Bill C-18 (Historical)

An Act to amend the Federal-Provincial Fiscal Arrangements Act

Criminal Code

[Dick Harris, Canadian Alliance, Prince George—Bulkley Valley, BC]

Madam Speaker, I am very pleased to rise today to speak to Bill C-46 because it is a completion of a number of steps that have been taken. There are more steps, but in the fight against impaired driving, every time we take a positive action in the House it is another step that will go a long way to saving lives and injuries as a result of impaired driving.

Back in the 36th session of parliament, I introduced a private member's motion recommending that the government have a complete review of the criminal code and how it affected impaired driving. We sat on the committee as it was being discussed and had some interesting debate.

That private member's motion then became a votable opposition supply day. For the first time in 13 years in the House of Commons, the federal government, took some very good leadership in allowing the motion eventually to become a reality. A review was made of the criminal code with respect to impaired driving and changes were made. I congratulate the government on that initiative.

At the same time, I have to point out that 13 years was a long time to drag our feet toward dealing with something as important as this, particularly when organizations like Mothers Against Drunk Driving had been petitioning members of parliament on a regular basis pointing out the need for the overview.

A profound change in thinking took place as a result of that exercise in dealing with the impaired driving issue. I congratulate all members of parliament for this change of attitude toward drunk driving. I believe that, until we got into looking at it in the House and in committee, there was a wide ranging attitude among many people, including parliamentarians, for whom perhaps impaired driving was described as a social ill. I do not fault them for that. I think it is more a lack of education than anything else. By the time we were through the exercise of dealing with impaired driving in the criminal code, I think it became clearly evident to every member of parliament, and indeed a whole lot of Canadians, that impaired driving was a serious crime.

If we have accomplished something in going from one broadly endorsed attitude to another, that is a very positive step. Again, I want to congratulate and commend organizations like Mothers Against Drunk Driving and the people who support that organization. I and a number of parliamentarians support it both financially and in spirit.

In the two previous bills we took some great leaps ahead in the fight against impaired driving. Keep in mind that impaired driving kills well over 1,000 people every year and injures in excess of 50,000 every year, just because someone gets behind the wheel when impaired and drives. I heard it incredulously called a mistake in the House a little earlier by a former colleague of mine. Driving while impaired is not a mistake. It is a crime.

The culpability or responsibility for getting behind the wheel begins the moment someone makes a decision to have a drink of alcohol. I do not accept the excuse, and I know the Ministry of Industry does not accept the excuse “I just wasn't thinking”. There is a time to think and that is before we take that first drink. The idea that it was an absence of thought, or a mistake or something just does not fly. It is a crime and if we commit that crime, there are consequences to it.

This bill will remind people of their culpability because they will know that if they get into their vehicle after drinking, they will to have to blow into this device. In fact, there would be a mapping device which would prevent someone else from blowing into it. My colleague from Elk Island had some concerns about that. However the first time people blow into the device they set the standard. It is like an eye scan or a fingerprint. No one else can blow into that device and try to trick it.

Of course we will support this bill. It is a good bill. It is another step in the fight against impaired driving. As parliamentarians know, this is very high on the wish list of Mothers Against Drunk Driving, which has presented mountains of evidence as to why this device will do the job. I personally, as well as many parliamentarians, have seen the effectiveness of this. We know it is about as foolproof as we can possibly get. The records are there to show how it will stop impaired people from driving.

We will support the bill, as we supported Bill C-18 and Bill C-82.

Just before I close, there is another issue that is very high on the wish list of Mothers Against Drunk Driving. That is the lowering of the BAC, the blood alcohol content, which determines whether a person is impaired or not. MADD has a very good case.

The problem we have is the BAC is at .08 right now. Every study in the world declares that at .08 we are impaired and should not be driving a car. Unfortunately, the courts and the legal system have allowed a margin of error of .02 or .03. Even though there exists no margin of error in the devices which record the blood alcohol content, through courtroom tactics defence lawyers have been able to build in this margin of error which means people cannot get a conviction on impaired driving unless the readout is at least .01.

Therefore, we maintain that if the legally impaired level is .08, let us take into consideration that .03 margin of error, lower the BAC to .05, let them have their .03 and we can start convicting at .08, where we should be, because these people are legally impaired and should not be driving.

I want to congratulate the government for introducing Bill C-46. I hope that it is passed speedily through the House and given speedy royal assent in the Senate. I encourage the government to follow this with another bill calling for the reduction of the BAC to .05. Let us get it to committee, get the experts and let us prove beyond a shadow of a doubt that the BAC level should be lowered to .05.

Impaired Driving

[Anne McLellan, Liberal, Minister of Justice and Attorney General of Canada]

Mr. Speaker, the hon. member raises a very serious question for all of us as the holiday season approaches. In the last year for which we have statistics, 1999, 906 innocent people lost their lives due to impaired drivers. The government has taken action in Bill C-82 and Bill C-18.

Let me say that, with the co-operation of all parties in the House, we are introducing a new amendment to the criminal code that will involve ignition interlock devices. These devices have been used successfully in provinces like Alberta and Quebec. Today's legislation will ensure that we keep more impaired drivers off the road, thereby saving lives.

Customs Act

[Myron Thompson, Canadian Alliance, Wild Rose, AB]

Madam Speaker, it gives me pleasure to speak to Bill S-23. I thank the minister for staying around to answer a few questions. In his speech he referred to Canada customs as one of the most modern agencies in the world. That is just not the case. That is reflected in his answer to my question regarding PALS. He stated that there is an effort being made to upgrade a number of systems, including PALS, that are used on the front lines.

I want to refer to a number of things that I have received in the past couple of months since becoming the critic for customs. They deal with border crossings, seaports and airports. I will refer to some documents but they are actually letters written to the minister. I know he has received these letters because I gave him some on behalf of frontline officers, the first line of defence, who are very unhappy for a number of reasons.

The reason I will refer to them is that I am a believer that if someone wants to learn how things should be done, a good place to start would be right on the front line with the people who deliver the service and face the problems.

We have a problem in Canada with the government. Everywhere I have been the border customs officers are doing a fantastic job given what they have to work with. It is an utter shame that when we visit these places we are denied the opportunity to talk with the frontline people because of directives from the minister, other departmental heads and commissioners.

I received letters that were written by an assistant deputy minister and an acting assistant deputy minister. I have others from a southern Ontario regional commissioner, an assistant commissioner and a regional director. All these individuals are with customs.

One of these letters states very strongly that employees should refrain from making any direct, or through a third party, public pronouncements critical of federal policies, programs and officers or on matters of current political controversy. It states that employees are not allowed to talk when others who are not of the government come to visit. The final sentence in each of these documents states that if they choose to do so they will be subject to disciplinary action up to and including termination.

In other words, customs officers, prison guards, corrections officers, or those holding whatever job in a government department, have strict orders not to speak their mind when people ask questions. When we go to visit these people they are not allowed to answer questions. I get a pile of letters from different individuals doing these jobs with the trust that I will not use their names lest they face the consequences of having provided information to me.

I cannot believe that in a supposedly democratic country when we are looking to the people at the front lines of defence at the borders, in our prisons, or wherever they may be, for suggestions on what we can do to make it easier for them to accomplish their mission, which is to protect and provide security for Canadian soil, its people and its property, they cannot openly discuss their views so that we can take them back, research them and possibly come up with better legislation. They have received orders from the government not to speak out in that nature to anyone.

During my last visit I was denied the opportunity to visit with the front line people. We know what the supervisors will say. They follow the rules very well. That is why they are supervisors. The higher up the ladder they go the better they follow them.

As I walked through these areas it was a shame to see the people on the front lines handing me notes urgently requesting that I call them because they are desperate to speak with me. They really want to speak with us yet are not allowed to. These people from all areas of the system wish to voice some serious concerns.

The response I have heard from the government these last few days during our two supply motions regarding the terrorist legislation and aspects of Bill S-23 was that anything we suggest is simplistic. The government's answer to everything is that it is too simplistic.

The most simplistic thing I have ever seen in my life is a government that was elected by the people to run the show yet in the House of Commons openly admits that it does not, as the solicitor general did during question period when he said he does not run his department.

He is right. The government does not run the show but the bureaucrats sure as dickens do. They hold an iron fist. There are a whole pile of instructions from the bureaucrats to the frontline people ordering them not to speak out or they may lose their jobs. Welcome to the democratic society of Canada. It is disgraceful.

I will point out how difficult it is to get our hands on the information we desperately need to help make the situation at the border safer and more secure, especially since September 11. This is the kind of support the frontline people are crying out for.

Canada customs has been all about collection for years and years. One customs officer said he was getting awfully tired of being referred to as a grocery cop or a tax collector when one of his main functions at the border has always been to provide safety and protection. However customs officers work for a revenue agency which is good for collecting money. It is the type of agency that will provide them with bulletproof vests and then give them calculators. It does not make much sense.

It is time to move out of collection and into protection. Protection is what it is all about. That is the priority we see across the country as a result of the events that took place on September 11.

Where are we falling short? I pointed out to the minister during our short question period that this piece of equipment, PALS, is out of date. A few hundred yards down the road at the U.S. border the system in place there is instantaneously tied into every agency that is essential for a customs official to do his or her job. It immediately identifies the felons, the murderers, the smugglers and those who are being sought for kidnapping.

Ours does not. That sends up a red flag. There is a problem when we must detain and question a person for a few minutes while we go into the main office and try to hook up to all the things we can to gather information about what it is we are looking for. It is time to start bringing things up to date.

I have stood in the booth at the border and have been shown how it works and what its shortfalls are. I know the equipment. We could sit here and start talking again, as I know the member over there who is shaking his head would like me to do, about what it is and what it is not. Unfortunately I do not think most members over there spend their time in a booth at the border to see what is really going on.

I am tempted to paint Liberal all over my car some day, although I would regret it dreadfully, and drive to the border so that I would be welcomed with open arms and able to speak freely with all the people who work there. If one is not a Liberal one cannot do that. They will not allow it. The customs officers are gagged. The documents right here tell them loud and clear that if they talk freely they will jeopardize their jobs.

I was the principal of a school for many years. If I wanted to know what we could do or change to make things work better in Grade 1, I did not go to the Grade 12 teachers. I went to those who were offering the service.

All the university training and all the elections one could have would not change my view that if I wanted to know how to do things right I should talk to the people who spend years providing the service and putting their experience to work. These people look for the best solutions, something the government refuses to do because its bureaucrats have all the simplistic solutions. They are simplistic because they do not believe in consulting with their frontline people.

Long before September 11 the auditor general recognized that with more than 100 million travellers a year entering the country at 147 border points and 13 international airports, the risks to Canada's safety and security were extreme. He recognized it in his reports long before September 11. Last April the auditor general wrote that the main role of customs officers was to protect Canadians against illegal activities such as smuggling of contraband or the unlawful entry of inadmissible people. The audit raised concerns about how well the risks were being managed.

The first thought that comes to some people's minds, including my own, is that if smuggling of contraband and dealing with criminals and inadmissible people is the main thrust and primary function, should it be done by a revenue collection agency like Revenue Canada?

Customs officers are being asked to enforce the criminal code. They are being asked to arrest drunk drivers. They are being asked to arrest smugglers. They are being issued minimal equipment to do their jobs. The government has upgraded that a little. It now gives them bulletproof vests, most of which are used ones donated by the United States because we do not have new ones.

The auditor general points out that if they are to function in this capacity and enforce the criminal code it will not be easily accomplished through an agency designed to collect taxes and revenues. He does not suggest this point blank but he alludes to it.

Why do we not move it to an organization that has the knowledge and ability to work with these people so they can do an effective job of enforcing the law? That is what the majority of their work entails.

That would require upgrading of equipment. It would require upgrading a number of things such as the number of people and hours of training. Frontline officers south of the border in the United States have 16 weeks of training. That is more than a lot of basic training camps in the military.

It is not so on this side of the border, certainly not when it comes to hiring students to fill in for the people we have. These students receive only two weeks of training yet their duties are the same. They must enforce legislation brought forward by the government in Bill C-18, which empowers them to arrest drunks and do everything they can to enforce the criminal code.

I will reiterate once again what happens. We have a number of border crossings where there are only one or two people on duty. They need to close these crossings at certain hours because they cannot keep them open that long.

I understand the government will try to keep all border crossings open 24 hours a day. It will need more people to do that. When crossings are closed they put out little orange cones to block traffic. Would that really stop someone from coming into the country who should not be here? People are under the illusion that criminals, smugglers and people trying to find their way into the country illegally do not know about that. They think they will stick to our main points of entry. That is not the case.

When will we recognize that if we are to properly equip and train our people to enforce the criminal code it could be better accomplished under a different agency than a tax collection agency called Revenue Canada? However the government has said that solution is simplistic.

It has been alluded to by a great number people, including the auditor general, that there are serious concerns.

Let us look at the customs office in Victoria. That is the famous port where Ahmed Ressam was arrested and finally caught on the U.S. side after many years of operating out of Canada. At the Victoria port's main terminal they do not have a single computer. They operate out of a 35 year old trailer. They consult 30 year old lists on a clipboard about how to operate, who to look for and what to do. There is no computer. With more than a million people passing through the port a year, how can a clipboard do the job properly?

I will refer to some comments, not just one comment from one person but some pretty general comments. First, people on the front lines have talked about technology. Technology is extremely important and it needs upgrading severely.

Second, we need more people at our borders. When we consider the number of individuals we will need at Pearson and other international airports, when we look at the 147 border crossings across the country and all our major airports and seaports, 130 people is a drop in the bucket. They need a lot more. They are understaffed by 10% to 50% in most places across the land.

We need to look at eliminating the student program. Members should not get me wrong. I believe in hiring students. It is important that we keep students working and provide them an opportunity for work. However when it comes to the security of the nation and all the training customs officers require to do their job properly, many believe that students are not the ones who can best fulfil the job. It needs to be done by trained professionals, as it is today. We could eliminate the danger by eliminating these kinds of programs.

Let me read one quote to the House: “I would like to talk about another aspect of my job, which is danger. Every day I go to work could be the last day of my life. The customs and immigration part of my job sees me interdicting persons smuggling high value drugs, firearms and weapons, as well as inadmissibles, some of them criminals and terrorists from other countries. Now I have the authority of a police officer and I am responsible for arresting drivers who are drunk or high on drugs, persons abducting children or persons with warrants for their arrest for a wide range of offences right up to murder”.

It is quite astounding what is required of this individual. He also said: “I basically deal with the same persons, goods and situations that my armed colleagues on the other side of the border deal with. As a result it would be prudent to assume that customs officers in Canada would be subject to the same dangers faced by the law enforcement officers in the United States”.

When I went to Fort Erie I noted the equipment issued to the customs officers, like bulletproof vests, batons and pepper spray. They had no sidearms. I went to the other side of the border where they were all wearing sidearms and were equipped with whatever was necessary because they have to deal with the criminal element. On the United States side of the border, frontline individuals can speak with anyone at random. There are no restrictions. They can speak with the press or anyone. They have the freedom to do that, which we do not have on this side of the border thanks to the government, which will not allow it.

The officers in the United States first of all commended the officers in Canada for doing a great job and for doing the best they could with the equipment they have, but they fear daily for each and every one of them and feel they are not in a position to look after themselves properly.

Our government in its wisdom must have recognized that, because it put out regulations. Regulation 16, I believe, in the manual states that in the event someone is coming into Canada and is showing signs of being a real and sincere threat to our nation and its people or to the guards themselves, they are to simply wish that person well and admit him or her into the country then report it to the police. I do not know at how many ports of entry where it might be at least half an hour or up to maybe two, three and four hours before the police can even respond to the situation.

I do not know if members have seen this out west, but in Ontario it is the same. People can come across these borders in these areas and if they want to get lost for a while, boy, it is easy to do. They will not be found. If they are, it will be well after the fact simply because the customs officers do not have the backup or the proper equipment to make an arrest when they should be able to. If there is a threat they have to let these people go.

The people working on the front lines do not like doing that, because they recognize the fact that those people can run free and loose forever. It is really hard for them to accept the fact that they have to let people go who they know will cause real serious problems somewhere down the line for some other people.

We have talked to a number of individuals in regard to some of our suggestions. My colleague from Edmonton, who is the chief critic for customs and revenue, and I visited with a number of people from the union representing the individuals we have talked about. We have talked to the police association and their people. It is always strange: When people get together who always seem to agree with the suggestions that we put forward in terms of what is needed to enhance the bill or what is needed to make the anti-terrorism bill better, they do not look upon the suggestions as being at all simplistic. In fact they agree with them.

They agree that customs and revenue should not be the agency that is working with, controlling or managing the frontline officers or customs officers at the borders. These jobs should not be under that portfolio. They should be under a portfolio that deals with law enforcement. They are just not allowed to arrest or detain people and they cannot use force against them.

I do not understand why the government has such a hard time accepting the suggestions that come through the mail from these people who are not allowed to voice their opinions when they would like to. They have to white out their names and ask that their names not be used for fear of losing their jobs.

A lot of my colleagues have seen the same problem in the coast guard and waterways are another area that needs to be addressed. When we go to a waterway border crossing and look to the south, we see the American coast guard going full scale in regard to protection. If we look to the north, nothing is happening.

I once asked a supervisor how he knew what the boats coming north were bringing in and what was happening. They do not know. Once again, they can only report to the police and the police usually do not have time to investigate because they are tied up with so many things. It is a pretty sad situation when a customs official has to say that a boat docked at one angle is probably carrying cigarettes, at another angle it is probably carrying whisky, at another probably guns and at another probably people. That is the best they can come up with. They simply do not have the forces to look after the continual flow of boats coming in freely at different crossing points, because we do not have officers patrolling those lines.

We are continually looking for legislation to address the needs. One of the needs of course is that we have to keep traffic flowing. We do not want the economy to collapse because of not being able to move freely across the borders. That is why we supported Bill S-23. It worked toward that end. If we do not get our heads out of the sand, start looking across country, recognize what the problems are and be willing to deal with them, we are headed for some serious problems.

I think the government should make one thing happen. It should be willing to allow the voices of the people trying to provide the service to be heard. I will emphasize that more and more. If their voices could only be heard to the fullest extent then we could come up with some very good suggestions and solutions for the problems we face each and every day.

The morale of such individuals is terribly low and I can understand why. They request something and it is not allowed. They write a letter and they get a warning that they will lose their jobs if they do not keep their mouths shut. Welcome to Canada.

I know the Liberals have a real hard time listening to the truth. The truth is an aggravating thing, especially when a party is operating a government that does not allow democracy to work. It is an absolute shame. I just cannot express enough about what it is like to work for a government agency where people's hands literally are handcuffed and their mouths taped lest they lose their jobs. We should think about that for a minute.

They do not have to worry about it on the other side of the House. Maybe they will lose their jobs in an election but they can say anything they like.

The guards at the border crossings have asked me to make certain that their voice is heard in all these respects. They do not enjoy the idea of going to work improperly equipped. They do not feel safe in their work. There are a number of issues that could be so much better if the government would only listen.

I also want to speak on behalf of the remote ports. They are really crying out for help, with one person at one station all by himself. We do not have anything there to address that person. There are many of those crossings, all across the line.

I want to talk about the students once again. They are trained for only two weeks, on average, yet they make up over half of the customs workforce during the two busiest months of the year, July and August. Half the workforce is students. There have been reports of shifts at Pearson airport manned entirely by students. To my way of thinking and to a lot of people's thinking, to have students as the first line of defence is a bit terrifying. I just recently heard about a female student who intercepted an individual crossing the border who had a gun. In the process of the student checking the chamber of the gun, it discharged and the bullet lodged in the building across the street. The students are not trained well enough in the inspection of a gun. It went off, but that was a student. She is not to blame. Sure, there should not have been a bullet in the chamber, but anybody who knows anything about guns knows that is the first thing a person wants to know when picking one up.

The auditor general's report referred to that. It also said that at many ports relations are totally strained among customs, immigration and other agencies and departments. When we add them together, customs, immigration and other agencies and other departments, at these ports, when they are strained to the degree that they are why are we not doing something about it? We are putting on 130 people. That is hardly a drop.

A quality referrals report was recently produced by immigration officers who were frustrated with the poor quality of referrals from the primary inspection line that is staffed by students. They were having a real problem because the expertise was not there to do the job properly.

On October 12, 17 of 29, or 60% of the officers on duty, were students with two weeks of training. This is a common occurrence. Week in and week out more than half the officers at Pearson are students. Our immigration officers are pretty sick and tired of the poor quality of referrals being sent to them. They are bogged down so badly that it is eating at their time. They feel they are not able to properly handle their work.

In 1991 we learned that the immigration department hired a contractor because the quality of referrals from the primary inspection line were so poor. The Ekos report found that in August, a peak travel period when a massive number of students is employed, more than 50,000 immigration referrals to secondary inspections were missed.

I do not understand why the minister will not remove students as a first line of defence or at least make provisions for them to be properly trained. It should be more than two weeks of training.

I want to remind the House that in the past week the American government has tripled its border workforce. The Americans increased their officers by 5,400 people and their border patrol officers to 900 persons along the Canada-U.S. border. Our minister announced last week the addition of 139 employees.

When I look at this I can understand the disappointment from the people on our side as to why this is not much of a priority. If the Americans have information that indicates they need 5,400 people on the border, what information do they have that we do not? Do the American officials understand that our immigration policy is so weak that they must defend against those travelling through Canada with the United States as their final destination and getting prepared for that? They have a lot of reasons to think that.

I want to express one more time that terrorism is an extremely serious situation. We have provided answers through consultation with those on the front lines, as much as we could, and with the police associations at every opportunity and they are on side with our suggestions. We have consulted with other agencies that like what we have to say with regard to what we should be doing. However, there are some people across the way who will not listen. They do not listen. They like their simplistic solution of letting the bureaucrats deal with it.

What else is new? I think that has been going on for 30 or 40 years. Once this government decides we ought to have a few reforms within our own country that respect democracy to a better degree, we might see the changes that are essential.

When I look at what is happening today, it is tiring to see day in and day out that respect for democracy by members across the way is diminishing and that there is little or no concern for protecting our people who are providing the service.

I hope that some day the members on that side will wake up and recognize that our first priority, particularly at this time, should be protecting our country and providing security. I hope that one day they will start acting on this.

Supply

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Madam Speaker, in the few minutes remaining in the debate, I would like to make a few comments with regard to this important issue.

There was a suggestion made by the member for Okanagan--Coquihalla that somehow we on this side of the House would call the measures outlined in the motion draconian.

Personally, I would suggest that individual initiatives that have been presented have some merit and that is what the government is acting on. The Canadian government does not want North America to be anything but a secure place but the decisions must be made by Canadians for Canadians. We must ensure that our policies and procedures are complementary, that we are not working at cross purposes with the United States, and that we do not sacrifice our sovereignty.

In recent testimony at the Standing Committee on Citizenship and Immigration the commissioner of the RCMP claimed he was strongly in favour of the perimeter initiative put forth by the Canadian government. He believes that our border officials already are setting the standard.

All Canadians can be proud of the security measures enforced by our immigration and customs officers at the Canada-U.S. border. Indeed the United States ambassador, Mr. Cellucci, recently commented that his government is very impressed with the co-operation between our two administrations and the work being done in Canada to increase security in its immigration procedures.

Canada deploys immigration and customs officials at the border in numbers that are comparable to those of the United States. Both countries have increased these numbers and are on an enhanced security level since September 11. Last year alone, Canadian officials stopped 21,000 criminals from entering Canada from the United States while the American agents stopped 14,000 criminals from entering the U.S. from Canada.

The commissioner of the U.S. Immigration and Naturalization Service recently praised Canada's security efforts. He noted that Canadian officials helped arrest half of the 8,000 criminal aliens caught in the first six months of this year. This is despite the fact that the U.S. has eight times more agents on its Mexican border. He credited the success to Canada's “excellent system” of information sharing with the American authorities.

Under Bill C-18 passed in 1999, customs officers were given officer powers to arrest and detain individuals suspected of having committed offences under the criminal code, such as impaired driving, child abduction, or those with outstanding arrest warrants. Officers will complement the work of police forces by bridging the gap between the time an officer detects a criminal code violation and the time when police can arrive and intervene.

When proposing the bill, the minister at that time stated on May 13, 1998:

By expanding the scope of their powers to include violations under the criminal code, we will enhance the overall safety and security of Canadians.

Given that Canada customs officers already have the powers necessary to enhance the overall safety and security of Canadians, there is no reason to move Canada customs officers out of the tax collection agency and into a law enforcement agency.

With regard to the issue of detention of refugee claimants, as part of the $280 million anti-terrorism plan, the government recently invested $49 million to accelerate the Department of Citizenship and Immigration's ability to complete an increased security strategy.

Of this new money, $17 million is going to the security screening of refugee claimants. Because of the new security concerns, all refugee claimants must go through interviews and examinations upon their arrival. These include indepth questioning, checking the claimant's information against various databases, taking the claimant's photograph and fingerprints, and keeping all travel documents on file. If the claimant is considered to be a security risk, he or she is detained.

In 2000-01, 8,790 individuals were detained on the average of 16 days. Due to the increased state of alert and more intense security screenings, CIC officials expect there will be more detentions in the future.

It is important to note that when we are making decisions, we are making them in Canada's interest. I am always concerned that our friends across the way would like us simply to be absorbed by the Americans in their approaches.

[Madeleine Dalphond-Guiral, Bloc, Laval Centre, QC]

Mr. Speaker, exactly six weeks ago today, the world was rocked by a quake whose magnitude exceeded anything on the Richter scale. With an epicenter located in the New York-Washington area, the terrorist acts of September 11 have led to especially great concerns in Canada, since they took place in our backyard, so to speak.

The motion brought forward by the official opposition today provides us with a good opportunity to debate the need to reconcile democratic values and security in what can only be described as horrible and cruel circumstances.

This is the fifth opposition day since the reopening of parliament. All but one of these days dealt with votable motions, and all dealt directly with the repercussions of September 11.

I would now like to read verbatim the motion by the leader of the official opposition, and member for Okanagan--Coquihalla. The motion reads as follows:

That, as part of a continental perimeter initiative to secure Canada's borders and protect the security of Canadians and our neighbours, and to protect our trading relationships, this House calls on the government to:

(a) provide both Immigration officers and Customs officers enhanced training and full peace officer status to allow them to detain and arrest suspected criminals or terrorists at the border;

(b) move Customs border officers out of the tax collection agency and into a law enforcement agency;

(c) detain all spontaneous refugee claimants appearing without proper documentation until their identities are confirmed and they have cleared proper health and security checks; and

(d) create a list of safe third countries, including the United States and member states of the European Union, from which Canada will no longer accept refugee claimants.

Everyone recognizes that because it is generating real anxiety in all spheres of society, the current international situation is ripe for extreme reactions. These are never productive and rarely do anxiety, anger and panic help us think straight.

As parliaments reflect on effective and realistic ways to fight terrorism, it is important not to lose sight of the values that underpin our democratic society. I will therefore be studying the opposition motion with the values of justice, freedom and compassion in mind, taking into consideration the international conventions that Canada has ratified, including the UN convention relating to the status of refugees, the torture convention and the convention on the rights of the child.

I would like first off, if I may, to comment on the preamble to the motion. It refers to the continental perimeter initiative. The Bloc Quebecois has expressed its opinion of this perimeter. We believe such a perimeter should exist only in conjunction with the three primary signatories to NAFTA, namely, Mexico, the United States and Canada.

We understand that the aim of this motion is primarily Canadian and American security and the assurance of continued trade relations. However, I saw no reference in the motion to this last objective. We must therefore face the fact that the motion is off the mark. While the events of September 11 raised the issue of security, can we allow the security measures to apply just to refugees, as if they were the guilty parties?

Let us move on to paragraph (a). It reads, and I quote:

provide both Immigration officers and Customs officers enhanced training—

The responsibilities of these officials are important and we support their being given training that will enable them to do their day to day work properly, upholding the law and treating individuals with respect. This is a worthy objective.

In April 2000, the Auditor General of Canada made the following comments “Training is a key element in providing customs staff with the knowledge and skills to speed the entry of travellers and manage risk”.

He asked customs to “ensure that the training needs of all employees are assessed on a regular basis, training plans are developed annually and appropriate training is provided in a timely manner”.

He considered it important as well that “training for term and student employees take into account their skills, experience and the job requirements”.

And he recommended that “training records be complete and be used to assess whether employees have received the training they need”.

Clearly, we will support the first part of paragraph (a).

However, we have some concerns about the second part of the motion which reads, and I quote:

(a) provide both Immigration officers and Customs officers...full peace officer status to allow them to detain and arrest suspected criminals or terrorists at the border;

What is the current status of these two groups of public servants? Subsection 110(1) of the Immigration Act reads as follows:

110.(1) An immigration officer has the authority and powers of a peace officer to enforce any provision of this Act, the regulations or any warrant, order or direction made under this Act or the regulations respecting the arrest, detention or removal from Canada of any person.

Therefore, how do we define full peace officer status?

As for the Customs Act, it provides the following in subsection 98(1):

98.(1) An officer may search if the officer suspects on reasonable grounds that the person has secreted on or about his person anything in respect of which this Act has been or might be contravened, anything that would afford evidence with respect to a contravention of this Act or any goods the importation or exportation of which is prohibited, controlled or regulated under this or any other Act of Parliament.

(a ) any person who has arrived in Canada within a reasonable after his arrival in Canada,

(b) any person who is about to leave Canada, at any time prior to his departure, or

(c) any person who has had access to an area designated for use by persons about to leave Canada and who leaves the area but does not leave Canada, within a reasonable time after he leaves the area,

The Customs Act also provides that the customs officer has the right to seize goods. Moreover, some agents are designated as having peace officer status for the enforcement of certain provisions of the criminal code, such as those on arrest without warrant.

Section 2 of the criminal code defines a peace officer as follows:

“peace officer”

(d) an officer or a person having the powers of a customs or excise officer when performing any duty in the administration of the Customs Act or the Excise Act,

As we can see, immigration agents are deemed to be peace officers when they enforce the provisions of the Immigration Act, while customs officers are also deemed to be peace officers and they have all the necessary powers to enforce those of the act for which they are responsible.

Since we have just finished debating a bill to amend the Customs Act, Bill S-23, which was debated at report stage in the House of Commons last Friday, it is hard to see why the Canadian Alliance did not take the opportunity then to present the amendments to the bill that it thought were necessary.

As we can see, both immigration and customs officers have the necessary powers to enforce the provisions of the legislation, particularly since the Immigration Act also provides that, in certain specific circumstances, an immigration officer may detain an individual.

The difficulty probably lies in the word “full” peace officer status. Perhaps this will become clear later in the debate.

Not only am I uncertain what “full” peace officer status means, but I am hardly reassured when I read that they should be allowed “to detain and arrest suspected criminals or terrorists at the border”.

What is a suspicion? Le Petit Robert defines it as conjecture by which blameful intentions are assigned to someone. It seems to me that the present situation may cause us to be more suspicious and that the very broad wording in the motion is hard to square with the 1986 Landry decision, which defined the notion of “reasonable grounds”. Furthermore, the 1999 edition of the criminal code provides, and I quote:

In order to arrest a person without a warrant, a police officer must have reasonable and probable grounds to believe that the person has committed an indictable offence. This subjective belief on the part of the police officer must also be justifiable from an objective point of view.

We can see how far apart the criminal code, the existing legislation and the Alliance motion are.

Paragraph (b) of the Alliance motion proposes that customs officers be moved into a law enforcement agency. This in itself is not without interest, although it raises a number of questions concerning conditions of work, the administration of customs duties, and budgets.

At this point, it is probably interesting to quote what the national president of the Customs and Excise Union said in his recent appearance before the Standing Committee on Finance regarding Bill S-23:

I believe this was proposed under the Conservative government, some six or seven years ago [--]

It must be a good eight years.

—perhaps longer—I forget now. At that time the Customs Excise Union fully supported that concept for customs officers. We do see customs officers as being a group of individuals that is becoming more and more oriented towards enforcement. In fact, the approval of Bill C-18 in 1998 has made that even clearer—

As for Denis Desautels, who was auditor general at the time, he stated that the role of customs offices “has evolved ...to one of facilitating the entry of travellers and goods, while protecting Canadian society”.

Now we come to what strike me as the two most worrisome paragraphs, (c) and (d). Their objectives seem very clear to me.

The first stipulates that any refugee claimant without proper documentation is potentially dangerous. The second is equally disconcerting, because it radically limits the reception of refugees, even if this represents a break with the Canadian tradition of compassion and openness.

Paragraph (c) reads as follows:

(c) detain all spontaneous refugee claimants appearing without proper documentation until their identities are confirmed and they have cleared proper health and security checks.

We are opposed to automatic detention of refugee claimants without papers.

The reason is a simple one. What reasonable person can believe that a refugee without documents represents such a risk to Canada's security that he or she must be imprisoned? I do not think so. Nor am I the only one, because it would make no sense for anyone who had any ill intentions toward Canada or any other state not to have official identity documents, or at least ones that looked authentic. Why not three or four different passports? We have already seen that. Why would anyone run the risk of an investigation? If I wanted to do some evil deed, I would come across as innocent as possible. That is elementary.

We do not think that this measure will in any way improve Canada's security coefficient. What it will succeed in doing is to treat the innocent unfairly, and we will thus be failing our duties under the charter of rights and freedoms, which is a source of Canadian pride.

We feel that our present procedure meets Canada's needs and requires no changes.

Right now an immigration officer uses the following procedure. He asks for the claimant's identification and the claimant states his true identity. The immigration officer then questions the claimant to determine whether he can provide identity papers. The claimant has to complete a form in which he provides information as to his identity. Finally, the immigration officer can detain the individual if he is unable to establish his identity to the officer's satisfaction.

Should the immigration officer find that the claimant is not properly answering the questions put to him, appears confused or refuses to answer certain questions, the officer may detain him for a period of seven days.

Interestingly the Canadian Council for Refugees notes that it is exceedingly rare for a person seeking asylum to be detained for not having identity papers or for having forged ones.

With paragraph (c) of the motion, we move to an extreme that is unacceptable. We oppose the systematic detention of persons claiming refugee status, since the practice is contrary to the charter of rights and freedoms, which applies to every citizen.

I will move on quickly to the last point, the request to establish a list of third countries. Once this list is drawn up, Canada will no long accept refugee claimants who have come through a third country.

Forty per cent of those claiming refugee status arrive in Canada from the United States. Forty per cent is a lot. What I understand from this is that we do not want any more refugees. I oppose this, especially since applications for refugee status in the States are given much more restrictive treatment than they are here in Canada.

Are we consciously, as a parliament, going to destroy what has been a port of peace and life for many who have suffered through wars and undemocratic regimes? We need only think of the millions of Afghans who are trying desperately to leave their country. Can we say “No, we will allow only those who arrive via Vancouver or Montreal or St. John's, Newfoundland”?

We also oppose this fourth paragraph strongly. I call on all parliamentarians who recognize the importance of compassion, justice and respect for the fundamental values of our society to oppose the Alliance motion.

Customs Act

[Myron Thompson, Canadian Alliance, Wild Rose, AB]

Mr. Speaker, I am pleased to speak to Bill S-23 today. The Canadian Alliance is supporting the bill because it will speed up the flow of goods and people entering Canada.

Bill S-23 is actually the product of indepth consultations with trade and tourism sectors. As far as the amendments which have been introduced this morning, we will support these as well. We do not have any problem with them and it only makes sense to do that.

What I would like to address more than anything else is what is not in the bill that is so important at this time. While assisting with trade issues, the bill does address some equally important issues that we consider to be positive including new penalty structures, improved equipment, more strict controls over export mail and customs-controlled areas at international airports.

We all know that the world as we knew it before September 11 has changed a great deal. I strongly feel that Canada customs must change as well. Since September 11 our frontline officers have done an excellent job in securing our borders. Security is of the utmost importance. To date, Canada customs has been about collection and not about protection. It is time to reverse those. It is now about protection.

The Canadian Alliance would like to see Canada customs removed from the tax collection agency of revenue Canada and moved into a law enforcement department of the solicitor general. Long before the terrible events of September 11, the auditor general recognized the fact that with more than one hundred million travellers a year entering the country at 147 border points and 13 international airports, the risks to Canada's safety and security were extreme.

Last April the auditor general wrote about customs officers and said that their main role now was to protect Canadians against illegal activities such as smuggling or contraband or the unlawful entry of inadmissible people. He said that their audit raised some concerns about how well these risks were being managed. Since the tragedy on September 11, he had the opportunity to meet with the Canadian Police Association and customs and excise union. He said that both of these organizations, among many others, were in full support of moving customs out of revenue Canada and into the solicitor general department.

The role of customs officers is already very similar to other peace officers. Customs officers in the last year have been issued bulletproof vests, batons, pepper spray and have been given self defence and use of force training to better enforce our laws. Recruitment requirements are now more difficult. Labour Canada has also just contracted a consultant to study the inherent risks of the job and this consultant will undoubtedly look at the question of whether customs officers should be equipped with firearms.

Let me just read a paragraph out of the regulations that customs officers are required to follow in regard to security. Paragraph 16 of the regulations states that Customs officers shall not use force against members of the public where it is known or strongly suspected that the individual is carrying a weapon and considered dangerous if, in the judgment of the officer involved, the use of force would present an undue risk to their personal safety or to the safety of another officer or the public. In these circumstances officers shall note the pertinent details of the case, permit the individual to proceed unobstructed and then the officer shall notify police immediately.

One of the problems with this policy is that in our vast country many of the border crossings are hours away from local police response.

In other words, some dangerous character who arrives at the border can come into Canada because customs officers are not properly equipped or trained to detain and arrest and keep the individual from coming in.

I can understand why the revenue agency would not be equipped in that sense. In one agency we issue both bullet proof vests and calculators. That will not detain the most ardent of criminals. It is time to start issuing the proper equipment so customs officers can do a good job at the border of being able to arrest, detain and hold individuals for the police.

It is possible to do that but we must equip them properly. Under the circumstances customs officers are at risk because they do not have the tools to look after their needs. In particular they do not have the tools to do their work at border crossings where there is only one guard on duty. What chance would they have?

Across the southern border they have increased personnel by 5,400. The last figure I heard was that possibly somewhere around 100 to 130 individuals would be moved into these positions in Canada. It does not make any sense, particularly following September 11.

Why would we want to allow a known criminal, smuggler, big drug pusher or terrorist into Canada for any length of time to roam around and then hope the police would be able to round him up before the individual caused any real problem? That does not make sense. The people at the border crossings are our first line of defence. Let us give them the proper equipment and tools so they can do their job as the front line of defence. We must let them detain and let them arrest. Let us give them the tools to do that.

Another thing I find amazing is that at some border crossings where they only have one individual they are only open for eight hours. They shut the port down for anywhere from 12 to 16 hours. They put up a little orange cone indicating that the border is closed. That would really mean a great deal to somebody who wanted to get into Canada. It would not stop them whatsoever.

If anyone thinks the criminal element or terrorists will only try to come through our major ports they need to give their heads a shake. They know about these ports. They know about the ability to come into Canada. These crossings exist and they know it. That is where they will go.

Let us get serious about tightening them up. Let us get them out from under a collection agency and get them under a protection agency that knows what is required to enforce the law to better protect Canadians. It only makes sense to do that. I do not understand why we are hesitating or reluctant to do that at this time.

In 1998 the government passed Bill C-18 which for the first time in the history of Canada customs extended criminal code powers of detention and arrest to customs officers. Does it not make sense that if officers are to be given the power to enforce the criminal code they should come under a different agency than tax collectors or Revenue Canada? One would think that would be the case.

We are supporting Bill S-23 because we want the flow of goods and services to continue in an uninterrupted manner and we want to do the best we can to keep them going. However we must not forget that the top priority today as a result of September 11 is the protection and safety of Canadians, so let us do that.

Having said all that I have said, let us make sure we make it a lot easier and safer for our front line officers by equipping and training them properly, getting the right individuals into position and getting them out of collection and into protection.

Message From The Senate

[The Deputy Speaker]

I have the honour to inform the House that when the House went up to the Senate chamber the Governor General was pleased to give, in Her Majesty's name, the royal assent to the following bills:

Bill C-12, an act to amend the Judges Act and to amend another act in consequence—Chapter No. 7.

Bill S-24, an act to implement an agreement between the Mohawks of Kanesatake and Her Majesty in right of Canada respecting governance of certain lands by the Mohawks of Kanesatake and to amend an act in consequence—Chapter No. 8.

Bill C-8, an act to establish the Financial Consumer Agency of Canada and to amend certain acts in relation to financial institutions—Chapter No. 9.

Bill S-17, an act to amend the Patent Act—Chapter No. 10.

Bill C-17, an act to amend the Budget Implementation Act, 1997 and the Financial Administration Act—Chapter No. 11.

Bill S-16, an act to amend the Proceeds of Crime (Money Laundering) Act—Chapter No. 12.

Bill S-3, an act to amend the Motor Vehicle Transport Act, 1987 and to make consequential amendments to other acts—Chapter No. 13.

Bill S-11, an act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other acts in consequence—Chapter No. 14.

Bill C-13, an act to amend the Excise Tax Act—Chapter No. 15.

Bill C-26, an act to amend the Customs Act, the Customs Tariff, the Excise Act, the Excise Tax Act and the Income Tax Act in respect of tobacco—Chapter No. 16.

Bill C-22, an act to amend the Income Tax Act, the Income Tax Application Rules, certain acts related to the Income Tax Act, the Canada Pension Plan, the Customs Act, the Excise Tax Act, the Modernization of Benefits and Obligations Act and another act related to the Excise Tax Act—Chapter No. 17.

Bill C-3, an act to amend the Eldorado Nuclear Limited Reorganization and Divestiture Act and the Petro-Canada Public Participation Act—Chapter No. 18.

Bill C-18, an act to amend the Federal-Provincial Fiscal Arrangements Act—Chapter No. 19.

Bill C-28, an act to amend the Parliament of Canada Act, the Members of Parliament Retiring Allowances Act and the Salaries Act—Chapter No. 20.

Bill C-9, an act to amend the Canada Elections Act and the Electoral Boundaries Readjustment Act—Chapter No. 21.

Bill C-25, an act to amend the Farm Credit Corporation Act and to make consequential amendments to other acts—Chapter No. 22.

Bill C-4, an act to establish a foundation to fund sustainable development technology—Chapter No. 23.

Bill C-29, an act for granting to Her Majesty certain sums of money for the public service of Canada for the financial year ending March 31, 2002—Chapter No. 24.

Bill S-25, an act to amend the Act of Incorporation of the Conference of Mennonites in Canada.

Bill S-27, an act to authorize The Imperial Life Assurance Company of Canada to apply to be continued as a company under the laws of the Province of Quebec.

Bill S-28, an act to authorize Certas Direct Insurance Company to apply to be continued as a company under the laws of the Province of Quebec.

Pursuant to order made on Wednesday, June 13, the House stands adjourned until Monday, September 17, at 11 a.m. pursuant to Standing Orders 28 and 24.

(The House adjourned at 5.26 p.m.)

Federal-Provincial Fiscal Arrangements Act

[The Deputy Speaker]

The House will now proceed to the taking of the deferred recorded division on the motion at third reading stage of Bill C-18.

[Wendy Lill, NDP, Dartmouth, NS]

Mr. Speaker, it is my pleasure to speak to this important issue because of the profound effect that equalization problems are having on my constituents in Dartmouth.

Simply put, the current transfer formula does not treat my constituents in Nova Scotia and Dartmouth the same way that citizens in other provinces have been treated. I will spend a bit of time talking about that this afternoon.

Equal opportunities need to be given to Nova Scotians under our federal transfer regime. Sadly there are a number of barriers in our equalization formula which continue to work against poorer provinces such as Nova Scotia and which are causing real hardship to ordinary hard working persons in Dartmouth.

Simply put, Bill C-18 does not meet the real constitutional obligations of the government. I will state what they are because I am not sure we all know. Subsection 36(2) of our constitution states:

Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonable comparable levels of taxation.

If we look at health care standards and the lack of availability of pharmacare, per pupil funding levels for primary, secondary and post-secondary education, and services for those living in poverty, including the thousands with disabilities in my community in Nova Scotia, it is self-evident that the lofty ideals of the constitution are not being met. Canadians know, and study after study shows, that there are significant inequities in services and taxation levels across Canada.

I concede that some of the inequities are the result of decisions made by provincial governments. Many Conservative governments, rather than using budget surpluses to rebuild social programs, have brought in large scale tax cuts which benefit the wealthy. That is not the fault of equalization.

Some inequities stem from the ability of some provinces to generate revenue from resources. There is no doubt that Alberta has greatly benefited from the fact that it is situated on large lakes of underground oil and gas. It receives full royalty revenues from those resources. There is some accounting of this in the equalization formula. However another inequity is at play here.

That relates to the fact that offshore oil and gas revenues cannot be taxed by provinces in the same way that onshore oil and gas revenues are presently being taxed. Therefore we are leaving the have not provinces in Atlantic Canada without the same ability to provide programs as Alberta has.

While I know there are different jurisdictions for onshore and offshore resources, it is difficult to give the legal mumbo-jumbo explanation to the people of Nova Scotia. Nova Scotians have made their living off the ocean since the province was founded almost 400 years ago just as much as they have made their living off the land.

Alberta's tar sands are a provincial resource, and telling Nova Scotians that Sable Island gas is not part of their province simply does not wash. They do not see the legal argument. They see that they are once again being kept poor by unequal rules set by central and western Canada, and they have a point. The government is not treating them fairly and it obviously could if it wanted to.

For example, there was a temporary exemption of royalty revenue in the calculation of equalization payments which had been granted to Newfoundland and Labrador in the past. This temporary measure helped boost the economy of that province, and Nova Scotia deserves no less.

I call on the government to give Nova Scotia the same deal which was granted to Newfoundland and Labrador. As my leader and colleague from Halifax said eloquently in today's debate, Liberal cuts to the CHST, their elimination of the Canada assistance plan and their general approach to giving a higher priority to tax cuts rather than rebuilding our social programs have hit Atlantic Canada very hard.

These are policy barriers to governments in Atlantic Canada which the government should address, but it should also be fulfilling its constitutional role to create equity in services through the equalization formula.

Bill C-18 leaves barriers in place. The biggest barrier is the cap on equalization payments. It needs to be removed. I am not alone in this regard. As has been mentioned, the provincial ministers and the premiers have brought this matter to our attention. Bill C-18 has failed to remove the artificial cap on equalization payments to poorer provinces for this fiscal year. It means that Ontario and Alberta keep more and Atlantic Canada keeps less. How can the Liberals justify this? Do they know what it means to the people in Atlantic Canada?

What it means is that Dartmouth students suffer with less funding and there is increased labour strife as school boards try to squeeze concessions from already underpaid workers. It means that post-secondary students have the highest tuitions and the most ineffective student aid program in the country. It means that fewer sick people can afford the medications they are told by their doctors they need to stay alive. That is not fair and it is not equal. That does not meet the lofty goals set out in our constitution.

Specifically on post-secondary education, I repeat my request for the federal government to increase the support for legitimate post-secondary educational needs in Nova Scotia through a bilateral agreement that would recognize the significant price that Nova Scotians are paying to support a disproportionate number of out of province students.

I hope the government of Nova Scotia would then use the funds to reduce student tuition fees, currently the highest in Canada, and increase the inadequate student aid plan. Atlantic Canadians do not want handouts. They want fairness. Sadly our party believes that Bill C-18 would not deliver this to them.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, I will be sharing my time with the hardworking and faithful hon. member for Vancouver Island North. I could have used more adjectives, but I did not want them to go to his head. It is an honour to stand in the House to talk about Bill C-18, a very important bill, and to address at this stage the broader question of equalization payments and the meaning of them.

I cannot resist the temptation to lay down a bit of what one might call a philosophical foundation for the idea. That foundation is what we as Canadians believe in so strongly. We believe in community and sharing with those who have need. The Liberals have somehow exploited this in their communication pieces to try to pass it off to Canadians that they are the only ones who care. They certainly are experts at caring in one particular way and that is taxing Canadians to death, then deciding how they can distribute the money they have gathered together.

Just yesterday, without any previous debate or approval of the House, the Prime Minister declared some of his values in Toronto when he announced a $500 million program to aid culture in Canada. 180 I shake my head at that when we have that same government saying that it will not increase the ceiling for equalization payments to help provinces pay for hospitals, education facilities for students and things like that. The government is ready to give us $500 million more for its interpretation of what Canadian culture is.

That is a very narrow point of view of what it means to be Canadian and what it means to be community. Very frankly the cultures that I see across the country are many and varied. These cultures for the most instance are very able in representing themselves and thriving without the aid of a bunch of government grants.

In fact in my riding we have a large Ukrainian community that does wonderful things to promote its culture and to keep it and its language alive. I had a conversation not long ago, actually I guess it is over a year ago but at my age years fly into days or weeks, with several people from the Ukrainian community. They said we should support more cultural grants from the federal government.

I engaged them in a little debate and asked them where they thought the money came from. We talked about it a bit. I told them that we were overtaxed with the huge burgeoning bureaucracy that was involved in sending money to Ottawa and that the bureaucrats spun it through their centrifuges. A bunch of that money would spill over the edges but would never get to the target for which it is intended. Then finally some would go back to a select group chosen in some cases by the Prime Minister because, as I understood it, he had a lot of clout in cabinet. However if they did not happen to be one of those they would not get the money.

I was able to show them that we would all do a lot better if we could simply reduce our taxes. Then all of us in all our cultures could fund to our heart's content the Ukrainian schools, the German schools and other schools that we would have liked to have but were prohibited from because of the official program of the government of taking about half of everybody's earnings and distributing it according to its will.

I also say that in the broader sense of community I do not want to restrict my community just to the town near which I live, nor my riding. It is a wonderful riding. I welcome you, Mr. Speaker, to come and visit. We have a national park in our riding. It is called the Elk Island National Park, named after my riding. It is a wonderful place and great place to visit. I would not like to restrict my sense of community just to our province.

It was mentioned earlier today that Alberta in the last year or so had a very good economic picture because of the energy situation. I can remember back a scant eight years ago when that was not the case. Albertans were struggling with their education and health funding probably as much as anyone. We had tremendous challenges in the province to rationalize the delivery of the health care system. A lot of it was due to the fact that this federal government reneged on what was originally an agreement to pay for half of the health care for the provinces. Over the years it eroded it to a point where it was once again the responsibility of the provinces. However it never reduced the taxes it sucked out of our provinces to bring to Ottawa. Therefore, I feel the government funding of those programs was irresponsible.

My country is my community. I came to the House as a Canadian. I stand proudly when we sing the national anthem in the House. Some may remember that I was even unwittingly and unintentionally the centre of a lot of controversy a number of years ago when I insisted that there should be nothing wrong with my having a flag on my desk in the House of Commons. Ultimately, it was ruled not permissible. It was considered a prop, so I am without my Canadian flag. So be it.

However I am a proud Canadian and this is my community. I insist that we would do well by extending the word community across this whole country and that we provide the needed health care and educational facilities to our citizens, which are more or less equal, at comparable levels of taxation. However it is impossible to have them exactly equal as that is just a practical consideration but they should be as equal as is possible.

Again, it is worth drawing the attention of the members to the fact that this is in our constitution. If we look at the Constitution Act, 1982, we will find section 36. I am going to read it because perhaps some people have not heard it. It states:

Without altering the legislative authority of Parliament or of the provincial legislatures, or the rights of any of them with respect to the exercise of their legislative authority, Parliament and the legislatures, together with the government of Canada and the provincial governments, are committed to

(a) promoting equal opportunities for the well-being of Canadians;

(b) furthering economic development to reduce disparity in opportunities; and

(c) providing essential public services of reasonable quality to all Canadians.

Then subsection 36(2) of our constitution states:

Parliament and the Government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

Although that was brought in by a Liberal government, it seems to me eminently fine. I have absolutely no problem with that particular clause in our constitution. It behooves us to make sure that Canadians across the country have comparably equal services at comparable levels of taxation.

However we need to make sure that there is not duplication. We must ensure there is efficiency in the delivery of those services. We must make absolutely sure that the provinces and the citizens in those provinces continue to have all the motivation in the world we can extend them to improve their situation, regardless of where that is. I insist our country would do best if we neither hung a milestone around the necks of those who are doing well as they will then do better, they will expand our economy and they will provide more jobs, nor leave destitute those whose needs are greater.

Quite clearly I could have spoken for longer but my time is up. I appreciate the opportunity to address the House on this important issue.

[Loyola Hearn, Progressive Conservative, St. John's West, NL]

Mr. Speaker, let me thank my colleague from New Brunswick Southwest for sharing his time with me.

I listened to him explain how we arrived at the present process of equalization and I listened to the leader of the NDP Party and the member for Regina—Qu'Appelle. I must say that the more I listen to people speak on the equalization process, the more I realize that we all agree the present system of assisting have not provinces, and I use those words very loosely, is not working. We all agree it is not working. We all agree there are better ways of doing it. Many of us recommend better ways of doing it.

That begs the question. If most of the parliamentarians in the House understand what is happening across our country, if we understand the fiscal realities of the have and have not provinces, if we understand the sharing, the equalization systems, the goods, the bads and the uglies, why is it that we do not do something constructive about it? Members on this side can only point out, recommend and represent. It is the people on the other side who must to do something, but we have not seen very much being done.

Bill C-18, which would remove the cap on equalization payments for one year, is a positive step and one which various provinces have asked for. They have also asked that the cap be removed entirely, which is something I would also recommend, but removing the cap on equalization would not solve all the problems. Changing the whole equalization reality would equalize it.

The word equalization is deceptive. When we hear the word we think of the old Robin Hood syndrome: if we take from the rich, being Alberta and Ontario, and give to the poor, everybody becomes equal. If that were the case, what a wonderful country we would have, but that is not the case. All we are doing is taking a very minuscule sum of money and sharing it on an equal basis depending upon status.

The province of Newfoundland has been looked upon by our fellow Canadians for years as a have not province, a province that has absolutely nothing to offer. Those who are experienced and travelled politicians, or experienced in the sense of having read and educated themselves about all the provinces, realize that is not the case.

I doubt if there is a province in Canada as rich as Newfoundland in relation to the resources within its boundaries. If we look at the small population of Newfoundland, slightly over half a million people, and divide it into the value of our resources, on a per capita basis we could be richer than any province in the country.

The parliamentary secretary from Alberta asked my colleague from New Brunswick Southwest whether it would not be good for the people of his province to travel to rich Alberta where they could find employment. I say to the hon. member that many people from Newfoundland have travelled to Alberta and have contributed significantly to the growth of that great province. Alberta and Newfoundland have been extremely close over the years. I had the privilege of serving in a government in Newfoundland in the mid-eighties at the same time that Premier Lougheed was the premier of Alberta. There was an exceptionally strong bond between our two provinces and that bond has held.

In recent months, Premier Hamm of Nova Scotia has led the fight for drawing attention to the plight of equalization clawback arrangements. It is interesting to see him being supported by other premiers who have not been directly affected and by the new leader of the opposition, Mr. Williams in the province of Newfoundland.

When Premier Hamm and opposition leader Mr. Williams took their plight nationally, the people of Alberta began to realize what they were being asked for. It was not just more money from Alberta and putting nothing back in return. When they saw the reality of what was happening, the people of Alberta, Premier Klein, former Premier Lougheed, the University of Alberta, the Calgary Herald —and I could go on—in their comments, their speeches and their editorials, all expressed support by saying that what these people wanted was right and proper and that it was not something that Albertans did not get in the past.

I talked about Newfoundland and its riches. Besides our forestry and farming potential and our small business and IT sector, which are growing rapidly, we have one of the greatest tourism potentials anywhere in the world. We are one of the last frontiers in Canada, as many people are starting to see. We are limited only by access because of unfair treatment by the central government in the type of ferry system we have, a monopoly airline, et cetera. Other than that, we have the last frontier as it relates to all the other areas except the far north.

We also have major resources. People must remember that we brought the fishery into Canada. We brought the Grand Banks of Newfoundland and all the surrounding fisheries around the coast of our province within the 200 mile limit. For years Canada bartered Newfoundland fish for deals, such as the sale of wheat and other sales to Russia, China and Europe. Everybody got a piece of our action, such as the Spanish, Portuguese and Russians. Our fishing grounds were ravaged by countries given quotas in lieu of deals made to ship off other Canadian resources.

In the end Newfoundland paid the price. Our water power in Upper Churchill was developed by an agreement with Quebec. Newfoundland receives about $10 million a year while Quebec receives closer to $1 billion in royalties out of our water power. I do not blame Quebec. It was a federally sanctioned deal, with absolutely no federal assistance, that provided a power corridor through to the United States markets, which is what was done for Alberta oil and gas across the rest of the country.

Newfoundland is extremely wealthy with minerals, especially the major find in Voisey's Bay. It is not being developed for several reasons, but the main one is that people want to move it somewhere else in order to create jobs.

Our oil and gas, which is now being developed and, as Alberta grew and prospered on its onshore oil, Newfoundland will eventually grow and prosper. As Alberta slides economically, maybe Newfoundland will be able to pick up the slack and reciprocate on the assistance it has received.

Confederation is supposed to be about sharing. Newfoundland, Nova Scotia and other provinces are not putting their hands out and saying “give us”. They are asking for a chance. They are saying that they have the resources to become a have province but that they need the chance to develop those resources and hold on to the royalties until they can create the infrastructure to make themselves a have province.

If the government wants to create equalization across the country, it should start doing it properly. It should try to be fair so that some day each province in this country will be equal.

[Alexa McDonough, NDP, Halifax, NS]

Madam Speaker, I appreciate the co-operation from members. I was so exorcised and frankly dismayed at the hypocrisy reflected by some of the previous comments that I was distracted from making that point at the outset. I do appreciate their co-operation.

I want to say at the outset that a fair formula for equalization is critically important to the constituents I represent, the people of Halifax. More than that it is critically important to citizens who live in and throughout the four Atlantic provinces, as well as citizens in the provinces of Quebec, Saskatchewan and Manitoba.

I will go further than that. I do not believe it is only the people who are on the punishing end of the measures taken by the federal government to artificially have equalization payments who care about this issue. I think what it means to be Canadian is to subscribe to a fair equalization formula capable of establishing not just the words to express it but the reality of Canadians, regardless of where they live, being eligible for a roughly comparable level of services.

Equalization is about ensuring that we do not experience a growing gap between those who have and those who have not, as it relates to individual citizens and regions. That growing gap is very alarming and is causing real strains in the lives of people, their families, their communities and inter-regionally, as a result of the government turning its back on a fundamentally important principle.

Let me say very clearly at the outset the position of the New Democratic Party. It has been championed by a succession of New Democrats in the House, but none more effectively than my colleague, the finance critic from Regina—Qu'Appelle. He has been a faithful, inveterate champion of the importance of a fair equalization formula throughout the 30 years he has served the constituents of his own community and all Canadians who believe in the fairness a proper equalization formula represents.

At the very heart of our concerns about the bill before us and the inadequacy of the amendments is the fact that there is an artificial limit on equalization payments that will be reinstated in the year that is now upon us. As far as we and fair minded Canadians are concerned the cap on equalization must be removed.

I guess the government needs to be reminded at every opportunity that Canada has a constitutional obligation to ensure that provincial transfers are set high enough so that all provinces have the capacity to serve the public interest and to ensure that the basic needs of the residents of all provinces are met. For historical, legal and moral reasons this must be the principal goal of the equalization plan.

The plan as it stands fails to achieve the goal. I listened to the Parliamentary Secretary to the Minister of Finance say what the bill is about. It would ensure that the objective of roughly comparable levels and quality of services is achieved for all Canadians. If the cap on equalization payments is reimposed then it is absolutely clear the objective he stated in the House this morning simply cannot be met. Not only can it not be met. It will not be met. The government has turned a deaf ear to the pleadings that the cap not happen.

One cannot possibly imagine that the parliamentary secretary, the finance minister and the Prime Minister do not understand that objective cannot be met. One has to go further and say that they do not intend that constitutional obligation and that important principle to be met by the provisions in the Federal-Provincial Fiscal Arrangements Act amendments before us.

We know the Liberal government has absolutely decimated fiscal transfers to the provinces, undermining the national interest and in the process destroying the very moral authority needed by a federal government that professes to believe in the concept of roughly comparable services being available to all citizens of Canada regardless of where they happen to live and regardless of the state of finances of their respective provinces.

Then the federal government shows great surprise and is actually puffed up with indignation when a province like Alberta introduces bill 11, when a province like Ontario is as bold as we saw the premier being this week when he talked about going further into privatization and turning our health care system into a commercialized operation, one based on the notion that profits will be extracted from people's illnesses and misfortunes.

We cannot repeat too often the fundamental flaw in the fiscal arrangements act that is now before us. Bill C-18 seeks to remove from the fiscal year starting April 1, 1999, the ceiling that would otherwise apply to equalization payments, but the bill then reimposes that ceiling for the year 2000-01.

Surely it is worthy of note that all 10 Canadian provinces are in agreement. They want the federal government to remove the cap on equalization. Even the provinces that are in the have category, that are the net contributors to equalization payments, agree that it does damage to the fabric of the nation and that it erodes the quality and comparability of services to people in the have not provinces to artificially impose and maintain that limit on equalization payments.

The Atlantic provinces and Manitoba asked the government very effectively before the finance committee last week that if it will not make a commitment to remove the cap, to remove it permanently, it should at the very least rebase the ceiling on equalization to the higher level of $10.79 billion.

Finance ministers from all five of those provinces made their case this week before the finance committee and did so very effectively. However the government, the Minister of Finance and the Parliamentary Secretary to the Minister of Finance have turned a deaf ear to the concerns of those finance ministers and the people whom their governments represent.

The minister of finance for Manitoba stated it very well. He said that the equalization program should be allowed to do its job by lifting the ceiling as a preferred point. As an accommodation it should be rebased to the level to which it grew in the year the ceiling was lifted, 1999-2000. That would offer much needed support to the provinces that are still reeling from massive unilateral cuts to transfer payments by the government.

The government must use a 10 province standard to ensure a truly equalized equalization formula and, more important, the concrete outcome the equalization formula is intended to achieve. The federal government has so drastically cut CHST transfers to the provinces, strangling their ability to adequately fund health care and post-secondary education, that when Harris and Klein started down their privatization track the federal government was not in a very strong position to defend the Canada Health Act or did not seem to want to.

One does not have to be very insightful, and I do not think it is cynical, to suggest that in the process of weakening the commitment to comparable services across the country and of engaging in massive cuts to transfer payments that enable provinces to deliver health care, education and fundamentally important social welfare services the people need, the federal government knew it was destroying public confidence, absolutely eroding public confidence in the important public services Canadians depend upon.

Further, the federal government must immediately restore funding to CHST transfers to the provinces. It has invested a pittance into infrastructure and transportation, causing delays of much needed essential repairs to transportation infrastructure in every part of the country.

The government has abandoned its federal constitutional responsibilities for far too long. It should recommit on every front to ensuring that provincial governments achieve the goal enshrined in the constitution that goes to the very heart of the kind of country we say we want to be, the kind of country that with considerable success we were becoming. That was recognized by others around the world.

If we fail to do that we are not only letting down the people who need and depend upon those services, but we are striking a blow to the very concept of Canada which means so much to people in this country and people around the world.

The government's actions speak to an attitude of indifference toward the real needs of Canadians. It is not too unduly harsh to say that the government is arrogant and out of touch with the real needs of Canadians, particularly in the less advantaged provinces.

When the government introduced its throne speech it completely failed to address the fundamental issue of ensuring some semblance of comparability of services to every citizen in Canada. At the time I raised a question on recognition and commitment from the government to deal with the problem posed by an unfair equalization formula, one that makes it virtually impossible for governments in have not provinces to make progress because of the excessive clawback of resources from offshore development, for example, that may now give an opportunity to Nova Scotia and Newfoundland to move out of the have not status.

On every front it seems that the government, not the people of Canada, has given up on the Canadian dream. When a government stops dreaming, when a government abandons something as fundamentally important and changes an equalization formula to artificially restrict the capability of provincial governments to deliver on that dream, it should examine what it is all about.

There are many elements to the battle to try to get the Canadian government once again to believe in that fundamentally important dream. I can speak from a Halifax perspective of what it means to the citizens of my community to have the federal government quite cynically make a decision to remove the cap for one year and then turn around and reimpose it.

I can speak about it from the point of view of what it means for citizens not to be able to get the health care they require, from the point of view of students unable to afford an education, or from the point of view of what it does to the lives of students if they go into debt to the level necessary to gain a post-secondary education these days. In a very real way it becomes a double jeopardy situation for the government to artificially cap equalization payments and to pull back on transfer payments. It becomes an out migration policy in effect of people going to the wealthier parts of Canada from the have not regions.

That is not the kind of Canada we believe in and not the kind of Canada we as parliamentarians are supposed to be here building together.

In conclusion, I implore the government to consider that what is a very small matter in terms of the text of this fiscal arrangements bill is a very fundamental matter that will have massive consequences if equalization payments are to be artificially constrained by the continuation of the cap in the year 2001. I ask the government to reverse itself and agree that the artificial cap should be removed.

[Deepak Obhrai, Canadian Alliance, Calgary East, AB]

Madam Speaker, it is a pleasure for me to speak to Bill C-18 on behalf of the constituents of Calgary East.

At the outset I want to make it absolutely clear that the Canadian Alliance believes in the concept of equalization. We believe in the concept that from coast to coast all Canadians should be receiving equal services. The Canadian Alliance strongly supports the equalization method of ensuring that a quality standard of living applies across our nation.

However, we certainly do have a problem with the way it is handled, the way the equalization formula is applied, and the way the Alliance feels it is used by the government to score political points.

Madam Speaker, at this time I wish to advise you that I will be splitting my time with my colleague from Kelowna.

The bill takes away the ceiling and increases the money requested by the provinces. We believe that the equalization system should serve the longer term purpose of equalizing economic opportunity and autonomy in all regions and should not create incentives for perverse economic policies on the part of provincial governments.

The lifting of the cap is a one time ad hoc reaction that fails to address the bigger and longer term problems and it was promised for purely political reasons. It may be good politics but it definitely begs the question, is it a good policy?

The fact that this one time band aid solution is even being proposed indicates the need for an open discourse in parliament to review the equalization program. The bill is part of a political effort to make up for the Liberal government's irresponsible $23 billion or 35% cut in health care funding.

At the first ministers conference the government agreed to increase the CHST but it never restored it to 1995 levels. As a result, the provinces requested more money to address health care issues. Therefore, the crisis was brought about by this government in the first place when it cut the CHST. In order to balance that out and look good, the government said it would commit $792 million to the provinces. That was because of its own shortfall in not raising the CHST transfers, as agreed at the first ministers conference, to the 1995 levels. What we have is the government trying to play politics by trying to lift up the ceiling to address the issue, which originally it failed to do.

The parliamentary secretary has indicated why there is a necessity for a ceiling and we agree. Otherwise it will spiral out of control. We saw during election time the money given to the supposed future contender for the Prime Minister's office, the Minister of Industry, when he received more money in equalization payments just prior to the election so he would look good in Newfoundland.

It is no secret across the nation that when the government cut the CHST it started a health care crisis, a crisis from coast to coast. In my own riding we heard stories from people who came in to tell us what the cuts had done to health care.

On the one hand, the federal government has the Canada Health Act. We agree with the Canada Health Act, but the government uses it as a stick to the provinces, saying “this is how health care services must be delivered”. On the other hand, the government took away the purse. It is supposed to give money to the provinces to administer their rules in the way they feel they should be addressing the health care issues. This is a contradiction.

We are in agreement with the five principles of the health act. As a matter of fact, we tried to put in a sixth principle, stable funding for health care, so that provinces do not in the future have to play games with governments that one morning decide to cut health care but will not make any changes to the Canada Health Act or will not give the provinces the leeway to see how they can deliver the services.

The merits or demerits of how the provinces are going to deliver services or whether they will be private will be left to the Canadian public to decide. As we have stated, we are not in favour of a two tier health care system. As the government of Alberta has said quite clearly under its bill 11, it needs more innovative ways to deliver health care services because it does not have the money, the money that the government cut.

The government cut this money and then said it had balanced the budget, leaving the provinces to handle how they were going to deliver the services. As we all know, as the population increases the demand on health care grows stronger. Our own health care critic, my colleague from Calgary—Nose Hill, will be leaving shortly for Europe to study how the system there is delivered.

The health care report we are receiving for Canada is that for the amount of money we put in, the end product, the delivery of services, is not that efficient. Therefore it needs to be addressed. As a matter of fact I saw today in a report that the premier of Ontario has been saying that he needs more money and that the surplus the government has should be given to health care.

Everyone in the provinces is demanding that. Canadians who have been using health care services are demanding a better system. Health care workers, with their shortage of nurses, doctors and patients are all demanding a better system because health care is failing. This all started because the government cut the funding for health care. It did that in 1995. Even when the government tried to bring the funding back up, even when it had the first ministers conference, it was not brought up to 1995 levels. There is also the factor of inflation and all these other things. When we add up all those figures and include the expansion and growth of services that is needed, the transfer of money from health care is bigger than what is indicated in the figures.

As members of parliament, we receive numerous calls from people who use health care services about how much trouble they have getting services. I am sure members on the government side do as well. Those who are rich are demanding that we do something because they have the money to get those services from the U.S.A. and it is not the right thing to do when we are supposed to have a public health care system.

The government turns a blind eye to that and trumpets about its past when health care was good. Yes, it was good in the past, but the demands were there before the cuts. The Minister of Health keeps saying that our health care system is good. He has tunnel vision. He closes his eyes and then stands up and huffs and puffs in parliament and tells us he is for a public health care system and that the government will maintain the five principles of Canada health care. He keeps saying these things.

That is all fine and dandy, but he forgets to tell us that the finance minister keeps cutting the funding. Of course, he is not the one who is implementing the delivery of health care services. It is being delivered by the provinces and the provinces are asking how they will deliver these services when the federal government cuts funding for health care.

On the CHST there is an agreement. The federal government gives money to the provinces through the CHST. The government says it has addressed this issue. Has it really? No, it absolutely has not addressed this issue, because we read in the newspapers and hear from our television stations that the provinces are still having difficulties and want innovative solutions.

Finally the government woke up. Now we have a commission to look into health care, headed by the former premier of Saskatchewan, Mr. Romanow, which I think started two days ago. I must say it was good for Premier Klein and Premier Mike Harris to say they want everything on the table. I am very happy to hear that Mr. Romanow has said he would put everything on the table. Finally we have somebody to look into the whole situation and see how we can best deliver health care services.

Coming back to the equalization issue, I need to repeat that we in our party are in support of equalization, because we believe that all Canadians from coast to coast should enjoy a comparable quality and level of important government services. However, we have a problem, as usual, with the way things are handled by the government. Our opposition to the bill is not based on disagreement with the equalization principle but more on the way it is being handled, the way it is done, because we do not think this is the most effective way to do it.

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Madam Speaker, I welcome the opportunity to address the House at third reading of Bill C-18, an act to amend the Federal-Provincial Fiscal Arrangements Act with respect to the equalization program. The bill fulfils the government's commitment made by the Prime Minister at last September's first ministers meeting to lift the ceiling for the equalization program for the 1999-2000 fiscal year.

In addition to this commitment, the Prime Minister asked the Minister of Finance to consult his counterparts in the provinces and territories as to how best to ensure follow up. The Minister of Finance concluded his consultations before the bill was introduced on March 15.

At the first ministers meeting, landmark agreements were reached on a plan to renew health care, improve support for early childhood development and strengthen social programs. These agreements resulted, through Bill C-45, passed in the last parliament, in the largest federal contribution ever made for health, post-secondary education, early childhood development and other social programs.

Over the next five years, federal spending in these areas will total $23.4 billion, $21.1 billion of it under the Canada health and social transfer.

As hon. members know, the CHST is one of the three transfer programs through which the federal government provides support to the provinces for health care and other social programs. The other two programs are territorial formula financing and equalization. Equalization is the subject of today's debate. Today the federal government transfers approximately $40 billion to the provinces and territories through these three programs.

The purpose of the equalization program is to ensure that less prosperous provinces can provide reasonably comparable public programs and services to their residents without their taxes being out of line with those of more affluent provinces. Equalization has played an important role in defining the Canadian federation since it was established in 1957. In many ways it expresses the generous spirit of Canadians.

The program is unique among federal transfers in that its objective was enshrined in the Canadian constitution in 1982.

The constitution states as follows:

Parliament and the Government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

Equalization is also unique in that it was one of the very few programs not touched during the period when the government was struggling to bring order to the nation's finances. This reaffirmed the importance the government attaches to the program as part of the essential fabric of the country.

Equalization payments are unconditional and provinces can spend the money as they see fit. In 2000-01 the seven receiving provinces, Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, Quebec, Manitoba and Saskatchewan, received payments totalling $10.8 billion.

Since 1993 the program has grown by 33% or $2.7 billion. This rate of growth of the program demonstrates clearly that the government understands what equalization means to receiving provinces.

According to the estimates, which are updated twice a year, the program is now at its highest level ever. Over the same period, other non-transfer program spending has grown by 2.6%. The latest estimates released in February by the finance minister show that payments to receiving provinces will be about $1.8 billion higher than estimated last October. These higher figures are due in large part to the exceptionally strong growth over the last two years in Ontario, one of the non-receiving provinces, not to the poor economic performance of receiving provinces. Those economies have been improving each year.

On February 27, 2001, the Minister of Finance announced that there would be an immediate increase in equalization payments of approximately one billion dollars. Of this amount, $52 million is for 1999-2000 and $955 million is for 2000-01. The other $800 million is the additional funding that will be provided to receiving provinces through passage of the bill.

I would like to stress also, as I did during the second reading debate, that the equalization program is reviewed on an ongoing basis by federal and provincial officials to ensure that differences in the abilities of provinces to raise revenues are measured as accurately as possible. Those discussions are under way as we speak. In addition, the program is renewed legislatively every five years, most recently in 1999.

A province's capacity to provide public services obviously depends on how its economy is performing. Equalization payments therefore are based on a formula that measures the relative performance of provincial economies. The formula applies in the same way to all provinces and adjusts automatically in response to economic developments in the provinces.

When a province's economy is booming relative to other provinces, its equalization payments automatically decline under the formula. Conversely, when a province's economy and therefore its fiscal capacity, or ability to generate revenues, decline relative to other provinces, its equalization payments automatically increase. In this way the program acts as an automatic stabilizer of provincial government revenues.

I would urge hon. members to keep in mind that individual provinces do not receive the same amount of equalization because they do not have the same economic circumstances. This year, for example, Saskatchewan needs $230 per person to be brought up to the equalization standard, while Newfoundland requires $2,000 per person. Equalization payments are also subject to ceiling and floor provisions.

The capping provision, which has been applied in only 5 of the last 20 years, enables the program to grow at a rate that the federal government can sustain. By setting a maximum payment level, this provision ensures that the program does not grow at an abnormally fast rate.

The floor provision is the flip side of this coin. It provides the provinces with protection against large and sudden decreases in equalization payments that would otherwise be warranted by the straightforward application of the formula.

The equalization ceiling does not cut entitlements, as some have suggested. Rather, the ceiling allows the program's growth to mirror the rate of growth in the economy and to grow at a sustainable rate. Based on the forecast for GDP growth in last October's economic statement and budget update, the ceiling will rise to $12.5 billion in the year 2003-04.

I would now like to turn to the specific bill we are debating today, which lifts the equalization ceiling for the 1999-2000 fiscal year and only for that year. As I explained earlier, lifting the ceiling fulfils the commitment made by the Prime Minister last September at the first ministers meeting. The final communiqué released at the end of the meeting states that:

The Prime Minister agreed to take the necessary steps to ensure that no ceiling will apply to the 1999-2000 fiscal year. Thereafter, the established equalization formula will apply, which allows the program to grow up to the rate of growth of GDP.

While the final cost of lifting the ceiling will not be known until the fall of 2002 when the final estimates for 1999-2000 become available, it is currently estimated to be $792 million.

That amount will be allocated among the seven eligible provinces on a per capita basis. In order to determine the payment that will go to each, the per capita amount is multiplied by the total population of each receiving province.

Each eligible province will receive an additional $67 per person. Viewed another way, here is the total breakdown per province. Newfoundland will receive $36 million. Prince Edward Island will be eligible for $10 million. Nova Scotia will qualify for $62 million. New Brunswick will receive $50 million. Quebec will receive $489 million. Manitoba's payment will be $76 million. Saskatchewan will receive $69 million.

In conclusion, the government realizes that not all parts of the country can generate the same revenues to finance public services. Federal transfers therefore help ensure two things: first, that important programs are adequately funded, and second, that all Canadians receive reasonably comparable levels of public services regardless of where they live. Bill C-18 contributes to achieving these goals.

It underscores the priority the government places on equalization and helps ensure that the receiving provinces continue to have resources to provide the services their people need and want.

Further, it fulfils the Prime Minister's commitment to lift the equalization ceiling for the year 1999-2000, which means more money for receiving provinces.

Bill C-18 continues the tradition of fairness through which equalization has been delivered for over 40 years. I encourage all members to support the bill and pass it without delay.

Committees Of The House

[Maurizio Bevilacqua, Liberal, Vaughan—King—Aurora, ON]

Mr. Speaker, I have the honour to present the third report of the Standing Committee on Finance regarding its order of reference of Monday, April 2, in relation to Bill C-18, an act to amend the Federal-Provincial Fiscal Arrangements Act.

The committee has considered Bill C-18 and reports the bill without amendments.