House of Commons Hansard #164 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.

Topics

The House resumed, from March 2 consideration of the motion that Bill C-73, an act to provide borrowing authority for the fiscal year beginning on April 1, 1995, be read the second time and referred to a committee.

Borrowing Authority Act, 1995-96
Government Orders

10 a.m.

Bloc

Stéphane Bergeron Verchères, QC

Mr. Speaker, I welcome this opportunity to speak to the budget that was brought down Monday by the Minister of Finance.

Not that I am particularly pleased with the provisions it contains, far from it. Nevertheless, I feel it is my duty as a parliamentarian to engage in a critical analysis of the budgetary measures proposed by the government and to report on my conclusions in this House. I admit it was not very difficult to be critical of a budget I would qualify as insidious and inequitable.

This budget is disappointing in several respects, and perhaps I may elaborate.

I think that first of all, it can be said that the budget contains no specific measures for economic recovery and job creation, which is unusual, to say the least, considering the government's emphasis on these issues. Need I recall that during the election campaign in 1993, the Liberal Party promised it would champion job creation and fight unemployment?

My constituents, Quebecers and Canadians are still waiting for this vigorous recovery and the jobs promised in the Liberal Party's red book, which the Prime Minister brandished repeatedly as a sure fire recipe for prosperity. There is nothing new in this budget to create jobs and worse, the Liberal government has, without any compunction, made cuts in the only sizeable job creation program it managed to come up with so far, and I am referring to the infrastructure program.

This program was supposed to create nearly 45,000 jobs-temporary jobs-over a period of three years. The budget intends to cut about $200 million from this program over the next three years, which will inevitably result in the withdrawal of equivalent amounts by participating provinces and municipalities. So altogether, $600 million less will be spent on job creation over the next three years.

What is more, the government is virtually cancelling out the expected effects of the infrastructure program by laying off some 45,000 public servants over the next three years. This is exactly the number of temporary jobs that this program was to create, before it was announced that the program would be spread over five years.

Clearly this budget is continuing the practice instituted by the previous government of going after the unemployed instead of tackling unemployment itself. For instance, despite a significant surplus in the unemployment insurance fund, the government is announcing cuts of 10 per cent in the unemployment insurance budget. Needless to say the federal government is on the wrong track if it thinks that this sort of measure will help find work for the some 800,000 people who are unemployed and looking for work in Quebec.

While the fight against the deficit is being waged on the backs of the unemployed and public servants in the government's budget, and I will definitely come back to this point later on, we must also recognize that it is being waged at a cost to the provinces.

With its brief passages in French alluding clearly to the referendum, the Minister of Finance's speech spoke of the dynamic and changing nature of Canadian federalism based on the pseudo decentralization project, which is nothing more than a hollow promise and a huge operation to dump the federal deficit into the laps of the provinces. They will have no choice but to cut public services and increase income or other taxes or pass the cost on to the municipalities.

Not wanting to spoil its chances in the upcoming referendum, the federal government is taking great care to put off its sinister plan to make massive cuts in transfers to the provinces until next year, that is, until after the referendum. It will be cutting $2.5 billion in 1996-97 and $4.5 billion in 1997-98. And the $7 billion cuts announced in the 1995 budget will be in addition to the $48 billion cuts in transfers to the provinces since 1982 and the $2 billion cuts in the 1994-95 budget.

The worst part of it all is that the provinces will have to continue to meet the standards defined by Ottawa. Those that fail to do so will be immediately deprived of what remains of federal funding, that is an increasingly paltry amount.

Furthermore, this so-called decentralization program will certainly not eliminate duplication, there will always be two ministers of health, two ministers of natural resources, of the environment, of revenue, etc. The alleged project to give more power to the provinces is hollow, because the federal government is not withdrawing from areas that come under provincial jurisdiction in exchange for a share of the taxes we pay to Ottawa. Is federalism cost effective?

For Quebec in 1996-97, these forecasts represent a reduction of almost $700 million or 27.1 per cent of the cuts made to all the provinces. The federal government's way of proceeding in this regard will obviously have a definite impact on public finances in Quebec. Deprived of part of its revenues, which I might add were earmarked for welfare, health and post-secondary education, the Quebec government will be left no alternative other than to make drastic cuts in its own spending, not to reduce its own deficit, but simply to make up for the shortfall due to the drop in federal transfers. Quebec will obviously not be spared in the round of cuts planned for 1997-98. In looking at the Martin budget, the more one reads the more one realizes that it is more of a curse than a blessing to the people of Quebec.

The same can be said for the federal public service and more specifically for the Outaouais which feels it has been given an especially rough ride by the federal budget. The government has shown itself to be extremely insensitive in announcing the elimination of 45,000 jobs in the Canadian public service over three years. Of these 45,000 jobs to be cut during the next three years, some 14,000 will be in the Hull-Ottawa area, nearly one third of jobs cut in the whole country. It is easy to see that this decision would have a direct and very negative impact on the economy and social life in the area.

Of the cutbacks expected to total $29 billion over the next three years, the federal government intends to cut nearly $16.9 billion from the management and operations of its programs. So the federal deficit will to a large extent be reduced on the backs of federal public servants, especially those in the Outaouais region.

Even more unacceptable is the fact that the federal government knowingly made the Outaouais region economically dependent on it. Seeking to generate in Quebec and especially in the Outaouais a sense of belonging to Canada, the federal government began by creating the National Capital Commission in 1958. Pierre Trudeau's Liberal government, eager to give concrete proof of French Power as a means of hampering the sovereignist movement in Quebec, proceeded to implant a large number of federal government buildings on the Quebec shore of the Ottawa River in the 1970s. Probably taking the region for granted, the federal government seems to have no qualms about leaving the region to fend for itself in the wake of the disastrous cuts it announced. To repeat the jest made by the Quebec finance minister, which I feel hit the mark, the federal government is acting like a guy who gets a girl pregnant and then takes off.

I agree with the Coalition des associations économiques de l'Outaouais, which is of the opinion that the federal government must assume responsibility for the region. It must help to absorb the shock of budgetary decisions on the Outaouais region, just like it does when there is a shortage of fish in the Atlantic or a drought in the Western prairies, by giving the region a one-time payment to be put in a fund for diversifying the region's economy. Unless I am mistaken, the budget makes no mention of such a compensation which, by rights, should be paid to the region. Does the government intend-and I see that the Minister of Intergovernmental Affairs, who is responsible for looking after the region, is sneaking out-does the government intend to give-

Borrowing Authority Act, 1995-96
Government Orders

10:10 a.m.

The Acting Speaker (Mr. Kilger)

Order. As we all know, the rules of the House stipulate that no comment can be made either about the presence, and most especially about the absence, of members of the House, in view of all of the various demands and responsibilities of our positions.

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10:10 a.m.

Bloc

Stéphane Bergeron Verchères, QC

Mr. Speaker, I apologize. Unless I am mistaken, the budget makes no mention of this compensation which, by rights, should be paid to the region. Does the government intend to make good on the request made by the Coalition des associations économiques de l'Outaouais? We are still waiting for an answer, and from what I can gather, we will not get one today either. Obviously, these massive public service staffing cuts are underhanded and pernicious, because they were made unilaterally in an autoritarian way.

In the months leading up to the budget, the government obstinately refused to reach an agreement with the Public Service Alliance of Canada, which represents 70 per cent of federal public servants. This union, however, was ready to negotiate and to hammer out what could have been a mutual and fair agreement with the government. No matter, the government rejected the union's proposal out of hand, not even bothering to negotiate.

The people are justifiably concerned about the quality of the services they are entitled to, which will now be provided by a heavily mortgaged public service. Would it not have been better for the government, instead of slashing its own public service as it did, to put in place mechanisms allowing it to stop wasting Quebec and Canadian taxpayers' money?

What does the government do to avoid wasting public funds, duplication and overlap? Of course, the government did not take any action to achieve this goal. That is why I strongly believe that, had it been otherwise, the cuts in the federal public service could have been less severe.

To get back to the glaring contradictions and questionable priorities in the federal budget, I note that the Liberal government has announced a $532 million cut in the international aid budget. This decision is quite surprising, since he himself pointed out very recently in his foreign policy statement that international aid was crucial to meeting three objectives: prosperity, employment and international security.

Having cut the international aid budget by over 25 per cent, how can the government claim it is adhering to the principle of moral responsibility toward international aid for developing countries, in order to reduce poverty? The fact is, it cannot, Mr. Speaker.

Furthermore, how can they favour international trade development, when Canadian businesses are subsidized so that they are kept artificially dependent on the government? In fact, these subsidies hurt their competitiveness at the international level. This leads me to believe that because he did not have the courage to go further in reducing business subsidies, the minister will help keep these businesses in an unhealthy state of dependence that will hurt their development and hinder access to international markets.

In closing, I would like to say a few words about the budget measures with respect to agriculture. Clearly, the federal budget does not affect all farmers across Canada the same way. The federal government announced the abolition of the $560 million Crow rate subsidy that helps finance Western grain transport.

However, this measure comes with a financial compensation package in the order of $1.6 billion for losses in land values, as well as $1 billion in credit guarantees for grain purchases. In addition, Western farmers affected by the cancellation of the Crow rate subsidy will receive $300 million over five years to facilitate the transition. On the other hand, Canadian milk producers, almost 50 per cent of whom are in Quebec, will see their federal subsidies cut by 30 per cent over the next two years.

I find it hard to understand the logical basis for compensating Western farmers for the loss of the Crow rate subsidy, while industrial milk producers, most of whom live in Quebec, will not be entitled to any compensation from the federal government. Is this a case of double standard? I am afraid so.

After crying wolf for several months to prepare the population for draconian budget measures, the Liberal government finally gave birth to a budget that is neither flesh, fish, nor fowl, that defers until later many of the real solutions, and that insidiously ignores many of its potentially perverse and negative effects.

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Government Orders

10:15 a.m.

Hull—Aylmer
Québec

Liberal

Marcel Massé President of the Queen's Privy Council for Canada

Mr. Speaker, I must say that I was really disappointed with the Bloc's presentation. Perhaps nothing more should be expected from someone speaking on behalf of a party which has already made fundamental choices for ideological reasons and is therefore impervious to the truth.

The truth is that, last year, 433,000 new jobs were created in Canada. This is actual job creation, not just idle talk. In Quebec, 116,000 jobs. In the National Capital Region, a net total of 16,600 new full time jobs were created in 1994. These are the facts, not a bunch of unsubstantiated claims like those made by the previous speaker.

Yesterday, when the hon. member for Verchères said 14,000 public service jobs would be lost in the Outaouais region, he showed his profound lack of understanding of the region. The truth is that the total job loss resulting from the budget over a three year period will be approximately 3,000, not 14,000.

In all of Canada, 45,000 jobs will be cut but this does not mean people actually losing their jobs because in many cases these jobs will be filled by other employees reassigned as a result of the attrition process. I cannot expect the hon. member opposite to have deep knowledge of government, but I would ask him to at least stick to the facts and analysis. The truth about the budget tabled this week is that it is the only way to promote job creation in the long term.

When the hon. member says that this budget will result in the loss of a few thousand jobs throughout the National Capital Region, he makes it sound like job creation would necessarily ensue if the deficit in the federal budget were allowed to continue to build up. If that were true, Canada would have achieved full employment a long time ago, given its accumulated deficits.

The truth is that this is the only way to avoid hitting the wall like New Zealand did. In just a few months, New Zealand had to cut its public service by two thirds, not a mere 14 per cent like us. Our public service will continue to operate with 86 per cent of its employees in three years. Because New Zealand acted along the lines of what the hon. member opposite recommends, it had to cut its public service by two thirds. These are historical facts, not empty words like those spoken by the hon. member.

By shrinking the size of the federal government, which was long overdue, by forcing ourselves to streamline and downsize government, we are ensuring that the 1994 job creation effort can continue.

If we had carried on with the deficit that we had, the rise in interest rates would very quickly have prevented investments in the private sector, thereby also preventing the creation of jobs. What we did was to foster the economic climate which will promote investments and new jobs in the private sector.

The member opposite has no idea of what is going on in the Outaouais, which is my region, when he says that the federal government is keeping it in a state of dependency. If you look at the 1971 census figures, you will see that, back then, one third of all the jobs for our region were in the public service. By comparison, last year only one fifth of the jobs in the Outaouais were in the public service.

In other words, 80 per cent of the jobs in our region are not in the public service. In the national capital region, there are more jobs in the service sector than in the federal government. It is based on that necessary economic diversification that our government developed a plan for the region which will allow the private sector to create jobs that are needed and that will reduce the excessive burden on taxpayers, since the federal public service had become too big.

I have a question for the member opposite regarding dairy producers. Quebec provides 48 per cent of the milk production in Canada and it exports that production elsewhere in the country. Should the province separate, where would it sell its milk, which costs two to three times more than the milk which we could get from the United States? It goes without saying that the rest of Canada would buy its milk at a cheaper price. Quebec's separation would totally destroy its dairy industry. While the federal government adjusts prices at the national level over a certain period of time, the member opposite wants to destroy the dairy industry in Quebec.

As regards public servants, the actual number is 3,000 for the Outaouais, taking into account the five provincial and three federal ridings. We are told that Quebec would absorb the federal public servants, there are 50,000 of them, plus the other 50,000 public servants they already have. They put the 3,000 public servants from the Outaouais and the 100,000 for all of Quebec in the same boat. These people would want us to believe that they will absorb all these public servants, a measure which would cost them $4.4 billion.

Given the analysis made by the hon. member, my question is this: Does he know Quebec sufficiently well to hope to create a better future than the one that we, federalists, have found to be adequate for over 125 years?

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10:20 a.m.

Bloc

Stéphane Bergeron Verchères, QC

Mr. Speaker, I have a problem with the minister's somewhat sweeping statements. When he says that more than 400,000 jobs were created across Canada, when he says that thousands of jobs were created in Quebec, he implies that it was all thanks to the federal government.

Last year, the federal government did not set up a single job creation program, with the exception of the infrastructures program, which is a program of temporary jobs. The government is just riding the wave of economic recovery. Jobs are being created and it says: Look at that, we created those jobs. This is entirely misleading. The federal government had nothing to do with it, and I think it is rather absurd that the minister should go around bragging that they created those jobs.

The government planned to create 45,000 temporary jobs through the infrastructures program and then turns around and cuts 45,000 jobs in the Public Service. I heard the minister say that only 3,000 jobs would be lost in the Outaouais. I hope he is right. We are going to keep tabs on those figures and the region will as well. We can only hope the cuts will not go over 3,000.

However, that does not deal with the real problem. The minister says he knows the Outaouais area well, but if he took a more active part in the activities of the Commission on the future of Quebec in this area, he would realize that his knowledge of the Outaouais is partisan and incomplete, since a number of people who appeared before this commission kept telling us-these are not my words-that the region's economy was dependent on the federal government.

The minister quoted some figures just now. He said that, at one time, one of every three jobs in the Outaouais was in the federal public service. It is now one out of five. With the cuts being made by the government, it may go eventually down to one out of ten. My point is that considering the economic dependence the federal government has artificially created in the Outaouais, is the federal government-and the minister did not answer this question-is the federal government prepared to offer financial compensation by investing in an economic diversification fund, to compensate for the number of jobs lost in the public service? To get back to the notorious question, if I can call it that, because it is more like, I will not use the word misleading, but a very-

Borrowing Authority Act, 1995-96
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10:25 a.m.

An hon. member

Very pernicious.

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10:25 a.m.

Bloc

Stéphane Bergeron Verchères, QC

-pernicious, thank you, a very pernicious statement that sovereignty would destroy Quebec's dairy industry. First of all, I want to say that I am dismayed at the minister's lack of confidence in Quebec's dairy industry, and furthermore, the minister ought to know that the milk produced in Quebec is probably the best quality milk in North America. There are no two ways about it. It is the best. No doubt about that. If you want to buy a quality product, no problem. Milk from Quebec can meet the highest standards in the world.

That being said, this can work both ways, since in Quebec we eat a lot of beef from Western Canada, which is probably more expensive than beef we could buy elsewhere. In the event of a sovereign Quebec, if the market dries up for Quebec dairy producers, we will buy our beef elsewhere. Business is business.

Borrowing Authority Act, 1995-96
Government Orders

10:25 a.m.

The Acting Speaker (Mr. Kilger)

Order! Before we proceed, I must inform the House that at the beginning of today's sitting, we forgot to inform the House of the absence of the Speaker. I therefore order the clerk to make the appropriate entry in the Votes and Proceedings . Resuming debate. The minister of Intergovernmental Affairs.

Borrowing Authority Act, 1995-96
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10:25 a.m.

Hull—Aylmer
Québec

Liberal

Marcel Massé President of the Queen's Privy Council for Canada

Mr. Speaker, I am delighted to participate in this debate. This is a budget of very strong measures, because this is what it takes to break the deficit's hold on our policies. This budget contains the most draconian measures taken by a government in 50 years.

The budget achieves our deficit goal without increasing personal income tax rates. For the second year in a row the government has refused to reduce the deficit on the backs of individual Canadians.

I am particularly pleased to have the opportunity to explain the process and significance of the program review, one of the core elements of the budget.

Last September in Quebec City the Prime Minister outlined the four key elements of the government's jobs and growth agenda. This week hon. members have witnessed with the unveiling of the 1995-96 budget the details of one of those fundamental elements, the program review.

Last year the Prime Minister asked me to lead, in co-operation with my cabinet colleagues, the most fundamental review of government operations in two generations. The review was meant to be and was an exhaustive examination like none ever undertaken before of every government program and service, with a view to getting government back to basics and focusing on the priorities of Canadians.

I worked closely with my colleagues and I want to take this opportunity to congratulate them once again for their commitment to the exercise designed to get government right.

Unlike previous governments we listened to Canadians and the result we have seen in the budget tabled by my hon. colleague, the Minister of Finance, demonstrates that we have the courage to set the country on a new, much more secure course.

I believe the Canadian people will agree that the budget and the program review results are ushering in a new approach to government.

It will be a dramatically changed national government. It will be a government that is getting back to basics, a government that reflects the priorities of average Canadians, a government that is affordable, a government that protects the most vulnerable, and a government that responds to the true needs of Canadians.

The Prime Minister detailed our intentions last September before the Quebec City Chamber of Commerce saying that control over the size and cost of government was vital to economic growth and job creation. It was in this perspective that the program review was developed and became one of the basic components of the budget.

This review will enable the federal government to focus on its major priorities, to return to basics while enabling it to reduce its expenditures in an orderly fashion. The review was guided by three objectives.

First, to strengthen public administration of federal programs and services; efforts in this regard will lead to a smaller but more efficient federal administration, which will provide the programs Canadians consider important. Secondly, to help modernize Canadian federalism; the government should provide only those programs and services it is best suited to provide. Thirdly, to help the government attain its financial objectives.

This involved, therefore, totally rethinking what government did and what Canadians could allow themselves. In the future, departments will have to drop all but fundamental responsibilities. They are amalgamating like programs and services found within a department or spread among several departments. They are eliminating job duplication and costly overlap. They are reducing the operating costs of programs through new approaches, while raising standards of service. They are funding necessary programs through cost recovery and user fees.

It must be stressed that the aim of the program review was not to identify or make cuts solely in response to financial needs. On the contrary, we asked each minister to review their programs and activities according to six criteria.

First, public interest: Does the program or activity continue to serve the public? Second, the role of government: Is it necessary or legitimate for the government to be involved in the area of the program or activity? Third, federalism: Is the present role of government appropriate, or should consideration be given to transferring it to the provinces? Fourth, partnership: What programs or activities could be transferred wholly or in part to the private or volunteer sectors? Fifth, efficiency: How could the efficiency of the program or activity be improved? Finally,

financial capability: In financial terms, can we afford all of the resulting programs and activities?

I can briefly summarize at this point that we undertook an unprecedented review of government activities because this government believes first and foremost it is crucial that we get our own house in order. As we have seen, this budget focused on cutting spending, not on raising taxes. Second, we began from the premise that the priorities of the government must reflect the priorities of Canadians. We did not want a blind slash and burn exercise.

The approach we took in our program review was guided by three fundamentals: one, its fundamental objective to sustain growth and job creation; two, its fundamental challenge to get the economy right; and three, its fundamental requirement to refocus government on priority roles.

Program review encompassed about $52 billion worth of government spending. The result is that over the next three years program spending will decline by almost 19 per cent, more than $16 billion. Some departments will see their spending cut in half.

The Department of Transport over three years will be cut by 50 per cent. The Department of Natural Resources over the same three years will be cut by 49.8 per cent. The public service will be reduced by 14 per cent, 45,000 positions over three years.

Program review will lead to long lasting structural change in what the government does. These are not, as my hon. colleague the Minister of Finance stated Monday, the phoney cuts we saw so often in the past, measures that pretended to define a slower rate of increase in spending as actual cuts.

The cuts in this budget are real cuts in real dollars. They were accomplished by refocusing government programs on basics, eliminating overlap and duplication, improving the efficiency of our operations and shifting market interventions away from direct subsidies. Let me give some examples.

In the past, agricultural subsidies have been tied to specific commodities which resulted in a large number of programs. The emphasis will now shift from income support to income stabilization.

Fisheries and oceans will focus its resources on science and regulation to ensure conservation and sustainable fish stocks. We will discuss with the provinces the possibility of eventual devolution of freshwater fisheries management.

Finally, assistance to business will be considerably reduced. Assistance will shift to repayable loans.

In many departments there will be fundamental change in how programs and services are delivered. For example, an immigration fee will be charged to newcomers and sponsors will have to provide financial guarantees.

Environment Canada will concentrate more on science and policy and finding new ways to deliver services. Environmental protection remains a priority in order to ensure the health and safety of Canadians. Pollution prevention will become a priority in partnership with the provinces, territories and industries.

A large number of specific measures are based on a common philosophy and foundation.

For example, we have taken important measures in this budget to substantially reduce business subsidies offered under all government programs. Subsidies will be reduced by close to 60 per cent over a three year period. Some programs will be discontinued or drastically reduced. For example, we will be eliminating the transportation subsidies offered under the Western Grain Transportation Act, the Atlantic Region Freight Assistance Act and the Maritime Freight Rates Act.

Some programs will be restructured or merged, for example, regional development organizations will be more geared to the needs of small and medium size businesses. Some activities will be transferred to other public administrations. For example, several responsibilities concerning inland waters will be turned over to the provinces; recreational harbours will be divested to municipalities; the forestry and mining development agreements with the provinces will be revoked, since the provinces have indicated that development of these resources falls under their jurisdiction; the operation of airports will be transferred to local authorities.

Some activities will be commercialized or privatized: the remainder of the government's share in Cameco and Petro-Canada, Canadian National, the Air Navigation System, Canada Communication Group. Cost recovery and user fees will be implemented for some services.

Treasury Board will put in place a new spending management system which will improve the management of public funds.

The program review has allowed us to put our house in order in order to tackle the challenges of the next century. It fundamentally changes not only what we do but how we do it. The program review allows us to restore fiscal health to the nation's

finances and also to make necessary spending reductions in an orderly way. The program review actions in the budget only start what will be an ongoing process of reform and renewal of the federal government.

Clearly, as announced in the budget, these results will have a major impact on the public service. All regions of the country are affected by the cutbacks and reductions. This is no less true for the national capital region. I want to say that as the Minister responsible for Public Service Renewal and as a member of Parliament in the national capital region, I am particularly and acutely aware of the difficult period many public servants across the country are going through at this time.

The departure of employees who over the years have demonstrated loyalty, professionalism and dedication is the most painful part of any restructuring process. Decisions that affect people's livelihood are the most difficult to make. Departures are never easy. Let me reiterate this government's commitment to deal with employees in the fairest and most sensitive way possible. We will continue to work with the unions and local governments to ease the transition. We hope to keep layoffs and the number of employees on unpaid surplus status to an absolute minimum.

Some individuals will be accommodated through normal attrition. Some will take advantage of the departure and early retirement incentives announced by the President of the Treasury Board. Some individuals will transfer to the private sector as some operations are being privatized. Others will find work in the private sector. No doubt there will be a period of change and uncertainty as we move to what I firmly believe will be a revitalized public service in the coming years.

I deplore the fact that the representative for the Outaouais region, Mr. Blais, and some members of the opposition are misleading the local population and are creating more uncertainty. They are proclaiming that the budget cuts 14,000 public service jobs in the Outaouais region.

In fact, the total number of jobs that will be affected in all of the national capital region, on both sides of the river, will be 12,000 to 13,000 over the next three years. This means, therefore, that the real number of public servants in the Outaouais region that will be affected is more like 3,000. I cannot accuse them of telling untruths, since the difference between their current claims and the true figures is only one job to five, which is about par for them.

I am happy that regional players, including Hull mayor Ducharme and Outaouais urban community president Croteau, have taken a clear, credible and realistic stand on this budget.

With the various measures I mentioned and the co-operation of the private sector and all economic stakeholders in the region, we will manage to minimize job losses while at the same time diversifying the region's economy.

As the member of Parliament representing Hull-Aylmer, I have had the privilege of rubbing elbows with people of this area. I was able to observe how imaginative they are and how enthusiastically they tackle new challenges. I want to salute their courage in these tough times.

The budget is further proof of the flexibility of federalism; it is not stuck in status quo. The budget stresses our commitment to provide the people with good government in Canada. And this entails the challenge of bringing the deficit down and streamlining government. As part of our commitment, no region will be receiving preferential treatment nor be subjected to more cuts than the others.

The new Canadian social transfer combines into one lump-sum transfer three formerly separate transfers, thereby lightening the administrative burden of the provinces. This transfer will ensure maximum flexibility in developing provincial programs suited to the needs of the regions. The new lump-sum transfer limits the restraint the federal government can impose in exclusive provincial jurisdictions.

This new and more flexible formula does not affect the quality of services provided to Canadians.

The terms and conditions set out in the Canada Health Act will be maintained and the provinces will have to abide by the provisions of the act with respect to health care.

At the same time, we remain committed to fiscal equalization, one of the cornerstones of the Canadian federal system, through which Quebec receives nearly $4 billion per year.

The budget marks the beginning of a new era, an era in which the federation will be managed differently. Management will be simpler, more efficient and, yes, more sensitive to provincial jurisdictions. The budget give provincial governments full scope to meet the needs of the people.

The budget is convincing evidence of the fact that the federal system is a progressive, co-operative and dynamic system. Less than a year and a half into this Parliament, we have already tabled two budgets to substantially reduce public expenditures, something Ontario and Quebec will also have to do. We also restructured government organization. The measures outlined in this budget are the most stringent federal measures in fifty years.

We have abandoned the across the board cuts used by previous governments which proved to be counterproductive and ineffec-

tive. This budget is a rational way to bring the size and structure of government into line with our needs.

We agree with Canadians that a balanced budget is the goal and we will get there by setting realistic and achievable targets. This budget leads by example. We are cutting government first.

We believe this budget truly marks the beginning of a new era.

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10:45 a.m.

Bloc

Ghislain Lebel Chambly, QC

Mr. Speaker, I have been listening to budget speeches for at least 30 years. Except for a brief 8-year period of Conservative government, the Liberals were in office for most of those 30 years. I have yet to see a Minister of Finance table a budget in this House and say that it is not a good one. All were guided by the same concern for fairness and justice. Not one of those ministers said that what he was proposing was not good. What I do not understand is that, after 30 years of good budgets, the end result is bad.

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10:45 a.m.

Some hon. members

Hear, hear.

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10:45 a.m.

Bloc

Ghislain Lebel Chambly, QC

I was never able to understand that equation: the sum total of the good is a negative figure. And right now that figure is almost $600 billion. The Minister of Finance tells us that all those who were here before him were in the wrong and that what they suggested made no sense. He adds that his budget is a real one and a good one. Sure. However, one the predecessors of the finance minister is the current Prime Minister, who also contributed to the growth of the deficit.

The minister just told us that there are people in the national capital region, in Ottawa-Hull, who are happy about the cuts made in the public service. The minister more or less acted the way he did with Saint-Jean. He eliminated 400 jobs and, at the very last minute, he managed to save 20 and claim that it was a miracle on his part. Let the minister bring those Hull and Aylmer residents and ask them in front of us whether they agree with the loss of 45,000 jobs in the public service. Let me give you an example. At the taxation data centre, in Saint-Hubert, there is a 6-month backlog to process the returns of businesses conducting R & D.

Currently, there are businesses on the verge of experiencing major financial problems because they are not receiving their due from the federal government. The public servants cannot process their claim. And the minister would want us to believe that the budget tabled on Monday is the greatest thing since sliced bread. I do not believe that and let me tell you something else. Next year, the minister will once again say: "The others before me, including myself, did not do well. However, I know what I am doing this time".

The minister should explain certain things. I remember one month when the unemployment rate dropped one tenth of one per cent. The Minister of Finance was elated. The economy was picking up and everybody was happy. The following month, economic activity rose by one per cent. Now, that was even better; things were really looking up. But I simply cannot understand these people. How did the minister manage to fool Outaouais residents and make them accept the elimination of 45,000 jobs, when in fact such a loss is a terrible thing. I would appreciate an answer from the minister.

Borrowing Authority Act, 1995-96
Government Orders

10:50 a.m.

Liberal

Marcel Massé Hull—Aylmer, QC

Mr. Speaker, I am very happy that opposition members have asked me these questions, because they will give me the opportunity to set the record straight. Over the years, Canadian budgets may have resulted in a large deficit but, at the same time, they have produced what the UN calls the best country in the world, with one of the highest rates of income per capita in the world, a country that enjoys considerable peace and harmony compared with other nations, a country where life is good and incomes are high. That is what successive Canadian budgets have given us.

During the quiet revolution that took place in Quebec in the sixties, we as Quebecers managed to change our structures, values and policies within the federation as it was back then. This gave us the country we now have and want to keep, because it served us well. Speaking of the last budget, 433,000 jobs were created in 1994, including 116,000 in Quebec. What are the factors involved in creating jobs in a country?

Most jobs are not created directly by governments, whether it is Ontario, Quebec or the federal government. However, government policies produce a climate allowing the private sector to create jobs. Clearly, the confidence generated and the policies adopted by the Liberal government last year allowed the economy to create over 400,000 jobs, including more than 100,000 in Quebec. That is what our government has accomplished.

I am so pleased that the hon. member has brought up the matter of Saint-Jean, a community where we had reached with the former Liberal government in Quebec an agreement that the local population found acceptable, which would have kept the college open and continued to create jobs, which was, in fact, a hope for the future. When the new government, of which our Bloc colleagues, under the direction of their leader, are a mere extension, arrived on the scene, it decided, for its own ideological reasons, that it wanted no part of any agreement. These ideological reasons were disclosed by a minister, who has kept a pretty low profile since then.

In one month, we met with local representatives who know that the region needs the college and whose goal is not to promote their ideology but to create jobs and generate economic activity in the region. We agreed with these people to keep the college open and maintain the core that will eventually become a

dynamic institution that will continue to benefit the region. I am still very proud of what we did in Saint-Jean, despite the Parti Quebecois government and its ideology.

Third, I was asked if people in Hull agree. In fact, people in Hull think about what is happening in their community. They know how to evaluate the role of government, how to use it and how to enjoy one of the lowest unemployment rates and one of the highest rates of income in Quebec. They have voted Liberal for decades because they know which party has best served their economic, political and social interests.

Borrowing Authority Act, 1995-96
Government Orders

10:55 a.m.

Reform

Jim Gouk Kootenay West—Revelstoke, BC

Mr. Speaker, during the last election the Reform Party ran in many ridings where civil servants would be affected by layoffs. The Reform Party was very honest and said we do have to downsize government. There will be some changes.

The Liberal Party ran against us in those ridings and said: "That brutal Reform Party. We would never do that. The poor civil servants. We would protect their jobs". The word that comes to mind is hypocrisy.

The minister is going to downsize his department. He is quoted in the Ottawa Sun this morning as saying that job cuts based on race or sex are illegal according to the charter of rights.

He says that the department recognizes the need for employment equity, respecting the various proportions that exist now and if possible will increase them.

Is the minister going to use this downsizing of the government to try and bring in some form of equity balancing, or is he going to do it by merit the way the laws of the land say he has to do it?

The article suggests that he is asking the department how it is going to do it. Who is in charge? Is it the minister or is it the bureaucrats? I would like to hear his answer.