
are no guarantees.
Who says that laying off 45,000 people will result in gains, in
terms of effectiveness? Who says that the low morale in the
organization will not affect services to the public? What
guarantee do we have, and this is important, that the Liberals
across the floor, who are prone to patronage appointments, will
not favour their friends by contracting work out to them? This
happened in the past. Yet, there is no guarantee that it will not
happen again. There is only a risk that the indiscriminate
lay-offs which are
10119
taking place will result in a need to contract work out and that,
instead of saving money, the federal government will end up
spending more than ever before. That is also something which
happened in the past.
We always forget that, within the public service, there are
competent and experienced people who do a good job. If you
contract the work out, it often ends up costing you more because
you deal with businesses whose only objective is to make a
quick profit at the expense of Canadian taxpayers. Let us not
forget that.
As I have said several times, when the official opposition
talks about trimming the fat in the federal administration, when
it says that Canada is overgoverned, it does mean that the public
service is too large and that there are too many public servants.
However, there is a proper way to deal with that. We do not
endorse indiscriminate layoffs. Even the Public Service
Alliance of Canada told us that it was prepared to discuss
restructuring, provided it was properly thought out, did not
merely mean cuts which will end up costing taxpayers more for
fewer services provided by disheartened public servants. This is
a difficult situation.
I do hope that the government will again meet with PSAC
officials to discuss that issue, something which it has not done
since it came to office. The first thing the government did when
it took office was to stop discussing, even though it had
criticized the breakdown in discussions between the previous
Conservative government and the unions representing public
servants. This government should sit down with the PSAC.
These people have suggestions to save money. They have ideas
as to how the federal administration can be streamlined in an
intelligent way. The government should rely on their expertise.
As regards agriculture, yesterday the minister avoided the
real issues. He did not want to stir up old controversies.
(1115)
I remember one such controversy in 1982, when there was talk
of amending the Crow's Nest Pass agreement. Back then, I noted
that there was a very real conflict between the interests of
western cattlemen or beef producers, which even differed from
those of their fellow grain producers, but which were mainly at
odds with those of easterners, particularly Quebecers.
In his budget, the minister eliminates the $560-million
subsidy for grain transportation to railroads in the Prairies.
However, to make up for that loss, the minister will give western
producers, based on their cultivated acreage, $1.6 billion to
compensate the alleged loss of land value in the West. However,
the Minister of Finance and the Minister of Agriculture both
forgot that the Crow's Nest subsidy created a healthy balance in
Canadian agricultural production. Indeed, while western
farmers concentrated on grain production and enjoyed
subsidized transportation of their products, livestock breeding
developed in the East, particularly the dairy and pork industries.
If you break that balance by eliminating the Crow's Nest
subsidy, and if you give compensation for the alleged loss of
value of western lands, you overlook an important element,
namely the impact of such a measure on eastern producers.
Nowhere in the budget speech is there any mention of
compensation for eastern producers, particularly Quebec
producers, who will also suffer. Doubly so. Indeed, not only will
western producers get a $1.6-billion subsidy to adjust, but they
will also be able to use that federal money, 25 per cent of which
comes from Quebec, to compete with Quebec livestock
breeders. Is that the federal government's idea of fairness? Is
that the nice balance between the East and the West? Things do
not work that way.
Moreover, western producers will get a loan guarantee of one
billion dollars, plus $300 million to adjust to the new situation.
They will receive $3 billion to make up for the loss of the
$560-million Crow's Nest subsidy. There is something very
wrong right there. It is unfair to use federal moneys, 25 per cent
of which is comes from Quebec, to support the competition from
out west on our own markets.
While the West will get $3 billion, Quebec will lose $30
million because the Budget provides for a 30 per cent reduction
in dairy subsidies to eastern producers, which will affect
industrial milk, cheese, yogurt, ice cream and the rest. Fifty per
cent of the dairy products we consume are produced in Quebec.
So the government gives $3 billion to the West and takes $30
million away from dairy producers in Quebec. Is that fair? Is
that how the government wants farmers in Eastern and Western
Canada to help put public finances back on track?
Mr. Speaker, fair is certainly not the word here. As for dairy
producers, this merely adds to existing pressures, because we
should remember that during the past two years, under the new
World Trade Organization agreements, dairy producers in
Canada and Quebec have had to face increased competition.
They lost one of the basic pillars of the dairy production system,
referred to as Article XI. Since that time, competition has
increased steadily, as the tariffs that replace protection at the
border under Article XI go down and foreign products are
allowed to compete with Quebec and Canadian dairy products.
And now, the government is asking them to tighten their belts
even more. Yesterday, Laurent Pellerin, president of the UPA,
said that farm producers were prepared to do their fair share, but
this was too much. This was absurd.
I would also like to comment briefly on the international
assistance envelope.
10120
(1120)
Time and time again, when the members of this government
were in the official opposition, they condemned the
Conservative position on international assistance. Time and
time again, the Minister of Finance-who was not Minister of
Finance at the time-and the present Prime Minister expressed
their outrage because the Conservatives were cutting
international aid. What they are doing is far worse.
The Budget brought down yesterday by the Minister of
Finance provides cuts totalling $532 million in international
assistance, thus exacerbating a situation where Canada is
already reluctant to reach a helping hand out to the neediest
international communities. When we talk about the neediest, we
are talking about millions of children who are dying every day.
It exacerbates a situation that was already criticized under the
Conservatives, and the cuts in international assistance continue.
Not only is this government utterly lacking in compassion for
the neediest in Canada and Quebec, it is even more so in the case
of children who are dying daily throughout the world.
And now for National Defence. Another area where everyone
has to do his fair share. The minister says the government will
close the base at Saint-Hubert, in Quebec, and will cut back staff
and reduce infrastructures in Bagotville, also in Quebec. His
own analyst at National Defence believes that, in Quebec, the
expenditures by the Department are short by some $650 million,
on average. Six hundred and fifty million dollars. This is the
minimum figure.
Year in and year out, despite the size of the population in
Quebec and the significance of tax contributions-Quebecers
pay $30 billion in income and other taxes into the federal
coffers, we are not talking about gifts here-despite all that,
defence department spending in Quebec is short annually by a
minimum of $650 million.
In addition, even though Quebec has roughly 24 per cent of
the population and contributes 23.5 or 24 per cent of the federal
tax base, only 15 per cent of national defence infrastructures are
located there. A highly disproportionate amount compared to
the demographic weight and the tax contributions of Quebecers.
Despite all of this, we are told that everyone has to make an
effort. We have been streamlining for years, we have been
paying for it for years. In Quebec, we have had our fill of paying
for it. When they say that everyone has to pay for it, they should
have a look and see what we have already paid without getting
our share in Quebec of the annual expenditures and investments
by the Department of National Defence. They should have
thought twice before they did it. Quebecers will remember
because we will constantly remind them of it.
This budget is hypocritical, as I have already pointed out,
because the truth has been kept from senior citizens. They have
been told that things are fine and that nothing will change within
the federal plan, just when a committee is being set up-and the
Leader of the Opposition raised the problem yesterday-to
examine the whole problem of pensions and old age security
next year. As the Leader of the Opposition and member for
Lac-Saint-Jean put it so well yesterday, committees are not set
up to increase pensions.
However, in 1995, a referendum year, the federalists, and the
Liberal Party in particular, would lose a major argument if they
tackled the seniors now-the argument that seniors' pensions
would decrease if they changed governments. They did not want
to do this before the referendum. They are keeping the truth
from Quebec seniors just the way they are keeping it from all of
the people of Quebec. And the truth is that there is no more
money in the till.
The finance minister has found a way to betray the Prime
Minister's promise not to raise taxes during the first two years of
his mandate. Last year, his strategy of cutting the age tax credit
for senior citizens brought in $500 million in extra revenues.
This year, taxes on gasoline and tobacco will bring in a total of
some $800 to $900 million.
(1125)
This budget does not address the real problems or respond to
people's real needs. Maybe the federal government will get
away with it this time. Maybe the bond rating agencies will
allow its credit rating to stand if the government appears to have
public finances in hand. But these agencies will most surely
have their eye on the provinces since the federal government has
offloaded all of its financial problems onto the provincial
governments. So regardless of whose credit rating is dropped,
there will be an increase in interest rates when the time comes to
refinance the debt, whether the federal debt or the provincial
debt or Quebec's debt, the burden will still fall onto the same
taxpayer.
This situation, this observation is deceptive. My Reform
colleagues would do well to bear this in mind. Nor does this
budget in any sense set a strong, solid course in regard to the
accumulated national debt in the medium term, something
which Moody's bond rating service has clearly pointed out. It is
precisely the magnitude of the national debt which worries
investors and has a major impact on interest rates, the lack of
investments, the lack of significant job creation to recover from
an unemployment rate hovering around 10 per cent. As of 1997,
and I am warning my fellow Quebecers, more sacrifices will be
imposed on them. The federal government will continue cutting
and offloading, leaving the Quebec government the hateful task
of increasing taxes or cutting spending on essential services.
10121
But that will not be the end of it since this budget has
resolved nothing. We will always face a monstrous debt if we
do not take steps of some sort toward renewal, true structural
renewal, to create a new country and breathe new life into
Quebec. If this is not done, we will pay for it and go on paying.
In Quebec we have the chance to start afresh, to create our
own social plan, to make an honest general effort not to be at the
mercy of this government's arbitrary measures year after year
which result in higher taxes any way you look at it. We can
decide to extricate ourselves from this system or to keep sinking
with the big federal machine.
I think that Quebecers will choose to change governments,
they will opt for renewal instead of the doldrums year in, year
out, with no real social plan, without hope for job creation,
without hope for enrichment, other than the enrichment of the
federal debt.
I would like to suggest the following amendment to the
Minister of Finance's budget speech; I move:
That the motion be amended by striking out all the words after the word ``That''
and substituting the following:
``the House of Commons reject the government's budget which systematically
offloads the federal government's financial problems onto the provinces; makes no
provision whatsoever to ease the tax burden of the middle class while preserving tax
loopholes for wealthy Canadians and large corporations; and completely disregards
the pressing needs of the unemployed and the most disadvantaged who will bear the
full brunt of additional cuts to social programs''. brev
(1130)
[English]
Mr. Preston Manning (Calgary Southwest, Ref.): Mr.
Speaker, I rise to address the budgetary policy of the
government as contained in the budget presented to the House
yesterday. In doing so I wish to approach the budget not so much
from the perspective of an opposition party, but more from the
perspective of the people whose personal and collective
interests are affected by the budget.
On behalf of Canadians, Reformers will be subjecting the
budget to four major tests. The first is the employment test.
Does the budget address the needs of the unemployed or
underemployed in the country? The second is the social security
test. Does the budget address the needs of the recipients of
government services, in particular, social services? The third is
the fiscal test. Does the budget meet the fiscal expectations of
those putting up the money, the lenders that are being asked to
put up over $30 billion to cover the government's overdraft and
the long-suffering taxpayers who are asked to put up almost
$120 billion a year? Finally there is a character test. Does the
budget demonstrate the qualities of honesty, courage, fairness,
leadership and integrity which Canadians have a right to expect
from their government?
My colleagues will be applying these tests to the budget in
greater detail than I, but let me give a summary of the results.
The finance minister says the budget meets the partisan goals
of the Liberal red book and its timid fiscal target of getting the
deficit down toward $25 billion by the year 1997. While a few
observers and commentators may be gullible enough to accept
the red book and the 3 per cent goal as acceptable measuring
sticks, at the end of the day the vast majority of Canadians will
not.
If this budget is measured against the interests of the
unemployed and underemployed Canadians who want real jobs,
it betrays those interests because it contains no real long term
stimulus to private sector job creation.
If this budget is measured against the interests of the
recipients of government services who desire real social
security, it betrays those interests because it does nothing to halt
the diversion of funds away from social programs into massive
interest payments on a growing federal debt.
If this budget is measured against the interests of Canadians
who want a solid plan for deficit elimination, it betrays those
interests because it only plans to get the deficit to $24 billion by
the year 1997.
If this budget is measured against the interests of the
long-suffering taxpayer who wants no tax increases and
spending reductions which lead to tax relief, it betrays those
interests because it takes over $1 billion more per year out of the
pockets of taxpayers and lays the foundations for future tax
increases.
In short, when this budget is measured against the public's
interests; the interests of workers, the interests of those who
depend on social services, the interests of investors, lenders and
taxpayers, it betrays those interests at every turn. It is a betrayal
of trust of the same order as the Mulroney and Wilson budgets of
1984-85 which missed the narrow window of opportunity to
balance the budget, which comes only once to a new
government, never to return again.
In delivering this sad commentary, I do not wish to be unfair
to the Minister of Finance, nor overly disparage his efforts to
bring in a better and more honest budget. If the Minister of
Finance and his department had been given more freedom and
support by the Prime Minister, they might have come clean with
Canadians on what deficit spending is doing to destroy social
programs. They would have made the target of the budget deficit
elimination, not merely deficit reduction. However, the Prime
Minister discouraged such frankness and directness and the
minister acquiesced.
I believe that if the Minister of Human Resources
Development had not utterly failed to provide a blueprint for
reforming social spending, the finance minister might have
presented the
10122
combination of real social reforms and spending reductions. The
Minister of Human Resources Development both undermined
and failed the Minister of Finance.
(1135)
I believe that if the Liberal caucus did not contain so many
members that cling to obsolete notions, such as the idea that
government spending is stimulative, such as the idea that
Canada has a revenue problem, not a spending problem; if the
finance minister did not have these living millstones around his
neck he might have done better.
To be fair we do not lay the blame for this budgetary betrayal
of the public interest entirely on the Minister of Finance. We
believe the blame should rest even more heavily on the Minister
of Human Resources Development, on the soft-headed wing of
the Liberal caucus and on the Prime Minister.
As a constructive contribution to this debate, my colleagues
will be applying the other tests of the budget which I have
already mentioned. For example, they will apply an employment
test to the budget to show how it hurts, not helps, one million
unemployed and over two million underemployed in the
country. As a constructive alternative they will also offer
Reform's 5-R jobs program which relies on deficit elimination
and tax relief to stimulate long term private sector job creation.
The 5-R jobs program is based on the premise that a dollar left
in the hands of a taxpayer or a consumer or an investor or a
business person creates more jobs than that dollar in the hands of
a bureaucrat, a lobbyist or a politician.
My colleagues will apply a social security test to the budget to
show the damage it does, especially in the long run, to those
dependent on the big federal social security programs: OAS, UI,
established programs funding and the Canada assistance plan.
As a constructive alternative we will offer Reform's vision of a
more secure society through the empowerment of individuals
and communities and the decentralization of social program
delivery to the levels of government closest to the people.
My colleagues will show how by applying these principles we
can get more social security for more Canadians out of $140
billion in combined federal and provincial social spending than
the current government is going to get out of $155 billion in
combined social spending. The Reform alternative to the
welfare state is based on the premise that a dollar left in the
hands of a mother, a father, a family, a student, a senior, a front
line care worker is more productive, more conducive to social
security than that dollar in the hands of a distant federal
government.
Finally, my colleagues will apply fiscal tests to the budget to
show how it undermines the confidence of taxpayers and
lenders. As a constructive alternative they will put forward the
premises and calculations of our taxpayers' budget presented on
February 21 which achieves deficit elimination in three years
through spending cuts alone without tax increases.
While we are extremely critical of both the character and
content of the budget, in the name of workers, recipients of
services, taxpayers and citizens, unlike the Bloc and others, we
have a constructive alternative to offer. All of those are
contained in the taxpayers' budget which we invite the media,
the public and members of the House to compare and contrast
with the Liberal budget.
Today I again repeat my challenge to the Prime Minister and
the Minister of Finance. We want a fair, no holds barred, two on
two debate; the government's budget versus the taxpayers'
budget. Let us pick a night sometime in the next week or 10
days-to save money let us have it in this Chamber-but let us
leave our cheering sections at home, just five people on the
floor; the Prime Minister, the finance minister, myself and one
of our finance critics and yourself, Mr. Speaker. Let us have only
two documents on the table; the Liberal budget and the
taxpayers' budget. Let the TV cameras roll and let our members,
the media and the public view the exchange. Let us have a real
debate and a cross-examination of the fundamental assumptions
behind these two budgetary alternatives and the directions in
which they lead. The issue to be decided is nothing less than
which course of action will get the fiscal affairs of the federal
government in order for the 21st century.
(1140)
As I said at the beginning, one supreme test must be applied to
this budget above all others. That is the character test. Does the
budget demonstrate the qualities of honesty, courage, fairness,
leadership and integrity which Canadians have a right to expect
from their government? Again, sad to say this budget fails the
character test.
In the red book the government ignored and downplayed the
damage that the deficit and the debt are doing to private sector
job creation and continued to insist for months that government
overspending, such as through the infrastructure program, was
the key to job creation. It simply lacked the courage and honesty
to tell Canadians that it was high deficit, debt and tax levels
which were undermining the private sector's ability to create
jobs for hundreds of thousands of unemployed Canadians.
Now in the budget the government continues down the same
path. It ignores, downplays, even attempts to deny and cover up
the irreparable damage that government overspending, the debt
and the deficit, are doing to social security programs on which
so many Canadians depend.
Under the budget plan the government will add over $100
billion to the federal debt. Interest payments on the federal debt
10123
will rise to over $50 billion a year, or almost one-third of the
federal budget by the end of this Parliament.
Diverting taxpayers' dollars into paying $50 billion a year in
interest diverts billions of dollars directly away from spending
on all other government programs, in particular social spending,
since social spending is the largest part of the federal spending
program.
In other words, the greatest and most real threat to social
programs in Canada is not supposed and imaginary attacks by
fiscal reformers, it is the chronic, unrelenting, systematic
failure of a Liberal government to get the deficit to zero as
quickly as possible.
Until I see an addendum to the budget that clearly projects the
impact of rising debt and interest costs on social spending, the
impact on seniors, on people on social assistance, on people
dependent on the federal government for health care, the budget
is lacking in honesty and courage. It is a cowardly and dishonest
budget that fails the character test at the point where it is most
needed.
This brings me to the equally important character traits of
fairness and leadership. The finance minister calls for
Canadians to make sacrifices in order to reduce overspending
and the deficit. The budget signals future cuts, for example, in
unemployment benefits, seniors' benefits, and cuts to social
transfers to the provinces. He insists that the spending cuts and
tax increases he will impose are guided by fairness.
As the minister has said, however, the devil is in the details.
Fairness and leadership call for those at the top of the
government to make the first and most visible sacrifice. For this
Parliament and this government that means relinquishing the
gold plated MPs' pension plan which so many Canadians find
obscene and which they regard as the cardinal example of
excessive spending at the top of government.
What does the government do? A few days before the budget
it brings out a slightly modified MP pension plan-we call it
trough light-which still offers MPs the most generous pension
plan in the country. It contains an opting out clause directed to
first time MPs, but it offers millions and millions of dollars in
pension benefits to senior ministers and senior backbenchers
beyond the wildest dreams of ordinary Canadians. It declares
this is pension reform. It declares this is equity and fairness. It
declares this is real cost cutting when in fact it is not.
This failure to practice with respect to the MPs' pension plan
the principles that the government espouses in the budget points
to a flaw in the character of the government.
(1145 )
There is no way in which a government member can vote for
the budget with its spending reductions and tax increases and
vote for the gold plated MP pension plan at the same time,
without undermining the integrity of the government itself. So
what will it be?
It is the intention of Reform MPs to opt out of the MP pension
plan. We call upon every other member of the House to do
likewise. ``Opt out or get out'' will be the cry in the
constituencies. It is a cry which must be respected if fairness and
leadership by example and integrity are to be restored to
Parliament and any budget it endorses.
In conclusion, some observers of the budget will say that it
brings Canada one step closer to hitting the wall, one step closer
to a crisis of confidence on the part of lenders that will drive the
dollar through the floor, the interest rates through the roof, grind
the economic recovery to a halt and begin the complete
unravelling of the social safety net.
Some will say that the failure of the government to eliminate
the deficit now, when the economy is in relatively good shape,
will leave Canadians virtually defenceless in the face of an
economic downturn.
Some will say that the cuts necessary to balance the budget,
when they inevitably come, will now be much deeper and much
more destructive because the government lacked the courage to
act now. Only time will tell.
However, on behalf of Canadians everywhere-taxpayers,
employers, employees, consumers, recipients of services and
citizens-I say to the Prime Minister, to the Minister of Finance,
to every member of the Liberal cabinet, to every member of the
Liberal caucus and to every senior civil servant who had
anything to do with the preparation of the budget: If the country
hits the wall, if the country's social programs hit the wall
because of what the budget failed to do, they will be held
personally, professionally and politically accountable for the
consequences come hell or high water.
I move:
That the amendment be amended by striking out all the words after the word
``budget'' and adding thereafter the following words:
``for its failure to eliminate the deficit quickly and decisively within the life of this
Parliament and by asking future generations to bear the cost of fiscal
irresponsibility''.
Some hon. members: Hear, hear.
Mr. Elwin Hermanson (Kindersley-Lloydminster, Ref.):
Mr. Speaker, I enjoyed listening to the address by my leader, the
hon. member for Calgary Southwest. It is the only address I have
heard on the budget to this point in the House that actually made
any sense.
(1150)
We saw a budget tabled yesterday that had some tax increases
and some spending cuts. However the problem I find is that our
total national debt, the GDP ratio, remains unchanged. It is still
10124
around 73 to 75 per cent, which means that we are not gaining
any ground.
Yes, we are experiencing some pain as taxpayers. We are
going to pay more to put gas in our cars. We are going to pay
higher taxes and, yes, we are going to see some reduction in
services. We are going to see it at the bottom. We are going to
see 45,000 people cut from the civil service and very little
cutting at the top. That means services to Canadians are going to
be reduced.
We are going to see some pain. We are going to see some
additional costs but we are not going to see any gain. We are not
going to see any better future for our children in the long term.
Would the hon. member talk about the positive aspect of the
Reform taxpayers' budget in that respect in light of the budget
tabled by the minister yesterday?
Mr. Manning: Mr. Speaker, I thank the member for his
intervention. He puts his finger on the core problem that has to
be resolved in the House, I would hope in the course of the
budget debate.
After the spending cuts that have been proposed by the
minister the sad problem is that we still end up running a $25
billion deficit at the end of 1997. The federal debt is over $600
billion and the interest payments on that debt are over $50
billion.
If members would work through the consequences of those
higher interest costs on the rest of the social spending,
particularly the social programs, they would find that does more
damage to the social services network than virtually anything
that has ever been proposed by anybody in terms of spending
reductions.
The taxpayers' budget we presented endeavoured to get the
deficit down more quickly so that the debt stops growing and
this bleeding off of social program spending through interest
payments ceases.
I honestly submit to the House that if people would compare
those two, the pain of the cuts to get the deficit down more
quickly versus the pain that will come if nothing is done and
those programs are all eroded by higher interest costs, they
would find it would be more advisable, more saleable to the
electorate and more acceptable to Canadians to hit the Reform
target of deficit elimination in three years rather than the
minister's target of cut the deficit in half by 1997.
Mr. Dennis J. Mills (Parliamentary Secretary to Minister
of Industry, Lib.): Mr. Speaker, when the member for Calgary
Southwest rose to his feet today he said that he would not be
approaching the debate in a partisan way. Therefore I was rather
surprised the leader of the Reform Party did not acknowledge
the fact that there were no personal tax increases in the budget.
I read the Reform Party's budget. I realize that I cannot show
it here because it is inappropriate. It would propose a flat tax
idea. As members will know, this is something I personally
believed in although I call it the single tax and it has a much
more progressive design than the member is proposing.
In the proposal of the leader of the Reform Party for a flat tax
it is absolutely inevitable under that system that many
Canadians would pay more personal income tax. How does the
leader of the Reform Party square that flat tax idea with his
statement that there should be no more money taken out of the
personal income tax envelope?
(1155 )
Mr. Manning: Mr. Speaker, I thank the member for his
question and I will respond to it in two parts.
First, he implied that we should be thankful for the minister
not increasing personal income tax. I remind the member of the
fact he knows well that all these taxes come out of the pocket of
the same taxpayer. Automobiles do not pay this fuel increase of
1.5 cents a litre on gasoline; people pay it. The tax increases of
over a $1 billion a year in the budget are going to be paid by real
people. Ordinary taxpayers do not care much about where it is
coming from. They end up having to pay it.
With respect to the member's second question on the
implications of flat tax on the budgetary situation and the impact
on taxpayers, I say it comes back to the concern about the total
tax load. If we could get spending capped and then down to the
point where we could offer tax relief, which is the whole aim of
the taxpayers' budget, the total tax load on Canadians under a
flat tax system or any other system would be lower than it is
under the current system.
Our aim is to deliver genuine tax relief second through tax
reform but first through getting the spending down, which is the
root cause of high taxes.
[Translation]
Mr. Roger Pomerleau (Anjou-Rivière-des-Prairies,
BQ): Mr. Speaker, I have only a brief comment and a question
for the leader of the Reform Party. Among the measures
affecting farmers in the east contained in this budget, there is a
cut of $32 million in funding for Quebec. Of course, the
government has also made cuts affecting farmers in the west, for
example the Crow rate, but it will also compensate farmers of
that region to the tune of $2.9 billion.
This measure typifies what Quebec has a problem with in this
country. Money is taken from some areas and given to others,
and Quebec gets none of it. Before asking my question, I cite the
energy sector in Canada and Quebec as an example of this. We
have three kinds of energy: petrochemical, nuclear and electric.
The government made massive investments, billions of dollars
10125
worth, in petrochemical energy. Hibernia is an example of this.
The federal government made massive investments in CANDU
reactors. The federal government's cumulative investment in
this project is $12 billion, of which Quebec paid 25 per cent.
Nothing was ever invested in electricity in Quebec.
This is what we say. I think that what my hon. colleague meant
when he said: ``We're going to hit the wall quite soon'', and I
fully agree with him, is that he admonishes that we are on the
verge of an apocalypse, and we Quebecers say that our personal
apocalypse would be to stay in this system.
Can my hon. colleague tell us his point of view on the
differences between how the west and Quebec are being treated?
[English]
Mr. Manning: Mr. Speaker, I could respond to a number of
points. I thank the member for his intervention. I remind him
that Quebec Hydro has paid no income taxes. Nor was Quebec
Hydro ever been subject to a raid by the federal government the
equivalent of the national energy program, which is one of the
differences between how energy has been treated in the west and
how it has been treated in Quebec.
With respect to the agricultural impacts of the budget, I have
heard other comments by the member's colleagues implying
that there is some unfairness in the government cancelling the
Crow rate and compensating western farmers to the tune of $1.6
billion and the 30 per cent reduction on subsidies to the dairy
industry, a large portion of which is in Quebec.
I remind the member that the dairy industry gets its subsidies
from two sources. One is directly from the government but the
other is from the high level of protection that supply
management is offered. That subsidy comes directly out of the
pockets of the consumer and not from the government. If we add
the levels of subsidy we find the subsidization of supply
managed industries in Quebec is as high or higher than the more
free market grain trade and livestock trade in the west.
It is for members from the province of Quebec to consider that
if Quebec is an independent country the capacity of Quebec to
subsidize and protect to the degree it has in the past is gone and
those farmers would be hurt infinitely more than they would be
by any measure under the budget.
(1200 )
Mr. David Walker (Parliamentary Secretary to Minister of
Finance, Lib.): Mr. Speaker, I want to say to the leader of the
third party with humour, not anything else, that if he wants to
speak without props I suggest he look around here, then look
around behind himself where he came to this debate fully
propped for his presentation.
It gives me a great pleasure to join in the debate today, which
perhaps is one of the most important times of our history, the
discussion of the 1995 budget presented yesterday here in the
House by the Minister of Finance.
I do not have to tell the House that it not only deals with the
questions of cutbacks, with the question of some of the nitty
gritty and the program review. In a fundamental way the
Minister of Finance has laid out for this government and for the
people of Canada how we are going to go about getting
government right.
This philosophy is clear. In order to fulfil the ambitions of this
government-I hope of the whole House-our job here is to
provide an environment for economic growth, for creating jobs
for Canadians and to see that there will be new economic wealth
shared by all Canadians. In this context that we have set out the
first step we must take is to make sure we get government right
and we do things properly here in Ottawa.
[Translation]
This budget will result in considerable savings so that we can
meet our red book commitment to reduce the deficit.
Furthermore, if the economy does better than forecast in our
extremely prudent estimates, the deficit could go down even
faster.
[English]
This will pay off not only this year, not only next year, but
because we are getting it right this time, it will pay off long into
the future.
As an aside, everyone in this House should be heartened by
the tremendous positive reaction. This budget has been accepted
by Canadians from coast to coast, by people who are concerned
about our deficit but on the other hand wanted to be given hope
that the government was not going to hurt their lives
unnecessarily. Yes, the price is being paid by many people in
many ways in many walks of life. On the other hand, it is also
gratifying that Canadians have come to a point in this
development where they can say this is the right step, that we are
doing the right things for Canada. International observers who
do have an influence on our success have also seen that the
Minister of Finance has taken the right steps and is going about
putting our house in order.
This budget is different, very different from the previous Tory
budgets. People ask me that question all the time. We are not just
making rhetorical flourishes. We are doing very precise things.
We are going to be successful. It is not a budget of promises. It is
a budget of commitment. We proved last year that we can fulfil
our commitments. We will prove it next year, the year after and
the year after that.
Most important for people on this side of the House, this is not
a Conservative budget in a fundamental way. It adheres to the
Liberal legacy of nation building. It is clearly rooted in the
principles of economic leadership, compassion and increased
10126
fairness. We will not leave Canadians with another decade of
disappointments in the development of the budget and the
development of their government.
Today's budget is a call for action. It is a time for opportunity
and challenge. As our Prime Minister has said on many
occasions, if we have to make cutbacks in government, make
them while the economy is growing. The economy is growing
now and now is the time for firm action.
We have seen in the past year, not because of our actions but
because of the collective wisdom of Canadians and their
increased confidence, over 443,000 permanent jobs created in
this economy. We have seen a growth rate that far outstrips all of
our fellow countries in the G-7. We have shown the way among
western industrial nations about how to grow an economy.
We do not take credit for that. We understand that it is not us
but we hope that we are helping to provide the environment
which makes businesses and individuals confident of the future
because that is the way that this economy will continue to grow.
(1205)
[Translation]
We also have an opportunity at the political level. Canadians
clearly indicated that they wanted vigorous measures to reduce
the public debt so that we can get rid of the crushing burden of
high taxes and resulting interest rates.
The challenge we face is just as clear. Canada's economic
future is in real danger because of the $500 billion debt which
makes us extremely vulnerable to the brutal impact of interest
rates.
These interest rates have continued to rise under pressure
from the U.S. and Canada. Since October, short-term rates have
risen by about 2.5 percentage points.
[English]
It is very important to emphasize this point. I want to say to all
parliamentarians here today that sometimes during the course of
our committee work we wonder if it has an influence, do the
ministers listen, does the Prime Minister listen, do opposition
members have an influence. I think the finance committee
stands out in its work as a great example of how
parliamentarians contribute to the development of policy.
We went through long hearings. We heard from over 650
witnesses in the fall. We came to the conclusion that the
government must be prudent, that the government must pay
attention to increasing interest rates, that we must take dramatic
and deliberate actions to reduce the deficit. The Minister of
Finance heeded those words.
Although we seemed to be on the drastic side when we made
our recommendations our warnings bore out the truth, that
interest rates have gone up and made the job of this government
much more difficult.
To the credit of the Prime Minister and the Minister of
Finance and other colleagues in the ministry, they responded
and produced a budget which showed our own willingness to
reach our targets. This caution will be what propels this
government to do the right thing in the years to come.
Let us stop and think. What would have happened if we had
done nothing? There are voices in the country and voices on the
lawn in front of Parliament which say this is really an okay
situation, all this talk about deficits is some right wing plot to
destroy our social programs. If we had not done anything we
would have been $5 billion higher in our deficit this year and we
would have missed the mark by $10.6 billion next year. In other
words, we would be further behind than when we formed the
government on the commitment to reduce the deficit to 3 per
cent of GDP. The actions are necessary and we are in the process
now of taking the necessary steps to rectify the situation.
In order to reach our budget targets as the Minister of Finance
explained yesterday we are implementing cumulative savings
over the next two years of $15.6 billion. Over $13 billion of
these savings will be in spending cuts and there will be no
increase in personal income tax rates.
As the leader of the third party said a few minutes ago, this is
great news for Canada. We have to realize that we have attacked
the problem of government debt while at the same time
recognizing the legitimacy of middle class families, that the tax
burden has shifted over the past 15 years far to much to them and
therefore to their children and their ability to have economic
security.
This government has listened to that message and listened
very carefully and responded with prudence, responded in such a
way that Canadians understand that we are putting this
government in order and are calling upon them as a last resort to
lend assistance.
[Translation]
We are also taking firm action to make the tax system fairer,
close loopholes and increase the contribution of big business to
the fight against the deficit.
[English]
Taking the next three years together, the budget delivers
almost $7 in spending cuts for every $1 in revenues. These
actions are changing the size and shape of the government by
hard choices on priorities. By 1996-97 program spending will
fall from $120 billion down to $108 billion. This is the most
dramatic action seen in any government for decades.
10127
(1210)
The most important point of all, in 1996-97 the debt will no
longer be growing faster than the economy. When the Minister
of Finance says on public occasions that we are going to break
the back of this, we are going to get off this treadmill, this is the
key point. The debt to GDP ratio will begin to decline. That is
the key for the fiscal sustainability and that will put us on a
permanent downward track.
There are going to be payoffs. We want Canadians to
appreciate this. This is the first step. Budgets are not made or
broken on one night's announcement, they are made by
Canadians adjusting themselves and departments adjusting
themselves. There will be a payoff. The payoff is that we will
make sure we reach our targets.
We set up substantial contingency funds: $2.5 billion this
year, $3 billion the year after. Even if interest rates go another
full percentage point higher we will still be able to reach our
targets.
It is this type of caution in the pasture which has caused us to
reach our target, to do better than we told Canadians we were
doing, and that is what is contributing to the confidence of
Canadians in their national government. We are saying things
that we can do. We are not setting targets five years down the
line or ten years down the line so that when a crisis occurs like
Mexico everybody says do not worry about this particular short
term problem, we can put it off and look after it in the future.
What we are saying in this House is that as a crisis occurs we
adjust, we reduce our spending, we reach our target year after
year. That is the confidence builder, not having some vague
target in the future which says we can reduce the deficit to zero
in three or four years. That does not help anybody. That just
frustrates people. That leaves a bad taste in the mouths of the
politicians who are over promising.
It is very important that every member in this House
understand the responsibility that we have in the debate, that
Canadians understand that we are going to reach targets and that
those targets will be reached in such a way that it is done fairly
and consistently. When people look back at the period of the
mid-nineties it will not be like it was in the mid-eighties, there
will be real accomplishment by their national government.
[Translation]
Our contingency reserves could play a dual role in the future.
Not only will they ensure that we will meet our objectives, but,
if they are not needed they will not be spent and will allow us to
further reduce the deficit.
This is yet another dividend to be reaped through prudent
economic forecasting.
[English]
If interest rates and growth do better than our forecast and
conform to the private sector average the 1996-97 deficit could
drop dramatically. It could be much less than projected in the
budget. We could have a deficit under 2.5 per cent instead of 3
per cent of GDP.
The government is being very careful on this point. We want
people to understand that our targets are realistic and if we do
better it is through good luck. We are being prudent in each of
our particular projections because we do not want to fall short.
We think that the credibility, not of this government but of the
nation, is based on targets reached year after year.
The heart of the process to achieve these goals was not done in
the hurried up fashion of a Minister of Finance sitting around a
table with a few officials. In my first year the minister would
call me in from time to time and we were trying to figure out
what could be done. We had only been in office for a few months
and it was very much a learning process.
What the minister decided quite appropriately, which was
supported by his cabinet colleagues, was to have a program
review which in some respects sounds esoteric. A program
review gave a group of ministers an opportunity to talk with
each other about what they wanted to see reshaped in
government, a new strategy within government. It was not to
throw around programs and say, cut here and cut there. It was to
say department by department, what is it that we have to get out
of and what is it that we have to emphasize? How do we
redevelop an industrial strategy? My colleague from Don Mills
is involved with that. How do we develop a strategy on science?
How do we reduce subsidies in the agricultural field? How do we
make the transportation system more effective? These are not
catch as catch can questions, these are hard to answer; nor are
our answers this year the final answers.
(1215 )
We will find this will be a progression of innovation. We will
be back again and again suggesting new ways to do things. This
budget is going to energize our colleagues on this side to do the
right thing and to find new ways for the government to operate. I
hope the opposition parties will make suggestions that we can
incorporate so that we can develop a stronger and stronger
national government.
[Translation]
Of course, we did not wait for the budget to take concrete
action. Our review of agencies, offices, councils, boards and
commissions-which ended in early February-will lead to the
abolition of 73 of these 120 organizations. The 47 remaining
entities will be restructured and rationalized. This will allow us
to eliminate 665 positions held by governor-in-council
appointees and save $10 million a year.
10128
[English]
We could mention a lot of examples that have proven to be
really fruitful in this process. Spending by fisheries and oceans
will fall $210 million over three years. We have found that there
are more officials than there are active fishers. Transport will
move from being an operator of the transport system to a role of
regulator and policy maker.
There has been a large question raised in the minds of the
public about subsidies to business.
[Translation]
In fact, business subsidies will be cut in every department. The reduction will affect agricultural and transportation subsidies that were established decades ago.
[English]
Overall the budget will cut subsidies in half, from $3.8 billion
to $1.5 billion by 1997-98.
We will also do other measures on cost recovery, for example
in dealing with immigration issues.
On the question of provincial transfers, we are taking action
to reform the provincial transfer system. We think that our
innovations will create a system that is more sustainable and
more responsive to community needs.
In the last budget, to set the stage to show ourselves to be
supportive of each of the provinces, we renewed equalization for
five years. There is no change in that commitment in this budget.
For 1996-97, the other major programs, established programs
financing for health and education and the Canada assistance
plan, will be converted into a single, consolidated block transfer
called the Canada social transfer.
[Translation]
It is a matter of converting the Canada Assistance Plan to the
block funding system already used for EPF, thus allowing the
provinces to innovate according to their priorities.
However, the budget also makes it clear that the principles in
the Canada Health Act must be adhered to. And there is no
change to the principle that the provinces must provide social
assistance services without minimum residency requirements.
[English]
The introduction of the CST will see total provincial transfers
reduced by $2.5 billion next year and the year after that by $4.5
billion. This means that the total of all major transfers to
provinces in cash and tax points will be 4.4 per cent lower next
year than it is today.
By comparison, the drop in federal spending will be 7.3 per
cent. To put it in another perspective, the reduction by the
second year will equal only about 3 per cent of all provincial
aggregate revenues. We have hit ourselves harder than we are
hitting anybody else.
There are two other issues which are still outstanding:
unemployment insurance and support for the elderly. I will
touch on them very briefly.
[Translation]
Sometime this year, the Minister of Human Resources
Development will be tabling legislative proposals to put in
place, based on the best features of the UI program, a reformed
program the emphasis of which will be on assistance rather than
dependence.
(1220)
[English]
This reform will take place in 1996 and will reduce the size of
the program by a minimum of 10 per cent. For 1996-97 this
means the reform will secure savings of $700 million. I will
choose another time to speak about the payments to the elderly.
This may be a difficult budget in some ways but the optimism
with which Canadians received it last night and today shows that
we are on the right track and that we have the support of the
country.
[Translation]
Mr. Jean-Paul Marchand (Québec-Est, BQ): Madam
Speaker, I listened with interest as my hon. colleague sang the
praises of the latest budget, saying that this may be the
opportunity we were looking for to act aggressively to put our
fiscal house in order. But would he agree with me that this
budget did not come down very hard on the banks and family
trusts?
All banks are asked to pay over the next two years is about
$100 million. This is really not very much when you think that
banks are the businesses that have turned the largest profits over
the past five to ten years. Last year alone, the Royal Bank's net
profit was $1.2 billion. And this is just one bank.
In addition, by deferring changes regarding family trusts to
1999, or five years down the road, the wealthiest segment of our
society will have ample time to find another place where to put
their money away to avoid any form of taxation. Considering
that the government could have brought in perhaps as much as
$1 billion from these trusts alone, does the hon. member really
think that his government took firm and fair action?
Mr. Walker: Madam Speaker, the hon. member raised two
issues on which I would like to comment. First, with respect to
family trusts, we have removed all tax advantages related to
these trusts and reduced the allowed deferral under the 21-year
rule. We are beginning immediately to take action on family
trusts.
10129
[English]
There are two questions under family trusts. One is the
question of income dispersed to beneficiaries which is going to
be changed immediately. The other is the question of the capital
tax. The 21-year rule is effective in 1999 which is the time it
takes given the fact that the Conservative government
eliminated the rule. There had to be a few years to allow for
adjustment. On the income issue we will begin immediately; on
the capital issue we begin.
[Translation]
On the other issue, the bank issue, we are raising a special tax
on banks, which will bring in $60 million just this year.
[English]
We think this is a great step forward. It will begin to deal with
the banks on several issues we think they should be addressing
immediately.
[Translation]
Mr. Pierre Brien (Témiscamingue, BQ): Madam Speaker,
the hon. member referred to the transfers to provinces and said
that, in his opinion, provinces would not be really affected,
considering the cuts involved. This raises the whole issue of
national standards. What will happen to standards?
The budget makes several mentions to such standards, but
they are not very clear. I wonder if the hon. member could give
us his own view on that issue. In his speech, the Minister of
Finance said, and I quote: ``Provinces will now be able to design
more innovative social programs- programs that respond to the
needs of people today rather than to inflexible rules''.
Thus, and that is a step in the right direction, the minister does
confirm that, in the past, there were some inflexible rules. But
the sentence which follows is the one for which I would
appreciate an explanation. It reads: ``However, flexibility does
not mean a free-for-all''. That sentence appears in italics in the
budget speech. What does the minister mean when he says:
``flexibility does not mean free-for-all''?
It means that the federal government will continue to exert
some control. Yesterday, the Minister of Human Resources
Development, who was participating in a radio show with me,
said that before the government had no control over funds but
that would now change because the federal government would
define standards, in co-operation with the provinces.
(1225)
We all know what joint standards mean. Therefore, I wonder
if the hon. member could explain the statement to the effect that
flexibility does not mean free-for-all.
[English]
Mr. Walker: Madam Speaker, I thank the member for his
question. This area is both old and new in Canadian politics, that
is to say, how do we transfer money to the provinces?
Essentially the federal government's strategy since the
mid-1960s has been to have a program called the Canada
assistance plan. It allows the provinces to access money freely if
they fulfil certain federal conditions. In the 1977 EPF program,
we said to the provinces that they would have block funding for
post-secondary education and health as long as they conformed
to the Canada Health Act.
In several discussions going back to the early 1980s the
provinces have been asking for greater flexibility in the Canada
assistance plan to enable them to design more innovative social
programs. At the same time there is the feeling at the national
level by many national interest groups that as one moves about
the country support for post-secondary education is varied. The
types of services available under the Canada assistance plan are
varied.
We have said to let us go back to the first principles. Let us
move toward a way in which we can give the provinces a wider
range of flexibility through social transfers. At the same time, as
a national government we have to make sure we are true to the
principles we want as a Liberal government. Through the budget
consultations which normally take place when the budget laws
are introduced, we will have an opportunity to discuss it. I am
sure the ministers of finance and social policy as well as the
prime minister will want to talk about it.
Mrs. Jane Stewart (Brant, Lib.): Madam Speaker, I would
like to congratulate the parliamentary secretary on his speech
and tell him how much I enjoyed working with him on the
Standing Committee on Finance.
He made reference to the fact that the work of the committee
had a big impact on the minister and the results of his budget. I
agree that I could see a direct reflection in the budget of the
recommendations made by the committee and the details
provided to us by individual Canadians. The committee
provided an important venue for Canadians to participate in the
debate on the budget which is so important to them.
Does the parliamentary secretary expect that the Minister of
Finance will continue this participative process with the
Canadian public? Will the minister ask the committee yet again
to be involved in the process as we prepare for our next budget?
Mr. Walker: Madam Speaker, it is going to be a much more
elaborate process next year, in a good sense of the word
elaborate. We all learned something last year. I think we would
like to start a little earlier.
10130
The consultations by the finance committee is a House order.
We are mandated by the House to do these consultations. We
will continue with them.
I can also point out that the government itself has changed the
way that departments produce their budgets. Each committee is
now going to be involved with the budget preparation. We are
going to build upon last year's success. We are going to have a
very strong process. The finance committee will be the centre of
it, but unlike this year, we will not be the only participants. I
welcome the work of other committees to make sure we improve
the budget on an annual basis.
[Translation]
Mr. Ghislain Lebel (Chambly, BQ): Madam Speaker, I want
to ask the parliamentary secretary if he shares my impression to
the effect that there is very little in terms of job creation
programs. The Minister of Finance is somewhat like a
discouraged unemployed worker who sells his tool box because
he feels he will never find another job.
I do not see any job creation initiatives in this budget. Rather,
I am under the impression that the minister is selling his wood to
pay for his stove. There is something wrong in all of this.
Can the parliamentary secretary tell us what miraculous
solutions he sees to promote job creation?
Mr. Walker: Madam Speaker, last year we announced our
infrastructure program. That program enabled us to create many
jobs and implement many projects.
(1230)
This budget will allow us to pursue our job creation efforts
right across the country. I am convinced that our strategy will be
successful.
The Acting Speaker (Mrs. Maheu): I have the honour of
welcoming the Leader of the Opposition among us, once again.
Some hon. members: Hear, hear.
Hon. Lucien Bouchard (Leader of the Opposition, BQ):
Madam Speaker, 16 months after the October 1993 election, the
government just made a very sharp turn. Indeed, the government
has now stopped claiming, as it did for most of 1994, that there
was no real fiscal crisis in Ottawa and that it could just surf on
the wave of economic recovery, a wave which largely came from
south of the border.
When a country with a debt as huge as ours anticipates, as the
federal government did in its February 1994 budget, a reduction
of its deficit based on totally extravagant assumptions regarding
interest rates, that does not reassure anyone, let alone creditors,
whether in Canada or abroad. Because of the irresponsible
action of the federal government, these creditors have become
the true masters and judges of Canada's fiscal position. Since
the Canadian government needs foreign lenders, the latter have
had ample opportunity, in recent months, to signal the end of the
party. A weak dollar and high interest rates are two phenomena
that have become inseparable. At this very moment, real interest
rates are among the highest we have ever known. The cause is as
straightforward as it is shocking: by March 31, 1995, the federal
debt will be $546 billion or 73.2 per cent of GDP. If we add to
this what the provincial debt will be on the same date, $210
billion, the total equals 102 per cent of GDP.
This means that a country as rich as Canada has practically
lost its monetary and budgetary autonomy. One third of federal
revenues, $42 billion, will be spent this year on servicing the
debt.
Perhaps I may digress at this point because there is a comment
I would like to make. Two billion more or less may not be that
important, but I was nevertheless surprised when in his speech
on October 18, 1994 before the Standing Committee on Finance,
the Minister of Finance evaluated debt charges for 1994-95 at
$44.3 billion, and then reduced this to $42 billion in his budget
yesterday, although interest rates had gone up considerably
since October 1994, something no one could have foreseen. This
is rather interesting, and I have a distinct impression that the
Minister of Finance occasionally lets politics, with a small p,
play a part in his financial forecast. Yesterday's budget is
certainly no exception. So much for that.
Our creditors snapped their fingers and, lo and behold, the
little red book drafted by the same Minister of Finance went up
in smoke. Cuts in social programs, providing for a surplus in the
UI account that will be allowed to rise above $5 billion, the
savage downsizing of cash transfers to the provinces: none of
this was on the red book's agenda.
On this side of the House, we talked about cutting the fat in the
federal apparatus, a possible reduction in the defence budget,
and getting rid of tax shelters and duplication of services by the
federal government and the provinces. On the other side of the
House, they just laughed and said somewhat condescendingly:
Sure, we know the Bloc wants to dismantle the federal
government. You want to cut $6 billion from the government's
operating budget, plus 2 billion from the defence budget, while
Canada spends less on defence than any other NATO country.
Now be sensible! That is what they told us not so long ago.
Yesterday, the Minister of Finance told us we were right. In
three years, non statutory spending by federal departments will
be cut by $9.8 billion, in real dollars. Better late than never,
although the many targets of the government's program review
do not necessarily deserve the kind of treatment they get in the
budget, a budget that takes a hard line on social programs and
tries to manipulate the public.
10131
[English]
Listening yesterday to the Minister of Finance I was reminded
of a song by Dinah Washington at the end of the fifties. Some
members may remember What a difference a day makes, a nice
soft ballad. Yesterday's budget could have been subtitled:
``What a difference a year makes''.
(1235)
Remember last year. Who was talking about the debt crisis,
the fat in the federal government, the wasteful overlapping
between federal and provincial governments, and so on? Was it
the Liberals? Of course not. They were all or almost all singing
together from their bible, the red book. The Prime Minister was
saying: ``What debt crisis? Canada is okay''. A year later,
sobered by the money markets which are now calling the
shots-he who lends to the piper calls the tune-the same
Liberals are cutting with a vengeance.
The objective of a 3 per cent deficit to GDP ratio, the alpha
and the omega of budget discipline in the red book, has become a
simple marker on the way to a balanced budget. No date has been
set aside for this new objective, but one senses that the Minister
of Finance would like to get there as soon as possible and, I
would add, at almost any cost.
For example, he becomes lyrical on the possibility that the
deficit could be below $19 billion in the 1996-97 fiscal year. I
would like to sound a note of caution here for two different
reasons.
The first one refers to that inscrutable thing we call the future.
The future has a way of messing things up. The Minister of
Finance knows this very well. Just last year his interest rate
forecasts were solidly off base barely two months after the
budget was brought down in the House. Who predicted the
Mexican crisis which began last December 21? Nobody,
publicly anyway. On December 20, if we believed the pundits,
Mexico was doing fine.
I am told that economists like many other respected
professionals tend to follow the herd. This explains, at least in
part, why their forecasts are very often interchangeable and
consistently miss the turning points. All recessions have been
predicted after the fact. To be more precise, one can feel
uncomfortable with the budget assumption about real GDP
growth. Last year the GDP growth assumptions for 1994 and
1995 were 3 per cent and 3.8 per cent. The first one
underestimated it by a wide margin for it finally was 4.3 per
cent, thanks in part to the strength of the American economy.
This year the assumption for 1995 is the same as last year, 3.8
per cent. This sounds a little strange in view of the fact that
interest rates are projected to be so much higher this year than
was anticipated last year. Already there are signs that high
interest rates are biting into consumer demand. We certainly
cannot exclude the possibility of 2.5 per cent real growth this
year. In such a case the Minister of Finance's plan will be set
back.
But there is another reason for our caution. Real expenditure
cuts are one thing and the program review is supposed to deliver
them. However there are other cuts in the budget which rather fit
in the smoke and mirrors category.
[Translation]
The budget stresses the importance of a second set of
reductions involving cuts in transfers to the provinces. Transfer
payments basically cover three different programs: the Canada
Assistance Plan, Established Programs Financing, which
includes health care and post-secondary education, and
equalization. Their treatment is not necessarily the same. The
federal government's calculation of these payments not only
includes cash payments but also the revenue yielded by tax
points transferred to the provinces under cost-sharing
agreements. This makes the federal government look good.
However, it has no control over what the provinces make of
these tax points and can certainly not take them back: there was
never any question of its doing so. What the federal government
controls are cash transfers, and how they change is the true
measure of federal fairness.
Here is where the federal government strikes a real blow.
Convinced that, and I quote from the budget speech: ``At
present, transfers under the Canada assistance plan come with a
lot of unnecessary strings attached, which limit the flexibility of
the provinces to innovate'', the federal government decided to
combine them with the established programs financing into a
single program, as of 1996-97, to be known as the Canada social
transfer.
(1240)
This program will continue to include, in federal accounting,
both tax points and cash transfers. And, for the federal
government, this is the beauty of the thing. For three reasons.
The first reason is that this arrangement means a significant
reduction in cash transfers, which are the only real expenditure
for the federal government, and it means the government can
show financial markets a more impressive record in deficit
terms, while presenting a different image to Canadian public
opinion, and this is the second advantage, thanks to the tax point
transfer being included in the calculation.
Also according to the budget speech, and I quote: ``This
means that the total of all major federal transfers to the
provinces in 1996-97 will be 4.4 per cent lower than they are
today. That compares favourably with the reduction in spending
in our
10132
own backyard-that is, everything except transfers to the
provinces-which will be down 7.3 per cent by that same year''.
The third advantage of launching the Canada social transfer
lies in the date of ignition: not this year, but early in 1996-97, in
other words, after the referendum. This point is revealing,
unintentionally, of course, but revealing nonetheless. If this new
program were so beneficial to the provinces, including Quebec,
and if it really demonstrated the flexibility of Canadian
federalism, should it not be operational by the start of the new
fiscal year, that is by April 1? This way, Quebecers could
examine the quality of the merchandise with their own eyes
before making their historical choice in the referendum. In
actual fact, there is no chance in the world this will happen. We
will see why. All provinces are concerned.
[English]
All provinces are directly concerned about the impact of the
new Canada social transfer. If one looks at the cash transfers that
come with it on page 33 of the budget speech, one sees the
unvarnished truth.
From 1994-95 to 1996-97 cash transfers from this program
will fall from $17.3 billion to $12.9 billion, a $4.4 billion drop.
One needs to take into account equalization grants, which
increase from year to year, to obtain the global picture for
transfer payments to provinces. When one does so there is still a
drop of $3.6 billion in federal transfers to provinces over a
two-year period. As a matter of fact this represents a real 14 per
cent decline, not the theoretical 4.4 per cent the Minister of
Finance would like us to believe, hence a more drastic decline
than the one experienced by total federal program spending.
Who is going to be fooled by the pretence of such a program to
define a more decentralized federal system when its sole motive
is to cut federal spending? A last proof, if need be, that this is not
a one-shot program but rather a constantly vanishing one. The
global sum-fiscal and cash transfers-is available for the
Canada transfer program in 1997-98 but not the cash transfer
separately.
However, having both fiscal and cash transfers separately for
each year from 1994-95 to 1996-97 makes it quite easy to
produce a good estimate for the cash transfers part in 1997-98.
It amounts to about $10.3 billion or $2.5 billion less than in
1996-97. Flexible federalism, maybe, but for whom?
This cut in the Canadian social transfer to the provinces
represents more than 40 per cent of the reduction in federal
program spending between 1994-95 and 1996-97. It allows the
federal government to trumpet the achievement of a less than
$25 billion deficit in that last year. It may or may not raise
eyebrows in the money markets, but it is almost certain that
many provinces will have to accept higher deficits in order to
cope with the cold wind blowing from Ottawa.
(1245)
[Translation]
For Quebec, there is more to come and there is worse still.
Information on cash transfers both before and on
implementation of the Canadian social transfer shows that
Quebec will suffer a net loss of nearly $700 million in 1996-97
alone. For 1997-98, the loss will amount to nearly $2 billion. In
view of this, the budget speech is rather comic if not somewhat
ludicrous. I wondered how the finance minister could have kept
from laughing when reading to this House the part of his speech
praising the innovative approach the provinces could take from
now on in managing their social programs.
His composure and self-control must have been seriously
tested when he read the following passage, and I quote: ``With
the Canadian social transfer, provinces will now be able to
design more innovative social programs-programs that
respond to the needs of people today rather than to inflexible
rules''. And he continued, deadpan as ever, and I quote again:
``However, flexibility does not mean a free-for-all''. The
federal government is creating a program which will take $2.5
billion from Quebec over three years, but wait, that is not all.
There are still standards to be met. Big Brother is cutting and
keeps on cutting, but is still issuing orders. Is this stupidity or
sheer arrogance?
It takes a lot of nerve to speak to the provinces in such a tone,
just before tying them up in a financial straitjacket. Good news,
the minister tells them, I am cutting $7 billion but at the same
time I am letting you use your imagination. The budget and the
minister do not say so, but we know very well how provincial
leaders will have to use their creativity. They will have to be
creative in devising new cuts to services and racking their brains
to prevent their deficits from ballooning out of control.
This will be a merciless process, with a domino effect causing
one level of government to fall after another. But in the end, the
taxpayer will bear the brunt of it all. For the unemployed, the
poor, the sick, the minister's skilful manipulation of figures and
evasion of responsibility will result in awfully concrete
realities: a reduction in unemployment insurance benefits, the
elimination of assistance programs, reduced health insurance
coverage. That is without counting seniors, who will be
informed of the results of the minister's review of their old age
pensions next year, after the referendum. At the very least,
seniors must be thinking that when a Minister of Finance
reviews a social program, it is not to see whether he can increase
funding.
Then, there is the more specific issue of fairness toward
Quebec in the implementation of certain programs. I am
thinking in particular about the farming sector. Quebec's dairy
farmers have been hard hit by a 30 per cent cut in dairy
subsidies. No compensation.
10133
Farmers from the west are faced with the elimination of the
Crow rate, a grain transportation subsidy. However, they are
being very generously compensated by non-taxable cash
payments. Double standard. Regrettably, there is another case.
We will talk more about the other cases in the next few days.
In the defence sector, for example, a recent study found that
Quebec is getting $600 million less per year than the share of
military contracts and spending it would get if its share were
weighted according to its population.
Six hundred million dollars per year, and to top it off, Quebec
does not have its quota of Canadian military bases. Already, it is
getting short shrifted out of defence spending, should it not get
its fair share of military bases? So what does the budget say?
Another Quebec military base, Saint-Hubert, will be closed and
staff at another, in Bagotville, will be cut. You may reply that
there will also be cuts in the rest of Canada. No. Of course there
will be cuts elsewhere, the scale is already off kilter. The latest
decisions only tip the scale more in their favour. Even if we take
transfer payments into account in comparing the current
situation with the situation that will be created once the new
transfer payment arrangements are implemented, we must draw
the same conclusion.
(1250)
In Quebec, federal transfers are going to shrink away: $7.4
billion today; in three years, $6 billion. Another paragraph from
the budget seems to predict even darker hours: ``So we are
prepared to address those issues by funding CAP in a similar
way as we fund the existing EPF transfers for health and
post-secondary education''. This statement is very ambiguous.
Quebec receives approximately 35 per cent of CAP's funds and
some 25 per cent of EPF transfers. But if demographic
considerations take precedence over those of real need in
calculating the Canada social transfer, the result will of course
be an additional shortfall of several hundreds of millions of
dollars for Quebec.
One paragraph in the budget plan suggests that such a
reorientation is not beyond the realm of possibility. One of the
justifications given for the new Canada social transfer is as
follows, and I quote: ``Federal expenditures will no longer be
driven by provincial decisions on how, and to whom, to provide
social assistance and social services''. This looks very much
like a pulling back from a more socially oriented approach.
And what better time to point out the very real asymmetry of
Canadian federalism? If the federal government does not like
the provinces forcing its hand, it could draw a line and withdraw
beyond it. But for decades the provinces, particularly Quebec,
have had to bow to the wishes of the federal government, with no
power to keep it from interfering. It is probably in the field of
health that this relative powerlessness of the provinces is the
most in evidence. The budget states in no uncertain terms that
the federal government will make increasingly smaller
payments for health costs, while ordering the provinces, who
already carry the bulk of the financial burden, to meet the
standards set out in the Canada Health Act.
Less for health, less for social assistance, less for the
unemployed. When we know that the elderly now account for 40
per cent of all health care needs, and that this proportion will
continue to grow, we can only conclude that this budget marks a
change of direction in social policy that could indeed be
described as harsh and insensitive. Is Canada so poor, is social
solidarity so fragile that the poorest and most helpless in our
society must bear the brunt of the necessary fight against public
waste?
However, this change in social policy will not take effect
tomorrow but only a year from now. The government is trying
not only to impress the financial community but also to
influence the results of the referendum by postponing until after
the Quebec referendum all projects it is about to cut and slash.
When will it clear-cut transfer payments to the provinces? In
one year. New UI restrictions? They will be discussed in the fall
and start in July 1996. What about the debate on income security
for seniors? In the fall, with major changes already proposed for
implementation at the beginning of 1997, particularly for the old
age security pension.
[English]
One does not need to be a rocket scientist to realize that the
federal government is playing the waiting game. It would dearly
love to see the referendum take place tomorrow. But how could
anybody decide now between two fundamental options when the
federal side does not want to clarify its position on all those
dossiers that it is keeping in its bosom? Does it think Quebecers
have forgotten about May 1980? The trap was sprung once. It
will not happen a second time. I say to those in front of me:
``Clear the air. Show us what you have up your sleeve. The
people want to know what you are going to offer them''.
One thing at least is clear. All the hoopla about the budget led
some to believe it could rekindle the flame of a new federalism
where the federal government would retire from provincial
jurisdictions and send the appropriate fiscal resources to the
provinces. For many people the deception must be all the more
cruel. The idea of a dominant central government and of 10
``infeodated'' provinces is as present as ever.
(1255)
[Translation]
Canadian federalism encompasses financial and regulatory
powers. For a long time, the federal government enjoyed both
types of powers. Today, because of its meddling, it lacks
financial power. That is why it holds on to regulatory powers in
the name of a certain conception of the Canadian ``nation'' that
the people of Quebec have always rejected. If the federal
government manages to shift a significant part of its deficit to
the provinces, it will clean up its finances, at others' expense, of
course. It is already thinking about it, as the budget clearly
10134
shows. Many observers feel that there is an automatic link
between the federal debt and the distribution of powers. Things
are not so simple. Reducing the size of government is one thing,
but a genuine decentralization is something else. Clearly, the
federal strategy is to do the former without a serious
commitment to decentralize and therefore without a coherent
vision of the future relationship between Quebec and the rest of
Canada. That is the budget's main lesson. It is probably a history
lesson but for reasons that are the opposite of those put forward
by the author.
Mr. Ronald J. Duhamel (Parliamentary Secretary to
President of the Treasury Board, Lib.): Madam Speaker, I am
pleased to rise today to speak to the budget.
Our position is very clear. International markets have reacted
favourably to this budget. Of course, the Reform Party feels that
the cuts do not go deep enough. They wanted the government to
slash more deeply. We remember the so-called budget they
tabled a few days ago-I say so-called budget because it did not
generate any positive comments. They tabled this document to
convince Canadians that they were competent enough to bring
down a budget. All this so-called budget did was to propose
deeper cuts across the country.
And then this morning, the Bloc, the official opposition, said
that we cut too much or not enough. I listened to their speeches
with a great deal of attention and I am not sure that I know what
they want. What do they want: more cuts, fewer cuts, different
cuts? I do not know.
I have just heard a comment to the effect that the Bloc's
suggestion that the size of government should be reduced was
held holding to ridicule by the Liberals, and now we are told that
we have finally realized that there was some fat to trim after all
and made cuts. Is there not a glaring contradiction between these
statements?
It seems to me that there is a glaring contradiction. If I am
wrong, my hon. colleagues will no doubt ask questions and
clarify their position. I would be only too happy. We find
ourselves today stuck between the far right and the left-I would
even say the far left at times. This is not a bad position at all.
What do the people of Manitoba have to say about this
budget? I thought my hon. colleagues from both opposition
parties might like to know. One paper ran the headline:``Grits
Axe Spending''. Another headline reads: ``Western
Diversification to Get New Look''; this is positive feedback.
This one says: ``Social Safety Net Rescued'', a quote from the
Minister of Human Resources Development.
(1300)
And it goes on. ``Tough Plan Boosts Buck, Raises Hopes''.
These words were not written by Liberals, I assure you. Also,
``Federal Budget Turning the Corner''. And this one, from
Manitoba: ``Budget Draws Applause''. So, the response is
generally positive in Manitoba. I can see my colleagues from the
Bloc Quebecois are just thrilled by this positive response. I will
list more positive responses in a moment.
I know how appreciative my colleagues from the Bloc
Quebecois are when I mention them in my remarks, pointing out
their glaring contradictions, demonstrating that the whole
country, except for the official opposition party, can see some
good in the budget just tabled. It is not just good, it is beyond
being plain good.
As you know, this is a tough but fair budget. Not one region or
group of individuals is affected unfairly. Many people are
affected, but can you say they are treated unfairly? If so, please
let me know.
The Minister of Finance made a special effort to distribute
budget cuts equitably amongst the various regions. I must add
that this budget takes necessary steps, and I stress the word
necessary, to bring the deficit under control. These are the most
severe budget measures taken by the federal government in fifty
years. This will ensure that the deficit is going to be brought
back to 3 per cent of the GDP by 1996-97.
Consequently, the budget exceeded the expectations of
international traders. I should add that this is not the budget of a
Conservative government. This budget does not make
indiscriminate cuts: it redefines the role of the government, so
that every department can concentrate on the priorities of
Canadians. This is something important. We are going to do
what we have to do.
I do hope that Bloc members will be pleased to see that,
following the implementation of the measures announced in the
budget, overlap and duplication will be reduced. Bloc members
will surely be pleased to hear that, since they talk so much about
that issue.
Moreover, unlike the previous Conservative budgets, we did
not target the poor, absolutely not. The Liberal Party of Canada
made a commitment regarding social programs.
Later this year, the Minister of Human Resources
Development will table a bill on a significantly revamped UI
program designed to better meet the needs of all Canadians.
Our government is also determined to provide fair, financial
protection to our seniors, who have made such an important
contribution to this country's development.
There is more. As I mentioned earlier, this is a tough budget
but, according to most observers, it is also fair. To reach our
10135
objective of deficit reduction, the following measures take
effect immediately. That is very important.
First, the tax rate for large corporations goes up from 0.2 per
cent to 0.225 per cent. As well, the surtax rate for companies
increases from 3 to 4 per cent. Together, these two measures will
generate additional revenues of $260 million annually. All large
companies with capital assets exceeding $10 million will be
affected by this tax rate increase.
The budget also provides for a temporary increase of the
capital tax for banks and other large deposit institutions
mentioned in Part VI of the Income Tax Act. That additional tax
will bring in $100 million over a period of 20 months.
(1305)
Another issue often discussed here in this House was that of
family trusts. They were decried, but we are dealing with this
problem. Family trusts will be eliminated as of January 1, 1999.
The choice allowing one to postpone capital gains taxes
according to the 21-year rule will be abolished.
The cancellation of that choice given the preferred
beneficiaries will prevent people from using the trusts as an
income splitting tool, a most profitable procedure.
My friends from the other side will no doubt be happy with
these very progressive and, above all, fair measures. I can see it
in their smiles. This is a measure they will applaud and praise.
There is no provision for income tax increases in this budget. I
am surprised my colleagues have not commended on that. I am
surprised they only pick out items that, according to them, will
embarrass government.
I am also surprised that my colleagues from the other side
have not mentioned that for each tax dollar, government
programs will be reduced by $7. I am enormously surprised they
have not mentioned one outstanding and very important point,
which is fundamental to the process launched by the
government, the fact that we ensure a simple and reasonable
financing which will allow us to meet the needs of Canadians
while cutting programs that are not absolutely essential.
I am also surprised they did not talk about RRSPs, an issue
where we certainly found a reasonable solution. As you know,
there were people on both sides: those who did not want any cuts
and those who wanted RRSPs to be practically eliminated. What
did the government do? It cut a little; they will be frozen and
increased by 1,000 $ every year. Well-off people will be those
mostly affected. I would have thought that my friends of the
Bloc would have at least indicated that this was a step forward.
Perhaps they will do so later on.
No taxation of dental and medical health programs. As you
know, we all received letters from citizens throughout the
country who did not want these programs to be taxed, and they
were not. I would have thought that my colleagues across the
way would have had something nice to say about that. Perhaps
they forgot. It is quite likely that they will mention that very
soon.
This morning I read various press clippings from everywhere
in the country. I would like to quote some of them so that
Canadians know about the feelings of people who are not in
politics, who do not belong to any political party in the
opposition, who are looking at it in a rational way in order to
give Canadians some advice.
Here is from The Gazette: ``Belt-tightening Impresses
Markets''. How interesting. And ``Ottawa aims to shrink deficit.
Big spending cuts, modest tax hikes will be used to save $13.6
billion''.
There are others, and I know that my colleagues really
appreciate the fact that I am sharing with them a rational point of
view. The Globe and Mail says: ``Family Trust to Lose
Deferment''. And it goes on, Mr. Speaker. ``Department
Spending Reduced by 19 Per Cent'', Le Devoir, February 28.
How interesting.
Then, a headline in The Globe and Mail says: ``Ottawa Axes
Business Handouts. Subsidies Being Cut by Nearly $2.3 Billion
over Three Years''.
(1310)
Here, on the same page: ``Women's Programs Dodge cuts''.
Surely, my colleagues are going to rise in favour of that
measure. Let me go on. In today's edition of the Ottawa Citizen,
one can read: ``Environment Groups Offer Rare Praise to
Government''. How interesting.
Let me continue: ``Average Consumer Escapes Brunt of
Budget''. That can be found in today's Gazette. The Toronto Star
says: ``Liberals Cut Where Tories Didn't Dare''. How
interesting, Mr. Speaker.
Let me continue further. Jeffrey Simpson writes, in The Globe
and Mail: ``A Fine Start in Attempting to Escape the
Deficit/Debt Trap''.
And on the other side of the page, still in the Gazette:
``Historic Budget Slays the Herd of Sacred Cows''. Then in
today's edition of La Presse, one can read: ``L'économie peut de
nouveau respirer''. That means that the economy can breathe
again. ``Martin Budget Good First Step, but Canadians Still
Face Tough Decisions''. It is true, indeed. But it is a step in the
right direction.
Finally, and this is quite interesting, in a press release,
chartered accountants say that they give 4 out of 5 to the federal
budget. Four out of five!
10136
This morning, opposition party members were giving us
perhaps 1 or 2 out of 5. I am surprised that they did not find
anything good about the budget. It is beyond me. I know that
some people would like to find us to identify issues close to
their hearts and would like to make recommendations to
improve the situation with regard to those issues. I understand
that and I respect that. That is the role of the opposition.
However, I do not understand why they cannot find anything
positive in the whole budget. It is beyond me.
One thing that also surprises me about the Bloc is that they
think that there is a federalist hiding behind each reduction and
each operation. They say that it must be a prereferendum
strategy, that, yes, there is something there, that there has to be
something there. They think that even if there seems to be
nothing, there is surely something. They imagine that there is a
federalist lurking behing each comma, each period, each word,
each sentence.
The budget is reasonable, fair and tough and it is also
sensitive to regions. When you take the position of the far
right-
[English]
That is the Reform Party. I talk about the extreme right, the
Reform Party. The Reform Party came forward with ``a budget''.
Of course I did not see one positive comment from any
responsible journalist across the country on it. The fact that it is
going to sit here and criticize this budget perhaps lacks some
substance in credibility.
Again I would invite its members if I am wrong to correct me.
I would invite them as well to suggest how this document can be
improved. That is the challenge I offer my colleagues from both
opposition parties, the official opposition as well as the third
party.
Do not just stand there and shoot at this budget. Stand up and
make sound recommendations so that it can be improved for the
benefit of this nation and for the benefit of all Canadians. That is
the challenge.
I spent some time in opposition. I rather enjoyed it I must
confess because one has a responsibility obviously to critique
that which comes forward. That is fair. Surely the responsibility
goes beyond simply taking particular issues where one feels that
the government might be vulnerable or where one feels one
might have a political advantage. I accept that. However, it goes
beyond that and one has a responsibility to make concrete
suggestions.
(1315)
[Translation]
To my friends from both parties on the other side of this
House, I would like to offer this challenge. We have a number of
days to debate this budget and make progress. Criticize all you
want in a constructive manner but please, make suggestions that
will improve what has been proposed. Make suggestions which
will meet the needs of Canadians everywhere and allow us to be
much more sensitive than we might have been if we had not had
a chance to share your ideas and your political wisdom had you
chosen to use those qualities for something else than attacking
this budget. I underline that it has been well accepted up until
now throughout the country, but even more important, on
international markets.
Mr. Michel Bellehumeur (Berthier-Montcalm, BQ): Mr.
Speaker, I would like to say to the hon. member for
Saint-Boniface that if we were smiling on this side, it is simply
because we are always astonished to see how a government
member can turn a deaf ear to politics with a small ``p'', as the
Leader of the Opposition said earlier.
When the hon. member says that we have found no positive
elements in the budget, it is not true. I wish he had understood or
listened completely to the speech that the leader of the Official
Opposition gave earlier. My friend would have seen that the hon.
member for Lac-Saint-Jean referred to some positive things.
However, this budget does not go far enough. It contains
inequities, and I will mention only three to the hon. member for
Saint-Boniface because my time is limited.
The member for St. Boniface says he saw nothing unequitable
or unfair in this budget. First, does he think it is fair to cut $32
million from subsidies paid to Quebec farmers and dairy
farmers and to give western farmers $2.9 billion to compensate
them for cuts that are, relatively speaking, identical? Does he
think such a cut is fair? He also mentioned family trusts. Is it fair
to wait until 1999 to take action in this area?
By 1999, there will be no more money in family trusts. Those
persons will have found other tax shelters to protect themselves.
The budget should have addressed this issue immediately.
Finally, does the member think it is normal that banks, among
others, be taxed a mere hundred million dollars when a single
bank, the Royal Bank, made more than $1.2 billion in profits last
year? Is it normal? Is it fair? I would like to hear what the
member for St. Boniface has to say on those issues.
By the way, the member for St. Boniface quoted headlines
from some newspapers in his riding. I suppose he should have,
as a French speaking member, chosen at least a few headlines
from French newspapers in his riding. I do not know. Maybe
francophones are less well served in his province than in
Quebec.
Mr. Duhamel: Mr. Speaker, I will start with the last
comment. No French papers were published last night or this
morning. That is why I did not quote any.
As for French speaking citizens of my province, yes, indeed
there have been very positive improvements. I do believe that
the constituents in my riding are well served by their federal
member and their provincial member, as well as their municipal
councillor, since we are all French speaking. We will see.
Eventually we will have to go back before the electorate. I was
elected in 1988, and again in 1993, and I might get elected again
in 1997 or 1998. We shall see. I will let my constituents pass
judgment, rather than my friend from the Bloc Quebecois.
10137
I might add, however, that I thought it was a bit mean on his
part to argue that I only quoted English newspapers from
Manitoba. I repeat that none in French were published this
morning.
When I went through the press clippings, I quoted some in
French which praised the government for the budget. I took what
I could find. I will find some more and I will pass them on to
you, so you can read them and perhaps change your opinion.
(1320)
The Acting Speaker (Mr. Kilger): I hesitate to interrupt the
hon. member for St. Boniface, but I want to make sure that all
comments are made through the Chair, and that hon. members
do not use ``you'', or ``vous'' in French. Hon. members must
address the Chair.
Mr. Duhamel: As for the three specific questions on cuts in
the west versus those in the east, you know, Mr. Speaker, the
people from the west-Mr. Speaker, I thank you for having
reminded me to address my comments to the Chair because it is
my intention to do so.
That is the problem with Bloc members. They are like that
sometimes. It is sad because there are people, men and women,
who are very broad-minded when they want to- Here is what
Westeners are saying: We had a 100 per cent cut, while in the
east they suffered a cut of only 30 per cent.
This is how people think. One member said that they would
receive compensation. Of course, but if their subsidies are
totally eliminated, perhaps it is only right for them to be
compensated.
Mr. Speaker, they do not want to consider this: compensation
for having lost 100 per cent of their subsidies. But a 30 per cent
reduction is not fair. Members should think about it.
As for family trusts, we are the first government to act on the
issue.
Mr. Bellehumeur: Are you?
Mr. Duhamel: Patience. You see, Mr. Speaker, they want us
to do everything today, even when they are not ready. In fact,
this government will ensure that it is done, but without being
unreasonable. When we decided to cut transfers, we did not say
right now, as of midnight tonight. We are giving people time to
adjust to the change. It is the sensible way to go about it. We did
not smash everything at once with the government's big
hammer. We are kind. We are giving them time to adjust.
As far as banks are concerned, $100 million is a lot more than
what I have presently in my bank account. It might be a
significant percentage of their revenues. Could it be higher? Of
course, it could. What will the impact be? If we were to increase
it a lot more, will it have a negative impact on job creation? The
problem is that they refuse to look at all the other sides of the
medal. They only look at one. They keep on referring to
something people dislike, such as the banks' huge profits, and
they try to exploit it. I do not find this very honest on their part.
[English]
Mr. Ray Speaker (Lethbridge, Ref.): Mr. Speaker, the hon.
member for St. Boniface read from a number of newspaper
articles and quoted a variety of sources that commended
somewhat the budget but not in a conclusive way. It was said that
it is a good first step but Canada faces challenges.
One of the major challenges that Canada and individual
citizens face is the fact that the government, in its first period of
administration, by 1996-97 will have placed in the laps of
Canadians another $100 billion in debt without any plan,
without any indication that there is finality or an appointed time
at which that debt will stop accumulating and growing. There is
not one mention or indication at all to Canadians that it is going
to stop.
Does the hon. member after all of his fine pronouncements
have the answer to the question when the deficits will stop
accumulating on the debt? Then Canadians will know the finite
sum of our debt, at which point we will have to deal with it.
Mr. Duhamel: Mr. Speaker, I welcome the question. First, I
am delighted that my colleague acknowledges there have been a
number of newspaper articles-I remind myself I am not
supposed to use those as props-that have seen the budget rather
favourably. They said not only is it a good first step but that it is
going in the right direction and that we are going to get there.
There is supposedly no plan. That is not accurate. I know my
colleague is a honourable person and he is not trying to suggest
anything Machiavellian. There is plan. We have indicated in the
red book that 3 per cent of GDP was our objective. Once we have
attained that then we are going to eliminate the deficit and start
attacking the debt. My colleague knows that.
(1325)
Mr. Speaker, you know that this other Mr. Speaker is aware of
that which I speak. There is a plan. It is as plain as one's nose on
one's face, and particularly plain when I talk of myself in that
way. There is a plan. We will reach that objective. Subsequent to
reaching that objective we will eliminate the deficit, attack the
debt, and the country will be on a sound footing.
[Translation]
Mr. René Canuel (Matapédia-Matane, BQ): Mr. Speaker,
a brief comment. This budget is a little bit like venom to which
sugar has been added to make it easier to swallow. Why is it that
measures dealing with family trusts have been delayed until
1999, and that nothing is said about measures aimed at senior
citizens?
10138
If transfers to the provinces are cut, and this is my question
for the member for St. Boniface, how could it not affect the
least fortunate, the poorest members of society? Back home,
farmers are going to suffer a great deal. The 15 per cent cut
this year added to the 15 per cent cut next year is going to hurt
them tremendously. Some of them told me this morning that
they could hardly manage as it was, and that with these new
cuts, it was going to be hell. How can you claim that this is
not like venom?
Mr. Duhamel: Mr. Speaker, I wish to thank the hon. member
for his question. Of course, the budget will hurt some
Canadians. Let me repeat that this budget is tough, but fair. I do
not think that it is harder on any particular group.
There is another consideration. If I am wrong, what can we do
collectively to try and counteract this? Now that a decision has
been made, what can we do? Asking the reasons for a delay
serves no purpose. We all know that, often, consultations must
be held. We cannot simply say: ``There, it is done.'' In other
cases, time must be given to adjust to new measures. This is, in
my opinion, a reasonable approach.
[English]
The Acting Speaker (Mr. Kilger): Before the hon. member
begins, in the last intervention we heard from the parliamentary
secretary. He referred to the hon. member for Lethbridge by his
name. Of course we know that is not a practice which is
customary. However, I know full well that when I am in the chair
and he refers to Mr. Speaker he is not speaking to himself.
Mr. Ray Speaker (Lethbridge, Ref.): Mr. Speaker, in my
former life as a member of the Alberta legislature I ran into the
same sort of circumstance. I appreciate being recognized in the
House and having the opportunity to enter the budget debate
today.
Yesterday I listened very carefully and considered what the
Minister of Finance presented as the government's plan for
Canadians. We heard in the last election about the plan that was
going to change everything for Canadians and fix all the
problems. During that campaign we were presented with the red
book that supposedly had all the answers to all the questions.
The problem is that red book is now out of date and does not
answer the questions. The red book principles were applied to
the budget plan that was presented to us yesterday. It is not good
enough for Canadians.
Why is it not good enough? First, if I had to define the budget
and describe it, I would say that it is a budget without any
conclusion, without any direction and without any real
resolution of the major problem that Canadians are facing, a
major problem that is only being enhanced and encouraged by
the government.
(1330)
When I say that there is no conclusion, I think of the Minister
of Finance in his former responsibility in his private life where
he had a fleet of boats on the Great Lakes. The hon. member
would never have put a boat on the lake and said: ``It sits there. I
do not know where it is going and I have no conclusion as to the
destiny of that boat''. He would not do that. Nor would anybody
tell a story without having a conclusion to that story so that we
understood where the story was leading us as it was being told to
us. This budget does not have its conclusion.
What was the conclusion that we were waiting for as
Canadians? I heard it through the media. The member for St.
Boniface has said to us as he quoted a number of articles about
the budget that people were responding in a certain way.
In the last week to 10 days Canadians, people in the
investment community and the media had one question that was
paramount in their minds: when will the deficit be eliminated?
When will that deficit come to zero?
The answer to that question was not in this budget. That has
had a devastating effect in my mind on the confidence of
Canadians investing in this country. We do not know where
interest rates are going to go, what the value of the dollar will be.
We do not know the type of revenue growth that we are going to
have because there is a lack of confidence. This government did
not have the will nor the courage to put its administration on the
line and set up a plan that would reach a proper conclusion, one
that must be dealt with in this country.
What did we get out of that budget? As I said a few moments
ago as I raised a question in this House, we are left with $100
billion of added debt to the current debt in this country.
In three years of administration of this government by the
time we get to 1996-97, $100 billion will be added to the debt.
Interest payments from 1994-95 to 1995-96 have gone from $42
billion up to $49.7 billion, over $6 billion in one year of
additional cost in terms of our interest.
The following year, in 1996-97, are those interest costs going
down? No, they are not. They will be $50.7 billion. We can
imagine what that does to the budget, how that affects social
programs, how that affects other priorities, how that is going to
affect this government in its decision making in terms of
expenditure reduction, of reducing the services of the federal
government to the Canadian people.
The interest cost is out of hand and is going to continue
because there is no plan, there is no conclusion in this budget.
What happens after 1996-97? That is a serious question. This
government does not know what is going to happen.
10139
It says that maybe in 1996-97 the deficit can go down to $19
billion, that the 3 per cent target is $25 billion. If we get there
then we are okay in Canada. That is not true. All we need is
a bit of a recession and the $25 billion deficit will start to
balloon again up to $25 billion, $30 billion, $40 billion, $50
billion. What is the consequence?
The consequence is that we could add another $100 billion
very quickly to the accumulated debt of this country. It will not
only be in 1996-97, $603 billion as the Minister of Finance told
us yesterday. Most likely by 1998-99 it could be $700 billion.
Where then is our interest cost and where is the economy of
Canada? We are in a disastrous position.
(1335)
This governments says do not worry, it is going to be okay,
that it is going to come up with a plan to deal with it, it has two
years of administration to do something. It has not done
anything. In this House we wasted the fiscal year 1994-95 by a
do nothing budget. This budget is not much better when we clear
away some of the rhetoric that we heard. Do we know what the
real expenditure reductions are-$4.1 billion of expenditure
reduction. It is heralding it as a great success.
By the time we reach the conclusion of this Parliament or the
fiscal year 1996-97, that is not much of a start in dealing with
the deficit. We are going to pay the consequences. The softer we
are, the liberal approach that we are using is not going to work
very well and Canadians are going to pay.
I want to make one more point in my last two minutes. Who
pays for this? We are laying on our children and on the future
generations of this country at least another $100 billion in debt.
That is a crime.
This government stands up here and says in this budget that it
did not increase personal income tax. Think of the increase in
personal income tax on our next generation. That is only a few
years down the road. It will have to pay to pick up this
accumulated debt. Think of the imposition that this government
has laid on its shoulders, another $100 billion which is its
responsibility; not the Conservatives, which was the last
government, it is its responsibility.
Think of the increase in personal income tax that is going to
happen. Think of the corporations that will have to flee this
country because they cannot pay the amount of taxes that will be
imposed on them by, who knows, the next Liberal government or
another government that has to come in and deal with the
circumstances.
That is the crime in this budget. That is the absolute crime.
Like never before we need a Reform budget, the taxpayers'
budget, which said very clearly to Canadians that taxes should
not be increased at this time. That is number one. Number two,
we must reduce the expenditures so that the deficit is brought to
zero within a three-year period.
This is the responsibility that we should be taking in this
House, not this soft hand approach that has been used and one
that is leading us into terrible circumstances for the future
generations of this country.
I think that has to be taken into consideration. If the
government does not, it has to live with the crime. Its members
have been the cowards not to deal with the problems that face
them, and future generations will look back at this very difficult
time that was not dealt with in a responsible way by this
government.
Mr. Julian Reed (Halton-Peel, Lib.): Mr. Speaker, I am
very curious to know what kind of discombobulated crystal ball
my friend had that he looks into and is able to predict the future
four or five years down the road.
I expect he predicted the decline of the Mexican peso. I
suspect four years ago he predicted an anticipation of feared
inflation in the United States which would raise interest rates.
I expect he must know the answer to when the budget will be
balanced ultimately. The minister has taken a position, right or
wrong, that he wanted to do it in two-year leaps, in two-year
packages, for the simple reason that he had a better chance of
predicting what was going to happen in that time.
As we all know, they did not all pan out the way they had been
originally predicted. By what curious vision does my hon. friend
express the question or bring the challenge to the government
that somehow we should be able to say in x number of months or
x number of years the budget will be ultimately balanced? My
friend may be surprised that it may end up being balanced before
both he and I expect.
(1340)
I would like to know how he projects into the future in the way
he seems to be doing.
Mr. Speaker (Lethbridge): Mr. Speaker, in all of the
presentations we make, whether it is policy or pronouncements
in this House, our whole objective is to look forward, not
backward. Perhaps that is the difference between the Liberals
and the Reform Party.
We all know that when we do forecasts there is a certain
amount of risk. When we have the responsibility of government
we have to make the best possible projects as we can.
It is obvious that this government is going to reach its 3 per
cent of GDP and leave us with a $25 billion deficit in 1996-97.
That is obvious. I think it is going to do that. That is not a tough
target. That is number one.
Number two is at that period of time we will have added, as I
said, $100 billion more to the accumulated debt. That is obvious
and predictable.
10140
Number three, after following that, has this government the
will to make some kind of projection so that it brings the deficit
down to zero? Does it have confidence in itself that it will bring
the $25 billion in 1996-97 down to a zero base within the next
two years? If the government thinks it can, why does it not say
it?
The Acting Speaker (Mr. Kilger): The member is splitting
his time with his colleague from Capilano-Howe Sound. I give
an undertaking to the member of the official opposition seeking
the floor on a question or comment that if he should so choose on
the next intervention I will recognize him.
Mr. Herb Grubel (Capilano-Howe Sound, Ref.): Mr.
Speaker, I think that without malice it is useful on the occasion
of this budget to recall what Liberals used to say on such
occasions: ``The budget cuts of $6 billion out of general
government programs are slash and burn. They will lower the
quality of government services that Canadians expect from their
federal government as a matter of sacred trust. The firing of
42,000 civil servants is heartless and without compassion''. The
Liberals would have said it destroys forever the sanctity of
labour contracts, it is equivalent to union bashing.
The biggest indignation Liberals in opposition would have
reserved would be for the close to $4 billion cuts in transfer
payments. They would have said: ``It will make it impossible to
enforce national standards on health and higher education and;
heartless and without compassion on welfare. This is the
proverbial slippery slope where Ottawa and the upholders of
standards of compassion will lose their grip. The country will
fall apart. It will become just like the United States. Oh, my god.
There will be beggars on the street. The poor will have to
commit crime. People no longer feel like Canadians because
when they move from one province to another they will get
lower welfare rates, can you imagine that, inferior universities
and different health standards''.
They would say the deficit problem is being solved on the
backs of the poor, those least able to defend themselves. The
Liberals in opposition would have said the gasoline tax increase
is a tax grab and regressive because of all those with lower and
middle incomes who have to use their cars to go to work. Worse,
the tax measures did not tax the allegedly obscene profits of
banks. They did not raise the tax on the rich or expropriate
wealth by an inheritance tax.
The finance minister when he was in opposition used daily
question period to ask the government to lower interest rates. He
now refuses to. He did not order the governor of the Bank of
Canada to lower interest rates and the debt burden. What is
wrong?
(1345)
I am sure the Liberals when in opposition would have used
this opportunity to remind the government of broken election
promises. The regressive, expensive, annoyingly complicated
GST is still there and will be used to grab another $2 billion from
Canadians, many of whom are poor. There is still no new day
care facility. NAFTA is sucking jobs to Mexico.
The rat pack would have hurled the ultimate insult at the
opposition. They would have said: ``They are slowly eating their
red book''. For a summary indictment, these Liberals would
have used: ``This budget sounds like the agenda of right-wing
think tanks and horror or horrors, like the program of the Reform
Party''. We proudly say that this is so.
I am not a Liberal and I will not use these slogans to criticize
this budget. Its shortcomings are fundamental and frightening
for anyone familiar with history and the power of compound
interest.
During the 1980s my economist colleagues and I would sit at
the lunch table at Simon Fraser University. We discussed the
successive budgets of Michael Wilson, who sounded just like
Paul Martin-like the present Minister of Finance. I apologize,
Mr. Speaker.
The Acting Speaker (Mr. Kilger): I would like to remind
members to not refer to one another by name, but by riding or
ministry.
Mr. Grubel: Mr. Wilson would say: ``We had to face financial
reality. We had to take tough measures that will transform the
way the Government of Canada works. In doing so we have
turned the corner. We have stabilized the debt to GDP ratio. The
next budget will bring it down. We are well on the road to fiscal
sustainability''.
I will never forget how we all agreed that the stabilization of
this ratio during prosperity was not enough. Spending and tax
measures to achieve this objective during prosperity will result
in deficits once a recession hits again. We were right at that
time, not as a matter of ideology, but of simple economic
principle.
This budget is déjà vu all over again, except this time there are
absolute spending cuts rather than Wilson's magic reductions in
previously inflated plans for spending increases. These cuts
represent a truly major achievement for which most of the credit
must go to the Minister of Finance and some of his colleagues.
The tragedy is that these cuts are too little and too late. With a
debt of $550 billion these absolute cuts achieve the same
objective as did Wilson's phantom cuts when the debt was half
that size.
The cuts of $10 billion in program spending just about match
the $9 billion in higher debt service charges on the planned debt
level over the life of this budget. The expected increases in
revenue due to prosperity and tax measures amount to a
staggering $12.7 billion. Yet, these revenue increases only keep
constant the debt to GDP ratio.
These facts represent the key to understanding my negative
views of this budget. Let me repeat them.
10141
The cuts of $10 billion, however wrenching they may have
been, just about match the required increases in debt payment
of $9 billion on the planned increased debt over this period. The
expected increases in revenue due to prosperity and tax
measures amount to a staggering $12.7 billion. Yet, these
revenue increases only keep constant the debt to GDP ratio.
(1350)
The reason for this bottom line is that the biggest spending
category in the budget, transfers to persons, which amounts to
$37 billion is to remain unchanged. The debt to GDP ratio will
never be lowered during prosperity unless this spending
category is made to contribute its share to the solution of the
country's crisis.
Investors who determine the fate of the dollar and the
Canadian interest rate will look at the bottom lines that loom
behind the rhetoric and brave actual cuts. They will ask why
transfers to persons are unchanged. They will remember the
traditional Liberal slogans recalled above and will connect the
two. They will not be assured.
Mr. Speaker, I hope for the sake of Canada and my children
and yours that my diagnosis is wrong and that Reform will never
be able to say we told you so.
Mr. Jean-Paul Marchand (Québec-Est, BQ): Mr. Speaker,
in listening to my hon. friend I do not know whether he is going
forward or backward. He does give me the impression that he is
definitely going backward.
Unfortunately there are some things I have to agree with. He
does speak to the fact that this government has not really been
firm enough in reducing the deficit which is already
astronomical. It does not take a rocket scientist to recognize that
the longer we delay in resolving the issue, the more pressure we
are putting on future generations.
It is the youth of this country who will have to pay. We are
being nice to ourselves by not really being more firm but that is
where I do not agree with this hon. member. I do not share his
lack of feeling and lack of compassion toward people who are
getting the screw when there is latitude to demand for example
that the banks contribute a bit more.
Would my hon. friend agree with me that it is unfair to ask that
banks in Canada contribute $100 million over the next couple of
years when we know they have been making incredible profits
over the past few years? The Royal Bank last year made $1.2
billion net profit. We are asking these banks to contribute only
$100 million and we are cutting and slashing social programs.
Does he think that is fair?
Mr. Grubel: Mr. Speaker, I believe on economic policy one
has to take the longer run view. It does not do to penalize success
like the banks have had now for a year or so after having
absorbed huge losses for many years. If we do this kind of thing,
we will drive out investment in Canada.
Investment in Canada is the source of our prosperity. It is the
only source that will raise our living standards by increasing
productivity. Without it, it is not possible. Even new technology
needs investment to be introduced.
I do not share the judgment that it is wise for the longer run
fortune of this country to say to anyone, be it a bank, a
corporation, a professional, a gambler, anybody who has had
success: ``You are not allowed to keep it because there are some
people out there who did not invest, who did not have luck, who
did not work as hard. They have to get their money from us''.
This is not what has made this country great and it is not what
will keep this country prosperous. The Reform Party and
certainly I will forever defend the system that has gotten us to
the standard of living to which we have proudly become
accustomed.
Mr. Dennis J. Mills (Parliamentary Secretary to Minister
of Industry, Lib.): Mr. Speaker, I listened to the member's
remarks and noticed that he wanted to make some serious cuts to
the social security program spending.
(1355 )
I have always believed that our responsibility in this Chamber
is not to spend all of our time focused on those who are
advantaged but to primarily make sure that governance always
has a focus on those in our community who are disadvantaged.
I want to read directly from the taxpayers' budget in brief.
Under unemployment insurance cuts which is currently $15.6
billion the member is proposing a cut of $3.4 billion by the end
of the third year.
Does the member honestly feel that it is good public policy
when people are in such a very difficult circumstance of not
having a job to take almost a 22 per cent decrease-those are the
member's own calculations-from those people who are going
through a very difficult period, specifically being unemployed?
Is that good public policy?
Mr. Grubel: Mr. Speaker, I thank the member for raising this
important point. The OECD issued a report in which it said that
Canada's unemployment insurance system is an outstanding
example of excessive generosity. The Auditor General has a
graph which I recommend to the hon. member. It documents this
generosity.
If someone in the United States earns $100 and goes on
unemployment, he gets $20. In Europe if he earns $100 and goes
on unemployment, he gets $30. Does the hon. member know
what a person gets in Canada according to the Auditor General?
He gets $60, twice the European amount. Is there any
heartlessness in taking on the suggestions by the OECD and the
Auditor General to reduce this excessive generosity a little bit?
10142
The Speaker: It being 2 p.m., pursuant to Standing Order
30(5), the House will now proceed to Statements by Members,
pursuant to Standing Order 31.
_____________________________________________
10142
STATEMENTS BY MEMBERS
[
English]
Mr. Ron MacDonald (Dartmouth, Lib.): Mr. Speaker, today
marks the last day of Black History Month.
As the member of Parliament for Dartmouth I am proud to say
that I represent the largest indigenous black communities in
Canada, in Preston, North Preston, Cherrybrook and Lake Loon.
The Preston communities have a rich and compelling history. It
has contributed greatly to the culture of Nova Scotia and indeed
all of Canada. Unfortunately for the rest of the country, much of
this cultural heritage has been unwritten, instead being passed
on from generation to generation by word of mouth.
Students of Cole Harbour High have sought to change this by
using modern communications technologies. As a project for
Black History Month students have created a site on the
Internet's world wide web to give millions of computer users
across Canada and around the world a glimpse of this rich
heritage.
I ask the House to join with me in congratulating the students
involved in this project for their tremendous efforts to bring
Nova Scotia's black history to the world.
* * *
[
Translation]
Mr. Paul Crête (Kamouraska-Rivière-du-Loup, BQ.):
Mr. Speaker, we cannot accept that, in his budget, the Minister
of Finance is once again attacking the poor while leaving
untouched the tax privileges enjoyed by the rich in our society.
That approach, which proposes no tax reform, perpetuates
inequities. There is nothing in this budget to eliminate the tax
treaties signed with countries considered tax havens, thus
allowing large corporations to avoid taxes. There is nothing as
well about flags of convenience used by Canadian shipowners
and the government itself so that they can employ foreign sailors
who pay no taxes to Canada.
To top it all off, the Minister proposes to tackle family trusts
only in 1999, while rich families use this loophole to avoid
paying their fair share to the government. As radio anchorman
Joël le Bigot said, if you hit the humble, you are ready for the
federal government.
[English]
Mr. Monte Solberg (Medicine Hat, Ref.): Mr. Speaker,
yesterday the finance minister delivered his budget and in so
doing missed a glorious opportunity.
Canadians want hope. They want truth. They want leadership.
But where is the hope when we discover that the compound
interest on the deficit the finance minister is projecting, on top
of our already huge debt, will cancel out the savings from the
cuts announced by the minister? The minister could not even
muster the strength to tell us when we will have a balanced
budget.
Canadians want the truth. They want to know what will
happen to their social programs as compound interest continues
to eat up an ever larger share of their tax dollars simply because
the government could not make the hard decisions in the budget.
On this issue the minister is silent.
Finally, they want leadership. They want a government that
will make personal sacrifices. Canadians resent a government
that cuts the public service, ups taxes and allows overspending
to jeopardize old age security but does not have the character to
give up what is the richest, most extravagant pension plan that
taxpayers' money can buy.
* * *
Mr. John Solomon (Regina-Lumsden, NDP): Mr. Speaker,
the headline in the Regina
Leader-Post this morning says it all
in one word: devastated. This budget leaves farmers-
The Speaker: I would remind the hon. member not to use any
props in the House, please.
Mr. Solomon: Mr. Speaker, this budget leaves farmers
reeling in western Canada. It has the effect of a hurricane on
agriculture. It will leave a trail of destruction and devastation
throughout rural Canada.
It will cost rural families one-third of their net income and
one-third the value of their land. Farmers work hard to put food
on our tables and only ask to be treated fairly. The Liberal
government responds by attacking farmers with ruthless cuts.
The minister of agriculture has betrayed rural Canadians by
taking away the Crow benefit, reducing dairy subsidies by 30
per cent and abandoning more rail lines.
Farmers are now trapped between dwindling incomes and
little prospect of selling their farms. The treatment the
government has shown to rural Canada is unforgivable and will
cause
10143
permanent damage to what was once the proud breadbasket of
this land. This is a devastating budget for western Canadians and
a shameful day for a Liberal government that promised more.
* * *
Mr. Pat O'Brien (London-Middlesex, Lib.): Mr. Speaker,
with Canada's health care system at a crossroads, the Prime
Minister has wisely established the National Forum on Health to
develop a vision for Canada's health system into the 21st
century. This vision must be capable of achieving a balance
between care and health promotion, prevention and protection
measures.
From various backgrounds and regions of the country,
members of the health forum are seeking to identify national
priorities and encouraging dialogue among Canadians on
medium and long term health issues. Over the coming months
they will focus discussion and assist in developing strategies to
improve the health of Canadians.
I am proud that a member of the London community was
appointed to the health forum. Ms. Shanti Radcliffe brings to the
forum her experience in community based health for youth,
women, seniors and immigrants. I commend Ms. Radcliffe and
all members of the health forum as they help to ensure Canada
has the best health care system in the world.
* * *
Mrs. Brenda Chamberlain (Guelph-Wellington, Lib.):
Mr. Speaker, Guelph-Wellington residents wanted responsible
deficit reduction and spending cuts and the Minister of Finance
has responded.
They know it is easy to cry for cuts but more difficult to
ensure that any deficit reduction is fair and equitable. The
budget ensures fairness. They know it is easy to criticize, but
more difficult to make the good and necessary decisions which
the government has made. They know that it is easy to release
figures and offer ideas based on principle rather than reality.
Yesterday's budget recognizes that deficit reduction will affect
the lives of real people.
The people of Guelph-Wellington are not looking for the
easy solutions found in 1-900 numbers and cable programs.
They believe in this country and our ability to overcome our
problems. They want Canada to succeed. They wanted a tough
budget. They wanted spending reductions. They wanted
fairness. For their sake, we have delivered.
* * *
[
Translation]
Mr. Nick Discepola (Vaudreuil, Lib.): Mr. Speaker, a
sovereign Quebec would be a country of intolerance, where
democracy would be trampled on and ideological dissidence
could be equated with treason, depending on the outcome.
(1405)
When someone like Bourgault brands as racist the
anglophones who would democratically vote against their
proposal, that is one thing. When someone like Landry says that
there is no place for multiculturalism in Quebec society, that is
another, but when a democratically elected member of the
House maintains that newly arrived Quebecers should not have
the right to express their views or vote on such a vital question as
the future of their country, that is unacceptable.
On behalf of all English-speaking and newly arrived
Quebecers who have chosen to settle, to live and to raise their
children in Canada and in Quebec, I demand an apology from the
hon. member for Louis-Hébert.
I want to remind the Bourgaults and the Parés of this world
that they also come from-
The Speaker: Dear colleagues, when making such statements
or expressing such views, we must refrain from attacking
individual members of this House. I would ask each of you not to
use the names of the members of Parliament, just the names of
their riding.
* * *
Mrs. Madeleine Dalphond-Guiral (Laval-Centre, BQ):
Mr. Speaker, yesterday, the Chrétien government announced in
its budget that it intends to cut pensions-
The Speaker: Dear colleague, please do not use the name of
the hon. member.
Mrs. Dalphond-Guiral: Yesterday, the Liberal government
announced in its budget that it intends to cut old age pensions as
early as 1997. The budget tabled yesterday is proof positive that
the biggest threat to old age pensions and social programs comes
from the federal government, not the Quebec government.
Judging by the government's actions, this direct attack on the
elderly, the unemployed and welfare recipients is only just
beginning. The chairman of the no side, Michel Bélanger, who
has been trying to scare people by saying that the nasty
separatists want to cut old age pensions, must truly be
disheartened.
We are anxious to hear his perceptive analysis of the federal
budget.
* * *
[
English]
Mr. John Duncan (North Island-Powell River, Ref.): Mr.
Speaker, the Auditor General recently stated some program
spending of the department of Indian affairs fails to meet
strategy objectives, exhibits management inadequacies, lacks
appropriate performance and evaluation information and thus
impedes accountability.
10144
In addition, the department has not published an annual report
since 1992. This deprives us of an opportunity to properly
scrutinize efficiency of program delivery.
The federal budget calls for spending reductions in all federal
departments except for Indian affairs. The government is asking
Canadians to share in deficit reduction yet is increasing
spending by 12 per cent over three years for Indian affairs. Much
of Indian affairs' program spending is outside of constitutional,
legal or policy commitments.
Given these concerns, the budgeted increase in Indian affairs
funding is unacceptable and unfair.
* * *
Mr. Harold Culbert (Carleton-Charlotte, Lib.): Mr.
Speaker, the Minister of Finance tabled the government's
budget yesterday. This budget, along with the one tabled in
1994, established the challenge and goal of the government: to
bring the deficit and debt under control.
Canadians have requested and supported a combination of
cuts in government spending and the continuation of our agenda
of jobs and growth: growth that has led the G-7 countries over
the past year and growth that will continue as a result of this
strong budget.
The measures taken in the budget ensure we will reach our
deficit target of 3 per cent of gross domestic product that was
outlined last year.
The minister has produced a fair and equitable budget to
provide social programs for Canadians' needs and the spending
reductions they require.
Congratulations to the Minister of Finance for his dedication
to controlling the deficit and debt and building the confidence of
all Canadians.
* * *
(1410 )
Mrs. Marlene Cowling (Dauphin-Swan River, Lib.): Mr.
Speaker, this has been a tough budget but it had to be done. And
true to our commitment it has been done fairly.
The best time to make cuts is during periods of growth. In the
agricultural sector, prices are increasing, export markets are
expanding and producers are in an excellent position to adapt to
change.
The buyout of the Western Grain Transportation Act, the
WGTA, with tax benefits, will put $2.2 billion in the hands of
prairie farmers this year. We will ensure those dollars are paid
out in a fair and equitable way.
I am confident that the men and women of Canadian
agriculture will continue their proven track record of adapting to
the constant changes of their industry to ensure that Canada
remains a world leader in agricultural production.
* * *
[
Translation]
Mr. Martin Cauchon (Outremont, Lib.): Mr. Speaker, I
want to congratulate the Minister of Finance for the excellent
budget he tabled yesterday. It seems that the money markets
were pleased with the resolve the minister showed in his fight
against the deficit and their reaction was quick.
Indeed, the Bank of Montreal, the Laurentian Bank and the
mouvement des caisses populaires Desjardins have already
announced a reduction in their prime rate. In light of this initial
reaction we can expect a drop in mortgage rates in the short
term, which will contribute to a much needed recovery in the
construction industry.
Such good news should reassure Canadian consumers and
sustain our present economic growth. Congratulations to our
Minister of Finance and to our government for sticking to their
commitments.
* * *
Mr. Roger Pomerleau (Anjou-Rivière-des-Prairies,
BQ): Mr. Speaker, Quebecers now know what to expect from
Ottawa in this referendum year.
Far from proposing a decentralisation of powers, yesterday's
budget shows that Ottawa still refuses to retreat from areas of
provincial jurisdiction. In fact, Ottawa seems determined to step
up its interventions, particularly in the area of job training.
The only thing the federal government has transferred to the
provinces is the deficit. With yesterday's budget the federal
government has tried to shift the burden of the deficit to the
provinces: $2.5 billion next year, $4.5 billion the year after.
The federal government wants to delay until after the Quebec
referendum the bulk of the cuts in transfers to the provinces and
in federal services to the public. That would be the real cost of a
``no'' in the referendum, the real cost of the status quo.
10145
[English]
Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker,
Reformers have always recognized the need to cut government
spending and the need to empower people to take care of
themselves when they are able to do so. Reformers also believe
that before cuts are made, barriers should be decreased and
flexibility increased so that people are able to do well in a freer
market setting. Farmers share this vision.
Yesterday Department of Agriculture spending was cut
substantially. Farmers and industry leaders say these cuts will
be difficult but recognize they are necessary.
I am concerned however that in moving toward a more market
driven system, the government has not removed regulatory
barriers and has not allowed for increased efficiencies. Without
these changes farmers and industry will be crippled instead of
strengthened by these funding cuts.
In order for farmers to adapt to new fiscal realities they need
stability, predictability and certainty. Farmers need the freedom
to recoup some of the losses incurred by this budget. The
government has failed to deliver.
* * *
[
Translation]
Mr. Denis Paradis (Brome-Missisquoi, Lib.): Mr.
Speaker, this is the first time I rise in this House and I want to
take this opportunity to thank the people of Brome-Missisquoi
for placing their confidence in me in the February 13 byelection.
I want to reiterate my commitment to make every effort
possible to deliver the high level of service my contituents
expect.
[English]
I am proud to join the forces of the Liberal Party of Canada in
the House of Commons. I have asked the constituents of my
riding to have confidence in the government. After less than a
week on Parliament Hill I see the government will not let the
Canadian population down.
The delicate financial situation of the country urgently
needed to be addressed. A courageous and fair budget has been
tabled. The country is now on the right track.
(1415)
[Translation]
Senior citizens are protected, the tax burden of low and
middle income families has not increased and the government
will be streamlined and better managed. I undertake to be
actively involved in the job creation and economic renewal
process in the riding of Brome-Missisquoi and I want to thank
my colleagues in the Liberal caucus who have already assured
me of their support in the pursuit of these goals.
_____________________________________________
10145
ORAL QUESTION PERIOD
[
Translation]
Hon. Lucien Bouchard (Leader of the Opposition, BQ):
Mr. Speaker, in its prebudget marketing blitz, the government
announced that it would table a budget for a new Canada. The
Minister of Foreign Affairs even went as far as to say, with a
reformist zeal very uncharacteristic of him, that the status quo
would no longer be an issue after the budget. However, what the
promised decentralization really boils down to is Ottawa
continuing to withdraw its funding for health, post-secondary
education and welfare.
My question is for the Prime Minister. Where is this new
Canada that was announced with great fanfare when all the
government did yesterday was to offload $7 billion or so more
onto the provinces?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, in the budget tabled yesterday, we decided to give
provinces much more flexibility in the administration of their
programs and we are trying to improve the situation for
everybody. It will be easier for provinces to establish their
programs themselves, provided they respect the aspirations of
all Canadians, that is that there be minimum programs for all
Canadians so that the dignity of persons will be respected across
Canada. I think this budget reflects the willingness and capacity
of this government to propose changes.
Hon. Lucien Bouchard (Leader of the Opposition, BQ.):
Mr. Speaker, how can the Prime Minister have the audacity to
claim that while depriving provinces of $7 billion he gives them
more flexibility and more capacity to innovate in social
programs, when provinces already have an extremely difficult
time dealing with their growing expenses in the areas of health,
social assistance and education?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, provinces had been asking us for a very long time to
remove certain conditions which applied to the administration
of social assistance programs, and that is what we are now
proposing.
As for health care services and the five conditions set in the
federal Health Act, everybody in Canada agrees that they should
be maintained because they are the very essence of our society
and they give people access to the same health care system,
regardless of one's financial circumstances.
10146
In any case, we had to be fair in our budget. We could not
cut federal government's operating expenditures systematically
and not cut transfer payments to provinces. It is only a matter
of treating all government programs fairly.
Hon. Lucien Bouchard (Leader of the Opposition, BQ):
Mr. Speaker, the Prime Minister said he tried to be fair in his
budget. I wonder if he was thinking of Quebec when he said that,
because criteria in documents of the Department of Human
Resources Development already indicate that Quebec will bear
the brunt of transfer payments reductions, with 41,7 per cent. Is
that fair? Quebec is being taken to the cleaners.
Mr. Loubier: Yes, 41 per cent. Some fairness. Talk about
fairness.
Mr. Bouchard: How can the government display that kind of
arrogance, given the duplicity of its present attitude, on the one
hand, proclaiming its determination to maintain the principles
of universality and accessibility, and on the other, drastically
cutting its contribution to programs?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, program spending is being reduced at all government
levels. Last December, if I am not mistaken, members of the
present Quebec government, the opposition leader's friends, cut
$600 million from health programs. We are doing the same,
because cuts are necessary and all levels of government must
benefit from those cuts.
(1420)
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ): Mr.
Speaker, in his budget, the finance minister announced that all
transfer payments to provinces would be rolled into a single
comprehensive transfer called the Canada social transfer. He set
at $7 billion the amount of additional cuts in transfer payments
in the next three years, but he did not specify how those
payments would be distributed in 1997 and subsequent years.
How can the finance minister decide on such drastic cuts in
transfers and casually postpone discussions with provinces?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, it is not a question
of putting off the discussions. We are willing to initiate them
tomorrow if the provinces are ready. This is quite clear. In fact,
we said so during our meeting with the finance ministers. I
invited the provincial finance ministers to join me immediately
after the budget speech, and I am ready to meet them anytime
they want. There is no question of postponing the discussions.
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ): Mr.
Speaker, by postponing, as the minister says in the budget, the
negotiations with the provinces on the distribution of transfer
payments, is the Minister of Finance trying to conceal from
Quebecers before the referendum the negative impact of the
new Canada social transfer because it is Quebec which will lose
the most, 41 percent of the transfer payment cuts in 1997?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, to begin with, the
figures mentioned by the member are totally false.
Second, if you want to know, the cuts in Quebec, in 1994-95
and 1996-97, will amount to $350 million. These are not
ridiculous figures like the ones mentioned by the member.
As for the discussions and the fact that he believes we will
postpone them until after the referendum, we said in the last
budget that we would inform them instead of surprising them
like the former government did.
Is the member suggesting that we should proceed
immediately? I believe Mr. Campeau will not be very satisfied
with that.
Third, tell us when the referendum will be held, let us hold it
and then we will be able to solve our problems.
[English]
Mr. Preston Manning (Calgary Southwest, Ref.): Mr.
Speaker, in yesterday's budget the Minister of Finance pledged
to get the federal deficit down to $24.3 billion by 1997.
Meanwhile officials of the Department of Finance have been
predicting to reporters and the financial markets that the deficit
will then be reduced to zero by the year 2000.
However, yesterday's budget was silent on the all important
question of how the minister proposes to get from a deficit of
$24 billion to zero in three years.
Will the minister tell Canadians and tell the House today how
he plans to get the deficit from $24 billion a year to zero: by
increased taxes, by cuts to social programs or by both?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, I have said
countless times in this House that in terms of government by far
the best way of hitting targets is through a series of short term
targets that keep government's feet to the fire.
That is by far the best kind of spending control that any
government can have. It is the reason that we hit our target this
year. It is the reason that we are going to hit our target next year
and it is the reason that we are going to hit our target the year
after.
10147
I will tell members what this government does not want to
do, and that is bring in a budget like the Reform Party did based
on phoney assumptions and false input which does not attain
its objectives.
Mr. Preston Manning (Calgary Southwest, Ref.): Mr.
Speaker, the fundamental flaw in the minister's answer is the
same fundamental flaw that was in his budget yesterday.
It does not come clean about the imminent threat to Canada's
social programs from rising interest payments. Under the
minister's budget plan program spending will be reduced by $12
billion over three years, yet the interest on our debt will grow by
$13 billion to $51 billion a year in 1997. The reality is that the
interest payments are growing faster than the ability to either cut
or raise revenue.
(1425 )
My question to the finance minister, and this is just looking
for a straight figure, is can he tell Canadians how many billions
of dollars per year they will be paying in interest in the year that
the budget is finally valid?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, the member
opposite knows that his question is nonsense. We have said that
we are going to get to a balanced budget through a series of short
term targets and therefore obviously we are looking at the
ultimate thing.
I cannot believe that once again this party stands up and talks
about preserving social programs when last week it brought
down a budget which said that the ultimate purpose of it was to
make sure that every poor Canadian stays poor and that the
middle class becomes poor.
Mr. Preston Manning (Calgary Southwest, Ref.): Mr.
Speaker, the minister claims that his budget protects social
programs from unfair unnecessary cuts, but the real social cut is
lurking in the massive unnecessary interest charges that this
government is irresponsibly building by not attacking the deficit
more quickly.
This means that when Liberal social cuts come, as they will,
they will be bigger and more desperate and more destructive
than Canadians could imagine.
Will the finance minister honestly admit to Canadians that he
has put social programs in the gravest of jeopardy by failing to
balance the budget more quickly when he had the chance?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, the way to clean
up this nation's finances is to bring in a budget that brings
federal spending down from $120 billion in 1993-94 to $108
billion by 1996-97.
The way to deal with the nation's finances is to have program
spending at 13 per cent of the total, which is the lowest number
since 1951. The way to preserve social programs is to make sure
that the party which said it would claw back the old age pension
from people on the guaranteed income supplement never takes
power.
Some hon. members: Hear, hear.
[Translation]
Mr. Pierre Brien (Témiscamingue, BQ): Mr. Speaker, my
question is directed to the Minister of Finance.
The budget tabled yesterday provides for additional cuts of $7
billion in payments to the provinces over the next three years.
By transferring an additional $7 billion shortfall to the
provinces, Ottawa is again downloading part of its deficit.
Would the Minister of Finance agree that the additional cuts
his government has ordered in transfer payments to the
provinces will inevitably cause either a reduction in services to
the public or an increase in provincial taxes or a combination of
both?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, not at all. At our
meeting with the finance ministers, they asked us, first, to give
them at least one year's notice: no surprises. And we did that.
Second, they asked us to cut our own spending first and to cut
more than we would cut in payments to them. In 1996, for
instance, there will be a 7.3 per cent cut in federal spending and
only a 4.3 to 4.4 per cent cut in payments to the provinces. If we
consider the province of Quebec, it is only $350 million
compared with this year. So these cuts are less than 3 per cent of
provincial revenues, and I think that is reasonable.
Mr. Pierre Brien (Témiscamingue, BQ): Mr. Speaker, the
minister's figures are wrong. He is looking at total transfers, and
he knows perfectly well he is only cutting cash transfers.
Would the Minister of Finance confirm that the cuts in
transfer payments to the provinces he ordered yesterday will
result in a shortfall of over $2.5 billion for Quebecers, three
years from now?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, compared with
this year, it is $350 million.
(1430 )
[English]
Mr. Herb Grubel (Capilano-Howe Sound, Ref.): Mr.
Speaker, during the 1980s Michael Wilson used to deliver
budgets that contained the same rhetoric and projections of
stable debt to GDP ratios as did the budget tabled yesterday. As
10148
analysts said then and are saying now, planning for stable debt to
GDP ratios during prosperity is not sufficient.
Why would not the next inevitable economic downturn again
increase the deficit and once again put the country on the
unsustainable path of a growing debt to GDP ratio?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, the hon. member's
premise is wrong. First, when Michael Wilson brought down his
budget his cuts were not real. As the member knows, they were
simply cuts from rising reference levels.
Second, Michael Wilson did not do it according to any kind of
vision of the country or sense of priorities. They were simply
blind cuts across the board.
Third, Michael Wilson never hit his targets and we have.
Mr. Herb Grubel (Capilano-Howe Sound, Ref.): Mr.
Speaker, Michael Wilson was also in the very fortunate position
of having had a debt of only $250 billion rather than $550
billion.
The absolute spending cuts of $10 billion in the budget just
about match the expected increases of $9 billion in the cost of
servicing the debt over the projected budget period. The
expected revenue increases due to prosperity and tax increases
amount to a staggering $12.7 billion.
Does the minister expect similar spending cuts and revenue
increases in the next budget to simply maintain the debt to GDP
ratio?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, as the hon.
member knows, in 1996-97 the debt to GDP ratio will not only
stabilize but it will commence a downward track which, may I
assure the member, is going to be permanent.
The member has raised a very important question. The debt to
GDP ratio is a very important target. It is one that we are very
conscious of and we will keep it down.
The member refers to the level of debt that I have to deal with
compared to Michael Wilson. There is another difference
between Michael Wilson and me. Michael Wilson had the good
fortune to take over after a Liberal government. I had to take
over after the Tories.
[Translation]
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, the
government did not dare reveal in its budget its real intentions
with regard to old age pension reform, preferring to put off yet
again a study that was to be published last year.
Would the Minister of Finance confirm that his government
intends to reduce old age pension benefits for thousands of
Canadians and in fact limit access to the plan for thousands of
seniors?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, not at all. The
answer is a definite ``no''. What we do intend to do is study the
Canada Pension Plan fund with the provinces, and, at the same
time I am sure, they will look at the Quebec Pension Plan fund,
because it is this fall that the necessary revision will have to be
made. It is perfectly natural to look at them all together, with the
provinces.
(1435)
I can assure you and I can assure the hon. member that we
intend to protect those who are most vulnerable in our society,
our senior citizens.
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, you
understand how surprising it would be if the Minister of Finance
were to set up a committee to raise old age pensions. I would be
very surprised.
Will the Minister of Finance acknowledge that if he is not
revealing the terms of his proposed old age security reform right
now, it is because he does not want seniors to know his
intentions until after the referendum in QQuebec?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, legislation has for
a long time included a schedule to review the Canada Pension
Plan fund and the Quebec Pension Plan fund every five years.
We were not the ones who established the schedule. I repeat
again, tell us when you will have the courage to hold the
referendum; we will resolve the problem, and then we can go on
with building the country.
As you know, there are many issues to be resolved in Canada.
The economy has to be managed, and perhaps I should ask the
question once again. The great thinker of the great separatist
movement, Richard Le Hir, stated that he was not ready to meet
Quebec's liabilities as far as the debt is concerned. Is that the
position of the Bloc Quebecois? Is there still a difference of
opinion?
[English]
Mrs. Diane Ablonczy (Calgary North, Ref.): Mr. Speaker,
Canadians were promised a plan by the government to preserve
and protect our future social security while dealing with fiscal
reality. They never received such a plan. Yesterday the budget
promised yet another discussion paper from the Minister of
Human Resources Development.
10149
My question is for the finance minister. Why should
Canadians entrust social program reform a second time to a
process and a minister who have done nothing but fail them in
the past?
Hon. Lloyd Axworthy (Minister of Human Resources
Development and Minister of Western Economic
Diversification, Lib.): Mr. Speaker, the hon. member, once
again with the hope of trying to obtain some kind of rhetorical
response, does not know what she is talking about. I regret it
because we are dealing with very serious matters.
As the budget clearly outlined yesterday, we have clear plans
and initiatives on social reform. There will be major legislation
this fall on unemployment insurance. We established a new
human resources investment fund in yesterday's budget that will
give us the flexibility to begin initiating now many of the
reforms that were proposed.
We have already begun reorganizing the Department of
Human Resources Development to begin to decentralize its
delivery in a very different way so that we can begin to end
duplication and overlap. We have initiated a new transfer
program that will again eliminate duplication and overlap with
the provinces.
It seems to me that is an awfully good start at social reform,
much better than anything the Reform Party has offered.
Mrs. Diane Ablonczy (Calgary North, Ref.): Mr. Speaker, I
did not realize the minister expected the Reform Party to do his
job for him.
Speaking of serious matters, the minister knows that every
dollar borrowed today means two dollars in cuts tomorrow.
Worried Canadians are asking: ``What will this do to our social
programs?'' What answer does the finance minister have to give
them?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, it is very clear.
The major difference between the Reform Party and ourselves is
our deep belief in the social fabric of the country.
(1440 )
There are those in the House who simply feel that cutting is an
accounting trick, balancing the books and not balancing the
needs of a nation. That is not the view of the government.
The government is cutting the deficit, not because we think
people should be without but because we want to preserve social
programs and the legacy of the Liberal Party.
[Translation]
Mrs. Francine Lalonde (Mercier, BQ): Mr. Speaker, after
making cuts to unemployment insurance of $5.5 billion over
three years in his first budget-and the unemployed have not yet
fully felt the effect of these cuts-the Minister of Finance is not
letting up, cutting an additional 10 per cent from the
unemployment insurance budget for next year.
Does the finance minister realize that these additional cuts he
has announced for unemployment insurance will deprive the
unemployed of at least $700 million more in 1996-97?
[English]
Hon. Lloyd Axworthy (Minister of Human Resources
Development and Minister of Western Economic
Diversification, Lib.): Mr. Speaker, the hon. member should
first look closely at what was in the budget papers and at the
kinds of initiatives we have talked about in reforming
unemployment insurance.
The reform of unemployment insurance is a way of trying to
change a system to help people get back to work, to take away
many of the disincentives in the system, and to give people real
resources to get good training, good counselling and good
programs. To do that we can use the money from the savings we
are about to introduce as part of the legislation.
The hon. member is totally wrong. The fact of the matter is
that we want to convert unemployment insurance into an
employment insurance fund to give people new hope, new jobs
and new opportunities. That is what the reform is all about.
[Translation]
Mrs. Francine Lalonde (Mercier, BQ): Mr. Speaker, while
the Human Resources Development Committtee was travelling,
we were told repeatedly that it was not merely a question of
training but of jobs, real jobs. And yet this budget contains
nothing about employment.
How does the finance minister dare demand an additional
sacrifice from the unemployed, to the tune of at least $700
million, when he has imposed a temporary tax of $100 million
over two years on banks and financial institutions although we
know that the Royal Bank alone recorded profits of $1.2 billion
last year?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, as the minister
just said, the best way to create jobs in Canada is to move away
from passive support toward active assistance to give workers
the tools they need.
The best way to achieve this is to reduce unemployment
insurance premiums so that small and medium size businesses
can afford to hire new employees. Thirdly, the best way to
achieve this is to keep economic recovery rolling. We created
433,000 jobs last year, and this year, we will match that number.
10150
[English]
Mr. Peter Adams (Peterborough, Lib.): Mr. Speaker, my
question is for the Parliamentary Secretary to the Minister of
Industry.
Yesterday's budget established a path for solid economic
growth. It lived up to the commitments that were made in the
election. One of those commitments was job creation through
small and medium size businesses.
Would the Parliamentary Secretary to the Minister of Industry
expand on what the budget does to address the concerns of small
and medium size business?
Mr. Dennis J. Mills (Parliamentary Secretary to Minister
of Industry, Lib.): Mr. Speaker, the greatest hope we have for
putting Canadians back to work rests with small and medium
size businessmen and women in the one million enterprises that
employ close to 70 per cent of the nation.
In the budget the Minister of Finance did three very specific
things for small business. First, the small business corporate tax
rate was not touched. Second, the $500,000 capital exemption
was not touched. Third and most important, the Minister of
Finance announced last night that the chartered banks of the
country would be brought to task for their relationship with
small and medium size business.
(1445 )
Today the chairman of the Standing Committee on Industry
announced that within the next two and a half weeks the
presidents of all the financial institutions in this country will
come to the committee to report on what they are doing for small
business.
That is how we will create jobs.
Mr. Jim Abbott (Kootenay East, Ref.): Mr. Speaker, hidden
in the bowels of this Liberal budget are gas taxes, a 2 per cent
interest increase on penalties, UI premium surplus revenues,
and elimination of PUITTA transfers just to name a few. Does
the minister admit that he is digging deeper and deeper into the
pockets of middle income Canadians?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, we have just spent
a year and have finally quite satisfactorily solved alternative
fuels in terms of ethanol.
Some hon. members: Oh, oh.
Mr. Martin (LaSalle-Émard): Mr. Speaker, I wish I had
never started on this. I am being sandbagged.
The Speaker: We have bowels on one side and bags on the
other.
Some hon. members: Oh, oh.
Mr. Jim Abbott (Kootenay East, Ref.): Mr. Speaker, on a
more serious note, the minister prides himself on being open. He
does talk about a 1.5 cent per litre gasoline tax but surprise,
surprise, there is a tax on this tax: the GST. Would he agree that
this might be a tactic which would be considered deceitful by
some Canadians?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): No, Mr. Speaker, clearly not.
Canadians understand quite well those areas in which the GST is
applied. With the budget now behind us, we look forward to
dealing with the GST question this year.
[Translation]
Mrs. Pierrette Venne (Saint-Hubert, BQ): Mr. Speaker, my
question is for the Minister of Finance.
Faced with new spending cuts, the Minister of National
Defence announced yesterday that the headquarters of the land
component of the armed forces and the facilities at Saint-Hubert
would be closed. According to the newspaper La Presse,
because of this decision, 400 people will lose their jobs, half of
those civilians.
After closing the Saint-Jean military college last year, how
can the Minister of Finance justify the decision to shut down
these facilities and the base at Saint-Hubert, while we know that
Quebec is under-represented when it comes to armed forces
facilities and spending, and is getting at least $650 million less
per year in this area than it should?
[English]
Hon. David M. Collenette (Minister of National Defence
and Minister of Veterans Affairs, Lib.): Mr. Speaker, the
House of Commons and Senate special joint committee on
defence recommended that to save money we eliminate one
command structure within the armed forces. In yesterday's
budget we did that by closing air command in Winnipeg,
maritime command in Halifax, and land forces command at
Saint Hubert.
[Translation]
Mrs. Pierrette Venne (Saint-Hubert, BQ): Mr. Speaker,
will the Minister of Finance commit to rapidly announcing
adjustment measures to help these civilians find new jobs?
[English]
Hon. David M. Collenette (Minister of National Defence
and Minister of Veterans Affairs, Lib.): Mr. Speaker, in last
year's budget we announced the elimination of 16,500 people
from national defence. Yesterday it was just under 12,000. That
is nearly 30,000 people. All of these people will be eligible for
the force reduction plan covering the uniformed personnel and
the civilian reduction plan covering the civil servants.
10151
There has been a 73 per cent take up with an average payout
of $53,000 for those people announced last year. We envisage
that these people will be dealt with fairly and humanely and
will accept the buyout packages.
(1450 )
Mr. John Williams (St. Albert, Ref.): Mr. Speaker,
according to the budget estimates tabled this morning,
Enterprise Cape Breton Corporation has a budget increase of
69.3 per cent. That is right, an increase of 69.3 per cent over last
year. I thought the Minister of Finance stated yesterday that he
was going to cut spending.
How can the Minister of Public Works and Government
Services possibly justify this increase in spending in his own
riding? Justify that to Canadians in the rest of the country.
Hon. David Dingwall (Minister of Public Works and
Government Services and Minister for the Atlantic Canada
Opportunities Agency, Lib.): Mr. Speaker, I thank the hon.
member for his question.
He should be aware that the cutbacks to ACOA and Enterprise
Cape Breton come to a total of $173.5 million over a three-year
period. The reductions with regard to Enterprise Cape Breton
are in excess of $2.5 million, with a 24 per cent reduction in
personnel in that particular office.
Mr. John Williams (St. Albert, Ref.): I thought I said it was
an increase of 69 per cent, Mr. Speaker.
I also noticed in the estimates that the Department of
Canadian Heritage will be spending $1.8 million on a golf
course in Cape Breton.
Yesterday, the Minister of Finance said: ``Cut spending''. He
also said that the second principle of the government is that
priorities must reflect the needs of the people and that the third
principle is frugality, that every dollar counts.
Does the Minister of Public Works and Government Services
not understand what the Minister of Finance said, or does he
refuse to give up this pork barrel way of spending?
Hon. David Dingwall (Minister of Public Works and
Government Services and Minister for the Atlantic Canada
Opportunities Agency, Lib.): Mr. Speaker, again I want to
thank the hon. member for his question.
He should be aware that regional development agencies have
been cut in excess of $550 million by the Minister of Finance.
All ministers of the crown and every agency of the Government
of Canada has been looked at under program review. Each and
every one has had to sustain a reduction.
ACOA amounts to $173.5 million over a three year period. In
that category 50 full time positions will have to be removed
from the books.
Mr. Andy Scott (Fredericton-York-Sunbury, Lib.): Mr.
Speaker, my question is for the Secretary of State for Science,
Research and Development.
Yesterday's budget reflected the very serious fiscal situation
we face as a government and as a nation. It is important in
coming to terms with our deficit that we also continue to build
the framework for future economic growth.
With that in mind, could the secretary of state advise the
House how the budget affects science and technology funding
and its future?
Hon. Jon Gerrard (Secretary of State (Science, Research
and Development), Lib.): Mr. Speaker, science and technology
was given priority treatment in the budget.
For example, while the budget of the Department of Industry
Canada was cut by some 43 per cent, the cuts to the two granting
councils which fall within the Industry Canada portfolio,
NSERC and SSHRC, are only 14 per cent over the next three
years. The cut to the National Research Council is only 15 per
cent over the next three years.
Thus the budget is tough but fair. It has given priority
treatment to science and technology which is important for our
future.
Hon. Audrey McLaughlin (Yukon, NDP): Mr. Speaker, my
question is for the Minister of Finance.
The minister has stated that a cornerstone for his budget is
regional fairness. Yet today if you are a farmer, a fisher, a small
business person in a rural community or a miner, this has not just
been a tough budget, it has been devastating.
Will the minister agree that it is small town and rural Canada
that have been held hostage by Wall Street in this budget?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): No, not at all, Mr. Speaker.
The hon. member knows we have a debt and deficit problem.
Canadians wanted us to face up to it. This action has been
delayed for virtually a decade. In fact it was the very industries
the member refers to and small town and rural Canada that were
suffering because the Canadian standard of living was declining,
not because of this budget but because governments had refused
to face up to it.
In facing up to this issue we have provided rural and small
town Canada with an enormous amount of hope. The hope is that
now our social programs will be preserved, that the basic
industries will be preserved and that Canadians will continue to
create jobs. That is really what we have done in this. This is a
budget for Canadians.
10152
Hon. Jean J. Charest (Sherbrooke, PC): Mr. Speaker, my
question is for the Prime Minister. It concerns the proposed-
Some hon. members: Oh, oh.
(1455 )
The Speaker: The hon. member for Sherbrooke.
Mr. Charest: Mr. Speaker, this is the longest question I have
had in a long time. My question for the Prime Minister concerns
page 58 of the budget plan and the granny tax.
On pension reform, the government announces it will include
in its changes the provision of OAS benefits on the basis of
family income. That would mean that women who are 65 and
over receiving OAS would lose their OAS based on their
spouse's income. Will the Prime Minister confirm this to the
House of Commons?
[Translation]
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, my answer is that the hon. member's claim will not
come true. At this point, we want to ensure that the pension plan
is reviewed. We are required, under legislation enacted by
Parliament, to meet with the provinces every five years. We
must meet them this year to discuss that issue. We must ensure
that Canada's pension plans can continue to exist for
generations to come, as the Minister of Finance indicated in his
budget yesterday.
Mr. Jean-Guy Chrétien (Frontenac, BQ): Mr. Speaker, my
question is for the Minister of Finance. Yesterday, the minister
announced that the grain transportation subsidies would be
eliminated, adding that a generous compensation of close to $3
billion, which includes direct subsidies, would be given to
western producers. The minister also reduced by 30 per cent the
subsidies to dairy producers, who are not so lucky since they
will not be getting any compensation.
How can the Minister of Finance justify such an unfair double
standard: dairy producers, most of whom are in Quebec, will not
get any financial compensation, while western grain producers
will?
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional
Development-Quebec, Lib.): Mr. Speaker, first, there is a
fundamental difference between the two. Clearly, we just
eliminated the Crow benefit. However, as regards subsidies to
the dairy industry, the Minister of Agriculture is in Quebec City
today to meet with association officials. We did not abolish that
subsidy: we reduced it by 30 per cent. I have some problem with
the member's point of view, but I do understand it. We have to be
consistent. We did reduce the subsidy by 30 per cent. May I
quote the Leader of the Opposition when he took part in a debate
with Joe Clark? Mr. Clark said:
[English]
``We have substantial subsidies of industrial milk production.
As you are going to try to make an independent Quebec more
competitive, would you drop those subsidies, Lucien?''
[Translation]
And the leader of the Opposition replied, and I quote:
[English]
``If you ask me yes. Yes, we should stop doing that''.
Some hon. members: Oh, oh.
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, my
question is for the Minister of Finance.
While normal Canadians are taking a hit in this budget, this
year's spending estimates reveal that the budgets for running the
Senate and ministerial offices have been increased.
Why is it that senators and politicians continue to ride the
gravy train on planet Ottawa while overtaxed Canadians have to
tighten their belts?
Hon. Arthur C. Eggleton (President of the Treasury Board
and Minister responsible for Infrastructure, Lib.): Mr.
Speaker, I believe the Senate line in the main estimates shows a
$1,000 increase.
I understand that the members of the other house are still
looking at possible cuts, as has the House of Commons. The
chief government whip announced just last week that cuts are
being made in the budget of the House of Commons. Not to
mention that yesterday in the budget the Minister of Finance
announced 19 per cent cuts over three years. These are the most
massive cuts which have been made in government expenditure
in modern times. In addition to that 19 per cent, a 33 per cent
reduction in the MPs pension plan has been made in one year.
* * *
(1500)
The Speaker: My colleagues, I would like to draw your
attention to a person in the gallery who is no stranger to this
House. He is a former Speaker of this House, my brother
Speaker, the Hon. Alan A. Macnaughton.
Some hon. members: Hear, hear.
10153
10153
GOVERNMENT ORDERS
[
English]
The House resumed consideration of the motion that this
House approves in general the budgetary policy of the
government; the amendment, and the amendment to the
amendment.
Mr. John Harvard (Winnipeg St. James, Lib.): Madam
Speaker, I want to offer my congratulations to the Minister of
Finance on his presentation of yesterday's budget, a budget in
my opinion that was fair and balanced. I think it meets the first
test that was put down by all Canadians, that it had to be fair and
balanced, fair to all Canadians, all individuals and all regions.
The finance minister has succeeded in doing that, at the same
time making a major effort in bringing down the deficit and the
debt and getting government right for the first time in a good
many years.
I rise in the House today not only to address the budget which
was introduced yesterday but also to comment on a disease
which I see gripping Canada, a disease which becomes more
visible and widespread during events like this budget debate. It
is a disease born from a lack of understanding, compassion and
acceptance. It is a disease which focuses on self. It is a disease
perpetuated by individuals, businesses, media types and hon.
members alike. I am referring to what I call the culture of
victimization.
This culture is both painted and exacerbated with brushes
almost exclusively from the political right. I believe that in the
last 10 years there has been an alarming increase in the
perception that we, each and everyone of us, is a victim.
Canadians are victims. We live in fear of further victimization.
In truth, I believe that this paranoia has created a society in
which we are all victims of something out of necessity.
We are victims of crime. We are victims of taxes. We are
victims of government. We are victims of big corporations. We
are victims of interest groups. We are victims as westerners. We
are victims as Quebecers. We are victims as easterners. We are
victims if we speak English. We are victims if we speak French.
We are rarely just people who share a single common bond.
However, we do have that common bond. We all are Canadians.
It is this undeniable fact that we are all Canadians upon which
the Minister of Finance has based his budget.
(1505)
The $7 expenditure reduction for every dollar in new tax
revenue is not a burden attributable to one type of Canadian but
to all Canadians. If we are all affected, can we possibly all be
victims? As I listened to some hon. members opposite I hear
those ominous words reinforcing the notion that we are victims.
Some interest groups and even provinces which did not get
what they wanted from this budget have said that this
government has not been straight with them. Like spoiled
children, our critics demand more for themselves with little or
no regard for others. At the same time they demand greater
fiscal restraint and usually expect someone else to shoulder their
burden.
They tell Canadians to believe, really to expect that it is the
government's responsibility to make things better for
themselves. It is the government's job to make life happier: ``If
life is not the way I think it should be it is because that big, mean
government machine will not let me succeed, for I am a victim''.
We have all in some way contributed to the creation of this
culture in which we perceive ourselves as helpless victims.
For example, economic indicators suggest that Canadians are
recovering from the recession of the early 1990s. Yet a certain
trauma lingers. The Minister of Finance surpassed his 1994 cost
cutting goals and yet the opposition howls. Program spending
will be reduced by about $10 billion and that is a benefit to all
Canadians. The opposition howls again: ``What about me?''.
In many ways, and thanks to the critics, Canadians have
become more dependent on government. Government is
expected to ensure that we all have jobs and also accommodate
our every whim. Government is even expected to bandage our
scratches. We have become less reliant on ourselves and on our
own abilities. Thus we have let ourselves become victims. We
cannot think only of ourselves. Nor can we accept this
characterization that we live in a culture of victimization.
Kennedy was right when he said our privileges can be no
greater than our obligations. The protection of our rights can
endure no longer than the performance of our responsibilities.
Reformers would have us slash and burn programs and
services to all Canadians; let us cut deeper and indiscriminately.
The political right in this country would never have conceived
the notion of compassion and human understanding as
demonstrated by the introduction of the new Canada social
transfer to the provinces.
It is true that money to the provinces will be reduced as a
means of getting our financial house in order. This action cannot
and should not be viewed as an indirect means of attacking
individuals. Rather, such action demonstrates our commitment
to getting government right by reducing overlap and
duplication.
Canadians are being presented with the opportunity to help
create and develop a more mature fiscal federalism. Through
initiatives like the Canada social transfer the government has
met the requirements needed to accommodate citizens' con-
10154
cerns for more sustainable programs and provinces' concerns
for greater flexibility.
Keep in mind that the Minister of Finance has taken into
account that change requires a period of adjustment. This
government has not lost sight of the individual faces which will
be affected in this budget. This government does not intend to
perpetuate the notion that we live in a culture in which we are
victims.
Reformers in their budget played on the fears of those who see
themselves as victims. Some members opposite would have us
believe that if we simply cut, cut, cut then everything will be
better. At the same time Reformers will not commit to one
course of action. If you do not like where we have made cuts,
then the response is simple: make your own cuts. They had
better add up to the bottom line. Such a nonchalant, bottom line
approach implies that wherever the greatest burden exists
according to your own criteria, cut that. Just make sure you meet
the bottom line.
It is that kind of naive analysis which perpetuates our cultural
victimization. It would be wonderful to look at our own personal
budgets and cut those items which seem to cost the most. Why
worry about food, clothing and shelter? According to some
members it is only the bottom line that counts. Why concern
yourself with being human? We simply must balance the budget
regardless of the social cost.
(1510)
These types of cuts to food, clothing and shelter are
unrealistic on a personal level and are unacceptable at a federal
level. We must evaluate what is important to us and from there
determine where we can reduce expenditures. That is the
approach taken by this government and by this finance minister.
Simply cutting to meet a bottom line would make us even
greater victims. Sound reasoning and methodology were used to
determine areas of waste, areas of duplication and areas lacking
profitability. Through this realistic evaluation of Canada's
economic house, the Minister of Finance has introduced an
approach for fiscal responsibility which affirms the notion of
cultural success. The government is not contributing to the
disease of cultural victimization.
Essentially the third party would leave us to our own greed: ``I
live in the west, so I will cut services in the east''. Let us be
honest. Society cannot survive if we are enthnocentric. This
type of self-absorbed regional attitude creates a slippery slope;
we pick at the cultural threads of the Canadian fabric in a futile
attempt to hang on.
What happens is that the fabric becomes warn and ripped. We
must not continue to think we live in a cultural environment as
victims. We must not succumb to the notion that in order to
survive we must be the strongest or the most resourceful.
Reformers would have us all fall prey to this logic, a logic
which would throw out the social fabric and not repair it. If use
of this type of logic has as its only goal the elimination of the
debt, then what this approach does is forget that each and every
one of us, regardless of our province or country of origin,
whether from Manitoba or Prince Edward Island, whether
Yukon or Nunavut, new Canadian or native Canadian, is still a
member of a community.
We cannot survive if we focus on only my needs or my wants.
By virtue of our tendency as human beings to exist in groups
because we are social creatures we must look beyond our own
shadows.
Canadians wanted and deserved a budget which espoused the
virtues of fairness and equity. The minister has accomplished
that goal. Both corporations and individuals are equal partners
in the fight to save Canada.
We know that the Minister of Finance is serious. That is why
both individuals and corporations have been brought into
alignment. Through improvements to the tax system, for
example, requiring professional and other unincorporated
business to pay taxes on income in the year in which it is earned,
just like wage earners do, this budget has actively removed
barriers which have contributed to the culture of victimization.
We are fortunate that we live in a society that enables us to
exist as a synergistic entity where the whole is greater than the
sum of its parts or members. I will not deny that each of us has
problems, some unique to a few individuals, some to a particular
region of Canada, which affect all of us.
We must be able to stretch out our arms further and run faster
so that we are not borne ceaselessly into the past. We must
accept our responsibilities first as Canadians. We must also
realize that change is not inherently bad or negative. We must
realize that we are not victims but victors.
At this point I want to congratulate the Minister for Human
Resources Development and fellow federal Manitoba Liberal
caucus members for their hard work and commitment with
regard to this budget.
Two months ago the prospect of losing air command became a
horrible possibility. However, after yesterday's budget the
reality for Manitobans is less severe. Only about 350 to 375 jobs
will be affected as a result of air command's closure. This is a
significant difference from the anticipated number of jobs
which would have been lost. Although loss of air command will
be difficult for Manitobans, I am confident that once the
government's reasons are understood, Manitobans will be able
to accept this change.
10155
(1515)
Acceptance will result from a sense of fair play because it was
not only air command that was closed, but naval command in the
Atlantic region and army command in Quebec were also closed.
I can tell members there were people in Winnipeg who
thought that we would not be fair, that we might close air
command but we certainly would not close army command in
Quebec. It was done because the minister and the government
believe in fairness.
Manitobans will be able to appreciate that we were not singled
out for cuts. All regions have been affected. We cannot forget
that these closures are significant to their respective regions but
we will not lose sight of the fact that an entire level of
management has been removed at considerable saving to all
Canadian taxpayers.
The budget introduced yesterday redefines Canada and its
relationship with the provinces. Canadians are entering a new
era, a significant step has been taken toward eliminating the
culture of victimization which we have created. At long last,
government has sought to ensure that fundamental values are
preserved while appreciating the inherent differences among
provinces. Through the decentralization of airports in Canada,
for example, the government is preserving its role of guardian
but accepts the realization that people in Winnipeg, Toronto and
Barrie, Ontario are able to oversee the successful operation of
their local airports.
These efforts not only remove layers of bureaucracy but also
serve as positive motivation for all Canadians who are able to
function within a federation and not be victims of our regional
identities.
There is more to government than just cutting. There is smart
government which appreciates the social, cultural and moral
obligations. Perhaps now we can move beyond an attitude that
asks: What do you expect in a regional country? Of course we
are going to complain. Perhaps the Leader of the Opposition will
come to appreciate the notion of fair play and understand that
Quebec may receive $2 billion less in transfer payments but that
all the provinces will experience the same kind of reductions.
Perhaps members opposite will learn something of fair play
and refrain from trying to manipulate reality to suit a limited
agenda. I am referring to comments made that immigrants living
in Quebec should not be allowed to vote in a referendum, the
question evolving to include the notion of who is a real
Quebecer and who is not. We must work from our most common
denominator. We are all Canadians and we should all be entitled
to the pain and to the glory.
Ironically, most times, leadership is equated to economic
performance. President Clinton is doing the very same thing
across the border as we are doing here. He is trimming the
bureaucracy and reducing the debt. Despite President Clinton's
efforts the economic outlook is not nearly as positive as it is in
Canada. Yet Americans seem to believe in themselves and in
their ability to overcome any adversity.
In Canada, however, we are being convinced how bad it really
is. We listen to the leader of the third party, who when talking
with the media uses words like dishonest, cowardly and
hypocritical. I wonder how we can forget that ever-ominous
threat that the chickens will come home to roost. I suspect that
the grassroots are having their gooses cooked. The political
right would have issues decided by polls. It would be democracy
by telephone. There would be no consultation, no research, no
compromise or leadership. Opinion would reign supreme.
I suspect that the Reform leader would soon find out that
burdening every Canadian with every decision would have a
number of disastrous results, much like a grassroots guru
attempting to split atoms like he splits economic hairs.
This may come as a surprise to members opposite but the
reason behind democracy and having an elected representative
is the notion of efficiency and leadership. To govern is to
choose.
(1520 )
If we are to survive we must learn to believe in ourselves and
in this great country. We must accept the economic and social
realities and strive for tomorrow. Some would suggest that
things can only get better, but I submit to the House that it is a
subjective goal.
In the eyes of the United Nations, Canadians live in the best
country in the world. In a recent Swiss survey four Canadian
cities were considered among the 12 best places in the world to
live. Other nations and other cultures believe in and envy the
Canadian reality. The question now is: Why are Canadians so
cranky? Why is it that the majority of Canadians feel victimized
in one way or another?
Our challenge is to create a culture not of victims but of
victors. We must nurture the creation of a culture in which we
act out of compassion for others, not necessarily only for
monetary compensation. Success should be measured by the
results, not by the amount of money spent. Let me repeat,
success should be measured on the basis of results. These results
must be evaluated both according to economic criteria and
social criteria. That is what members opposite fail to appreciate
about the minister's budget of yesterday.
When has a Reformer asked us to think of others before
thinking of our own individual interests? When has the Leader
of the Opposition considered the wants of Quebecers when he
muses about postponing the referendum date so as to be able to
manipulate the results? This is not democracy. When will
Canadians be allowed to seek appreciation and elevate their
10156
self-esteem, receiving joy from the notion that the receiving is
in the giving?
This is a budget debate, but there is more to a budget than
numbers. There are the people who are affected by change.
[Translation]
Mr. Roger Pomerleau (Anjou-Rivière-des-Prairies,
BQ): Madam Speaker, the hon. member used the word
manipulating several times, as in manipulating facts and figures
in our analysis of the budget that has just been brought down,
and as in political manipulating with respect to the referendum.
I may remind the hon. member that in Canada, political
manipulation is what happened in 1982 when the Canadian
Constitution was patriated against the will of a unanimous
National Assembly in Quebec. The terms of the contract that
binds us were changed. That is political manipulation.
I would like to ask the hon. member, since we have nothing to
gain by staying in Confederation and, eventually, we will have a
referendum, whether he thinks the budget that was brought
down yesterday is likely to help matters?
[English]
Mr. Harvard: Madam Speaker, there is a body of opinion in
the province of Quebec that says we are committed to the
so-called status quo, that the choice in the coming referendum
will be between the status quo and sovereignty.
I submit there is another choice. It has to do with a progressive
federalism, a federalism that is alive, a federalism that grows
and evolves. Looking at the budget you can see how the
federalism we have is flexible and how it can grow. The changes
recommended under the Canada national transfer program give
more flexibility to the provinces, which is something they have
wanted for a long time.
We in the federal government want national standards and
national principles and we will have them. The budget shows
that federalism, as we know it, is a living thing. It is a living
organism. It changes with the times. It adapts to new
circumstances. It adapts to new conditions.
(1525 )
I know this will come as a great disappointment to the
sovereignists that go around telling their friends that our kind of
federalism is carved in stone or frozen in ice. Nothing could be
farther from the truth.
[Translation]
Mr. Roger Pomerleau (Anjou-Rivière-des-Prairies,
BQ): Madam Speaker, there is a lot of talk about flexible
federalism. In 1980, Quebecers said no to sovereignty for
Quebec, one of the main reasons being that we were told if we
voted for sovereignty, we would have a terrific problem with
debt, unemployment, the deficit and taxes. Of course we said no.
In 1980, Canada's debt was $80 billion, and now, 15 years
later, it is $550 billion. Is that progressive federalism, is that
flexible federalism? Would the hon. member not agree that this
much vaunted federalism is ``broke''?
[English]
Mr. Harvard: Madam Speaker, when we came to power in the
fall of 1993 after nine years of Conservative rule our fiscal
house was in shambles. It was not in order. It has taken us a
number of months to get to where we are today. However, this
budget is going to get our fiscal house in order.
If there is disenchantment in the province of Quebec or
anywhere in the country, it is because we had a federal
government for nine years that simply would not address the
nation's finances, that would not address our national problems.
This government will address those problems. The deficit and
debt will be reduced systematically and methodically. In the not
too distant future we will be in a situation where there will be no
deficit whatsoever.
[Translation]
Mr. André Caron (Jonquière, BQ): Madam Speaker, I
welcome this opportunity to speak to the budget brought down
yesterday by the Minister of Finance. I want to take this
opportunity to inform the public that although the Minister of
Finance promised to do something about the debt and tax reform
when he brought down this budget, he failed to keep his promise.
Yesterday, the Minister of Finance started his budget speech
by identifying Canada's two major problems. First, the Quebec
referendum and second, the debt. Upon reading the budget I
have to conclude that the Minister of Finance is only
considering Canada's problems. Of course Quebec seems to be a
problem for Canada. What is the Minister of Finance doing and
what has the federal government been doing for the past 20 or 25
years? The federal government considered the problem, looked
at it, examined it, thought about it, but did nothing to resolve it.
This is somewhat the case with the debt as well. For 25 years,
finance ministers have been looking at the debt. Both Liberal
and Conservative ministers, including Mr. Lalonde, Mr. Wilson
and Mr. McEachen have had a look at it. Each one has said, ``It is
really too bad, we spend more in Canada than what we earn. It is
too bad. We should reduce the deficit. We must reduce the
debt''. And if we take a look at the tables, we see that Canada's
debt has been growing for the past 20 to 25 years. We looked at
the tables produced by the Minister of Finance following his
budget, and the debt continues to grow.
10157
(1530)
So Canada is looking at its debt problem as it is looking at the
problem of Quebec, at what for it is the problem of Quebec. I
think that one of Canada's greatest weaknesses is that it looks at
its problems, but never resolves them.
There is another problem in Canada as well, which the
minister has failed to identify. It is a problem he raised in many
speeches during the elections-the problem of jobs, the problem
of unemployment. During the elections, Liberal Party material
spoke of jobs, jobs, jobs. Today, there is no more talk of jobs, the
word is debt, debt, debt and cut, cut, cut. The problem of the
unemployed is far from the mind of the Minister of Finance.
Looking at my own region, my city, my riding, an industrial
area which has been under direct attack for about ten years, all
the restructuring, modernization of businesses, new technology,
have left unemployed people who had worked for big business
for years, earning average or even above average salaries. These
people have been unemployed for a year for a lack of specific
policies to help them get retrained. Now they are turning to
welfare.
This budget contains nothing for the unemployed. It contains
absolutely nothing to give them hope for the future. There is
indeed talk of possibly reforming unemployment insurance
while at the same time cutting the program by 10 per cent. There
is also talk of reform providing for the unemployed to train for
new jobs.
This seems to be a roundabout way of presenting minister
Axworthy's famous unemployment insurance reform, a
two-tiered unemployment insurance system, what someone in
my region described as generous UIC and miserly UIC. Some
people in Canada will have to make do with the miserly version
of UIC. When I look at the finance minister's budget, it is these
people I think of. What is new in this budget for the unemployed,
persons on welfare, fully trained young people trying to find
jobs?
Training is not the issue for young people. For young people,
it is a point of fact: they are trained in leading edge technologies.
Take the young people trained in technical fields at the
Jonquière CEGEP, for example, they have been trained in every
advanced technical area. These people should not have any
trouble finding jobs because they are competent and have all the
necessary training. But they cannot find jobs. Why not? Because
there are no jobs.
There is no work for people looking for it. Even to restore
employment to levels we had before the economic crisis, we
would have to create 400,000 jobs in Canada. With those jobs,
we will find ourselves where we were three years ago, and
furthermore, this does not include newcomers on the job market.
I was surprised when the Minister of Finance said that
Canada's two biggest problems were Quebec and the debt and
that he did not mention unemployment.
Now to the budget: what is the verdict? This morning's papers
ran stories on people who are happy and who say the economy
will finally have room to breathe. That was the title of an
editorial from La Presse. Before the budget, people were saying
that these were hard times, that Canada was on the road to
bankruptcy and that its credit rating was going to be
downgraded. After the budget, people are now saying that things
have improved, and accounting associations have given the
Minister of Finance a mark of 80 per cent. Therefore, all is well.
But who is telling us that this is because of the budget?
(1535)
Big business, banks and brokerage houses that sell Canadian
bonds, in fact, all of the people who gain from the system. They
are well paid and work in a sector where the economy is well
developed: the financial sector. While this sector often does not
generate much wealth, it plays with it, taking a cut from it in
passing. Those people are happy.
Two insights into this comment. Firstly, these people are
happy because they see that the budget contains a solution to the
debt problem. Curiously, a budget that appears to close certain
debt-related gaps is enough to make the other problem-that
Quebec is one of Canada's major problems and may scare off
potential investors-disappear. They are not saying that Canada
has succeeded in solving the Quebec problem, but that Quebec is
simply no longer a problem. That is something I have noted.
What do ordinary taxpayers think about the budget? I have the
impression that they simply feel relieved because they avoided
major cuts this time. Of course, they will pay a little more for
gas. Dairy producers in Quebec will see their subsidies reduced,
by $2,000 or $3,000 in some cases. It is still a significant
amount. Some taxpayers may have to pay a little more in taxes
but, in general, taxpayers feel that they have avoided the worst.
But what about all the others, those who have been forgotten,
that I mentioned earlier, those looking for jobs or trying to
improve their socio-economic status in Canada? Those people
are not praising the budget in newspaper headlines. They are not
heard. They are silent.
In the last few years, Canada's major newspapers, whether in
Quebec or in English Canada, have been paying significantly
less attention to those people than they did in the 1970s.
Probably because owners have succeeded in selling a little more
their philosophy that the state should intervene less and less and
let the disadvantaged and less fortunate in society fend for
themselves.
10158
This philosophy has spread to the newspapers where
everyone has good things to say about the budget. Where are
the budgets that used to take care of the less fortunate without
excessive spending? This is not done anywhere in this budget.
And there are other things that must not be forgotten. We must
not forget that, according to the Minister of Finance, this budget
was aimed in a way at restructuring Canada to a certain extent
through decentralization. They said that Canada was too
centralized, that it was too costly, that they wanted to shift some
responsibilities to the provinces.
They are transferring certain things to the provinces. In the
next two years, they will transfer $7 billion to the provinces for
health, education and social assistance. We note, however, that
they are not really decentralizing but rather transferring
problems. This is not a transfer following negotiations in good
faith on restructuring Canadian federalism.
More importantly, this budget will not bring about tax reform.
RRSP provisions will be tightened a bit. The large corporations
tax rate will rise from 0.2 per cent to 0.225 per cent, which
amounts to only $145 million. The surtax on profits will go up
from 3 per cent to 4 per cent, which represents $350 million over
three years. There will be a temporary tax on banks.
(1540)
A tax which will raise about $100 million total, from all
banks, when the Royal Bank of Canada alone turned profits of
$1.2 billion this past year. What is $100 million as compared to
the aggregate of all bank profits? Peanuts.
Why does the Minister of Finance come up with such a
measure, a proposal which is almost insulting to those who pay
taxes? Actually, I think this may well have to do with the public
perception of a shockingly low level of taxation. Next year, the
banks will again turn huge profits. Given the current interest
rates and the streamlining efforts of the past three or four years,
banks stand to make huge profits. So, you can expect more
hoopla in the press. What will the Minister of Finance have to
say? He will be able to say: ``But we did impose a temporary tax
on them, a special tax to bring in $100 million''. That is one
hundred million dollars in taxes on profits perhaps as high as
$10 billion.
That is a mere one per cent. It is somewhat insulting to those
who often have to pay as much as 40 or 50 per cent of their
incomes in taxes. Of course, they are probably among the
wealthy.
The fact of the matter is that the budget before us has not put
our fiscal house in order as it should have. The tax shelter issue
remains unresolved, as do the ones raised on the French
television network newscast Téléjournal, last week, where the
situation of two individuals earning $100,000 was compared.
One hundred thousand dollars is not peanuts. These are wealthy
people. The salaried worker would pay $40,000 to $43,000 in
taxes every year, while the self-employed person earning just
slightly less, thanks to all kinds of tax loopholes and tricks, and
with deductions for children, would end up paying $22,000 in
taxes.
When Canadians see things like that-even though they often
have little sympathy for those who earn $100,000-when they
compare the two situations, they realize that there is something
wrong with our tax system.
Consequently, we feel that this budget is unacceptable
because it does not include a major tax reform.
Let us now turn to the debt. Again, it would be one thing if
there were some concrete results, but such results are not
obvious. The Minister of Finance, who is not making whimsical
predictions, currently estimates that the debt will be somewhere
around $500 billion this year, and that it will reach about $603
billion in three years. Therefore, regardless of what the minister
does, the debt will increase by another $100 billion. The
interests on that debt will increase from $42 to $50 billion. As
well, the deficit will remain around $24 billion in 1996-97.
So, the government talks about reducing the debt, but
Canadians who are watching, and who may be prepared to make
sacrifices, cannot help but think: ``Sure, but the debt is still
there. It will still grow. We will still have to pay high interest
rates on it''. Where is the improvement?
Canadian taxpayers will be even more sceptical when they
find out what these assumptions are based on. These forecasts
are based on the prediction that the economy will continue to
grow after 1997. Therefore, the debt will continue to rise even if
the economy is doing well or continues to do well over the next
three years.
The budget also forecasts interest rates. I am a little surprised
to see the Minister of Finance forecast interest rates two years in
advance when he often fails to forecast accurately two months in
advance. Whatever. Nevertheless, the budget does have to
contain some numbers to make it look scientific and serious.
There is another issue that is probably scandalous and that, in
my opinion, will floor the average person who ponders the issue
and that is that they predict a drop in the rate of job creation.
This year, it will be about three per cent; next year, it will only be
about two per cent.
They forecast an unemployment rate of around 9.4 per cent.
That is no low rate. In fact, 9.4 per cent represents only the
unemployed workers who are included in the survey, but many
of them are not. This means that regions like mine will again
face real unemployment rates of 15, 16 or 17 per cent.
10159
(1545)
The budget tabled by the Minister of Finance offers no
comfort to those who want to work to support themselves and
their families.
I have two last points to make. This budget does not offer
solutions to the debt problem. Why not? Perhaps because the
budget is based on a number of assumptions, which do not take
into account the Bank of Canada's potential influence on the
monetary policy.
Many financial players say that making the monetary policy
more flexible would stimulate the economy by reducing interest
rates so that people could invest in and revitalize the business
sector. In an approach that I would describe as doctrinaire, the
Minister of Finance refuses to make any change to the monetary
policy, in spite of the fact that there is no inflation, so to speak,
in Canada. So, it would be time to cut some slack in that area to
give the economy a chance.
I will conclude on this. I suggest there is another solution that
we, Quebec sovereignists, could bring about. We think Canada
is in need of economic restructuring. I think that Quebec's
achievement of sovereignty, which will no doubt happen within
a few years, will provide a welcome opportunity to restructure
the economy, start over based on new presuppositions, review
our policies and build on new bases.
For all the foregoing reasons, I will be voting against the
budget.
[English]
Mr. Paul Szabo (Mississauga South, Lib.): Madam Speaker,
I listened with interest to the member and noted one particular
aspect. I do have a comment and one specific question for the
member.
He asked about the young people and what is there for them,
that there are no jobs. There is no question there are still a large
number of Canadians, particularly young people who do not
have jobs.
Governments in themselves do not create jobs; businesses,
and particularly small businesses do. Over one million small
businesses in Canada employ over 70 per cent of Canadians.
They are the ones who are the engine of this economy. They are
the ones who are going to help to create jobs. The member well
knows that over the past year the government has assisted in the
creation of over 433,000 jobs.
I looked at the economic statistics for the last year. The fact is
our growth rate over the last year was 4.25 per cent, the highest
in the G-7. According to the OECD, Canada will continue to
lead the industrialized world in growth for the next two years.
The unemployment rate has dropped below the 10 per cent level
and in fact we have virtually no inflation.
The member concluded his remarks by getting back to the
essence of why he is here. It has to do with sovereignty, the
separatist question and the separation of Quebec.
Would the member not admit that the ability of Canada to
move forward and to achieve economic growth and greater job
creation depends a great deal on the confidence level of
investors in Canada and the certainty that people have with
regard to the affairs of Canada? Would he not agree that once the
referendum question is dealt with, once this issue which has cost
Canada so dearly over all these years is finally resolved,
Canada's economic position will be much stronger?
[Translation]
Mr. Caron: Madam Speaker, I thank the hon. member for his
comment and question.
With respect to his comment, I would just like to say that,
when the Minister of Finance talks about job creation or when
the Liberal Party was talking about job creation during the
election campaign, they never said: ``We will create 400,000
jobs''. What the Liberal Party said is: ``We will create jobs''.
And what the Minister of Finance is telling us is: ``We have
created 450,000 new jobs in Canada''. I suggest he qualify this
statement by saying ``we contributed to the creation of'', if we
follow my hon. colleague's reasoning.
(1550)
On the issue of confidence and Quebec, I do not think that
shoving our problems under the carpet will resolve anything.
The Quebec issue is that of a people who wants to achieve
sovereignty. I could tell you a long story, but it would be the
history of Quebec, to make the point that, for us, this is a
culmination. And Canada will not make this problem disappear
by denying this reality. A better way of dealing with this
problem would be to recognize it and look at the potential
impact of Quebec's sovereignty on both Canada and Quebec.
I have the distinct impression that Canada would survive if
Quebec were to secede. Why not? I think that those who say that
people are reluctant to invest because Quebec wants its
sovereignty are just using this as a scare tactic. Interestingly,
after the defeat in 1980 and the patriation of the Constitution
which was supposed to create a new order in Canada, we did not
experience a major boom in the economy. I remember what
happened in 1982. There was a serious recession, and that was
two years after Quebecers said no in the referendum. I do not
think there is a relationship between the two.
But there is something I would like to say to the hon. member
in closing. As long as the issue of Quebec has not been resolved,
Canada will always identify this issue as a problem. I do not
think that holding people against their will, scaring them and
threatening them will solve the problem. Whether the answer is
yes or no in the referendum, the problem will still exist and there
will still be sovereignists in Quebec who will continue to stand
10160
up for what they believe in because not only is it an emotional
issue, but it is also a matter of interest for Quebec.
Mr. Philippe Paré (Louis-Hébert, BQ): Madam Speaker,
for many months and in fact for a number of years, federalists
have claimed that all Canada's economic ills are caused by
political instability. When in recent months interest rates went
up and the Canadian dollar went down abruptly, people said: It is
all because of those nasty separatists.
Perhaps the hon. member would care to explain why, the day
after a budget that was rather well received by the financial
community, interest rates seem to be going down and the dollar
seems to be going up? Why, since the Quebec problem still
exists? How would he explain that?
Mr. Caron: I want to thank the hon. member for his question.
Madam Speaker, I would say that the connection is tenuous and
as far as I can see, non existent. We heard the same excuse after
the results of the referendum on the Charlottetown accord in
1992. I remember seeing certain studies, including one by the
Royal Bank which said that if Canada said no or Quebec said no,
that would be the end of Canada, and I remember, this was either
in the study or maybe it was a political cartoon, there would be
train loads of Canadians heading for the American border to take
shelter in our neighbour's economic paradise. In fact, there is no
connection. If you look at the economic situation and the whole
issue of Quebec's sovereignty, there is no connection between
the two. Often, support for sovereignty is strong while the
economy is weak, but often it is the other way around.
(1555)
Unfortunately, some politicians are using this issue to make
political gain. I deplore that because politics is a noble art, a
noble science, a noble calling, and it is the art or the science, if
you will, of government. It is the art or science of guiding and
moving societies. When we use all kinds of tricks and excuses to
try and get at our opponents and even resort to blackmail on
these issues, I think that in addition to weakening our case, we
also diminish our performance as a politician.
I want to thank the hon. member for Louis-Hébert for giving
me this opportunity to say that I do think economic issues are
linked to the question of Quebec sovereignty. I agree, but I do
not agree that this very fact weakens the Canadian economy. I
would say that people are waiting. People are waiting, and if we
manage to reach a decision, I am sure the economy will recover,
both in Canada and Quebec, and that we will then have the
resources to restructure our economies and ensure that within
Canada's present borders there are two countries that are
comfortable financially and whose citizens will be able to work
together.
Mr. Raymond Bonin (Nickel Belt, Lib.): Madam Speaker, I
rise in the House today to express my support for an innovative
budget that sets the Canadian economy and Canadian
federalism on a new course, a budget that at the same time
remains faithful to the most fundamental Liberal principles. I
commend the Minister of Finance on presenting a budget that
strikes a balance between the need for a quick return to fiscal
responsibility at the federal level and the need to maintain what
identifies us as a people, the compassion of our social programs.
Since the pre-budgetary consultations began, the message
from my constituents has been clear: we must tackle the deficit,
but at the same time, we must be fair and equitable.
[English]
My constituents have told me unequivocally that, like each
household, the government must learn to live within its means.
It must concentrate on reducing the deficit by significant cuts in
government spending, not by increasing the burden on the
middle class.
They have also told me that they wish to see increased fairness
in the taxation system and a continued protection for our most
vulnerable by way of efficient and modern social programs.
Those same constituents conveyed to me their belief that our
social programs are in need of reform to modernize them and
make them more efficient and pertinent to the realities of the
1990s.
I am pleased to state that I believe this budget to be a
significant first step in achieving the delicate balance requested
by my constituents. However, I must say that balance is only
achievable because Canadians want and are ready to support real
change, a new policy direction and a new approach to governing
in Canada.
Getting government to live within its means is our first
challenge. Not unlike a household, a government that lives
above its means eventually faces hardship.
There can be no doubt that the accomplishments of Canada
and Canadians, a nation with a small population base, are
unprecedented. Canadians have banded together to build the
best nation in the world. Our resource base is abundant. Our
population is well educated and hard working. Our private
sector is dynamic and entrepreneurial spirit abounds.
Last year we led the G-7 in growth. Our inflation is low,
exports are booming and jobs are being created. Our economy is
on track. The fundamentals and basic ingredients for guaranteed
economic success are in place.
However, our interest rates and the currency are at the mercy
of the international financial markets that speculate on our
ability to control public debt and deficits. Those markets have us
living under a microscope and any rumour can send our interest
rates upward and our dollar plummeting. Under those
conditions, Canadians live under a perpetual cloud of economic
uncertainty which affects personal financial decisions as well as
business decisions.
10161
(1600 )
Year after year governments have spent more than they have
taken in. We have borrowed to the point where our ability to
repay is in doubt. We are now at the mercy of lenders that
monitor our every move. It can be said that public policy is now
judged by its impact on Canadians and on our creditors, who are
more concerned with our ability to repay than our aspirations as
a people. In a true sense, because of the rising debt and
persistent deficit we are losing control of the public policy
agenda.
The budget is unprecedented in scope and
comprehensiveness. It builds on last year's initiatives and sets
the stage for regaining control of public finances and the public
policy agenda, signalling the eventual return to our traditional
focus of building a fair and just society.
The budget significantly reduces the deficit. In three years the
government will have saved $29 billion. We will have reached
the target of 3 per cent of GDP by 1996-97 and if private sector
forecasts are correct, we will even surpass it. As the Minister of
Finance has repeatedly stated, we must meet the deficit
reduction target or risk remaining vulnerable to the speculation
of the international financial markets.
The budget does more than set out a deficit reduction plan. It
also defines a new approach to government, a new approach
more in tune with the needs and challenges of the nineties.
When the government accepted the challenge of deficit
reduction it rejected the slash and burn approach or the notion of
across the board cuts. Across the board cuts of 20 to 30 per cent
are not the key to deficit reduction for the simple reason that a 30
per cent cut in a bad program still leaves 70 per cent waste,
whereas a 30 per cent cut in a good program just does not make
sense.
A slash and burn approach to deficit reduction may achieve
results, but more often than not at the expense of those most
vulnerable. That is not our way. We believe in fiscal
responsibility. We also believe in fairness. The government
knows that in addition to deficit reduction, the machinery of
government has to be renewed to better serve Canadians in a new
economy.
The budget makes the federal government smaller while it
lays the foundation for a government that is smarter, more
efficient, more responsive and more focused on renewed
priorities. That is the essence of a program review. Under
program review the departments started with a simple question:
In the nineties, what should a federal government do for the
people? Those things a federal government should do are being
analysed to determine the best way to deliver them.
The things a federal government should not do were either
discarded as something that no government at any level should
do or were determined to be best achieved by a level of
government closer to the people. The end results are smaller
departments, $16.9 billion in cuts from program review alone,
but smarter departments with renewed mandates, a tighter focus
and new priorities that will better serve the taxpayers and better
support an innovative economy.
The process of reinventing the role and the machinery of
government clearly demonstrates that Canadian federalism is
flexible and continues to evolve to meet the changing needs of
Canadians and of the new economy. We all know that
well-publicized constitutional conferences at which little is
produced but disagreement and divisiveness are not a viable
source of change.
Change in our federation occurs incrementally, through
discussion, through dialogue and through negotiation on
practical issues of concern to everyday Canadians. It is at this
level that Canadian federalism is flexible and responsive to the
needs of all their citizens.
[Translation]
As a francophone from northern Ontario, I have witnessed
this change. It is because of Canadian federalism, flexible
federalism, that I am able to stand in this House today and speak
in my mother tongue to talk of my heritage, which I have kept
and enriched, and of my pride in being a French Canadian.
(1605)
The road has not always been easy, and there have been
struggles on a number of occasions. However, without Canada,
without federalism, the battle would have been lost from the
start.
[English]
A critical component of program review has always been that
the level of government best positioned to deliver a service
should do so. Such a bold statement clearly demonstrates that
the federal government wishes to actively promote the evolution
of federalism because it is in the best interest of Canadians.
Federalism in Canada is not about the status quo.
That federal wish is inherent in the new transfer system to the
provinces. The block funding system discards the cost sharing
roles to give the provinces more flexibility in delivering
programs funded in part by the federal government. This
measure acknowledges the need to tailor social programs to
meet the specific needs of Canadians living in different parts of
the country. The 4.4 per cent reduction in transfers to the
provinces is a necessary measure to help the federal government
meet its deficit reduction target.
However, it must be emphasized that in 1996-97 the federal
government will be transferring to the provinces $35.3 billion. I
know that the majority of Canadians will agree that transfers in
the order of $35.3 billion per year confirms the government
commitment to equalization payments and the support of
provincially run social programs. In addition, the government is
always prepared to meet with the provinces to establish prin-
10162
ciples which govern the distribution and the use of those
transfers.
My experience at the local level has clearly demonstrated to
me that much of the funds targeted for social programs are
consumed by administration. The money directed to the poor is
not reaching them because of the high cost of administration.
With flexibility I am hopeful that the provinces will be in a
position to lower administrative costs and get more money out
of the hands of administrators and down to the people who need
it. If properly managed, savings could even reach the 4.4 per
cent of reductions in transfers.
Some provinces or provincial governments may try to
characterize the cuts and transfers as a personal attack or
downloading. I would remind those people that we have three
levels of government, including the municipalities, but we only
have one taxpayer. In the end, that one taxpayer does not draw
any benefit from a provincial budget that is balanced by way of
transfers from a debt ridden federal government.
Deficits and accumulated debts are common problems
throughout the federation at all levels of government. We must
learn to work together to solve them in the best interest of that
one taxpayer.
As many of my colleagues have already mentioned, the
budget is unprecedented in scope and comprehensiveness. It
puts us on the right track for deficit reduction. For every $1 of
new revenues the budget will generate, there will be $7 in cuts.
No government likes to cut but we were left with limited
choices. We proceeded in what we believed to be a rational and
fair way. We did not cut blindly. As I mentioned earlier, we
began with non-priority areas and also sought to renew the role
of the machinery of government to bring about significant
savings of $16.9 billion. We applied the principle of shared
responsibility to the concept of deficit reduction. To protect the
more vulnerable, we asked those who could afford it to shoulder
a larger part of the burden.
For example, the budget sets out massive cuts to industrial
programs, business subsidies, regional development agencies,
transportation subsidies. There are also significant cuts to
defence, natural resources and Canadian heritage. All in all,
there were significant cuts in varying degrees in the vast
majority of departments.
On the revenue side we have moved decisively to introduce
new fairness into the tax system. We have sent a clear message
to those able to pay that they will have to shoulder an increased
responsibility for deficit reduction. For example, we have set
temporary limits on RRSPs at $13,500, affecting only those who
earn in excess of $75,000. There will be a new tax on investment
income of private corporations. We will eliminate deferral of tax
on business income. We will limit some incentives. We will tax
family trusts. We have increased tax on large corporations.
There is a new corporation surtax. We have a new capital tax on
banks. Finally, there is the gasoline tax.
(1610)
Looking at the overall picture of the revenue side I am sure the
majority of Canadians will agree that we have met the criteria of
fairness. I am sure that in the future we will move again to close
more loopholes.
I would like to take a few seconds to tell the House what the
budget is not about. The government has demonstrated the
courage to open the budget process to let Canadians in.
Throughout the process we emphasized that we would use a
balanced and fair approach.
The opposition has used this consultation process to falsely
suggest that the government would impose additional taxes on
the middle class. Members said we would overburden the
middle class with the budget. We have not. They said that there
would be a health tax. There is none. They said that there would
be a dental benefit tax. There is none. They said there would be a
tax on RRSPs. There is none. They said there would be a tax on
lotteries. There is none. Finally, they said there would be income
tax increases. There are none. I would also add that there are no
increases in UI premiums.
In the end, I believe we have achieved a fair distribution of
restraint among all Canadians in all regions of the country.
[Translation]
Madam Speaker, some individuals and groups tell us we have
gone too far, while others say we have not gone far enough. I
answer them by saying that we have done what we said we
would: we have formulated a budget that will meet our
objectives and targets for deficit reduction.
We have chosen the best route. Our budget is carefully
balanced. It balances the need to control government
expenditures with the need to provide the protection of social
programs to our most vulnerable. Cutting too much in order to
satisfy the financial circles would mean too great a cost to the
disadvantaged and would weaken Canadian confidence in the
economy. Cutting too little, on the other hand, would threaten
our ability to pay our expenditures and make us more vulnerable
to control by foreign markets.
In hard times, the provinces turn to the federal government for
leadership. Unfortunately, during the last nine years, the
provinces turned to the federal government for leadership, and
the Mulroney government failed to provide it.
I would like to repeat the quote given by the Minister of
Finance in his speech: ``Government must not live in the past-
Every day there are new needs to be met. If inflation is to be
10163
fought, unemployment countered and something done, and
soon, to get Canadian prosperity back into its stride, the
government must begin to plan ahead-not timidly, not
tentatively-but boldly, imaginatively and courageously''.
It is no coincidence that the person with the Prime Minister is
the son of the individual who made this statement. He is the
person, the son of Paul Martin, Senior, who will return stability,
confidence and prosperity to Canada.
Furthermore, Canadians may be assured that their federal
government will provide the leadership sought by the provinces.
If we are now facing a new opposition consisting of two parties,
the Reformers and the Bloc Quebecois, it is because the
Mulroney government did not meet the provinces' call for
leadership.
For this very reason, the Liberal team will respond to this call
by the provinces and these new parties will inevitably disappear.
(1615)
[English]
In conclusion, I would like to bring to the attention of the
House another issue in the budget. I would like to offer the
services of my riding and my region to help the Minister of
Finance fulfil this commitment. Sudbury and the region of
Nickel Belt have rich mines, skilled workers and all the skills
and institutions in place to provide to the Government of Canada
the new $2 coin that is referred to in the budget. We would be
pleased to provide that service for the rest of Canada.
Mr. Leon E. Benoit (Vegreville, Ref.): Madam Speaker, I
have heard this member and others before him make the
comment that we are targeting spending better with this budget.
The most substantial spending measure in this budget is as a
result of what was not done rather than as a result of what was
done. That is the increase in interest payments on the debt.
Does that mean that it is the deliberate intention of this
government to target spending more to interest payments than in
the past?
Mr. Bonin: Madam Speaker, this question has been asked so
many times in the House. I will attempt to answer it differently
because it seems that Reform members do not understand.
There is a balance to be offered when there is such a huge
problem as we have in this country. We inherited the problem.
I like to compare it with a program I saw on TV. In New York
City the underground infrastructure of the water system is so old
and rusty that they cannot check to see if a valve is working.
There is so much rust that the valve will break if they turn it. I
like to make that comparison.
The people I share this with, the people of my riding and other
ridings and the people from my party and other parties, except
for the Reform Party, seem to relate that there is a danger in
overkill.
Definitely, Canadians and the Liberal government would like
to say let us slash and burn and there is no more debt. The only
serious difficulty is it would affect human beings. That is the
part the Reform Party cannot associate with. We include it in our
answers and try to explain to them that they have to have some
compassion. That word is used often by a good many members
in this House but it is never used by members of the Reform
Party.
A society with compassion is often judged by the way it treat
its seniors. Taking $3 billion out of the seniors' pockets is not
my idea of compassion. I have answered the question for the
people who understand. I feel like the minister or the priest who
preaches to the people who do not practise. They sit there having
heard the answer so many times and still they do not understand.
[Translation]
Mr. Philippe Paré (Louis-Hébert, BQ): Madam Speaker, I
would like above all to respond to the initial remarks made by
the member for Nickel Belt. He seems to regard it as quite an
exploit that, thanks to Canadian federalism, he is still able to
rise in this House and speak in French.
I must say, it is very difficult for me to understand how this
view can be so easily accepted since the opposite would indicate
assimilation. So he admits that it is exceptional that he has not
been assimilated.
As he comes from a French speaking community, I find it
rather difficult to understand how someone like him could say
that; he is aware of the incredible rates of assimilation in
Canada. In 1971, the rate of assimilation for all English
speaking provinces was 27 per cent, but by 1991 it had increased
to 37 per cent.
(1620)
Equally, he is a member of a government whose language
commissioner recently released a totally shocking report on this
government's inability to provide francophones in other
provinces with services in French. He is also a member of this
government which will make cuts to the CBC, no doubt equally
in the French and English networks, without realizing that the
French network has been discriminated against for 20 years,
although audience ratings are identical and budgets are one third
higher for the English network, identical ratings and identical
schedules, unless I can be convinced that the English language
CBC network is on the air 36 hours a day, which I would find
very difficult to understand.
10164
I find it difficult to understand those remarks and I would
like to know how he can rise in the House and praise a federal
system which has created these things which are after all
neither very interesting nor very praiseworthy.
Mr. Bonin: Madam Speaker, I am surprised to see the
knowledge that my colleague opposite has cultivated regarding
the situation of francophones outside of Quebec. When I first
came to Ottawa, at the same time as he did, his party thought that
I was one of their own when they heard me talk.
Most of these people have never ventured outside of Quebec.
Most of these separatists were oblivious to the fact that there
were any francophones outside of Quebec. My riding is 40 per
cent francophone. I represent such a riding, and our separatist
colleagues from Quebec do not even know we exist. At the end
of 1978, René Lévesque came to Laurentian University in my
riding in Sudbury and said to francophones outside of Quebec
that Quebec had enough problems and had no time for us. That is
what he said.
My colleagues from the Bloc Quebecois are surprised and
moved that there are francophones outside of Quebec. I will give
them a little background on northern Ontario. There were nine
children in my family, all francophones. I organize family
picnics for the Lefebvre family in my riding, and we invite all of
the descendants of my grandmother and grandfather. I recall one
year where 750 people registered, all francophones. So, come
out of your shell! Excuse me, Madam Speaker, I meant to tell
them through you to come out of the shell in which they have
been hiding.
It is never adviseable to propose to separate from something
you do not know. Go see the rest of Canada. Go see whether it
exists, get a taste of it and you will conclude that it is worth
keeping Canada together. Yes, if I rise in this House today and
am so proud to speak to you in my mother tongue, French, it is
because I had the opportunity to live it, to be raised in it and to
speak it at university. My son is registered in a family medicine
program in French in northern Ontario and my wife teaches at a
French school.
Before being elected, I taught French in a French college; the
new college is under construction. I was the president of a
French-English school board, the majority of whose members
were francophones. So do not try to tell me that francophones
outside Quebec have no rights and that our rights are being taken
away from us daily. We had our problems in the past, but we got
to know one another instead of deciding to separate. We decided
to sit down together and learn to work with one another.
I played hockey with the anglophones and I enjoyed it. They
are good people. I also played in another league where everyone
was French and we spoke French on the ice and in the locker
rooms. We learned to work at overcoming problems, to respect
one another. The respect of one person for another is very
important for a federation.
The message is not complicated. For the separatists, if you
wish to separate, at least know what you are separating from,
because you run a very great risk of hurting the people you
represent. This is not right, because the members of the Bloc
Quebecois in this House do not represent the majority of
Quebecers. They are playing a dangerous game and those of us
from northern Ontario know it.
(1625)
With reference to Radio-Canada, I am going to tell you about
one of the problems we have in northern Ontario, because I think
something needs to be said. Most of our programming comes
from the province of Quebec, but we would like more local
programming. The propaganda we get on the television and the
radio is driving us to switch to our other francophone stations in
northern Ontario.
[English]
Mr. Werner Schmidt (Okanagan Centre, Ref.): Madam
Speaker, I will be dividing my time with my colleague, the hon.
member for Red Deer.
I wish to address this House on the business of the budget
which was presented yesterday. I want to deal particularly with
one part of that budget. It has to do with the provisions for
science and technology. The hon. Minister of Finance said that
the general objective of federal spending in science and
technology is to build a stronger science and technology
capability in Canada.
There are two funding councils through which a lot of this
money goes, the National Sciences and Engineering Research
Council of Canada and the Social Sciences and Humanities
Research Council of Canada. Both promote and assist primarily
university research and graduate education. Their budget was
reduced proportionately less than those in other areas because,
as he said, that reflects the importance and priority placement of
R and D for this government.
The same thing happened with the National Research Council.
It too was reduced, but not in the same proportion as were
certain other parts. The National Research Council will have to
eliminate activities of a lower priority.
From the above it is pretty clear government has
demonstrated that science and technology is considered to be a
strategic asset of government.
Let me quote directly from the Minister of Finance's budget
plan: ``High deficits and debt lead to higher interest rates, higher
taxes and reduced confidence, which dampen investment and
growth. The financial requirements flowing from chronic
deficits, when not matched by increases in private sector
savings, increase Canada's dependence on foreign borrowing,
the servic-
10165
ing cost of which is a permanent drain on national income and
future living standards. The constant financing of deficits also
reduces the government's capacity to provide important public
services and to make adequate investments in the area of
strategic national importance, such as science and technology.''
It should be clear to everyone that this budget, because it does
not adequately deal with the fiscal problems of this government,
will make it difficult to develop in precisely those areas upon
which the future economic development of this country depends
and which must take place if Canada is to compete in the global
marketplace.
Concerns have also arisen with respect to the treatment of R
and D expenditures on information technology generally, and in
particular those incurred by financial institutions. I quote the
minister again: ``As an interim measure, all information
technology R and D performed after budget day by financial
institutions will be excluded from the definition of scientific
research and experimental development pending the completion
of the review of information technology R and D''.
Is this specific act a discrimination against one of the major
stakeholders in scientific and technological development? Or is
it as Peter Cook stated yesterday in his article in the Globe and
Mail: ``Fairness to the politician does not mean burden sharing.
It means goring the fewest oxen.'' Since there is not a large
number of financial institutions and the chartered banks are by
far the fewest and the largest of those, only very few oxen will be
gored by this regulation.
(1630)
The question, however, is a larger one. Does this action
discourage other innovators in the information technology
field? That is particularly problematic in light of the Auditor
General's observations that we must recognize the global
economy is increasingly driven by knowledge based industries
and that innovation is critical.
He goes on to detail some of the characteristics of an
innovative country. He states among other things that first,
innovation has become a crucial survival issue. It cannot be
treated as an option. Second, innovation trends do not arise by
themselves. It is generated and sustained through the efforts of
people. Innovation is where the innovative spirit is. It cannot be
legislated or brought about by edict. It comes from individuals
and from creative and interactive communities and it thrives in
an environment of encouragement and support.
Three, he says government needs to create an environment
that is supportive of innovation. If not, innovators will not
innovate or leave to go to places where there is support for
innovation. Four, partners in an innovative society include all
aspects of our communities, all governments, communities,
individuals, corporations and families. Five, he says Canada has
the potential to be particularly innovative as a society because of
the cultural diversity of its people. Canada could become known
as an innovative country.
The Auditor General also observed that within the science and
technology department there is an absence of strong leadership:
``The government does not have a clear idea of precisely what it
is trying to achieve in science and technology''.
In response to that observation of the Auditor General, here is
what the Minister of Finance said in his budget plan:
Industry Canada is developing a federal science and technology strategy. The
department is drafting a national vision of science and technology through
external consultations, internal review as well as an independent assessment of
the national advisory board on science and technology.
Industry Canada, in conjunction with other relevant departments, is also
working to increase the relevance and economic impact of the government
science and technology spending; a more businesslike approach is being
adopted.
This is a total statement with regard to this matter. It is vague,
yet it readily admits that knowledge is where the future lies.
How much money would a private investor place in a vague and
wishy-washy sense of direction like that?
In this case, as in any other pursuit, it is essential that there be
a clear goal as to where one is going so that one may determine
the costs and know when the goal has been reached. At the
moment I am afraid there is much money and a lot of activity
being thrown in a particular direction but little to show for it.
When resources are scarce we cannot afford such lack of
accountability and irresponsible expenditure of public funds.
There are some suggestions that I would make that might be of
assistance in meeting the Auditor General's message. First, in
this country there are insufficient links between science and
technology policy on the one hand and economic indicators on
the other. Do the government policymakers ask themselves what
economic indicators are being directed toward science and
technology?
Second, science and technology remains internalized. While
it talks about being innovative, about being an important
component of economic recovery, it seems to have no idea how
to activate policy to become that component. The reason for that
is because any review that has come out of the department of
science and technology has not had its genesis or relationship
with the finance department.
In many ways science and technology and Industry Canada
are having an identity crisis. They know what they want to be, an
engine of fiscal recovery, but they have no idea how to get there.
10166
We hear much about creating stronger partnerships between
government and universities, government and industry,
industry and university. We have not heard a whisper about the
relationship that is necessary to forge between academic
scientists and economists.
(1635 )
Many who comprise and compose the structure of science and
technology have moved from the ivory tower of the university to
the ivory tower of government. Neither is a traditional place
where market value means much to the daily workings of the
respective institutions.
Protected from the real world and from having to generate
revenues to support their work, their objectives are fuelled by
the desire to maintain the status quo. Instead they choose to
believe that the granting system is sacred and necessary, that
generating revenues is not within the purview of science.
However, generating revenues is a principal element in
becoming an engine that drives economic recovery. We are
relying on science and technology to produce products, jobs and
a niche for Canada in the global marketplace. When we are told
that science and technology can do that we believe it because we
want it to be so. However, we want it to be happening now.
Do we have to wait another 30 years since the last science and
technology review took place when nothing happened? One year
from now is too long. It is time to get out of ivory towers and do
it now.
We need to have a different structure, a necessary new
configuration; one that places more emphasis on each
knowledge worker and less concentration and centralization of
services, one that joins Newfoundland to British Columbia by an
information highway capable of sharing ideas of co-operative
creation, of production teams equipped with expertise not
limited to institutions, sectors, regions or governments. That is
innovation. That will assure Canada's future. That is what we
must do and we must do it now.
Mr. Bob Mills (Red Deer, Ref.): Madam Speaker, I rise today
to give a speech that I sincerely hoped I would not have to give.
In the fall the Minister of Finance promised he was going to get
serious about the debt and deficit in his budget and that he
realized Canadians would not accept any higher taxes.
The minister went on to conduct a much touted prebudgetary
consultation process. The minister claimed again and again that
he would listen to Canadians. The hopes and wishes of the
Canadian public have been betrayed. It is absolutely
unacceptable.
I want to talk about the tax grab of the government. Since I
was elected, one of the most ironclad wishes of my constituents
and the Canadian public has been that the government put a halt
to increased taxes. Canadians are already taxed to death. They
are bled dry by the government.
Although the government knew all about the terrible situation
it is once again sticking its fingers into the wallets of Canadians
and picking them clean. Only this time, since the part of
Canadians' wallets that holds the bills is empty thanks to the
government, the tax man is rifling through the part that holds the
change, plucking the last few loonies away from the beleaguered
public.
We have a tax on gas, a tax on utilities in Alberta and taxes on
corporations which get passed on to the public. This is not
closing loopholes. This is not taxing the rich. These are taxes on
everyone who uses a light bulb, heats their home, drives a car,
farmers and consumers in general.
This is totally unacceptable. The government has been told
time and again it does not have a revenue problem, it has a
spending problem. Last year the government spent its way to a
record setting deficit. We have now racked up a debt of over
$550 billion, costing the taxpayer close to $80,000 a minute in
interest charges.
This is unbelievable and this is what we are leaving future
generations. That is the compassion we have heard some of the
members talking about. There should be some compassion
shown for the future. The government seems to think that
overspending by 24-odd billion dollars by 1997-98 is the
greatest achievement ever accomplished. Where the
government gets its priorities is totally beyond me.
What did the government not understand about the message of
the Canadian public which was no new taxes and fix the deficit?
(1640)
Even the Liberal Party's own personal cheering squad, the
Toronto Star and many others, had come up with front page
headlines like ``Get a grip on deficit with cuts, MPs told, but
don't try raising taxes, constituents say''.
The government was given this message over and over again
but it did not listen. I do not doubt the government has a million
and one justifications for increasing taxes and I am sure the spin
doctors figure they can manipulate the Canadian public into
believing these taxes are in the best interests of everyone, but
they are wrong.
We really feel that removing the deficit and putting in place a
reformed tax system and a long term plan for the reduction of the
debt will be the only way to save the programs that Canadians
value.
In 1984 our debt was $190 billion. We had a fellow come
along who said he was going to fix it. By 1988 he said that he was
going to fix it again and then we were up to $370 billion. In 1993
we were told that there was such a terrible government and it had
10167
built up $489 billion by election day. We were again told that it
was going to be fixed.
By 1997 at the next election we will have over $600 billion.
All this and the government thinks that a $32 billion deficit next
year is a great achievement. I am sorry, I do not think that is
good enough.
In the past the government has always figured that it could
formulate policy and then bring it down from on high. The
government thought it knew what was best for Canadians and
imposed this on the public.
The last government was particularly good at this trick but we
know what happened to it. As much as the government does not
want to hear this piece of news, the days when Ottawa told
Canadians what to do and how to live are over. It is time for the
Canadian grassroots to tell the politicians in Ottawa what to do,
and they better do it.
For months now the government has made its problem even
worse because it told Canadians it was listening. The public was
optimistic that a new day had dawned but now it knows. Now
Canadians realize that the government was going to do whatever
it wanted regardless of what it heard in the prebudgetary
consultations.
It is politics as usual in Ottawa. The government pretends to
listen to make itself look good and assures Canadians it has
turned a new leaf but the illusion never lasts. This budget is the
splash of cold water to the face of the public it needed to realize
where the government really stands.
Tax and grab is the name of the game and wishes of the public
do not matter. Shame on you, Mr. Finance Minister. You sit on
your gold plated pension while future Canadians are sacrificed.
Not only is it a huge shame that the government has chosen to
raise taxes, but when I ask myself if it is at least taking care of
the debt and deficit properly, my answer is no.
Our federal debt is around $550 billion and it is going up by
$10 billion every few months. The interest on this debt is huge
and is going up by $80,000 a minute. Every time the interest
rates go up by 1 per cent the deficit rises by almost $2 billion. By
the time the next election is held our yearly interest payments
will be over $50 billion. This is what will really threaten our
social safety net and nothing else.
The international money managers are happy today because
they have just been guaranteed an ever increasing source of
cash. Let me put it another way. Even if there were no more
interest charges on this debt ever and a single Canadian put
$10,000 per year into paying off the debt they would reduce it to
zero by the year 55000000 A.D.
Faced with this debt problem, what is the government's
answer? What resolute action is it going to take to save our
country from economic peril? It has promised to reduce its
overspending to roughly $25 billion per year beyond what we
can afford by the time the next election is called.
This will mean that Canadians will only have another $100
billion dollars added to the national debt, bringing it over the
$600 billion mark. Wow, what commitment and responsible
action. With those kinds of fiscal skills, maybe the cabinet
ministers of this government should act as financial consultants
when they are looking for new jobs after the next election. I am
sure financial wizards like themselves should have no problem
finding a job. Maybe the savings and loan companies in the U.S.
are looking for senior executives.
(1645)
In all seriousness, it boggles my mind how the government
can think that it has done enough. For months now Canadians
have told the government that they are willing to bite the bullet
in order to address the deficit problem, but the government
continues to believe that it can do things as usual; it can have its
cake and eat it too. It can spend the country into the ground with
big government in one breath and pretend to fight the deficit in
the next.
I am sorry, but it just will not do any more. Canadians are
unwilling to play the old Ottawa game. They want real change,
real reform, real spending cuts and no more taxes. The message
is simple but the government is not listening. The actions
needed are obvious but the government is afraid to act.
Over the coming year Canada will slip further and further into
debt, the dollar will struggle and upward pressures on interest
rates will be the norm. As interest rates rise our growth will slow
and unemployed Canadians will continue to be frustrated in
their efforts to find jobs. In the past the government has been
fond of blaming such problems on the previous government.
That time is now over. The government has made its bed and
now it is time to lie in it. The people of Canada are smart. They
know the bill of goods that has been sold to them and they will
not forget.
The smoke and mirrors approach of Ottawa will not sell to the
provinces or to the people of Canada. Enough is enough. Start
from the top. Reduce MP pensions. Reduce the number of MPs.
Reform and reduce the Senate. Cut upper and middle
management and stop offloading cuts on the lower end of the
pyramid.
We have reached a turning point in this government, a
downward turn, a turn for the worse, and the Reform party will
not stand idly by. Reformers have got the message, no more tax,
fix the deficit. Now is the time for us to confront the government
and force it to listen. We will tell it over and over, as many times
as it takes, to try to get the message through that we have a
serious problem and we must address it.
10168
Mr. George S. Rideout (Parliamentary Secretary to
Minister of Natural Resources, Lib.): Madam Speaker, I
listened with interest to my colleague opposite. He said that the
government did not listen, did not discuss and did not involve
Canadians in the process of budget and budget reform in trying
to strike a budget that at one time would deal with our financial
crisis but at the same time not push the country into recession.
Canadians told us that they did not want us to raise personal
income tax, that they did not want us to touch RRSPs and that
they did not want us to tax dental plans. They wanted us to make
substantial cuts in government so that it would function more
efficiently. This government listened and that is what it did.
As I listened to the Reform budget I heard it take on the little
guy and make it tough. That budget would impose a direct tax
against Atlantic Canada, would attack ACOA and would attack
those institutions which make Atlantic Canada function. It
would attack seniors and senior women who would see their
income taxes rise because of the budget that was put forward by
the Reform party.
Did the Reform Party listen to anybody when it put forward its
budget?
Mr. Mills (Red Deer): Madam Speaker, what we have done is
really listened to the people. People are saying that they are sick
and tired of government from the top down. They are saying give
them programs that will let them take care of themselves at the
local level.
If the hon. member had read the taxpayers' budget he would
see that is exactly what it does. It puts in place things like RPSPs
which allow people to take care of themselves, not depend on
bureaucracy to do it and not depend on government which over
35 years has failed them; failed to guarantee the social programs
and failed to provide them with services. That is what the people
are saying.
(1650 )
The threat is that $600 billion and that $50 billion in interest
payment. That is the threat to all the social programs and it is
going to hit everyone where we presented a budget which was
going to be fair and equal to all and would have provided a
solution. It will be too late by the time these people wake up.
Mr. Paul Szabo (Mississauga South, Lib.): Madam Speaker,
I too have to comment on the member's brief speech.
The Reform Party had used the time in advance of
consultation on the budget to go around stirring up so called tax
revolts and really scaring Canadians by indicating the
government is going to do this, the government is going to do
that. As the previous member stated very clearly, the
government is not taxing RRSPs or health and dental benefits.
The government did not raise personal income taxes. The
government did listen.
The government reduced its spending. There are $7 in
spending cuts for every $1 of revenue increase. The member
now, in trying to salvage some face with regard to the ridiculous
tax revolt incitement, is trying to rest everything on an excise
tax of 1.5 cents per litre.
I have a very simple question so that all Canadians fully
understand what that means. Could the member please advise
the House how much that means to the ordinary Canadian in
terms of going to a gas station to fill up a tank? How much does
that tax cost Canadians?
Mr. Mills (Red Deer): Madam Speaker, the answer to that
question is $500 million, but there is a lot more to it than that.
There are a lot more areas.
There is that 12.5 per cent to corporations which is going to be
off loaded on to people. There are all of the changes when the
money is transferred to the provinces to allow them less money,
to allow them to increase their delivery of services.
We talk about long term. I am from Alberta and we had a
premier in that province, Mr. Getty, who gave a budget very
much like this. It was a feel good, be happy, do not ruffle
anybody's feathers, try and keep everyone kind of balanced
budget.
As far as consultation with the people, I would like to say that
in terms of this consultation, the number of town hall meetings
and so on that come about in that consultation I would gladly
compare with anything that the hon. member does.
Ms. Hedy Fry (Parliamentary Secretary to Minister of
Health, Lib.): Madam Speaker, unlike the last speaker, I think it
is a great honour for me to stand today and support the budget. I
am very proud of its very bold and visionary approach to fiscal
management.
Throughout this budget the Minister of Finance had in effect
courageously redefined Canada's system of government while
at the same time maintaining the basic principles of fairness and
equity.
There are some specific areas of the budget that I would like
to address today, especially as they impact on British
Columbians and on my constituents.
I would like to stress that this budget has fulfilled all the
promises made by our government. It was tough but it was fair.
This budget has ensured that the financial burdens faced by all
Canadians will be distributed in an equitable manner. It started
by cleaning house, by setting an example of frugality and fiscal
prudence from the top.
10169
There is no NIMBY syndrome in this budget. We started right
in our own backyard. We redefined government by downsizing,
by becoming lean and efficient and by enunciating a more
appropriate role for government, one that enhances growth
rather than manages it.
We did this by getting out of mega projects, by cutting back on
subsidies to businesses, to farms, to transportation and to
mining. We feel that these sectors can sustain themselves and be
competitive if we just get out of their way. They have told us this
often enough and now we are doing it.
We will commercialize viable sectors like transportation so
that they can be self-sustaining and so that the users pay for
their services rather than all taxpayers. We will still ensure that
public safety and national standards are maintained.
(1655)
This budget clearly comprises a major turning point in our
economic history. In the last few years we have been straining to
govern. We have been straining to survive under the cloud of a
burdensome debt and a dangerous deficit.
This economic downturn we just suffered compounded the
negative impacts of the deficit and the debt by affecting our
credibility in world markets. Our economic sustenance was at
the beck and call of investment bankers in New York and
editorial writers in Washington.
We had two choices. We could continue to ride the downhill
spiral toward indebtedness and even to third world status or we
could take measures to change direction. We needed a
revolution and this budget has provided us with one.
Over the next two years this budget will create cumulative
savings of $13.3 billion, $11.9 of which will represent cuts in
government spending. That equals $7 of spending cuts for every
dollar of tax revenue. As a result in 1996-1997 our economic
growth will finally be greater than the growth in our debt.
This is a key element. It marks the turning point in our
indebtedness as a nation. It means that we will be taking in more
money than we are borrowing for the first time since World War
II. We have finally turned the corner.
Contrary to the rhetoric spawned by the furious and
impetuous reaction of opposition parties and other groups, this
budget does not reduce our commitment to social programs. I
think rather it enshrines it. By taking control of our finances we
have regained our sovereignty and our ability to make our own
decisions about the kind of social democracy we want to live in.
We have empowered ourselves so that we can make decisions
based on our values as a people; values of compassion and of
social justice, values that see government's role as one which
creates opportunity for all, one which removes obstacles and
one which protects the most vulnerable in our society.
This budget will let us protect our social programs from the
investment bankers and editorialists of the world. By achieving
our deficit targets we are taking action to prevent New York or
Tokyo from in effect running our country and defining our social
programs. A Liberal government could never allow that to
happen.
I am glad to see that this budget, tough as it is, was not
balanced on the backs of the poor, the sick and the elderly. As
Parliamentary Secretary to the Minister of Health, I am pleased
to note that his budget in no way affects the medicare standards
and principles that are so dear to us and that are enshrined in the
Canadian Health Act. Health care delivery across this country
will continue to be comprehensive, universal, portable,
accessible and administered by the public. In the red book we
committed to ensuring that these principles are upheld and we
are keeping that promise.
Yesterday in a typical knee-jerk reaction to the speech by the
Minister of Finance, the Leader of the Opposition and his
finance critic stated that the budget was merely another
confirmation of status quo federalism. It is clear that the Leader
of the Opposition did not read the document, or if he did he did
not understand it.
The budget does the exact opposite. It clearly marks the
beginning of a new era of federalism and of federal-provincial
relations. It is a move in the direction of a leaner, more efficient,
more accountable system which recognizes provincial
responsibilities and the ability to redesign and redeliver
effective services at the local level; the bottom up approach that
the opposition parties so often tout but are reluctant to
implement.
In reading the newspapers this morning I noticed that much of
the media has focused its concerns on the new system of block
funding, the Canada social transfer which will result, it says, in
fewer services being provided by the provinces. On the contrary,
with the new system of lump sum transfer payments, our
government is in effect giving the provinces greater flexibility
and greater leverage in the administration of their social
programs.
The federal government's role has been redefined but in a
positive way. I firmly believe that these changes will provide a
window of opportunity for us to set clear national standards for
all social programs. This is a move that my constituents and
groups across this country have advocated for years.
Instead of balkanizing the country, this move will allow us to
set national objectives for education and social security like we
have done so successfully with health care.
(1700 )
Since its inception medicare has given over the management
and administration of health care to the provinces governed by a
set of principles enshrined in the Canada Health Act. This has
created a health system that binds us together as Canadians, a
system of which we are duly proud, a system that has freed the
federal health department to concentrate on the broader issues
10170
that affect the health and safety of all Canadians. This is what
we intend to do with the devolution to the provinces.
I trust that following his consultations with the provinces the
Minister of Human Resources Development will act swiftly in
proposing standards and principles that will see us act along the
lines of the Canada Health Act and the standards for
administration and national care we see as a nation.
The Canada social transfer will do exactly what we want it to
do. We have shown by our leadership as a federal government
that we can provide better, leaner and more efficient
government. I believe the provinces will rise to that challenge
and be able to show us that they can do just as well as we can and
as we have done.
I would also like to talk a bit about the changes to the
Unemployment Insurance Act that I feel are very important. I
believe that one of the key issues of unemployment at the
moment is in keeping with our Liberal mandate, which is to get
people back to work and keep them at work. If we can
concentrate our efforts on employment services and training we
will do exactly that.
Those Canadians who feel very vulnerable now because they
are unemployed and who are concerned that this will damage
their futures should not be concerned because our move is to
give them the tools and skills needed to get them back to work,
to stay in work and to make us a more competitive nation. We are
removing the safety net but we are providing a springboard. I
think most Canadians want a springboard.
We are also cutting some funding to the unemployment
insurance program. By the fall of next year the funding will be
reduced by 10 per cent. This is only funding that is going to be
done because of downsizing of administration and because it
will automatically come from the lower unemployment rates. As
the House knows, we have been creating jobs and have brought
our unemployment down by two percentage points, which had
not been done over the last 10 to 15 years.
We are also moving to reduce some of the abuse that I hear
from all over the country is endemic in the system. That will
save us $200 million.
Furthermore we are looking to do something that is
innovative and creative. We are looking to build a $5 billion
surplus in the UI fund so that we do not have to make the same
mistakes we made the last time. When the cycles of recession
and downturns in the economy come we will have a buffer to
start so that we do not have to increase UI premiums and
therefore hamstring the businesses that need to grow, to help us
to sustain the economy in bad times. This is just common sense.
By maintaining a surplus we will be able to mitigate the rates
and help in periods of slow economic growth. It will also help us
to encourage job creation at a crucial time when we are
recovering from downturns in the economy.
In addition, I am very pleased to note that throughout the
budget the government has remained totally and absolutely
committed to a fair and sustainable system of protection for
seniors. It recognizes the important contributions that seniors
have made to Canada's social and governmental infrastructure.
I have a large seniors population in my riding. They have been
very concerned that their pensions would be destroyed in the
budget. I am pleased to be able to tell them that the two main
pillars of the public pension system, the Canada pension and the
Quebec pension plan, the old age security and the guaranteed
income supplement will be maintained and improved.
In the budget the Minister of Finance has promised to sit down
with the provinces in the fall to review our very shaky Canada
pension plan. The Minister of Finance pledged to release a paper
in conjunction with the Minister of Human Resources
Development to recommend changes to the system to ensure its
affordability, fairness and sustainability as many of us baby
boomers move into old age.
Finally, the minister is announcing a change in the method of
payment of old age security to high income seniors who have
been subject to the so-called clawback. This is simply an
administrative, common sense approach. If we pay out our
benefits to individuals at a time every month instead of waiting
until the end of the year to give in and pay back, it just prevents a
lot of paperwork. That is the kind of silliness that has been
costing so much money in government spending over the last
few years.
(1705 )
The budget has also followed through on our red book
promises to maintain fairness and equity in our taxation system.
The Minister of Finance has refused to balance the budget on the
backs of the poor. Rather it seeks to distribute the onus of fiscal
frugality to those who have traditionally not been paying their
fair share.
Reforms to family trusts are a good example. I firmly believe
that in times of fiscal restraint all Canadians should pay their
fair share and not escape through nice old loopholes.
The budget eliminates the cap and justly so for family trusts,
changes to the family trust administration and will terminate the
preferred beneficiary election for trust taxation years that begin
after 1995, except where the beneficiary is physically or
mentally impaired. Again the government has done a sensible
thing with compassion so that we will not harm those who are
most vulnerable.
I recognize that family trusts have many valid non-tax
objectives such as helping with succession planning, but these
changes ensure that family trusts will not be used to defer capital
10171
gains for income splitting purposes. That is the loophole we
were trying to get rid of. Once again the budget has shown that
we are committed to reductions as long as they are fair.
There is more good news for my constituents in the budget
such as changes to the government's role in transportation. The
federal government's role in transportation is evolving from that
of being an operator of the system into one that is primarily a
policy maker, a regulator and a landlord with only limited
operational responsibilities. Subsidies are being reduced and in
many cases eliminated. Major operations will be given more
commercialized forms and remainder operations will be made
more efficient with greater reliance on users rather than
taxpayers to pay the cost of the transportation system.
Thus the budget reduces net spending by Transport Canada
and related agencies by over 50 per cent in 1997-98, from $2.8
billion to $1.4 billion. As a consequence the port of Vancouver
in my riding and other ports across Canada will have the
opportunity to thrive under the autonomy they have sought for
many years now and finally become competitive.
Changes to the mining sector will have a positive impact in
the long run in B.C. In the budget the federal government has
decided not to renew mineral development agreements, but it
also likes to emphasize that this non-renewal does not mean it
has abandoned the mining sector. The mining sector has not had
a fair system of taxation to assist it in different levels of mining
such as reclaimed mines versus new mines. We are going to look
at these issues so that we can give that sector what it needs and
remove the barriers so it can thrive and become as viable as we
know it can be in Ontario and in British Columbia.
I would like to comment a bit on members of the Reform Party
in the House who have attacked our budget. They have said we
have not done the things we should do and they have discounted
our figures. They have said that we have been hypocritical.
The budget tabled by the third party was punitive and
non-creative. Throughout the history of the country the Liberal
Party has always been here at times of change. Whenever the
country has sought to move into new areas, has sought to
become a greater country or has sought to change the way we do
things, there has always been a Liberal government in place to
lead us into the changes.
We are moving into the 21st century. There will be many
challenges for the country. We have seen we need to be
competitive. We have seen we need to look at training. We need
to look at employment. We need to look at jobs. We need to look
at economic growth. We are focusing on economic growth. We
are focusing on the engines of growth: small business, science
and technology. We are going to make the country move
forward.
As always, a Liberal government has been there to help
Canada to manoeuvre its way through difficult times. We will be
here once again to move us into the 21st century when I know the
world will look to Canada for leadership.
[Translation]
Mr. René Canuel (Matapédia-Matane, BQ): Madam
Speaker, I was listening to what my colleague has just said with
great interest. I do believe her Liberal roots are showing.
(1710)
It is full of sophisms. I will make a comment and then put a
question to my colleague. How will it be possible to provide
quality health care when transfer payments to the provinces will
be cut by $700 million next year? How will it be possible to
improve health care? She spoke at length about this earlier.
If I were a young graduate, I would be very concerned tonight.
If I were on income security, I would be even more concerned. If
I were unemployed, I would be extremely concerned. They are
talking about cutting 45,000 public service jobs, about closing
military bases in Saint-Hubert and elsewhere. The extremely
competent workers who will lose their jobs will surely find other
jobs, but for a 24-year old graduate, it is a different matter. One
job means one job, not two jobs.
Tonight, I would be very happy if I had a family trust as I
would have until 1999 to avoid taxes. Nothing to worry about. If
I were the Royal Bank, I would be very happy, too. I would send
you a dozen roses and we would sing together. The wealthy are
rejoicing while the most disadvantaged are sad.
I would ask my colleague to really explain to these young
university graduates and unemployed workers how and where
this budget will help create jobs quickly, when we know that it
takes $200 million away from infrastructure programs?
[English]
Ms. Fry: Madam Speaker, I would like to respond first to the
statement the hon. member made about health. Many studies
have shown now that the health care system is appropriately
funded but that the health care system needs to be managed more
efficiently. That is what we should be looking at doing.
We do not need to continue to pour money into the system.
The system can provide the best health care in the world that
Canadians need if we manage it. It has not been managed on
sound management principles. We have not looked at the
outcomes of the things we do to see whether they make a
difference to the health status of the population.
10172
There are enough studies now to show that we can save
significant amounts of money that we can put into important
aspects like prevention and helping to improve the health status
of the population so our children can grow out of poverty and
be healthy. We know that poverty is a major determinant of ill
health in the country. We need to shift our resources where they
do the best and where they improve the condition. That is what
we can do if we manage the system better.
I do not see that any kind of cutbacks in funding will make our
health care system worse. It is a challenge for provinces to learn
how to manage the system appropriately on sound principles and
guidelines. I think we can do that and I think the provinces are
equal to the challenge.
With regard to young Canadians who are looking for work and
any Canadian who is looking for work, the unemployment
insurance system at the moment has shown us that 25 per cent of
Canadians across the country are functionally illiterate. Forty
per cent in the maritimes are functionally illiterate. We are not
looking at the traditional student any more. We are looking at
adult populations, non-traditional students, who need skills and
tools to get back to work.
On one hand, the government is trying to push the engines that
will drive the small and medium size business sector which will
create 80 per cent of our new jobs. On the other hand, we are
looking at unemployment insurance as an adjustment that will
help people to get the tools and the skills they need to get back
into the workforce so they can become independent contributing
citizens who contribute to the competitiveness of the country.
That is what we are looking to do, create opportunity; a
springboard and not a safety net.
(1715)
Mr. Jim Abbott (Kootenay East, Ref.): Madam Speaker,
when I listen to many of the Liberal members I am reminded of
Eliza Doolittle. She was getting very frustrated and she finally
sang a song which I believe was ``Words, words, words. I am so
sick of words''.
I listened to the member talk about the proposal where the
government is proposing to combine the money it is transferring
to the provinces for health and welfare and for post-secondary
education into this Canada social transfer act, then magically
make $4.5 billion disappear.
Members should know Reform made a proposal like that.
However, when we talked about it, we were talking about
transferring tax points, transferring the ability of the provinces
to be able to fund these. This is simply downloading.
The difficulty with this plan is that the Canada Health Act and
the Canada assistance plan are both etched in stone as far as the
provinces are concerned. Therefore the entity under the Canada
social transfer that literally goes begging with this $4.5 billion
is post-secondary education. Post-secondary education simply
disappears.
I have a very specific question for the member. Considering
that members' pensions are such a monumental issue in the
province of British Columbia, I know that her constituents,
certainly all the people in British Columbia, would be interested
to know if she intends to exercise her option of opting out of the
members' pension plan, thereby showing the leadership that the
people of Canada are looking for.
Ms. Fry: Madam Speaker, although the member made a nice
little speech prior to his question that I would like to comment
on, I will respond to his question first.
The hon. member is asking me if I will opt out of the pension
plan because he sees it as a way of being responsible. There are
many ways of being responsible. I would like to look at the
whole issue. I would like to see whether it is feasible to opt out
or whether I choose to do so.
Reform of pensions is a fundamental and basic issue. It has
been looked at. The Prime Minister was very clear when he
talked about reforming members' pensions. We have had a
report from a third party that talked about a lot of reforms to
pensions and to MPs incomes that I do not see the hon. member
discussing in total.
It is easy to cherry pick, to take one little part of a report and
comment on it. You have to look at the whole. That has been a
fundamental flaw in all of the third party's policies. Its members
take a little piece of a narrow strip and never look at the big
picture. They never see how it impacts, whether there is a
domino effect or not.
The hon. member should look at the big picture sometimes.
[Translation]
Mrs. Francine Lalonde (Mercier, BQ): Madam Speaker, as
the official opposition critic on human resources development,
since the last election campaign, I am today faced with the
Martin budget. It has been one long obstacle course.
Having come this far and despite what the minister says, I
know from reading his budget and listening to his speeches that,
far from giving up the idea of implementing major cuts in social
programs and centralizing powers, the budget before us
confirms that what the central government wants most of all is to
withdraw from health, education, social assistance and other
social services, but to keep the sectors where it feels it must be
involved, even if they are not under its jurisdiction.
(1720)
Now, without a word of warning, without any concern for
efficiency, it is about to shamelessly increase duplication and
overlap. During the human resources development committee's
10173
recent tour, many groups and individuals, more than 1,000
Canadians, came and told us basically that what they needed
most was not training, although it was often requested, but
rather jobs, decent jobs.
There is strictly nothing in the budget on this matter. The
budget is silent for some incomprehensible reason. It is silent,
while budget cuts alone lead nowhere in terms of dealing
seriously with the deficit and debt problem. Yes, the minister
made a step in the right direction, but you need only take a good
look at the budget to see that the debt will not be reduced this
year, on the contrary, and that a deficit reduction was achieved at
the cost of great and extremely difficult sacrifices. Considering
that a single percentage point will make $1.7 billion difference
in debt charges, it is obvious that we must not look only at cuts.
We must not for the sake of the debt, of course, but above all
for the people whose livelihood depends, right now, on their jobs
or the hope of getting one. All over Canada, people have told us
that they were prepared to talk about social programs and social
reform, but not in the context of further cuts. They told us also
that Canada was no leader in terms of social programs. Recent
OECD statistics clearly show that Canada's social expenditures
are below OECD average, at the same level as that of New
Zealand's, for the information of New Zealand admirers.
What does this budget say? It tells us that another $7,5 billion
will be cut in social programs between now and 1998. I say
``another'' because we must not forget that the previous budget
passed in this House also provided for a $7.5 billion cut in social
programs. So, this makes two times $7.5 billion, or a total of $15
billion, in cuts in social programs over a period of four years.
That is what we learned following a leak, when the Minister of
Human Resources Development announced his project. In the
end, after this whole exercise and after the bickering among
Liberals, we realize that what was the plan in October is now in
the Minister of Finance's budget, in spite of all these
consultations.
People said: ``The government can no longer cut into social
programs''. Yet, the expected cut is being made, in spite of the
problems that it will generate. What else does this budget tell
us? We see that the federal government is backing away from
funding in health, education and welfare.
(1725)
I use the term ``backing away'' because the federal financing
of these sectors is reduced to such an extent that the provinces
will experience increasingly more serious problems. The
merging of the old financing, education and health programs, as
well as social assistance, is called the Canada Social Transfer.
This transfer hides two realities mentioned in the budget. First,
because of this Canada Social Transfer, if there is a recession,
the provinces will have to fully assume the additional costs
related to the increase in the number of people relying on
welfare. That is what I mean by backing away, Madam Speaker.
The Canada Assistance Plan, which was far from being
perfect, was based on the financing, by the federal government,
of provincial programs designed to help the poor. The federal
government is now eliminating that structure, claiming that it
will provide more flexibility. But where is the flexibility for the
provinces? The federal government is not transferring
responsibilities to the provinces: they already had them. Rather,
it is transferring costs and, in fact, leaving the provinces to look
after the problems, while knowing full well that, in the end, it is
Canadians who will pay the price, and in a very dramatic way.
I will repeat a comment made by the hon. member from
British Columbia who spoke just before me. She said that the
government was giving back to the provinces the power to spend
because they are in the best position to do so appropriately. Why
is it that the government is giving back to the provinces funds
which are dwindling and about to disappear? The federal
government is telling the provinces to use their imagination,
when it is in fact dumping its problems on them.
But there is money available, even though that may come as a
surprise to you. There is a hidden fund which explains why the
budget may have looked better than expected. I am referring to
the UI fund and the programs financed through that fund.
Quebec asked for the control of the whole manpower sector, or
at least as regards vocational training. There is money for that.
Where will that money go? Unfortunately, when there is money
available, the federal government does not think that the
provinces are in the best position to show some imagination, to
know what the public's needs are, and to help Canadians. No.
The federal government only recognizes the ability of the
provinces when they are forced to live with cuts, to make hard
decisions and to look like the culprits.
However, when the provinces could have the tools to promote
employment and define meaningful strategies, then the federal
government prefers to remain in control.
Thanks to the UI fund, the federal government can, in its
budget, make proposals which almost go unnoticed. One such
proposal is the new investment fund for human resources.
The Acting Speaker (Mrs. Maheu): I am sorry to interrupt
the member for Mercier. You will have ten minutes after the
vote.
10174
The House resumed from February 2 consideration of the
motion that Bill C-37, an Act to amend the Young Offenders Act
and the Criminal Code, be read the third time and passed.
The Acting Speaker (Mrs. Maheu): It being 5.30 p.m.,
pursuant to Standing Order 45(5)(a), the House will now
proceed to the taking of the deferred division on the motion for
third reading of Bill C-37.
Call in the members.
(The House divided on the motion, which was agreed to on the
following division:)
(Division No. 164)
YEAS
Members
Adams
Alcock
Allmand
Arseneault
Assadourian
Augustine
Axworthy (Winnipeg South Centre)
Bakopanos
Barnes
Beaumier
Bellemare
Bernier (Beauce)
Bertrand
Bethel
Bevilacqua
Bhaduria
Blondin-Andrew
Bodnar
Bonin
Boudria
Brown (Oakville-Milton)
Brushett
Bryden
Bélair
Bélanger
Caccia
Calder
Campbell
Cannis
Catterall
Cauchon
Chamberlain
Chan
Clancy
Cohen
Collenette
Collins
Cowling
Crawford
Culbert
DeVillers
Dhaliwal
Dingwall
Discepola
Dromisky
Duhamel
Dupuy
Easter
Eggleton
English
Fewchuk
Finlay
Fontana
Fry
Gagliano
Gagnon (Bonaventure-Îles-de-la-Madeleine)
Gallaway
Gerrard
Godfrey
Graham
Gray (Windsor West)
Guarnieri
Harb
Harvard
Hopkins
Hubbard
Iftody
Irwin
Jackson
Jordan
Keyes
Kilger (Stormont-Dundas)
Kirkby
Knutson
Kraft Sloan
Lastewka
Lavigne (Verdun-Saint-Paul)
LeBlanc (Cape/Cap-Breton Highlands-Canso)
Lee
Lincoln
Loney
MacAulay
MacDonald
MacLellan (Cape/Cap-Breton-The Sydneys)
Malhi
Maloney
Marchi
Marleau
McCormick
McGuire
McKinnon
McLellan (Edmonton Northwest)
McTeague
McWhinney
Mifflin
Milliken
Mills (Broadview-Greenwood)
Minna
Mitchell
Murphy
Murray
Nault
Nunziata
O'Brien
O'Reilly
Ouellet
Pagtakhan
Paradis
Parrish
Patry
Payne
Peric
Peterson
Phinney
Pickard (Essex-Kent)
Proud
Reed
Regan
Richardson
Rideout
Rock
Rompkey
Scott (Fredericton-York-Sunbury)
Serré
Simmons
Skoke
St. Denis
Steckle
Stewart (Brant)
Stewart (Northumberland)
Szabo
Telegdi
Terrana
Thalheimer
Tobin
Torsney
Ur
Valeri
Verran
Volpe
Walker
Wappel
Wells
Whelan
Young
Zed-146
NAYS
Members
Abbott
Ablonczy
Althouse
Axworthy (Saskatoon-Clark's Crossing)
Bachand
Bellehumeur
Benoit
Bernier (Gaspé)
Bernier (Mégantic-Compton-Stanstead)
Breitkreuz (Yorkton-Melville)
Bridgman
Brien
Brown (Calgary Southeast)
Bélisle
Canuel
Caron
Chatters
Chrétien (Frontenac)
Crête
Cummins
Dalphond-Guiral
Daviault
Debien
Duceppe
Epp
Fillion
Forseth
Frazer
Gagnon (Québec)
Gauthier (Roberval)
Gilmour
Godin
Gouk
Grubel
Guimond
Hanger
Harper (Calgary West)
Harris
Hart
Hayes
Hermanson
Hill (Macleod)
Hoeppner
Jacob
Jennings
Johnston
Lalonde
Landry
Laurin
Lebel
Leroux (Richmond-Wolfe)
Leroux (Shefford)
Loubier
Manning
Marchand
McLaughlin
Mills (Red Deer)
Morrison
Nunez
Paré
Picard (Drummond)
Plamondon
Pomerleau
Ramsay
Ringma
Robinson
Sauvageau
Schmidt
Silye
Solberg
Solomon
Speaker
St-Laurent
Stinson
Taylor
Tremblay (Rimouski-Témiscouata)
Tremblay (Rosemont)
Venne
Williams-79
PAIRED MEMBERS
Anderson
Asselin
Bergeron
Bouchard
Brushett
Deshaies
Dubé
Dumas
Flis
Goodale
Guay
Hickey
Irwin
Langlois
Lavigne (Beauharnois-Salaberry)
MacLaren
Mercier
Ménard
Peters
Pillitteri
Robichaud
Vanclief
Wood
de Savoye
10175
(1800 )
[English]
The Acting Speaker (Mrs. Maheu): I declare the motion
carried.
(Bill read the third time and passed.)
* * *
[
Translation]
The House resumed consideration of the motion, of the
amendment, and of the amendment to the amendment.
Mrs. Francine Lalonde (Mercier, BQ): Madam Speaker, it
is always difficult to pick up the momentum one had in the first
part of a speech. I am sure that we lost our listeners and viewers
during the vote.
I just would like to add very quickly that there is something I
find very surprising in this budget, and that is the role of the
unemployment insurance fund. As we saw, the federal
government is withdrawing from funding health care, education
and social assistance. This spring, it passed Bill C-17, which
tightened up eligibility criteria so that fewer people were
entitled to UI, and received smaller benefits for a shorter period
of time.
The UI fund allowed the federal government to pay itself back
for the loan it had made during the recession and consequently to
present a more favourable picture. But this is not all. Since the
government did not lower premiums but reduced eligibility, it
was able to make some incredible forecasts. This year and next,
there will be a difference of $5 billion between expenditures and
revenues.
What is this money going to be used for? Naturally, the
government proposes, first, to reduce the deficit. Does it
propose to reduce contributions, to help small and medium size
businesses? No. It proposes to let a surplus of $5 billion
accumulate. What it also proposes, to finance the creation of a
human resources investment fund, as the budget calls it, through
a new reform of unemployment insurance, is to divert money
from UI to this new fund.
(1805)
In fact, the unemployment insurance fund is the cash cow of
the federal government. It will protect it from the effects of the
next recession. By withdrawing from the financing of social
programs and the CAP in particular, the federal government
leaves the provinces in a position where they will have to deal
with the consequences of a future recession and a future increase
in the numbers of the poor, while insulating itself from such
consequences. How? By having surpluses in the unemployment
insurance fund.
Who generates such a surplus? Companies, of course. But not
any company, the ones that are labour-intensive, that is the
low-tech companies, those where things are done manually. The
companies where wages are the lowest. These companies and
these workers contribute in a large part to the unemployment
insurance fund. Companies with more technology and higher
wages, because of ceilings, are exempt. And this means that the
fund is financed by workers and companies which are not the
main beneficiaries of the fund. Not only do they help give the
federal government some protection against the next recession,
they also allow it to show a lower deficit since the money is
added to the federal budget. We recommended that it not be
included anymore.
Finally, not only do we see more cuts in social programs,
nothing whatsoever in the way of employment, and continued
interference by the federal government in areas where there is
money to be had and where it can call the shots, but in the case of
manpower training, the federal government no longer says that
the provinces know best. That is not what it says. It maintains
control over job training and all manpower issues. As I said, it
does not want to withdraw from areas where there is money to be
had.
However, the money in the unemployment insurance fund
comes from labour-intensive corporations employing a lot of
low-paid workers and from these workers. Let me conclude by
saying that the workers are really the ones who foot the bill since
the corporations pass on their costs onto the consumer.
It is really a shame to see the federal government use this fund
to shamelessly guard against whatever the future holds, while
workers will have to pay more taxes and will run into more
problems in the areas of health, education and welfare.
There is another important issue I want to address and it is
linked to the new national standards that we can expect with the
Canada social transfer. Throughout the budget speech, we are
told ``This is the beginning of a new era in Canada. We have
finally realized that provinces know best'', especially, may I
add, in tough times. But there is more.
With this new Canada social transfer, the federal government
will be able to withdraw during the next recession and still have
the power to set new standards.
(1810)
What are we told? We are told that, for two years, this Canada
social transfer will be funded at the average combined rate of
CAP and EPF and that, for two years, health care standards will
apply, so that the federal government will be able to withhold
10176
payments to provinces who do not comply. We are also told that
the Canadian assistance plan, or CAP, the source of half of the
social program funding in Canada, no longer exists. The only
responsibility that remains is to make welfare payments without
minimum residency requirements.
The bottom line is that the government, by dropping CAP,
wants to be seen as generous and mindful, at last, of the role of
provinces. But the fact is that the government is retreating
because it can no longer afford CAP. It does not want to invest
the money needed to give its share to Ontario, a province that
suffered a lot during the last recession. The government was in a
bind and either had to find more money, or penalize Quebec. So,
it decided to put on a show of openness, but at the same time to
prepare with the provinces new standards applicable, as Mr.
Martin said, to the Canada social transfer.
No more cuts, no more centralizing. Let the people and the
provinces take care of all the problems and the debt. But the
federal government got itself some breathing space by using the
money of workers and small businesses.
Mr. Patrick Gagnon (Parliamentary Secretary to Solicitor
General, Lib.): Madam Speaker, I find it strange that the
opposition critic objects to this transfer of some areas of
jurisdiction to the provinces. Even though the role of the
opposition is to criticize the government, in this case, it is still
criticizing federalism.
We talked about the surplus in the unemployment insurance
fund. Certainly, these past few years, we have been forced to
review our programs, to seriously reevaluate them, in order to
see where we are in these programs which have existed for more
than fifty years or so. We certainly must make some
adjustments. We must face the new challenges of market
globalization, and I believe that the federal government is fully
aware of the importance of taking some corrective measures in
this regard.
I would like the opposition critic to tell us what she thinks
about the fact that the government has decided to do more in
counselling services, in basic training abilities, as well as in
training and experience in the workplace. It also intends to do
more in child care services. It is even looking at the
opportunities relating to the income supplement. I would like to
know if, in her opinion, these are not new ways of doing or
seeing things which are highly commendable and which will
certainly work towards the well-being of the people of Quebec.
Mrs. Lalonde: Madam Speaker, I thank my hon. colleague
for his question.
First, I want to say that if I talked about surpluses in the
unemployment insurance fund, it is because these surpluses are
due to the cuts that have been made. However, my hon.
colleague gives me the opportunity to say that what the federal
government is about to do with its Human Resources Investment
Fund is to provide itself with a fat account, because it will be
supplied both by the programs presently financed through the
Consolidated Revenue Fund and-this is made very clear in the
budget-by the reallocation of the moneys saved by a new
reform of unemployment insurance.
That means that the government will provide itself with a big
fund to take action in areas of provincial jurisdiction. It will not
even bother any longer to try to negotiate or impose its
standards, it will take action.
(1815)
The last step is the centralization in Canada of social
programs since the transfer of jurisdictions, because at that time
at least they sought approval by Parliament. The last step deals
with direct involvement in day care services, in income
supplements, because the minister's objective was to be able to
take up, through federal funds, the assistance, employability and
job development services, yes, but for people able to work, who
from now on would not be under provincial jurisdiction but who
would, because of the long term unemployed provisions, fall
under the central government's control.
So, there is indeed a large reform under way, but that reform,
instead of going in the direction of recognizing provincial
jurisdictions, is going in the direction of giving, through
funding, direct power to the central government. This
government does not care about overlap and duplication. It does
not care about co-ordinating its operations and setting a strategy
with the provinces, which means that in fact the government will
completely take over the area of manpower. Under the
circumstances, it is easy to understand why it does not want to
hand over manpower training to Quebec.
[English]
Mr. Jim Abbott (Kootenay East, Ref.): Madam Speaker, I
would like to make my position very clear that I do not believe
for a second that the people of Quebec, given the opportunity to
vote in a referendum that is fairly put to the people, will vote in
favour of separation. The member and I have a very substantial
difference.
I want to put that on record because I would like to ask a
question that would encompass both the possibility of her
achieving her dream of Quebec separating and if not. In the issue
of bringing education, hospital and the Canada assistance plan
together under one roof and downloading as the Liberals are
trying to do, at the same time removing $4.5 billion which
means that if we are going to maintain the same level of service,
which may or may not be necessary, the taxes would then have to
go up at the provincial level.
If we can just set that aside, I would like to ask a question in
terms of concept because she did raise the issue of national
standards. If, as I have already stated, I reject categorically the
concept of a separate Quebec but nonetheless if that should
transpire, how would the people of Quebec be better off
considering that there would be absolutely no national
standards; in
10177
other words there would be no joint jurisdiction between Quebec
and Canada?
Second, if, as I believe is going to happen, Quebec people
choose what is best for them and do stay in Canada, would
Quebec and the provinces not be better off if they had the ability
to raise the taxes? In other words, the federal government
transfers the ability to tax the tax points to the provinces. If they
were administering the programs, is that not really the
fundamental problem that the BQ and the PQ are presently
trying to do, to get more jurisdiction over the areas of health,
welfare and post-secondary education?
[Translation]
Mrs. Lalonde: Madam Speaker, if I understood well the
question of the hon. member, he is wondering if we are not
asking in fact for a transfer of tax points. That was the position
we adopted and the minority report of the Committee on Human
Resources Development refers to a transfer of tax points.
However, it is important to make a point about standards. In
all regions of Canada where the members of the Committee have
travelled, il was clear that everywhere, except in Quebec, people
want strong national standards. As far as they are concerned,
Quebecers want, with a few exceptions, to have their own
standards.
(1820)
Quebecers are a people, even though they do not always call
themselves that way et they want to make their own standards.
Often, those standards are higher than elsewhere for reasons I
will not explain here, but it is nevertheless a fact. It is true for
daycare services, it is true in the case of the Act on handicapped
people, and I could go on.
But being a distinct people with regional differences, it is
normal that Quebec wants to create its own standards. This is
what I had to say on that issue. From a philosophical point of
view, the economic or social organization is different from one
people to another. You only have to study peoples as a whole or
even peoples having a comparable level of social expenses to
see that choices are different according to peoples, their history,
their priorities or simply because they are different from one
another.
It is therefore on that basis, without explaining it with rational
arguments, that one can understand and defend the idea that the
people of Quebec wants its own standards.
Hon. Alfonso Gagliano (Secretary of State (Parliamentary
Affairs) and Deputy Leader of the Government in the House
of Commons, Lib.): Madam Speaker, I must say that yesterday,
I listened to the finance minister's speech with interest. I was
expecting answers to the many questions put to me in recent
months and weeks by the people of Saint-Léonard.
Indeed, all the people I met with and spoke to on the phone
gave me much the same advice: ``Make up your mind, do
something, it is time to take action''. They told me: ``Put your
fiscal house in order, we are on the road to ruin''. They said:
``Downsize the government, it is too expensive''. And above all,
they begged me not to raise taxes. They also said not to touch
seniors. They said they wanted to continue to invest in their
RRSPs because they needed them. They told me to cut subsidies
to businesses, to support small and medium size businesses and
to tax big corporations and banks.
The electorate in Saint-Léonard is realistic. People there are
reasonable and pragmatic. They know that our future depends on
the choices we are making now, in the budget the Minister of
Finance tabled yesterday afternoon. They know that we must
take the bull by the horns and learn to live according to our
means. But above all, they know that without a drastic
about-face this year, our standard of living and our future
chances at prosperity are in danger.
Right at the beginning of his speech, the minister said:
``Today, we have made our choice. Today, we take action''. Yes,
indeed. Our government chose to take the most drastic
budgetary measures ever seen in 50 years to control this monster
that our deficit has become. The federal government will tighten
its belt and cut expenditures-all expenditures at all levels.
However, we will do so in the greatest respect of the values
that Canadians hold so dear. We will promote job creation and
economic recovery. We will protect the most vulnerable in our
society. We will cut down on our life-style. And we will do all
this without raising taxes, without cutting the old age pension
and without taxing retirement savings plans.
(1825)
Today, in Saint-Léonard as in everywhere else across the
country, Canadians applaud the Minister of Finance. He had the
guts to do what others had promised to do for almost ten years.
For too long, we have only had smoke screens. Canadians want
results, solid and measurable results, and we already have some.
Last year, we promised in our first budget to reduce the deficit
to under $40 billion. Once all calculations are done, our bottom
line should show that our basic deficit is some $4.4 billion less
than expected. Now those are tangible results. This is something
new and exciting. For ten years, there were promises to reduce
the deficit, but it never happened. And now we managed to make
it happen, and we did even better than we expected.
It has been a long time since anyone saw a government
overestimate its deficit. The results have been very encouraging
as well, here in the House of Commons. As you know, Madam
Speaker, a year ago the Board of Internal Economy adopted a
plan to restructure the expenditures of the House of Commons.
This plan, referred to by some-rather ironically, I suppose-as
10178
the Gagliano plan, was aimed at cutting our expenditures by $5
million annually.
The big challenge was to make these cuts while at the same
time providing members and their staff with the tools they need
to fulfil the mandate they were given by their electorate.
However, times are changing, technology has become more
sophisticated and, as a result, members as well as the general
public must adapt their tools to changing needs.
For instance, the advent of fax machines and electronic
transmission has completely changed our requirement for
messengers on Parliament Hill. We sat down and methodically
analysed our requirements. We suggested new approaches and
implemented our recommendations carefully and diligently.
We helped our employees by proposing generous terms for
voluntary departure, which a large number accepted. We
redefined tasks and ask the rest of the staff to do their share, each
employee being asked to do a little more with a little less.
This morning, the President of the Treasury Board reported on
the results of this plan. So far, the House of Commons has saved
no less than $5,719,500, compared with last year's budget. We
have not only achieved our objective, we have already exceeded
it.
But there is more. This exercise continues, since yesterday,
the Speaker announced a reduction of $1 million in the budget of
the Food Services Branch of the House of Commons.
Implemented over a period of three years, this measure will help
reduce the operational expenditures of the House of Commons
by nearly $7 million annually.
That is what I call results. Concrete results that clearly show
we mean what we say when we want to put our house in order.
We are the first to tighten our belts, and we are not asking
anyone to do anything we are not prepared to do ourselves.
(1830)
The answer is simple, and everyone knows what it is. From
one end of the country to the other, Canadians are staying within
their budget by watching their spending every day. The time has
come for all governments, including our own, to do the same.
The Minister of Finance has clearly stated our overall plan.
For every dollar of additional revenue, the government will
reduce its expenditures by $7. This is an extremely bold new
direction, the most cost effective seen in this country in the past
50 years.
To ensure the long term health of public finances, we must
review the role and structure of government, without fail. We
must centre the activities of government on the priorities of
Canadians. With this budget, we are reducing the size and
structure of government to a level in keeping with our means.
As the Minister of Finance put it so well, and I quote: ``Our
view is straightforward. If government doesn't need to run
something, it shouldn't. And, in the future, it won't''.
The government is therefore going to privatize and
commercialize its activities whenever possible and desirable.
We will progressively divest ourselves of our interests in
companies such as Cameco, a uranium company, CN,
Petro-Canada, the Air Navigation System and the Canada
Communication Group.
We will reduce our subsidies to business by 60 per cent-I
repeat, 60 per cent-within three years. Assistance to industries
which we shall maintain will be targeted to the main driving
forces behind economic growth, namely expanding trade,
science and technology and small business.
Almost every time I rise in this House, I remind my
colleagues of the important role played by small business in our
economy.
It is always with great pride that I point out that small
business is the main source of new jobs in our country. Small
business is ever-changing, full of vitality and creativity. It helps
us recover more quickly from downturns in economic cycles and
makes a major contribution to community development. It
should therefore be a matter of priority to provide small
business with concrete assistance to ensure its survival and
growth. Better yet, we should eliminate obstacles to its success,
because when it succeeds, we succeed.
Last year we announced our plan to review the $500,000
capital gains cumulative tax exemption for farmers and small
business owners. We have undertaken this review and have
concluded that this exemption should be left intact.
I would like to go into a few details in this regard. Yesterday
evening, the Leader of the Opposition tried to plant the seeds of
fear and confusion in Quebec by criticizing the government for
wishing to review certain issues which we must face in coming
years.
True, the government does want to review and discuss with
the provinces how to preserve our old age pension system,
modernize our unemployment insurance system and maintain
assistance programs for the poor.
The Leader of the Opposition said earlier that when
governments undertake a review, it is always with cutting in
mind. I say to my hon. colleague, this is not so. We must be
careful not to make such generalizations. We must not plant the
seeds of fear and confusion without any good reason. Reviewing
means analyzing, examining. Consulting means looking for
solutions.
10179
(1835)
The $500,000 capital gains exemption for small businesses
and farmers proves it.
Last year, we said that we would review the matter. After
reviewing it, we said that we would keep it, that keeping it was
important. Therefore, we must not scare people and have them
believe that we are going to change everything and take pensions
away from people just because the Minister of Finance
announced yesterday that he will be reviewing the pension plan.
These organizations, like the Federal Office of Regional
Development-Quebec, play important roles in economic growth
and sustainable job creation. Nevertheless, we will not reach
these goals by showering businesses with gifts. Everyone agrees
on this point. Therefore, we are going to reduce business
subsidies substantially. In the future, most assistance will take
the form of refundable loans to businesses.
The repayment conditions attached to these loans will
promote true expansion possibilities. They will continue to
really help our small and medium size businesses, yet get the
most for our taxpayers' money.
Lastly, we are determined to give our small and medium size
businesses access to the financing they need to remain the
primary source of job creation in Canada. I have often repeated
my deep conviction that Canadian banks in particular have
responsibilities in this area.
We have already taken the initiative of working with banks to
correct their current shortcomings. From now until the fall, we
will continue our efforts in this area in order to draw up points of
reference for small business financing. We want to see concrete
results in that sector as well. This process will be reviewed next
year, and we have every reason to believe that this collaboration
will produce valid results for our small businesses.
The budget tabled in this House yesterday by the Minister of
Finance marks the beginning of a new era. It proposes a new way
to manage the Canadian Confederation. It features a simpler,
more efficient approach that recognizes provincial areas of
jurisdiction. That is why we can say without any doubt that this
budget reflects our progressive, dynamic, co-operative and
pragmatic approach to federalism.
No one can accuse the Canadian government of promoting or
proposing the status quo. The provinces will now enjoy greater
flexibility and fewer constraints in managing their areas of
jurisdiction. The Canada social transfer, which combines into a
single consolidated block transfer the three separate payments
the provinces used to receive from the federal government, will
greatly facilitate operations. This new approach will reduce
administrative obstacles for the provinces while giving them
maximum flexibility in adjusting programs to users' needs.
Provincial governments will no longer have to identify eligible
expenditures. They will prepare their own budgets and make
their own decisions.
This initiative will simplify bureaucracy at the federal and
provincial levels. There will be less red tape, fewer regulations
and more results. That is what Canadians from all parts of the
country expect from their federal and provincial governments
alike. I admit that our budget is a tough one. The cuts announced
are without precedent.
(1840)
But we no longer had any choice. If we want to maintain our
standard of living and preserve our children's future, the
government has to take firm measures and implement them with
determination.
Nevertheless, all should recognize that the budget is also fair.
We have made sure that everyone participates in the effort to
correct the situation. The residents of Saint-Léonard understand
that, as do all Canadians. Our budget is tough, but it preserves
the essential. It respects the fundamental principle of fairness
between individuals and between regions which guides
Canadians. That principle forms the very foundation of our
federation and makes Canada one of the best countries in the
world. If you will permit me, Madam Speaker, I would like to
say a few words to my English speaking voters.
[English]
The budget the Minister of Finance introduced last night is
definitely a strong budget. The question we have to ask
ourselves today is whether we had a choice. In the last few
months international financial markets and our own financial
institutions had sent the message that we had to put our financial
house in order.
The Minister of Finance, who has the responsibility to find a
balance between restoring confidence in the market and not
being too harsh in cutting measures, was able to ensure that
economic growth would continue. At the same time, the
financial markets were looking for a commitment from the
government that it was serious and meant business about putting
its financial house in order.
The Minister of Finance did a very good job in presenting his
very balanced budget. This morning we saw the financial
markets responding, as did the media and the people. I have been
a member of the House for over 10 years. It is the first time that
after the presentation of a budget I have seen such positive
announcements and comments in the media and elsewhere. We
owe a message of congratulations to the Minister of Finance and
the government for a job well done.
Mr. Lee Morrison (Swift Current-Maple
Creek-Assiniboia, Ref.): Madam Speaker, after hearing the
reassuring words of the minister I would like to be able to say I
will sleep better tonight, but I cannot.
10180
The minister referred in his presentation to serving up
illusions. The inference is that this is no longer happening to
us with the present government. We have had 25 years of
illusions, 25 years of rhetoric, 25 years of telling us we are
going to get tough with the deficit, we are going to really move
in on it this year, next year or the year after that.
What the minister forgets is that it was much easier for
previous finance ministers to sell illusions than it is for the
incumbent. Previous finance ministers could actually make
illusory cuts and sell them, but the present minister, in order to
sell an illusion, has to make real cuts. The problem is that it
remains an illusion because the cuts are not deep enough.
All that is happening is that the government is making enough
cuts in the projected spending for the next three years to keep
even with the additional interest that it is going to have to pay on
the money it already owes. The government is standing still.
It makes me think of a sailor who has been shipwrecked and is
treading water madly. He sees a lifeboat about 100 yards away.
Instead of trying to make it to that lifeboat he says: ``That's too
tough, that's too hard. I'm just going to keep right on treading
water''. He does and eventually he drowns. This government is
treading water and Canada is drowning in debt.
(1845)
I ask the minister, what contingency plan does this
government have for the time when the interest payments on our
deadweight debt become so great that there is no money left to
maintain social programs or even basic government services?
This is the direction in which we are heading.
We are heading in a direction where there will be no social
safety net. There will be no pensions. There will be no welfare.
There will be no UIC. There will be nothing if the whole rotten
house of cards comes tumbling down. What contingency plan
does this government have?
Mr. Gagliano: Madam Speaker, first I want to thank the hon.
member for giving me the opportunity to express my thoughts
on this matter.
I understand the member. I have the same frustration. I have
been in this House for 10 years. Every year we would see the
Minister of Finance get up and promise to reduce the deficit, but
he never did. Last year, for the first time in 10 or 11 years, a
Minister of Finance stood in this House and predicted a deficit.
The government fiscal year end is March 31 and we are now at
February 28. We are one month away from the end of the fiscal
year and we are predicting, after accounting for everything, that
the deficit will be reduced by more than what we predicted, $4
billion more. That was the commitment we made to Canadians
in the last election. It was the commitment we made to
Canadians when the Prime Minister took office. We said that
what we say is what is going to happen because we made that
commitment and we want to make sure that Canadians know.
That is why this morning financial markets and all the
economic and financial analysts were very satisfied with the
budget. They finally realize that we are going to have a deficit of
$24 billion next year, which is our commitment in the red book
we campaigned on, of 3 per cent of the GDP. It is important to
our financial markets, our financial and economic system that
we make the assurance that when we predict something, when
we estimate and make assumptions that we know what we are
assuming and we reach those targets.
That is the first thing the Minister of Finance did in his first
budget. He has continued to do it in the second budget. He has
kept our commitment of 3 per cent and also has reached beyond
that.
There will be a day when we will have no deficit and we can
start tackling the national debt. There will be that day with this
government and with this Minister of Finance.
Also, the member should not forget that besides having a
financial deficit there is a human deficit. The government is not
a business that can just close the door and say: ``Well, too bad''.
This is a government. We are running a country. Besides the
financial deficit there are human beings who have to be
considered.
That is what the Minister of Finance and this government are
doing. We are making sure we keep our commitment to reduce
the deficit so that we will be able to tackle the debt and have
economic prosperity in order to assist those in need. We will be
able to create jobs for the youth of this country so they will have
a future.
The way the Reform Party sees things, everything is black and
tomorrow is the end of the world.
Mr. Jim Abbott (Kootenay East, Ref.): Madam Speaker, to
the secretary of state, I notice in the document provided by the
government yesterday called the ``Budget in Brief'' there is a
quote on page 14: ``This government is absolutely committed to
providing a fair and sustainable system of protection for
Canada's seniors''.
I wonder if he can help us understand something here. The
government has just made, I grant, real cuts of $10 billion. The
payment on interest in the time that this government has been in
place has increased $10 billion which means that we are treading
water. Interest charges are increasing at a rate of 17.3 per cent.
The governments have let our Canada pension plan get into a
position of being underfunded $487.5 billion on top of the $545
billion that we are in debt at the national level; in other words,
over a trillion dollars.
10181
Considering all this, I wonder if he would not agree with me
that the words in ``Budget in Brief'' saying, to quote the finance
minister, that come hell or high water we are going to look after
our seniors are not just words.
If we are going in the hole that quickly with additional interest
charges which is interest being paid on money that we have
already borrowed, we are going backward so rapidly that in spite
of this government's words we are not going to have the capacity
to be able to look after our seniors.
Mr. Gagliano: Madam Speaker, let me assure the hon.
member and all Canadians watching as of this moment that there
will be money. The Government of Canada will be able to keep
its commitments and pay pensions to seniors.
The difference is that the Reform Party sees everything black,
it is the end of the world. The member acknowledged that we
have made real cuts. We have a balanced budget in terms of real
cuts and it will encourage economic growth. The deficit will
disappear. The deficit will be reduced by creating jobs.
What the Reform does not understand is that by creating jobs
people work, pay taxes and will increase the number of dollars
that will come in. The government will pay the debt.
The problem that we had in the past 10 years was the previous
government committed to certain targets that were never met
and the expenses were higher than revenues. For the first time in
Canada our operating budget is in surplus. That is what the
Reform Party does not want to understand.
[Translation]
The Acting Speaker (Mrs. Maheu): It being 6.52 p.m., and
since no member wants to take part in the adjournment debate,
the House stands adjourned until tomorrow at 2 p.m., pursuant
to Standing Order 24(1).
(The House adjourned at 6.52 p.m.)