House of Commons Hansard #161 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.

Topics

The Budget
Oral Question Period

2:55 p.m.

Reform

Jim Silye Calgary Centre, AB

Mr. Speaker, my question is for the Minister of Finance.

While normal Canadians are taking a hit in this budget, this year's spending estimates reveal that the budgets for running the Senate and ministerial offices have been increased.

Why is it that senators and politicians continue to ride the gravy train on planet Ottawa while overtaxed Canadians have to tighten their belts?

The Budget
Oral Question Period

2:55 p.m.

York Centre
Ontario

Liberal

Art Eggleton President of the Treasury Board and Minister responsible for Infrastructure

Mr. Speaker, I believe the Senate line in the main estimates shows a $1,000 increase.

I understand that the members of the other house are still looking at possible cuts, as has the House of Commons. The chief government whip announced just last week that cuts are being made in the budget of the House of Commons. Not to mention that yesterday in the budget the Minister of Finance announced 19 per cent cuts over three years. These are the most massive cuts which have been made in government expenditure in modern times. In addition to that 19 per cent, a 33 per cent reduction in the MPs pension plan has been made in one year.

Presence In The Gallery
Oral Question Period

3 p.m.

The Speaker

My colleagues, I would like to draw your attention to a person in the gallery who is no stranger to this House. He is a former Speaker of this House, my brother Speaker, the Hon. Alan A. Macnaughton.

Presence In The Gallery
Oral Question Period

3 p.m.

Some hon. members

Hear, hear.

The House resumed consideration of the motion that this House approves in general the budgetary policy of the government; the amendment, and the amendment to the amendment.

The Budget
Government Orders

February 28th, 1995 / 3 p.m.

Liberal

John Harvard Winnipeg—St. James, MB

Madam Speaker, I want to offer my congratulations to the Minister of Finance on his presentation of yesterday's budget, a budget in my opinion that was fair and balanced. I think it meets the first test that was put down by all Canadians, that it had to be fair and balanced, fair to all Canadians, all individuals and all regions. The finance minister has succeeded in doing that, at the same time making a major effort in bringing down the deficit and the debt and getting government right for the first time in a good many years.

I rise in the House today not only to address the budget which was introduced yesterday but also to comment on a disease which I see gripping Canada, a disease which becomes more visible and widespread during events like this budget debate. It is a disease born from a lack of understanding, compassion and acceptance. It is a disease which focuses on self. It is a disease perpetuated by individuals, businesses, media types and hon. members alike. I am referring to what I call the culture of victimization.

This culture is both painted and exacerbated with brushes almost exclusively from the political right. I believe that in the last 10 years there has been an alarming increase in the perception that we, each and everyone of us, is a victim. Canadians are victims. We live in fear of further victimization. In truth, I believe that this paranoia has created a society in which we are all victims of something out of necessity.

We are victims of crime. We are victims of taxes. We are victims of government. We are victims of big corporations. We are victims of interest groups. We are victims as westerners. We are victims as Quebecers. We are victims as easterners. We are victims if we speak English. We are victims if we speak French. We are rarely just people who share a single common bond. However, we do have that common bond. We all are Canadians. It is this undeniable fact that we are all Canadians upon which the Minister of Finance has based his budget.

The $7 expenditure reduction for every dollar in new tax revenue is not a burden attributable to one type of Canadian but to all Canadians. If we are all affected, can we possibly all be victims? As I listened to some hon. members opposite I hear those ominous words reinforcing the notion that we are victims.

Some interest groups and even provinces which did not get what they wanted from this budget have said that this government has not been straight with them. Like spoiled children, our critics demand more for themselves with little or no regard for others. At the same time they demand greater fiscal restraint and usually expect someone else to shoulder their burden.

They tell Canadians to believe, really to expect that it is the government's responsibility to make things better for themselves. It is the government's job to make life happier: "If life is not the way I think it should be it is because that big, mean government machine will not let me succeed, for I am a victim". We have all in some way contributed to the creation of this culture in which we perceive ourselves as helpless victims.

For example, economic indicators suggest that Canadians are recovering from the recession of the early 1990s. Yet a certain trauma lingers. The Minister of Finance surpassed his 1994 cost cutting goals and yet the opposition howls. Program spending will be reduced by about $10 billion and that is a benefit to all Canadians. The opposition howls again: "What about me?".

In many ways, and thanks to the critics, Canadians have become more dependent on government. Government is expected to ensure that we all have jobs and also accommodate our every whim. Government is even expected to bandage our scratches. We have become less reliant on ourselves and on our own abilities. Thus we have let ourselves become victims. We cannot think only of ourselves. Nor can we accept this characterization that we live in a culture of victimization.

Kennedy was right when he said our privileges can be no greater than our obligations. The protection of our rights can endure no longer than the performance of our responsibilities.

Reformers would have us slash and burn programs and services to all Canadians; let us cut deeper and indiscriminately. The political right in this country would never have conceived the notion of compassion and human understanding as demonstrated by the introduction of the new Canada social transfer to the provinces.

It is true that money to the provinces will be reduced as a means of getting our financial house in order. This action cannot and should not be viewed as an indirect means of attacking individuals. Rather, such action demonstrates our commitment to getting government right by reducing overlap and duplication.

Canadians are being presented with the opportunity to help create and develop a more mature fiscal federalism. Through initiatives like the Canada social transfer the government has met the requirements needed to accommodate citizens' con-

cerns for more sustainable programs and provinces' concerns for greater flexibility.

Keep in mind that the Minister of Finance has taken into account that change requires a period of adjustment. This government has not lost sight of the individual faces which will be affected in this budget. This government does not intend to perpetuate the notion that we live in a culture in which we are victims.

Reformers in their budget played on the fears of those who see themselves as victims. Some members opposite would have us believe that if we simply cut, cut, cut then everything will be better. At the same time Reformers will not commit to one course of action. If you do not like where we have made cuts, then the response is simple: make your own cuts. They had better add up to the bottom line. Such a nonchalant, bottom line approach implies that wherever the greatest burden exists according to your own criteria, cut that. Just make sure you meet the bottom line.

It is that kind of naive analysis which perpetuates our cultural victimization. It would be wonderful to look at our own personal budgets and cut those items which seem to cost the most. Why worry about food, clothing and shelter? According to some members it is only the bottom line that counts. Why concern yourself with being human? We simply must balance the budget regardless of the social cost.

These types of cuts to food, clothing and shelter are unrealistic on a personal level and are unacceptable at a federal level. We must evaluate what is important to us and from there determine where we can reduce expenditures. That is the approach taken by this government and by this finance minister.

Simply cutting to meet a bottom line would make us even greater victims. Sound reasoning and methodology were used to determine areas of waste, areas of duplication and areas lacking profitability. Through this realistic evaluation of Canada's economic house, the Minister of Finance has introduced an approach for fiscal responsibility which affirms the notion of cultural success. The government is not contributing to the disease of cultural victimization.

Essentially the third party would leave us to our own greed: "I live in the west, so I will cut services in the east". Let us be honest. Society cannot survive if we are enthnocentric. This type of self-absorbed regional attitude creates a slippery slope; we pick at the cultural threads of the Canadian fabric in a futile attempt to hang on.

What happens is that the fabric becomes warn and ripped. We must not continue to think we live in a cultural environment as victims. We must not succumb to the notion that in order to survive we must be the strongest or the most resourceful.

Reformers would have us all fall prey to this logic, a logic which would throw out the social fabric and not repair it. If use of this type of logic has as its only goal the elimination of the debt, then what this approach does is forget that each and every one of us, regardless of our province or country of origin, whether from Manitoba or Prince Edward Island, whether Yukon or Nunavut, new Canadian or native Canadian, is still a member of a community.

We cannot survive if we focus on only my needs or my wants. By virtue of our tendency as human beings to exist in groups because we are social creatures we must look beyond our own shadows.

Canadians wanted and deserved a budget which espoused the virtues of fairness and equity. The minister has accomplished that goal. Both corporations and individuals are equal partners in the fight to save Canada.

We know that the Minister of Finance is serious. That is why both individuals and corporations have been brought into alignment. Through improvements to the tax system, for example, requiring professional and other unincorporated business to pay taxes on income in the year in which it is earned, just like wage earners do, this budget has actively removed barriers which have contributed to the culture of victimization.

We are fortunate that we live in a society that enables us to exist as a synergistic entity where the whole is greater than the sum of its parts or members. I will not deny that each of us has problems, some unique to a few individuals, some to a particular region of Canada, which affect all of us.

We must be able to stretch out our arms further and run faster so that we are not borne ceaselessly into the past. We must accept our responsibilities first as Canadians. We must also realize that change is not inherently bad or negative. We must realize that we are not victims but victors.

At this point I want to congratulate the Minister for Human Resources Development and fellow federal Manitoba Liberal caucus members for their hard work and commitment with regard to this budget.

Two months ago the prospect of losing air command became a horrible possibility. However, after yesterday's budget the reality for Manitobans is less severe. Only about 350 to 375 jobs will be affected as a result of air command's closure. This is a significant difference from the anticipated number of jobs which would have been lost. Although loss of air command will be difficult for Manitobans, I am confident that once the government's reasons are understood, Manitobans will be able to accept this change.

Acceptance will result from a sense of fair play because it was not only air command that was closed, but naval command in the Atlantic region and army command in Quebec were also closed.

I can tell members there were people in Winnipeg who thought that we would not be fair, that we might close air command but we certainly would not close army command in Quebec. It was done because the minister and the government believe in fairness.

Manitobans will be able to appreciate that we were not singled out for cuts. All regions have been affected. We cannot forget that these closures are significant to their respective regions but we will not lose sight of the fact that an entire level of management has been removed at considerable saving to all Canadian taxpayers.

The budget introduced yesterday redefines Canada and its relationship with the provinces. Canadians are entering a new era, a significant step has been taken toward eliminating the culture of victimization which we have created. At long last, government has sought to ensure that fundamental values are preserved while appreciating the inherent differences among provinces. Through the decentralization of airports in Canada, for example, the government is preserving its role of guardian but accepts the realization that people in Winnipeg, Toronto and Barrie, Ontario are able to oversee the successful operation of their local airports.

These efforts not only remove layers of bureaucracy but also serve as positive motivation for all Canadians who are able to function within a federation and not be victims of our regional identities.

There is more to government than just cutting. There is smart government which appreciates the social, cultural and moral obligations. Perhaps now we can move beyond an attitude that asks: What do you expect in a regional country? Of course we are going to complain. Perhaps the Leader of the Opposition will come to appreciate the notion of fair play and understand that Quebec may receive $2 billion less in transfer payments but that all the provinces will experience the same kind of reductions.

Perhaps members opposite will learn something of fair play and refrain from trying to manipulate reality to suit a limited agenda. I am referring to comments made that immigrants living in Quebec should not be allowed to vote in a referendum, the question evolving to include the notion of who is a real Quebecer and who is not. We must work from our most common denominator. We are all Canadians and we should all be entitled to the pain and to the glory.

Ironically, most times, leadership is equated to economic performance. President Clinton is doing the very same thing across the border as we are doing here. He is trimming the bureaucracy and reducing the debt. Despite President Clinton's efforts the economic outlook is not nearly as positive as it is in Canada. Yet Americans seem to believe in themselves and in their ability to overcome any adversity.

In Canada, however, we are being convinced how bad it really is. We listen to the leader of the third party, who when talking with the media uses words like dishonest, cowardly and hypocritical. I wonder how we can forget that ever-ominous threat that the chickens will come home to roost. I suspect that the grassroots are having their gooses cooked. The political right would have issues decided by polls. It would be democracy by telephone. There would be no consultation, no research, no compromise or leadership. Opinion would reign supreme.

I suspect that the Reform leader would soon find out that burdening every Canadian with every decision would have a number of disastrous results, much like a grassroots guru attempting to split atoms like he splits economic hairs.

This may come as a surprise to members opposite but the reason behind democracy and having an elected representative is the notion of efficiency and leadership. To govern is to choose.

If we are to survive we must learn to believe in ourselves and in this great country. We must accept the economic and social realities and strive for tomorrow. Some would suggest that things can only get better, but I submit to the House that it is a subjective goal.

In the eyes of the United Nations, Canadians live in the best country in the world. In a recent Swiss survey four Canadian cities were considered among the 12 best places in the world to live. Other nations and other cultures believe in and envy the Canadian reality. The question now is: Why are Canadians so cranky? Why is it that the majority of Canadians feel victimized in one way or another?

Our challenge is to create a culture not of victims but of victors. We must nurture the creation of a culture in which we act out of compassion for others, not necessarily only for monetary compensation. Success should be measured by the results, not by the amount of money spent. Let me repeat, success should be measured on the basis of results. These results must be evaluated both according to economic criteria and social criteria. That is what members opposite fail to appreciate about the minister's budget of yesterday.

When has a Reformer asked us to think of others before thinking of our own individual interests? When has the Leader of the Opposition considered the wants of Quebecers when he muses about postponing the referendum date so as to be able to manipulate the results? This is not democracy. When will Canadians be allowed to seek appreciation and elevate their

self-esteem, receiving joy from the notion that the receiving is in the giving?

This is a budget debate, but there is more to a budget than numbers. There are the people who are affected by change.

The Budget
Government Orders

3:20 p.m.

Bloc

Roger Pomerleau Anjou—Rivière-Des-Prairies, QC

Madam Speaker, the hon. member used the word manipulating several times, as in manipulating facts and figures in our analysis of the budget that has just been brought down, and as in political manipulating with respect to the referendum. I may remind the hon. member that in Canada, political manipulation is what happened in 1982 when the Canadian Constitution was patriated against the will of a unanimous National Assembly in Quebec. The terms of the contract that binds us were changed. That is political manipulation.

I would like to ask the hon. member, since we have nothing to gain by staying in Confederation and, eventually, we will have a referendum, whether he thinks the budget that was brought down yesterday is likely to help matters?

The Budget
Government Orders

3:20 p.m.

Liberal

John Harvard Winnipeg—St. James, MB

Madam Speaker, there is a body of opinion in the province of Quebec that says we are committed to the so-called status quo, that the choice in the coming referendum will be between the status quo and sovereignty.

I submit there is another choice. It has to do with a progressive federalism, a federalism that is alive, a federalism that grows and evolves. Looking at the budget you can see how the federalism we have is flexible and how it can grow. The changes recommended under the Canada national transfer program give more flexibility to the provinces, which is something they have wanted for a long time.

We in the federal government want national standards and national principles and we will have them. The budget shows that federalism, as we know it, is a living thing. It is a living organism. It changes with the times. It adapts to new circumstances. It adapts to new conditions.

I know this will come as a great disappointment to the sovereignists that go around telling their friends that our kind of federalism is carved in stone or frozen in ice. Nothing could be farther from the truth.

The Budget
Government Orders

3:25 p.m.

Bloc

Roger Pomerleau Anjou—Rivière-Des-Prairies, QC

Madam Speaker, there is a lot of talk about flexible federalism. In 1980, Quebecers said no to sovereignty for Quebec, one of the main reasons being that we were told if we voted for sovereignty, we would have a terrific problem with debt, unemployment, the deficit and taxes. Of course we said no.

In 1980, Canada's debt was $80 billion, and now, 15 years later, it is $550 billion. Is that progressive federalism, is that flexible federalism? Would the hon. member not agree that this much vaunted federalism is "broke"?

The Budget
Government Orders

3:25 p.m.

Liberal

John Harvard Winnipeg—St. James, MB

Madam Speaker, when we came to power in the fall of 1993 after nine years of Conservative rule our fiscal house was in shambles. It was not in order. It has taken us a number of months to get to where we are today. However, this budget is going to get our fiscal house in order.

If there is disenchantment in the province of Quebec or anywhere in the country, it is because we had a federal government for nine years that simply would not address the nation's finances, that would not address our national problems.

This government will address those problems. The deficit and debt will be reduced systematically and methodically. In the not too distant future we will be in a situation where there will be no deficit whatsoever.

The Budget
Government Orders

3:25 p.m.

Bloc

André Caron Jonquière, QC

Madam Speaker, I welcome this opportunity to speak to the budget brought down yesterday by the Minister of Finance. I want to take this opportunity to inform the public that although the Minister of Finance promised to do something about the debt and tax reform when he brought down this budget, he failed to keep his promise.

Yesterday, the Minister of Finance started his budget speech by identifying Canada's two major problems. First, the Quebec referendum and second, the debt. Upon reading the budget I have to conclude that the Minister of Finance is only considering Canada's problems. Of course Quebec seems to be a problem for Canada. What is the Minister of Finance doing and what has the federal government been doing for the past 20 or 25 years? The federal government considered the problem, looked at it, examined it, thought about it, but did nothing to resolve it.

This is somewhat the case with the debt as well. For 25 years, finance ministers have been looking at the debt. Both Liberal and Conservative ministers, including Mr. Lalonde, Mr. Wilson and Mr. McEachen have had a look at it. Each one has said, "It is really too bad, we spend more in Canada than what we earn. It is too bad. We should reduce the deficit. We must reduce the debt". And if we take a look at the tables, we see that Canada's debt has been growing for the past 20 to 25 years. We looked at the tables produced by the Minister of Finance following his budget, and the debt continues to grow.

So Canada is looking at its debt problem as it is looking at the problem of Quebec, at what for it is the problem of Quebec. I think that one of Canada's greatest weaknesses is that it looks at its problems, but never resolves them.

There is another problem in Canada as well, which the minister has failed to identify. It is a problem he raised in many speeches during the elections-the problem of jobs, the problem of unemployment. During the elections, Liberal Party material spoke of jobs, jobs, jobs. Today, there is no more talk of jobs, the word is debt, debt, debt and cut, cut, cut. The problem of the unemployed is far from the mind of the Minister of Finance.

Looking at my own region, my city, my riding, an industrial area which has been under direct attack for about ten years, all the restructuring, modernization of businesses, new technology, have left unemployed people who had worked for big business for years, earning average or even above average salaries. These people have been unemployed for a year for a lack of specific policies to help them get retrained. Now they are turning to welfare.

This budget contains nothing for the unemployed. It contains absolutely nothing to give them hope for the future. There is indeed talk of possibly reforming unemployment insurance while at the same time cutting the program by 10 per cent. There is also talk of reform providing for the unemployed to train for new jobs.

This seems to be a roundabout way of presenting minister Axworthy's famous unemployment insurance reform, a two-tiered unemployment insurance system, what someone in my region described as generous UIC and miserly UIC. Some people in Canada will have to make do with the miserly version of UIC. When I look at the finance minister's budget, it is these people I think of. What is new in this budget for the unemployed, persons on welfare, fully trained young people trying to find jobs?

Training is not the issue for young people. For young people, it is a point of fact: they are trained in leading edge technologies. Take the young people trained in technical fields at the Jonquière CEGEP, for example, they have been trained in every advanced technical area. These people should not have any trouble finding jobs because they are competent and have all the necessary training. But they cannot find jobs. Why not? Because there are no jobs.

There is no work for people looking for it. Even to restore employment to levels we had before the economic crisis, we would have to create 400,000 jobs in Canada. With those jobs, we will find ourselves where we were three years ago, and furthermore, this does not include newcomers on the job market.

I was surprised when the Minister of Finance said that Canada's two biggest problems were Quebec and the debt and that he did not mention unemployment.

Now to the budget: what is the verdict? This morning's papers ran stories on people who are happy and who say the economy will finally have room to breathe. That was the title of an editorial from La Presse . Before the budget, people were saying that these were hard times, that Canada was on the road to bankruptcy and that its credit rating was going to be downgraded. After the budget, people are now saying that things have improved, and accounting associations have given the Minister of Finance a mark of 80 per cent. Therefore, all is well. But who is telling us that this is because of the budget?

Big business, banks and brokerage houses that sell Canadian bonds, in fact, all of the people who gain from the system. They are well paid and work in a sector where the economy is well developed: the financial sector. While this sector often does not generate much wealth, it plays with it, taking a cut from it in passing. Those people are happy.

Two insights into this comment. Firstly, these people are happy because they see that the budget contains a solution to the debt problem. Curiously, a budget that appears to close certain debt-related gaps is enough to make the other problem-that Quebec is one of Canada's major problems and may scare off potential investors-disappear. They are not saying that Canada has succeeded in solving the Quebec problem, but that Quebec is simply no longer a problem. That is something I have noted.

What do ordinary taxpayers think about the budget? I have the impression that they simply feel relieved because they avoided major cuts this time. Of course, they will pay a little more for gas. Dairy producers in Quebec will see their subsidies reduced, by $2,000 or $3,000 in some cases. It is still a significant amount. Some taxpayers may have to pay a little more in taxes but, in general, taxpayers feel that they have avoided the worst.

But what about all the others, those who have been forgotten, that I mentioned earlier, those looking for jobs or trying to improve their socio-economic status in Canada? Those people are not praising the budget in newspaper headlines. They are not heard. They are silent.

In the last few years, Canada's major newspapers, whether in Quebec or in English Canada, have been paying significantly less attention to those people than they did in the 1970s. Probably because owners have succeeded in selling a little more their philosophy that the state should intervene less and less and let the disadvantaged and less fortunate in society fend for themselves.

This philosophy has spread to the newspapers where everyone has good things to say about the budget. Where are the budgets that used to take care of the less fortunate without excessive spending? This is not done anywhere in this budget.

And there are other things that must not be forgotten. We must not forget that, according to the Minister of Finance, this budget was aimed in a way at restructuring Canada to a certain extent through decentralization. They said that Canada was too centralized, that it was too costly, that they wanted to shift some responsibilities to the provinces.

They are transferring certain things to the provinces. In the next two years, they will transfer $7 billion to the provinces for health, education and social assistance. We note, however, that they are not really decentralizing but rather transferring problems. This is not a transfer following negotiations in good faith on restructuring Canadian federalism.

More importantly, this budget will not bring about tax reform. RRSP provisions will be tightened a bit. The large corporations tax rate will rise from 0.2 per cent to 0.225 per cent, which amounts to only $145 million. The surtax on profits will go up from 3 per cent to 4 per cent, which represents $350 million over three years. There will be a temporary tax on banks.

A tax which will raise about $100 million total, from all banks, when the Royal Bank of Canada alone turned profits of $1.2 billion this past year. What is $100 million as compared to the aggregate of all bank profits? Peanuts.

Why does the Minister of Finance come up with such a measure, a proposal which is almost insulting to those who pay taxes? Actually, I think this may well have to do with the public perception of a shockingly low level of taxation. Next year, the banks will again turn huge profits. Given the current interest rates and the streamlining efforts of the past three or four years, banks stand to make huge profits. So, you can expect more hoopla in the press. What will the Minister of Finance have to say? He will be able to say: "But we did impose a temporary tax on them, a special tax to bring in $100 million". That is one hundred million dollars in taxes on profits perhaps as high as $10 billion.

That is a mere one per cent. It is somewhat insulting to those who often have to pay as much as 40 or 50 per cent of their incomes in taxes. Of course, they are probably among the wealthy.

The fact of the matter is that the budget before us has not put our fiscal house in order as it should have. The tax shelter issue remains unresolved, as do the ones raised on the French television network newscast Téléjournal , last week, where the situation of two individuals earning $100,000 was compared. One hundred thousand dollars is not peanuts. These are wealthy people. The salaried worker would pay $40,000 to $43,000 in taxes every year, while the self-employed person earning just slightly less, thanks to all kinds of tax loopholes and tricks, and with deductions for children, would end up paying $22,000 in taxes.

When Canadians see things like that-even though they often have little sympathy for those who earn $100,000-when they compare the two situations, they realize that there is something wrong with our tax system.

Consequently, we feel that this budget is unacceptable because it does not include a major tax reform.

Let us now turn to the debt. Again, it would be one thing if there were some concrete results, but such results are not obvious. The Minister of Finance, who is not making whimsical predictions, currently estimates that the debt will be somewhere around $500 billion this year, and that it will reach about $603 billion in three years. Therefore, regardless of what the minister does, the debt will increase by another $100 billion. The interests on that debt will increase from $42 to $50 billion. As well, the deficit will remain around $24 billion in 1996-97.

So, the government talks about reducing the debt, but Canadians who are watching, and who may be prepared to make sacrifices, cannot help but think: "Sure, but the debt is still there. It will still grow. We will still have to pay high interest rates on it". Where is the improvement?

Canadian taxpayers will be even more sceptical when they find out what these assumptions are based on. These forecasts are based on the prediction that the economy will continue to grow after 1997. Therefore, the debt will continue to rise even if the economy is doing well or continues to do well over the next three years.

The budget also forecasts interest rates. I am a little surprised to see the Minister of Finance forecast interest rates two years in advance when he often fails to forecast accurately two months in advance. Whatever. Nevertheless, the budget does have to contain some numbers to make it look scientific and serious.

There is another issue that is probably scandalous and that, in my opinion, will floor the average person who ponders the issue and that is that they predict a drop in the rate of job creation. This year, it will be about three per cent; next year, it will only be about two per cent.

They forecast an unemployment rate of around 9.4 per cent. That is no low rate. In fact, 9.4 per cent represents only the unemployed workers who are included in the survey, but many of them are not. This means that regions like mine will again face real unemployment rates of 15, 16 or 17 per cent.

The budget tabled by the Minister of Finance offers no comfort to those who want to work to support themselves and their families.

I have two last points to make. This budget does not offer solutions to the debt problem. Why not? Perhaps because the budget is based on a number of assumptions, which do not take into account the Bank of Canada's potential influence on the monetary policy.

Many financial players say that making the monetary policy more flexible would stimulate the economy by reducing interest rates so that people could invest in and revitalize the business sector. In an approach that I would describe as doctrinaire, the Minister of Finance refuses to make any change to the monetary policy, in spite of the fact that there is no inflation, so to speak, in Canada. So, it would be time to cut some slack in that area to give the economy a chance.

I will conclude on this. I suggest there is another solution that we, Quebec sovereignists, could bring about. We think Canada is in need of economic restructuring. I think that Quebec's achievement of sovereignty, which will no doubt happen within a few years, will provide a welcome opportunity to restructure the economy, start over based on new presuppositions, review our policies and build on new bases.

For all the foregoing reasons, I will be voting against the budget.

The Budget
Government Orders

3:45 p.m.

Liberal

Paul Szabo Mississauga South, ON

Madam Speaker, I listened with interest to the member and noted one particular aspect. I do have a comment and one specific question for the member.

He asked about the young people and what is there for them, that there are no jobs. There is no question there are still a large number of Canadians, particularly young people who do not have jobs.

Governments in themselves do not create jobs; businesses, and particularly small businesses do. Over one million small businesses in Canada employ over 70 per cent of Canadians. They are the ones who are the engine of this economy. They are the ones who are going to help to create jobs. The member well knows that over the past year the government has assisted in the creation of over 433,000 jobs.

I looked at the economic statistics for the last year. The fact is our growth rate over the last year was 4.25 per cent, the highest in the G-7. According to the OECD, Canada will continue to lead the industrialized world in growth for the next two years. The unemployment rate has dropped below the 10 per cent level and in fact we have virtually no inflation.

The member concluded his remarks by getting back to the essence of why he is here. It has to do with sovereignty, the separatist question and the separation of Quebec.

Would the member not admit that the ability of Canada to move forward and to achieve economic growth and greater job creation depends a great deal on the confidence level of investors in Canada and the certainty that people have with regard to the affairs of Canada? Would he not agree that once the referendum question is dealt with, once this issue which has cost Canada so dearly over all these years is finally resolved, Canada's economic position will be much stronger?

The Budget
Government Orders

3:45 p.m.

Bloc

André Caron Jonquière, QC

Madam Speaker, I thank the hon. member for his comment and question.

With respect to his comment, I would just like to say that, when the Minister of Finance talks about job creation or when the Liberal Party was talking about job creation during the election campaign, they never said: "We will create 400,000 jobs". What the Liberal Party said is: "We will create jobs". And what the Minister of Finance is telling us is: "We have created 450,000 new jobs in Canada". I suggest he qualify this statement by saying "we contributed to the creation of", if we follow my hon. colleague's reasoning.

On the issue of confidence and Quebec, I do not think that shoving our problems under the carpet will resolve anything. The Quebec issue is that of a people who wants to achieve sovereignty. I could tell you a long story, but it would be the history of Quebec, to make the point that, for us, this is a culmination. And Canada will not make this problem disappear by denying this reality. A better way of dealing with this problem would be to recognize it and look at the potential impact of Quebec's sovereignty on both Canada and Quebec.

I have the distinct impression that Canada would survive if Quebec were to secede. Why not? I think that those who say that people are reluctant to invest because Quebec wants its sovereignty are just using this as a scare tactic. Interestingly, after the defeat in 1980 and the patriation of the Constitution which was supposed to create a new order in Canada, we did not experience a major boom in the economy. I remember what happened in 1982. There was a serious recession, and that was two years after Quebecers said no in the referendum. I do not think there is a relationship between the two.

But there is something I would like to say to the hon. member in closing. As long as the issue of Quebec has not been resolved, Canada will always identify this issue as a problem. I do not think that holding people against their will, scaring them and threatening them will solve the problem. Whether the answer is yes or no in the referendum, the problem will still exist and there will still be sovereignists in Quebec who will continue to stand

up for what they believe in because not only is it an emotional issue, but it is also a matter of interest for Quebec.

The Budget
Government Orders

3:50 p.m.

Bloc

Philippe Paré Louis-Hébert, QC

Madam Speaker, for many months and in fact for a number of years, federalists have claimed that all Canada's economic ills are caused by political instability. When in recent months interest rates went up and the Canadian dollar went down abruptly, people said: It is all because of those nasty separatists.

Perhaps the hon. member would care to explain why, the day after a budget that was rather well received by the financial community, interest rates seem to be going down and the dollar seems to be going up? Why, since the Quebec problem still exists? How would he explain that?

The Budget
Government Orders

3:50 p.m.

Bloc

André Caron Jonquière, QC

I want to thank the hon. member for his question. Madam Speaker, I would say that the connection is tenuous and as far as I can see, non existent. We heard the same excuse after the results of the referendum on the Charlottetown accord in 1992. I remember seeing certain studies, including one by the Royal Bank which said that if Canada said no or Quebec said no, that would be the end of Canada, and I remember, this was either in the study or maybe it was a political cartoon, there would be train loads of Canadians heading for the American border to take shelter in our neighbour's economic paradise. In fact, there is no connection. If you look at the economic situation and the whole issue of Quebec's sovereignty, there is no connection between the two. Often, support for sovereignty is strong while the economy is weak, but often it is the other way around.

Unfortunately, some politicians are using this issue to make political gain. I deplore that because politics is a noble art, a noble science, a noble calling, and it is the art or the science, if you will, of government. It is the art or science of guiding and moving societies. When we use all kinds of tricks and excuses to try and get at our opponents and even resort to blackmail on these issues, I think that in addition to weakening our case, we also diminish our performance as a politician.

I want to thank the hon. member for Louis-Hébert for giving me this opportunity to say that I do think economic issues are linked to the question of Quebec sovereignty. I agree, but I do not agree that this very fact weakens the Canadian economy. I would say that people are waiting. People are waiting, and if we manage to reach a decision, I am sure the economy will recover, both in Canada and Quebec, and that we will then have the resources to restructure our economies and ensure that within Canada's present borders there are two countries that are comfortable financially and whose citizens will be able to work together.