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STÉPHANE DION RESPONDS TO BERNARD LANDRY
JOLIETTE, QUEBEC, March 3, 1997 – Federal Finance Minister Paul Martin’s
fourth budget, which has been well received, especially in Quebec, has been
criticized by Quebec Deputy Premier Bernard Landry. Canada’s Minister of
Intergovernmental Affairs, the Honourable Stéphane Dion, described as unfair
the criticism by Mr. Landry, who claims that it is a "centralizing"
budget that reflects a "predatory" federalism, and that the federal
government is continuing to "offload" its deficit onto the provinces.
Speaking to members of the Chambre de commerce du Grand Joliette, Stéphane Dion
responded to those three points and pointed out to the audience that the Martin
budget "shows us how closely fiscal balance, economic growth and the unity
of our country are intertwined." Referring to the "Canadian
miracle" evoked by economists both here and elsewhere, foreign governments
and the OECD, Mr. Dion described the progress achieved by the federal government
and the provinces in putting their respective public finances in order. He
stressed that this progress has been achieved through cooperation by all
Canadians, and that Minister Martin’s four budgets have shown rigour,
discipline and fairness.
In response to repeated criticism by Mr. Landry that the federal government is
offloading its deficit onto the provinces, Mr. Dion noted that the federal
government will have cut more in its own spending -- 14% -- than in funding for
the provinces -- 9.9% -- between 1993-94 and 1998-99, and that reductions in
cash and tax point transfers to the provinces account for scarcely 2% of total
provincial revenues.
As for repeated criticism by the Parti Québécois and the Bloc Québécois that
Quebec does not receive its share of federal transfers, Stéphane Dion responded
that Quebec, which makes up one quarter of Canada’s population, receives 31%
of federal transfer spending, 46% of which is in equalization payments.
"Quebec continues to receive the highest federal transfers in Canada,"
Mr. Dion added. An overview shows that in 1994, the most recent year for which
data are available, federal spending in Quebec stood at 24.5%, whereas Quebecers
contributed 21.4% of the Government of Canada’s revenues. "Not bad for
"predatory" federalism!", the Minister remarked.
Stéphane Dion reproached Mr. Landry and the other secessionist leaders with
perpetuating resentment against Ottawa by always using the same strategy, which
consists in giving a truncated interpretation of a limited number of expenditure
items and making generalizations about Quebec’s lot as a victim.
Using the example of research and development, an area in which the PQ and the
Bloc Québécois claim that Quebec loses out, the federal minister responded
that, according to the latest available data (1994-95), 23.8% of total federal R
& D spending is made in Quebec, a proportion that is close to the province’s
demographic weight and greater than its proportion of the Canadian economy.
Those data include laboratories in the National Capital Region, such as the
National Research Council, which has a non-profit, auxiliary vocation of
assisting research throughout the country. "In terms only of spending
distributed on a regional basis," Mr. Dion added, "Quebec’s share is
even more substantial: Quebec businesses receive 40.2% of federal R&D grants
and 42.8% of federal R&D contracts, while Quebec universities receive 27.6%
of funding to Canadian universities."
Stéphane Dion also pointed out that the Government of Quebec receives
unconditional transfer payments that it can use as it likes, including for
research and development.
Minister Dion also reproached Mr. Landry with blaming the federal government for
the Government of Quebec’s current financial problems, noting that "all
the provincial governments have had to deal with cuts in federal transfers, but
that hasn’t prevented most of the provinces from overcoming their public
finance crisis." Stéphane Dion added, "we Quebecers are capable of
improving our economy, to the point where we will one day be making equalization
payments to the less wealthy provinces."
The Minister cited figures proving that the Canadian federation is one of the
most decentralized federations in the world, along with Switzerland: "The
federal government’s own spending represents only 11% of GDP and 37% of
program spending, 27% not counting the debt." He also referred to the
measures the federal government is implementing to clarify roles in a large
number of areas.
The Minister explained that the new Martin budget is continuing in that
direction. Stéphane Dion reviewed the following main initiatives and showed how
they are in keeping with the Constitution and in a spirit of consultation with
the provinces: Canada Pension Plan reform, the National Child Benefit System,
health care initiatives, the Canada Infrastructure Works program, and the Canada
Foundation for Innovation. He added: "We in Canada are fortunate to be a
federation, to be able to combine the strengths and solidarity of the Canadian
whole with the flexibility and spirit of regional autonomy. Thanks to the
combined efforts of the provincial and federal governments, we can look to the
future with confidence."
Minister Dion concluded by saying that "it is wrong to believe that our
national unity hinges on dry discussions on the Constitution, and that the
issues of economic growth, jobs, and quality of life are not a part of that
unity. All of these matters are interrelated [... and] through a good
understanding of how our federation works, we will succeed in conquering
unemployment and alleviating poverty, especially among children. All of this is
part of national unity."
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For information:
André Lamarre
Press Secretary
(613) 943-1838
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