Hon. Marcel Massé (President of the Treasury Board and Minister responsible for Infrastructure, Lib.): Mr. Speaker, I would also like to table, in support of the Estimates, Part I, the Government Expenditure Plan.
In addition, I will table with the Clerk of the House, on behalf of my colleagues, Part III of the Estimates consisting of 78 departmental expenditure plans. These documents will be distributed to the members of the standing committees to assist in their consideration of the spending authorities sought in Part II of the Estimates.
In 1993, the Red Book stated: ``We will exercise unwavering discipline in controlling federal spending and will reorder current spending priorities to make sure that maximum return is obtained on each investment''.
These estimates mark the turning point: the point where we regain control over government spending. The point where we deliver public services adapted to today's reality.
[English]
As we promised in 1993, we are working to put the country's financial house in order. The main estimates I am tabling today contain expenditures that are closer to our means.
[Translation]
We are fully committed. We have worked hard and we are on the verge of achieving our objectives.
In the span of four years, we have significantly reduced the deficit, we have built a more efficient public service. We are working to deliver quality services to all Canadians.
(1010 )
For example, this year, Revenue Canada will process several million tax returns, and it will do so in less than 10 days.
Environment Canada has rationalized its approach. The number of weather offices was reduced from 71 local offices to 17 regional offices. This was made possible by better use of modern equipment and technology. Weather information and services provided to Canadians will be improved.
[English]
By the end of the current fiscal year, the percentage of the gross domestic product allocated to federal programs as a whole will be the lowest it has been in almost 50 years. Government program spending will account for only 11.9 per cent of the gross domestic product in 1998-99 as opposed to 16.8 per cent in 1993-94.
[Translation]
Since it assumed responsibility, this government has reduced the federal government's expenditures from $120 billion to $106 billion.
[English]
As we promised, we have changed the way in which we govern even as we continue to put public finances in order. We took up the fight and we will win the battle to provide our citizens with quality government.
[Translation]
The people of Canada elected us because they had confidence in us and believed, with just cause, that we could succeed. Our expenditure plan will live up to their expectations, but we still have a long way to go to transform government. This year we can achieve our financial goals without announcing any new reductions.
I left the public service and decided to enter the political arena in order to protect the financial future of our country. I was already dreaming of the day when I would be part of the birth of a new culture of public financial management.
In December 1993, I said: ``Over time, governments collectively have promised more than they could deliver- and delivered more than they can afford''. Today marks a turning point in the history of the administration of public finance in Canada. We have examined our financial situation, made firm decisions, and taken action to achieve our objectives. We have governed strongly and wisely.
But make no mistake: the battle has not yet been won. To relent would be to stray from the path that we have set. We are readying ourselves to enter the 21st century on sound and solid footing.
[English]
In February 1994 I told hon. members that we had to undertake an in depth review of the roles and responsibilities of the federal administration so that we could give the country a government equipped to meet the challenges of the 21st century.
Program review has been the cornerstone of our strategy. Thanks to this unprecedented exercise, we have been able to achieve our deficit reduction targets, to improve the delivery of services to Canadians and to clarify the role of the federal government in a number of areas.
[Translation]
We have reformed the system of expenditure management. We have inaugurated an ongoing program review, and soon will be in a position to provide public services within our financial limitations. We have created a stable long term planning framework for the departments.
The program review has, among other things, led us to the conclusion that, at the close of the 20th century, the state did not need to be the owner of railways, airports, or even the St. Lawrence Seaway in order to serve the taxpayers' interests. It enabled us to more clearly define the areas in which the government can best be involved in co-ordinating the actions of all citizens.
The main focus of public administration must still be the pursuit of program excellence and quality, in keeping with our means and with the needs of all of our fellow citizens.
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Our mission has been developed without ever losing sight of the goal of enhancing the measurement of outcomes and of accountability. We are still faced with the challenge of maintaining a culture of state administration which supports constant improvement.
To that end, we have put in place a number of initiatives.
[English]
In partnership with industry we have eliminated half of the administrative irritants identified by small businesses. By next September, Veterans Affairs Canada for instance will have cut the time it takes to process an initial disability claim in half. All of this has been done while in fact spending less than we had predicted.
[Translation]
While reducing costs and providing quality services to Canadians, we are preparing partnerships with the provinces, the private sector and the NGOs.
The Canada infrastructure program is one example of a successful partnership.
Another is the transfer by Transport Canada last November of its civil air navigation services to a private sector not-for-profit agency, which today employs 6,000 former public servants.
[English]
Not only must program delivery reflect today's reality but most important, it must meet the needs of Canadians. Soon Canadians will be using more of the new information technologies to deal with government. This is a more economical, more efficient approach that will be accessible to Canadians at any place and at any time. The government would like to develop cost recovery more fully; however, we will move forward cautiously to avoid obstacles that might unduly inhibit the competitiveness of companies or the access of Canadians to services.
[Translation]
This tool will lead to a change of attitude in both public servants and those who pay user fees. Departments will have to better tailor their services to users' needs.
Thanks to the determined support of the public servants who have been behind our undertaking for the past four years, we have made considerable progress. Thanks to their innovative nature, these public servants have proven their ability to adapt rapidly to change, while keeping firmly in sight the objective of the pursuit of excellence and the delivery of quality services.
Canada has an administrative system that is the envy of the rest of the world. Yet we cannot rest on our laurels. The constantly and rapidly evolving world economy demands greater efficiency and greater rationalization of our operations.
Our public administration had become too unwieldy over the years. The governmental machine had multiplied its areas of intervention, and had built cumbersome and costly structures. After reviewing the functions of the state, we were forced to reduce its size.
[English]
However, we are treating our employees with civility and respect as we move through the public service reduction process. Accordingly, we established the early departure incentive program, called the EDI, and the early retirement incentive program, or ERI, both of which offset a number of the consequences of staff reductions.
[Translation]
The number of federal public servants has gone from 225,000 down to 195,000 between April 1995 and December 1996.
We all want a modern and dynamic public service. We also want a quality public service. We cannot afford to be left behind, nor to let events overtake us. Accordingly, we have introduced a series of measures and strategies to address this issue. The program known as ``La Relève'' is the catalyst for building a modern and dynamic public service.
[English]
The return to collective bargaining is another important step for the government. I look forward to successful negotiations with the unions. We are expecting a great deal from these negotiations. We are looking for financial accountability. We are looking to establish the concept of total compensation and we are looking at transforming the public service.
(1020 )
[Translation]
Canada deserved a new way of managing public affairs. We have a vision of the future that is shaped by the need to move forward with pride.
I do not need surveys to know that Canadians are happy that their financial independence is within reach and that they will soon be free once again to choose the type of society they want.
[English]
Our vision held true as we improved results, assessment, transparency and accountability. These changes mean that we can establish a new public service culture in the best interests of all Canadians.
[Translation]
We still have much to do, but I am proud of what we have already accomplished.
The House will recall that last March we introduced, on a pilot basis, a new format for six of the Part IIIs of the Estimates.
In October, I also tabled performance reports for 16 departments and agencies. These reports provided the House with more detailed information on the results achieved. And they brought this information to members six months earlier than if we had waited for the tabling of the traditional Part III. These documents were well received and appreciated. They reflect our efforts to improve the information we present to Parliament. We have therefore decided to continue with the initiative this year.
The 16 departments and agencies have prepared outlook documents, entitled ``Plans and Priorities", which I am tabling as their
Part IIIs. They are the outcome of discussions with members of the House and the auditor general.
I would like to thank all of them for their valuable contribution, especially the member for St. Boniface and the members of his working group.
As further good news for Canadians, I am also making public today another document: ``Getting Government Right-Governing for Canadians''.
This document-which is close to my heart-is a report on the current status of government reform, as well as a description of the action we will be taking to achieve our goals.
We promised to create quality government. Canadians can be proud of their government. We have kept our promises. We are back on the right path-the path to cost-effectiveness and to quality.
Mr. Richard Bélisle (La Prairie, BQ): Mr. Speaker, as the minister said a few minutes ago, in 1997-98, the federal government will budget nearly $106 billion for program spending, 2.9 per cent less than in the current fiscal year.
In his speech, the President of the Treasury Board seems to be looking at the world through rose coloured glasses, and what he says is far removed from the experience of thousands of public servants who have been laid off or whose professional future is uncertain.
Take, for instance, the situation at the cheque printing centres, where employees, non-unionized and in a vulnerable position, were given the choice of accepting a 40 per cent drop in salary or staying home, when their service was privatized.
The minister's self-congratulatory tone is hardly appropriate, considering the unemployed who are getting poorer because their benefits were cut as a result of unemployment insurance reform, while today, the Minister of Finance is using the UI fund surplus to reduce his deficit artificially.
(1025)
The minister tells us, and I quote: ``We are working to put the country's financial house in order''. How can the minister say that when we know that 50 per cent of spending cuts represent cuts in transfer payments to the provinces? Similarly, putting the country's financial house in order explains only 21 per cent of spending cuts, in other words, $1 out of every $5 committed by the government.
The minister went on to say, and again I quote: ``In the span of four years, we have significantly reduced the deficit''. What the minister should have said in the House this morning is that, in addition to the provinces, the unemployed have also significantly reduced the deficit, when we realize that the other major weapon in the battle against the deficit is the unemployment insurance fund.
The minister also said: ``This year, we can achieve our financial goals without announcing any new reductions''. However, as a result of cuts in transfer payments, the provinces will have to cut funding themselves and do the minister's dirty work.
Of this $14 billion in spending cuts, only $3 billion is directly the result of spending cuts within the federal government. Does the absence of new reductions mean the end of federal house cleaning before the election?
Making the provinces pay and thus take the blame for spending cuts in health care, education and social services and making the unemployed pay as well, is that the beginning of a new culture in public financial administration the minister has been bragging about?
The minister also said the government was treating its employees with civility and respect as it moved through the public service reduction process. Where is the civility and respect in refusing, as the minister himself did, to invest the $18 million required to align the federal employee drug plan with the plan under which all Quebecers will be covered once the Rochon plan is in place?
In Quebec, maximum insurance coverage is $760 per year. This means that federal employees who suffer from a serious medical condition will have to pay 20 per cent of their drug costs however high they may be, which could amount to thousands of dollars every year.
In response to a question on this particular situation, the minister told this House only 2 per cent of federal employees living in Quebec may be affected. If so few of them are affected, why not put them on an equal footing with the other 98 per cent, those who are blessed with better health?
The minister added that, between April 1995 and the end of December 1996, the federal public service shrank from 225,000 to 195,000 employees. We will have to check how much contracting-out the government did during the same period, especially now on the eve of a federal election.
This old Liberal habit of spending money they have not earned yet is obvious here. Where is this financial independence the minister is referring to when he tells us, as he did a moment ago, that he does not need polls to tell him that Canadians are pleased with regaining their financial independence, when the accumulated debt is $600 billion? The only good news is that the debt collector is no longer knocking at Canada's door? Thanks to the contribution of the unemployed and the provinces, the threat of bankruptcy and insolvency is not as imminent as it was four years ago.
Go ask the unemployed, those who despaired of ever finding work and dropped out of the labour market altogether, and the provincial finance ministers. Where is the financial independence the minister is boasting about this morning?
Here is an example of this old Liberal habit-one might even call it an atavistic trait-to spend other people's money.
(1030)
At page 2-14, Part III, of the 1997-98 Estimates, we read the following:
The government is considering obtaining four UPHOLDER class submarines from the Royal Navy.I hope Canada is no longer buying the old tubs that the British Navy wanted to get rid of a few years ago. It goes on to say:
Delays in approving this project resulted in expenditures which were paid through the operating budget, to support an additional program to overhaul OBERON class submarines.There is also $8.6 million to buy a patrol frigate by March 1997; $61.3 million to buy sophisticated air-to-surface missiles. However, as regards spinoffs for the Canadian industry, the defence department document says: ``Since the weapons, pods, testing material and spare parts will be bought through the American government, the Canadian industry will not be directly involved in the contracts''.
In other words, this document, the Estimates, is drafted in Canada, but benefits the American industry.
Meanwhile, the minister is proud of these results.
Granted, the minister is an intelligent person. However, he does not live in the same world as we do, he does not live in the same world as Canadians do. That is the tragedy.
[English]
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, I am pleased to respond to the President of the Treasury Board's tabling of the estimates this morning. I think that we have to point out that not everything is as clear as he would like us to believe. I refer to his speech in which he said ``we will exercise unwaivering discipline in controlling federal spending''. That is a wonderful statement.
When I looked at the Globe and Mail last week I happened to see an article that said ``next week's government spending estimates will prove the ad hoc and very political nature of the heritage minister's eleventh hour $10 million gift for CBC because the money won't be there''. Guess what, I checked the estimates and the money is not there. There is a little column for last minute add-ons for the political changes made by cabinet and sure enough we find that the heritage minister at the very last minute, after the estimates were printed, was able to squeak in another $10 for her little favourite programs. So much for the unwaivering discipline in controlling federal spending. Obviously it is completely and totally subject to the whims of the people who have power around here. Therefore we have to take a look at the political nature of the rest of the documents to see what else we have found.
The President of the Treasury Board goes on to talk about the fact that the percentage of program spending is going to be the lowest in GDP for almost 50 years, but again he completely fails to tell us about how much money in addition to program spending we are paying in interest. Canadians have to take out $45 billion to $50 billion a year of their pockets to pay for interest for the past mistakes of this government and the previous government. The Tories and the Liberals combined for the last 25 years have been spending with abandon. Now Canadians have to come up with $50 billion a year or the better part thereof just to pay for these mistakes. They were not their mistakes, they were the government's mistakes but guess who gets to pay. And that is the shame of these estimates.
What else did we find in the president's speech: ``Over the last few years the federal public service has grown too large and therefore we have to make it smaller''. A wonderful statement but what do find? Let us take Nav Canada. Again in his speech he referred to the fact that he has transferred 6,000 former federal employees into this hybrid crown corporation, not for profit organization, hid from the auditor general organization; 6,000 federal employees and he claims he is reducing the public service.
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Not one person lost their job. It was a transfer from one department into a not for profit agency. Nothing changed. Yet he would have us believe that he is downsizing the federal civil service, that we are getting more efficient and that we can manage our money better. Wrong. Completely wrong.
We saw the Minister of Finance stand up in this House and heard him boast about his accomplishments, how he has brought down spending, how he has brought it under control and how we are finally getting the federal government's fiscal house in order.
When we look at it, we find that the federal government is getting its house in order again at the expense of somebody else. Remember how I said that the taxpayers have to pay for the government's mistakes. We are also finding that provincial governments are now paying for the federal government's saying it is getting the job done. The health and social transfer to the provinces is how it is doing it.
Last year the federal government transferred to the provinces $14.9 billion for health, education and social services tax. This year it is only going to spend $12.5 billion. That is a reduction of $2.5 billion right there that did not reduce the size of the federal government one inch.
It did not reduce the number of civil servants by one. It was a case of passing the buck to the provinces and saying ``you will do with less in order for us to balance our budget''. Is that responsible
government? Is that the way we want to manage our federal government, by passing the buck to the provinces with $2.5 billion less while Canadians are saying ``what about my health care, it has fallen to pieces''? Does it care?
It cares about the Minister of Finance's being able to stand up and boast about his accomplishments. We read in the paper and I see in Edmonton, where I come from, that people have been denied emergency services, that people have died because they have had to transfer from one hospital to another in an emergency. They died in the process because there was not a bed available for them.
This government is cutting $2.5 billion in cash from health and education. It says it is a good job. The other day the Minister of Finance stood up and said ``Boy, am I good. I am going to throw another couple or three hundred million dollars back into health care. Is that not good news?''
Compare that to the cut of $2.5 billion from health care in one year. That is terrible news. Canadians ought to know what is really going on when it comes to this government's management of health care for Canadians. Abysmal. Downright abysmal.
We have also heard the Minister of Finance tell us about how interest rates have come down and how he is saving all kinds of money. Let us recognize that interest rates are down right around the world. They are down in Japan. There are practically non existent there. They are down in the United States. They are down in the United Kingdom. They are down all through Europe.
I wonder if the minister is taking credit for all that, too. The reality is he just happened to catch the benefit of a wave that was going around the world. Let us remember that interest rates came down not because the Minister of Finance caused it. He just happened to get the benefit of it.
This year we are going to see a reduction, finally, in the cost of our debt. It is going to drop by $1.8 billion, the prediction is, down to $46 billion. Let us remember that it was not the management of this government and it was not the management of this Minister of Finance that caused it.
Thankfully Canadians who have mortgages and loans with taxes to pay are getting the benefit of it. Again there are the seniors who would rely on their investment to give a little enhancement to their quality of life on top of the pittance this government gives them. What happened to their incomes?
(1040 )
I did not hear the Minister of Finance say seniors are going to be better off because interest rates are coming down. While he was boasting that someone with a big mortgage would save $500 a month, he did not say that the senior who has a $100,000 investment is going to lose $500 a month. I did not hear him say that, but that is what happened.
My hon. colleague is going to be retiring after the election. He is going to have to suffer because his investments are going to bring him less money. Does the Minister of Finance care? Perhaps not.
The point is there are hundreds of thousands of Canadians across this land who are being squeezed by the reduction in interest rates, squeezed by taxes going up, squeezed because health care is not there for them, all because the Minister of Finance says ``boy, am I doing a great job''. Canadians know he is not doing a great job. They know that their jobs are potentially in jeopardy. One in four Canadians is concerned about a job. There are 1.5 million unemployed who are looking for a job, and high taxes are destroying these opportunities.
University graduates are asking how to get a job. The Minister of Finance is saying they will have an extra six months to before they have to start to repay their student loans. Let me assure the House that each and every one of them would rather have a job opportunity than an opportunity to defer the payment of a student loan. But these are the types of things that are going on that we do not hear about. We did not hear it in the government's tabling of the estimates.
I refer to the people in power seeming to be able to get what they want. In a stack of documents I have here there is a little interest in what is going on in the department of heritage. If I remember the numbers clearly, while the Minister of Finance says: ``I am squeezing everybody, everybody is having to do with less'', does anybody get more? Yes, the Deputy Prime Minister and the minister of heritage gets more. I think she gets about $90 million more, an 8.4 per cent increase in her budget.
An hon. member: Her Canada pension payments.
Mr. Williams: Not her Canada pension payments, it is for the little programs she wants, the CBC, $10 million; flags for everybody, another few million dollars; the information office, $20 million. She gets what she wants and everybody else has to do with less.
She is on the left side of the party and she thinks government exists to spend money, government exists to manage the economy and manage people's money properly. She does not even know what that means. That is why these estimates fall in hard behind the budget. It tells us that Canadians are being duped by the government.
The other thing I want to point out is the smoke and mirrors. The Minister of Finance said that program spending is coming down and we are finally getting a handle on this. But let us take a look at the numbers. CRTC's budget in the main estimates is down by $18 million, from $22 million to $3 million. Wow, what is going on here? I checked into it and I found that the revenues that were collected have been netted against the expenditures for the depart-
ment. Therefore rather than showing the $22 million which is normally spent, the revenues have now been netted out and they are down to $3 million. But it is still going to spend $22 million.
So what has changed other than the numbers on the piece of paper? The facts are that the way the numbers are presented would lead one to believe that major progress is being made. But when we ask the questions behind it, we find that is not the case. That is the story of the government. That is the story everywhere.
(1045 )
It does not matter if the department of heritage states at the last minute that it wants another $10 million out of taxpayers to get their favourite programs on TV. It does not matter if it is the President of the Treasury Board who stands and says that civil servant numbers are coming down. He is just moving them off the balance sheet. It does not matter if the Minister of Finance stands up and says that interest rates are coming down because of his great management. That is also wrong.
I could go on and on. The point is that the election is coming up and Canadians will have a real choice between the fiscal responsibility and management by the Reform Party and the fiscal irresponsibility by this government.
Mr. Taylor: Mr. Speaker, on a point of order. I am wondering if I might have unanimous consent to reply on behalf of the New Democratic Party to the tabling of the estimates.
The Acting Speaker (Mr. Milliken): Is there unanimous consent?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mr. Milliken): I hear nos.
Mr. Ray Speaker (Lethbridge, Ref.): Mr. Speaker, I rise on a point of order.
I was wondering if the estimates that have just been tabled are in order considering a motion that was passed by this House approximately one year ago. This motion gave direction to this House as well as to components of the legislative branches of government.
Today in raising this matter, I think it is the first time that the motion could be put in its context and be applied to the business of the House and in this case, the business of supply.
To remind us, back on December 11, 1995, we passed a motion in this House of Commons that reads in part as follows:
Whereas the people of Quebec have expressed the desire for recognition of Quebec's distinct society;
(2) the House recognize that Quebec's distinct society includes its French-speaking majority, unique culture and civil law tradition;
(3) the House undertake to be guided by this reality;Mr. Speaker, that is the part of the resolution which I want you to take under consideration, ``that the House undertake to be guided by this reality''.
The fourth part reads:
(4) the House encourage all components of the legislative and executive branches of government to take note of this recognition and be guided in their conduct accordingly.Mr. Speaker, that is the item I am raising in this point of order, as to whether this motion has been considered in the process of determining the presentation of supply to the House. Mr. Speaker, I refer you to Beauchesne's sixth edition, citation 553:
Every question when agreed to assumes the form either of an order or a resolution of the House. By its orders the House directs its committees, its Members, its officers, the order of its own proceedings and the acts of all persons they concern;Mr. Speaker, I would like to ask if you considered what the motion's procedural significance had on the receivability of the supply here today and would have on other bills, motions, amendments, questions and other proceedings that are going to be placed before the House. If you read the motion that was passed by this House as I did, the government and this House must take the reality that Quebec is a distinct society into consideration in all that they do.
On page 16972 of Hansard, the Prime Minister tried to clarify the motion when he said to us in this assembly:
Once it is passed, this resolution will have an impact on how legislation is passed in the House of Commons. I remind Canadians that the legislative branch will be bound by this resolution, as will be the executive branch.Today the minister is a representative of the executive branch.
This is a real, dynamic recognition, recorded in the very heart of our country's government.(1050 )
Considering that the distinct society motion has been in effect for over a year, those so ordered by this House have had sufficient time to take the reality that Quebec is a distinct society into consideration when planning budgets and drafting bills, including any change as to how the proceedings of this House conform to that order.
It is our responsibility at this time to ask those so ordered by this House how they have considered the motion. You, Mr. Speaker, by virtue of this motion have been ordered to do so. The minister who just tabled the estimates has been so ordered. While under those orders did he confer upon Quebec any rights, any privileges or benefits not conferred upon the other provinces of Canada? That is a very key question.
In conclusion, many Canadians agree that Quebec is a distinct society. However, they are concerned with the impact it would have on them if it were entrenched in the Constitution. They are also concerned with having this reality, as the Prime Minister described it, recorded-
The Acting Speaker (Mr. Milliken): Order, please. I have listened very patiently to the hon. member in spite of some concerns that others may be having and I fail to see any tie-in between the point of order that he has raised and the form of the estimates. I fail to understand why it would be that the estimates, which appear to be in the normal form for estimates as required by the rules and orders of this House and by our longstanding practice, should take on a different form based on the point which the hon. member has raised.
Accordingly, having heard nothing that would convince me there is anything irregular whatever in the form of these estimates, I can only say that I believe the hon. member's point of order is not well taken. I think we should proceed with the business of the House.
[Translation]
Mr. Duceppe: Mr. Speaker, I think your decision is in fact justified, and this is proof that the distinct society resolution meant absolutely nothing because, as you see, in something as important as the budget, it has no application.
The Acting Speaker (Mr. Milliken): I would ask the hon. member to be circumspect and not to put words in the Speaker's mouth. I merely indicated that the hon. member for Lethbridge was out of order in questioning the Estimates tabled by the minister and recommended by His Excellency in the House today and the resolution we passed. That is all that I said.
[English]
I do not want the hon. member from the Bloc Quebecois to draw any other inference from what the Chair said as he is trying to do at this time.
I would suggest we move on to the regular business of the House. I do not believe that a point of order has been raised.
I will hear the hon. member for Lethbridge briefly, but I have listened very patiently and I think he has had a fair hearing on this matter.
Mr. Speaker (Lethbridge): Mr. Speaker, I appreciate the time which you have allotted to me because the matter is of very great significance.
I would ask for a clarification on your ruling. I am not questioning your ruling but in terms of clarification, with respect to the motion which was passed on December 11, 1995, are you saying that the House or a member of the executive council does not have to consider that motion as ordered by the House as it relates to a piece of legislation or the estimates of today or any other matter? Is that what I interpreted-
The Acting Speaker (Mr. Milliken): No. I simply said that the hon. member had failed to show that there was anything in the estimates which was not in compliance with the motion. I respectfully suggest that was his point. Having failed to prove it on any cogent argument, in my view the point of order is not well taken and I so rule.
I am prepared to move on with the business of the House at this point.
Mr. Williams: Mr. Speaker, my hon. colleague from Lethbridge specifically referred to the motion passed in the House on December 11, 1995 and the fact that this House will take these things into consideration.
The estimates which were tabled this morning by the President of the Treasury Board contained no reference whatsoever that this motion has been addressed in the preparation of these documents. Therefore, I ask that the-
The Acting Speaker (Mr. Milliken): Order. I have already ruled on this point. I think the hon. member is re-arguing the point. The Chair has given a ruling and I think it is quite clear. There was no evidence put forward in any of the lengthy argument of the hon. member for Lethbridge to show that there was anything irregular in the tabling of these estimates. I am sure that we could get into a protracted debate as to whether the estimates have taken into consideration the point that was adopted by the House in the resolution to which the hon. member for Lethbridge has referred. I suggest that is a matter for debate. It is not a matter of a point of order.
(1055 )
The minister and the members who wish to argue this point can do so on one of the allotted days when we will be considering these estimates, as no doubt we will be over the next coming months. I suggest that it is a matter for debate. It is not a point of order. The estimates appear on their face to be in order and I respectfully request that we move on.
[Translation]
Mr. Duceppe: Mr. Speaker, I need some clarification.
This distinct society motion indicated that, in all its actions and decisions, the government was to take this reality into account. That was what was passed.
That being said, the estimates bear, among other things, on the heritage department. Through the issue of culture, whether Quebec or Canadian-
The Acting Speaker (Mr. Milliken): Order, please. This is the same point. As I said, we have already ruled.
[English]
I would also like to thank the witnesses who appeared before the committee as well as the members of Parliament for their work on this committee. This is a very important report that I think will guide the government in its approach to this very significant question.
[Translation]
Mrs. Maud Debien (Laval East, BQ): Mr. Speaker, ``The State of the World's Children'' is the title of the latest Unicef report, from which I quote the following: ``Today, over 250 million children around the world-in countries rich and poor-work and many of them are at risk from hazardous and exploitative labour. Denied education and trapped in cycles of poverty, their most basic rights, their health and even their lives are in jeopardy. The contributing factors are multiple and overlapping, including the exploitation of poverty, lack of access to education, and traditional restrictions, particularly for girls''.
Today, the government is tabling the report of the sub-committee on sustainable human development on this same topic, along with a proposed action plan on this intolerable situation.
I must say that the Bloc Quebecois members took part in the activities of this sub-committee with interest. Our active participation contributed to improving the report, and the government party accepted almost all of our recommendations.
We must point out, however, first of all, that the conditions under which the final report was drafted and translated into French are unacceptable.
I would just like to indicate that we played a significant part in the drafting of this report, and we are calling for the government to implement its 19 recommendations as promptly as possible.
(Motions deemed adopted, bill read the first time and printed.)
He said: Mr. Speaker, I am, in fact, introducing two bills whose purpose is to wake up francophone members outside Quebec who are usually asleep or hide their heads in the sand when enforcement of the Official Languages Act in Canada is at stake. The President of the Treasury Board, when he was principal secretary at Foreign Affairs, even tossed out the Official Languages Act.
This bill is intended to give enforcement of the Official Languages Act in Canada more teeth. It would ensure that funding earmarked for Canadian francophone communities gets to those communities. Unfortunately, this money is appropriated by the provinces for other purposes.
The bill therefore suggests that transfer payments to those provinces be reduced, if the money does not go to these communities or if the provinces violate the Canadian Constitution as it applies to the minority rights of francophones. That is, in fact, the case in most Canadian provinces.
(Motions deemed adopted, bill read the first time and printed.)
He said: Mr. Speaker, the second bill is along the same lines as the first one. Its purpose is to ensure that the provinces that do not use the portion of transfer payments which is designated for francophone communities are fined accordingly by the federal government, in other words, an equivalent amount is cut from transfers to the provinces if the amounts allocated to francophone communities do not go to those communities.
(Motions deemed adopted, bill read the first time and printed.)
[English]
He said: Mr. Speaker, it is a pleasure for me to introduce my private member's bill, an act to amend the Agreement on Internal Trade Implementation Act.
The agreement on internal trade that was signed nearly three years ago was a start. However, it has not yet been completed. The main obstacle to the completion of this agreement is the use of the term consensus as it has been used by the negotiating committee comprised of cabinet level representatives from federal, provincial and territorial governments.
This committee has interpreted the definition of consensus to mean unanimity. Therefore, any one government, regardless of population, can impeded the progress of the agreement, and indeed that of the Canadian economic union.
My bill will allow the federal government to use its constitutional responsibility under sections 91 and 121 of the Constitution to complete sections of the agreement on internal trade. It is important to note that this action will be taken only in situations where co-operative agreement between the provinces has been sought and not reached.
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This proposed approval formula will require agreement among at least two-thirds of the provinces that have at least 50 per cent of the Canadian population. This provision will facilitate the removal of internal trade barriers and present growth opportunities to Canadian businesses which previously have been restricted by these barriers.
(Motions deemed adopted, bill read the first time and printed.)
Since the list is rather lengthy, I would ask that the list be printed in Hansard at this point without being read.
The Acting Speaker (Mr. Milliken): Is it agreed?
Some hon. members: Agreed.
Mr. Massé: I move the following motion:
That the Main Estimates for the fiscal year ending March 31, 1998, laid upon the Table on February 20, 1997, be referred to the appropriate Standing Committees of the House, according to the detailed distribution list here appended.[Editor's Note: List mentioned above follows:]
To the Standing Committee on Aboriginal Affairs and Northern Development
Indian Affairs and Northern Development, Votes 1, 5, 10, 15, L20, L25, L30, 35, 40, 45 and 50
To the Standing Committee on Agriculture and Agri-Food
Agriculture and Agri-Food, Votes 1, 5, 10 and 15
to the Standing Committee on Canadian Heritage
Canadian Heritage, Votes 1, 5, 10, 15, L20, 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75, 80, 85, 90, 95, 100, 105, 110, 115, 120, 125, 130, 140 and 145
To the Standing Committee on Citizenship and Immigration
Citizenship and Immigration, Votes 1, 5, 10 and 15
To the Standing Committee on Environment and Sustainable Development
Environment, Votes 1, 5, 10 and 15
Privy Council, Vote 30
To the Standing Committee on Finance
Finance, Votes 1, 5, L10, 15, 20, L25, 35 and 40
National Revenue, Votes 1, 5, and 10
To the Standing Committee on Fisheries and Oceans
Fisheries and Oceans, Votes 1, 5 and 10
To the Standing Committee on Foreign Affairs and International Trade
Foreign Affairs, Votes 1, 5, 10, 15, 20, 25, L30, L35, 40, 45, 50 and 55
To the Standing Committee on Government Operations
Canadian Heritage, Vote 135
Governor General, Vote 1
Parliament, Vote 1
Privy Council, Votes 1, 5, 10 and 35
Public Works and Government Services, Votes 1, 5, 10, 15, 20, 25, 30 and 35
Treasury Board, Votes 1, 5, 10, 15 and 20
To the Standing Committee on Health
Health, Votes 1, 5, 10, 15, 20, 25 and 30
To the Standing Committee on Human Resources Development
Human Resources Development, Votes 1, 5, 10, 15, 20, 25, 30 and 35
To the Standing Committee on Human Rights and the Status of Persons with Disabilities
Justice, Vote 10
To the Standing Committee on Industry
Industry, Votes 1, 5, L10, L15, 20, 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75, 80, 85, 90, 95, 100, 105, 110, 115 and 120
To the Standing Committee on Justice and Legal Affairs
Justice, Votes 1, 5, 15, 20, 25, 30, 35, 40 and 45
Privy Council, Vote 40
Solicitor General, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45 and 50
To the Standing Committee on National Defence and Veterans Affairs
National Defence, Votes 1, 5 and 10
Veterans Affairs, Votes 1, 5 and 10
To the Standing Committee on Natural Resources
Natural Resources, Votes 1, 5, 10, L15, 20, 25, 30 and 35
To the Standing Committee on Procedure and House Affairs
Parliament, Vote 5
Privy Council, Vote 20
To the Standing Committee on Public Accounts
Finance, Vote 30
To the Standing Committee on Transport
Privy Council, Vote 15
Transport, Votes 1, 5, 10, 15, 20, 25, 30, 35 and 40
To the Standing Joint Committee on Library of Parliament
Parliament, Vote 10
To the Standing Joint Committee on Official Languages
Privy Council, Vote 25(Motion agreed to.)
Therefore the petitioners call on Parliament to support the private member's activities and developments of the victims' bill of rights in this House.
Therefore, Nova Scotians assert their right to control the destination of Sable Island gas and demand that the federal government cease tampering in this issue.
The signatories call on Parliament to urge the Prime Minister and the Minister of Health to commit to a renewal of the National AIDS Strategy with at least the current level of funding.
The petitioners note that 38 per cent of the national highway system is substandard, that the national highway policy study identified job creation, economic development, national unity, saving lives and avoiding injury, lower congestion, lower vehicle operating costs and better international competitiveness as benefits of the proposed national highway program.
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The petitioners call on Parliament to urge the federal government to join with the provinces to make the national highway system upgrading possible.
Mr. Monte Solberg (Medicine Hat, Ref.): Mr. Speaker, pursuant to Standing Order 36, I have two petitions to present. The first calls on Parliament to urge the federal government to join with the provincial governments to make the national highway system upgrading possible beginning in 1997.
Nevertheless, two Liberal dominated committees have recommended still another federal gas tax increase added to the incredible 566 per cent increase in the past decade.
The petition requests no new gas taxes and for the government to use existing gas taxes to improve Canada's crumbling national highways.
The petitioners request that Parliament support the immediate initiation and conclusion by the year 2000 of an international convention which will set out a binding timetable for the abolition of all nuclear weapons.
The petitioners would like to draw to the attention of the House that our police and firefighters place their lives at risk on a daily basis as they serve the emergency needs of all Canadians.
They also state that in many cases the families of police officers and firefighters killed in the line of duty are often left without sufficient financial means to meet their obligations.
The petitioners therefore pray and call on Parliament to establish a public safety officers compensation fund to receive gifts and bequests for the benefit of families of police officers and firefighters killed in the line of duty.
The petitioners would like to draw to the attention of the House that managing the family home and caring for preschool children is an honourable profession that has not been recognized for its value to our society.
The petitioners therefore pray and call on Parliament to pursue initiatives to assist families who choose to provide care in the home for preschool children, the chronically ill, the aged or the disabled.
The Deputy Speaker: Is that agreed?
Some hon. members: Agreed.
[Translation]
The Deputy Speaker: I wish to inform the House that because of the ministerial statement, Government Orders will be extended by 37 minutes.
Mr. Monte Solberg (Medicine Hat, Ref.): Mr. Speaker, it is a pleasure to respond to the budget presented by the finance minister earlier this week.
I want to begin by pointing out that a budget can never be looked at in isolation from what is going on in the country. It can never be looked at in isolation from the government's history, nor from what is going on in the current economic and social climate.
Frankly, that is the great weakness of the government's budget. It wanted to give the impression that this was a budget about which Canadians should feel very good, that all the problems of the past were behind us and now we can look forward to a bright future.
When the government presents a budget that implicitly says that, it ignores what is going on in the real world.
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The fact is many Canadians today are asking ``If this is such a good budget, why am I not seeing any of the benefits? Why am I not, for instance, able to find a job? Why can I not rely on the health care system? What about the pension system''? Those are the kinds of questions people in the real world are asking today. I did not see any of that reflected the budget we heard just two days ago.
Some have referred to this budget as the fudge-it budget. I think that is a good name because this budget is remarkable not for what is in it but for what is not in it. A budget should take into account all the big issues that are out there today, particularly economic issues. The budget sets the agenda for the government for the entire year. However, if it does not address the issues that Canadians are concerned about, to that degree it has no relevancy to what is going on in the real world. Obviously if the government is going to show leadership, be responsible and accountable to Canadians then the budget should be relevant to the situation of Canadians today. But I do not think the budget is. I think the budget completely missed the point on some very important issues.
I mentioned a minute ago that people today are concerned about jobs. I was astounded when I read the budget document and the booklet dedicated to the issue of employment that there was not one reference to the fact that taxes kill jobs. I heard the minister say in this place that taxes, payroll taxes, are a cancer on job creation. Many people in this place have said the same thing. But in that whole document there was nary a reference to the fact that payroll taxes kill jobs.
It would be bad enough at any time, but coming five days after the finance minister announced a 70 per cent in payroll taxes for the Canada pension plan is absolutely astounding. How could he not know that Canadians were going to be outraged by a tremendous increase in taxes, the largest tax increase in the history of the country? There was no reference to the impact it would have on job creation.
When the government thinks it is going in its favour and announces a 10 cent or a 30 cent decrease in UI premiums, it crows about how many jobs that will create. It alleges that a 30 cent decrease in UI premiums will create 40,000 jobs. But on a huge 70 per cent increase in CPP premiums, there is not a word on how many jobs it will kill. There is not one word in the budget. Nowhere is it seen.
To bring forward a budget five days after it announced that CPP premiums were going to go up a whopping 70 per cent and to not even mention it is simply outrageous, neglectful of the responsibilities of the finance minister. Frankly, it proves beyond a shadow of a doubt how out of touch the government is with the concerns of ordinary Canadians.
During the last election campaign the government ran on the issue of jobs, jobs, jobs. When I went through the jobs document I did not see a single reference to the 9.7 per cent unemployment rate. It was nowhere to be found in the document. There were some words in the budget speech about how we should be concerned about joblessness. However, in the jobs booklet, an appendage to the budget document, under the section of economic indicators one would think that somewhere in there would be a mention of the 9.7 per cent unemployment rate. Somewhere it would mention that we have 1.5 million unemployed Canadians.
Hon. member across the way will correct me if I am wrong, but I believe that going into the last election we also had 1.5 million unemployed Canadians and he government ran on the promise of jobs, jobs, jobs.
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We had 1.5 million unemployed Canadians at that point. Three and a half years later we present a budget with no mention of the fact that we still have 1.5 million unemployed Canadians. If the Liberals ran on that promise I would suggest, in the strongest possible language, that they have completely failed to keep that promise. The promise was a sham, it has not been fulfilled and Canadians have been let down, including the millions of Canadians who voted for the Liberals based on the promise that they would soon find employment. It simply did not happen.
One of the things that was not mentioned in the budget document, even though the Liberals had to put some numbers in but was not remarked on in any significant way is the fact that revenues have gone up dramatically under the Liberal government. Tax revenues have gone up dramatically. If we look at the five year mandate of the government, according to its own numbers going from 1993, including its projections for next year, its total tax revenues will go up about $30 billion. That means a 30 per cent increase.
However, if we look at what has happened to the incomes of ordinary Canadians, I would argue that in a direct comparison ordinary Canadians have fared very poorly. Their incomes have gone down 10 per cent. The government's income has gone up 30 per cent. There was no recognition of that in the budget.
Again, I think the budget should be relevant to Canadians. It should reflect what is going on in the real world. It is fine for the finance minister to speak from the Ottawa bubble and suggest that things are going well, but it ain't necessarily so back in the real world.
Taxes not only kill jobs but they make it impossible for people to fulfil their dreams. We should remember that the whole point of having a budget and of having a government is to serve the people. That is why we are here, we are public servants. However, I do not believe that has been reflected at all in this budget document either.
I would argue that what we find when we read the budget are a lot of self-congratulations and an attempt by the government to put the best possible face on a very bad situation.
I mentioned a minute ago that people are not able to fulfil their dreams because of the staggering level of taxes. However, that is probably the best case scenario for some people. For many people who went bankrupt, including all those people who went bankrupt last year as result of this government's high tax policy, it has been a complete and utter disaster. In 1996 in this country we faced record bankruptcies. That is not a surprise because, after all, we had record high levels of taxation. We had record high levels of personal indebtedness. We saw disposable incomes fall by $3,000 from the time the government came to power in 1993. Again, that was nowhere reflected in the budget documents. I believe it again reflects a disconnectedness with where Canadians are at today.
There are other reasons why I think we need to refer to this document as a fudge-it budget that does not give the whole story.
One of the things that the government and the minister crowed about was the new spending initiatives that he introduced in the budget, about $1 billion a year over two years.
However, what he did not say, and we should always point this out when we have a debt approaching $600 billion, is that this reinvestment was with borrowed money. That is the first thing we need to point out.
The second thing we need to point out when the government is proposing to spend new money on areas that it asserts are important to Canadians, and I believe it is right when it says that, is that when it spends a billion dollars in areas like research and development or health care initiatives it should, to be fair, point out that it also cut $7.5 billion from the Canada health and social transfer and it has made cuts to research and development in the past.
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The impact of those cuts is far greater than the benefits of the money that it is proposing to put in. This year alone it is another $2.8 billion in cuts to the Canada health and social transfer, and it is crowing about $300 million that it is going to put into health care over a three year period.
Let us put things in perspective. For every $1 the government is putting back in this year it is going to take $10 out. I do not think that is much of a help to ordinary Canadians.
A lot of ordinary Canadians are going to say this is nothing but pre-election flimflammery. They have every right to be cynical about what the government is doing and they really wonder what the exercise or what the purpose of a budget is. If it is not to tell the complete story then what exactly is the government doing? Obviously it is trying to put the best possible face on a very bad situation.
One of the concerns I have is that over the three and a half years we have been here our party has railed away day after day on the problem of the deficit. I want to give the government some credit here. The government is finally taking the deficit situation seriously. After nine years that we have pounded away about the deficit, it has become an issue. I would like to suggest that perhaps the Reform Party can take a bit of credit for raising that issue and making it a big issue. I applaud the government for finally recognizing that it is important. It has taken a while but the message has gone through.
Where we disagree completely with the government on its approach to the deficit is in how it has lowered it. The government has taken a completely different approach than our party would have taken. I want to expand on that for a moment.
The government has raised revenues. It has raised taxes, raised revenues, and it has used that money in a couple of different ways. It has used it partially to reduce the deficit and it has used it partially to maintain a government that is far too big, far too wasteful, far to inefficient; a government that still has all kinds of pools of money to give out to special interests, to business groups and to many big businesses like Bombardier. The government has used the money to curry favour with regional interests. It has used it in a number of ways that are not very efficient and do not contribute to the overall betterment of the Canadian people and the Canadian economy.
That is one of the big differences between what the government does and how the Reform Party would handle this situation. The government says that it thinks it is okay to gradually reduce its spending until it has a government of around $107 billion or somewhere around there. We say it is much better to reduce the size of government down to about $94 billion and to turn the savings back to Canadians. In other words, the government has continuously raised revenues up, and that has come from only one place, from the pockets of ordinary Canadians. Meanwhile Canadians' incomes have fallen.
We say it is time to reverse that trend. We would make government smaller and give the benefits back to ordinary Canadians in the form of a $15 billion tax relief package. It would amount to $2,000 for the average family of four by the year 2000. I will go into that in more detail in a moment.
However, there is another area where we are critical of the government. We are critical of the government in so far as when it has reduced spending it has reduced it by cutting transfers to the provinces.
We came here three and a half years ago, coming out of an election campaign where the Reform Party proposed to balance the budget over a three year period. We called it zero in three. In that package we outlined a number of spending reductions. We said because Canadians have made it very clear that health care is a priority for them, we would preserve health care spending and higher education spending, but that just about everything else would have to be looked at. In that plan we were able to come up with enough cuts that we would be able to balance the budget over a three year period.
When we were proposing those things the government members across the way at that time during the election campaign pilloried the Reform Party despite the fact that we were going to save health care and save higher education. What did they turn around and do? They proceeded to cut health care far more dramatically than anything anybody in the provinces ever proposed. We proposed to save it; they cut it by billions and billions of dollars. There are hospitals closed around the country today due to what the Liberals did after they said they would not do it.
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In the election campaign they went around the country telling people they were going to be the defenders of medicare. I do not think there is anybody who would buy that line today. The finance minister has served as the Dr. Kevorkian of health care in this country. He has pulled the plug on health care in many, many regions of the country. I hope the Liberals will pay the price for that.
Cutting transfers to the provinces is the wrong way to cut spending. We say that it is much better to look at your own house first. When you do that then you have the moral authority, you have exercised leadership and people are much more willing to accept cuts at their level if you have already demonstrated that you are willing to accept cuts at your own level.
In order to get its spending in line the government cut defence. It has cut that department by about $3 billion since it has been in power. Defence has been the whipping boy of successive governments for a long time and the cuts have to stop.
When we add up the cuts the government has made to transfers to the provinces which amount to about $7.5 billion, and the cuts which it has made to defence which are about $3 billion, it amounts to $10.5 billion. It has only cut $17 billion in total. The other $6.5 billion has come from cuts to its own administration.
If we add that to the increase in revenues which the government has brought in, which amount to about $28 billion and which include user fees and other revenues, this indicates that only about 5 per cent of the overall improvement in the bottom line is due to cuts in its own backyard. It has only cut itself by 5 per cent. Taxpayers have taken a major hit. Their pocketbooks are empty because of what the government has done. The provinces have taken a major hit. The people in defence have taken a major hit. But only 5 per cent of the improvement in the bottom line is due to cuts that the Liberals over there have taken.
One of the most egregious examples is the cementing in place of the MP pension plan that Liberal members were thrilled to engage in about two years ago. Now they turn around and say: ``We are going to go after seniors and all the rest of the people who are coming up through the ranks and paying into the Canada pension plan by raising their premiums by 70 per cent''.
It is typical of what has happened in this budget. It is typical of what has happened in the past. Liberal members pad their own pockets first and then ensure that their way is paid for by higher premiums and higher taxes from ordinary hard working Canadians.
This budget is a fudge it budget. It has not told the complete story about what is going on in the country. The government has proven that it is disconnected from what is going on in the country. The government has proven it does not understand the pain which ordinary Canadians are feeling. The government has completely broken its promise on jobs. It has left the young people of the country out in the cold. Youth unemployment stands at 17 per cent.
There is a better way. The Reform Party will provide people with a better way through lower taxes, smaller government and a reinvestment in social programs. I hope that Canadians punish the government in the next election for what it has done.
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, the Reform Party continues to talk about how Canadians feel.
I wonder if the Reform Party has considered how the disabled feel about this budget. Their benefits have been enhanced. I wonder if it has thought about how students feel about the expanded tuition credits and deductions they are going to get. I wonder if it has thought about how seniors feel now that there is in place a seniors benefit program and amendments to the CPP which will guarantee pensions and disability benefits. I wonder if it has thought about how Canadian parents feel about the enriched child tax benefit.
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Has Reform thought of how the Canadian tourist industry feels about the significant injection of funds, or about how the technological industry in Canada feels? How about the agricultural sector? How about the youth strategy, the jobs and opportunities? These are also Canadians and they understand that the government has delivered a budget of hope.
The member spent a lot of time dealing with health care and how awful it is. Let me talk about what has happened with health care in my province of Ontario. The CHST was decreased by two and half per cent of provincial revenues which is far less than what we cut our own spending by. What happened is that the Ontario government then proceeded with a 30 per cent tax increase. The National Forum on Health has stated that the problem with our health system is not money itself but how the money is spent.
My question has to do with the Canada pension plan. I would like the member to answer some questions for the House and Canadians. Do the Canada pension plan collections received by the government reduce the deficit? Do individuals, corporations and self-employed people pay less tax because they are paying a little more in CPP?
If the answers to those questions are what they should be, then the member will also agree that the government deficit increases as a result of the CPP increase in premiums because of lower tax revenue from individuals, corporations and self-employed people. The Reform Party has said that CPP increases are a tax grab, but
they are actually reducing the government's revenues and increasing the deficit.
Mr. Solberg: Mr. Speaker, there are a lot of different issues there. I hope the hon. member will forgive me if I do not get to all of them.
He touched on students. I will try to answer the member's questions about what this budget does for students. As I said before, this budget is not remarkable only for what is in it but also for what is not in it. The hon. member forgot to mention that the government has already cut seven and a half billion dollars in the health and social transfer. Transfers for education have been dramatically reduced by this government. When the hon. member says that the government has thrown a bone to students, he has forgotten to say that it already took about 10 bones away. He should mention that in fairness.
The same thing applies to the disabled. There have been billions of dollars in cuts to health care. The disabled more than any other group rely on health care. In fairness he should point that out. We do not have a problem with the government contributing more money toward the disabled; that is not a problem. But he should in fairness point out that the government has dramatically reduced transfers to the disabled.
With respect to the child tax credit, we have no problem with money going into programs for poor people in this country. That is a good idea. We have no problem with that. Our point is that if you keep raising taxes and hurting people, poor people in particular who have the least income and cannot afford tax increases, then you are undoing any good you could possibly do by giving them more money through a program to alleviate child poverty.
With respect to technology, if you raise taxes through the roof, which is what this government has done, and then you throw people a bone in a pre-election budget, that is superficial. People understand exactly what the government has done in the past. Those cuts are still hitting home today. So let us not be misled.
What was in the budget with respect to agriculture? I did not hear anything. Was there anything? There was nothing in there, despite the fact that we have tremendous transportation problems in the west and we have a wheat board which many people would argue is completely dysfunctional. So let us not suggest there was something in there when there was not.
With respect to youth, I simply must say when the member talks about a youth strategy, what people really want are jobs. This country has a 17 per cent youth unemployment rate. It is horrendous especially considering the government ran on a promise of jobs, jobs, jobs. We do not need more programs, what we need are more jobs.
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Finally with respect to CPP-
Mr. O'Reilly: Mr. Speaker, on a point of order.
I respect the views of the hon. member for Medicine Hat but that is the third time he has used the term ``jobs, jobs, jobs'' which was Mr. Mulroney's statement.
The Deputy Speaker: That will not come out of the time of the hon. member for Medicine Hat.
Mr. Solberg: Mr. Speaker, Liberal, Tory, same old story.
With respect to the CPP, I simply must point out that the finance department itself has called the premiums on CPP a payroll tax. Therefore it is a payroll tax and we must not mislead Canadians by suggesting that somehow this is an investment which is what I think my friend across the way wants people to believe.
In fact if it were an investment, it would be the worst possible investment I have ever heard of in my life: premiums go up 70 per cent and there is a 10 per cent decrease in the pension. How in the world can members across the way call that an investment? If it is an investment, it is a Liberal investment and the worst possible one I have ever heard of.
Mr. Len Taylor (The Battlefords-Meadow Lake, NDP): Mr. Speaker, I have a comment and a question for the member for Medicine Hat generally on the debate yesterday and today.
I see a tremendous circus spectacle being undertaken here. Jugglers from all sides of the House are throwing brightly coloured balls into the air, diverting the attention of Canadians from what is really happening behind them. The political agenda of both the government and the Reform Party is being ignored while the public watches all these coloured balls but Canadians see through this. They are not watching the balls in the air any more. They are concerned about what is happening behind the jugglers.
We see today in particular the Reform Party's finance critic talking about jobs and what would happen under the budget. I have to accept all of the critical words the member for Medicine Hat has put out with regard to the government's record on jobs. The government's record is abysmal in this regard and the government knows it.
The member for Medicine Hat also knows that the program which created no job creation in this country is the same type of program he would advocate were he the finance minister. There would be additional cutbacks in the public service and tax breaks to the large corporations which have not produced any additional jobs in this country.
I would like the member for Medicine Hat, who is Reform's finance critic, to comment on some of the numbers that have come out of the budget, in particular one set of numbers. In 1993, the last year of the Mulroney government, 5,250 taxpayers earning over
$70,000 a year paid no taxes. Under the current government there has been a 400 per cent increase in that 21,270 Canadians who earn $70,000 a year or more paid no taxes. There are more Canadians paying less taxes or no taxes-
The Deputy Speaker: The hon. member's time will be up in one minute and eleven seconds.
Mr. Solberg: Mr. Speaker, I have the same response to my hon. friend. The Reform Party is an advocate of a much simpler taxation system that ensures everybody pays taxes. In fact we have been at the forefront of the debate in advocating a flat tax system and would certainly invite my hon. friend and others to contribute to that debate. It is wrong for people to escape paying taxes in this country if indeed they have an income, or in the case of corporations if they are making a profit. That would be the short answer.
The other point I would make to my hon. friend is we believe that subsidizing businesses by giving them taxpayers' money is equally wrong. That is something my friends across the way in the Liberal Party have been guilty of for a long time.
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The most blatant example of that was recently when they gave their friends at Bombardier hundreds of millions of dollars in subsidies. I note in the budget that another $250 million has been set aside for precisely that. They should be ashamed of that approach to job creation because it only creates jobs for their corporate buddies in corporate Canada.
Mr. Geoff Regan (Halifax West, Lib.): Mr. Speaker, I am splitting my time with the hon. member for Saint-Denis.
With this, our fourth budget, we begin to build the future while recognizing we are still constrained by the past. As we head into the new millennium, we are continuing to restore Canada's fiscal health. We are continuing to invest in immediate jobs and growth. We are continuing to invest in job creation and growth in the long run and we are continuing to invest in a stronger society.
From the beginning our government has struggled under the weight of massive debt; like a $500 billion ball and chain, the debt prevented us from going where we wanted.
Today we are by no means unchained. The only thing we spend more on than interest is transfers. We spend more on interest on the debt than on everything else combined, excluding transfers. So debt remains a problem. Even when the annual deficit has gone down to zero the ball and chain of debt will remain until we pay off our enormous loan.
As the economy grows and the debt declines we will be able to move more and more freely. So no, we are not unchained but our deficit is lower than it has been in 15 years. We have restored international confidence in our fiscal management of the country. We have restored our fiscal sovereignty. We have restored interest rate sanity and our load is beginning to lighten. We can now begin to move beyond securing, stabilizing and sustaining, toward striving for a stronger society, toward seizing our destiny in the 21st century.
There are those who say this is simply an election budget, that we are not showing our true colours, that our new spendings on jobs, health care and poor children are just short term election ploys. To them I say look at the numbers. They all add up and we are still ahead of our fiscal targets. If we could not sustain these programs and this new spending, would that be so? To them I say look at the markets. Our interest rates are a full two and a quarter percentage points below the U.S. and the dollar is staying strong. When did that last happen? If we could not sustain this spending, would that be so?
As we begin to shed the mantle of heavy debt, our true colours are beginning to shine through. But let us not forget that for the parties of the right, not just the Reform Party but also the Conservative Party, we have not cut quickly enough. The Conservative leader demanded that we clean up the mess his government left behind. He wanted us to cut deeper. He wanted us to cut faster. But our government has taken a more balanced approach.
From the beginning, even as we cut many areas of government to meet our deficit targets, we invested what we could in key Canadian priorities. We cut our own government the most and we cut our transfers for social programs the least. As we gain greater fiscal freedom we are continuing to invest in those priorities.
With this, our fourth budget, we are continuing to invest in immediate jobs and growth. Jobs and growth have been our number one priority from the start; 790,000 new jobs since we started is nothing to sneeze at but it is not nearly enough.
We are extending the Canadian infrastructure works program which has created jobs for 100,000 Canadians.
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We increased funding for youth employment, including doubling assistance for summer jobs. We are investing $15 million per year more on promoting tourism. That is an investment that will help to draw people to the rugged rocks of Peggy's Cove and the beautiful beaches of Queensland and Hubbards.
We are continuing to invest in job creation and growth in the long run. We are establishing the Canada Foundation for Innovation, an $800 million foundation to support research infrastructure especially in health, environment, science and engineering.
In the short run, this means jobs for those who will design and build these new and expanding research facilities. It also means more jobs at universities and hospitals in places like Halifax. In the long run, the research this money supports is key to competing in the global race for jobs in the 21st century.
As we all know, a better education means a better job. We are helping students and their parents cope with the rising cost of education. We are improving the student loan system and enhancing the education credit. We are continuing to invest in a stronger society.
When we began, our indebtedness was threatening the very future of our social programs. Now we are investing $300 million over the next three years to support key recommendations of the national forum on health. Now we are allocating $600 million in new funds for the child tax benefit to reduce child poverty. Now we are allocating $230 million over 3 years to assist Canadian with disabilities.
When we began, Canadians had to marshal a great national will to keep Canada from going broke, to secure our social programs and to make them sustainable. Now we need to begin to marshal that same will to build a Canada that works for everyone. Now we need to strengthen our society to make sure Canada can stride unshackled toward its destiny in the 21st century.
With this budget we turn the page. With this budget we take the first steps together on a great new journey.
Mr. Len Taylor (The Battlefords-Meadow Lake, NDP): Mr. Speaker, I have a couple of questions for the member from Nova Scotia. He has accepted the premise of the budget about improving the economy and moving us forward. In particular, I want to talk about the children of the working poor, many of whom I know live in Nova Scotia and for whom Nova Scotians are looking to the member for representation.
This morning in a news conference in Ottawa on Parliament Hill, the federal New Democratic Party leader Alexa McDonough urged the federal government to reverse plans hidden in the budget from Tuesday that will cut benefits for some 288,000 children of working poor in this country.
She released some evidence, including copies of newspaper clippings from Toronto yesterday, that women living in the Toronto area were shocked to find out that they will get less money under the new program once it is brought into place than they were getting to date.
It is noted that the combined working income supplement and the child tax benefit for families with one child will be $1,625 under the new proposal instead of the $1,770 that they are getting today. This represents a 20 per cent cut in benefits for roughly 40 per cent of those estimated to be Canada's working poor families.
I want to ask the member whether he believes that this information is correct. If it is, would he work to help change the direction that is being taken by the government with regard to this part of the budget?
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My second question deals with the lack of attention that the budget paid to the goods and services tax. The House had a major debate here over the harmonization of the GST for three of the four Atlantic provinces. I was not present to hear comments from the hon. member from the Halifax area with regard to the harmonization of the GST.
I see that the Senate is about to hold hearings in Atlantic Canada, something the House of Commons and the government chose not to do. Therefore I am wondering if the member would appear before the Senate committee touring Atlantic Canada and what he would say.
Mr. Regan: Mr. Speaker, I want to thank the member for The Battlefords-Meadow Lake for his question. I always enjoy hearing questions from this hon. member because he holds the seat that my grandfather, Jack Harrison, held many years ago and we have once in a while had exchanges in the House and it has always been a pleasure to discuss important issues with him.
Since I came to this House in 1993 I have worked, as have many of my colleagues, on issues relating to child poverty. It has been an issue of priority for me for many years, long before I came to this House, as some members will know.
When I hear the hon. member say that this is going to make people worse off, we have had a look at the numbers. The fact is no one will be worse off than they are under the present system. Here are the numbers, here are the facts. The maximum benefit will be increased from $500 per family to $605 for the first child, $405 for the second child and $330 for each additional child. Benefits will continue to be phased in based on family earned income over $3,750, not a very high threshold, and reduced as family income exceeds $20,921.
This is a very important measure in the right direction. We have to go on. I do not say this is enough. I do not begin to say that we are investing in this budget all that we need to do in the long run to solve the problem long term of child poverty, but we are beginning to see the light at the end of the tunnel. We are beginning to make a very important investment. We are showing that this is the direction we want to take on this important national challenge of fighting child poverty.
The member raised the question of the GST and the HST. The changes to the GST and HST in Nova Scotia are very important and very valuable in many ways. They are not perfect. I have never seen a change in taxation that was, unless it is actually eliminated.
We would love to be able to do that. However, when we are paying $42 billion-
The Deputy Speaker: I am sorry, but the hon. member's time has expired.
Mrs. Eleni Bakopanos (Saint-Denis, Lib.): Mr. Speaker, what is a budget, we may ask. It is a blueprint for action.
Over the past three years our budgets have served as a road map for Canadians, telling them what lies ahead and forging a path to the 21st century.
When we first received our map over three years ago the roads had been washed out in my opinion. We were heading down the road of economic destruction and social inequity. Nine years of failing to meet the targets by the Conservatives had taken their toll.
In 1993 Canadians gave this government their overwhelming support to draft a new economic road map. We set about restoring public confidence by providing good government and creating a climate for putting more Canadians back to work.
[Translation]
Our fourth budget is our latest contribution to turn around the nightmarish economic and fiscal situation inherited from the previous administration. In January 1994, the deficit was $42 billion, and our debt load had jeopardized the future of our social measures. It is no wonder that so many Canadians lost hope. But four Liberal budgets have put us back on track.
[English]
We have made progress. Our fiscal policy of restraint in government spending and program review over three previous budgets is today showing tangible results.
Let us make no mistake. Jobs and growth as well as preserving our health and social programs have been a priority of this government from the very beginning.
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Since coming into office, we have initiated a series of actions to stimulate immediate job creation. We have worked in collaboration with municipal and provincial governments, even Quebec, in an effort to improve the well-being of all Canadians. We took immediate action. We introduced the infrastructure program which was a success from coast to coast and, for that reason, we have decided to reintroduce it.
In my riding of Saint-Denis, one of the biggest infrastructure programs was launched to renovate Jarry Tennis Stadium and thereby ensure that the international tennis tournament remains in Montreal. In the case of my riding, I have seen tangible evidence of Canadian tax dollars working to improve the well-being of my constituents.
[Translation]
In 1996 alone, more than $3.5 million has been invested in the riding of Saint-Denis by various ministers and state secretariats. With these subsidies, organizations were able to carry out many projects, bettering the lives of our fellow citizens and creating more than 50 permanent jobs and nearly 80 summer jobs.
Several non-governmental organizations, including La Jarnigoine literacy centre in Villeray and the recreational and educational and heritage activities association, have received federal subsidies. Moisson Montréal, and its affiliate Renaissance Montréal, were also able to further their objectives in providing the most disadvantaged with either food or clothing at a very low cost.
One of the priorities I set for myself when I ran in the last election was to ensure a better future for young people in Saint-Denis.
[English]
I agree wholeheartedly with the Minister of Finance who said in his budget speech this week: ``Let us recognize that Canada's greatest natural resources do not lie buried deep in the ground but in the skills and talents of those who walk on it''.
[Translation]
The youth employment strategy announced last week by the Minister of Human Resources Development will help young people achieve their goals by providing them with the necessary tools.
Some $60 million of the amount earmarked in the 1996 budget was used to double the number of student summer jobs, which climbed to 60,000 in the summer of 1996.
[English]
New internship programs in partnership with the private sector will be put in place to allow young Canadians to gain work experience, a first job. How many times have we heard frustrated graduates say: ``I have the degree, now if I could only get some job experience''. We have given them that opportunity.
Total federal spending on youth employment programs, including Youth Services Canada, Youth Internship Canada and Student Connections, over three years, 1996 to 1999, will be about $1 billion, a substantial commitment to Canada's future leaders.
[Translation]
Several organizations in the riding of Saint-Denis have already been able to hire under the summer career placement program, including the Coopérative fédérée du Québec, the Copains de Saint-Simon, Résidence Louvain and Cap du College de Bois-de-Boulogne.
In addition, we have carried out in Saint-Denis four Youth Service Canada projects, providing employment for 63 young people.
[English]
I will mention two examples today, the first one is the Octave Cremazie project. Fifteen young people who had never had any opportunities are now working in cleaning the environment in one sector of my riding. The other example is the Park Extension Youth Organization. We gave these kids their first opportunity to work and have some experience in working with a team. It was the first time that it had ever been done in one of the poorest districts in all of Canada.
[Translation]
The Liberal government's fourth budget will also help students and their parents deal with the increased cost of higher education, through three important measures: the amount on which the education tax credit is based will be doubled, the student loans program will be improved by providing a longer payment period for students, and the ceiling on annual contributions to an educational savings plan will be doubled. Once all these measures are in place, they will increase by $275 million per year tax assistance to students and their families.
I think this is good news to the students of Collège de Bois-de-Boulogne and throughout the province of Quebec. At a time when the unemployment rate for young people is close to 20 per cent in Quebec, it is inappropriate for provincial authorities to criticize any attempt by the federal government to improve the situation.
[English]
Small and medium size businesses with fewer than 15 employees account for approximately 42 per cent of all private sector employment. They have generated between 70 per cent and 80 per cent of all new jobs in Canada over the past three years. In Saint-Denis, small and medium size businesses dominate the industrial sector.
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Last month I organized an information seminar for these entrepreneurs. Despite the snowstorm, nearly 100 business people were present. Many were impressed with the gamut of services which have been introduced by the Minister of Industry and by the Secretary of State for the Federal Office of Regional Development.
We often hear those same entrepreneurs complaining about the amount of paperwork they have to complete. The 1997 budget, along with the Minister of National Revenue, addressed these concerns. For example, the requirement to file monthly payroll deductions will be eliminated for small businesses with a perfect compliance record. They will now be permitted to file quarterly. This measure has the potential of benefiting up to 650,000 small businesses.
In addition, the budget proposes to raise the ceiling on the Small Business Loans Act from $12 billion to $14 billion, providing additional borrowing assistance for fixed assets. Budgets are not just numbers. They speak of people's futures, their economic, social and mental well-being.
To illustrate the important role of government in people's lives I wish to quote a great Canadian born economist, John Kenneth Galbraith. He said: ``There must be, most of all, an effective safety net-individual and family support-for those who live on the lower edges of the system or below. This is humanely essential. This is also necessary for human freedom. Nothing sets such stern limits on the liberty of the citizen as the total absence of money''.
Let us not forget that 1997 is the international year for the eradication of poverty. We have made a commitment to that effect to the poor children and families of the country. The measures introduced in the budget are important steps toward this goal. But that is only the beginning. We must do more. We are now at the crossroads of our road map.
[Translation]
As of July 1998, the federal contribution for children will go up from $5.1 billion to $6 billion. The Canada child tax benefit will provide increased support to one million Canadian families, and their children.
The two levels of governments made a commitment to create a new national child tax benefit program, which would be based on the Canada child tax benefit.
We did our share and I hope the provinces, including the separatist government in Quebec, will do theirs, so that as much money as possible is available to reduce child poverty.
[English]
The road has been a difficult one. We can all attest to that. All members of the House, on both sides, felt the suffering and loss of hope which many families and young people have endured these past few years. We have made many difficult decisions in the past three years, but we had few choices. Thus we have strived once again with this budget to provide a road map which will better the quality of life of all Canadians as we approach a new millennium; a map which will lead us to eliminate social and economic inequalities, a map that guarantees educational and work opportunities for our youth-
The Deputy Speaker: I am sorry to interrupt the hon. member but her time has expired.
Mr. Ray Speaker (Lethbridge, Ref.): Mr. Speaker, thank you for the opportunity to make a comment and also to put a question to the hon. member for Saint-Denis.
She stated that measures in the budget are important. I certainly understand that comment and the arguments she has made to support that position.
The question I would like to ask the hon. member relates to a motion which was passed in the House of Commons on December 11, 1995, which gave some direction to the House. Has the government or she as a member of the Liberal government taken that motion into consideration in terms of support for the measures that are strong in this budget.
Just to remind the House, the wording of the resolution was:
Whereas the people of Quebec have expressed the desire for recognition of Quebec's distinct society:
(2) the House recognize that Quebec's distinct society includes its French-speaking majority, unique culture and civil law traditions;
(3) the House undertake to be guided by this reality;That is the operative part and the direction to this House and the item I would like the hon. member to comment on.
Third, I would like her to comment on this portion as well:
-the House encourage all components of the legislative-branches of government to take note of this recognition and be guided in their conduct accordingly.(1210 )
Are we being guided?
The Prime Minister reinforced the direction to this House by saying: ``Once it is passed this resolution will have an impact on how legislation is passed in the House of Commons''. I would think that should apply to budgets as well. ``I remind Canadians that the legislative branch will be bound by this resolution, as will be the executive branch. This is a real dynamic recognition recorded in the very heart of our country's government''.
Today in an earlier ruling by the Speaker it was felt that this procedure did not have significance.
There was a directive of the House. We are talking about the budget of the country which is the framework on which many other decisions are made. Does the motion we passed, supported wholeheartedly by the government, have any affect on the budget?
Mrs. Bakopanos: Mr. Speaker, I thank the hon. member for his question. On this side of the House we make no distinction between different parts of the country. As far as we are concerned the budget is for all Canadians. The same measures apply across the country.
As I said at the end of my speech, we want to ensure that all Canadians are treated equally by the government. Throughout our three-year mandate we have addressed areas where there are inequities.
Mr. Len Taylor (The Battlefords-Meadow Lake, NDP): Mr. Speaker, this question is a follow-up to my question to the member from Halifax. It is with regard to the working income supplement and the child tax benefit for families. I believe the member who just spoke heard what I had to say on that issue.
The National Council of Welfare has concluded that the child tax benefit will actually cost tens of thousands of families with one child more than $500 over two years. Yesterday the finance minister told the Toronto Star that families with one child will receive less money from Ottawa, and the member for Elgin-Norfolk also told the Toronto Star yesterday that he is not happy with this situation and that he would try to get it fixed.
Last year the budget set out a scheme for providing additional funds to families of the working poor. This budget has changed that formula dramatically and has cancelled the increase for families from last year. Because it is now child based rather than family based, it will result in a 20 per cent cut in benefits to 288,000 poor children or roughly 40 per cent of the poor living in Canada.
Will the member for Saint-Denis also work to correct this deficiency in the system?
Mrs. Bakopanos: Mr. Speaker, I thank the hon. member for his question but I will repeat what other hon. members have said.
These budget measures will result in all children being better off than they were three years ago. I find it kind of unusual that the hon. member is not applauding some of the efforts outlined in the budget.
The NDP should be applauding some of the measures that have been introduced. They are measures to ensure a better future for Canada's children.
[Translation]
Mr. Richard Bélisle (La Prairie, BQ): Mr. Speaker, this fourth budget brought down last Tuesday in the House by the Minister of Finance is election minded and centralist.
It is centralist because the areas it addresses are all, without exception, provincial in jurisdiction: literacy, tax benefits for children, tourism, higher eduction, students, the disabled, health and medical expenses.
It is election minded because it consists of a scattering of timid measures and a few million dollars tossed out to attract groups that are generally anti-Liberal.
Let us take the example of tourism, in which they will invest $15 million annually. As Alain Dubuc pointed out yesterday morning in the editorial in La Presse, the interest alone on the federal debt is over $125 million daily.
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Seventy million dollars will be spent this year on the child tax benefit, less than the cost of servicing the debt for 17 hours, corresponding to 53 cents per child per week. There will be a 10 cent reduction in UI premiums for every $100 of insurable earnings.
In addition, the Farm Credit Corporation will receive $50 million to support diversification in rural Canada, and $10 million in funding will be provided to help connect rural areas to the new information highway.
You will observe that all these areas come under provincial jurisdiction or are areas in which Quebec has been trying to defend its jurisdiction for years, with no success, given Liberal policy.
The Liberals' strategy could not be clearer. After cutting transfers to the provinces by several billion dollars and forcing them to struggle with increased deficits and, in the case of Quebec, to manage downsizing in education and health, with all that that represents in terms of management of collective agreements and workforce reduction, the federal government is tossing a few scraps the way of the provinces to increase its visibility in the months leading up to the election.
This budget is Machiavellian, because it leaves the dirty work of cutting back program spending to the provinces. Because, year after year, the federal government has dipped into the $5 billion surplus in the unemployment insurance fund, deficit reduction is also supported by employers, for whom it is a sort of payroll tax in disguise, and by the workers, for whom it represents a hindrance to employment. The unemployed who are still searching for employment are 1.5 million strong, and there are another 1.5 million who are no longer in the unemployment statistics, having given up hope of finding a job.
The tax burden has increased by $22 billion in four years. Over that time, expenditures have decreased by $14 billion, over half of that the result of decreased transfer payments to the provinces.
The Minister of Finance is concealing his true margin of manoeuvrability from us. It is impossible for his deficit to decrease by only $2 billion next year, when it has already gone down close to $10 billion this year. The minister is hiding several billion dollars up his sleeve, just for the purpose of justifying his approach to cutting the deficit.
There is nothing for employment, nothing for the battle against poverty. The government will earmark $800 million for the creation of a Canadian foundation for innovation. As if by chance, this amount of $800 million comes from transfer payments to the provinces, which are precisely $800 million less than what was forecast for 1997-98 in the 1996 budget, essentially due to an improved economic situation.
This foundation duplicates services already provided by the provinces. Creating a new foundation instead of reinforcing existing research bodies would give the Liberals a chance to put in their own people, people who will act as a kind of liaison in connection with future appointments and fundraising for the Liberal campaign, now the election is only months away.
There is no provision for compensating the Quebec government for harmonizing the GST in 1991, while the maritimes will be entitled to $1 billion in return for doing what Quebec did six years ago, without any compensation at all.
The minister is reactivating some good news that was announced a few months ago, and prefers to remains silent on the cuts that will kick in this year and were included in last year's budget.
Instead of reducing duplication and overlap, the federal government increases these as well as the inefficiencies for which it has been criticized by the Bloc Quebecois for the past four years. However, there may well be no more duplication and overlap in the future.
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As transfers to the provinces are reduced, the provinces will have to hand over entire components of their mission to the federal government. That is not how the provinces and Quebec taxpayers would like to see duplication and overlap eliminated.
The 1997 budget elbows the provinces aside even more, so there will be more programs flaunting the maple leaf. What matters most to the government on the eve of an election is the visibility of the maple leaf on printed matter sent to Quebec and Canadian households between now and June 9, and the government is even happier if this mailing perhaps includes a cheque.
Notwithstanding the increase in tax revenues over the past four years, the reduction in transfer payments to the provinces and the appropriation of the unemployment insurance fund, the minister does not expect his deficit to drop by more than $2 billion next year. The minister therefore retains considerable flexibility, and the measures to deal with unemployment and poverty are minimal, compared with the actual spending capacity of the federal treasury. They could even forecast a zero deficit for the year 2000 or even 1999.
The Bloc Quebecois estimates that today, the Minister of Finance has about $8 billion to use as he sees fit. The minister is a year ahead of schedule in his fight against the deficit. If he refuses to disclose the real numbers, it is because he wants to prevent any action by the provinces, community groups and unions which would certainly ask him to refinance social transfers to the provinces.
If we look at how the budget has changed in the past four years, we see that 52 per cent of the $14.2 billion reduction in federal government spending involves transfers to other levels of government, primarily the provinces. Only 21.1 per cent, or one dollar in
every five, of this reduction comes from direct government expenditures.
The Minister of Finance says he did not raise taxes in his 1997 budget. Since the Liberals have been in power, personal income taxes have continued to increase and at a rate greater than the GDP year in and year out. This increase in the personal tax burden especially on the middle class is not the result of a review of the tax system aimed at improving tax equity. Not at all. It is the result of several subtle increases, such as the non indexation of the tax and tax credit tables, causing individual income tax to rise every year in Canada.
The minister talks of an improvement in the child tax benefit, which will not have a real impact until 1998, thus after the election. Will the Liberals give the child tax benefit the same treatment they gave the promises on the national child care system they promised in the last election?
After impoverishing their parents through massive cuts to social transfers and unemployment insurance, will the Liberal government in a gesture of cynicism ease the lives of the children of these families?
Family policy and the fight against poverty are provincial matters. The continued and even expanded federal intrusion into areas of provincial jurisdiction is not acceptable and hampers the implementation of coherent policy in Quebec. While ministers Harel and Marois in Quebec are struggling to find the millions required to help children, families and the jobless, the federal finance minister is trying to develop a family policy, an area that does not come under the responsibility of the federal government and for which it does not have the necessary expertise, since this has traditionally been a provincial jurisdiction, in Quebec and in the other provinces.
Looking at this cynical and centralizing budget, one stops wondering why a majority of Quebecers long for a sovereign Quebec. It is to finally be free from this perpetual state of confusion where the level of government that controls the purse strings does not know what the needs are and does not have the human resources to serve a public which is, at any rate, far away.
Leading anti-poverty organizations estimate that at least $2 billion more would be required every year to put up a serious fight against poverty. But starting in 1998, the government will be spending only $850 million per year on the fight against poverty. This is therefore not nearly enough, especially since the federal government has considerably impoverished the provinces.
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It has been announced that unemployment insurance premiums will be reduced by 10 cents starting January 1, 1998. This is an announcement that is normally made in November. Knowing him as we do, we can expect the Minister of Finance to announce this good news twice. In addition, this reduction is much smaller than what employers' associations have asked for and what it should have been, given the huge surpluses in the unemployment insurance fund.
The Bloc Quebecois asks that the government substantially reduce UI premium rates and improve the employment insurance program, which has become too restrictive and is, unfortunately, forcing onto welfare people who, as job seekers, should continue to receive benefits.
The accumulated surplus is large enough to allow eligibility rules to be relaxed and the premium rates to be reduced even further. Any annual surplus is a hidden tax paid by employers and employees. A 10 cent reduction of the 1998 premium amounts to $700 million. With a $5 billion surplus forecast for 1998, it should be possible to reduce the premium rate by 70 cents. The $15 billion surplus accumulated by the end of 1998 should even translate into a tax break, since it is in fact an employment tax of $2.10 for one year.
One can see the feeble attempt made by the Minister of Finance to help job creation. The minister claims that serious studies estimate at somewhere between $10 billion and $15 billion the reserve required to prevent another recession. Just look at what will happen when the next recession occurs. Since the reserve is already being used to reduce the deficit, the minister will suddenly and drastically increase the premium rate, because the reserve will have disappeared.
In November, the Bloc Quebecois released a comprehensive study on corporate taxation, so as to make an honest and objective contribution to the debate and to provide suggestions to the minister, who is often bereft of ideas.
Today, it is obvious that the 1997 Estimates include no changes to corporate taxes. There is no tax measure to promote job creation. The minister is clearly showing that he did not want to change the corporate tax system to promote employment. The minister's inaction regarding the corporate tax issue reflects his inability to adjust to the current economic context and to make job creation his top priority.
In conclusion, I feel the minister has turned a deaf ear to the Bloc Quebecois' recommendations regarding obsolete tax deductions for business. Obsolete tax shelters and deductions should be replaced by a tax system designed to promote employment. But nothing of the sort was done. The Bloc Quebecois suggested using up to $3 billion in ineffective tax deductions to create jobs instead.
Given the current economic context, job creation should be the main thrust of the corporate tax policy. However, under the budget,
corporate tax revenues will only fluctuate by $205 million, of which $175 million is the result of a mere accounting exercise.
The only other measure affecting corporate taxation is the decision to extend the temporary tax on large deposit taking institutions. This represents $25 million. Given the sky-high profits made by Canada's major banks, it is a very small contribution on their part to the community's well-being.
Mrs. Eleni Bakopanos (Saint-Denis, Lib.): Mr. Speaker, we, in this House, have spent the last three years listening to myths being spread by Bloc Quebecois members and their PQ friends in Quebec. The first such myth is that Quebec is not getting its fair share from the Canadian government. This is a myth which Bloc members continue to spread, with the help of their friends.
The facts are undeniable: year after year, Quebecers receive more than they contribute in federal taxes. As for equalization payments, they receive 42 per cent of the total amount. I hope that some day Quebecers will be told the truth.
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My question to the Bloc member is this: Why is the Quebec government, which is also my government, unable to balance its debts or, to be more specific, unable to reduce its deficit, like other provincial governments have done? Indeed, other provincial governments have implemented changes. Mr. Klein even announced a surplus.
I find it sad that the object of the hon. member's whole speech is to blame the federal government. These are myths, and we must say so. We have a responsibility to Canadians and to Quebecers, but so does the provincial government. We have taken action because the Quebec government did not act to eliminate poverty among Quebec children, women and families.
I would like to know what the Bloc has done to help the provincial government achieve its goals.
Mr. Bélisle: Mr. Speaker, I thank the member for Saint-Denis for her question. My colleague spoke of myths. She said we were perpetuating myths. I would like to tell her that the biggest myth circulating in Quebec and in Canada is the one about centralizing federalism as practised in Canada for the last 30 years, during 20 of which the Liberals were in power. That is the biggest myth.
The Government of Quebec is having difficulties because the federal government is offloading its deficit onto the backs of the provinces.
Let us take the example of research and development. Over the last ten years or so, Quebec has received approximately 17 per cent of federal research and development grants, while the neighbouring province of Ontario has received 50 per cent. Historically, the federal government has always put less money into economy building measures.
What Quebecers want is not just transfer payments to help subsidize welfare and assistance to the less fortunate members of society. What they want from the federal government is spending that will have an impact on the economy, such as Ontario has seen for ten years or so. Historically, Quebec has never received its fair share.
When there are massive cuts by the federal government in transfer payments, such as we are now experiencing, Quebec is more severely affected than Ontario or other provinces. The federal government has not put money where it would have allowed Quebec to have proportionately fewer people living in poverty. When this kind of spending is cut, people are hard hit.
Finally, the flexible federalism, the decentralized federalism we keep hearing about from the Prime Minister and the federal government is always based on a double standard. If this is the kind of distinct society the Liberal government wants to talk to us about, we are not interested.
Take the case of the GST. The maritimes received $1 billion in compensation for harmonizing with the GST. Quebec did the same thing in 1991 without a cent of compensation, when it should have received approximately $1.9 billion. If that is what they mean by distinct society, treating Quebec differently where taxes are involved, I can understand that Quebecers are increasingly considering sovereignty.
I would also like to tell the member for Saint-Denis that what the Bloc Quebecois most dislikes about the Minister of Finance's budget is its scattershot approach. The amounts involved are small, a few million dollars, and they have been ladled out all over the place. Rather than watering down the impact of the $1 billion available in the 1997 budget, why did they not target one or two specific areas in order to produce a bigger bang in terms of jobs and wealth?
Mrs. Bakopanos: Mr. Speaker, as I said before, there are myths and myths. When a government spends taxpayers' money on political propaganda, there is less money left to invest in helping young people and the poor.
Mr. Loubier: Oh, oh.
Mrs. Bakopanos: It is true. But I have another question for my colleague. As I said before, what does the provincial government intend to do to balance its books? Taxes cannot absorb everything. I pay a lot of income tax in Quebec.
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Mr. Bélisle: Mr. Speaker, I want to thank the hon. member for Saint-Denis for her question.
Speaking of propaganda, I hardly think we can criticize the Government of Quebec, when we consider the 23 million flags distributed by the Minister of Canadian Heritage.
The hon. member for Saint-Denis asked me how the Quebec government will balance its books at the end of the current fiscal year and in the years to come, to help the disadvantaged. Well, it will not be easy. The Quebec cabinet is involved in a series of complex accounting exercises. They may have to renegotiate collective agreements with unions in the public and parapublic sector, and that will not be easy.
Now, if the federal government were to send, as soon as possible, a first instalment on the $1.9 billion the federal government owes to Quebec for harmonizing the GST with its provincial sales tax, that would be a good start.
If the federal government then sent another cheque as a first instalment on the $2 billion in transfer payments that were cut in the case of Quebec, over the past few years, we would be well on our way to balancing the budget, and we could go ahead and give people additional protection.
As I said before, historically, the percentage of disadvantaged people and poor people has always been higher in Quebec, because the federal government never did the kind of strategic spending it did in Ontario and the other provinces.
What Quebecers want is research and development and investment in technology.
Mrs. Bakopanos: They want political stability too.
Mr. Bélisle: We have had more than enough welfare, social assistance and unemployment.
Mrs. Bakopanos: Mr. Speaker, I am very proud I was elected in Quebec. I am a Quebecer and a Canadian. I want to say this because some hon. members do not believe me, but the Liberals also defend the interests of Quebecers.
The hon. member said it was always the federal government's fault. Another myth that our separatist friends have perpetuated.
By the way, he did not answer to my question. ``It is the federal government's fault again'', is something we have heard in Quebec for years. I want my provincial government to take steps to ensure that with the co-operation of the federal government we can improve the lives of all people, especially the people in the riding of Saint-Denis, and we do that by providing political stability.
Mr. Bélisle: Mr. Speaker, I have the following comment for the hon. member for Saint-Denis. Will the hon. member promise, on behalf of her government, that the federal government will stop reducing transfer payments once and for all? Could she promise, on behalf of her government, that these cuts will be stopped once and for all?
The government is trying to balance its public finances, and this is not easy. I think it will manage. There is a budget plan. At the summit last year, there was an agreement with employer associations and unions in Quebec. There was a consensus to the effect that Quebec's budget would be balanced by March 31, 2000. I think we are on the right track.
However, if the federal government keeps reducing historic transfer payments to Quebec, it will be well high impossible.
[English]
Mr. Glen McKinnon (Brandon-Souris, Lib.): Mr. Speaker, I will be sharing my time with the member for Vancouver South.
It is a pleasure to rise today to speak in response to the budget speech. I would first like to congratulate the minister and all the assistants who laid the foundation for this budget. It was a job well done. I think it has been well received across the country.
When I consider all the nuances of the budget, it is the human component that to me is the most significant. Addressing child poverty, support for the disabled, youth employment initiatives, health care reform and pension adjustments are just a few. It is my wish today to discuss post secondary education as the focus of my comments.
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We live in a world where knowledge and education are the keys to long term industrial success. They ensure that a country's industries can apply innovation to seize new opportunities in global markets and they provide workers with the skills employers need.
The number clearly indicate this. In Manitoba, my home province, in 1995 only 4..8 per cent of students who dropped out of high school have found jobs, compared to 71.9 per cent who stayed in school, graduated and found employment.
Post secondary graduates fared even better. About 80 per cent of Manitobans with a post-secondary certificate or diploma or university degree were actively involved in the labour force. This pattern is virtually the same across the country.
It is for this reason that the government has increased federal support for post-secondary education by $137 million in 1997, reaching $275 million annually when the changes have all matured.
This funding is targeted to provide assistance for students and their families, including workers upgrading their skills to help them cope with the rising costs of post-secondary education, students facing higher debt loads after graduation, and parents saving for their children's educational future.
I should note that these issues build on the $80 million increase in direct federal tax assistance for post-secondary education that was provided in the budget one year ago and they are complemented by the creation of the Canada Foundation for Innovation which will ensure that post-secondary students have access to better facilities and equipment to prepare for the knowledge based economy of the 21st century. For this the government is making up front investments of $800 million.
I will get to the foundation in a moment, but first let me discuss the government's plans to increase access to higher education.
Specifically, the budget proposes several measures. First, the amount used to establish the education credit will immediately rise to $150 per month from $100 and to $200 per month for 1998 and subsequent years.
As tuition fees increase, the amount of assistance provided by the tuition fee credit increases automatically. However, as a parent of three daughters who are all attending university, and as an aside all three were in university in one academic year, I know that students also have to pay a number of mandatory fees on top of their tuition. The budget proposes to extend the tuition tax credit to cover additional mandatory fees imposed by universities to cover these costs of higher education.
Second, students or their parents may not have enough tax payable in a given year to fully benefit from the tuition and education credits. To ensure that all students can use those credits fully, students will now be able to carry forward all unused portions of these credits and to be applied against any future income.
At a time when university and college classrooms are filled with more and more mature students, it is important to note that this measure will also benefit workers who have decided to return to school after a short period in the workforce.
To demonstrate the effect of these budget measures I will give a simple example. By 1998 a student in full time attendance at a post-secondary institution faced with tuition fees of $2,800 and an additional fee of $300 will receive over $1,200 in combined federal and provincial tax assistance per year. This is no small amount. In fact, it represents an increase of more than 30 per cent from the $900 of assistance available to the student in 1995.
The 1997 budget also announced an important change to the Canada student loans program. Students are expected to start repaying their loan six months after graduation. But students facing hardship are allowed to defer making payments on these loans for up to 18 months. The federal government pays the interest accruing on the student loan during this period.
Recently a coalition of groups representing the post-secondary educational community agreed that while this system provides considerable help, changes needed to be made and they issued a proposal which pointed out among other things that some students are unfortunately left unable to meet these obligations. I supported this coalition in their call for change, as did other members of Parliament.
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It is clear today that our government listened to what Canadians were telling it and subsequently agreed. As a result, the budget proposed to extend to 30 months from 18 months the period of time during which students are allowed to defer making payments. Combined with the initial six months after graduation when no payments are required, this means that students will have up to three years to deal with their financial debt load. This measure will come into effect on August 1, 1997. It is projected that it will provide an additional $20 million a year in assistance to students.
In addition, the federal government is ready to pursue with interested provinces, lenders and other groups a new repayment option that would offer students another choice. Students would be able to choose between current repayment arrangements and an income contingent repayment schedule. By tailoring payments to individual circumstances, the debt would be made more manageable.
We are also acting to improve incentives for parents to save for their children's education. Parents with young children are increasingly worried about whether or not they will be able to afford the rising costs of their children's education.
Registered education savings plans, or RESPs, exist to provide parents with incentives to save for their children's education. The full benefits of these tax sheltered plans are reaped by parents who start saving when their children are quite young.
The budget proposes that annual contribution limits to RESPs be doubled to $4,000. This will assist parents who are not able to start saving for their children's education when they are young and therefore have fewer years to make contributions.
Under RESP provisions, all RESP income must go for educational purposes and the family loses the investment income in their plan if their child does not pursue post-secondary education. Since this can discourage parents from starting an RESP, two measures are proposed to address this problem.
Individuals winding up an RESP will now be allowed to transfer all or part of this deferred income to RRSPs, provided they still have room in their RRSP accounts. Alternatively, individuals without available RRSP room or who do not wish to make RRSP contributions will be allowed to receive investment income directly, subject to an appropriate charge. This charge will ensure that assistance is not provided to those who might use RESPs for tax
shelter purposes which are unrelated to either education or retirement savings.
The government is proposing the creation of the Canada foundation for innovation. I would suggest that this is perhaps the crown jewel in terms of educational opportunities in this country. This new independent body operating at arm's length from the government is designed to help renew facilities and equipment, research infrastructure if you will, at Canadian post-secondary institutions associated with research institutions and hospitals.
Through this foundation we are saying to our young students that we want them to pursue their research career here in Canada. It is important for us to have a workforce with the capacity to put new technologies into practice. People who understand developments in science and technology are indispensable.
The foundation will help support innovative capital projects in the areas of health, the environment, science and engineering. Funded through an up front investment of $800 million by the federal government, it will provide an annual average of $180 million over the next five years. It will operate on the basis of partnerships with the private sector, universities and colleges, volunteer organizations and provinces to the extent they wish to participate.
In closing, I quote the hon. Minister of Finance who in his speech said: ``What government does with scarce resources shows what its values are-''
The Deputy Speaker: I am sorry to interrupt the hon. member but his time has expired. Questions or comments.
Mr. Len Taylor (The Battlefords-Meadow Lake, NDP): Mr. Speaker, I appreciate the words of the hon. member from Manitoba. I have enjoyed listening to him over the past three years. He has made great commitments on behalf of the people he represents. Therefore, I am a bit surprised that he has so gullibly jumped into the rhetoric of the finance minister on the budget.
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The member comes from a constituency that relies on the rural sector for its own buoyant economy. This budget had very little to offer to people who live in rural Canada, particularly those areas that were affected by cutbacks to the western grain transportation program of previous budgets of this government.
In previous budgets there was $720 million a year cut from farmers' pockets for transporting grain to port so that Canada can sell it into the lucrative export market. In those previous budgets which took that $720 million from transportation and ultimately from farmers' pockets, we were told at the time that value added production would return benefits to rural Canada and would therefore create jobs.
Value added production since that time has not increased dramatically. While there have been some gains made in Winnipeg, Saskatoon and Regina, there have been virtually no gains made in small town western Canada. This budget should have acknowledged the greater need for value added production in rural Canada giving the opportunity for a number of the young unemployed individuals throughout Canada, many of whom the member talked about in his remarks, the opportunity to gain some income to proceed with their post-secondary education.
My question to the member for Brandon-Souris is quite simple: Will he work to assist young people in rural Canada to generate the type of economic activity that is necessary in the Cut Knifes, the North Battlefords, the Kindersleys and Brandons of the world and ensure that the government supports their efforts through a value added production type of programming?
Mr. McKinnon: Mr. Speaker, I thank my colleague for his question. It is relevant to a member from southwestern Manitoba.
We have had a number of initiatives under way in Manitoba since the WGTA changes took place. We have probably had the most diversified investments occurring throughout the prairies in terms of our region and in terms of crop diversification.
We had numerous investments put in place of technologies that are going to lead to an increased economy. Working through our rural caucus colleagues here in Ottawa we have been able to spur debate, discussion and interest in investment. Might I comment that Manitoba has had more investment money coming in since the WGTA changes than any other region of the country. As it pertains to post-secondary education which was the essence of my discussion, it is going to allow more young Manitobans to stay in our region, live in our region, invest in our region and make a substantial contribution to the nation.
The Deputy Speaker: There is only 49 seconds left. Sharing 49 seconds gets a little difficult.
Mr. McKinnon: I should have spoken a little longer.
Mr. Harbance Singh Dhaliwal (Vancouver South, Lib.): Mr. Speaker, I am very happy to speak on the budget today. It is an excellent budget. There are a couple of very important ingredients in the budget. Generally it is a balanced budget, it is a responsible budget and it is a compassionate budget. Let me state why those three things are very important for us on the government side.
The budget had to be balanced because we want to ensure that the actions we have taken on the deficit do not take away from the future. I know some people have said that they want to get rid of the deficit in three years but we have said right from the beginning that
our approach in dealing with the deficit would be balanced and reasonable and that we would deal with it in a compassionate and responsible way.
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When we became the government there was a $42 billion deficit, a problem which many said was very difficult to deal with. During the first radio show I did after the election Bill Good asked me if my government was really going to deal with the deficit. I said that absolutely, we were going to deal with it because it was important for the future of the country, but that we were going to do it in a responsible way.
In the last election campaign we set specific targets and said that we were going to meet those targets. In the last four budgets we have met all the targets; in fact, we have done better than meeting the targets. It was very important to meet every one of our targets because it sent the very strong message to the international financial community that we were serious about dealing with the deficit.
Some of the Reform members are trying to take credit for our actions on the deficit but during election time we set specific targets, not because of the Reform Party but because we felt it was important to deal with it. Those targets have been met and as the minister stated in the last budget, we will be at least $5 billion below our target of $24 billion.
It was very important to meet our targets for a number of reasons. Because of the confidence we have established in the international community, our dollar has stabilized. Interest rates are unprecedented; I cannot remember the last time Canadian interest rates were below American interest rates. Our interest rates are presently more than two and a half per cent below the American interest rates. In the past it has always been the reverse, where the American interest rates were two to two and a half per cent below the Canadian interest rates.
This is what will create jobs. Opposition members have asked, what about jobs? Low interest rates create jobs, investment and confidence. Interest rates play a major role in the investment decisions of small and medium size businesses. If someone wants to construct a new building, for example, a new hotel or a new factory, interest rates will play a very important role in determining if that investment will go ahead. Canadians buying homes have to look at what the interest rates are. Interest rates can affect their choice of a home because of their influence on monthly mortgage payments. When Canadians buy cars, the interest rate is an important factor which determines whether or not they can afford to buy a car.
We have one of the lowest inflation rates of the G-7 countries. This will ensure the maintenance of our low interest rates.
All these things, dealing with the deficit, meeting our targets, having credibility in the financial markets, have led to lower interest rates, lower inflation rates and a greater confidence in the economy. It is so much so that economists are predicting Canada will have the best growth figures in the next medium term compared to other G-7 countries. It was not any easy task and all Canadians know that. It was a difficult task to achieve what we have today.
The attitude of this government and the finance minister was to look at government from the bottom up. We did not just say that to deal with the deficit we were going to cut everybody by a certain percentage. As a government we said that we wanted to review all programs starting from the bottom up. We said that we wanted to get rid of those programs that were no longer relevant to Canadians. We said that we wanted to get rid of those crown corporations that were no longer relevant to Canadians. We looked at how we could turn those services that could be provided more efficiently and effectively by private industry, municipal governments and provincial governments over to them.
Canadians have said to us that they want a government that is efficient, that they want less duplication and less waste. That is another area we looked at in terms of saving money and dealing with the deficit. We asked: Where is there waste in government? Where are there inefficiencies? How can we do it better? This was the basic view we took in trying to deal with the deficit and in trying to re-engineer government to meet the 21st century, to move forward into the next century where we could have a government structure that could be with us for a long time. It was not an easy task. It was a difficult task, but that is what we have done.
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We also understood that there are investments to be made in this country so that we could be competitive in the rest of the world, that Canadian products could be sold. The reality is there is globalization. We have to compete on the international market. Canada is a trading nation.
We understood, for example, that infrastructure is very important to be competitive around the world. If we have road systems, ports, airports that are efficient we will be more competitive. If we have a communications system that is efficient and responsive we will be able to be more competitive in the rest of the world. If we have ports that can ship products very efficiently it helps the business community because it is more efficient and much more cost effective. We understood that. That is why we had an infrastructure program to ensure that we maintain the infrastructure and improve it for the coming century.
We also recognized that research and development is very important. Any country that does not do research and development falls behind. So in this budget we have said that there will be $800 million in the Canada Foundation for Innovation, $800 million
toward research and development which, by the way, will be administered by the private sector. It will determine where it is most advantageous for Canadians to spend that money.
We also understand how important trade is for Canada. That is why we have the Prime Minister's Team Canada missions where he has travelled to the Asia-Pacific, to South America and other regions to tell other countries that Canada is ready for business. Canada has the expertise. It has the skills. It has the products to deliver to people around the world.
I can say having the opportunity to travel and meet many leaders around the world that other countries want to do business with Canada. They know the type of products that we can provide. They know the skills, the efficiencies and the quality of the products which Canada provides in goods and services. They have all said ``We want to see Canada at the table. We want them to be there because we are confident in the services and products they provide''.
We understand how education is so very important for Canadians. That is why we have made it easier for students to pay back their loans, to give them more time and not to have to pay back their loans in the first six months but over 30 months to give students that leeway.
As well, we have said we want to encourage people to invest in education. That is why the registered education savings plan has been doubled from $2,000 a year to $4,000 a year to encourage Canadians to invest in education and invest in their children.
We recognize that truly children are our future. I am proud of this government's work on child poverty where we have invested in children. We are making sure that we help those children of the working poor. That is the recognition of a country with true compassion that cares for those people who are less fortunate.
Mr. Herb Grubel (Capilano-Howe Sound, Ref.): Mr. Speaker, as you might know, I will not be seeking office in the upcoming election. Therefore today I am definitely giving my last speech as an MP in this House in reaction to a government budget.
Let me start my comments with a brief assessment of the budgetary policy of this government during the last three years.
The $42 billion deficit in 1993 required urgent and decisive action. This view was shared by most Canadians and it produced the historic electoral success of the Reform Party which ran on the platform of fiscal responsibility. There are a number of indications suggesting that in 1993 neither the Liberal Party nor the finance minister fully appreciated the severity of the country's fiscal crisis. For this reason the first budget in 1994 reflected the belief that Canada would grow out of the crisis if we just reined in the growth in spending.
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The 1995 budget showed that reality had finally mugged the minister and his party. I take pride in my and my colleagues' contribution to driving home the fundamental truth about the effects of compounding interest and the risks associated with threats to the value of Canadian bonds caused by growing debt to GDP ratios.
Pressed in addition by high interest rates, warnings by Moody's about the downgrading of the debt and slow economic growth, the government bit the bullet and announced substantial cuts to program spending and some relatively small but still substantial tax increases.
The minister deserved the positive reaction to his historic budget given by the financial markets and the Canadian public. I praised the minister for having lowered program spending in absolute dollar values for the first time in post-war history.
I still believe that this praise was deserved. The 1996 budget contained no substantial further cuts or tax changes. All the politically difficult decisions had been made and embedded in the 1995 budget.
During the last two years, economic development largely outside the control of government favoured the Liberals and their budgetary goals. Economic growth remained moderately high simply because the country enjoyed a cyclical upturn.
The growth was driven largely by strong exports to the United States, which were fed in turn by a strong U.S. expansion and a low dollar. Most important, interest rates in the U.S. trended downward.
These fortunate exogenous developments produced better than expected increases in revenue, along with decreases in interest costs. As a result, the interest rate spread on short to medium term bonds between Canada and the United States moved in favour of Canada and resulted in even more moderate, positive effects on the fiscal balance.
In light of the much better than expected and very fortuitous improvements in the deficit, a large and vocal faction of the Liberal caucus began agitating for a resumption of the party's traditional policy of spending to buy votes for the next election, though of course they always describe these spending programs as providing compassionate aid to the unemployed and needy.
When the 1997 budget was revealed this week I, the financial community and in my view most Canadians were pleased to find out that the Minister of Finance increased spending and reduced taxes only by a relatively small $1 billion.
With most of the big increases coming a year or two in the future, he has stayed the course of fiscal restraint in this election year and stared down his spend thrift colleagues in the party.
Moreover, the spending increases he made were not of the traditional make work, pork barrel variety but, with some exception, involved projects that have a high probability of bringing good social and economic returns.
Ironically, the basic pattern of the Liberal budgetary policy is almost identical to what Reform had promised to do in its zero in three election platform in 1993. However, there are several major differences.
First, the cuts have not been fast and incisive enough. As a result, in the 1997-98 fiscal year the deficit will still be $16 billion or nearly $1.5 billion a month. This level of deficit may seem low by historic and some international standards but by any other standards it is still outrageously large. I repeat, we are adding to the debt $1.5 billion every month. Divide this by 30 and you get $50 million a day.
An important consequence of this continued deficit is that it exposes Canada to the risk of backslide should there be a turnaround in economic fortunes like a rise in interest rates and lower economic growth. Both these events are certain to take place in the future.
For the sake of Canadians, let us hope that the economic environment remains benign for several more years.
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Also, because improvements in the fiscal balance have been so slow, the debt is well over $600 billion and there are no plans for paying it down. Very soon Canada's problem will not be the deficit but the debt, if it is not already so.
Interest payments on the debt of $46 billion nearly equal what the government spends on elderly benefits, OAS and others, employment insurance, formerly known as unemployment insurance, and social transfers to the provinces combined. Let me repeat this. The sins of the past decade, including the last three years, have resulted in an outcome whereby the cost of servicing the result of those sins takes up the same amount of money as our very generous and expensive program of old age security benefits, now called the elderly program, unemployment insurance and the social transfers for health, higher education and welfare. This is truly an astounding number.
When interest rates go up again, the problem will be even worse. Only debt repayment can end this regretful state of affairs.
The media has finally picked up on one of my main themes in past comments on the budget. Two-thirds of the improvement in the fiscal balance was achieved by increased tax revenues mostly through bracket creep, partly through tax rate increases and some through the growth of population and wealth. Only one-third of the fiscal improvement has been due to cuts in program spending.
Unfortunately half of these cuts involved downloading of the adjustment burden on the provinces which in turn have cut funds for health care, higher education and welfare. Only a meagre 35 per cent of the reduction on program spending involved cuts to the size of the federal government, the departments which provide subsidies to business, regions and special interest groups which offer services which duplicate and overlap those delivered by the provinces.
Finally, I was very disappointed that the budget did not start the most fundamental debate that Canadians will have to face in the future. Assuming that economic conditions continue favourably and that the deficit will be eliminated in the year 2000 or so, the debate will be over the use of future dividends.
Canada faces three choices. The fiscal dividend can be used to lower taxes and gradually produce a smaller government. Alternatively, it can be used to pay down the debt and start a virtuous cycle of growing fiscal surpluses which in turn can be used for further debt and tax reductions. The third possible use of the fiscal surplus is increased spending and a larger and more intrusive government.
The next election should involve the discussion of these different paths for the development of Canada. Any government elected in 1997 or 1998 will face the need to decide on this matter. There are obviously no best choices. Each of the three alternatives has advantages and disadvantages. However, in the light of post-war experiences, in my view bigger government does not appear to promise many benefits for society at large.
Surely there are always beneficiaries from government largesse and they always tell good stories on why they deserve the goodies from the state. However, as we look back on the decades since the 1960s it is difficult to find evidence that the massive expansion of governments has produced a significant improvement in the lot of the average Canadian above that due to general and largely exogenously determined economic growth.
If we believe the government's statistics and read the public opinion surveys, poverty, educational attainment, health care, crime and unemployment are worse than they were before the massive growth in spending after the 1960s. In my view it defies logic to argue that because past spending has produced the deterioration of these standards we therefore should have spent more.
I know I am running out of time but I have just one last page. I assure the House that I know the arguments on the other side. Some are good but most involve rhetoric and wishful thinking.
I admit that I may be wrong about the merit of large government. It is for this reason that I think we need a national debate on this issue. What a shame that the 1997 budget did not set the framework for such a debate during the upcoming election.
Mr. Barry Campbell (Parliamentary Secretary to Minister of Finance, Lib.): Mr. Speaker, I have worked with the member for Capilano-Howe Sound over three years now, as both of us are members of the finance committee. We may not agree on everything. However, the member for Capilano-Howe Sound always has been fair and always has been prepared to give credit where credit is due. He has done so consistently through the last three budgets, in which I know he took a great interest and. He spent a great deal of time sharing his views with us about what the government should do and responding to what it had done on each occasion.
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His colleagues talk a great deal about doing politics differently. As he prepares to leave the House, on behalf of the Minister of Finance, myself and many of my colleagues, I want to say the member for Capilano-Howe Sound is truly one who has done politics differently in the House. I compliment him for it. He will be missed.
Mr. Grubel: Mr. Speaker, the member is getting me into a lot of trouble with my party, which is not a very nice thing to do. However, you will have noticed that when I presented the summary of my experiences over the last four years I did come down very hard on the shortcomings of the policies. There is a clear difference in vision between the Liberal Party, the Reform Party and other parties on the right.
This should be emphasized and made clear in discussion and should be on the level of historic tax experience and not just hand waving.
Mr. Len Taylor (The Battlefords-Meadow Lake, NDP): Mr. Speaker, I hate to get involved in this lovefest between the Liberals and the Reform Party. However, the parliamentary secretary is correct that the member for Capilano-Howe Sound has done things differently in the House and that is certainly to his credit.
One thing he said in his opening remarks bears repeating. I would ask him to shuffle his notes a little bit and share with us again his comments about how basically the Reform Party policy of a few years ago has been implemented by the government. It is worth noting from the point of view of most Canadians that the government is a party of the right and does share a number of the viewpoints of the Reform Party. It is incumbent on all of us to get it right.
If the member would care to share with us again his comment about the government implementing Reform policy, we would all appreciate it.
Mr. Grubel: Mr. Speaker, I think the division was quite clear during the election campaign and the people spoke clearly. One party said that it could not go on adding to the debt the way it had happened in the preceding 15 years. Two governments and two different parties had engaged in this spendthrift policy. In effect, the government has cut program spending, as Reform had proposed. We had proposed reducing interprovincial transfers. Instead it cut transfers for health, education and welfare which we had not proposed.
There are a large number of parallels but also some significant differences. The point I am trying to emphasize, which came out clearly in the numbers I gave, is that the deficit had to be brought under control. That was done. The government should be given credit for it. It did not do it right and I outlined why it was not done right and what the consequences of it were.
I believe my statement is basically correct. I am proud that because we had this agenda, we have helped prepare the way for the Liberal government to do what is right for Canada.
Mr. Dick Harris (Prince George-Bulkley Valley, Ref.): Mr. Speaker, I am most anxious to participate in the debate on the Liberal budget.
I must say at the outset that the Liberal budget can best be described as an example of sleight of hand at its finest. The budget is sprinkled full of little goodies, but it is simply an attempt to conceal the Liberals' real record. And what a record it is.
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Unemployment and bankruptcies are at record levels. Taxes are at record levels. Funding for health care and education has been slashed to record lows. We are approaching a record national debt level of $600 billion, with debt servicing costs reaching a record $50 billion a year.
The Liberals like to congratulate themselves on lowering the deficit, but it was done on the backs of Canadian taxpayers, students trying to get an education and Canadians who have suffered under health care cutbacks. That is the record of this Liberal government.
Let us not forget how Liberal taxation policies have affected the pensions of seniors and will continue to affect the retirement plans of seniors.
The Liberals have brought in 36 new tax measures and raised tax revenues by a record $24 billion. The deficit has fallen by $33 billion since 1993 and, therefore, a full 92 per cent of the reduction in the deficit is a result of Liberal higher taxation revenues. That is nothing to be proud of. Anyone can pull that golden handle and wrench more dollars out of Canadian taxpayers. Even this Liberal government can do that.
The government has not reduced its spending significantly. It has not made government more efficient, as the Reform Party has cited. It has battled the deficit by squeezing Canadian taxpayers.
This is not the only thing Liberals are good at. They are good at cutting transfer payments in support of health care and education to achieve a reduction in the deficit. That is not what the Reform Party wants to do. Reformers want to give Canadians a tax break. We want to restore funding to education and health care. At the same time, we want to cut $15 billion from the operation of government. That is where the big blood is.
The Liberals have battled the deficit by squeezing Canadian taxpayers. That is the only thing they are good at, shaking the money tree known as the Canadian taxpayer. The taxpayer is the Liberals' magic cash register. When they need more money for bigger government, bigger bureaucracy, bigger payments and bigger programs they dip into their cash register, the pockets of hard working Canadians.
The average Canadian family has seen its disposable household income shrink by $3,000 under the Liberal government. Every reputable economist in the country will testify to that, but the Liberals are in denial. Canadian families will testify that they have $3,000 less to spend to put food on the table, to put clothes on their kids' backs, to pay their medicare premiums and to provide the necessities of life. What kind of a record is that?
Do we know who does not have to worry about getting a job when the Liberals are in power? Liberal party fundraisers, former candidates, former Liberal provincial leaders and past party presidents. They do not have to worry about what the government is doing because they are getting jobs, while 1.5 million Canadians who do not hold Liberal memberships are looking for jobs.
The government has appointed hundreds of party faithful to various boards, agencies and commissions; appointments which come with obscene paycheques and obscene perks. That is being done despite the fact that the Liberal red ink book talks about making appointments based on merit. It seems that the only merit which is required is the $10 for a Liberal membership.
Why am I even referring to this flawed Liberal election document? Nobody believes it any more, not even the Liberals. They have stopped quoting from it because they were caught so badly in the big GST lie. There are so many broken promises in it they do not even dare use it any more. It is too bad, I would love to see the Liberals bring that out when they go to the election that is coming soon. They can bring out that red book and talk about all the promises they have kept and we will talk about the promises they have not kept.
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The Liberals red book has proved one thing only. It is not worth the paper it is written on. This red book will continue to give the Liberals headaches in the 1997 election as they twist, turn, flip and flop their policies when the policy winds change. And, Mr. Speaker, in case you did not know, Liberal philosophy and policy do change. They say ``these are my policies, if you don't like them give me a little while and I'll come up with some new ones''.
I would like to return to the chronic problem of the 1.5 million Canadians who are unemployed. The Liberals do not believe us when we say tax cuts create jobs. Maybe they will believe evidence from some non-partisan sources. The Cato Institute in Washington studied 10 tax cutting states and 10 tax hiking states between 1990 and 1995. These are figures that they will not want to listen to but, Mr. Speaker, I know you will want to hear this.
This study discovered that the tax cutting states created nearly two million net new jobs. The 10 tax hiking states created zero net new jobs. Furthermore, the economies of the tax cutting states grew 22 per cent faster than those of states which continued to raise taxes. Michigan was one of the states in that study that cut taxes-maybe the Liberals should know this-15 times since 1991 and brought the state back from economic ruin. Now it has an unemployment rate that is at its lowest since the 1960s.
In the Reform's fresh start program we argue that taxes kill jobs. We argue that tax relief creates jobs. Every single economic think tank in the country, perhaps in the world, knows and agrees that taxes kill jobs. Taxation kills jobs.
Yet this government has just imposed a $10 billion payroll tax on Canadian businesses and Canadian workers. That defies logic. When every economic think tank in the country agrees that taxes kill jobs except for the socialist economic think tanks that the Liberals call on from time to time for their policies, and the NDP as well. And every same thinking economic think tank knows and confirms that taxes kill jobs.
It is because of these taxation policies that we have 1.5 million people unemployed. It has killed the jobs and it has ripped the heart out of our social programs of which these Liberals are so proud. They have cut $7.5 billion from health care and education. No matter what little crumbs they through out in this budget, let us not forget that they are the ones who have cut the $7.5 billion from health care and education.
Reform Party policies in the fresh start program make sense to Canadians because they come from Canadians. We listen to Canadians, not like the Liberals who listen to their well-heeled back room advisers. This budget is smoke and mirrors. It is sleight
of hand at its finest. There is no way that our party and average Canadians will accept it.
Mr. Robert D. Nault (Parliamentary Secretary to Minister of Human Resources Development, Lib.): Mr. Speaker, I would like to enter into the debate on what the individual who has just spoken and represents the third party said.
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In the next election there is going to be a significant amount of discussion as to what we do as country in the new millennium. Part of that discussion is factually correct, as the previous speaker from the Reform Party suggested, as to what we do with this major surplus that will be achieved because of the good fiscal management of the government.
In that discussion there are going to be a number of items. One is Reformers in their platform have suggested that they are going to make government smaller. They are suggesting some $15 billion in cuts to the present government apparatus. My understanding in that scenario is the Reform Party will have to cut some 80,000 to 85,000 public service jobs in order to achieve what it perceives as small, efficient government.
We all know and the polls have showed continuously that Canadians feel very strongly about their social programs, feel very strongly about the ability to deliver those programs. I would like to ask the member if he would comment on that particular item, and while he is at it I would like to have him answer this for me.
Does the hon. member believe it is good economics for governments to give across the board tax cuts, like Ontario has, to the tune of so far 15 per cent in personal income tax, going up to 30 per cent of income tax reduction, which is a reduction in revenue of $4.9 billion when they are running a $10 billion deficit? That analysis is pretty easy if we picture the fact that this year they have had to cut $6 billion worth of services in Ontario. That is $6 billion of services that relate to education, relate to health, relate to transfers to municipalities, which of course have turned things upside down in the province of Ontario.
Would the member explain to me the whole issue of tax cuts when we need those revenues and when we still have a major deficit and whether he agrees or disagrees, and with his numbers as they relate to the 80,000 cuts.
Mr. Harris: Mr. Speaker, I think it would be hard to get the message on tax cuts across to this Liberal member in the next five minutes. They have not learned anything in three and a half years from us, so five minutes is not going to solve that problem.
The hon. member did talk about cutting the size of government. The Liberals of course believe that big is better. There is no doubt about that. They have displayed that.
Reformers, on the other hand, would prefer to work with a lean and mean government, no waste. The problem with this Liberal Party is it believes in this big bureaucracy. We want to be lean.
The fact is we want to cut spending. We want to cut the government waste. There is about $15 billion a year in government waste because of this big government policy that the Liberals are so proud of.
The hon. member did not read our fresh start. We are going to put $4 billion back into health care and education. The Liberals ripped the heart out of those programs to the tune of $7.5 billion.
How could the hon. member have the audacity to stand up and say that it is the Reformers who are going to hurt health care and education when his very government has ripped $7.5 billion out of health care and education? How does he explain that to people in my town who go to the hospital and find a third of the beds closed and line-ups for operations? How does he explain that to students who cannot afford tuitions because of the cutbacks that this Liberal government has made in education?
That is hypocritical. That is hypocrisy at its finest, absolute hypocrisy.
Mrs. Brenda Chamberlain (Guelph-Wellington, Lib.): Mr. Speaker, I am pleased to speak to this motion and in support of the 1997-98 federal budget. This budget continues the course set on October 25, 1993 when Canadians voted for change in the last federal election. It provides the tools necessary to help keep Canada the best country in the world.
When the Liberal government was elected in 1993 we had three choices. Two were easy. The third was difficult.
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The first choice we had was to continue spending without any concern for the future, as the past Conservative government did. In nine years the Conservatives nearly tripled the debt and left us with a deficit of nearly $45 billion.
It would have been easy in the short term to give everyone all they wanted, to add to the deficit and debt and to let someone else deal with the problem, just as the Reform Party now is proposing on the CPP issue. That would have been irresponsible and it would have placed Canada's future and our sovereignty at risk.
The second easy choice would have been to make deficit elimination our only goal, as it used to be the Reform Party's. In doing so we could have easily abandoned the sick, the elderly, those most vulnerable and possibly eliminated the deficit much faster.
It would have also been irresponsible because it would have caused pain by ignoring the millions of Canadians who rely on the federal government for their pensions, for health care, for post-sec-
ondary education and for the countless government services provided each and every day.
Instead, Liberals opted for a third choice, one that was challenging, difficult and required imagination, innovation and responsibility. This third choice was to reduce the deficit while preserving social programs.
We know that the efforts initiated by the Liberal government have been difficult. They have meant fewer public servant positions. They have required new ways of doing business in government and they have called for sacrifice.
In doing so, we are admired around the world for the way we have turned our federal budget around and for ensuring that those most vulnerable are cared for which is, after all, the reason we are the best country in the world.
The finance minister visited Guelph on November 12, 1996. In doing so, he participated in a call-in program on our local radio station, CJOY. He met with reporters from the Guelph Mercury and the Guelph Tribune and his visit to Guelph must have had enormous impact on him because this is truly a Guelph-Wellington budget.
When the minister announced $800 million for the new Canada Foundation for Innovation, he was speaking directly to the researchers and administration of the University of Guelph.
He spoke directly to President Mordechai Rozanski, Larry Milligan and others who asked me to help them in their work. Our commitment to fund research infrastructure will ensure that the place of the University of Guelph as the finest post-secondary education facility in Canada will not be challenged.
When the budget promotes donations to charitable organizations it speaks directly to Morris Twist of the United Way social planning council, to Lindsay Kennedy of the Wellington County literacy council and to Jassy Narayan of Onward Willow.
It encourages the thousands of volunteers who help make Guelph-Wellington the best community in Canada and it makes the responsibility of the professionals who run social service agencies, clubs and foundations a little easier.
When the budget provides more funding for infrastructure, it responds to a resolution passed on February 3, 1997 by Guelph city council asking for the continuation of this important initiative.
In providing more assistance for people with disabilities, it is in direct response to the recommendations and suggestions offered by groups and individuals in Guelph-Wellington to the task force chaired by our colleague from Fredericton-York-Sunbury.
In promoting trade, this federal budget has said to business leaders in Guelph-Wellinton like James Watson of Armtec, Wolf Haessler of Skyjack and Hock Choong of Semex that others will be allowed to benefit from Team Canada as they have.
I have been allowed a number of opportunities, especially as chair of the national Liberal caucus committee on economic development, to speak to the finance minister on priorities for the people of Guelph-Wellington.
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In response to a survey I sent out in December 1994, my constituents identified three areas of importance for federal spending: health, social services and youth. When the finance minister presented his budget on February 18 he spoke to those priorities.
We have encouraged our young people through initiatives like the youth employment strategy and in helping parents and students to cope with the rising costs of post-secondary education to obtain the experience and education necessary in today's changing workforce. By assisting young people to obtain a post-secondary degree we are also helping the people of Guelph-Wellington whose jobs are dependent upon a growing student population.
In providing $300 million over three years to assist efforts to find new and better ways to meet Canada's health care needs we are acknowledging the many people in Guelph-Wellington who have asked us to make health care a priority. I am pleased that a health transition fund will provide funding for projects that could include home care services. If this fund means that people can stay in their homes longer then it will mean much for the elderly and the sick in Guelph-Wellington and all across Canada.
In developing the new Canada child tax benefit, we are not abandoning the social safety net for those children and their parents who need our help the most. These are exactly the kinds of federal spending priorities that have been demanded by the people of Guelph-Wellington; all of this while never wavering from our deficit reduction targets.
There are those who are critical of this budget. They spoke earlier. Let them come to Guelph-Wellington to address our university researchers and tell them that they are opposed to the Canada Foundation for Innovation. Let them visit our charities and tell our volunteers that they are opposed to support for charitable giving and let them respond to the thousands of Guelph-Wellington residents who told me that health care is important. Let them say to those people that they are opposed to improving Canada's health care system. Let them meet our students and their parents and say that they are opposed to investing in post secondary education, and let them tell our citizens with disabilities that they are opposed to our help.
This budget does stay the course. In doing so it says that the hard work, the sacrifices and the reductions that Canadians have made since October 1993 were not lost. In fact, this is a budget of hope and it is a budget for a stronger and brighter future.
[Translation]
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ): Mr. Speaker, I accept the invitation of my colleague for Guelph-Wellington.
If she really wants us to, we will go to her riding to meet the people, the researchers, the people affected by poverty or unemployment, and we will explain to them as follows: in the past three years and a half, the Liberal government has cut $4.5 billion in transfer payments to the provinces to assist with their welfare, education and health programs. Her government has also jeopardized the income security system in Canada, the health system, and part of the research activities.
Yes, we accept her invitation, and we will go and tell her constituents in Guelph-Wellington the truth, no offence meant to my colleague, as I do respect her abilities.
I would also like to challenge what she has said about the $800 million foundation. Let them stop treating us like imbeciles. The $800 million is $800 million for the foundation, but new R & D investments represent $180 million yearly, and $180 million is very little in damage control by the federal government, after it has made hundreds of millions of dollars in cuts, $500 million in R & D alone. Part of the $4.5 billion in the Canada social transfer went for funding research activities and infrastructures.
They have made cuts here, and now they are offering a little treat, a little band-aid, a little ointment on the huge gaping wound they themselves have caused. And they are patting themselves on the back for it.
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Yes, we will go to your riding to explain that to your fellow citizens, as we have been explaining it ever since you brought down this clown's budget.
[English]
Mrs. Chamberlain: Mr. Speaker, I am so pleased to have the opportunity to respond.
I will welcome my colleague into my riding. He needs to come to my riding to tell the people of Guelph-Wellington and the rest of Canada why he as a Bloc member wants to break up Canada. He needs to explain why he has plunged Quebec into instability. He needs to tell the people of Guelph-Wellington why we have lost jobs in Canada. It is because of the instability and fear the Bloc has put into the Canadian and Quebec people.
I would welcome this member into my area, let me tell you, Mr. Speaker. Furthermore when his past leader, Mr. Bouchard, travelled on taxpayers' money to promote separatism, my community of Guelph-Wellington wrote petitions and stopped Mr. Bouchard from travelling on taxpayers' money.
Mr. Len Taylor (The Battlefords-Meadow Lake, NDP): Mr. Speaker, it is an interesting debate but unfortunately it does not help the young people of Canada attend university and other post-secondary educational institutions.
The member for Guelph-Wellington talked about the innovation funding going to Guelph. I certainly support that funding just as I would support it to the University of Saskatchewan or to other institutions.
Like the member from the Bloc who spoke earlier and like many people in Canada, I too am aware that on the one hand billions of dollars have been taken out of education and health care funding by the government. As a result the provincial governments and the institutions have had to raise tuition fees and have changed the student loans program to the extent that only the wealthy are able to attend school.
The member talked about the innovation funding at the university yet she is allowing the government to remove the funding that caused the Government of Ontario to raise tuition fees again this year by up to 20 per cent. If the students cannot go to the universities, what good is the funding for research?
Mrs. Chamberlain: Mr. Speaker, I would first like to point out to my hon. colleague, whom I like very much, that his own premier in Saskatchewan who is also a member of the NDP, has had to get Saskatchewan's finances in order. It seems to me all provinces have finally realized that Canadians really do understand that we do have to live within our means but we also have to choose priorities with vision. Clearly in this budget that is exactly what has happened.
Finally, after being elected in 1993 and hitting a financial wall because of where we were brought to, we are now only seeing a little bit of movement. We are able to begin putting money into health care which this budget is doing, into post-secondary education which this budget is doing, and into mechanisms like the RESPs. Parents can use those and then transfer them back into their RRSPs if they wish. There are a number of mechanisms in the budget.
I know my hon. colleague being the fine gentleman that he is and the caring spirit that he has would be appreciative of-
The Deputy Speaker: Resuming debate, the hon. member for Lachine-Lac-Saint-Louis.
Mr. Clifford Lincoln (Lachine-Lac-Saint-Louis, Lib.): Mr. Speaker, of course as Liberals we would have much preferred not
to tackle the deficit and concentrate on social programs. Of course as Liberals we would have much preferred to keep the research budget as it was. Of course as Liberals we would have preferred to beef up social programs. However, we were faced with a deficit of over $44 billion that was crippling the country and making it bankrupt.
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All Canadians regardless of their political stripe, regardless of their ideology recognized that something had to be done. This is why today people have so much respect for the Minister of Finance and the Prime Minister for having set the direction toward balancing our finances and for having reduced the deficit of $44 billion by 57 per cent over the last three years. Today we can see daylight. Our finances are getting back into shape and we are now getting back to our roots as Liberals and we are looking at social programs again.
[Translation]
I would like to concentrate on two programs especially dear to my heart. First, I would like to talk about persons with disabilities. With my colleague Andy Scott, whom I congratulate sincerely on his extraordinary work, I had the privilege of participating in a working group on persons with disabilities. Because of this group, we based our approach on a broader perspective in society for persons with disabilities, in terms of independent living and access to work. Of the measures tabled by the Minister of Finance, some seem pretty basic to us, but to people with disabilities, they are vital to their independence.
There are tax credits of 20 per cent for vehicle conversion, and 50 per cent for the installation of an air conditioning unit vital to a person's ability to breathe and carry on his or her life. There are also the costs of adapting a residence, of assistants for those with severe handicaps, of customs duties, which are now eliminated for goods sent for people with handicaps really needing them.
These measures include an opportunities fund of $30 million annually to ensure that the disabled are entitled to financial and personal freedom and to full citizenship.
I know our detractors will say that $30 million annually is peanuts. It is, however, a big step forward, a beginning. It is a new start given that, in the past, we could not afford this luxury. Now, as we see some balance in our finances, our thoughts turn first to people with disabilities, children in poverty, research, innovation and students-all needing our support.
The second measure I wish to talk about is our research and development program. There is no reason to hide the fact, Canada has fallen far behind the other countries in the OECD in terms of research and development. If we look at the statistics, it is no secret that Germany, England, France, the United States and Japan are far ahead of us in this area.
This budget at least gives us a start. It shows the way the government wants to go in the future. It is all very well for the opposition to say that $180 million a year is nothing. However, the $180 million will be spent in partnership with private enterprise, with universities and research institutions so that it will be doubled each year.
It has been said that we will be able to set up a research fund of $2 billion in five years. They say this research fund is paltry. However, according to Dr. Simard, the rector of the University of Montreal, it is the response they were waiting for. According to Dr. Shapiro, the president of McGill University, it will be of significant help in the area of university research.
[English]
A few weeks ago I had the privilege of spending some hours at the Montreal Neurological Institute, the famous institute founded by Dr. Wilder Penfield. There I could sit with Dr. Murphy and Dr. McPherson and Dr. Baxter and find out how much they crave for research funds. Our research funding has been cut. We had no choice. Now we must restore it. We must give the young scientists who crave funding for grants a chance to shine again. We have in Canada among our young research scientists the most brilliant in the world.
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I visited the Montreal Neurological Institute and found that what they are working on today is at the very forefront of progress in medical research. They want to continue their work, to perfect it. The only way they will perfect it, because funding is always a problem, is to seek partnerships.
In the past, in their traditional sense, universities never sought out private enterprise but today the university system is joining with private enterprise. The Montreal Neurological Institute is going to the Royal Bank for a partnership.
The funds which the government is extending will give a sense of direction, a sense of leadership that we want to restore our funding in research. We want to restore our funding in medical research, in environmental research, in research in high technology.
I salute the government for having taken this very forward step. I know we need more research grants, more funding, but it will only happen if we restore our finances first. Within the next few years, once we have a budget deficit of $9 billion or less, we will be able to fund research even more.
The budget will restore the faith of many people, many small l liberals who want government to go back to its roots and fund social programs. I am extremely proud that the government has taken that route. Henceforth, all the funding that we will be able to spare will be geared toward programs to help those who are most in need.
[Translation]
It is a Liberal budget. One that points the way to the future for those who need us most. I am very proud of this budget, and I strongly support the direction taken by the Minister of Finance. My colleagues and I will push for continued movement in this direction, for a return to our Liberal roots and for remembrance of those who need us most.
[English]
The Speaker: We will now proceed to Statements by Members.