GOVERNMENT ORDERS

BUDGET IMPLEMENTATION ACT, 1997

Mr. Jean-Guy Chrétien (Frontenac, BQ): Mr. Speaker, it is with great pleasure that I rise this afternoon to speak on Bill C-93, the Budget Implementation Act, 1997, at third reading.

You will probably recall how proud the Minister of Finance was when he tabled his fourth budget, boasting about the fact that the deficit, which was $42 billion when the Prime Minister entrusted him with this portfolio, should have shrunk to a mere $17 billion by the end of the current fiscal year.

There is a difference between the current Liberal government, and the previous Conservative government. While the Conservative Party underestimated its deficits, the Liberal Party tends to overestimate its deficits, which means that, by March 30 next year, the deficit may actually be closer to $12 billion.

The minister is fiddling around with the numbers and using the communicating vessels principle, in other words interest rates, to his advantage. In Canada as in every other industrialized country in the world, interest rates are relatively low right now. On the more than $615 billion in cumulatve deficits or debt, one can understand that the Minister of Finance is saving a bundle each month by paying less interest than he would have to if we had interest rates of 8 per cent or 9 per cent.

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However, and there is the rub, he is dipping deep into the employment insurance fund. This year, the EI fund will be generating a $5.6 billion surplus. Where does the money that generates this surplus in the EI fund come from? From the $2.95 premium paid by workers on every $100 of insurable earnings and $3.20 premium paid by employers, these premiums amounting to a payroll tax on employment.

By charging way too much, they get a surplus at the expense of workers. Indeed, this same government has decided to shorten the benefit period while at the same time increasing the number of hours-they count hours now-required to qualify for employment insurance benefits. Naturally, the benefit rate will be reduced by 1 per cent for every 20 weeks of benefits collected. After a few years, a worker who has collected employment insurance benefits for more than 20 weeks will see his benefits reduced by 1 per cent increments down to 50 per cent of his insurable earnings.

So, on the one hand, the Minister of Finance is keeping the employees' and employers' contributions to the employment insurance fund way too high while, on the other hand, he is making it extremely difficult for potential recipients to qualify for benefits. At this rate, within a few years, the fund will be overflowing.

However, this is another way this government can shift its deficit onto the provinces. The unemployment rate tends to go down because people are no longer on the list of those actively looking for work; however, meanwhile, the number of welfare recipients has been on the rise for some years in all of the provinces.

This is the case in Quebec, where the unemployment rate has gone down, while the number of welfare recipients has gone up because, in many cases, people are no longer eligible for employment insurance benefits and are still without a job. The result is that these people end up on the welfare rolls.

The Minister of Finance also reduced transfers to the provinces, including social transfers for post-secondary education and health. This triggered a chain reaction whereby all the provinces had to make other taxpayers, particularly municipalities, school boards and hospitals, shoulder part of the burden dumped on them by the finance minister.

What is really serious is the inequity of the minister's approach to balancing his budget within three years. The most blatant examples are undoubtedly the abolition of the Western Grain Transportation Act, in the prairies, and the harmonization of the infamous GST, which the Prime Minister himself promised to abolish, to scrap, as he said so eloquently. To scrap means to tear up, to throw in the garbage.

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The Prime Minister often said: ``I will scrap the GST''. Four years later, what has been the cost of scrapping the GST? It cost at least a byelection in Hamilton East, since the Deputy Prime Minister had pledged to resign in the first 12 months of a Liberal government if the GST was not abolished.

It took a lot longer than 12 months for her to resign her seat in the House of Commons, and the official opposition had to remind her for several weeks of the promise she had made, with the help of the media, which ran almost daily clips of her saying: ``I promise to resign if we have not abolished the GST in the first 12 months''.

Obviously, it took several weeks, several months, and in June of last year she handed in her resignation, because a promise had not been kept, a promise that can of course be found in the red book, which I note by the way has become as rare on Parliament Hill as Chairman Mao's little red book has in China; people made a point of learning Mao's book by heart. My colleagues in the Liberal Party also made a point of memorizing their little red book. What I would like is for my Liberal friends opposite to give me a few copies. I will need them for my next election campaign, and nobody wants to give me a copy.

I throw out an appeal to everyone, as they do on the quiz show Tous pour un: if you have half a dozen red books, I need them in the riding of Frontenac-Mégantic to give to my Liberal opponent, Manon Lecours, to read over again before she rushes headlong into the next election campaign that will be announced next Sunday.

I am certain that nobody will provide me with these books because they are so ashamed of them. I urge Liberal candidates in the next election not to lapse into the Pinocchio syndrome described in the book of the same name written by my friend, André Pratte, a reporter with La Presse. You must have read it, Mr. Speaker. He mentioned a number of famous comments made by our friends across the way. He gave examples of frequently lengthening noses on the faces of some of you, my Liberal friends, as the result of past untruths.

To get back to Bill C-93, I should point out that the Minister of Finance applies cuts sometimes unevenly, sometimes unfairly. I was talking about the GST, the harmonization with the three maritime provinces, three small Canadian provinces. To help them swallow the pill, he gave them $960 million. The GST has lost its name. Now it is the HST, the harmonized sales tax. The people in the maritimes will forget the GST in a few months or years. They will be calling it the HST.

In Quebec, the late Robert Bourassa, a federalist premier, with his good friend the former Prime Minister of Canada, Brian Mulroney, another federalist, agreed to harmonize the GST and the Quebec sales tax. I recall very clearly, when I was a farmer, having to complete two forms for the GST and the QST.

In 1991, I was very proud, I even telephoned my MNA to congratulate him on harmonizing with the federal government, since we would be completing only one form. Quebec collects the GST for the federal government, and, at the end of the month, makes a cheque out to the Minister of Finance of Canada.

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The only advantage the Government of Quebec receives is a split of the costs involved in collecting, whereas the maritime provinces get $960 for this same harmonization. Worse yet, the provinces do not do the collecting, the federal government does. It looks after the forms and the investigations and charges the provinces nothing for doing so. A double standard.

The Quebec department of finance fairly calculated the cost of having the same privileges in Quebec. The Minister of Finance's government would have to pay $2 billion if it were going to treat everyone fairly.

We in the Bloc Quebecois will pester all Liberal candidates in Quebec to be fair and to make commitments to the voters. As I said, it was utterly unfair of this government to use the WGTA to reduce its deficit. The Western Grain Transportation Act will save the Canadian treasury $560 million per year.

To sugarcoat it for western grain producers, the same finance minister paid $2.9 billion in compensation, including $1 billion paid directly to the producers, under the table. He sent them a cheque and told them: ``You are not required to claim this amount on your next income tax return, and no TP4 or T4 will be issued to include with your return''.

It is the same thing with bribes: one is not required to tell the tax man about them. The government paid producers under the table to sugarcoat a bitter tasting pill. It is appalling.

Mr. Canuel: Our hon. speaker, for one, would not take it.

Mr. Chrétien (Frontenac): I certainly hope not.

Mr. Canuel: At least I do not think he would.

Mr. Chrétien (Frontenac): It is appalling. There is a double standard here, because 48 per cent of dairy producers are in Quebec, and the Minister of Finance told them: ``We are cutting the milk subsidy to commercial milk producers''. In 1994-95, the subsidy was $5.42 per hectolitre, that is to say that dairy producers were paid $5.42 per 100 litres of commercial milk. As we know, commercial milk is under Quebec's control.

The subsidy was cut by 80 cents in 1995-96 and by 82 cents the following year. In five years, it will be all gone. By the year 2000, it will be down to 76 cents, and by 2001, it will be all gone. By August 1, 2001, there will be nothing left.

Quebec dairy producers are taking a $168 million loss. This cut is made in Quebec, which is a big milk producing province as compared to the western provinces, without a cent in compensation being paid. Quebec dairy producers are not getting anything to make the cut more palatable, when $2.9 billion, almost $3 billion,

was paid to western grain producers when the Western Grain Transportation Act, commonly known as the Crow rate, was abolished. That is appalling and unjustified.

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What will be the impact on Quebec farmers? It will bring up the price of butter or cheese. According to a comprehensive study, whenever the price of butter goes up 10 per cent, consumer demand drops by 7 per cent. And 48 per cent of the milk used to make butter comes from Quebec's dairy producers.

I see the hon. member for Pierrefonds-Dollard, who is a city dweller. He is not affected. However, his voters are consumers and they will pay 40 cents more for a pound of cheddar and 30 cents more for a pound of butter.

In a wealthy neighbourhood such as Dollard, this is not a problem. However, it is a different story in poor areas. It does create problems. Indeed, the reason the demand drops by 7 per cent is that the poor buy less butter, or no butter at all. They may have to use margarine, fat or something else.

The same is true in the case of cheese. When the price of cheese goes up 10 per cent, demand drops by 4 per cent. As the official opposition critic on agricultural issues, I look after the interests of dairy producers. However, I am well aware that, ultimately, consumers are the ones who will have to make up for this government's cuts.

I want to go back to the Pinocchio syndrome. Some years ago, I was in my living room, listening to the news. Brian Mulroney was Prime Minister and Statistics Canada announced that, the previous week, there were one million Canadians unemployed. Back then, the rat pack sat on this side of the House. Things were bad: ``One million unemployed and the Prime Minister is not doing anything. We want jobs. We want our young people to find work. You are rotten. You do not work for Canadians''.

Today, there are 1.5 million unemployed. There are three million children in Canada who live in poverty and who do not eat three meals a day. We are not talking about Zaire, but Canada. What is the Minister of Finance doing? What is the Prime Minister doing about these children living in poverty?

Last week, I met a teacher in Montreal who told me that several children in her class arrive at school without having had breakfast and that they barely have anything to eat for lunch.

It is sad to watch this government go about its business. After three years and seven months, Canadians will have the opportunity to elect a new government, and I hope they will. I hope that, on Sunday, April 27, the Prime Minister will hand in his government's resignation to the Governor General, so that voters can teach him a good lesson.

[English]

Mr. Paul Szabo (Mississauga South, Lib.): Madam Speaker, having listened to the member over the last 20 minutes, he has mentioned a number of things, some of which I would like to comment on and which require some clarification.

I am going to talk a little bit about the GST. I am sure it is a subject we are going to hear an awful lot about in the next election.

In the last budget the Liberal government announced that there would be no tax cuts until we could afford them and we could sustain them. No tax cuts. In the next election there is no question that the Reform Party will be running on tax cuts. The Conservatives will be running on tax cuts. The Liberal government is going to say no tax cuts.

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It is not enough simply to look at the bottom of the end result. The Reform Party and the Conservative Party are a little bit different; one is when it is balanced and one is immediate. There are conditions. The situation is there are conditions and some other matters.

The member must understand that we cannot use just one phrase or one word to say what represents the position. We have to look at all of the terms and conditions that are associated with tax cuts or no tax cuts.

The Liberal Party has said that we are going to have tax cuts when we can afford them. We are not opposed to tax cuts; we are going to have them. Having established that, let us talk about the word ``scrap''. Canadians are going to want to know more of the facts about what happened.

If we go back to the beginning of this Parliament, the finance committee was immediately asked to undertake a study of the alternatives to the consumption tax, the GST. I participated in this all-party committee. It held 35 meetings with hundreds of witnesses. It analysed and assessed for months and months at least 25 alternatives to the GST, including a modified GST or other forms of consumption tax. All members know that because all parties were represented in the finance committee.

Let us think about this. If in fact the government's position was to scrap the GST with no replacement, to just get rid of it the way those members have been trying to suggest, then why is it that the finance committee spent almost a year studying alternatives? Why did the public or the opposition parties not go ballistic about why we were breaking our promise of scrapping it with no alternatives? They did not do that. They did not complain when we were studying alternatives because they knew and Canadians knew that the undertaking of the government was to replace the GST with a revenue neutral-meaning not getting rid of the $18 billion-harmonized system with the provinces.

Some Canadians will say that they did not see the red book. I understand that because there were not enough produced for each and every Canadian. However, each and every member who ran on that platform included the extract in their literature. I did and I know my constituents saw it.

In addition, all of the media reported on the platforms of each and every party including in detail the proposal to replace the GST with a revenue neutral harmonized tax. It was reported in the press.

Did some members of Parliament use a word or a phrase to describe the whole platform? Yes, that is true. Even in this House I know there is at least one member of the cabinet who stood up and said that we would scrap it. However, to suggest that to use a word or a simple description of a platform policy is not to be taken in isolation, one has to also impute that it involves the full conditions and terms under which it was said.

I will conclude by asking the member a question.

[Translation]

Mr. Chrétien (Frontenac): Madam Speaker, I rise on a point of order. My distinguished colleague has already said enough that it will take up the rest of the time allotted me to reply. You will understand that, without wanting to get into a debate with my colleague-

The Acting Speaker (Mrs. Ringuette-Maltais): I would like to remind the hon. members that the 10 minutes are for questions or comments.

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[English]

Mr. Szabo: Madam Speaker, the member wants to respond and I am going to let him. I would simply ask-

[Translation]

Mr. Canuel: Madam Speaker, I rise on a point of order. It is entirely normal that he make a comment and then ask a question, but the comment must be about what the hon. member said and not about any old topic.

[English]

Mr. Szabo: Madam Speaker, the member was talking about scrapping the GST but the other member was not here. I forgive him for not being in attendance to hear the speech.

However, in courtesy to the member, he knows that the Quebec government did not wait until the legislation came forward to harmonize its provincial consumption tax with the federal tax. It went ahead and made arrangements to implement it. Quebec did not wait because it knew the advantages. It knew that through harmonization it would have an input tax credit available on the provincial component of the harmonized sales tax.

Is the member aware that exports from Quebec to other provinces and outside Canada enjoy an input tax credit on the provincial sales tax component of the combined tax which the other provinces did not enjoy before the HST?

[Translation]

Mr. Chrétien (Frontenac, BQ): Madam Speaker, I would like to remind my distinguished colleague, the member for Mississauga South, a good-hearted man, a man of courage and incredible loyalty, that we are not in politics to fool the voters. You can fool people once, but you cannot fool them all the time.

When we look at the latest surveys on how much confidence people have in various professions, doctors top the list, used car salesmen are at the bottom and one up from them are politicians. Do you know why? Because certain politicians often suffer from the Pinocchio syndrome, as my colleague has just shown. He says for all to hear: ``We never promised to abolish the GST''. That is a lie. I do not say he is a liar, I say it is a lie.

All the CBC and TVA footage showed the Prime Minister of this country saying: ``We will scrap the GST''. And the Deputy Prime Minister, who was one of the rat pack and who held a major post in the last election campaign in 1993 said: ``I will resign in the first 12 months if we do not abolish the GST''. It took 28 months. We had to give her a shove. This resignation cost the public $500,000, so that she could turn around and get re-elected with a much smaller majority in Hamilton East.

I ask my distinguished colleague, a good-hearted and loyal man as I was saying earlier, to find me six copies of his red book in French, because I need them badly in Frontenac-Mégantic for the next election.

[English]

Mr. Ed Harper (Simcoe Centre, Ref.): Madam Speaker, I am pleased to participate in the debate on Bill C-93.

First I would like to address some of the comments which were made a moment ago by the hon. member for Mississauga South. He was trying to defend the government's position on the GST. He suggested that it might be an election issue. I assure all members it will be a major issue in the coming election.

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The promise that was made in the red book, without reading the weasel words or the fine print, to scrap, abolish or get rid of the GST was made by a government in full knowledge of the difficulties that would be put in place trying to do that.

When he says we cannot take a few isolated comments out of context, I remind him and all members that the current finance minister apologized to the Canadian people for the government's lack of performance on the GST.

Not only did the finance minister apologize, but the Deputy Prime Minister resigned. A member of cabinet resigned over their failure to do what they had promised the Canadian people.

Talking about the resignation, I have to mention that it was done only after a poll was taken in the riding to make sure that the Deputy Prime Minister would be re-elected, hardly a move to address the cynicism that exists between the politicians and the voters. Her denial to do what she should have done for over a period of a week certainly hurt politicians, not just the government.

We had the Prime Minister who, in a town hall meeting, took exception to people who understood what they were saying differently and challenged that they should have read the red book.

Again on the GST, the government talks about harmonization. While in opposition the Liberals fought harmonization. As a matter of fact, the current finance minister was very strong in his opposition to harmonization. He said that once it is in there, we will never get rid of it. How he has changed his position now that he has moved from the opposition to the government.

In order to save face, to try to put some kind of positive spin on the GST, we get the $1 billion incentive to the three Atlantic provinces to come on board with harmonization. That is $1 billion which will be paid by taxpayers right across this country.

In the province of Ontario, the Ontario treasurer resisted harmonization on the basis that it would shift the tax burden on to Ontario taxpayers. It would increase it by $3 billion. He rightly resisted it.

When we talk about the GST, it indeed will be an election issue. It is one that we have to be honest about. I do not think the government, in making the promise, was honest. Its members are still not replying to the reasons why they did not fulfil their promise in being truthful with the Canadian people.

We are talking about the budget as it relates to the deficit and the debt this afternoon. It is one of the main reasons for my seeking office in 1993. I was very concerned about the insanity of the annual deficits that both the Liberals and the Conservatives had been running, $30 billion, $40 billion overspending resulting in now $600 billion of debt.

My concern was not so much for me as it was for my children and my grandchildren. I realized that while I had been in business over the years, I had allowed the governments of the day to engage in this overspending. They had mortgaged the future of my children and my grandchildren.

We were enjoying the benefits of being the number one country in the world and enjoying the very best in social programs but we were not paying our way. We were mortgaging their future. They were going to be paying our tab for being the number one country in the world, which we are, but we have done it on the backs of our children and our grandchildren.

That is something that we should be ashamed of. I am here to do all I can to reverse that, to bring some fiscal sanity to this place. I am hoping we will be able to do that.

When I think of this fourth budget that we are dealing with today, I recall the first budget, the second budget and the third budget. I have to go back to the first budget and say what a shame it was that the government wasted that first budget. It did absolutely nothing to deal with the serious problem of the deficit we had been running which at that point was almost $500 billion.

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As a matter of fact, when the Liberals ran in that campaign they made light of the deficit and debt by telling Canadian taxpayers that while it is a problem, do not be worried. It is okay. Do not fret. It is something they would look after. In the first budget the Liberals failed to address it any meaningful way. As difficult as it is to believe, they actually worsened the situation because they lowered the cigarette tax. They caved in to the smugglers. They said they have to deal with the smugglers and they reduced the tax on cigarettes. They were more concerned abut the smugglers with no regard for the health and cost implications to health care for Canadians.

I found it absolutely unbelievable to see the current health minister stand in the House and talk about the concern he has for the young people in our country who are smoking and that ``we have to do all we can to make sure it does not happen''. However, he is a member of the government that reduced the taxes on cigarettes and by doing so encouraged thousands of young people to take up smoking and put their future health at great risk. I found it extremely hard to believe when the health minister stood up today trying to show concern for the health of our young people, when by their actions they started many young people down that road.

The price of cigarettes was a major deterrent. I saw it in my own riding after the tax was reduced. When I drove by a high school I could see a significant number of young people smoking. The numbers increased because they could afford to buy cigarettes again and they were delighted. I find his concern now about the health of our young people a little difficult to believe. Of course, there was no thought of the future cost implications to our health budgets.

The second budget was a bit of an awakening. In the second budget the finance minister began to make a connection that the

deficit was resulting in high unemployment, in high taxes and was perhaps more serious than the government thought it was back in 1993 during the campaign.

Even at that point, the government still was not even serious enough to really tackle the deficit and come out with a program to eliminate it over a specific period of time. I recall very well that there was a warning issued by Moody's to the finance minister. Moody's told the finance minister, I believe before the second budget, that he had a very serious problem. ``You have been living beyond your means. You have a huge debt load and you are going to have to sell your bonds to maintain this lavish lifestyle you have enjoyed. We are concerned enough about your position that we are considering downgrading your bonds. We are telling you this because we want you to know how serious we think the situation is and how it is going to reflect in the advice that we give to people you borrow from, because you will have to borrow''.

There was another piece of information given to our finance minister at that time. He ignored the first and he also ignored the advice that he had to set a target date to balance the books. This rolling two year target where somewhere down the road we may get to a balanced budget is not going to fly with the people buying bonds. Give us a commitment. Give us a date. Of course, we know what happened when the finance minister ignored that advice. There were many who shot the messenger. Moody's was giving us good advice but there were those in government who asked who these young finance people in the red suspenders were to tell them what they should be doing. As a result of that advice being ignored, our bonds were downgraded with the potential to cost us more in interest payments.

In the third budget we did get some action. We heard again from the finance minister these deficits and debts were a serious problem. I am sure he was having a battle within his own party about whether to cut or spend more on social programs. Thank goodness his position prevailed and there were some limited cuts, but not nearly enough to eliminate the deficit and balance the books.

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Now we get to the fourth budget, the budget we are talking about today. As difficult as I find this to believe, I actually heard cheering from the other side when the finance minister stood up in the House and bragged about the fact that we will only be overspending by $19 billion. This is an accomplishment to be recognized with great applause that we are now only spending $19 billion more than we are taking in in taxes. This is an accomplishment.

There was even the suggestion that the battle is won. It is over. Now we can start spending again. We do not need to worry about it. We have won the battle. I have not heard anybody in the private sector saying that the battle is over. Is $19 billion of overspending something to applaud? I cannot believe it, but they did. I heard it.

Then we look at the other side of this $19 billion of overspending. We are now approaching $600 billion of debt. I did not hear any applause when that was mentioned. As a matter of fact, that may not have been mentioned too strongly, as indeed it should not have been. This Liberal government has increased our federal debt from $500 billion to $600 billion.

I heard government members saying in 1993 not to worry about the deficit and the debt, then during their term of office they realized that we were right and they were wrong and the deficit and the debt are a problem. I heard what they were saying about OAS and health care, the great defenders of health care and OAS. They are now doing far more, as we talked about.

NAFTA and free trade they opposed when in opposition. Now they are the biggest free traders we have ever seen. The Prime Minister spends as much time out of the country as he does in the country. Free trade has been good for Canada and NAFTA has been good for Canada.

The government does not know how to create jobs. The Liberals did not know how to create them when they were in opposition. They are now starting come around but it is a complete flip-flop from what they were saying when they campaigned in 1993 on all those issues.

Credibility is going to be an issue in this coming election. I suggest there is not a whole lot of it on the government side. The Liberals are going to have great difficulty just on those two major promises that were made to the people to get their vote, job creation and getting rid of the GST. Those two promises, regardless of the 173 others in the famous red ink book, are the ones on which Canadians gave Liberals their trust. It was based on both of those. They have failed the Canadian people on both those major promises. They are going to answer for it in a few weeks.

Promises made, promises broken. Canadians do not like to have promises broken, not when it involves jobs and not when it involves their pocketbooks. The voters are about to have their say. There will be some very surprised people. The polls indicating some popularity right now are paper thin.

This was an election budget to try to calm the waters and plug the holes in the dam, and there are some pretty big holes in that dam. Going into this election the voters will be asking, and we will be encouraging them, are they better off today than in 1993.

I do not think we are going to find very many voters from coast to coast who will answer in the affirmative to that question. They will take a look at that and say ``you are absolutely right, I am not and yet I was told I was going to be''.

They will look at jobs. They were promised jobs. The facts are there are 1.5 million unemployed today, 2 million to 3 million Canadians underemployed today, one in four of those who have a job worried about whether they will hold that job.

There have been 77 straight months of unemployment in excess of 9 per cent. Am I better off today relative to jobs? I think not. That is about the same number as when the Liberals promised jobs, jobs, jobs to get elected in 1993. They have not produced them. They will have to answer for it.

Let us go to taxes now. The GST is a tax. Canadians hate that tax. Canadians heard the words ``we're going to get rid of it'' and the weasel words, ``scrap, abolish, get rid of, read the red book if you can find one''. They were looking for tax relief. What the government has given the taxpayers is 37 tax increases and it has not scrapped the GST.

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That is why voters are so cynical about politicians. They do not have jobs. They do have the GST and their taxes have increased. All we hear is that there have not been direct personal tax increases, which is true, but there have been 37 indirect tax increases with the granddaddy of them all the CPP payroll tax increase. Some can call it an investment but it is a payroll tax and it is a tax increase.

The Fraser Institute has just released a study which states that the average Canadian family has taken a $3,000 pay reduction since the Liberals have been in office. That has come about because most Canadians have seen their salaries frozen and in that same timeframe Canadians have had 37 tax increases. The reality is the average Canadian family is $3,000 poorer than it was in 1993. Again, am I better off today than I was in 1993? I think not.

The record is there. We have record consumer bankruptcies. It was almost 80,000, just 79,000 and change which is up by 22 per cent since 1996. Am I better off today? There are 80,000 consumers who will say no very loudly.

Business bankruptcies are up by 7 per cent to 14,229. Canadian household debt as a percentage of disposable income was 54 per cent in 1985 and is 91 per cent in 1995. Am I better off today than I was in 1993? I do not think so. Canadians are asking themselves, ``if this is a feel good budget, why don't I feel good?''

In this atmosphere the government is saying that low interest rates will get the economy moving, that there will be no tax cuts because low interest rates will do it. We have record bankruptcies and record consumer debt. How in the world will low interest rates get the economy moving? Canadians have lost their borrowing power. They are in debt right up to here.

However, we should remember that when the Liberals talk about low interest rates they are talking about going into debt which is one thing they know a great deal about. We have to give them credit for that. They know about going into debt. That is what they are encouraging the Canadian people to do: ``Borrow, borrow more. You can borrow your way to prosperity. Just go deeper in debt''. That is a terrible message to send to the Canadian people. We should be asking the Canadian people to be fiscally responsible, to not spend what they do not have because future generations will be paying for it. Of course, the government cannot do that because it cannot even do it.

The low interest rates factor is a two-edged sword because not everybody benefits from low interest rates. There are those who do but there are many who do not. I am thinking of those who are living on fixed incomes. Across the board tax cuts help all Canadians. That is what will get our economy moving. That is what will create the jobs Canadians are so desperately looking for. The government has not made the connection between high taxes and high unemployment.

We have been going down this road of government spending and high taxes for 25 years and it has not worked. Why in the world are we not looking for a better way, a different way? What we have been doing has not been working. The unemployment numbers support this claim and something has to be done about it.

There is a lack of vision, a lack of ideas. It is the status quo. The Liberals have been saying: ``We have always done it this way so we have to keep going down this road. We can't do it any differently. We just don't have the vision or the plan to do it''. I am proud to say that we have a vision and we are going to be offering it to the Canadian voters in the coming election. I believe there will be the change in this place that is so desperately needed.

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Mrs. Brenda Chamberlain (Guelph-Wellington, Lib.): Mr. Speaker, I listened with great interest to the hon. member when he talked about jobs.

In 1993 when we were elected the jobless rate was at 11.2 per cent and now it is down to 9.3 per cent. I think that is a very good record. Is it enough? No. As the Prime Minister constantly says: ``It is not enough but it is certainly going in the right direction''.

The hon. member talked about low inflation and that is an important part. The average Canadian cares about that. Certainly home buyers care about it.

With respect to interest rates I do not know what riding the hon. member represents but in Ontario my people do care about low interest rates when they are buying homes or any other item. In my humble opinion it is totally irresponsible to promise a tax cut when

the deficit is not completely gone and when we have not tackled the debt yet.

Does the hon. member really believe that buying votes with such a see through method is honest? Does he believe it is correct to do such a thing when fiscally we have not put our house in order?

It is important that the Canadian people know that when we took power just 3.5 short years ago the deficit was $42 billion. It now stands officially at $19 billion. The rumour is that it is significantly less than that. Do the Canadian people think that is a good record? I believe so. I am proud to hold my head up.

It is really wrong to promise a tax cut when we do not have our books and our house in order. We are going in the right direction. The deficit is at the lowest level it has been for 15 years. That is a really good record.

Please do not let the hon. member promise a tax cut and put us further in debt. Please.

Mr. Harper (Simcoe Centre, Ref.): Mr. Speaker, I cannot believe what I have just heard coming from the government in that intervention. She talked about buying votes. She is accusing us of buying votes? I cannot believe it. Jobs, jobs, jobs, the GST, scrap and abolish NAFTA. Talk about buying votes.

We are not buying votes. We are saying we are going to offer tax relief after we get rid of the deficit. We make that very clear in our fresh start platform: after we get rid of the deficit we are going to act fiscally responsible and we are going to offer tax relief.

We also have a guarantee in our platform. We are saying to the voters: ``Don't trust us, trust yourselves. If we don't do what we say we are going to do right now, we want you to have recall''. That is something that the government does not believe in because it promised things it knows it cannot deliver.

Why do the Liberals oppose recall? Because they would be called to answer for the promises they have made and they do not like to be held accountable for their promises.

The government says that when it took over there was a $42 billion deficit. When the Conservatives took over from them the debt was about $200 billion thanks to annual Liberal deficits. Now the Liberals are extremely reluctant to slay the monster they created. We went down this path of insanity back in 1970 when the Liberal government started this deficit spending to the point that when they were booted out of office the debt stood at $200 million. Now it is approaching $600 billion. That is some kind of an accomplishment? I think not.

When I hear members over there say that we are being dishonest, I want to point out that we understand that cynicism. That is the fault of the Liberal government. That is why we believe in recall. That is why we believe in referendums. That is why we believe in freer votes in the House of Commons.

(1610)

The Deputy Prime Minister tarnished every politician in this House and in this country when she did not do the honourable thing and resign-

Mrs. Chamberlain: She did resign.

Mr. Harper (Simcoe Centre): Only after a week's haranguing and taking a poll in her riding. It lost its impact when she did not do it immediately, as indeed she should have.

I also want to talk about interest rates. The member talks about how interest rates are a big factor in her riding.

I have done a poll in my riding. The businesses are not looking for low interest rates to get the economy moving. That is way down on the chart. What they are looking for is tax relief. They want their consumers to have more dollars.

I wonder if the member has talked to the seniors in her community who are living on fixed incomes and looking for decent interest rates. Have you heard from them or are you listening to them? Low interest rates do not benefit everybody.

The Acting Speaker (Mr. Milliken): I would urge the hon. member to address his remarks through the Chair.

[Translation]

Hon. Don Boudria (Minister for International Cooperation and Minister responsible for Francophonie, Lib.): Mr. Speaker, I just saw another Reform Party member who wanted to rise after the previous speaker, so I thought I should rise as well to straighten out a few facts.

You may have noticed that the hon. member who just spoke was not altogether objective in his comments and was not altogether fair in the way he described the facts as we know them. And I am being generous, always abiding by the rules of this House.

[English]

I do not know why, but I kept thinking when I listened to the hon. member who just spoke about the words of Sir Winston Churchill. They have been ruled parliamentary by countless Speakers, so I guess I can repeat them in this honourable House.

He said about remarks which were similar to the ones we have just heard that the opposite to the truth had never been stated with greater accuracy. That is exactly what I thought when the hon. member spoke about the last budget of this government, this Prime Minister and this very excellent Minister of Finance.

Let us straighten out the facts before we go too much further. The member opposite talked about unemployment.

[Translation]

My position is that as long as there is a single person in my riding who is unemployed, there is too much unemployment. It would be a mistake to be satisfied with the unemployment rate, whatever it happens to be.

That being said, we still have to state the facts. Last month, 61,000 jobs were created in this country. This is a total of 800,000 jobs since the last election. A net gain of 800,000 jobs is quite an achievement.

Mr. Speaker, as the soul of objectivity in this House, you will have to admit that. Those are the facts, and I am sure this information is correct, since it was authenticated by Statistics Canada and other agencies.

[English]

The G7, the OECD and think tanks all over have acknowledged that the largest level of growth of any OECD nation this year will belong to Canada. It is not average growth. It is not a better than average growth. Only the best belongs to Canada. We are the best.

Of course it is not good enough to be the best, but it is a darned sight better than it would be under a Reform government. Heaven forbid that we would ever have such a thing in this country. That is not likely to happen at any time, let alone soon.

(1615)

[Translation]

The hon. member opposite just argued in favour of high interest rates. I found it hard to understand the logic of what the hon. member said, when he stated that people on low incomes would benefit from higher interest rates. I would like to know what school of economics launched that idea. Did you ever hear about people on low and fixed incomes who benefit from high interest rates, considering that high interest rates are usually accompanied by similar levels of inflation?

[English]

How many poor people end up better off with inflation? The member across the way says that poor people are better off with high interest rates. I wonder which one of his rich friends taught him that. Which one of his rich friends is trying to invest money on the backs of those same poor people?

Mr. Benoit: He never said poor people.

Mr. Boudria: That is what he did say. He said that people on lower and fixed incomes are better off with high interest rates. All members of this House have heard it, except for perhaps the member across the way who is heckling.

People on lower and fixed incomes are the first to be vulnerable with inflation, the first when something is gouging away at their purchasing power. Inflation in this country is at the lowest level it has been in years.

Mr. Benoit: That is untrue.

Mr. Boudria: It is not untrue. It is the truth. We have very distinguished members in this House, such as the member for Mississauga South who is an accountant and the member for Guelph-Wellington who is well known and well versed on financial issues, who can attest to this. Surely then all of us would know that this is a fact.

[Translation]

The hon. member for Simcoe-North, I believe, talked about-

An hon. member: No, it was the hon. member for Simcoe Centre.

[English]

Mr. Harper (Simcoe Centre): You don't even know my riding.

[Translation]

Mr. Boudria: No, I am trying to forget in his case. I must say I am doing my best to forget, and I hope the day will come soon when I can forget entirely.

Mr. Speaker, in the meantime, you have just reminded me of the name of the riding of the member opposite. He alleged that the government was wrong to put an end to the smuggling by lowering the Conservatives' tax on cigarettes. This scourge was affecting Quebec as well, because nearly 80 per cent of cigarettes were sold illegally. In my riding, I saw a native community torn asunder by the problem. I saw people in the same family opposing each other in this business of smuggling.

[English]

We had achieved an almost hobbesean state where it was every person for himself and life was brutish and short. People were going at each other with guns on the issue of contraband. Young people who broke the law were being rewarded by driving Corvettes and those who respected the laws were walking to school. That was the situation in this country.

Yes, it did take intestinal fortitude for the Prime Minister to take the decision that he did. I congratulate him and always will because he did the right thing. And the right thing is not always the easy thing.

When the hon. member for Simcoe Centre pontificates from afar-that is far right by the way-I say to him that he is wrong. The Reform candidate in his riding in the last election sure was singing from a different hymn book on that issue. However, that is not radically different for Reformers to disagree with each other.

Need I remind all of us of statements made by one member from across the way who said that people who were different from him

should be in the back of the shop. I remember that and we all will very shortly. That is the kind of mindset of the people across the way.

Mr. Harper (Simcoe Centre): You should be ashamed of yourself.

Mr. Boudria: I am not. I want to tell the hon. member across the way, who tried to pretend that somehow the issue of cigarette smuggling was anything different than what it was for his own partisan ends, he had better look at himself in the mirror and maybe at the same time have a close look at some of his own colleagues.

(1620)

[Translation]

That is the truth. We know what sort of leadership we had in this government. We recognize the honesty of the Prime Minister and his government. We know that we have renewed Canadians' trust in their parliamentary institutions, so much so that a poll revealed a few days ago that the level of confidence in Canada is the highest among the G7 countries, whereas it was the lowest before the last general election. Why? Because we have quality leadership.

I have had the honour for a number of months now of being a member of his leadership team, because of the mandate the Prime Minister conferred on me in appointing me to cabinet on October 4. I, like my colleagues, have tried to provide the people with honest and respectable government, and we have succeeded in doing so.

Whatever allegations the member opposite made earlier, the truth is the exact opposite. Soon, I hope, the Prime Minister will decide to return to the people and ask them to give us a new mandate. I know he can do so with his head held high. I do not know the date any more than the member opposite, who is having fun chatting. When he does decide, he can do so confident in the knowledge that he fulfilled his mandate and did what Canadians asked of him.

[English]

I am equally sure that the Prime Minister will again enjoy the confidence of the Canadian people. He and this government deserve that kind of confidence for having told Canadians the truth about every issue, even the issue we brought to the attention of all Canadians, that of the high deficit.

Today the European Economic Union is calling Canada the economic miracle of the western world. We are told that by people in Japan. We are told that by our other trading partners. Why? Because it is true. The whole world cannot be wrong, except the Reform Party. Not everyone is out of step except the member for Simcoe Centre. The reality is a little otherwise. The truth is otherwise.

I am proud of the quality of leadership by our Prime Minister, by our Minister of Finance, by this cabinet and by the entire Liberal team which has supported this government. It has taken difficult decisions for the good of all Canadians and for generations to come.

[Translation]

Mr. René Canuel (Matapédia-Matane, BQ): Mr. Speaker, the minister used the word ``truth'' a dozen times with great conviction. It seems to me that the truth speaks for itself. One needs not make a big production of describing what it is. When one says: ``We are on the side of truth'', then the case for truth is made. I have my doubts about what he said because what do you call the Prime Minister saying he would kill the GST and not doing it? There is a long list of similar situations.

Now, of course, everyone agrees that the deficit must go down and even disappear completely.

(1625)

Everyone agrees also that we should be paying off our debts. We all agree with that. But how do we go about doing this? That is the problem. Unfortunately, the Reform Party, the Conservative Party and the Liberal Party have nothing better to offer in that, until this place passes an elections act like the one passed in Quebec under René Lévesque, under which large corporations are forbidden to buy, so to speak, governments, regardless of their affiliation, I assure you these governments will have their hands tied. There will be no end to family trusts, and families earning $100,000 and more per year will pay almost no tax because lobbyists will still have easy access to the Prime Minister, the Minister of Finance and the other ministers.

Until a government passes this kind of legislation, every Quebecer and Canadian will be justified in doubting the authenticity of the government and doubting, when promises are made, the truthfulness of these promises. Not that I doubt the ministers and the Prime Minister as individuals, but it takes political courage to pass this kind of legislation. When the suggestion is made that it be passed, the major national parties balk. Why? Ask yourself why they do not want such legislation passed. It is either because they have their hands tied or because they lack courage.

When companies contribute $10,000, $20,000 or $100,000 to a party's campaign fund, they are friends and the party is indebted to them. This is the truth.

Earlier, the minister told you, Mr. Speaker, and I have a great deal of respect for you, that you are impartial. That is true, but I believe that, except for you, the only party which can be impartial in this House is our party, and I will tell you why.

Some hon. members: Oh, oh.

Mr. Canuel: Just let me explain. It is because we are not trying to form the government. I do not think we will ever form the

federal government. Therefore, because we are not trying to form the government, we can be impartial.

In fact, we are the only party that is not interested in holding such power. In any case, it is not the real power. The real power is held, as we know, by the financial world. Until we can dissociate ourselves from these companies and family trusts, everyone knows that our hands will be tied. The government may try, it may make an effort sometimes, but it cannot do a good job.

I ask the hon. member: If his party is re-elected, will he have the courage to promote a bill that would correct this problem with campaign funds? The result could be similar to what was achieved in Quebec, thanks to René Lévesque. Mr. Bourassa himself congratulated René Lévesque a few years later, because it is a lot easier to be honest with voters and tell them the truth. I ask the minister if he will sponsor such a bill.

Mr. Boudria: Mr. Speaker, I thought I had heard everything. The member opposite has just said Bloc members are impartial. So we will ask the member for Rimouski-Témiscouata, when the time comes, if she considers herself impartial.

(1630)

Mr. Canuel: Of course.

Mr. Boudria: Of course, right. We will ask Hull residents if they think she is impartial.

Mr. Canuel: But that is different.

Mr. Boudria: So we can all wonder about this proposal regarding the impartiality of a Bloc Quebecois member, including the member for Rimouski-Témiscouata, and of all the others as well, of course.

The member opposite has just said that we have attained the objective of lowering the deficit, but he is not in agreement with the way we went about it. You will immediately note the differences of opinion among opposition party members.

This member says: ``They met the objective, but we did not like the way they did it''. The member for Simcoe Centre, who spoke earlier, said: ``They did not meet the objective at all''. You see how opinions differ, and how these two opposition parties, which are not far apart on some issues, have very differing opinions when it comes to the economy.

I suspect that, depending on the opposition member you asked, opinions would perhaps differ even more widely, given that some members opposite have very little in common with each other, except for their views on sovereignty. That aside, some lean a little to the right, others-I am not saying the leader of the opposition-lean much further to the left, not to mention one who is really out in left field.

The hon. member across the way says that political parties are to some extent answerable to those who make campaign contributions.

Mr. Canuel: Yes, yes.

Mr. Boudria: And has just repeated it.

I am making no such accusation of the Canadians who contributed to my campaign-

Mr. Canuel: The companies.

Mr. Boudria: -all those who contributed to my election campaign, the one of the hon. member for Pierrefonds-Dollard, and those of my other colleagues in this House. I am convinced that my electors are basically honest, and when they contribute to my campaign, whether that means coming to my $5 a plate spaghetti supper, or my $100 a plate annual fundraising dinner-

Mr. Canuel; $2,000.

Mr. Boudria; No, I have nothing that goes over $100, which means that the meal is around $35, or $36 or $40, if the hall rental and the rest of the expenses are included, so the other $60 or so is a contribution. People do not contribute $60 to my campaign expecting to get any financial gain back.

I feel that such accusations concerning the people of Quebec and the people of Canada from sea to sea are totally inappropriate. Whether a person runs my local convenience store, has an engineering practice in my neighbourhood, or a company in my riding-most of them being very small, although there are one or two big ones-whether they have contributed the $5 or the $60 I referred to before, or even if they are one of the handful of people contributing maybe $200 in the last campaign, they are all honest people, in my opinion. Or at least I believe they are.

Unless it is proven otherwise, I believe that the Canadians who contribute to my campaign, like yours, like the campaigns of everybody else, merely want to help the democratic process in order to have good government, and we will have another good Liberal government, as we have had this time.

The Acting Speaker (Mr. Milliken): It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised at the time of adjournment are as follows: the hon. member for Chicoutimi-government contracts; the hon. member for Frontenac-tariffs on agricultural products; the hon. member for Davenport-Organization for Economic Co-operation and Develop- ment-the hon. member for Mackenzie-transport.

(1635)

[English]

Mr. Philip Mayfield (Cariboo-Chilcotin, Ref.): Mr. Speaker, as I listened to the hon. minister's response to that question or comment I was reminded of the politician who had the ability to

speak until he thought of something to say. The difficulty was that I was not quite able to determine what the minister was saying.

I am pleased to rise to speak on Bill C-93, the budget implementation act. It is an important act despite the dryness of the name because we are debating how the nation spends its money and the policies behind that spending.

Today's debate is very important for Canada and the Canadian people from coast to coast who are struggling. Why is it an important debate? I cannot remember another time, except perhaps for the chaos of the world wars or the depression, when life was so uncertain for so many people in peacetime.

For example, 1.5 million people are unemployed in Canada today, just as many as when the Liberals were elected in 1993. Another two million to three million Canadians are underemployed. One in four Canadians is worried about losing a job. We have had the worst string of unemployment numbers since the great depression, and perhaps the longest string as well.

After four years of what the Liberals call cost cutting, Canada will be over $111 billion deeper in debt. In total, 25 years of Liberal and Tory mismanagement have put Canada over $600 billion in debt. We spend about $46 billion a year on interest charges alone. The largest claim on the national treasury each year is the interest we pay on the debt. All this time families are hurting. Since the Liberals came to power the after tax income of the average Canadian family has dropped by about $3,000.

The Liberal government has increased taxes 37 times. The latest increase was the massive 70 per cent hike in Canada pension plan premiums. People are wondering how they can live with the creditor's hand in one pocket and the government's hand in the other. Many of them are not making it. Let us consider the number of bankruptcies that have occurred in the past year. Bankruptcies are at their highest level ever with almost 80,000 last year.

Let us also consider health care, education and social programs, how they have been gutted by $7 billion in the last three and a half years and the consequences of that.

Last year in my constituency in the city of Quesnel there was a tragic explosion. Five people lost their lives. Twenty people had to go to the hospital. The G. R. Baker Memorial Hospital has 50 beds. It actually has more beds, but if the administrator uses more than 50 he will get fired because of the closures and the cutbacks. The hospital was entirely occupied by patients; there were 50 patients when the explosion occurred.

That is the seriousness of the situation. There is no slack in the system. There is no room for exceptions. There is no room for people who are caught in unexpected emergencies.

It is no wonder that today more than at any other time people are extremely concerned. They are frightened. They are concerned about their finances. They are concerned about their families, the opportunities available for their children and the opportunities that are not available. They are concerned about their health care. They are concerned about how they will pay their mortgages. They are concerned about their futures. That is why Canadians were looking to the 1997 budget and praying for some relief, some help along the way, an oasis in the desert. Did they get it? No, they did not.

(1640)

Let me explain why. The 1997 budget raised tax revenues another $4 billion. Tax revenues next year will be $24 billion higher than they were when the Liberals took office.

There was no real job creation strategy. People are still looking for jobs. People are still worrying about losing their jobs. There was no help for health care and no help for pensions.

I am afraid Canadians looked at the budget and said to themselves: ``If this is supposed to be such a good budget, where are the benefits? Where can I look for some hope?''

The finance minister argued that one of the benefits of the budget was that government finances were finally under control. Only in Ottawa will people celebrate when the government is in debt $600 billion, when it borrows $19 billion a year and when it pays interest charges of $46 billion a year, acting as though it is all under control, everything is fine and the war has be won.

We watched the Tory administration struggle with the deficit. If the Tories ever came close to achieving what they sought, they immediately reversed the trend and began spending more money. That is what I am afraid we are watching as the election approaches. We are watching any gain that may have been won being used up to buy election votes.

The finance minister has argued that his government is reducing the deficit by controlling spending. Just a couple of weeks ago Canadians heard some very disturbing news about the government and the finance minister. We learned that the finance minister had not met his deficit targets as he had promised. He is $5.2 billion off his 1995 budget target for expenditure reductions in the federal government. To cover up his mistake, the finance minister redefined departmental spending under program review.

When we are in a game we expect to get the ball into the goal. If someone moves the goal to catch the ball, there is a name for it. In addition, the true reality of what is happening on top of the government fudging its books is that the Canadian taxpayer has paid for 84 per cent of the deficit reduction through increased tax revenues.

It is no wonder Canadians are still asking the government: ``If this is supposed to be such a good budget, where are the benefits? Where is the hope for me?''

The finance minister argues that he has not raised taxes in this budget or in any other budget. However that is not reality. He may be able to move the goal to make the score but that score does not count.

Since the Liberals came to power GST revenues went up by $2 billion. Corporate income taxes went up by $6.8 billion. Personal income taxes went up by $15 billion. Other taxes went up by $500 million. That is a $24 billion increase in tax revenues over what they were when the Liberals took office. That does not include the $10 billion tax hike in the Canada pension plan. Again Canadians are asking the government: ``If this is supposed to be such a good budget, where are the benefits?''

The finance minister has argued that he is the great defender of medicare and that this year's budget shows it. The reality, however, is something quite different. We see the reality when people are caught in extreme circumstances such as the explosion which occurred in Quesnel last week.

(1645 )

The Liberals chose to hack, gut and gouge health care. These are the finance minister's own words. They are part of his vocabulary. The Liberals chose to hack, gut and gouge health care to the tune of $3.6 billion, a 40 per cent decrease. The effects of these cuts have been devastating.

Over 170,000 Canadians are on medical and surgical waiting lists. Forty-five per cent of those people say they are waiting in pain. Fifty-five people have died while waiting for heart operations in Ontario alone in the last 10 months. Hospitals are closing and services are being cut in every part of the country. This year's budget gave no help to those hurting people.

Canadians are still asking this government: If this is supposed to be such a good budget where are the benefits, where is what Canadians need? Most of all, Canadians were looking for jobs from this year's budget. As I mentioned earlier, Canada is experiencing the worst and longest lasting set of jobless numbers since the great depression. The finance minister's budget has not changed this reality. In both months following the 1997 budget, February and March, the unemployment rate was still over 9 per cent. Let us ask why.

The government has failed to give Canadians job relief and has failed to give them tax relief. Reduced taxes mean more money in the pockets of families, consumers, small business people and investors. But the money is not there for them. Consumers who spend more money will create the permanent well paying jobs that Canadians throughout all of Canada need and are crying for.

The finance minister's message to Canadians is that low interest rates are the best medicine for the economy. Despite the lowest interest rates in years, the unemployment rate is still 9 per cent and there are still 1.5 million people unemployed. For a person who has just gone bankrupt, for a person who does not have hope or does not have a means, the low interest rates are not doing any good.

It is quite clear that the economy cannot be pushed uphill with interest rates. There has to be income growth. There has to be job growth. There has to be tax relief. What consumers need, what Canadians need is a tax cut. Government expenditures are breaking the financial backs of Canadians.

Although Canadians got no help from the finance minister or the government in the 1997 budget, there is a hope on the horizon and that hope is called Reform's fresh start. As I close, let me describe this fresh start for Canadians. A Reform government will cut government waste and trim government departments to balance the budget by 1999, two years from now. A Reform government will then use these budgetary surpluses as follows.

There will be a $5 billion down payment on debt reduction by the year 2001 with a fixed proportion of future surpluses being dedicated to debt reduction. We still have this enormous debt hanging over us. How are we going to deal with it unless we actually begin to start making payments on it?

A Reform government will provide a $4 billion per year transfer to the provinces for health and education purposes.

There will be $15 billion in much needed tax relief to the long suffering Canadian taxpayer. Tax relief of this magnitude will reduce the tax bill paid by the average Canadian family of four by $2,000 a year by the year 2000. That is what Canadians need and it is what the Canadian economy needs. This kind of tax reduction will spur job creation for parents and families who want and need jobs. It is a significant tax relief which will help them pay their bills.

(1650)

I repeat, more money in the pockets of consumers, small business people and investors will mean greater spending and prosperity for all Canadians. Consumers that spend more money will create the permanent, well paying jobs Canadians are looking for, which is what they need and have not had for years.

What I have described is Reform's fresh start. What we are putting to the Canadian people is a plan that will give Canadians a hand up, not a hand out; a plan that will help them succeed in their goals in the 21st century.

The Liberal government has done nothing for Canada's sick, elderly and disadvantaged. It has done nothing for Canadian families and consumers except pick their pockets and impose hardship. It has raised taxes and has cut health and education

benefits. Canadians are asking where the benefits are from this budget. Where are the benefits from the government? Is the government here to serve the Canadian people or are the Canadian people simply called on to bear the burdens of government without hope of relief?

Reform's course is clear. We will balance the budget by 1999. We will begin paying down the debt. We will reinvest in social programs and create jobs by giving tax relief to every Canadian.

Mrs. Brenda Chamberlain (Guelph-Wellington, Lib.): Mr. Speaker, I listened with great interest to the hon. member. He talked a lot about his concern for health care. I think we can come to an agreement that all of us are very concerned about health care, along with all of our constituents across Canada.

I think the hon. member is quite misguided in believing that a tax cut somehow will help our health care system. We need only to look at places like Alberta where it offered a tax cut and where health care did suffer. We need only to look at places like Ontario where a tax cut has been offered and indeed health care has suffered. There is no question that a tax cut directly affects health care and hurts every Canadian across the country.

The Reform Party says that in its fresh start it will put additional moneys into health care. Here is a news flash: the Liberals have done that and continue to do it. There are a number of measures in the budget, as my colleague knows. Also I hope he understands that for the years 1998 to 2001, there already has been a promise made to increase transfers and increase payments for health care.

There is a large question around the fresh start proposal which has really been a quandary for me. Reform has also said that it is going to take $3.5 billion out of transfers. I guess I am really in great awe, wondering how it is going to do that and not affect health care. It must be going to affect education or perhaps other services people depend upon.

The hon. member talked about bankruptcies and asked what we are doing to help them, what happens to these people. We have a number of initiatives. But if the Reform Party carries out its threat, and I say threat of a tax cut because that is not positive, then we will see a decrease in services such as health care, education and all of our social safety nets. I do not know how that will help Canadians in the long run. In my view, it will not help at all. It has been proven in Ontario and in Alberta that it has hurt health care directly.

(1655)

The other thing the hon. member did not touch on is the fact that this government has vacated 32 per cent room in tax points for health care. We never hear hon. members talk about that, that tax room has been given and has helped.

I would really like to understand in all honesty, in all fairness, in the name of this wonderful fresh start how a tax cut can benefit Canadians when it hurts health care, when it hurts education, when it hurts us.

Mr. Mayfield: Mr. Speaker, I thank the member for her comments and questions. They certainly give me ample room to make my own comments in responding to them.

The difficulty I have had in watching the government's layoff policy and put its plans into action is the difficulty it has had in priorizing. It seems that when a cut is made by the Liberal government it slashes through in such a way that destruction is done without a lot of benefit. For example, we see layoffs but where are the layoffs? On the front line, in the provinces and the communities where people live.

Look what is happening in what used to be called the unemployment insurance office. The service is not there. People can no longer drop off their cards. They can no longer go to counsellors. They have to use the telephone and punch buttons. One of the biggest fights I have as a member of Parliament is getting telephones to outlying regions of my constituency. What do those people do? How did the government cuts help them?

It is not only tax cuts we are talking about. I have noticed that while tax cuts are taking place on the front line, very little is cut at the top of the government hierarchy. In fact I have seen the front lines cut and at the same time the executive and the research departments expanded.

I watched layoffs take place and a few months later with the shortages that have been left after the golden handshakes have been given, what happens? Many of the same people are hired back on contract so that we not only pay for the golden handshake, we pay for the new contract as well.

The member says the Liberals are putting money into health care. It would be a pleasure to know that is happening, but the benefits have not reached our communities.

I remember when I was campaigning in 1993 I promised that a Reform government would take no money out of health care. Today we are in a position where we will be putting money back into health care and education to restore them and repair the damage done by this Liberal government. Our cuts will be from the top. There is lots of room at the top.

When the Liberal government came to power what was the first thing I heard? ``Your friends are back'', the Prime Minister said to the government departments, to the bureaucracy. They have been well looked after.

The member talks about the threat of a tax cut. That is not a threat. That is a promise. It is a promise made to Canadians who have been calling for a tax cut for years. All they have had is the imposition of more and more tax increases to the point where we are now looking at almost 80,000 Canadians who have gone bankrupt in the past year.

That is the serious situation we are in. We have to look at government. We have to priorize our spending. We have to make the cuts from the top and provide leadership.

Talking about leadership, I am amazed that while Canadians are having their Canada pension plan premiums increased and the benefits over the years decreased, I have not heard this government say anything about the gold plated MP pension plan. Nothing has been said about that. There are no cuts there. Believe me, there are no cuts there. They should be ashamed of that. There should be leadership by example, not what we are seeing from the Liberals: ``Do what we say, not what we do''.

(1700)

[Translation]

Mr. Jean-Guy Chrétien (Frontenac, BQ): Mr. Speaker, I listened to the hon. member of the Reform Party promise tax rebates and tax cuts. Well, good luck to him, considering the credibility politicians acquired with the last red book.

They promised to scrap the GST, but more than three and a half years later, the GST is still there, and even worse, they paid three small maritime provinces $960 million to make the medicine go down in one part of Canada where the GST will miraculously change its name. Quite a feat, this name change. From now on, it will be known as the HST, the harmonized sales tax. This means that in New Brunswick, for instance, they blended the provincial sales tax with the GST. They pay 15 per cent, which is added on to the price, of course.

My point is that the government is acting like Robin Hood, but in reverse. Instead of taking money from the rich to give to the poor, it is taking money from the poor to give to the rich. For instance, at Bombardier, where you have more than-

The Acting Speaker (Mr. Milliken): My dear colleagues, I am sorry to interrupt the hon. member, but I have to give the hon. member for Cariboo-Chilcotin enough time to reply. We only have a few seconds left.

[English]

Mr. Mayfield: Mr. Speaker, I appreciate the opportunity to conclude. I want to comment on the issue the member raised about integrity of politicians.

It is an important issue and one of the reasons I got into politics. It is backed up in the Reform Party by a guarantee that if we do not do what we say, we will give the electors the opportunity and the ability to fire the MP or those MPs. That is a guarantee the Liberals would not understand. However it is one Canadians must have if they are to hold their politicians accountable.

Mr. Bob Mills (Red Deer, Ref.): Mr. Speaker, when we start talking about budgets and finances a lot of people's eyes glaze over in this place. I do not think it is the sort of thing Liberals like to hear discussed. They have demonstrated in the last 3.5 years not a lot of vision or planning for the 21st century as many of our young people would like to see.

We see a group of Canadians, particularly young Canadians, who have lost confidence in what government can deliver for them. I cannot help but remember the faces of many young people with whom I have spoken in universities across the country in just about every province. Many of them were graduates of courses of varying lengths and in various trades. They would ask: ``What about us? What has the government really done for us in terms of prospects going into the 21st century?''

We can touch on some of those things and some of the things we hear as we travel the country. Just this past week we have been asked how we got rid of the debt that was such a problem to us. When we tell them the debt that was zero in 1969 went to $18 billion in 1972 and climbed through from 1972 to 1984 to about $180 billion, they ask us how that was possible.

(1705)

We have to tell these young people that governments promised a lot of things and Canadians accepted a lot of things. The question we did not ask was what it would cost and from where they would get the money. Had we asked that question we would have found out that it was borrowed money and that we had many more services than we could afford. Taxes increased and we got cradle to grave services.

In 1983 a guy came along who said that it was terrible and that we could not let it grow any more. In two consecutive elections we put that person in. By the time we got to 1993 it was at $489 billion. We went from $180 billion to $200 billion to $489 billion. Then we decided to get rid of that person because another government said it would rein in spending. Now we are at $600 billion.

Young people ask why they should trust politicians. Even more sinister, the finance minister stood and said they had solved the problem, that there was no financial problem any more. To prove the point, in the past week close to $8 billion was spent on various types of pre-election programs. How can it be helped? The Canadian population, particularly young people, are asking what these people are doing.

To go further, somewhere in the neighbourhood of $14 billion federal is spent on advanced education. Depending on the figures used, somewhere around $16 billion is spent on health care, $20 billion on pensions and close to $50 billion on interest payments. Out of a budget of $109 billion, Liberals have the nerve to tell

people there is no problem when they spend close to $50 billion on interest payments in a year and get nothing for it.

What is threatening our social programs? Certainly not our party. Not even the Liberals. Interest payments are threatening the country. It will take a concerted effort by a government to turn that around.

When we see the spending of $8 billion on vote buying in elections or when we see the heritage minister having a two-hour caviar party with around 100 people at a cost according to access to information of $65,671, Canadians say the Liberals are out of control and do not know what they are doing.

That is why people have lost confidence. That is why young people have lost confidence. To go further with the young people scenario, they ask about the Canada pension. Canada pension is in trouble. They will not get anything if we do not fix the problem.

They will not do it all at once because they do not have the courage. They will do it over six years. They will sneak up on people. People will wonder why they do not have more money but that they will not really know why it all happened. The Liberals will be a little deceitful about it and make it happen over six years.

What are they promising young people? They are telling them that if they earn $30,000 their premiums will be raised from a maximum $845 up to $1,600 and some dollars maximum and that their employers will match it. They will collect roughly $3,300 every year from young people and put it into a fund that will be used for the people who are retiring now. When they are 65 years of age they will be given $8,800.

(1710)

Is that a wonderful thing to do? If young people took the $3,300 and put it into their own annuity fund, they would get about $26,000 and would have the principal, using a 6 per cent rate of return.

Young people say the Liberals have blown it on the debt and on the insurance plan. Why should they pay that kind of money? There will be a generational rebellion down the road when young people wake up to a 73 per cent increase in premiums that will be dramatic. Some government will face it very soon. Certainly, if not now, six years from now when it all kicks in.

What is even worse is that MPs have the nerve to collect a pension that is four to five times better than what people get in industry. That is not putting their money where their mouth is. It says to young people that they do not care about them, that they do not have a plan, that they do not raise taxes and rip them off, and that they do not mind taking advantage of them because they know best. They have a real problem with accountability. Politicians should be accountable.

Let us examine taxes. We have heard from members on the other side that it would be sinister to lower taxes and that they have to keep raising them. The Liberals set a good example of raising taxes. They threw a penny and a half on to the price of a litre of gasoline and said that it was not a tax increase, that it would not affect anyone because after all only rich people use cars. The Liberals said that they would get rid of the GST before the election, but when they were in power they forgot that promise.

They tax seniors. Recently I received hundreds of letters in response to a questionnaire I sent out. I was shocked at how many of them were from seniors with a gross income somewhere in the range of $17,000 to $18,000. They are living in their own homes. They are 75 years old. They are trying to make a living and stay in their homes as long as they can. This year they are paying $1,100 in federal income tax for the first time.

When I say to them the government needs that money, they say they heard me talking about the caviar party, some of the other waste in Ottawa. They say the other place has to be the best example of waste, that everybody likes to talk about it, and they do not know anybody who likes that place.

MP pensions is a hot issue. If our Liberal colleagues stand before their constituents and say they deserve a pension four to five times better than what any of they deserve, they have different constituents from the ones I have. My constituents are quite happy to pay me a pension equal to what I could get in industry, but they sure are not happy to pay the kind of pension that MPs get.

(1715 )

I found it interesting that a member opposite said that lowering taxes would hurt the economy. I spent some time in New Zealand this past July. That country had an economic problem. In 1984 its political parties got together to try to solve the problem. They lowered taxes by close to 50 per cent. The economy in New Zealand is booming. The unemployment rate is under 5 per cent. New Zealanders are enthusiastic about their country. Its young people have the choice of two or three jobs. If that kind of tax relief does not send a message, then these people across the way have their heads in the sand. They have no vision.

When young people hear figures like that they are shocked and ashamed of what has happened. This country should be at the top of the list instead of near the bottom in terms of the things offered to young people and the tax relief that is offered.

The most meaningful thing that struck me in New Zealand was when I read about how stamps had decreased in price three times

in a year. Can you imagine that? If that is not an indication of what lowering taxes will do, I do not know what is.

One of my colleagues mentioned privatization. New Zealand privatized its television network and it is now very profitable. It brings in a lot more money than it ever did before.

Lowering taxes is not a bad thing. Lowering taxes will provide a vision. Taking money from a senior who earns $17,000 a year is not helping the rich. The government is penalizing the poor. It is going after the poor people. When it takes 1.5 cents off a litre of gasoline, that punishes everyone.

What is the vision for the 21st century? Canadians know, particularly young Canadians, that there is no vision. Look at the justice system. How can people have confidence in the justice system?

I come back again to the 300 or more young parents who I met in a gymnasium. They said to me: ``Our justice system is not fair''. Why is it not fair? A pedophile who had offended nine times had just been released into a neighbourhood in our city. The reports which were read to those young parents that night had a message. The psychiatrist said: ``This person will definitely reoffend''. The prison authorities said: ``We had to remove this person from the treatment program because he was too violent''. The head of the RCMP in our community said: ``We are really concerned about this individual reoffending''.

I was very proud of those young parents. They were not vigilantes. They did not ask for blood. They asked why the system was failing them so badly.

Young people have lost confidence in this country. The government is overspending. The increase in Canada pension plan premiums is a terrible attack on young people.

(1720 )

The tax system continues to grind away and grab more and more. The justice system does not deliver hope to innocent citizens. I ask you, Mr. Speaker, when that 10th victim occurs how will I face that young family and say: ``We knew that was going to happen and now we can put that person away''. How will I answer that question for that young person?

We can touch on the area of unity and of course again we see no plan. Obviously Canada has changed an awful lot in the last 130 years. Where once we were two founding nations, French and English, we are now a great mix of many nationalities with one-third of us not being of either French English background. We must have something better to tell our young people than the solution to our unity problem is distinct society. We must have a better answer than that.

Then other things come to mind, such as how women are treated in the electoral process. Reformers would love to have 53 per cent of our members female. That would represent the community but it is difficult to achieve. However, when a party starts appointing candidates that is just not acceptable.

In the riding in Victoria, for instance, Reform had three candidates running for the nomination. There was a political scientist, a businessman and a woman teacher. They worked very hard and did what they had to do to try to win the nomination. When Arla Taylor won that nomination she can now stand up and say I won it because I was the very best. That is what our young people are looking at. That is the kind of thing they want to say is a vision for the future.

That bothers the people on the other side because they just cannot accept equality. They cannot accept that everybody is equal. They like special status for different groups.

Finally, we must have a vision for the 21st century. The Liberals certainly do not have one.

Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, I would like to make a comment and then ask my colleague a question.

The biggest problem I have with the budget implementation act, Bill C-93, is with the budgetary habits of the Liberal government and the budget of the finance minister this last time around. I gave him an F on the budget, not necessarily for what is in it and for the numbers that are in it, but I gave him an F for what is not in the budget. I gave him an F for the perception that he is creating by distorting the strength of our economy.

He brags and assures Canadians that the back of the deficit is broken with a projected $19 billion deficit which of course will be down around $14 billion range. How can the back of the deficit be broken when we are talking about $14 billion deficits? The finance minister becomes inept because he brags about how the Liberals have restored confidence to the Canadian economy and yet he takes all the credit. Let us look at the factors that created the turnaround in the Canadian economy in the last three and a half years.

(1725)

First was a worldwide drop in interest rates. Second, the drop in those interest rates was as a direct result of the Bank of Canada's monetary policy and the high interest rate policy during the Conservative regime that tried to curb inflation. The Liberals railed, ranted and ravaged the Conservative government and the then governor of the Bank of Canada for their high interest rate policy. It is because that governor was right and did the right thing that Canada kept in pace and in tune with other world economies.

Now the finance minister is bragging: ``We have brought interest rates down to their lowest level in the last 30 years. We have implemented such a wonderful budget that we now have the lowest interest rates in 30 years. We deserve all the credit. Canadians will put us back into power because of our sound fiscal policies and this wonderful budgetary objective and restoring confidence in the Canadian economy''.

An hon. member: We are going to trounce them.

Mr. Silye: In school I was taught that is called plagiarism. When you copy someone else's written material and claim it as your own, it is plagiarism.

The finance minister is the beneficiary of low interest rates. He has allowed our huge debt to grow. However, he will not give credit where credit is due. He is taking full credit.

For example, I will give a quote that I could use as mine: ``In politics, perception is everything''. I could claim that is my quote but I would be lying, it would not be true because that quote belongs to none other than the Prime Minister of the country who is more interested in creating perceptions and smoke and mirrors than he is about the reality of life in Canada.

I gave the finance minister an F for another reason. He failed to tell the Canadian public about the debt. It was mentioned once in his budget speech. He talked for 60 minutes and he mentioned the word debt once. He has added $111 billion to the debt. He says that he has broken the back of the deficit and improved the economy when the debt now is over $600 billion.

Should he be so lucky to be in the government the next time around, I feel sorry for him when the debt grows to $650 million or $700 million. Even with the low interest rate policy he is going to have a hard time making ends meet and paying for the departmental programs in place now.

What if interest rates go higher than 5 per cent, 6 per cent or7 per cent? What if they go back to 9 per cent? I am very afraid of that.

I heard members opposite during my intervention asking what we would have added to the debt. We would have added $45 billion to the debt as opposed to $111 billion. We would have balanced the budget in three years from when we took office. We would have a surplus this year ending 1997.

I am sorry, I talked right through my time. I do want to ask the member to make one more comment on the vision of the government. Why does he really think it has a vision when the Prime Minister and the justice minister say: ``We will handle the problems one at a time''.

Mr. Mills (Red Deer): Mr. Speaker, in answer to the question of vision, we have had a lot of examples of why there is no vision. I tried to focus on young people. I enjoy working with young people. I probably enjoy that more than anything else I do in this job. They are saying that there is no vision. In fact, they are saying worse. They are asking: ``Is democracy really working?'' They are asking a much more serious question than just about partisan politics. They are asking about democracy. I think that is critical. Some countries like the U.S. have sometimes as low as a 30 per cent turn out. That is saying a lot about what the people are seeing in government.

(1730)

Fortunately in Canada we do not get down that low. Hopefully we can do things that will cause higher percentages. Australia has taken one approach to that by fining people who do not vote. I do not really think that is the answer.

We have to involve people in this vision. The real concern is with that debt. As the hon. member said, they do not have a plan for it. It is gone. Just think of the opportunity that has been wasted. With low interest rates and with inflation so low, what a great opportunity it would have been if they had had a vision to deal with this problem, to cut some of these Kodak tours, some of the caviar parties and some of the on top benefits that are around this place.

There are so many people who do not have the vision. To stand up in this House and say that this government controls interest rates and controls inflation, it does not.

I am afraid there is good reason for people to be very sceptical and dubious about where this government is going. They do not see that there is a plan. They are asking what happens when interest rates rise, when inflation returns, when the normal economic cycles take their course. What will this government do?

The government has been unable to deal with pensions, with unemployment, with health care, with education. If it has not been able to deal with those in the good times, what will it possibly be able to do in the tougher times when it is lacking vision?

Raising taxes is the answer that the Liberals possibly will choose, but I think Canadians have had it with that. They will have the opportunity to speak soon.

Mr. Philip Mayfield (Cariboo-Chilcotin, Ref.): Mr. Speaker, what would be the consequence in my colleague's opinion of interest rates rising 2 per cent on the present debt repayment program of the government?

Mr. Mills (Red Deer): Mr. Speaker, the answer to that would be a minimum of $10 billion in increased debt. As that goes up our ability to service it becomes less and less. Again, that is the big problem that will hang over us along with the other problems Canadians will face in the 21st century.

Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, what the hon. member for Red Deer referred to earlier, he is absolutely right. This government has missed the problem. It has identified the wrong problem.

The government has taken the low bar on the high jump and said deficit is the problem. ``We will solve that. What we will do is we will promise Canadians to spend less than the Conservatives did. We promise Canadians that we will bring in a lower deficit than the Conservatives did and that will solve our problem''. I submit that did not solve the problem. It only adds to the problem.

I know this bill will be voted on at the end of the day. This is probably my last chance to speak on a monetary bill. I do not know if there is anything else on the agenda this week. The one thing I would like to leave with the Liberal Party and with Canadians across the country is I would like to remind them that it is a noble effort and it is worthwhile and it is a necessity to lower our deficit and we have to get to a surplus.

To the degree that this government has lowered the deficit, I compliment it. It is the right direction to go.

The degree to which it brags and overexaggerates the benefits that we have achieved to date is a disservice to the Canadian public.

(1735 )

What I am really concerned about as a Canadian is that the finance minister, because the global economy and global markets have improved over the last four years, has missed the opportunity to make the cuts sooner in the other areas he has avoided. They dilly-dallied for a whole year before actually making cuts. The first budget was all talk. He then lobbied with his cabinet and colleagues and did a good job in getting them to agree to some cuts. They took some of our ideas from the zero in three, the ones they thought they could sell. That is smart. If you see a good idea just steal it, take it and take credit for it. That is fine as long as it is good for all of Canada.

They went too far on the cuts in social transfer. They put it all together. In health, education and welfare they cut $7.5 billion, which is way too much. Provinces are having trouble. Hospitals are having trouble. Everybody is concerned about this issue. It has been an issue in Alberta where a lot of angry people have had to be addressed concerning the closures of certain hospitals, especially in downtown Calgary. I am very familiar with the issue there and which hospitals were closed. That is from a regime that did not promise any tax cuts or give any tax cuts. It just promised to balance the budget over x period of time. This issue is important.

In our zero in three budget we would have only cut $3.5 billion from health care, education and welfare. This is clearly $4.5 billion less than the Liberal government did.

The reason I accuse the Liberals of downloading on the provinces is they made their cuts in social transfers to provinces rather than cuts to to their own departments, notwithstanding the promise of the finance minister that we will sacrifice as well in order to justify this. If Canadians would accept the government's $7.5 billion cut to the Canadian health and social transfer, it would cut 18.8 per cent from departmental spending amounting to $9.4 billion. To date, it is only at 4.2 or 4.5 per cent. It assures us that it will get there but it has now changed the rules on how it will get there. It is not quoting $9 billion any more. It is not quoting a final number any more.

What the government is saying is that it will reach its 18.8 per cent cuts in program spending but it will redefine what program spending is and then move a whole bunch of spending off balance sheet accounting. It is now going to say it has met its 18.8 per cent. Pretty soon we might find in a year that it is $5.6 billion or another billion dollars, because I know it is projected and I know what will happen, but $5.5 billion will now represent 18.8 per cent and once again it will brag about how it has met its targets and objectives.

My biggest problem with what the Liberals have done is that they will go to the public after they call an election and ask and seek for a vote of confidence to stay the course and support a pan-Canadian view of this country where we have to give inducements to three provinces to buy into a harmonized sales tax at a cost of a billion dollars to the rest of the country. That is not even revenue neutral. It means that the finance minister had to dip into the current account to pay for that. The Liberals are going to ask for a vote of confidence without telling the Canadian public what they will do if they ever balance the budget.

What will they do? We say we should balance the budget and the sooner the better. Our party makes a firm commitment date as to when we would do that. We say that we would cut. Where we would cut more than the Liberals of course is in direct subsidies to businesses because we feel that distorts the marketplace. There is another $2 billion to $3 billion there.

In my opinion, if the minister had done that he could have really been looking at a balanced budget a lot sooner.

We say a tax cut after we balance the budget and after we have created a surplus. We take that money, apply some of it to the debt and some to lower taxes for all Canadians, not just the rich Canadians they accuse us of. Everybody's personal and spousal exemptions would rise to $7,900. That helps everybody. That is what we would do with a surplus. We would then lower the cost of government and lower the overhead. We do not need 300 MPs in this House. I think the majority of MPs would agree with me on that on a non-partisan basis. Why are we increasing it by six?

(1740 )

The Prime Minister has said in his broken English and broken French, the same way in both languages, that maybe we spend, maybe we do not spend and maybe we will have more money. As

soon as we hit a balanced budget are they going to go back to increasing spending on different programs? Are they going to continue to create that dependency on a big federal government so big government will look after everybody? Then we will just add to that debt.

Somebody has to address the fact and the reality that sooner or later, I do not care how small it is, whether it is a $1 billion payment, this government or any government will have to make a repayment on that debt. In our personal lives we cannot go on forever and ever increasing our debt without making a payment on it. It is fine to reduce your interest cost, your deficit, but we cannot continually go on adding to our debt. Sooner or later the bank calls us on our loan. Sooner or later it takes away our car if we do not make a payment.

Somehow or other government politicians and the bureaucracy-I do not think it helps sometimes-seem to think that the public purse is somehow different. The debt is $600 billion but they think the only problem to solve to get to a balanced budget is the deficit. They think that will solve the problems of everybody. That debt has to be addressed.

A prudent government and a prudent finance minister would have pushed harder and talked about the debt as a percentage of the gross domestic product. They would have talked about how we are going to repay it over 30 years, or at least some of it. We do not have repay the whole $600 billion but we should be making a $1 billion or $2 billion principal repayment at least every term of government. I agree that the repayment should be over the long term, that we should bind government to no more deficit spending except under extreme circumstances or emergencies.

The difference between the United States and Canada is gross taxation levels. High taxes kill jobs. Lower taxes will create jobs. The proof is that in the United States total state and federal taxation amounts to 27 per cent of the gross domestic product. The total value of the goods and services the Americans generate is taxed at a level of 27 per cent for individuals and corporations. In Canada taxation at all levels represents 35 per cent of our gross domestic product. The U.S. unemployment rate is 5 per cent and our unemployment rate is close to double that. The United States has lower taxes, more people employed and a larger population than we have. It must be doing something right. I maintain it is in the field of taxation. Therein lies the problem.

If we could ever give tax cuts we would go a long way to solve our economic problems and to improve our economic situation. We have to create less dependency on a big federal government. If we want to do that we have to give more disposable income back to the people so they can look after themselves. There will be less need for people to look to welfare programs and unemployment programs. I do not want to talk about unemployment because I will get off topic with that slush fund he has cooking, taxing us to the tune of $7 billion which is in that EI fund already. That is a generous surplus. I agree the fund should theoretically contain that surplus, but it is not really a surplus. If he is so far ahead of his deficit target, that is one small selective tax cut he could make. He may do it.

I know a lot of economists make representations to the finance minister, and he does listen, of course only if it is politically convenient to do so. He may do it at some point during the election campaign after the Liberals receive enough heat and they get enough criticism from the general public about their arrogance and how they brag about how well things are. The Liberals may receive heat about keeping half the truth from the Canadian public, the truth about the debt, the truth about the rising interest costs. Even though interest rates are low, the sum total of what this government is now paying in interest has gone from $30 billion to $50 billion. Is nobody worried about that? Is nobody worried about a $650 billion debt, notwithstanding the interest rate? Is nobody worried about how much money we are going to have to pay? That will be the single biggest cost to any future federal government. That is scary and that is after spending is reduced.

(1745)

I submit there is room for another $10 billion worth of cuts the Liberals have not touched. Some government will or through attrition we will get down to that lower level of spending. After we get there the federal government will be able to provide the services Canadians want. It will take us two or three years to get there but it will be done.

Interest costs will rise if the Liberals continue to add to the debt. They will brag. They will say: ``Vote for us. Give us a vote of confidence because we will have a balanced budget in two years''.

I am worried about what they will do with the surplus. Will they ignore the debt and increase spending? Will they say they have taken enough flack from the Reform Party on health care and increase spending on health care by $1 billion? If they feel they have taken enough flack from the Reform Party in an area will they increase spending there? Will they say the foundation for innovation is so great that they will double its budget? Will they say regional development is doing good they will triple its budget? Will they ignore the debt?

We cannot ignore the debt. It is the single biggest problem facing the country along with the interest cost that services it. It has to be addressed.

I must be a voice in the wilderness. I am the only person who talks about the debt and high interest costs. No government member talks about them. The finance minister mentioned debt once in his 60-minute speech. We do not talk about it. He brags about everything else in his economic statement. An economic

statement should fairly and accurately represent the economic status of the country at any given time.

The minister dwells on the positives. That is misleading. He gets an f from me for not talking about the other side of the story, the debt. While the deficit has decreased how much have interest costs gone up? That is an important component.

Yes, we are a rich country. Yes, we can sustain a high level of debt. Yes, people will continue to lend us money. However, we are 40 per cent indebted to foreign countries.

The finance minister and the Prime Minister can brag about not borrowing any more and about the decrease in borrowing requirements. The foreign borrowing or borrowing requirements of the government have decreased from $32 billion to $14 billion. That is tremendous. That is a plus. That is good. We all want that.

It could have been twice as good as that. We could have got there twice as fast if the cuts I am talking about were made at the time I am talking about. They should not have wasted time. They should have lived up to their commitment to cut $9 billion from departmental spending.

The Liberals wasted two years. They failed to act for two years. They did not make the cuts, even the cuts they said they would make. The President of the Treasury Board got all the other ministers to agree to doing it to justify the $7.5 billion. That has now been done. I would defend the $7.5 billion, but I would do so by ensuring that departments lived up to their commitment, which was to cut $9 billion. That has not happened.

They will come in with a $14 billion to $15 billion deficit. We must consider the two years of inactivity. If they had made those cuts during those two years they could brag about a balanced budget. The election would be about what they do next. Do they address the debt or do they talk about spending on new programs or increase spending on programs?

If the Prime Minister and the finance minister come up with a sequel to their red book they had better address those things. What will they do when there is a surplus? A surplus is coming. Spending has been frozen. Certain departments have been told to cut back. There will be a surplus. It will take them a year or a year and a half longer than it would take us.

Nevertheless historians and economists will be able to go back and refit the numbers to see what would have happened if they acted here or there.

[Translation]

The Deputy Speaker: Dear colleagues, time has run out. Pursuant to the order made Monday, April 21, all questions necessary to dispose of the third reading stage of Bill C-93 will now be put to a vote without debate or amendment.

(1750)

Is it the pleasure of the House to adopt the motion?

Some hon. members: Agreed.

Some hon. members: No.

The Deputy Speaker: All those in favour will please say yea.

Some hon. members: Yea.

The Deputy Speaker: All those opposed will please say nay.

Some hon. members: Nay.

The Deputy Speaker: In my opinion the yeas have it.

And more than five members having risen:

The Deputy Speaker: Call in the members.

(1820)

[English]

(The House divided on the motion, which was agreed to on the following division:)

(Division No. 329)

YEAS

Members

Parrish
Patry
Peters
Peterson
Phinney
Pickard (Essex-Kent)
Pillitteri
Proud
Regan
Richardson
Rideout
Robichaud
Scott (Fredericton-York-Sunbury)
Sheridan
Speller
Steckle
Stewart (Brant)
Stewart (Northumberland)
Szabo
Telegdi
Terrana
Ur
Valeri
Vanclief
Volpe
Wappel
Wells
Whelan
Zed-109

NAYS

Members

PAIRED MEMBERS

The Deputy Speaker: I declare the motion carried.

(Bill read the third time and passed.)

INCOME TAX CONVENTIONS IMPLEMENTATION ACT, 1996

The Deputy Speaker: Pursuant to the order made Monday, April 21, 1997 all the questions necessary to dispose of the report stage and third reading stage of Bill C-37 shall now be put without further debate or amendment.

Mr. Kilger: Mr. Speaker, if the House would agree, I would propose that you seek unanimous consent that members who voted on the previous motion be recorded as having voted on the motion now before the House, which is the concurrence at report stage of Bill C-37 and also third reading of the main motion of Bill C-37, with Liberal members voting yea.

The Deputy Speaker: Is there unanimous consent?

Some hon. members: Agreed.

[Translation]

Mr. Laurin: Mr. Speaker, the members of the Bloc Quebecois vote in favour of this motion.

[English]

Mr. Strahl: Mr. Speaker, Reform Party members will vote in favour of this.

Mr. Blaikie: Mr. Speaker, NDP members present vote yes on these two motions.

Mr. Bhaduria: Mr. Speaker, I will be voting in favour of the motion.

Hon. Paul Martin (Minister of Finance, Lib.) moved that the bill be concurred in.

(The House divided on the motion, which was agreed to on the following division:)

(Division No. 330)

YEAS

Members

Brown (Oakville-Milton)
Brushett
Bryden
Caccia
Calder
Canuel
Catterall
Chamberlain
Chan
Chatters
Chrétien (Frontenac)
Cohen
Collenette
Collins
Comuzzi
Crawford
Culbert
Cullen
Daviault
de Savoye
DeVillers
Dhaliwal
Dion
Discepola
Dromisky
Duncan
Easter
English
Epp
Fillion
Finlay
Flis
Fontana
Frazer
Gagliano
Gallaway
Gauthier
Gerrard
Godfrey
Godin
Graham
Guarnieri
Guay
Guimond
Hanrahan
Harb
Harper (Simcoe Centre)
Harvard
Hayes
Hermanson
Hickey
Hopkins
Jackson
Johnston
Karygiannis
Kerpan
Keyes
Kilger (Stormont-Dundas)
Kirkby
Knutson
Kraft Sloan
Lastewka
Laurin
Lee
Leroux (Richmond-Wolfe)
Leroux (Shefford)
Lincoln
Loney
MacAulay
Maloney
Mayfield
McClelland (Edmonton Southwest/Sud-Ouest)
McCormick
McGuire
McKinnon
McLellan (Edmonton Northwest/Nord-Ouest)
McWhinney
Mercier
Mifflin
Mills (Red Deer)
Minna
Mitchell
Morrison
Murphy
Murray
Nault
Nunez
O'Brien (London-Middlesex)
Pagtakhan
Paradis
Parrish
Patry
Peters
Peterson
Phinney
Picard (Drummond)
Pickard (Essex-Kent)
Pillitteri
Pomerleau
Proud
Ramsay
Regan
Richardson
Rideout
Ringma
Robichaud
Rocheleau
Sauvageau
Scott (Fredericton-York-Sunbury)
Sheridan
Silye
Solberg
Speaker
Speller
Steckle
Stewart (Brant)
Stewart (Northumberland)
Strahl
Szabo
Taylor
Telegdi
Terrana
Tremblay (Lac-Saint-Jean)
Tremblay (Rimouski-Témiscouata)
Ur
Valeri
Vanclief
Volpe
Wappel
Wells
Whelan
White (Fraser Valley West/Ouest)
White (North Vancouver)
Zed-160

NAYS

Members

PAIRED MEMBERS

The Deputy Speaker: I declare the motion carried.

Mr. Martin (LaSalle-Émard) moved that the bill be read the third time and passed.

[Editor's Note: See list under Division No. 330.]

(Motion agreed to, bill read the third time and passed.)

Ms. Clancy: Mr. Speaker, on a point of order. I wish to say had I been in my place, I would have voted with my party.

* * *

YORK FACTORY FIRST NATION FLOODED LAND ACT

The Deputy Speaker: Pursuant to order made Monday, April 21, all questions necessary to dispose of the report stage of Bill C-39 shall now be put without further debate or amendment.

Mr. Kilger: Mr. Speaker, I believe you would find unanimous consent that members who voted on the previous motion be recorded as having voted on the motion now before the House, that is to say, Bill C-39 at the report and third reading stages, with Liberal members voting yea.

Mr. Laurin: Mr. Speaker, we give our consent and the Bloc Quebecois members vote yea.

The Deputy Speaker: An excellent point. Is there unanimous consent for proceeding in this manner?

Some hon. members: Yea.

[English]

Mr. Strahl: Mr. Speaker, Reform Party members present vote yes on this.

Mr. Blaikie: Mr. Speaker, NDP members vote yes on these two motions.

Mr. Bhaduria: Mr. Speaker, I will be voting in favour of the motions.

(The House divided on the motion, which was agreed to on the following division:)

(Division No. 331)

YEAS

Members

Speller
Steckle
Stewart (Brant)
Stewart (Northumberland)
Strahl
Szabo
Taylor
Telegdi
Terrana
Tremblay (Lac-Saint-Jean)
Tremblay (Rimouski-Témiscouata)
Ur
Valeri
Vanclief
Volpe
Wappel
Wells
Whelan
White (Fraser Valley West/Ouest)
White (North Vancouver)
Zed-161

NAYS

Members

PAIRED MEMBERS

The Deputy Speaker: I declare the motion carried.

Mr. Irwin moved that the bill be read the third time and passed.

[Editor's Note: See list under Division No. 331.]

(Motion agreed to, bill read the third time and passed.)

* * *

NELSON HOUSE FIRST NATION FLOODED LAND ACT

The Deputy Speaker: Pursuant to the order made Monday, April 21, 1997 all the questions necessary to dispose of the report stage and third reading stage of Bill C-40 shall now be put without further debate or amendment.

Hon. Ron Irwin (Minister of Indian Affairs and Northern Development, Lib.) moved that the bill be concurred in.

[Translation]

Mr. Kilger: Mr. Speaker, again, I believe you would find unanimous consent that members who voted on the previous motion be recorded as having voted on the motion now before the

House, that is to say, Bill C-40 at the report and third reading stages, with Liberal members voting yea.

[English]

The Deputy Speaker: Is there unanimous consent for this procedure?

Some hon. members: Agreed.

(1825)

[Translation]

Mr. Laurin: Mr. Speaker, the members of the Bloc Quebecois vote yea.

[English]

Mr. Strahl: Mr. Speaker, Reform Party members present will vote yes.

Mr. Blaikie: Mr. Speaker, New Democrats vote yes.

Mr. Bhaduria: Mr. Speaker, I will be voting in favour of the motion.

[Editor's Note: See list under Division No. 331.]

The Deputy Speaker: I declare the motion carried.

Mr. Irwin moved that the bill be read the third time and passed.

[Editor's Note: See list under Division No. 331.]

(Motion agreed to, bill read the third time and passed.)

* * *

FIRST NATIONS LAND MANAGEMENT ACT

The Deputy Speaker: Pursuant to order adopted Monday, April 21, all questions required for the disposal of the second reading stage of Bill C-75 will now be put, without further debate or amendment.

[English]

Mr. Kilger: Mr. Speaker, if the House would agree I would propose that you seek unanimous consent that members who voted on the previous motion be recorded as having voted on the motion now before the House, with Liberal members voting yea.

[Translation]

Mr. Laurin: We agree, Mr. Speaker. Members of the Bloc Quebecois will vote yea.

[English]

Mr. Strahl: Mr. Speaker, Reform Party members present have to vote no on this.

Mr. Blaikie: New Democrats vote yes on this motion.

Mr. Bhaduria: Mr. Speaker, I will be voting yea on this motion.

(The House divided on the motion, which was agreed to on the following division:)

(Division No. 332)

YEAS

Members

Volpe
Wappel
Wells
Whelan
Zed -137

NAYS

Members

PAIRED MEMBERS

The Deputy Speaker: I declare the motion carried.

(Bill read the second time and referred to a committee.)

The Deputy Speaker: It being 6.30 p.m. the House will now proceed to the consideration of Private Members' Business.

_____________________________________________