[Translation]
Mr. Réginald Bélair (Cochrane-Superior, Lib.): Mr. Speaker, pursuant to Standing Order 34(1), I have the honour to present to the House, in both official languages, the report of the official parliamentary delegation to the Canada-France Interparliamentary Association, which attended the 26th annual meeting of the association held in Paris and Strasbourg from January 20 to 28, 1996.
He said: Mr. Speaker, this bill was introduced in the last session. It was designed to stop the flow of financial or other aid to any foreign country that refuses to accept re-entry of its nationals or former nationals deported from Canada.
Far too often when foreign born criminals are ordered deported from Canada, deportation is hampered because some countries do not want to take back their nationals.
The foreign aid restriction act addresses this issue by freezing aid to countries that frustrate the Canadian deportation process. This bill is a strong measure to ensure an effective deportation policy in Canada. If a country will not take back its citizens who have committed criminal acts in Canada or who have misrepresented their past involvement in organized criminal activity, terrorism or other activities as noted under section 19 of the Immigration Act and are ordered deported, the bill would then direct the Department of Foreign Affairs to suspend all foreign aid to that country.
(Motions deemed adopted, bill read the first time and printed.)
He said: Mr. Speaker, it is my pleasure to introduce my private member's bill, an act to allow the electors of a province to express an opinion on who should be summoned to the Senate to represent the province.
The Reform Party's ultimate objective has always been true Senate reform: a triple-E Senate elected, effective and equal. We can change the method of appointing senators, that is, they be elected, without constitutional revision.
This bill will change the method of appointing senators through an election process without constitutional revision. It will require that the Prime Minister wait to receive the expression of opinion from any province with a senatorial selection act similar to the Alberta senatorial selection act which resulted in Senator Stan Waters being appointed to the Senate.
The current Senate has not been able to perform its role effectively because the selection process has undermined its legitimacy.
There is considerable urgency for the introduction of this bill now because the Government of Canada is cramming through legislation that is not widely accepted.
I am introducing this bill today as a result of the forced vote held last fall on Bill C-110. The long range interest of Canadian federalism will truly be served by Senate reform.
(Motions deemed adopted, bill read the first time and printed.)
The petitioners pray that Parliament act immediately to extend protection to the unborn child by amending the Criminal Code to extend the same protection enjoyed by born human beings to unborn human beings.
The petitioners pray that Parliament not repeal or amend section 241 of the Criminal Code in any way and to uphold the Supreme Court of Canada decision of September 30, 1993 to disallow assisted suicide or euthanasia.
The petitioners again call on Parliament to give immediate consideration to the removal of section 745 of the Criminal Code of Canada for the protection of all Canadians.
The petitioners pray and request that Parliament not amend the 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, including amending the Canadian Human Rights Act to include in the prohibited grounds of discrimination the undefined phrase of sexual orientation.
The petitioners call on Parliament to preserve Canadian unity, parliamentary tradition and protect the rights of all the people of Canada by prevailing upon the Speaker of the House of Commons to recognize the Reform Party of Canada as the official opposition during the remainder of this Parliament.
Mr. Robinson: Mr. Speaker, a point of order. I wonder if I might seek the consent of the House to revert to the presentation of private members' bills.
The Deputy Speaker: Is there consent to revert to private members' bills?
Some hon. members: Agreed.
He said: Mr. Speaker, I thank members of the House. The purpose of this bill is to amend the Canadian Human Rights Act to include sexual orientation as a prohibited ground of discrimination within federal jurisdiction. It would extend to gay, lesbian and bisexual people in Canada not special rights but equal rights.
In closing, I would note that since 1986 seven ministers of justice as well as the current Prime Minister have all promised this legislative change. The Canadian Human Rights Commission has asked for it. The Senate has passed it and the Ontario Court of Appeal has ordered it. It is time for Parliament to act.
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(Motions deemed adopted, bill read the first time and printed.)
The Deputy Speaker: Is there consent to allow all questions to stand?
Some hon. members: Agreed.
Mr. Bill Graham (Rosedale, Lib.): Mr. Speaker, I am grateful for the opportunity to address this motion. Today I will be sharing my time with the hon. member for Timiskaming-French River.
I am proud to be a part of this government which has reined in the deficit while at the same time contributing to ensuring the collective necessity in this country of sound social policies. We have managed to do this in three years. This budget is an important
contribution to that and to ensuring that the collective financial future and deficit reduction plan remain intact.
Last November the government announced that it had surpassed its deficit target for 1994-95. It now looks like the target for 1995-96 will also be achieved or even surpassed. The deficit will be reduced to 3 per cent of GDP as announced and to 2 per cent of GDP in 1997-98.
The growth rate of the debt will be lower than the rate of economic growth. This is the first significant improvement in the debt to GDP ratio in over 20 years. As a result of this, there is a dramatic decline in the amount of new money the government has to borrow from financial markets.
In 1993-94 Canada's financial requirements stood at 4.2 per cent of GDP or $30 billion. By 1997-98 the financial requirements will have dropped to 0.7 per cent of GDP or $6 billion.
As the Minister of Finance pointed out, relative to the size of the economy, Canada's borrowing requirements will be at the lowest level in almost 30 years. Measured on this basis, Canada will have the lowest fiscal shortfall projected among central governments of all G-7 countries.
As a result of this, international markets are responding favourably to the progress in deficit reduction. In fact, short term interest rates have fallen below those in the United States. For the first time the Government of Canada can actually borrow money for a short term at rates lower than those prevailing for United States securities which are the bellwether for all government securities in the world.
When the government was first elected there was a spread between Canadian and American interest rates of approximately 3 per cent. That spread represented the international market's view of the risk of investing in this country as opposed to that of the United States. I think we can take it from the fact that our securities are presently quoted at lower rates of interest than those in the United States that the international marketplace is putting on our securities a lower risk than that which would prevail on similar American securities.
Canadians know and accept that restoring public fiscal health is essential for job creation and economic prosperity. The government's job is to help create the appropriate economic climate, one in which private sector activity will flourish. Economic indicators support the claim that the government's approach is well advised.
As I pointed out, short term interest rates are down 3 per cent since March 1995. Inflation is at its lowest point in 30 years. Two hundred and sixty-three thousand private sector jobs have been created since 1995. The merchandise trade surplus has reached record levels and the current account deficit as a share of GDP is at its lowest level in 10 years.
In my view that demonstrates the wisdom of the government having rejected the slash and burn approach to deficit reduction urged by some of the parties in this House.
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Our approach is a sensible, balanced, fair and compassionate approach, and the 1996 budget continues on that track. It recognizes there are sacrifices Canadians are willing collectively to make to reach the point we now have. There are sacrifices that are being made today by constituents of mine in downtown Toronto who recognize this is the track we must be on if we are to achieve greater prosperity in the years ahead.
While saying this, we recognize as well that fairness and compassion are deeply held Canadian values. The Canadian commitment to helping the most vulnerable in society is an important factor in the government's philosophy. As a result, there will be no further cuts in transfer payments to the provinces.
Provincial entitlements will eventually increase. The Canada health and social transfer will provide secure and stable federal support for medicare, post-secondary education and social assistance. For the first time there will be a cash floor for transfers. The CHST is designed to give provinces more flexibility in program delivery.
Of course we would like to see more, particularly for post-secondary education. The government recognizes the importance of these issues, but the point is we must get our house in order after eight years of Tory mismanagement before we can build again. The beauty of this budget is that it lets us see that possibility clearly within the realizable near future.
The new seniors benefit to replace old age security and the guaranteed income supplement is designed to help those who need it most. The benefit level of 75 per cent of Canadian seniors will remain at the same level or even increase. Certainly low income seniors will receive more under the new system and the income tested approach will help to ensure the sustainability of the pension system for our children and grandchildren.
I take this opportunity to address an issue which is very much a concern to many people in my riding, social housing. Rosedale has a considerable amount of assisted social housing. It takes the form of straightforward government assisted housing and co-operatives.
This social housing contributes a great deal to the social stability of our inner cities. It recognizes there are many people living in our cities, particularly in inner cities, with a high cost of living, who do require some form of government support.
There have been misconceptions as a result of the budget. There were some suggestions in the province of Ontario that because of the approach of the present Conservative government social housing is under serious attack. The federal government has indicated
in this budget that it will continue its support for social housing and as a result for social stability in the inner cities. It will continue with $2 billion in support to provincial governments, $600 million of which will go to the province of Ontario.
The minister has made it clear that while there will be changes in the way in which this service is delivered, national standards will be required. I urge the minister that when she is dealing with the provinces no federal money should go to private housing schemes. Social housing should be recognized as public housing and the administration of housing should not be turned over to provinces that indicate they do not have a commitment to publicly owned social housing. There are alternative competent partners the federal government could choose such as the Co-operative Housing Federation of Canada.
This is an extraordinarily important issue which the government has indicated it intends to approach with sensitivity to the need for appropriate social policy while recognizing the need for deficit reduction. I am confident it will realize this goal in the way it has managed in other areas.
When we look at the core of this budget we see the notion of the economy, of jobs and of growth. There are three priority areas in the budget: youth, technology and trade.
The importance of investing in the country's future lies in investing in young people. We must give them the tools with which to recognize their aspirations. The creation of new youth employment opportunities, for example the Department of Human Resources Development summer student job action program, will help tens of thousands of young people to get summer jobs this year.
Also, we will be helping students and their families deal with the higher cost of education by increasing education tax credits, raising the limit on transfer of tuition education credits and increasing limits on the contributions to registered education plans.
My riding of Rosedale is home to three post-secondary institutions, the University of Toronto, Ryerson and George Brown College, and numerous high schools and youth groups.
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I have fairly frequent contact with young people in my riding who relate to me the special challenges they face in trying to find suitable employment in the new economy.
Often suitable job experience is what they require but lack. This initiative in this regard should go some way to providing opportunities in my riding and across the country for youth who deserve an opportunity to participate in the challenges the new economy offers us.
In addressing the issue of the new economy, this budget addresses the issue of technology. Existing moneys will be reallocated in order to encourage technological developments in key fields such as the aerospace sector, environment technologies and biotechnology.
The Business Development Bank will be given the resources to provide more loans to knowledge based, exporting and growth businesses. Equity injection of $50 million will allow banks to provide an additional $350 million in loans.
We will accelerate our efforts to increase access to information technology for all Canadians, especially for small and medium size businesses. This is a true recognition by government that technology is the way of the future and that we as a country cannot afford to be left behind in this important contribution to the global economy.
Similarly, in terms of international trade, the budget has indicated that the Team Canada approach which has been so extraordinarily successful in international marketing of this country will remain a centrepiece of our strategy.
Canada's trade performance has recently been excellent. The export sector has been expanding at 8 per cent per annum on average over the past decade.
Our merchandise trade balance has reached a record surplus of $28.3 billion. To encourage the continuation of this success, government will provide $50 million of new equity to the Export Development Corporation in order to support new export sales financing vehicles and new partnerships with exporters in the commercial banks. This and other measures will increase the amount of financing available for Canadian exports by as much as $500 million a year.
As the foreign affairs and international trade committee has realized, international trade is at the core of what this country is about. Small and medium size businesses are dependent more and more on international trade.
This budget will contribute to enabling our country to prosper in its international trade and achieves a balance in respect of our social programs.
[Translation]
Mr. Benoît Serré (Timiskaming-French River, Lib.): Mr. Speaker, before going into the details of the budget, I would like to salute the people of Verner and Lavigne in the south of my riding, who have had access to the parliamentary channel only since April 1 of this year.
I am pleased to rise today in this House to congratulate the Minister of Finance on an excellent budget. This budget is one of confidence and was well received by taxpayers and businesses
alike. The minister put forward an effective, well-balanced action plan that benefits all Canadians.
The people of this country care about their social service network, and the minister reassured them that all services currently in place would be maintained. Our government has been listening and will continue to listen to all the people, as this compassionate budget shows.
We all know how important social programs are. They benefit everyone and help sustain people going through hard times. However, a sluggish economy and the increasing burden of servicing the ever-growing public debt threaten the long term viability of Canada's social safety net. That is why it is so important to breathe new life into the economy and bring the public debt and deficit under control.
It is also necessary to overhaul Canada's social programs and transfer system in order to make them more effective and more affordable, while at the same time preserving the basic fairness of our social safety net.
In this budget, our government vows to revitalize the economy of rural regions and to tackle their problems. The new technologies put in place by this government, like the information highway and the community access component of SchoolNet, help our young people prepare for the emergence of the new knowledge-based economy.
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Rural Canada is rich in natural and human resources and faces different challenges than urban areas. The government will take the appropriate and necessary action to make sure that all Canadians benefit from economic prosperity.
[English]
The budget will renew the confidence of all Canadians, especially their faith in our social programs. All the measures taken in the budget will serve to reinforce Canadians' shared values in the system. These measures are to be implemented without raising taxes or disrupting the timetable to lower the deficit.
[Translation]
In his budget, the minister is proposing a new seniors benefit. This new system, which will take effect in the year 2001, is designed to protect current seniors, increase pension payments to low income seniors and ensure that income maintenance programs for seniors remain affordable and sustainable for generations to come.
The new benefit will be fully tax free and it will incorporate the current pension income credit and age credit. It will be paid in monthly instalments and, in the case of couples, each spouse will receive a separate and equal cheque.
Those who currently receive the guaranteed income supplement will receive $120 more per year, and spouse's allowance payments will also increase by $120 per year. Moreover, pension benefits will be fully indexed to inflation, which represents an important improvement on the current system.
This proposal will greatly benefit seniors. It will safeguard the pension system for seniors to enjoy now and into the future. Our government is fulfilling its commitment to current seniors and to those about to retire to maintain and, in many cases, to increase pension benefits.
Unlike certain other parties, we are responsive to the needs of seniors and recognize the outstanding contribution they have made and continue to make today to Canadian society.
[English]
Let us not forget the younger generation. Our youth are finally seeing the light at the end of the tunnel as more jobs are being created and more money is injected to create summer jobs. Students are also pleased that tax incentives for education have been increased.
On behalf of the mining sector, in which I have been actively involved since the election, I wish to thank the Minister of Finance for his support and concern. I am pleased the minister included in the budget some change to the flow through shares mechanism. It will certainly enhance the incentives for exploration and development activities and will end certain abuses.
The budget proposes that issuers will have an additional period in which to make the expenditures that have been flowed through the investor. In February my recommendation to the minister was to change the 60 day rule of flow through shares and extend it to one year.
Once again I thank the minister for accepting my recommendations. By doing so he is giving a real boost to the mining industry. Furthermore, I congratulate my colleague, the hon. member for Davenport, for his contribution to the environment by encouraging the extension of flow through share mechanisms for certain renewable energy and energy conservation projects.
Also included in the budget is the proposal to improve access to financing for the renewable energy and energy conservation sector by relaxing the specified energy property rules. These changes will provide an essential level playing field in the energy sector and recognize the importance of renewable energy to Canada's overall energy supply needs.
[Translation]
In this budget, the government recognizes that special measures and policies need be developed to ensure the economic well-being of rural Canada communities. This budget proposes interesting measures regarding natural resources.
[English]
In the budget the government recognizes that rural Canada needs special measures and policies to ensure the economic well-being and viability of this sector.
The budget is following its course on debt and deficit reduction in an orderly and humane fashion compared to the slash and burn approach taken by the provincial Conservative government and the Reform Party. This is why I call upon provincial governments to work in collaboration with this government in its efforts to replace the existing GST. The objective is a system which is fairer for Canadians, simpler and less costly for businesses to comply with and more efficient to administer.
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Canadians have demonstrated strongly and clearly that they want one national sales tax. Therefore, it is essential that all provinces reach an agreement on this very important matter.
[Translation]
Canada is a great place to live. Let us work together to ensure unity and prosperity in Canada.
[English]
Canada is a great place to live. Let us work together to ensure unity and prosperity.
Mr. Bill Graham (Rosedale, Lib.): Mr. Speaker, the hon. member for Timiskaming-French River is very knowledgeable about the mining industry. I preface my question by pointing out that I understand the city of Toronto is now considered to be the financial mining capital of the world. That is where corporations and individuals from all over the world finance mining activities which are not necessarily located in Canada. By doing that they enhance the richness, the wealth and knowledge of Canadians and of the Canadian mining industry.
I wonder, in that context, whether his view of the flow through share operation which he described recently in his speech would also be contributing to the development of not only the mining industry itself but to the very important securities industry which surrounds the mining industry and which is developing more and more in Canada.
Mr. Serré: Mr. Speaker, the point the member raises is very important.
Very few people know that there are more mining jobs in Toronto than in any of the rural ridings. There are more mining jobs in Toronto than there are in my riding, yet my riding has dozens of mines.
Toronto is now the centre for mining investment in the world. Investment in mining especially for exploration has risen from about $400 million when we took office in October 1993 to a projected investment of approximately $850 million this year. The mining industry is very healthy at this point in time. It is thanks at least in part to the actions taken by our government in the last three budgets.
We started in the first budget by permitting the deduction of the money used for reclamation funds. We went on to relax the flow through mechanism in the budget to increase the accelerated capital cost allowance. All of these measures have contributed to create the proper economic climate. Investors across the world now have faith in the Canadian mining industry. Discoveries such as Voisey's Bay are doing a lot to enhance Canada's international reputation.
Once again, by the actions of our government, we have put the Canadian mining industry back on the map. I hope my colleagues from urban Canada realize the importance of that sector not only to rural Canada but to all Canadians.
The three main economic sectors, agriculture, mining and forestry, account for 60 per cent of Canadian exports. We depend on exports. If we remove rural Canada, the economy of the country would be in shambles.
I hope these questions and comments will make my colleagues from urban Canada realize the importance of rural Canada. I hope they will work in co-operation with us to enhance the economy of rural Canada.
Mr. Monte Solberg (Medicine Hat, Ref.): Mr. Speaker, I listened with interest to the speech of the hon. member.
The member commented about the Reform Party cutting too deeply into areas of social programs. I am curious to know why the hon. member did not mention that while we advocated cuts of about $800 million to health care, his party is carrying out cuts of $3.2 billion in health care. His party is closing hospitals across the country. While we advocated cuts of about $200 million to higher education, his party is advocating and carrying out cuts of $1.2 billion in higher education. How can the member turn around and say that the Reform Party is being radical?
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Finally I want to point out that while his government is in power the interest payments will rise. In other words the transfers to foreign lenders and foreign banks will rise from $40 billion to $50 billion. That is absolutely ridiculous. That is slash and burn. I want the member to answer those questions.
Mr. Serré: Mr. Speaker, again we are hearing rhetoric and very little action by the Reform Party. Reform was to have submitted a budget ahead of the hon. minister and this budget never came about.
We hear from the Reform Party day in and day out to cut, cut, cut. Reformers would like us to have a balanced budget by the end of our term. I ask the hon. member from where would he take that money?
Our record speaks for itself. We have at this point in time the lowest deficit as a ratio of GDP of the G-7. Our interest rate is lower than the United States. For the first time we have the lowest inflation rate in the last 30 years.
The Reform Party is always asking us to cut, cut, cut. Even Ralph Klein and his colleague Mike Harris, who by the way supports the Reform Party, is not going far enough for the Reform Party. The Reform Party is at the right of Attila the Hun. Reformers give us rhetoric. They want us to balance the budget in three years but yet they do not want to cut anywhere.
I ask the hon. member how can the budget be balanced in four years if there are no cuts?
[Translation]
Mr. Stéphane Bergeron (Verchères, BQ): Mr. Speaker, first I want to draw your attention to the fact that until the end of the debate Bloc Quebecois members will split their allotted time in two ten-minute periods, followed by a five-minute period for questions and replies.
I am pleased to take part in the debate on the last federal budget, not because I am particularly happy with this budget, far from it, but because it is my duty, as a parliamentarian, to take a very close look at the way the government intends to spend public money. We have to recognize that, over a month ago now, the Liberal government brought down a budget which was very disappointing in several ways for Quebecers and Canadians.
The lack of vision in this budget is distressing, given that, based on its own figures, the government has added over $110 billion to the debt in the last two and a half years, which means $3,700 more for each and every Canadian. These figures speak for themselves. We have not even started paying back the principal on the debt, because the Minister of Finance has been totally incapable of substantially reducing the monstrous deficit of the Canadian government.
It will be remembered that, during the last election campaign, the Liberal party released a so-called plan of action unimaginatively and subtly called the red book. I need not make things even more unbearable by reminding the House of the fact that the Prime Minister never gets tired of quoting this document, as though it were his bedside book.
Let me quote a short excerpt from page 10 in the introduction of the document, which reads:
The Liberal agenda, therefore, is premised on an integrated and coherent approach to economic policy, social policy, environmental policy, and foreign policy. Liberals understand that these policies are and must be linked.If we compare these claims with the measures contained in the last budget, we can only conclude that the Liberal government did not deliver. While it claims to have an integrated and coherent approach when it comes to implementing measures, the facts say otherwise.
The hardest thing to accept when you take a close look at this year's budget is that there does not seem to be any guidelines regarding the objectives that must be met. At a time when everyone wishes the government would innovate in the field of public finances, at a time when everyone is aware that hard work is required to ensure a decent quality of life to future generations, the Liberal government prefers to improvise and make cuts without thinking things through.
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A blatant example of this lack of vision is the decision to eliminate the yearly $7.2 million subsidy to the Canadian centre for magnetic fusion, located in Varennes. The federal government's withdrawal from this area of scientific research is a sad and totally baffling development.
The decision clearly does not take into account the foreseeable spinoffs in development of a new waste free energy system. In signing the death sentence of this research centre, the Liberal government is giving up on 20 years of efforts in magnetic fusion development. It is sacrificing a $70 million infrastructure, including $11 million worth of new equipment which will never be used. Finally, it is sacrificing about a hundred high technology jobs. Such is the Liberal Party's environmental and economic vision.
But there is also a lack of vision and coherence in several other areas. For one thing, the remaining dairy subsidies will be cut. Last year's budget provided for a 30 per cent cut over two years. Yet, we were stunned to learn, when the last budget was brought down, that these subsidies will be totally eliminated, with no compensation at all for the producers.
This decision will be extremely hard on milk producers in Quebec and throughout Canada. Last year, Western farmers received nearly $3 billion in compensation, following the elimination of the grain transportation subsidy. Here again, a double standard is being applied by the Liberal government.
As for its economic and social vision, we must point out the government's poor performance in job creation. Between January 1995 and January 1996, the unemployment rate barely eased in Canada, slipping from 9.7 per cent to 9.6 per cent. What solutions does the government have to offer? Nothing, except the measly $315 million to be provided over three years for summer jobs.
It is rather ironical that the Liberal government is beginning to show concern for students, especially as it had previously reduced funding for summer job creation programs from $86 to $60 million over two years. Moreover, it is imposing drastic cuts of $150 million in postsecondary education funding for 1996-97, the
potential impact of which could be an increase of $1,000 in tuition fees for every student for this year alone.
What is more, it has already announced additional cuts of $300 million for 1997-98, which could lead to new additional costs for students. Therefore, this summer job creation program is a cynical move, since its only usefulness will be to help students pay the additional costs brought about by the cuts the Liberal government made in social programs.
That is not all, however. The Liberal government is again showing inconsistency since it is now going after a major means of creating jobs by lowering from 20 per cent to 15 per cent the federal tax credit related to labour sponsored investment funds and lowering from $5,000 to $3,500 the maximum share purchase in such funds.
Today, there are 19 labour sponsored funds with assets totalling between $2.5 billion and $3 billion. They have invested more than $850 million in the Canadian economy since their creation.
In Quebec, for example, the FTQ fund alone has managed to create and maintain more than 58,000 jobs. This measure will slow down the expansion of these funds, thus decreasing their job creation potential. What makes this decision even harder to understand is the fact that a report by the Canadian Labour Market and Productivity Centre concluded that governments recover the fiscal costs of labour funds in less than three years.
Instead of being a mere nuisance on the labour market, what does the government intend to do to implement real incentive programs to create jobs?
The Liberal government is also targeting senior citizens. From now on, old age security will no longer be the basic tier of pensioners' income. It will provide replacement income to those who have been unable to save for their retirement during their working life. Through this reform, the government is creating two classes of senior citizens, those who were able to save for their retirement and those who were not.
The important thing is that the new seniors benefits will now be a kind of welfare for senior citizens, and that they will be paid only to those most in need. So much for the consistency and complementarity of economic, social, and environmental measures of the government.
Let us now turn to foreign policy.
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Here again, the Liberal government's last budget is a far cry from the commitments made over the last few years. We think the new foreign affairs minister should reacquaint himself with his government's commitments. The Liberals had promised to advocate and promote democracy and human rights throughout the world. But the government's record in this is rather dismal.
With the cuts the Liberal government announced during the previous budget year and confirmed in its last budget, Canada's development assistance expenditures have been reduced to less than 0.29 per cent of the gross domestic product, which is farfrom the 0.7 per cent target recommended by the internationalcommunity.
After making these cuts, how does the Canadian government think it will be able to help the poorest people on earth?
Development assistance is important on a human level, but equally important on an economic level. It provides jobs here at home. As the Bloc Quebecois indicated in its dissenting report on the review of Canada's foreign policy, one out of four jobs in Canada is linked to exports and the increasing impoverishment of the third world will obviously have a negative impact on the employment situation in our country. In the medium term, our own economic growth will partly depend on the increase of the standard of living of about 80 per cent of the world's population.
As you know, the Bloc Quebecois supports and encourages the participation of Canada in United Nations peacekeeping missions. Of course, it is frustrating to see that several states do not pay their contributions to the United Nations, but Canada still has to continue to defend and promote human rights and democratic development.
That brings me to the fact that the Bloc Quebecois supports specific missions, like the one currently underway in Haiti. For instance, already more than 400 soldiers from CFB Valcartier, in the outer suburbs of Quebec City, are over there. The goal of the United Nations mission in Haiti is to consolidate the stability of this new democracy. These are the kinds of initiatives our party supports.
However, Canada could do more to tie its assistance policy and trade measures to the issue of respect for human rights. I am thinking in particular about Mr. Tran Trieu Quan, unfairly incarcerated in Vietnam. Yet, Canada has provided Vietnam with more than $50 million in assistance and development programs since 1994. This large amount of money is granted unconditionally to a country that is unfairly detaining a Canadian citizen and is more or less asking for a $1 million ransom for his release.
This budget is proof that this Liberal government has forsaken all decency when it comes to its relations with countries where human rights are violated.
In any case, after two years when they had to really tighten their belts, Canadians were ready for a third austerity budget on the part of the Liberal government. The latter knew that for a fact and did nothing to dissipate that impression. In fact, it rather encouraged it,
knowing full well that the people would better accept its budget if they really felt they were spared.
At first glance, the budget presented by the finance minister is so conceived as to give the impression that there is something in it for everybody. But if we look closer, we can see that it is in fact an insidious budget trying to hide the bad news or wrap them up with so-called good news.
All the major decisions concerning cuts and tax increases were announced last year and the year before. But they will continue to apply this year and for the next two years, allowing the government to continue to reduce its spending without having to make more unpopular decisions in the second part of its mandate.
[English]
Mrs. Dianne Brushett (Cumberland-Colchester, Lib.): Mr. Speaker, the hon. member has stressed quite vividly the government's position in the budget regarding seniors pensions and benefits. As he has suggested, perhaps we are subsidizing the poorest of the poor seniors through the changes made in the budget.
It comes across that the hon. member is quite opposed to the position the government is taking in benefiting Canadian seniors. We are giving them a long term plan whereby anyone 60 years of age as of January 1 this year can have the existing benefits of OAS and GIS and there will be no changes in that. We have given them the benefit of long term planning so that any of these new changes will only affect younger people. The hon. member seems to be quite opposed to this. I wonder what he and his party would suggest as an alternative for the people of Canada.
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[Translation]
Mr. Bergeron: Mr. Speaker, first of all, I want to thank the hon. member for her question. Contrary to what she has suggested, I want to point out that I am far from being opposed to the idea of the government supporting the poor in our society. That is not the issue.
What I said in my speech is that we are creating two classes of senior citizens. I think this is what makes this new program totally unacceptable.
Let me give you another example, that of a seniors couple with a family income of approximately $80,000 a year, currently entitled to benefits. Let us compare that couple to another with a family income of about $45,000, after the year 2001. The couple currently receiving pension benefits from the program would still enjoy these benefits after the year 2001, even with an income of $80,000 a year, whereas the couple whose income would total $45,000 a year would not be entitled to these benefits under the new policy of this government.
This is totally unacceptable, and this is what I condemned in my speech; it was not the support given to the poor in our society.
Mr. Réjean Lefebvre (Champlain, BQ): Mr. Speaker, our economy is faltering. The unemployment rate is still at harmful levels. The tax system must be reformed. Very few jobs are being created, and only by the private sector.
In such a context, the government must show its leadership. Recently, Mr. Chrétien and his team missed a good opportunity to change our economic environment and adjust it to the realities of this century's end. The budget tabling process is a public management tool that must include adjustment and stimulation measures that will help us reach our collective goals.
But Mr. Martin chose to bring down a budget which closely resembles an election budget containing watered down initiatives and lacking concrete job creation measures. The Liberals have soon forgotten the promise to create jobs they made during the last election campaign. In the past year, the unemployment rate went down by only 0.1 per cent. Concretely, this year's budget proposes a summer job creation program for students and a technological investment fund aimed at preserving jobs.
But in order to do so, the government is reducing tax benefits for workers' investment funds, a favoured job creation tool. Moreover, the cuts in research and development announced last year are being implemented this year, which is slowing down all the more innovation and research in Quebec and in Canada.
Indeed, job creation is not the Liberals' priority at the moment. Moreover, they are determined to go forward with their unemployment insurance reform, which they have the gall to call ``employment insurance'' in spite of all the public opposition and demonstrations.
With this bill the government should be able to give workers the tools they need to get the jobs available on the market. In fact, every year, 300,000 jobs remain unoccupied in Canada because of a persistent lack of consistency between the training given in our institutions and the needs of employers.
The government's objective is clear: increase UI fund surpluses and take them over at the workers' expense. It is time those funds were administered by the people to whom they belong and served the purpose for which they were collected. Only then could we speak of a real employment insurance. Without changes in that direction, the government must withdraw its bill.
The government continues to insist on making the poorest elements of our society finance its overspending and its inability to put public finances on a healthy footing. The reform, in its present form, in unfair because the conditions of eligibility are tightened and it creates two categories of unemployed: frequent users and
the others. Moreover, by lowering the benefit rate, it will throw more and more seasonal workers into poverty.
In an economy built on small enterprises, farms and small retail stores, like in my riding, there is a lot of seasonal work. The people occupying temporary jobs do not do so because they want to. Why then penalize them as if they had a choice?
The proposed reform is eroding the buying power of our workers.
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During the 1993 election campaign, the Liberals talked about eliminating the GST. Now they are talking about replacing it, about harmonizing it with provincial taxes. They are slowly setting the stage for the introduction of a national sales tax.
The federal government should transfer to the provinces the tax room occupied by the GST. The government is quick to forget its campaign promises, especially now that it seems more preoccupied with the next election. But Canadians have a good memory.
Fortunately, the Martin budget contained no tax increases for individuals but, indirectly, consumers will have to absorb part of the cost of the dairy subsidy. This budget provides for the phasing-out of the dairy subsidy over a five-year period starting next year. This will result in a loss of $76 million for Quebec dairy producers, who produce 47 per cent of industrial milk in Canada.
For farmers in my riding, this means an annual loss of about $1,500 each, or more than $7,500 between now and August 1, 2001. Members will recall that the dairy subsidy was introduced in the early 1970s to lower the selling price of dairy products and make them accessible to the largest possible number of consumers because they are good for their health. Once again, in a roundabout way, the government is making our small businesses and consumers pay the bill.
On another subject, the new seniors benefit, which will replace the old age security and guaranteed income supplement programs in the year 2001, will be based on the family income of pensioners. On the one hand, the government is encouraging people to invest in RRSPs and, on the other hand, it is saying that seniors whose family income exceeds $45,000 will be penalized.
For a couple, this represents an annual income of $22,500 per person, a figure which is relatively easy to reach for individuals who contribute $2,000 a year to their RRSP for about thirty years.
The Martin budget changed the situation for all those involved in the long term planning of their retirement. There will no longer be a universal old age security system. The minister just said that such a universal system will have disappeared by 2001.
In conclusion, the government is restricting access to programs and is quietly passing on the bill to low-income people. The noose is getting tighter and tighter. Enough is enough. We will not be fooled by this collective impoverishment strategy. The government must ensure a fair distribution of the present tax burden. The social and financial security of our children depends on it.
[English]
Mr. Alex Shepherd (Durham, Lib.): Mr. Speaker, I listened to the member talk about the redistribution of income. I think that was his last comment. I was surprised how he took exception to the proposals in the budget to restructure old age pensions. Basically the budget sought to define those people who are most in need in our democracy, those people who have less income in their retirement years. It sought to underpin their incomes in their retirement years. Indeed it actually increased their real disposable income. It made those payments non-taxable.
I heard the member say at one point in his speech there was a need to redistribute income. At another time I heard him take some exception to the fact that we have spent a lot of time in designing this legislation to create that safety net for the elderly.
I know as well that a committee is currently travelling throughout the country talking about the Canada pension plan. I am sure also that one of the parameters there is to ensure that those funds will be available for those people who are most in need.
These are things which I think are courageous of the government. We could simply forget about the Canada pension plan and by the year 2015 the cheques would stop coming. That perhaps would not hurt people who have high incomes but of course for those people who had not anticipated that it would create undue hardship.
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Our government has taken the time and the energy to recognize there is a problem coming, maybe not tomorrow but by the year 2015. We want to deal with problems today so a future generation of Canadians will have adequate means for retirement.
I would like to know how the member can argue that we are not redistributing income while at the same time he argues we should not be underpinning the retirement incomes of seniors who have less income than others.
[Translation]
Mr. Lefebvre: Mr. Speaker, I thank the hon. member across the way for his comments and his question. In connection with redistribution of income or old age pensions, I must point out that the hon. member did not really listen to my speech, since I did also refer to the unemployment insurance fund, with its $5 billion surplus, which the government is using to attack the least well off in our society. There is also the whole question of milk subsidies, which our Quebec farmers will no longer be getting.
What the province of Quebec wants is a fair redistribution of income, because that income affects people, the least advantaged segment of the population and the health of the people in our ridings,
Then there is the disappearance of universality in 2001, which will penalize those who have contributed to the pension plan all their lives.
In my opinion, the Martin budget makes a poor distribution of income.
[English]
Ms. Catterall: Mr. Speaker, on a point of order, our next speaker has not yet arrived. If the Chair wishes to proceed with the next speaker from the Reform Party that would be quite acceptable to us.
Mr. Penson: Mr. Speaker, our next speaker is not prepared either.
[Translation]
Mr. Yves Rocheleau (Trois-Rivières, BQ): Mr. Speaker, I shall continue in the same vein as my hon. colleague from Rosemont, on just how seriously our colleagues over there and next to us here are taking this budget, whether they are showing any real interest in criticizing it. This is a very serious matter, since it is so insidious and involves long term measures that will commit future governments, while not dealing well with the short term.
I shall continue, nevertheless, keeping those subtleties in mind.
The angles of attack-That, Mr. Speaker, may be the reaction of a man of the people to the silence from government members and Reform members.
It is certainly not for want of things to criticize about this budget. We could talk about old age pensions, as has already been done; about the government's intentions concerning the revenue commission-where not only is the federal government intervening in an area of jurisdiction which is provincial under the Constitution, but where it also wants to push aside the only province that stood its ground in this matter and respected the Constitution, namely Quebec. Now it wants to shove Quebec aside and take over everything in a Canadian context.
We could also criticize the way this government is dealing with the deficit. It is doing so at the expense of the least well-off members of society, that is the unemployed, by blithely dipping into the unemployment insurance fund to the tune of $6 billion yearly, a fund financed by workers' contributions. This is something that must not be lost sight of, something that must be mentioned again and again. Contributions come from employers and from employees. The cuts are being made at the expense of the provinces. They are blithely cutting transfer payments which ought normally to go to the provinces.
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But my intervention will deal mainly with the systematic attacks against worker funds. Two important worker funds appealed directly to Quebec. The first one, the CSN fund, was created recently and has known an almost resounding success, if we consider that they had a rather short timeframe to set it up. The second one, the largest, is the Fonds de solidarité des travailleurs du Québec, the flag ship of Canadian worker funds. The latter represents a third of all worker fund assets in Canada.
The federal government is going after those worker funds on two levels: first by reducing the tax credit granted to taxpayers and funds from 20 per cent to 15 per cent, and secondly by lowering the maximum contribution allowed from $5,000 to $3,500 per person.
The Fonds de solidarité is a huge success on both the financial and business levels. Since it was established in 1983, it has succeeded in creating or preserving 38,000 jobs. This is not peanuts. The fund did much better than previous Canadian governments.
It funds various projets. In the riding of Trois-Rivières, which I represent, the Tripap mill has closed its doors, the old CPFC, Canadian Pacific Forest Products Limited, had closed down. It was revived thanks to the energetic efforts of the Fonds de solidarité and provides 450 jobs today.
The Fonds has taken action at Novabus; Biochem Pharma, a pharmaceutical company particularly active in AIDS research, and Shermag, in Sherbrooke. In the Laurentians, it has been involved with the Château Mont-Tremblant and its ski resort. In the Mauricie region, in the Prime Minister's riding of Saint-Maurice, the Fonds provided financial assistance last year to a factory known as Desavenn Sac Inc., which had taken over part of the market left by the former Twinpac factory, in Cap-de-la-Madeleine, which had manufactured industrial paper bags for sugar, flour and chemicals that were exported throughout North America.
We can see how vital the Fonds de solidarité is for Quebec's economy. I am all the more pleased as the opposition critic to see that the Fonds has adapted over the years. It is now setting up regional development funds. Sixteen will be set up shortly. One in the Mauricie region was set up last fall. These 16 regional funds will complement the main fund of the Fonds de solidarité. Some of them are called SOLIDE, that is local job development investment corporations; thirty had already been set up by the end of 1995, with the co-operation of the Union des municipalités régionales de comté throughout Quebec.
In addition, the Fonds de solidarité in fine tuning its activities set up specialty funds in the areas of health, biotechnology and high technology in order to meet borrowers' needs.
It is all the more upsetting to see attempts being made to undermine the actions of the Fonds de solidarité instead of further supporting them. The value of this fund was demonstrated by a study undertaken by Carleton University for the Canadian Labour Market and Productivity Centre. It was not done in Quebec, but by Carleton University, not far from here.
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This study shows that the Canadian tax system recovers within three years its tax incentives for fund management. Therefore, there is no reason to try to undermine workers' funds, in particular the Fonds de solidarité. On the contrary there is every reason to encourage it. This is in contrast with the statements by our colleague, the member for Willowdale, and former chairman of the finance committee, as reported in an article published in the January 18 issue of the Soleil. It states that ``the chairman of the committee maintains that these funds are granted generous exemptions which warrant strict controls''.
This same attitude is observed in the industry committee, where it is claimed that what the workers funds ``cost'' the Canadian tax system-some ten millions dollars-should be reduced further, when everyone knows that this is a direct incentive for the economy of both Canada and Quebec.
It is also a direct social and economic commitment because we know their effect on job creation, tax revenues, unemployment insurance benefit reductions, as well as the importance of a job for a family in terms of consumption, quality of life, reduction of drug use, reduction of spousal abuse, and so on. We know what unemployment means, we know what a job means. People who are able to create or maintain jobs should be encouraged, not discouraged.
These measures are all the more alarming in the context where this kind of federal government's intervention is taking place, since the government was elected with the slogan ``jobs, jobs, jobs''. We will keep on reminding the government of it, this government that created 65,000 part-time jobs-that is for 6 to 12 months-since coming to office. It is still boasting about its infrastructure program, and it was elected with such a slogan.
In this budget there is no framework or incentive for private corporations to create jobs. It is a well-known fact that, these days, major corporations tend to make prohibitive, outrageous profits-it is particularly true for banks-while allowing mass layoffs. We must question the ethic of such a phenomenon.
I worked for the Quebec government, dealing with businesses in financial difficulty and I know they must consider the possibility of eventual mass layoffs. This is certainly quite logic. When a business is having a hard time, it must rationalize its operations and one possible solution is to layoff people. It is sad, but it is in the order of things.
But when profits reach such levels as they have recently in areas like the oil, telephone and banking industries, to name just a few, and when these industries still downsize and lay off people in numbers such as we have seen, for example at Bell Canada which plans to lay off 10,000 employees in Quebec, no doubt for very logical and justifiable corporate reasons, we must question such operations just as we must question the attitude of banks which make five billion dollar profits but, at the same time, do not hesitate to launch massive layoff plans.
In another context, while they say that solidarity funds and labour-sponsored funds are too expensive, they do tolerate unpaid income taxes amounting to $6 billion and seem to be totally insensitive to that. They should start with this type of operation, put investigators to the task if need be and collect all those unpaid taxes before they hit on good, competent people who are efficient at job creating, particularly those people from labour-sponsored funds such as the Fonds de solidarité des travailleurs du Québec.
As far as efforts are concerned, they require efforts on the part of the labour-sponsored funds, but they ask banks for a 65 million dollar effort over two years when these banks are reaping profits of $5 billion. Furthermore, according to present trends, it seems that these profits will be even higher next year. This $65 million contribution is almost equal to the total cost of labour-sponsored funds across Canada.
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I must also add that this is happening in a context where the federal government's policies in the area of economic development, particularly regional economic development, are almost morally questionable. Consider the debate about the coast guard, the introduction of cost recovery measures in the coast guard without any impact studies. The government went ahead with only one thing in mind: to meet the goal it had set itself, that is to recover by March 31, 1997, the $20 million forecasted in its budget for aid to navigation.
It wants to recover $20 million out of $160 million by the year 2000, without considering the real profitability of it, the real impact on users of the St. Lawrence River, namely shipowners. What would happen if, after having done their calculations, they decided that, economically, the St. Lawrence River was no longer a good place to do business because costs outstripped profits? It would be catastrophic. This type of calculation should have been done by the federal government. Just imagine the impact on the ports of Montreal, of Quebec City and all the other harbours which I might call secondary along the St. Lawrence River, like those of Sorel, Trois-Rivières, Sept-Îles, Baie-Comeau and Chicoutimi on the Saguenay River.
This type of measure impacting directly on labour sponsored funds is part of another scheme which is just as much a dodging of responsibilities as the user fees for the coast guard are.
Personally, I am shocked by the government's attitude toward the Fonds de solidarité des travailleurs du Québec in particular because, for us, this fund demonstrates the ability of Quebecers to look after themselves, to be imaginative and capable of being creative. We will not let the federal government go in that direction for very long. And the Liberal Party of Canada will pay the price for it, especially in Quebec.
Mr. Richard Bélisle (La Prairie, BQ): Mr. Speaker, on March 8, I took part in a television program called ``Droit de parole'' on the Radio-Québec network, along with representatives from various social and economic groups; employers, unions, women's groups, young people and chambers of commerce were represented.
A SOM-Le Soleil poll released during this program shows that only 33 per cent of the population rely on the budget to promote job creation, while 53 per cent rely little or not at all on this same budget to reach this job creation objective.
Also, when asked about the future of pensions, increasingly, fewer young people and members of the middle class say they rely on the federal government to ensure the future of the public pension system.
In a period of accelerated technological and social change, where confidence in democratic institutions should be high, the government is showing no leadership whatsoever. The government has lost all credibility with a growing number of Canadians. This had led, spontaneously, to the founding in Canada of about twenty new groups, such as the group Conference Confederation 2000, which met at the Château Laurier in March, following last October's referendum campaign, to fill the political vacuum left by this government. The emergence of these groups shows that nature abhors a vacuum, and at present, the vacuum is the government that is in place here in Ottawa.
What are the main causes of such a lack of credibility of the Canadian government with its citizens? Government rhetoric changes from month to month; federal ministers contradict each other, and policies put forward often cancel each other out.
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This lack of direction is reflected in the deficit reduction measures and some job creation measures which are supposed to be found in the federal budget.
The Minister of Finance emphasizes in his budget that the deficit will be $24 billion next year and $17 billion in two years. The Minister speaks only of the future. But let us not forget that the deficit is now very close to $33 billion and that it was $37.5 billion last year. That is the reality. These are not projections.
And if we add the $5 billion coming from the unemployment insurance account surplus, which in actual fact belongs to the employers and the workers and which the Minister has appropriated, the real deficit for this year remains close to $38 billion, and the one for last year was $42.5 billion. This is the same deficit level that we saw during the last year of the mandate of the Conservative government. At that time, the Liberals condemned the deficit.
To justify rolling the surplus of the unemployment insurance account into the consolidated revenue fund and reducing the deficit accordingly, the Minister says that if there is a shortfall in the unemployment insurance account during the next recession or during the next major the increase in the unemployment rate, the government will make up the shortfall in the account.
Imagine the burden the minister is placing on the unemployment insurance account and future government deficits. What is even more disquieting about the minister's deficit projections is that we are currently in full economic upturn; recovery is under way. The U.S., for example, recorded over 700,000 new jobs in February, the highest since 1983.
What will happen to the deficit in the next recession, which the economists are predicting for around the end of this decade? The Liberals place much emphasis on the last two Conservative deficits, which hovered around the $40 or $42 billion mark after the recession at the beginning of this decade.
It must be kept in mind, however, that in 1990-91 and 1991-92 the deficits inherited from the Conservatives were in fact $32 and $34 billion, the same as this year's deficit. In the good growth years from 1987 to 1990, this deficit was $28 or $29 billion, even less than the current figure.
Even in the Conservatives' day, the deficit was under $30 billion in the growth years, and around $40 billion in the recession years. The Liberals have done no better, even after raising taxes and pillaging the unemployment insurance fund.
The next recession is, therefore, liable to plunge us back into a vicious circle, into a deeper whirlpool than before. Debt servicing will be close to $50 billion next year, and a 1 per cent variation in interest rates adds $1.3 billion to the deficit. Worse, in the medium term, it has a $3 billion impact on the debt.
The Minister of Finance has no room whatsoever to manoeuvre, given the size of the debt accumulated so far. The impact of any change in interest rates is far too great. There is but one solution: what should have been done was to clean up business taxation right away, instead of striking a committee of experts to examine the question. Clean up by fighting waste throughout government
machinery and by cutting the defence budget much more substantially.
The deficit should have been reduced to $35 billion last year, $25 billion this year, $15 billion next year and $5 billion two years hence so that there would be a surplus in 1999 of $5 billion that could be applied to the debt creating the financial manoeuvring room that is so lacking now.
This is the only consistent program needed, and the government was incapable of instituting it.
The Liberals created the debt in the 1970s and early 1980s. In the 1990s, they are going at indebtedness with renewed vigour. They have no budget sense and will never be able to manage a budget.
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We have to get rid of this government before it becomes the cause of our demise. Ask our international creditors about the scope of the real political instability we all talk so much about. Ask them whether it comes really from popular consultation or the inability of our political leaders to balance the budget.
In terms of jobs, the budget tabled by the Minister of Finance is just as pitiful as it is in terms of the deficit and the debt. There is no major job creation measure. The budget for student jobs is increasing we are told from $60 million to $120 million, although it was already at $84 million before the Liberals reduced it.
So they double the budget for little summer jobs, but because the Liberals reduced transfer payments for post-secondary education by $450 million in two years, the provinces will have to double tuition fees. At this rate, many students will be unable to continue their studies and will have to keep for much of their life the little summer job created for them. This is what is commonly called dead end jobs.
There is always a double standard. The government gives with one hand what it takes away with the other. In the budgetary reallocation game, the President of Treasury Board makes up in new expenditures all that was saved in government cuts. All the savings should have gone to balance the budget. The whole accounting exercise of cuts and reallocations translates this year into a real net increase in expenditures of $34 million and barely $200 million in savings next year.
This government, therefore, is still far too interventionist, and the measures put forward in the Minister of Finance's budget fail utterly to resolve the problems of the deficit and employment.
Hon. Pierre S. Pettigrew (Minister for International Cooperation and Minister responsible for Francophonie, Lib.): Mr. Speaker, this is the first time I rise in this House, and it is with great emotion that I speak today as a member of Parliament. I would first like to thank the people of Papineau-Saint-Michel for their confidence in me and I want to tell them that I will always be proud and happy to represent them, to promote their interests and to defend their rights in this country.
My first loyalty is to them, since my primary role in our wonderful parliamentary democracy is to speak on their behalf. I heard their concerns and their fears, as well as their hopes, their determination and their common sense. I invite the people of Papineau-Saint-Michel, whatever their allegiances, to continue to communicate with me and tell me what they think. I am here for them; I would not be here without them.
In this era of upheaval resulting from the revolutionary force of globalization, liberal democracy faces its main challenge. We must say loud and clear that freedom is the goal pursued by human beings.
The people of Papineau-Saint-Michel will always find in their member of Parliament a representative willing to spend all his energy on protecting the freedom we enjoy as individuals, as well as that enjoyed by our respective communities. And because the time has come to redefine the role of government, I am very proud to make my first speech in this House on the finance minister's budget.
This budget meets the ambitious objectives set by the Government of Canada: to put the nation's finances in order to protect our financial future, while at the same time rethinking the role of government in the economy and in the lives of the people.
The finance minister's budget stays the course set by the government at the beginning of its mandate, and rightly so. We are finally getting out of the deficit spiral. Our deficit will fall to 2 per cent of GDP by 1997-98, ahead of the commitments made in the last general election. And this with no increase in personal or corporate income tax, or even in excise taxes. There were no personal income tax hikes in the last three budgets.
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Putting the nation's finances in order will prepare the ground for a more vigorous, job creating economy. A lower deficit will help reduce interest rates, increase confidence and promote new investments leading to more jobs and stronger growth. The government's performance with respect to employment deserves to be acknowledged. The unemployment rate dropped from 11.2 per cent in 1993 to 9.6 per cent today. There is still much work to be done, but we are on the right track.
This budget, presented in the middle of an election campaign, was very well received by the residents of Papineau-Saint-Michel, who voted in with a strong majority a member of the Liberal government.
The people of Papineau-Saint-Michel accepted the necessary yet respectful decisions made regarding pension benefits. I could feel it in my riding: my constituents realize that this is the only
budget approach that can actually boost the economy and ensure that our social programs will be maintained in the future.
As Minister for International Co-operation, I am responsible for projecting Canadian solidarity internationally. Canadians share a tremendous sense of solidarity in every respect and wealth is redistributed among the regions of Canada to ensure that all Canadians enjoy public services of a quality second to none in any federation on this planet. From this solidarity arose Canada's solidarity with less privileged countries. The Canadian International Development Agency is an institution that Canadians and Quebecers alike can be very proud of.
We are investing in the future, in our youth and in technology. This budget promotes export development, since international trade was responsible for creating 80 per cent of jobs created over the past few years. The people of Papineau-Saint-Michel appreciated this budget, but they are nevertheless worried. They are worried about the future of Montreal, and the east end of Montreal in particular.
Formerly the industrial and financial metropolis of Canada, Montreal is taking a radical shift toward the new economic order. While a part of Montreal, represented by high technology industries like aircraft manufacturing and computer science, consulting engineering and pharmaceutical products, is thriving, another part of Montreal cannot cope with such rapid and drastic changes in production modes and lags behind in the globalization movement. That is my part of Montreal, the one I represent in this place, the east end of Montreal, and this part of Montreal is choking to death.
The people of Papineau-Saint-Michel appreciate this government's economic policies. They made this very clear in the last election, but they also came to me with their concerns about unemployment, by which they are hard hit. They told me they wanted to work.
But my constituents realize that economic and monetary policies alone, however good they may be, are not enough to achieve the desired goal-and for us, Liberals, the goal remains employment. Even the best policies cannot help them achieve their goal if the political climate is not favourable. That is why every bone and sinew of Quebec must immediately come together to stop the brain drain and capital flight that have picked up since October 30.
Montreal, this large North American city, cannot develop in the restrictive economic conditions created by sovereignist pressure in Quebec and associated climate of political instability. Quebecers energies should not be wasted in divisions and political jockeying, but rather focused on strengthening Quebec's civil society and paving the way for its integration into rapidly forming transnational networks, strategic alliances and cultural coalitions. The Quebec society will show much more convincingly that it is mature, distinctive and distinct by resolutely engaging in a successful integration process that is now much more important than the obsolete nation state model.
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Throughout the world, identities are becoming more complex and allegiances are multiplying. The French are becoming increasingly more European, and both the French and European identities reinforce each other.
The Quebec identity is strengthened by the Canadian identity, particularly in light of the fact that the latter is strongly impressed in the head and heart of Quebecers, who greatly helped define that Canadian identity. Indeed, Quebecers greatly helped define the Canadian identity. That identity, which is more closely integrated to the North-American reality, helps many of our businesses and organizations by enabling them to be part of international networks and world alliances.
To think that we would strengthen our identity by giving it only a Quebec dimension is to totally misunderstand what is going on in the world today. On the contrary, such a measure would deprive our identity of elements which ensure its richness, its vitality and its future. The strength of an identity lies in its ability to reflect the facts and realities of a society.
To be sure, the solution of the sixties, namely a strong central state, allowed Quebec, which was lagging two or three generations behind Ontario and the rest of North America thanks to its elite, to make up the lost ground. All that took place within the Canadian federation. However, 1960 was also the golden age of decolonization; the welfare state was in its glory. That was 35 years ago. We are talking here about a Quebec nationalism-not sovereignism but nationalism-that is unifying and perfectly compatible with a modern Canadian federalism that is ready for globalization.
The nation state is a political model that is now obsolete. Without excluding a feeling of belonging, the Quebec nationalism of the 21st century must be modern and fully affirm itself in the economic, technological, linguistic, cultural and financial sectors. Quebecers have a unique opportunity to show that a normal people, to use the expression coined by the Bloc Quebecois, chooses to express its distinctive features, its determination and its intelligence by redefining its needs and its priorities in a contemporary way.
To be politically mature is to share its sovereignty with its neighbours. Are the French, the Germans and the Dutch any less sovereign? Are they less mature politically because they have transferred some powers to Brussels?
Sovereignists insult Quebecers when they travel abroad and say that Quebecers will chose sovereignty once they are free. We are a free people. We have chosen Canada every time we were consulted in the last 200 years.
The Quebec society should be well advised to focus its energy and nationalism on the new rising world rather than on yesterday's world. Any people in 1996 would prefer to be part of the G-7 countries, that have a lot of influence over the evolution of our world and exercise real leadership over the rest of the world. Any people would obviously prefer that.
By the way, during 18 of the 20 years the G-7 countries have existed, Quebecers have led the Canadian delegation. Last June, at the Halifax summit, Jean Chrétien, from Quebec, played host to heads of state; André Ouellet, who was the member for Papineau-Saint-Michel before me and who had a remarkable political career, welcomed the ministers of foreign affairs; and the Minister of Finance, another member of Parliament from Montreal, greeted his counterparts from the other G-7 countries.
So, these three Quebecers have, in a sense, the opportunity to work closely with people in Washington, Tokyo, Bonn, London and Paris, and I am proud to be part of a nation that is carving out a place for itself in this world.
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Far from preventing the Quebec society from integrating into the world, Canada is letting Quebecers play a role in international relations which they could not have if Quebec and the rest of Canada did not maintain the remarkable international reputation they have built together.
For instance, because of its dynamic presence within the French-Canadian community, Quebec can promote the growth of the French language both at the national and international levels. My role as Minister responsible for Francophonie helps me see Quebec's constant contribution to the French-speaking world. Nevertheless, the Canadian francophone community is not limited to Quebec, and it is our duty to also give this community a voice in the world.
It is only because it is part of the Canadian federation that Quebec meets the geographic criteria of the Asian and Pacific Council, an organization that is crucial to our relations with several economies which, in these times, are experiencing the most remarkable economic growth. Included in the growing industrial sectors in that region are several sectors where Quebec has a major competitive advantage: telecommunications, transportation, energy and development infrastructure.
Quebec must no longer exclude itself from Team Canada missions and from the economic and trade advantages that these missions bring to our businesses. Canada's reputation and the strength it gets from the association of the economic and political leaders of a great country, which is an influential player within the major and even the most exclusive centres of power, open a lot of doors and create a lot of business opportunities.
Quebec needs to be recognized by the rest of Canada. It needs the recognition of its unique mission in North America. This recognition must be reflected in the attitude of all Canadians and must find its place in the Canadian Constitution. But to fulfil its mission, Quebec needs all the advantages that come with being part of the Canadian federation.
[English]
To rejuvenate and revitalize Canada, that is our mission, my mission. We have to address the real underlying issues and not limit ourselves strictly to the legalistic formalities of constitutional process, however essential this process might be.
We need a new language, a new master plan which begins with a solid understanding of our common interests. The new generation in all regions of Canada must express its determination to overhaul federalism by renewing it, not dismantling it.
Obviously Quebec has a special contribution to make to that new Canada. Its distinctiveness in economic terms is certainly a worthy contribution. Obviously Quebec has a special contribution to make in cultural terms. Quebec is an asset in a world that is shrinking and the French language is an asset in many foreign markets in Europe, Africa and Asia.
For decades our constitutional debates have been inward looking, this region against that one, this linguistic community against that other one, individual rights versus collective rights. We need to give much more attention to the opportunities and threats from the outside world.
I remain convinced that when we re-establish dialogue among ourselves and look together at the outside world we will realize that we have more in common than we think, certainly enough to build solidarity, to maintain common institutions and a common country. We will certainly find we have enough to be generous toward Quebec and its special mission in this country and on this continent.
If enough people in the new generation everywhere across Canada accept this formidable task their creativity, their tolerance for our differences will in the end reinvent federalism.
The centralized nation state of the 19th century does not really excite Quebecers, and a majority of them will always choose an updated thoroughly rethought federalism over an ambiguous and doubtful sovereignty.
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The 21st century will be the century of integration of societies similar to what the Europeans are now building with some difficulty. Despite the hesitations, despite the lamentations, the European
Union is the future of Europe and Europe moves toward federalism as it approaches the next century. As Alain Minc, a respected French public figure told us last fall commenting on the European difficulties, le Canada c'est notre rêve, Canada is our dream.
Canada has a long tradition and much valuable experience in the accommodation of integration with distinctiveness. It can make a remarkable contribution to the 21st century as an example of tolerance, justice and democracy. Canada could continue to play a role in world affairs which divided we cannot play. Let us modernize what we have. Let us adapt it to the challenges of the next century.
If Canada did not exist today the chances are we would be working hard to create it. Let us work just as hard to reinvent it. Every generation of Canadians in a sense did so in the past. It is the task facing our generation and Canada deserves a victory.
[Translation]
Mr. Benoît Tremblay (Rosemont, BQ): Mr. Speaker, I must begin by congratulating my neighbour, the hon. member for Papineau-Saint-Michel on his election. If he has been elected, it must mean the campaigning is over now, something I think he has forgotten.
During that entire campaign, the minister who was then a candidate refused to take part in an open debate. Now he is in the House, and here there has to be debate. He cannot make just any old statement without some reaction. Those are the rules here. When a person claims to be an expert in international affairs, he has to be able to prove it. I want to give him the opportunity to do so.
The minister is dazzled by Canada's performance, with an unemployment rate that has gone from 11.2 per cent to 9.6 per cent since 1993. Could he explain to us how our American neighbours, with whom we do 80 per cent or more of our trade, have managed during that same time to have an unemployment rate of 5.5, 5.6 per cent? If this is lotus land, it must be an absolute paradise on the other side of the border.
There are other things that more important, or equally important. We are told that people found this to be a wonderful budget. Does that go for the tens of thousands of people who moved from unemployment insurance to welfare while the federal government was cutting benefits and increasing contributions to such an extent that it created a $5 billion surplus in the unemployment insurance fund, shifting tens of thousands of people onto welfare rolls and then washing its hands of its responsibilities to the provinces? The federal government has traditionally paid 50 per cent of welfare costs. That is no longer the way things are, however. The federal government abandons the unemployed to the provinces, but no longer assumes part of the costs.
As for political matters, I am obliged, unfortunately, to recognize that the member for Papineau-Saint-Michel truly represents Liberal Party tradition in this House. Perhaps his speech was prepared before last weekend's meeting of the Liberal Party of Canada in Quebec, because they just buried the constitutional debate by a sort of unanimous motion, which was also approved unanimously by all the federalist allies of the Liberal Party of Canada.
So we are in a position where a little knot of Quebec Liberal members-thanks to the Bloc now, we can show that it is a little knot of federal Liberal members-alone is right. This reminds us of something. They alone are right. They are open minded. They represent Quebec's identity.
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Well, I think the minister is going to have to take reality into account. The reality is that nearly 50 per cent of Quebecers voted for sovereignty. This is major progress. The minister adds ``sovereignty-partnership''. Of course, of course, we are modern. We are modern my friend, and we know it.
The minister should remember that it is thanks to Quebec that Canada adopted free trade. More than anywhere else in Canada, we are open to things modern and to international trade. It is very clear. It is also clear that we are open to partnership.
I welcome him. It is a welcome that promises vigorous debates, because it is clear that, on this side of the House, we very definitely do not share the vision of the member for Papineau-Saint-Michel.
Mr. Pettigrew: Mr. Speaker, I thank my hon. colleague from the riding next to mine for this opportunity to participate in the debate. I would like to mention that I had the occasion to debate during the last campaign and everybody agreed that it was fortunate for my adversary that there was no other debate because the score would have been even worse.
Some hon. members: Hear, hear.
Mr. Pettigrew: You asked about unemployment because I was applauding the fact that it has declined.
In Lille recently, there was a conference of industry and labour ministers during which President Chirac asked a very interesting question. He said: ``Is there a third method, half way between the American way, where jobs are created very rapidly and social programs are almost nonexistent, and the European way, which is extremely rigid, where social programs are on a much larger scale, yet where job creation has been stagnant if not regressing for the last few years?''
The answer is: Canada. We talked about that with President Chirac. Canada is the third way between European rigidity, which leans more toward socialism, and the American way, which leans more toward the free market but does not adequately protect its people.
I am extremely proud to say this Canadian way, this third way in the world, is the method that the Liberal government has supported year after year for the last few generations.
You say you are surprised that the electorate appreciated the budget. I was right there campaigning, my friend; I saw the constituents and I knew, the minute the budget was brought down, that the election was won because they were reassured about pensions. Let me remind you that we have brought the Liberal Party score from 52 to 60 per cent and that the Bloc Quebecois went from 39 to 34 per cent.
Mr. Bellehumeur: Let us not forget Lac-Saint-Jean.
Mr. Pettigrew: The Liberal Party's performance also improved in Lac-Saint-Jean where it received 8 per cent more votes. We were very proud of that fact.
I want to speak about what happened last weekend. It takes real intellectual dishonesty not to recognize, in the resolution adopted by the party at that meeting, that the objective of the Liberal Party of Canada is to have the resolution defining the principles of the distinct society enshrined in the Constitution. That is what the resolution that was voted on said.
In fact, I cannot understand this sudden attachment to the words ``distinct society'', which our friends across the way have always despised. As a Quebecer, I can tell you that I am perfectly prepared to work with you toward enshrining distinct society in the Canadian Constitution. But do you really believe that the words ``distinct society'' truly reflect the reality, when, just a while ago, you were telling me that it was an empty shell?
Enough is enough; such hypocrisy has to stop. It is no use crying over something you have already rejected. Do not interfere with our work and, hopefully, we will find better words, if those ones do not adequately reflect what the rest of Canada thinks. What I want is for Quebec and the special, unique, particular and distinct role it plays in Canada and North America to be recognized by the rest of Canada and enshrined in the Constitution. I got into politics to see this Canada emerge in the next-
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The Deputy Speaker: I regret to interrupt you, and I would like to ask our new colleague to please address the Chair, and not his colleague opposite. The question and comment period will be shared by two speakers, starting with the hon. member for Calgary Centre.
[English]
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, first I would like to compliment the new Minister for Intergovernmental Affairs on his maiden speech in the House of Commons.
I found myself agreeing with a lot of what he said in the latter part of his speech. I do believe in Canada and I do believe in federalism. I would certainly hope that both the Liberals and the Reform Party can work together to hold this country together because it is worth saving, unlike what the Bloc Quebecois would like to do with this country.
Having given him high marks on that part of his speech, I feel now that I will hit a little bit around the belt. I have to give him an F on finance because he said two things in his speech which I take exception to and which I would like him to elaborate on.
He said that the government has tackled the spiralling deficit and that solved the problem. I do not know how much the member understands about finance, but if he feels that by continually spending more money than is brought in and by continually adding to the debt that the problem will be solved, then I feel he had better revisit his math courses.
While he brags about the deficit going down from $42 billion to $37 billion to $32 billion to $24 billion, he fails to say that the debt is going from $508 billion to $545 billion to $578 billion to $602 billion. He may brag about a $24 billion deficit next year, but the debt will have increased to $578 billion. The year after where the projections are really fuzzy, he states a deficit of $17 billion and the debt will be $602 billion. The problem is the debt and the interest costs to service the debt. I would like his opinion on that fact.
This second point surprises me. He said that in the last three budgets the government has not increased taxes. Well, he just got here yesterday and I have to tell him that the government has increased taxes. Before he replies to that, let me point out to him that when this government came in, the revenue was $116 billion and is projected to go to $141 billion.
When he stands in the House of Commons and says that the government in its last three budgets has not raised taxes, he has been given false information. He has not researched the information. It is a disservice to the Canadian public to tell them that taxes have not been increased.
In answer to me he will then have to say that all this extra revenue has come from a growth in the economy and that there has been nothing done in the income tax system. There have been no excise taxes introduced, no taxes on seniors, no taxes on anything.
Before the member answers, he had better make sure he has the correct answer because the answer will stay with him for the rest of this Parliament.
I would like the member to answer those two questions because the budget does show that there are taxes.
Mr. Pettigrew: Mr. Speaker, first allow me to thank my colleague from the opposition for his offer of collaboration to recognize this great country we have and to do everything we can to accommodate every major partner of it. It will be essential and important that we all work together.
Members will know that there is an important majority of Quebecers who want us to adapt federalism to the new needs they have and to the needs of the 21st century. I can say that there is a great majority of Quebecers who would be very happy to see what develops in the next few months.
It is true that all major partners of this federation need to feel more comfortable in this country. We have to respect each major party of the federation for the contributions each makes to the federation. That is true for the regions as well.
Quebec has a special mission in the country. It contributes some elements that are unique to the personality of the country and to the identity of the country.
Mr. Penson: What area does not?
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Mr. Pettigrew: That is true. However, I am talking about the linguistic distinction in Quebec which is a major asset. In business, when one deals with foreign markets, the fact that we have a bilingual country is an extraordinary asset. It gives us a special voice in world affairs. We are all very attached to it. We need to make sure we protect that voice in our country.
I am delighted to now turn to finances. I come from the business community, which I do not miss, but I am delighted to talk to members about finances. I am extremely pleased to explain to my colleague that 6 per cent of the gross national product was the deficit when we arrived in 1993. We are moving to 2 per cent. We have gone from 6 per cent to 2 per cent for the first time in our history. This is extraordinary. We are now-
[Translation]
The Deputy Speaker: Unfortunately, the hon. member's time has run out.
[English]
Mr. Jim Hart (Okanagan-Similkameen-Merritt, Ref.): Mr. Speaker, I will be splitting my time with the hon. member for Peace River.
I rise on behalf of the people of Okanagan-Similkameen-Merritt to respond to the annual budget proposed by the Liberal government. My constituents and I are very pleased and anxious to reply to what we have heard.
The people in my area of the country want to hear something that would be of some use to them, for example, paying the mortgage on their homes, keeping them gainfully employed, contributing to their RRSPs, among other things. In fact, the people at our town hall meetings in Grand Forks, Merritt, Oliver and Penticton cited unemployment, crime and taxes as their major concerns.
I can hardly express the eagerness that the people of Okanagan-Similkameen-Merritt feel in terms of their willingness to work toward getting the nation's financial house in order. In the smaller communities in my riding the people know that their financial security and that of their families can be realized in a healthy, prosperous national economy.
The people who write to me or speak to me at town hall meetings and other events throughout the riding express a high measure of confidence in our ability to eliminate the federal government's annual budgetary deficit. This would create jobs for Canadians.
A recent poll indicates that some Canadians feel that deficit elimination measures would increase unemployment levels. Nothing could be further from the truth. Interest rates would fall. More economic opportunities would result for small business. More job opportunities would be created. Tax relief would become a reality.
The people in my riding have made it very clear that they support the Reform Party's plan to give economic stability and tax relief to Canadians. In turn, Canadians would be able to confidently plan their futures.
Canadians want to be able to buy a new car or house or plan a vacation or contribute to their retirement funds. Too many Canadians are in the position of just making ends meet or trying to pay off what seems to be the never ending credit card balance.
The Liberal Party of Canada should listen to this voice of confidence that is coming so loud and clear from western Canada.
My constituents and I are concerned that Liberals are afraid to eliminate the deficit. Reform members, following what we have been told by Canadians, are prepared to eliminate the deficit. We know that the federal government must abandon the old tax and spend types budgets. We know that governments should make it possible for the private sector to create jobs.
Canadians know that successive Liberal and Conservative governments over the past few decades have failed in this regard. They have failed to create jobs. It has been shown clearly that job creation must come from a healthy private sector.
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My constituents and I know that the Liberals have different ideas. The government's annual budget is supposed to flow from the people to the government. The Reform Party continually tries to drive home to the Liberals what Canadians are saying. The people in my area of Okanagan-Similkameen-Merritt have been specific when they speak of what should be the economic agenda for our nation.
During the extended recess in this place for most of the winter months, when the Liberals decided there was no work to do probably because it was too cold, I met with many of the constituents from Okanagan in British Columbia. In fact, while the Liberals were sitting close to their wood stoves getting warm I managed to hold town hall meetings in my riding.
The people told me that they are concerned about personal security. What they are talking about is first, good jobs; second, higher incomes resulting in lower taxes; third, safer streets; fourth, social security programs they can count on including health, education, pensions; fifth, political stability.
Following the unveiling of the Liberal Party's budget we now have some measure of the great distance from these priorities the Liberals have placed themselves and the federal government. The list of priorities I have just read is far removed from the priorities the Liberals have established for the government to pursue.
In the city of Penticton in my riding during the month of January 1996, $4.48 million was paid out in unemployment insurance. In 1995 about $34 million was paid out in UI; in 1994 $43 million; in 1993, $45 million was paid out in UI.
The Liberals are very proud of this type of reduction in UI payments. They try to cite their election platform of jobs, jobs, jobs, their infamous infrastructure program and their deficit reduction measures as being responsible for the drop in UI payments in my riding.
The other side of the coin is the increase in the number of social assistance recipients in the same area in my riding. The provincial government has changed the criteria for receiving social assistance and the federal government has tightened the qualifications for receiving UI payments. The figures I received from my constituency, which are a matter of public record, show clearly that the people who were formerly unemployed are now receiving social assistance. The apparent drop in UI payments is not an increase in the employment level at all.
In addition to what I have just said, there is a large opportunity to create jobs in the Okanagan valley. This is true of our nation as a whole. Deficit reduction will lead to higher employment levels and in the smaller communities such as in my riding in places like Princeton, Merritt, Okanagan Falls and Grand Forks.
Deficit reduction will lead to higher investment. International investors will have confidence investing in the economy once our financial house is in order. Canadians will determine that investment at home is more attractive than investing abroad. The private sector will be able to expand along with higher investment levels. The private sector will be able to create long term, high quality, sustainable jobs. That is what we need in this country.
For example, people speak to me about making contributions to their RRSPs. They note that only 20 per cent of their investment
can be placed in foreign investments. In the majority of cases, Canadians feel that foreign investments are most attractive. This situation should be reversed. Canadians should be expecting to get equal or better results, a better return on their money, by investing at home.
What is worse is that affluent Canadians with a great deal of money to invest are investing in offshore ventures in order to escape the taxes they would be required to pay if they chose to invest in Canada. An example of that is the Liberal finance minister, a classic case of a Canadian evading taxes by registering his company's vessels offshore.
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Canadian Press reports the Liberal minister's steamship company, held in blind trust, has six ships registered in tax free havens. One of these ships was built in 1982 with the help of a 9 per cent federal government subsidy. The president of the B.C. Federation of Labour says that this is ``precisely what is wrong with the tax system. If the people started paying the taxes already in place, we would not have a deficit problem''.
The Liberal finance minister, by registering his ships offshore, escapes paying Canadian taxes-
Mr. Arseneault: Madam Speaker, a point of order. When members enter into debate they must remain on a subject. They must deal with the administration of government.
The member has quite clearly pointed out in his speech that what he is discussing is in a blind trust. It has nothing to do with this government. He should get back on to the subject. His constituents would appreciate that. The Speaker has already ruled on that matter.
The Acting Speaker (Mrs. Ringuette-Maltais): Resuming debate. The hon. member has one minute left.
Mr. Hart: Madam Speaker, I appreciate that. The point is that the finance minister's company made $10.2 million profit in 1989 and $12 million in 1990. All Canadians would agree that there were millions of dollars in taxes that ought to have been paid here on a profit of over $20 million.
With that, I will conclude because I want to be sure that today's time was spent on delivering the response of the people of Okanagan-Similkameen-Merritt to the Liberal's budget without being overly critical of the Liberal Party of Canada.
Mr. Alex Shepherd (Durham, Lib.): Madam Speaker, I was very concerned about the attacks on the Minister of Finance. It is just more of the same from the Reform Party.
As I understand it, the company of the Minister of Finance has 17 out of 21 vessels registered under Canadian ownership. The company pays taxes. The minister made that statement in the House. It is unfortunate that the Reform Party refuses to take that into consideration. The lack of acknowledgement of facts is not peculiar to this issue. It is common in the Reform Party.
The member said that no jobs are being created in the country. It would appear that from the time Reform members were elected in 1993, they stopped reading, they stopped understanding and they stopped looking at Statistics Canada.
We know that over 500,000 new jobs have been created in Canada. Why speaker after speaker gets up and says: ``Jobs, jobs, jobs. You never create any jobs'' is beyond me. Can I send you some Statistics Canada productions? The last quarter has had a major net increase in job creation as well. This seems to be the rewriting of history which is common in the Reform Party.
He also talked about when the House was down, he was out running around the country and how the rest of the members in this House were doing nothing. I find that an insult, quite frankly. I was conducting town hall meetings and talking about the Canada pension plan with my constituents. We were looking for real solutions to real problems.
He talked about the concerns of people in his riding in paying their mortgages. He could have gone on to say that through the mandate of the government, real interest rates have declined significantly. Those mortgage payments are a lot easier to pay today than they were in 1993.
I would like to mention two items that are of interest to me, credit cards and the RRSP component being 20 per cent foreign mandated and perhaps it should be more than that.
Do members imagine that taxpayers should subsidize people to invest in other countries? I would have thought they would have been arguing the reverse, that we should reduce the 20 per cent foreign component of RRSPs to encourage more investment in Canada and to encourage small and medium business formation. However, not the Reform Party. The Reform Party seems to think it is quite fine to have that investment capital flow outside of our border to be invested in the United States. It would create jobs down there I suppose.
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The member mentioned credit cards. One thing that concerns me is the growth of consumer credit in Canada. We know that 93 per cent of disposable income is now paid toward debt repayments for the average individual, which does not include taxes. It is being paid to banks, to financial institutions, et cetera.
Would members of the Reform Party agree that is an alarming level of credit, that we need to curtail credit spending by individu-
als and possibly the extent of credit financing by some of our financial institutions?
Mr. Hart: Madam Speaker, on the question on foreign investment, my point was quite clearly that this is what Canadians are saying. They are trying to find ways to get more than the 20 per cent. I am not suggesting they should. I am saying it is the government's responsibility to somehow turn that perception that the better investment is a foreign investment.
I think Canadians want to feel the best investment is right here in Canada. The hon. member is trying to twist, as the Liberals in the House so many times do.
I will answer the hon. member's many other questions. The answers are no, no, no, no and no.
Let us consider some other issues such as what the Liberals could have done and what they did not do. The hon. member sits there smugly while in the budget the Liberal government has attacked the seniors in my riding and seniors across the country with a tax grab on seniors, while the members opposite sit there and smugly hold on to their own MP pension plans.
Take a look at what the Liberals did promise. The Liberals made a promise during the Quebec referendum and into the run-up to the budget. The Prime Minister repeatedly assured Canadian seniors their retirement incomes were safe. In a supplementary document entitled ``The Seniors Benefit: Securing the Future'' the government restated these claims-
The Acting Speaker (Mrs. Ringuette-Maltais): Sorry, your time has run out.
Mr. Charlie Penson (Peace River, Ref.): Madam Speaker, I am pleased to have the opportunity to address the House on the the 1996-97 budget.
The problems associated with federal overspending is what brought me and many of my Reform colleagues into politics in the first place. We recognized that the ballooning federal debt was to endanger the livelihood of most Canadians. If something was not done quickly it would endanger the programs delivered to Canadians who need them the most.
Canadians threw out the Conservatives in the 1993 election because they were fed up with the high spending legacy of the Mulroney Progressive Conservatives and because they were deeply concerned about our debt problems.
Imagine my surprise when travelling through Dallas last week. I picked up a copy of the Dallas-Fort Worth newspaper and I read that the Right Hon. Brian Mulroney was to be giving a keynote address in Fort Worth.
The introduction in the newspaper suggested the Right Hon. Brian Mulroney, former Prime Minister of Canada, will present the keynote address to Tarrant Export 40 awards. It went on to say
that Mulroney was a decisive Prime Minister credited with correcting his nation's disastrous economic course.
Imagine taking credit for something, the exact opposite of which he did, when he had the chance as Prime Minister. It seems that is why there is so much disillusionment with politics in this country.
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Brian Mulroney and the Conservatives were elected in 1984 to clean up the mess that was left by the Liberals who had created some $200 billion of national debt. What did he do when he had his opportunity? He doubled that amount. Taxpayers were much worse off after the Mulroney legacy and not vice versa, as he would claim.
I am convinced that if it had not been for the presence of a number of new members in the House, Reform members and some Liberal backbenchers who were elected in the 1993 election, the finances of the country would even be worse than they are today.
We have had some cuts. I think we can take credit for that, those of us who came here in 1993. We were a breath of fresh air in Parliament.
I know that cuts hurt. My riding of Peace River has made quite a few sacrifices in order to reduce federal government spending. However, as painful as these cuts have been, it is tragic that absolutely nothing has been accomplished through them. The cost of servicing the federal debt has grown. We have had a lot of pain but we have not had the gain to go along with it.
As part of federal cost cutting measures in last year's budget there were a number of things cut back in the riding of Peace River. The weather service was cut. Twenty-one jobs at the Beaver Lodge agriculture research station were cut. Air traffic control jobs were lost in the city of Grande Prairie. We lost jobs and services. However, I think Canadians are prepared to make those sacrifices.
There was a real human cost. Nothing can make up for those personal sacrifices made by the people in my riding, but it would have been nice to know that at least the cuts were worth it, that their loss and the loss of people like them had made a real difference in turning the country around. All that happened was the debt grew and the cost of servicing the debt also grew.
Cuts in last year's budget amounted to $4 billion. That is exactly the amount the national interest on the debt increased by. It was all lost to increased interest on the debt.
Not only is Canada threatened by members of the Bloc who want to take Quebec out of Canada, the country is also threatened by the Liberal government. It is not being responsible in getting our finances in order. It is putting the country at risk.
If we look at a pie chart of the budget, the biggest part of the pie would go not to the poor, not to funding for our health care system, not to maintaining our educational institutions; it would go to the increasing cost of servicing our national debt. That is absolutely shameful.
Before the government came into power we were spending $38 billion a year on interest payments to service the debt. That has grown to $42 billion in the past year and under the 1996-97 budget it will rise to $48 billion. There has been a $10 billion increase in the interest on the debt during the three years the Liberal government has been in power. That is tragic.
I believe the picture could have been entirely different. There is an awareness in the country that the deficit and the debt must be tackled. I think the public is far ahead of the government on this issue. The deficit and the debt must be tackled quickly and decisively. Half measures will not do because increasing debt servicing will simply eat up the cuts that are being made.
Provincial governments have received the message. Provincial governments across the land have taken the fiscal problem seriously. They have set firm targets and dates for eliminating their deficits; not reducing them, eliminating them.
The federal government is now the only government in the country which has not set deficit elimination targets. The government talks about rolling targets from year to year. What is the date the government will have a balanced budget?
Without a goal and a target date the people of Canada who are bearing the brunt of the cuts cannot hope that the government will get to where it is supposed to be going.
I would like to speak about my home province of Alberta. The government there is trying through a survey to decide what to do with this year's budget surplus. That is something we have not heard much of for a long time at the federal government level. The Government of Alberta is trying to decide whether to cut taxes or pay down the debt. Soon provincial governments all over Canada will be in the same position.
Not the federal government. Instead it has offloaded its problems to the provinces by reducing block funding for health care, welfare and advanced education. In effect it is asking the provinces to do its dirty work for it.
What is the situation in Alberta? As I said, this year we have a budget surplus. We have growth in the economy. We have the lowest unemployment rate than any other place in the country and we are starting to pay down our provincial debt. This province has made a difference. B.C. and Saskatchewan are currently on the
same track and all provinces have recognized that is the road we have to take. Not only do we have to start reducing deficits and get to a balanced budget, we have to start paying down our national debt.
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This is not the first time Canada has found itself under a staggering debt. Right after the second world war Canada had a debt larger in relation to our GDP than we have now, but there were special circumstances. That debt had been incurred because of the great depression of the 1930s and to finance the war effort. It took the Canadian people with their shoulders to the wheel 25 years, a lot of hard work and a lot of will, to pay off that debt.
We know this did not last very long, however, because the Liberals came to power and especially under Prime Minister Trudeau started another spending spree and the spiral started all over again. By the end of the Trudeau era we had built it up to $200 billion again. Unfortunately the current Liberal government is still adding to our debt.
On March 6 the finance minister tabled his third budget. Like his other budgets, it did nothing to address the problem of the debt which now stands at $578 billion. To service this debt Canadians will have to pay almost $40 billion in interest payments this fiscal year.
That sounds like a big number but I would like to put it into perspective. Fifty billion dollars translates into $4.2 billion each month which translates to $137 million a day in interest payments. The average Canadian taxpayer pays $3,700 a year just to cover the interest on debts. Taken as an average of their monthly cheques, it amounts to $309 million a year.
The third budget of the finance minister is no better than the others. It brings us the pain but no gain. We need balanced budget legislation. We need a firm date. It will happen only when in all corners of Canada where Canadians have made sacrifices they come to some kind of fruition through a government committed to a balanced budget and to pay down the national debt. It has to happen.
Mr. Walt Lastewka (St. Catharines, Lib.): Madam Speaker, I listened intently to the hon. member for Peace River and I appreciate some of his comments and the work he has done in his riding.
On a number of the issues I am not sure it was very clear whether he understood that for every $7 of expenditure reduction there was only $1 of tax balancing out that went into the budget. I am not sure whether he appreciated that expenditures had been cut over time and that working on the deficit is a prime concern and then working on the debt.
As he mentioned, a number of people were affected in his riding with the cuts. That is part of the expenditure cuts by the
government. Is it his view that the cuts should have been harder on the people or that we are going in the right direction and we have to take care of the deficit before there is any impact on the debt?
By having this planned approach allows people to adjust. I am concerned by the hon. member's remarks of cutting more. Does that give people and businesses enough time to adjust?
Mr. Penson: Madam Speaker, I thank the member for St. Catharines. I think we agree on a number of areas. I give credit to the government and the finance minister for tackling the deficit problem.
However, where I have difficulty is I do not believe they are going quickly enough to get to a balanced budget. That is the point I would have in debate with my hon. friend from St. Catharines.
We have to look at two experiences of where governments actually moved to balanced budgets and see what the consequences of those were, in Alberta and in New Zealand.
My home province of Alberta has tackled the balanced budget initiative in three years. In fact, it came out ahead of schedule and we are now starting to get the reward and the province of Alberta is beginning to pay down its provincial debt.
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What happened during that time? How tough was the hardship? We heard a lot of concerns. I know that Ontario has similar concerns right now. If we ask the average person on the street what difference they felt and how severe was it three years afterward in terms of the cutbacks to their personal lifestyle or their operation in business, with the exception of health care in Alberta, most people hardly noticed it was taking place. In fact, many people felt it was long overdue.
There was a consolidation of school boards. For example, school boards which had been put in place in the 1930s during the horse and buggy era now were no longer needed with modern transportation and communication. One school board was consolidated from three or four and in fact was even more effective because it had a little more buying power.
We need to work quickly. We need some reward at the end. There needs to be a light at the end of the tunnel. By continuing to drag our feet on this we are feeling the pain because we are making all of these sacrifices to increase debt servicing.
The example I used was that $4 billion in spending cuts last year, which I compliment the government for but I believe should have been more drastic, were just eaten up by the increased interest on the debt.
If anyone is under the illusion of how severe this is, think in terms of the size of the interest on the debt and how quickly it is growing as a proportion of our budget. We should be alarmed by
that increase because it is threatening very important social services such as health care and old age security.
The hon. member has asked if we need more time to adjust. My assessment would be no. The Prime Minister of New Zealand during the time of the crash in 1982 advised to go as quickly as possible, because the faster we get there the quicker the rewards take place and then small business will be able to create jobs as confidence in the economy grows again.
[Translation]
Mr. Guy H. Arseneault (Parliamentary Secretary to Deputy Prime Minister and Minister of Canadian Heritage, Lib.): Madam Speaker, please note that I intend to share my time with the hon. member for St. Catherines.
I am very pleased to rise today to speak to the 1996 budget. I would first like to congratulate the Minister of Finance. This budget and those tabled by the minister in recent years have always met and often exceeded the government's financial objectives.
The finance minister's budgets work together to help the people of Canada protect their future. To that end, the government has focused its efforts on four primary objectives: maintaining social programs for future generations, ensuring our financial future, rethinking the role of government, and investing in our future.
Although numerous measures will be necessary in each of these areas, today I want to concentrate on those I see as the most important.
[English]
One area I am concerned about in the federal government is in securing our social programs for the next century. I know this is a large area to look into in my short 10 minutes but I want to concentrate today on the employment insurance program and go back a bit to when it was first presented in December.
At that time a number of problems were identified. Even before those problems were identified, the minister in his presentation of that proposed employment insurance bill indicated to the House that he was willing to make changes that would be equitable, changes that would be based on common sense. From that time on the Liberal caucus and members of the Atlantic caucus especially have indicated to the minister a number of changes which have to be made.
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There is no doubt that the status quo is unacceptable. In my riding constituents have come to see me over the years. They indicated that the unemployment insurance program was not adequate and it had to be updated and modernized. They indicated where the problems were.
I know from personal experience when dealing with a layoff at the Atholville mill and the Dalhousie mill that every time we wanted to have some flexibility in the program we were told it was impossible because the Unemployment Insurance Act did not permit us to do this or that.
I am very pleased to see the government has decided to modernize the UI program. I am also very pleased to see the government has agreed to make changes. The minister from Acadie-Bathurst has decided to listen to the committee. I hope the committee will come up with some good amendments.
I congratulate the members for Fredericton-York-Sunbury, Halifax West, and Etobicoke-Lakeshore for the positive amendments they have put forth in that committee so far. Our commitment and amendments should help clarify the intensity rule by making it more equitable, especially for low income families, as you are so much in tune, Madam Speaker, with regard to alleviating their status at the present moment.
I should also point out another amendment that will be made with regard to the divisor rule. The hon. member for Halifax West has already indicated that he is ready to look at the divisor rule and to link it to the UI rate rather than the flat 20 weeks. That should again alleviate some of the problems that have been put forth or identified in the present bill.
The other thing that should be pointed out is the tremendous job the hon. member for Fredericton-York-Sunbury has done on this dossier altogether on his amendment with regard to the going back 26 weeks for UI eligibility and the counting of hours.
In all of this debate some of the positive things in the bill have been put aside and not emphasized enough. The area of counting of hours for qualifying rather than weeks is going to be positive. It will allow people to qualify sooner. It will allow them to qualify for longer periods. It would also be a way of guaranteeing that all hours count.
The other thing that is important on the other side is the flexibility it will give to the programs. I should mention here the transition fund which will go to high unemployment areas. The government has identified $300 million which will go into that fund and the investment fund, the permanent programs, the $800 million which will be put forth to help create more work.
We realize that the changes are not perfect but what I want to emphasize again is that the government has always been listening and has reacted to the concerns that have been brought up by members of Parliament and especially members of Parliament from the Atlantic region.
[Translation]
The 1994-95 budget measures will help us achieve our deficit reduction objectives for 1995-96 and 1996-97, namely 3 per cent of GDP. The 1996 budget guarantees that the government deficit will go down to 2 per cent of GDP in 1997-98. The deficit will have fallen from $42 billion in 1993-94 to $17 billion in 1997-98.
There is no increase in personal or corporate income tax or excise taxes in this budget. Finally, there have been no personal income tax hikes in the last three budgets.
[English]
It is very important to underline the fact of no new taxes because that is what the people have asked us to do. That is what we have heard in our ridings and in the meetings we have had with constituents, from letters and phone calls we have received. People did not want to have an increase in their taxes. The government has responded in a positive way.
The priority area the government has seen fit to work on is getting government right. In this case the budget takes continuing action in reducing waste and inefficiency and in redefining and redesigning the government's programs and activities. Program review, phase one, phase two, it is ongoing. The government has indicated publicly that it will continue that program review to make government more efficient and to cut out a lot of the duplication that exists.
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Working at delivering better quality services at lower costs to the taxpayer is what we want. Government must not only spend less, it must spend more wisely. An example of that is in my own Department of Canadian Heritage where a Parks Canada agency will be set up as a form of alternate delivery of services. In that case the agency will continue to report to the Minister of Canadian Heritage but it will allow for the services and the flexibility to be provided in each individual park. It will allow local parks to adjust their mandate to the local situation and to do that in a fashion that is speedier and more efficient.
Our government has been providing the economic and social environment that will encourage the economic growth that makes new jobs possible. The government has worked at keeping inflation down which results in lower interest rates.
The government has also recognized that youth are our greatest natural resource and the key to our future. Since our election a number of programs for youth have been implemented, such as youth services Canada, youth internship Canada and the student summer job action program. In this budget the government continues to build upon the measures taken for youth in the previous budgets. We have provided for on the job training through the reallocation of $315 million over three years to help create youth employment opportunities. The budget also doubles the government's commitment to the summer career placement program.
With regard to Canadian heritage the minister has announced renewed funding for Radio-Canada International which was again a request from Canadians, again a sign that we have listened to Canadians. They told us that it was an important feature of our culture, that it was an important feature for Canadians. We have reinstituted that funding to allow it to continue for another year. The minister is now searching for new ways of funding that service.
I should also point out that the minister has indicated to this House and publicly that a special culture fund is being set up to assist our cultural industries. That should be in place very shortly. The details will be announced publicly whenever they are ready.
[Translation]
I want to thank the Speaker for letting me speak this morning. I hope the hon. members opposite will applaud the Minister of Finance for bringing down a budget that will really benefit this country.
Mr. Nic Leblanc (Longueuil, BQ): Madam Speaker, I would love to congratulate the Minister of Finance for his supposedly excellent budget, as claimed by the hon. member for Restigouche-Chaleur. However, I find it difficult to do so, because I did not see anything very original in this budget.
Given that the tax burden continues to increase, that the deficit remains enormous, and that the debt continues to grow, does the hon. member agree that the government should go after the workers and the unemployed, particularly in New Brunswick, to collect more money? The budget provides that an extra $5 billion will be generated through higher contributions and fewer weeks of unemployment insurance benefit entitlement for the unemployed.
At the same time, the government is reducing transfer payments to the provinces to the tune of $3.5 billion per year. The extra money collected from the unemployed and the reduced amounts paid to the provinces total about $8.5 billion per year. This is more or less the amount by which the deficit will decrease in the coming year. This budget is not about innovating.
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It makes the same old mistakes. Moreover, it increases the burden of the poor and of the most vulnerable members of our society, including the unemployed, while making them pay so much in unemployment insurance contributions, and making small and medium size businesses, particularly in Quebec and in New Brunswick, pay so much more.
I really wonder how the hon. member can congratulate the Minister of Finance.
Mr. Arseneault: Madam Speaker, I want to thank my colleague for his question. I would like to point out to him that the government has two priorities: to put our financial house in order and to create jobs.
To answer the question put by my colleague about our financial future, I would say that if he had reviewed the figures in the budget, and I will repeat them because I mentioned them in my speech, he would have obviously noted that the deficit for 1995-96 will decrease to 3 per cent of the gross domestic product and that it will continue to fall. By 1997-98, the deficit will have dropped to 2 per cent and it will continue to diminish until it gets to 0 per cent.
In 1993, the deficit reached $42 billion. By 1997-98, it will have come down to $17 billion. So, it is widely recognized throughout the country that the Minister of Finance is acting responsibly and putting our financial house in order. We are making progress. The figures we have here go to prove it.
In terms of job creation, I think the minister has identified new initiatives with one priority in mind, our youth. It is one of our priorities, our future, the future of our country. In my view, this is our most important natural resource. It is very important that it be identified as one of our priorities. It is the first time that a federal government has made a priority of this very important issue.
The hon. member made some comments about the unemployment insurance program, based, I think, on the act itself, which we are currently amending to help solve the problem he mentioned.
[English]
Mr. Walt Lastewka (St. Catharines, Lib.): Madam Speaker, I would like to thank the member for Restigouche-Chaleur for splitting his time.
Today we are debating the 1996-97 budget. I am pleased to have the opportunity to represent the city of St. Catharines in this debate. I want to focus my comments on creating jobs because that is what the budget is all about, creating the atmosphere and positive attitude for businesses to create jobs.
During the election in 1993, unemployment in St. Catharines and Niagara was around 15 per cent. Last year, it was below the national average of 9.1 per cent, still too high but moving in a positive direction. It is not due to government handouts. It is due to the open process for budget review, cutting red tape, working with small businesses, working with people, working with communities. By working together we have obtained economic stability, growth and deficit reduction.
The government ran on a platform of creating opportunity. Liberals believe that a federal government must work with Canadian business to provide the proper supports and to create a positive climate for economic growth. That is what I endeavour to do in my riding. I meet with local business people in St. Catharines every week to try to find out how their businesses are doing, what they need to succeed and how government can work to help and not hinder business growth.
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I was telling the House a couple of weeks ago about a company in my riding, Lincoln Fabrics, which has the ISO 9002 standard. This company is the first fabric supplier of this type in North America to achieve this high level of quality manufacturing and management. I am going to make sure that people, governments and businesses know about this achievement because it is companies like Lincoln Fabrics that set the industry standard. It is companies like Lincoln Fabrics that create jobs.
I met recently with two companies which make wood products. These companies are going to work with the EDC to sell 100 per cent of their manufactured wood products to Germany. This is a very important step for these companies and is an example of how governments can create the opportunity for jobs within businesses without throwing money at them, instead working with them. These businesses need information, they need contacts, they need people who can open doors. With this help they can expand and create jobs.
I have worked with a business from the greater Toronto area. It was going to move to the United States because of the duty hit it was taking on imported goods and the requirement of up front money, excess paperwork and administration. The government passed Bill C-102 which provides for duty deferral and a free trade zone system. Now that business is staying in Canada, keeping Canadians employed.
Bill C-102 is important for a lot of companies. In St. Catharines we compete directly with U.S. businesses across the border. They had a major advantage over Canadian companies because of their free trade zones. We have changed that. A group of St. Catharines' companies worked with me and with the finance department to make sure the new legislation was effective and useful for businesses.
Local companies in St. Catharines are also looking forward to benefiting from the government's Canada community investment program or CCIP. Communities and businesses outside major urban areas like Toronto, Halifax, Montreal, Vancouver, Edmonton and Calgary need help. Areas like mine have smaller populations with fewer businesses but they have very active business potential which needs the assistance of the Canada community investment plan announced in the budget.
I believe many local projects which could have created jobs have been lost because of lack of financing, venture capital and a co-ordinated community investment fund. For example, did members know that the inventor of the plastic hockey stick is from my area? What they may not know is that he could not obtain funding in Canada so he had to go to the U.S., which meant jobs in the U.S.
How about the inventor of no-lead shotgun shells, John E. Brown, who was forced to go to the U.S. for funding, and we lost more jobs?
We must continue to find solutions to help Canadian inventors and entrepreneurs find risk and venture capital from Canadian sources. New programs like CCIP can help to create jobs. I have just outlined how government policies and programs through finance and industry have already benefited and will continue to benefit businesses in my area and areas across Canada.
The budget announced last month will continue to help business. It helps because it continues the path of fiscal accountability and stability. It helps because the bottom line is that the deficit must be brought under control in order to improve the Canadian economy and we are doing exactly that.
Canadians will not see a drastic slash and burn approach by this government. They will see an aggressive loyalty to bringing our fiscal house back in order. It took many years to create the deficit and it will take a few years to get in line.
In 1993 the deficit run up by the last government was $42 billion or 5.9 per cent of GDP. This year the target is $24 billion, which means the government will have met its target of 3 per cent of GDP. Meeting targets is very important. Next year with a deficit of $17 billion for 1997, the debt to GDP ratio will be down to 2 per cent. This will put us in a position where the economy can finally grow faster than the debt.
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As the finance minister said on budget day, it sets the stage for the first meaningful decline in the debt to GDP ratio since 1974-75. It sets the direction for meeting targets, building confidence and allowing people and business to make their home and business plans and build a better future for Canada and Canadians.
As I have just outlined, first and foremost government is putting its fiscal house in order. That is an important initiative the government can take to ensure the economic future of our country.
Action is being taken to directly foster job creation and growth in several ways. This year's budget reallocates $270 million to encourage technology and innovation over the next three years. This includes programs like Technology Partnership Canada and expanding the SchoolNet program introduced in 1994. Every member in the House should be working with their schools to promote SchoolNet in their area. It is an investment in young people.
When talking about unemployment, the focus must be on youth. Not just because they are the future of our economic success, but because young people have a much higher rate of unemployment than the overall population. In many cases it is their first job and it is very important.
The budget addresses the issues of education and improved job opportunities for youth. First, we have provided secure, long term funding for transfers to provinces which help to pay for post-secondary education. They asked for it and it has been given to them for five years, $25.1 billion. The student loan programs have been expanded to provide financial assistance.
In this year's budget the government is providing an additional $80 million a year in tax assistance to help students and their families with the cost of tuition.
Three hundred and fifty million dollars is being reallocated to help create jobs for young people over the next three years. This includes doubling the funding for student summer employment this year. The funds will also be used to help young people with the school to work transition. That can be a real barrier to getting a first job. This is in addition to the funding for the Youth Internship Canada and Youth Services Canada programs which have been very successful in my riding of St. Catharines.
There are many other items I would like to touch on, including the information from the Canadian Export Association on what the government has done.
In summary, I want to emphasize that the budget is about jobs. The government is working to create an economic and business climate so that jobs will be created, while at the same time being sensitive to the needs of our most important resource, people.
[Translation]
Mr. Philippe Paré (Louis-Hébert, BQ): Madam Speaker, I am pleased to take part in this budget debate. Based on the budget speech, it is possible to make an overall assessment of government action.
When we look at the action of this government, we are reminded of the old saying ``all talk, no action''. I will demonstrate this reality in two ways. I will compare the speech from the throne with the budget speech and I will also compare speeches that were made on Canada's foreign policy with the reality that this government is inflicting upon us.
The speech from the throne tells us that the government intends to withdraw from a number of areas under provincial jurisdiction. Four or five areas are mentioned, and members will recall that, in Quebec alone, the cost of duplication and overlap has been estimated at $3 billion by the Bélanger-Campeau commission. So when we look at the speech from the throne, we have a tendency to think that the government is going in the right direction.
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But, at the same time, what do we learn in the budget speech? That the government intends to establish a Canadian securities commission when such commissions already exist in the major provinces, including Quebec.
The government says it will withdraw from the area of job training, but look at all the procrastination around this so-called withdrawal. We can see that it has really no intention of withdrawing from this area.
The government is establishing a committee of tax experts, but the experts it appoints to this committee are all certified accountants that are experts in tax avoidance.
So what are the government's real intentions when it says it wants to reform the Canadian tax system? We can have our doubts about that.
The federal government is creating a health services research fund. We will now have a new area where there will be duplication and overlap.
In the speech from the throne, the government says it wants to ensure the viability of social programs. Let us take a look now at what is happening in reality: $7 billion cuts in transfers to provinces, and let us not forget that these transfers are for major services such as health care, income security and post-secondary education, that is colleges and universities.
It claims to be contributing to ensuring the viability of social programs by its unemployment insurance reform. Let us look at a few points here. With the UI reform, all workers start contributing with the first hour worked. So the little guy, the person who never contributed in the past, will be forced to pay into a fund, with no assurance at all of being able to draw anything out of it later on, of course.
At the same time, maximum insurable earnings are being lowered. Again the little guy will be forced to contribute, while the ones contributing in the past on up to $42,000 will now contribute up to $39,000, and yet the speech still claims the intent is to ensure the viability of social programs.
The government is more or less rifling $5 billion from the unemployment insurance fund, still for the purpose of ensuring the liability of social programs, of course.
In the throne speech, the government claims to have finally controlled the deficit. Now, the 1996-97 increase in the debt is $24 billion. Since this government came in, the debt has gone up by $110 billion and yet it is patting itself on the back, claiming to have gained the upper hand over the deficit.
The government tells us in the throne speech ``we will be making changes to Canadian federation in order to bring it more in line with what Quebecers and Canadians want''. Their last invention, the principal homeland of French culture in North America, has made them the laughing stock of everyone. We have only to look at the political cartoons and the newspaper editorials of the past two days. Everybody is making fun of it, and this is practically the only answer the government can come up with, since it is incapable of reaching a consensus within its own ranks on this question.
The second main element I am going to address, Canada's foreign policy, I will look at from two points of view: aid to developing countries and human rights. When the Liberal Party was in opposition, it criticized the Conservatives for their foreign policy, but it is interesting to compare the priorities the Conservatives set for themselves in Sharing Our Future and the Liberals' in Canada in the World.
The Conservatives set out their foreign policy under four headings: attacking poverty, helping people help themselves, promoting development and, finally, partnership in foreign policy, which was a key concept. What about the Liberal's famous foreign policy made public in 1995? When the document was tabled, of course, the Minister of Foreign Affairs spoke of the generosity and compassion of Canadians. While it is true of Canadians, it is not true of the government.
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Now let us look at the facts. The three pillars of Canadian foreign policy: prosperity and jobs through trade, security for Canadians in a stable world-God knows it is not stable-and, finally, exporting our cultural products and values. They even dare to add, ``to ensure our success in the world''.
So the concept of generosity appears in speeches as does the concept of compassion, but when it comes down to really formulating a policy and stating it, it appears that everything is centred on trade relations.
We have a very typical case to demonstrate the failure of Canadian foreign policy. It is the case of a resident of Sainte-Foy, Mr. Tran Trieu Quan, who has been a prisoner in Vietnam for over two years. He is a businessman who made a business transaction. He was simply the intermediary between an American company, which went through its Canadian subsidiary to deliver cotton to Vietnam. He was simply the go-between. There were fraudulent dealings in the transaction. The Government of Canada knows he is not responsible. Interpol in Ottawa has shown that Mr. Tran was himself a victim of this shady deal, the company's scapegoat, but the Canadian government says it cannot do a thing to help Tran Trieu Quan to return home.
There are actions the government could take. Remember that the Prime Minister, in his first trip to the Asian Pacific, signed, among other things, an agreement for a co-operation project with Vietnam worth $36 million. Just as the Prime Minister of Canada was about to sign, he could have set his pen on the table and told his Vietnamese counterpart: ``I would be very happy to sign this co-operation agreement but there is a little problem. A Canadian
citizen has been a prisoner in your country for a number of months. Until Mr. Tran Trieu Quan is released, no trade agreement can be signed''.
As you may also recall, the Canadian government helped Vietnam eliminate its debt to the International Monetary Fund. The IDRC has projects in Vietnam. The former Minister of Foreign Affairs increased financial aid to Vietnam by $20 million.
The April 13 edition of Le Journal des affaires reports that CIDA has just awarded a $7 million contract to Stikeman Elliott and Experco Limited, companies based in Montreal and Drummondville. Although this government continues to give millions of dollars to Vietnam, it is unable to take whatever actions are necessary to ensure Mr. Tran Trieu Quan's release.
This shows the very wide gap between what the government says and what it can or cannot do.
[English]
Mr. Ian McClelland (Edmonton Southwest, Ref.): Madam Speaker, I thank my hon. colleague for his presentation here today. By and large as we are both members of the opposition, our job is to keep the government's feet to the fire.
I have travelled a fair amount in Quebec in recent days and I think that we have a particularly serious problem in our country. As the economy of Ontario or Quebec deteriorates it pulls everybody else down because they are so dominant in the country. Even with the most cursory glance we can see the dynamism that has existed in Toronto and we can compare that to Montreal which at one time was Canada's premier city, the premier city in North America.
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When we go to Montreal today, it is with the feeling of unease when we see what has happened in Montreal over the last few years. An illustration of this is taken from the magazine L'Actualité in November 1995. In 1980 before the separatists really started to ruin the economy in Quebec and hurt the economy in the rest of the country, the residential vacancy rate in Montreal was 3.4 per cent. It is now 6.8 per cent. The business vacancy rate was 3.3 per cent and it is now 19.7 per cent. The public debt in Quebec in 1980 was 20.3 per cent of gross provincial product. Today it is 40.9 per cent.
To put this into context, the cost of servicing the debt that the country has is $47 billion, more than all of the social spending put together. Many Canadians define themselves by our social spending and perhaps even more so in the province of Quebec. Yet the ability to continue to spend on the very programs by which Canadians define themselves is threatened by the enormity of the debt and the cost of servicing the debt, which this year is $47 billion.
It is interesting to note that the former leader of the opposition on becoming the premier of Quebec has changed his spots once again. He has now put fiscal responsibility as the number one priority of Quebec rather than separation.
There are examples, evidence and proof that this incessant drive for the separation of Quebec is costing all of Canada, but by far it is costing Quebec and the citizens of Quebec far more than it is costing the rest of the country. It is very hurtful to the economy and to the people of Quebec. Would the member consider that perhaps this is an appropriate time to continue to work within the federation to evolve a new relationship for all provinces and particularly the province of Quebec but to do so within Confederation where we will all end up being winners rather than trying to make winners and losers?
[Translation]
Mr. Paré: Madam Speaker, if we could erase the last 130 years and if the hon. member for Edmonton Southwest were to ask his question, we would probably say: ``Yes, he is probably right''. We could experiment and try to see if Canada, with its English-speaking majority, and Quebec, with its French-speaking majority, can live in harmony at the economic, social and other levels.
The reality is that history cannot be erased. For a great many years, Quebecers have felt constrained in this country. Their English-Canadian partners have never been as open to them as they would have liked. So much so that Canada is even unable to accept the concept of distinct society, to recognize that Quebec and Quebecers are different. They tried to sell this reality by using another phrase: ``principal homeland''.
If Canada cannot accept Quebec as a distinct society, how can Quebecers trust the federal government to ensure their survival, their social, economic and cultural development?
Mr. Nic Leblanc (Longueuil, BQ): Madam Speaker, I am very pleased to rise in this House today to share some information for the benefit of the people of Quebec and the rest of Canada.
I would like to take a brief look back to find where the problems we are currently experiencing stem from. Where do our financial, social and economic development problems come from?
First of all, let me say that these problems can be traced back to the early 1970s and the Liberal federal government we had then. Let me explain.
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In 1970, the Liberal government, here, in Ottawa, was running budget surpluses of approximately $247 million. Between 1970 and 1984, the average annual deficit was $17 billion. Starting in 1970, 1972, 1973, the federal government decided to centralize more powers here, in Ottawa, and to develop national standards for health and education in particular, business subsidy programs and
loosely regulated procurement policies. The federal government was determined to become the grand centralizing master of Canada. That is where the problem stems from.
I am for free health care, for free education as much as possible, and for research and development subsidization. But at the same time, we must be honest and warn the public that all this will cost, that it has a price tag, that they will have to pay for all this.
That, however, is not the course the federal government took at the time, choosing to make the whole range of services available without increasing taxes. What duplicity. That is when they started running progressively higher deficits-$2 billion, $5 billion, $10 billion, $15 billion-up until 1984, when the deficit quoted in the last budget tabled by the then finance minister, Marc Lalonde, had reached $40 billion, while revenues were approximately $60 billion at the time. You can imagine just how huge a deficit that was.
All this because the federal government wanted to show the people of Canada, and Quebec in particular, that it was the almighty boss on whom depended the achievement of the quality of life we had to have and deserved as a have country.
All these commitments have cost us a fortune. In fact, between 1970 and 1980, so much money was injected by the government in the economy that it caused it to overheat, creating artificial economic conditions, which made the inflation rate climb by up to 12 per cent per year. The best solution the government could find to curb this inflation was to let interest rates rise as high as 21 per cent. This caused a terrible and savage recession. That is what the federal government, and the Liberal government in particular, did between 1970 and 1984.
Between 1984 and 1993, the Conservatives were in power. I was a member of that government from 1984 to 1990. Between the years 1970 and 1984, the Liberal government made many long term commitments, including long term bonds and mortgages. Consequently, when the Conservatives took office in 1984, it was very difficult for them to reduce the deficit, in spite of their extraordinary efforts.
There was also a lack of political courage. The Conservatives continued to spend too much. During those years, there was an average shortfall of $4 billion per year in government programs and services. In other words, each year people paid $4 billion more than they received in services and programs. That was already an enormous amount.
Yet, the debt increased by an average of $30 billion per year. This means that between 1984 and 1994, the deficit reached $30 billion per year. The federal government was still spending too much. It kept this overheating of the economy.
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Once again, the solution found by the government-the only one that it could find-was to ask the Governor of the Bank of Canada to increase interest rates in 1990. Of course, that was an easy solution which required little courage on the part of the government.
Increasing interest rates results in lower growth, which in turn means lower inflation. However, it also triggers a recession. We had a terrible recession in 1981 and people had not forgotten about it in 1990. That recession not only reduced inflation but actually triggered a deflation. That has been going on since then, which means almost six years now. This is nonsense, really a lack of courage for a government to act in this way.
The Minister of Finance has not been very inventive in his 1996-97 budget, nor very courageous. All that he has done is to decide to add $5 billion a year to his revenues from the unemployment insurance contributions made by employees and employers. Five billion of the employees' and employers' money. This is scandalous.
At the same time he has decided to transfer $3.5 billion less to the provinces. Calculating the receipts from the unemployment insurance fund, $5 billion, and the $3,5 billion less to the provinces, that gives $8.5 billion more to the government. This is the equivalent of what the Minister of Finance proposes in his budget, which is to reduce borrowing requirement from $26 billion to $16.8 billion.
The amount is almost the same. Make the unemployed pay more, transfer less to the provinces, that makes up the difference. Not a very imaginative solution. Scandalous in fact.
If the Minister of Finance had decided to transfer $3.5 billion less to the provinces, and at the same time had decreased the taxes collected from those same provinces, there would perhaps have been some grounds for saying that at least there was some spirit of decentralization, that the minister wanted to give more responsibility to the provinces, But no, that is not what he is doing. He will keep on taxing the people in the provinces in the same way, while at the same time cutting back on expenditures by $3.5 billion.
In conclusion, the cause of our current difficulties is the present federal regime.
[English]
Mr. Ian McClelland (Edmonton Southwest, Ref.): Madam Speaker, as always, the hon. member delivers a reasoned and thoughtful paper to the Chamber.
I would like to follow up on a question and comment to the earlier Bloc speaker. I suggested that regardless of our biases, whether we think funding for social programs should be 100 per cent government funded or 0 per cent government funded, the
quest for the separation of Quebec has cost the country dearly over the last 15 years.
Is our responsibility to the past or to the future? Is our responsibility to our grandparents or to our grandchildren? For whom should we be toiling in the Chamber?
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[Translation]
Mr. Leblanc (Longueuil): Madam Speaker, on the subject of the cost of sovereignty, I have just mentioned that it cost the federal government hugely to retain its authority and to increase its powers in order to further centralize the government here in Ottawa. I explained this in my speech. I think the member for Edmonton Southwest failed to grasp the message I was trying to get across, despite its simplicity, in my view.
In other words, huge sums were spent all over the place without any thought to medium and long term benefits. Accordingly, the federal government spent huge sums to show people, and particularly Quebecers, its authority and to demonstrate how they could not live without it.
On the subject of the future, we are well aware that, as was explained during the referendum, it currently costs between $2.5 billion and $3 billion to manage duplication. These costs were calculated by experts and not by the Parti Quebecois or the Bloc Quebecois.
The experts are not calculating the value of the shortfall or inefficiency. However, it could be said that the inefficiency of this duplication, which is creating a lot of inconsistency in our programs and funding, might mean we are talking about a shortfall of $10 billion.
So if everyone looked after their own business, the provinces would have their full responsibilities in many areas, and the federal government would be a sort of overseer, as was intended in confederation. Initially, the federal government served simply as a sort of co-ordinator, and the provinces were autonomous. If we follow this management style, we might well survive. At the moment, however, the government does not appear to want to decentralize. It is just the opposite. Each time new rules are set or legislation is passed or amended in this House, the aim is always to give more power to the federal government and less to the provinces.
Clearly, it is not going to happen in a hurry, unless Quebecers decide once and for all to take over their responsibilities so that they can get out of the current economic slump.
[English]
Mr. Roy Cullen (Etobicoke North, Lib.): Madam Speaker, it is a pleasure to speak for the first time in the House. I hope I will have a chance next week to speak at length.
Working in business in Canada we hear interest rates have been reduced to a level at which the spread between interest rates in Canada and in the United States has moved to a favourable position. Interest rates in Canada are now lower than in the United States, which is creating a huge potential for investment in Canada and in the province of Quebec.
I will echo to some extent the comments of the member for Edmonton Southwest. The difficulty we have is that investment capital is coming into Canada but with the instability of Quebec we see businesses leaving Montreal, we see more people leaving Quebec. As a person born and raised in Montreal, I think that is tragic.
We have an opportunity to attract capital into Canada for the well-being of Quebecers and Canadians.
Contrary to what the member for Longueuil said, the budget dealt with innovation in a very large way. I will try to capitalize on that opportunity in my riding which has a large innovative sector. I know we can produce some good results. I ask the hon. member to consider that for the province of Quebec and his riding as well.
The member talked about transfer payments. In this budget the transfer payments were reduced but the provinces were warned many years ago. The transfer payments were reduced in the order of 3 per cent to 4 per cent at a time when we were cutting the machinery of government by 8 per cent or 9 per cent.
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When is the member's party going to recognize that the prosperity of Quebecers is tied to keeping Quebec in Canada and getting investment in the country?
[Translation]
Mr. Leblanc (Longueuil, BQ): First of all, Madam Speaker, I must congratulate the new member on his election to this House.
Now, to answer his question, I should say that, as far as we are concerned, the political context does not really hinder economic development all that much. We sincerely believe that it is the poor management of the federal system and the enormous debt that the federalists have accumulated that hurt the economy.
As for interest rates, they are quite low these days, but they are still too high when considered in relation to inflation. The difference between the rate of inflation and interest rates is still well over three percentage points.
At present, interest rates should be around 5 per cent. The difference should never exceed 3 per cent. It is a yardstick that must be applied. If we compare interest rates to the rate of inflation, it is clear that interest rates are still higher than they should be in relation to inflation.
[English]
Ms. Susan Whelan (Essex-Windsor, Lib.): Madam Speaker, I will be sharing my time today with the member for Brome-Missisquoi. I rise today to speak in the 1996 budget debate.
The Canadian dream that built Canada on principles of sharing, caring, fairness and compassion is alive in this budget. The course charted by the Minister of Finance and the Prime Minister is the correct one for Canada, for us, for now and for the future. This budget sets the stage to lead Canada throughout the 21st century.
We as Canadians must remind ourselves of the greatness of the Canadian experiment and return our energies to the endeavours which reflect our collective values. The foundation on which we achieved success in the past and will continue to succeed in the future is our ability to understand, to compromise and to change. As a government and as a country we must rethink the role of government.
From this budget we will guarantee the future of our social programs, restore the trust in the old age security system by providing long term sustainability and guarantee the security and stability of federal support for health care, post-secondary education and welfare. We will also invest in the future by reallocating funds to make new investments, provide help for young people and support technology and international trade. These are the essential areas for job creation and future growth. We will take the necessary measures to redefine the role of government in the context of a modern federation economy.
My riding, the ethnically diverse riding of Essex-Windsor, consists of more than 70 different groups and reflects the shared values of Canadians. Pluralism and multiculturalism, the fact that we can be different and yet all be Canadians, these are the fundamental characteristics of my riding of Essex-Windsor and of Canada.
My constituents have participated actively in prebudget consultations for the past two years. I am pleased to say the Minister of Finance has listened once again. My constituents asked for no new taxes and there are none. As well, the warden for the county of Essex for 1995, Mr. Lyle Miller, expressed his concern over the replacement of the Canada assistance plan. This budget alleviates that concern.
The federal government's objectives of the Canada health and social transfer are to safeguard medicare and social programs, to return to growth in transfers, to guarantee the cash floor component and to restore stability and predictability by five year funding arrangements.
It was also raised by one of my constituents, Mr. Andre Marentette, a member of the group Canadians for Constitutional Money, that our foreign borrowing is too high. Not only is he correct but this budget will for the first time in years make us less dependent on foreign loans. How? As we reach our objectives of deficit reduction, we decrease our need for foreign borrowing.
Not only are my constituents concerned about our investment in the future, it is one of the very reasons I sought public office. I assured my constituents at my nomination that ``a new Liberal government will invest in Canada's greatest asset, our people. And by investing in them, we invest in our future''.
This budget does just that. It invests in our future to ensure not only our future but to restore the confidence of Canadians.
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This government has allocated resources to new investments in three main areas: youth, technology and external trade. Action in these fields is not an increase in expenditure but is financed by budget savings through reallocations from lower priorities.
Government cannot solve Canada's problems by simply throwing massive sums of money at different areas. This is what has created our difficulties in the past. Instead we must create an environment that encourages economic growth and make sustainable new jobs possible.
We need low inflation, low interest rates and declining deficits to build a growth environment. These are all critical to the future of our nation, to the future of Canada.
To talk about the future of Canada, let me speak for a moment about youth. Most of us will know that the unemployment of youth, those under 25, is very high. It is in the neighbourhood of 16 per cent. This needs to be addressed and it was in this budget. We must help our young people to take the first step to get their first job. In that objective I applaud the government for asking possible businesses to reach out and do exactly that.
There is $315 million allocated for new employment opportunities. There is $700 million already provided through programs such as youth internship Canada, youth service Canada and summer job programs. In this budget we will double the government commitment to summer job programs from $60 million to $120 million. With the $60 million last year, we created 30,000 jobs. We hope to double that number.
The remaining funds will be used to improve job possibilities for young people in innovative sectors: information technology, environmental technology, tourism, culture, trade and international development. These investments will build on a new domestic Team Canada style partnership between businesses and government to create entry level jobs for youth. With these new funds, $315 million reallocated and $165 million in tax expenditures, the
budget brings total expenditures for youth specific programs over a three year period from $700 million to $1.2 billion.
As well let us talk about the learning package. There is an additional $165 million in tax assistance to students and their families over three years. There is a 25 per cent increase in educational tax credits and tuition fee limits. As well the ceiling on annual contributions to an education savings plan has been raised.
Canada must also invest in science and technology to increase productivity and competitiveness which fuel export growth and ensure job creation at home. Encouraging export growth is a priority for this Liberal government. One billion dollars in exports represents about 11,000 jobs for Canadians.
In 1995 the value of Canadian exports exceeded that of imports by $28 billion. Along with the budget this Liberal government unveiled a new science and technology strategy which will target promising sectors. Technology Partnerships Canada will support the development of advanced manufacturing and materials, aerospace, environmental technologies and biotechnology. Funding will increase from $150 million in 1996-97 to $250 million in 1998-99.
Access to the information highway will also be increased by the SchoolNet program. By 1998 all of Canada's educational institutions and libraries will be connected. As part of SchoolNet, 2,000 computer students will connect 50,000 small businesses to the Internet.
To further encourage trading growth, the Business Development Bank will receive $50 million in additional capital allowing the bank to lend up to $350 million more to growth, knowledge based and exporting businesses. The Export Development Corporation will receive $50 million in new equity for innovative export financing.
We have talked and talked about the red book but by today I think we can come to this House with a remarkable balance sheet showing real achievements, particularly on the fiscal front. The Prime Minister recently noted we have finally turned the corner on deficit reduction. This has been done without raising personal income taxes in any of our three budgets. Turning the corner allowed the government to move forward on other fronts. The government is reallocating funding to provide increased support for job creation in three vital and key areas: youth, technology and trade.
It will be remembered that we talked about a deficit of 3 per cent of the GDP. It is now a reality. Now we are looking forward to and talking about a deficit of 2 per cent for 1997-98.
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With regard to social programs, the Liberal Party is the political party which provided Canada with a social system, a social safety net which is the envy of the rest of the world. Once again, I am proud to say in this House that the Liberal Party is the party which is able to meet the true challenges of this country. This government has met that challenge by rethinking the social safety net for the long term in order to provide security to those who will grow up in this country, to offer people in the 1990s a safety net meeting their expectations and to ensure that our country is ready for the next century.
This government is prepared to put people first.
Mr. Garry Breitkreuz (Yorkton-Melville, Ref.): Madam Speaker, it was with great interest that I listened to the rhetoric from the member opposite.
April is tax month, the month when most Canadians fill out their annual tax forms. Madam Speaker, how many Canadians do you think would be willing to walk into a department store at the end of every month, slap down a cheque for $500 and then let the clerk decide what to bring them for their money? How many people would let that clerk go to the shelves and decide what the customer will get for their hard earned wages? Would people be willing to tolerate being forced to go to the store every month and lay down a huge sum of money to buy things they do not necessarily want or need? What I am trying to say is we need to change the system and bring back democracy to the way our government spends our money.
The member opposite talked about how the government is not increasing taxes. Nothing could be further from the truth. Since this government has taken over, personal income taxes have risen over $1,000 per person and the hon. member says they are not raising taxes. What a bunch of you know what I am talking about, Madam Speaker. I am fed up with the Liberals misleading the public.
We need a tax system that does not just focus on collecting more money, but allows people to determine how it is spent. We would never go to a store and allow them to simply tell us what we are going to get for our money but the government tells the people of this country what they are going to get for their money.
The member said the government is going to put in place all of these new programs. She talks about reducing government spending and then goes on to list all these new programs. Do people have people a choice? How about a tax form that tells the government what the priorities of the people are. We have real problems with the way government when elected does not carry out the wishes of the people.
The hon. member went on to talk about how health care is a priority. Is it when we reduce funding for health care and increase it in other areas? She talked about multiculturalism in her riding. I have multiculturalism in my riding as well. In fact English and French are not the dominant features there.
I took a survey as to how my people want their money spent and multiculturalism was almost at the bottom of the list, yet this government emphasizes that kind of thing. People want to look after those programs themselves.
The system is rewarding lobbyists, special interest groups and corporations. What about the tax concessions and grants to the corporations, the very corporations that pay the bills for this Liberal government to get elected? Then when it gets elected it turns around and rewards those corporations with tax concessions and grants.
How about asking the taxpayers if that is how they want their money spent? I think the member gets the message. It is about time the Liberals started listening to the people and stopped misleading the people about how great it is to have all these new programs and to spend all this extra money when in fact they have increased taxes drastically but they try to portray the image that they have not.
I wonder if the member would like to go to a department store and slap down a huge sum of money every month and have them determine what she is going to get for it. Taxpayers deserve to have more input into how government spends their money.
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Ms. Whelan: Madam Speaker, I am quite surprised by the hon. member's comments. As he knows, for the first time in history the government has held prebudget consultations for two years in a row. What better opportunity for Canadians to have their say and to have their input into what the budget says?
My constituents participated. I do not know if his constituents did. They came and said what they wanted. The majority of the things that were heard at the meetings of the past two years in my riding and in other ridings were reflected in the budget.
We have met deficit reduction targets. How many governments in the past, including the Tory cousins of the party opposite, have done that? They could not meet those targets in the last 10 years. I would like to think that we did exactly what we said we were going to do in the election campaign. We kept our promise. We said 3 per cent of GDP and we have gone beyond that.
Liberalism and multiculturalism make this country great. They make it what it is. I am glad to be Canadian. I am glad to be part of this party.
[Translation]
Mr. Denis Paradis (Brome-Missisquoi, Lib.): Madam Speaker, I am pleased to rise today to speak to the budget. The theme of this year's budget is ``securing the future''. I think that securing the future is exactly what is needed in these difficult times.
In the last few weeks, I had the opportunity to tour my riding of Brome-Missisquoi, to visit every town and village and talk with the people. I can tell you that the main concerns or needs of the people of Brome-Missisquoi-which are probably similar to those of other Canadians-are as follows. I will try to list them in order of frequency.
Their first concern is taxes. I will get back to this in a minute to compare public expectations with what is in the budget. Second, bureaucrats and their red tape. Third, duplication between the federal government and the provinces and how it can be eliminated as quickly as possible. Fourth, how to decentralize the management of certain programs. Fifth, how to achieve recognition of Quebec's distinctiveness.
I will now go back to the people's first four concerns in light of the finance minister's last budget. The budget starts out by stating that we must secure our financial future.
One year before the Liberal Party came to office, budget figures pegged the deficit at $42 billion. The deficit fell to $37.5 billion one year later and to $32.7 billion two years later. The new deficit forecast is $24.3 billion, then $17 billion for next year.
I mentioned earlier that political choices have to be made, and political choices are important. We could have cut the deficit down to zero tomorrow morning. But what about social programs? What about the most vulnerable in our society? I think we must go ahead without forgetting the needs of the most vulnerable in our society.
We will eventually eliminate the deficit, but the new Canada social transfer will help the most vulnerable in our society make it through. I think that this is important, in the choices the government made.
The second point is rethinking the role of government. I was telling you earlier about the concerns of the people of Brome-Missisquoi, about the need to reduce duplication.
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Let me give you an example. The speech from the throne provides for the establishment of a national food inspection agency. Now, this is a measure that will help eliminate duplication. Currently, when it comes to food inspection, we have inspectors from Agriculture Canada and Health Canada at the federal level. At the provincial level, we have inspectors from the Régie des marchés agricoles du Québec, as well as from the Fédération des producteurs, which administers the joint program for that sector. Then, if we are talking about restaurants in Montreal, there are city inspectors who make regular visits to these establishments. That makes a lot of inspectors in the food inspection sector.
An agency like that will allow us to offer a partnership to all the other levels of government, because it is in the best interests of the
citizen. The citizen at the end of the process will not get the visit of five inspectors dealing with five different issues during the same week. This is an example of how to streamline operations and help eliminate duplication between the federal and provincial governments.
A similar example is the proposed revenue commission. Again, and this is particularly true in Quebec, the GST and the TVQ are harmonized. Agreements were signed by the federal and Quebec governments and things are going well. However, if we can increase the number of such agreements between Ottawa and the provinces, so much the better. Again, this will benefit citizens and taxpayers. In that sense, I believe the Canadian government is making great efforts to eliminate or reduce duplication.
A budget is about the moneys to be allocated or to be spent in a given year. Earlier, I stressed the importance of protecting seniors, as well as those who need to get an education and those who need health care services. As I said before in this House, thanks to the new Canada social transfer, the federal government will no longer send three cheques to the provinces, that is one for education, one for health and one for social security. It will be a single cheque. Provinces will be able to take that single cheque and spend it according to their own priorities.
Last year, when this was announced, the big cheque which combined the previous three cheques was cut about 4 per cent. But we should look at the facts. The federal government cut its program spending by 7 per cent, but transfer payments to the provinces by 4 per cent only. Better than that, the Minister of Finance announced in his last budget that the federal government had agreed to a new five year funding framework for the Canada social transfer, starting in 1998-99.
The first two years, the federal contribution will be kept as its current level. Then, in the following years, the transfers will increase at a rate linked to economic growth. What this means is that the federal government will not, as other governments are doing, transfer its deficit to the next level of government. The federal government will continue to assume its responsibilities, under the Canada social transfer, for health, education and social security. This is important.
I have the privilege of sitting on the public accounts committee of this House, where we can examine the way senior officials and deputy ministers manage, one after the other. This allows the Canadian government to be managed as well as can be, to cut spending and streamline operations to stay within budget, to see where we are going with our budgets from the inside, and to monitor those who spend money week after week and month after month. This allows us to save. These savings do not penalize the citizens who, I repeat, are the reason we are here in this House.
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In conclusion, I want to speak about the best part of this budget. The best part is the job creation program for our youth. We have
increased the resources allocated to the youth summer employment creation program from $60 million last year to $120 million this summer, for all of Canada. This is a real investment in the future, it is a measure that will help young people across the country who represent our future; therefore it will foster our progress as a society.
Mr. Michel Guimond (Beauport-Montmorency-Orléans, BQ): Madam Speaker, I listened carefully to my colleague from Brome-Missisquoi, who sits with me on the Standing Committee on Public Accounts. I have one brief question to ask him.
He has talked a lot about duplication and overlap. Does he not agree that one of the best means to eliminate duplication and overlap would be to take away one level of government, that is the federal government, and to make Quebec sovereign?
Mr. Paradis: Madam Speaker, at what price? I think two or three levels of government can very well co-operate together. My colleague from Beauport-Montmorency-Orléans knows full well that there is a program that worked very well last year and the year before, and that is the infrastructure program.
It is not a program from one government, it is a program that called for the co-operation of the federal, provincial and municipal levels and it was set up quickly. It has worked properly, and I am even sure that his riding must have benefited from this infrastructure program. I think the solution for the future-I was talking about young people earlier-lies in young people, but also in co-operation and joint action. I appeal to all my colleagues of the Bloc Quebecois to show willingness to co-operate and to take joint action, so that we can now revitalize the economy and ensure that we live in a province and a country that are even more prosperous.
The Deputy Speaker: It being 2 p.m., we will now proceed to statements by members.