Debates of March 31st, 1995
House of Commons Hansard #181 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.
- Question Period
- Budget Implementation Act, 1995
- Constituency Committees
- Health Care
- Learning Disabilities
- Canadian Wheat Board
- Youth Service Canada
- Canadian National
- Susan Aglukark
- The Late Donald Morrow
- Human Values
- Canadian Armed Forces
- National Defence
- Liver Disease
- The Cabinet
- Social Services
- National Defence
- Kanesatake Reserve
- Gun Control
- Marine Transport
- Gun Control
- Patronage Appointments
- Ncc Chairman
- Criminal Code
- Information Highway
- Air Carriers
- Canada Post
- Points Of Order
- Ways And Means
- Government Response To Petitions
- Committees Of The House
- Buffalo And Fort Erie Public Bridge Company Act
- Questions On The Order Paper
- Budget Implementation Act, 1995
- Hate Propaganda
Budget Implementation Act, 1995
Jean Payne St. John's West, NL
Mr. Speaker, when I was speaking earlier today I was referring to the Canada social transfer.
By announcing the changes to its transfer payments this year, to take effect next year, the federal government has given the provinces plenty of notice of the changes so they may have time to prepare.
Statistics show that under the CST total transfers, including equalization to the most needy provinces such as Newfoundland, will actually increase in 1996-97 compared with 1994-95. Total transfers including equalization to Newfoundland in 1996-97 will increase by $28 million compared with the 1994-95 levels. This demonstrates the federal government's commitment to both national standards and equalization among provinces.
Other initiatives to social security under the budget include an announcement that changes are to be introduced in September to reform unemployment insurance. These changes are to result in a reduction of 10 per cent to the overall size of the unemployment insurance program. In undertaking these reforms the Minister of Human Resources Development faces many challenges and has an abundance of conditions to rely on.
This past fall the Standing Committee on Human Resources Development undertook extensive consultations with Canadians on the topic of social security reform. During these consultations witnesses came forward time after time to tell the committee unemployment insurance systems often discourage people from getting back to work. People tell stories of being denied unemployment insurance because they wish to upgrade their skills while others get paid to stay home. Others tell of declining benefits while individuals whose spouses earn over $100,000 a year collect generous benefits.
The impetus for any change in the unemployment insurance system must be to design a system that has as its underlying goal helping people get back to work while providing the limited resources available to those most in need.
The Minister of Human Resources Development will keep these goals in mind when he prepares to make the necessary reform to the unemployment insurance system.
On the scheme of social security reform the finance minister has promised to release a paper on the changes required to the public pension system in order to ensure its continued sustainability as our population ages. The underlining goal again in this review will be to ensure those most in need receive the limited resources available. Therefore old age security benefits will be provided on the basis of family income as is currently the case with the guaranteed income supplement. In addition, the Canada pension plan will be reviewed this fall to ensure its continued sustainability.
Another area I would like to address is the impact of the budget on small business. Small business is the engine that drives our economy. Today over 99 per cent of all businesses in Canada employ fewer than 100 people. The small business sector accounts for 40 per cent of Canada's GDP. More important, it now accounts for over half of all the private sector employment.
A recent survey by the Canadian Federation of Independent Business cited the deficit-debt as its number one concern. The finance minister listened to this concern and is maintaining his commitment to lowering the deficit, thereby providing the environment needed for small business to prosper. A lower deficit also means lower interest rates for small business borrowers.
The inability to access financing has also been cited by small business groups as an area of major concern. To this end the government has announced it will be working with the banks to devise meaningful performance benchmarks for small business financing. It is expected this process will be completed by the fall of this year. This will make loans more accessible to small business which in turn will generate job growth.
The government has further demonstrated its commitment by maintaining tax preferences for small business such as the $500,000 lifetime capital gains exemption for small business shares and a lower tax rate on the first $200,000 of income.
These measures in conjunction with measures to reduce the paper burden should ensure continued job creation through the small business sector.
I wish to speak on a topic closely intertwined with my home province of Newfoundland, changes the budget will bring about in the Department of Fisheries and Oceans.
I congratulate the Minister of Finance on maintaining his commitment to the TAGS program. Under the budget the total funding of the program remains at $1.9 billion over five years, including the $1.7 billion of new funding announced last year. This funding is to help Atlantic Canadians to adjust to the devastation in the ground fishery, a situation over which they have no control.
Atlantic Canadians are a proud people. Given the opportunity, they would much rather work than receive government assistance.
The funding is meant to help them to adjust to the sad reality that the ground fishery has been mismanaged and overfished by foreign vessels. Again the minister, through his commitment to this funding, has ensured that the most vulnerable in our society are protected.
Other measures such as the merging of the coast guard with the Department of Fisheries and Oceans will enable Canada to strengthen its conservation efforts even more outside the 200 mile zone at a time when it is most needed.
In summary, I am pleased to pledge my full support for this budget. It shows that the Liberal government can do more than simply talk about deficit reduction. By setting reasonable targets for deficit reduction and then meeting them, this government has earned the trust and respect of the people of Canada. More important, this budget has managed to reduce the deficit largely through expenditure reductions while ensuring that those in society who are most vulnerable are protected.
While it is not with any great pride that many of these expenditure cuts were introduced, it was out of necessity to ensure that our economy stays on the road to recovery and our social system can remain sustainable in the future.
Budget Implementation Act, 1995
Ken Epp Elk Island, AB
Mr. Speaker, I am pleased to comment and ask a question.
Almost all of the Liberal members, including the hon. member who just spoke, keep patting themselves on the back for having attacked the deficit. Indeed, the announced deficit is targeted to go down. However, the fact is that interest rates are going up and the total interest payments are going up because our total indebtedness is still so very high.
Many Canadians do not know that with this budget, total government expenditures are actually destined to increase by some $2 billion in this budget.
We need to lean into the debt and the deficit. It is my opinion, which I believe is one shared by most Canadians, that time is of the essence. The longer we wait the greater our interest payments grow. Even if the Minister of Finance and the government of the day meet their goals, we expect the interest payments will have reached a minimum of $50 billion per year by the time this Parliament is finished.
We need to recognize that of that $50 billion per year, a great proportion is sent out of the country in the form of interest payments to those international lenders who have loaned us money. It totally removes that available cash for providing government programs.
The Liberals keep speaking of providing these programs and not wanting to give them up. That is admirable and is a wonderful goal, but our interest payments are making it less and less possible to continue funding those programs. As a matter of fact, if we do not get a hold of it real fast our social funding will disappear in deference to the requirements to pay the interest.
I would like the hon. member to respond to the statement on the speed with which we are attacking the deficit. She will probably say that they are doing great. But specifically, how does increasing annual interest payments from $40 billion to $50 billion help our social program funding?
Budget Implementation Act, 1995
Jean Payne St. John's West, NL
Mr. Speaker, I thank the hon. member for his question.
As the hon. member knows, many factors have influenced our budget ever since it was brought down a month ago. These factors will continue to have influence. However, he is also well aware that over the last two years we have met our budget targets through the efforts of the minister. I am sure that effort will continue. Yes, we are concerned with rising interest rates. I am sure that is no secret to the hon. member as the minister has spoken on that a number of times.
I do not believe and I am sure the hon. member, based on some of the statements he has made earlier in this House, is very well
aware that we cannot reduce the deficit on the backs of those who most need our assistance. They are a very vulnerable group.
Perhaps throughout the next year the minister will again need to do some readjusting as various factors affect our financial position.
Budget Implementation Act, 1995
The Acting Speaker (Mr. Kilger)
Before we resume debate, I just want to apprise the House that we have now exhausted the five hour maximum for the debate. We now go to the next stage of debate, which are 10 minute interventions without questions or comments.
Budget Implementation Act, 1995
Jack Frazer Saanich—Gulf Islands, BC
Mr. Speaker, I want to start my remarks on Bill C-76 by recognizing that in February 1995 the Minister of Finance brought down a budget which departs substantially from normal Liberal philosophy.
This is the budget that should have been introduced in February 1994. Rather than taking firm action then, the Liberals just cried and moaned about the mess left by the Conservatives. That was the time to really reduce spending and take corrective action.
Even now, the unrealistic 3 per cent of GDP target chosen by the Liberal government is akin to a high jump contest where the bar is never raised above two feet. Anyone can clear the obstacle because it is not a real test of capability. So the minister's crowing about achieving or exceeding his budget goals is ridiculous.
The aim should have been to present interim targets on the way to a balanced budget by the end of this Parliament, along with a plan to show how this was to be achieved. But this government had neither the political will nor the courage to set these realistic goals which are desperately needed if Canada's vaunted social programs are to be protected and sustained.
There is no question that various special interest groups and some Canadians would cry: "Yes, cut spending, but not in my program", or: "Yes, you should save money, but not on my subsidy".
The Reform Party has established that there is a large constituency in our country which recognizes and is ready to accept the need for meaningful spending reductions which will lead to a balanced budget. Historically, governments, including this one, have preferred to take the easier road, making a few spending cuts and raising a few taxes but not taking the measures really required to balance the books.
The federal debt has climbed from $28 billion in 1970 to nearly $550 billion today, a 28-fold increase. Among major developed countries only Italy has a larger debt relative to the size of its economy.
I have trouble visualizing a billion. I can come into the picture somewhat with a million, but a billion really escapes me. To try to put it into context, I converted it into time and used seconds as the basis. One million seconds is just under 12 days, 11.82 days exactly. A billion seconds is almost 32 years. This puts it into some perspective as to how large a billion is.
After running up a serious deficit during World War II, Canada's debt to GDP ratio gradually declined until the mid-1970s. The last federal surplus was recorded in 1970. From that point on governments continually spent money they did not have and in so doing accumulated the debt burden which saddles us today.
It took Reform Party insistence and concerned taxpayers to convince this government that Canada has a serious debt problem which must be addressed not by increasing taxes, but rather by reducing spending.
Then Moody's rattled the chains. Foreign investors expressed their concern that Canada's finances are in serious trouble, saying: "Either put your act in order or we will invest our money elsewhere".
With one-quarter of our national debt held by international money markets, Canada is hostage to their demands for a good return on the buck. Furthermore, while Canada has been an attractive place to invest money because of our stable political climate, the Quebec problem has put that climate in question and thus our finances are subjected to greater scrutiny.
As I said earlier, the federal debt is now almost $550 billion and provincial and municipal governments owe another $190 billion. Under Liberal plans, within three years the federal debt will increase by $100 billion to almost $600 billion and interest payments on that debt will climb to $52 billion. The result is that interest payments will account for nearly one-third of our total federal budget.
In 1981 the share of the provincial debt for each man, woman and child was $4,500. When a child is born here today, he or she enters Canada owing over $25,000. In fact, everyone pictures a baby being born and the doctor holding it up by the heels, slapping it on the bottom to get it to cry and start its life cycle. That is no longer necessary. All the doctor has to do is hold the baby up and say: "You owe us $25,000 and the baby automatically starts to cry".
When the Liberals took office, interest charges on our debt were $39 billion. Under their projected budget plan, by the next election those interest charges will have risen to $52 billion and as I said before will comprise almost one-third of our annual budget.
This means that more than 30 cents out of every tax dollar will be devoted to paying the interest on the debt. At that time the Liberals still project a deficit of $24 billion. Our debt is continuing to rise as will the interest payments we will be forced to pay.
This Liberal budget fails to deliver. The Liberals have no plan to balance the books by the end of their mandate. They have no plan to answer the problems rapidly approaching with an aging population. The Superintendent of Financial Institutions has
warned that the Canada pension plan will be exhausted in 20 years.
Despite the added pressure of an ever increasing deficit and debt to service, the government must still deal with this problem. It is clear the looming interest payments on the debt will virtually kill pensions and other social programs. Also, transfers to provinces for health, post-secondary education and welfare will be lumped into the new Canada social transfer.
The deepest spending cuts are left until next year when the $7 billion in social program cuts begin. Provincial transfers will be reduced by $2.5 billion in 1996-97 and $4.5 billion in 1997-98.
To what extent will spending cuts be downloaded to the provinces? A lump sum payment will be given to them and the feds say: "Find a way to save the money, but you must still live by our rules or we will withhold the transfers".
This budget does not place resources and responsibilities in the hands of those levels of government closest to the people. It does not include tax point transfers which would give provincial governments the resources needed to pay for their social programs.
Without social program reform, the provinces and the taxpayer will have to carry the burden. They will be asked to streamline programs. However, if the federal government does not like the changes, it can withhold the money.
Programs to natives, Inuit and Metis will increase. Yet the government has not taken measures to clean up what are clearly identified as badly managed programs. Despite budget cuts, spending will increase by $600 million because of escalating interest payments alone. This budget is an example of the consequences of not eliminating the deficit quickly.
On the other hand, the Reform Party's taxpayers budget would eliminate the deficit in three years with spending cuts and no tax increases. The taxpayers budget would restore labour market efficiency through the reduction of social program dependency. It would create an economic climate that would lead to lasting private sector job creation.
What will it take to ensure governments-this one and those that follow-live within their means by not spending more than they take in? We can look to Switzerland for an example. The Swiss enjoy one of the lowest marginal income tax rates, a high standard of living and a generous social safety net. How do they do it?
The Swiss government is required to go to the voters if it wants to raise taxes or spend more money. The government is constitutionally bound to live within its means. This has been in place for years and it works. Government is accountable to the people. Is that not the way democracy should work? It is representation by the people and for the people with the people having control of the purse strings. I wonder how those fat pension plans for MPs would fare if they had to go to the public to be approved.
The Swiss must also be consulted on any law or regulation. Does anyone remember the Liberal red book's promise to scrap the GST? In fact, the Swiss government asked the people to approve a similar goods and services scheme. Three times the voters said no. The fourth time the plan was successful and has just been implemented this year. If the Swiss decide they do not like the tax, they can rescind it by petitioning government to remove it. I am sure every Canadian would approve of tax and expenditure limits for their government.
This government had the good fortune to inherit a healthy economy. If the economy slows, as is expected, added pressure will be brought to bear at a time when the deepest budget cuts must take place. If we call this a debt crisis today, what will we call it then? This budget plan will still add to the debt and continue the erosion of social safety nets.
Our only hope is that the Minister of Finance will not be swayed and will continue to find ways to save money and ensure that programs are effective in their delivery while providing the necessary means to evaluate the programs. If programs do not achieve what they were intended to, they should be eliminated.
Spending cuts are important, but even more important is the acceptance of the need to balance the budget and the presentation of a plan that will take us there. Although too little and too late the budget was a step in the right direction.
The government is now left to do what must be done: plan to balance the budget during this term of Parliament and tell Canadians how it is going to do it.
Budget Implementation Act, 1995
Wayne Easter Malpeque, PE
Mr. Speaker, I welcome the opportunity to speak on the budget. In the week immediately following the budget I had two public meetings with constituents, two meetings with farm groups, and one meeting with the forestry industry.
My purpose in holding the meetings was to set out as well as I could the facts arising from the budget so that together with the constituents in my community we could understand the impact in a real sense and manoeuvre and develop policies to address the future.
In so doing I believe we were able to examine critically the budget and to obtain constructive feedback. I will come to the feedback later in my remarks. It is no secret that the priority of the government is to restore Canada to fiscal health and meet the
target of deficit reduction we campaigned on in the last campaign: 3 per cent of GDP by the end of 1996-97.
The budget takes strong action to deal with the deficit. It is tough and it encompasses painful program cuts. The government strategy required savings on government expenditures, program review, and some tax changes.
In so doing programs that many of us, myself included, hold near and dear have been cut. We have attempted as a government to be balanced across the regions and across the industries on both the social and the tax expenditure sides. Regardless of the facts it does not make dealing with tough fiscal measures any easier or make the impact on those affected any less.
Turning to the meetings I have had with constituents, farmers and especially my former organization told me in no uncertain terms that they felt the budget was tougher on the agricultural sector than on other sectors across the land, especially so when the transportation changes are brought into the equation.
The loss of ARFAA and MFRA rates within Atlantic Canada will impact upon primary producers. We have set aside considerable adjustment moneys, $321 million. By providing that money to the provinces there was concern expressed that the provinces may not address the needs of producers as a result of the changes in the budget.
We as MPs have a responsibility and must be involved in the process. I intend to be involved. At the very bottom line we certainly do need to have a national transportation policy in place. The loss of the feed freight assistance in Atlantic Canada could have a very negative impact on the Atlantic livestock industry if we do not provide other compensating policy initiatives to the livestock industry.
I will lay out the facts. I will not put a spin on them. I accept the facts as they are. When the feed freight assistance program in Atlantic Canada and the changes to the WGTA in the west are combined, the cost of barley in eastern Canada as compared to the west will be at approximately a $42 per tonne disadvantage. That is the reality. I do not believe we should despair over the facts.
The secretary of state for agriculture and agri-food will be setting up consultations with the farm community. Adjustment moneys are in place. The secretary of state and the Department of Agriculture are certainly discussing with industry and looking at new ways of developing the competitiveness of the livestock industry in Atlantic Canada.
In the meetings with farmers I attended in eastern Canada some concern was expressed about proposed changes to Agriculture Canada, especially in the area of privatizing the economic branch. There is a firm belief with which I agree that the minister needs a division within the department to do the economic analysis and the economic impact studies prior to policy changes being made.
I am one who firmly believes that we should be holding outlook conferences where the department has to put on record where it thinks the movement will be in agriculture over the next year and then come back and account for its prediction a year later.
By privatizing the economic branch there will be no real savings to farm out to economic consultants. In my mind it would be much more preferable to get rid of some of the paper pushers at the top, the people who do not really understand primary producers in terms of getting their hands dirty in the soil and understanding at the primary production level. We need some discussion in that area.
There is no question the minister had difficult choices to make. He will attempt to address the impact through improved safety nets, adaptation programs and new policy thrusts.
Turning to some other meetings I have had in my riding, on the Canada social transfer there were questions raised whether it would be an effective vehicle to equally deliver social programs such as post-secondary education and health care across the country. Questions were raised on what effect block transfers would have on the fight against child poverty.
I outlined to those in attendance that we had a very successful hearing on HRD and social security reform review. Many good points came out of the paper from the committee. I congratulate it on its work. The committee did good investigative work, held hearings and has come up with some sound recommendations that the government and members of Parliament can look at in terms of future initiatives in the social security area.
The debt and the deficit were discussed in great detail. The main focus of discussion with respect to the debt and the deficit was centred on the percentage of Canada's debt owed to foreign investors. I am very concerned about that area. When a few speculators basically playing computer games on the stock market floor can bring down a country in terms of its financial security, we have to look seriously at the issue. Whether it is a new Bretton Woods agreement or some other measure we have to look at it seriously. I believe the Prime Minister has put the matter on the agenda for the G-7 in Halifax.
Public service reductions were talked about at the meetings as well. Representatives from the public service expressed their anxiety with regard to what many public servants are undergoing and the demoralizing effect on the workforce. Representatives questioned why the compensation, the early retirement package, could not be offered to all public servants so the resulting vacancies could be filled by surplus workers who do not qualify for the package. We will be raising those points with the ministers responsible.
I must speak for a moment on the WGTA. It is widely known that I have spent the better part of my life defending the so-called Crow rate. I still believe there is an obligation the railways have never met in all the discussions and changes over the years. Regardless, the change is being made which will affect western producers and communities.
Adjustment measures are in place, the $300 million adjustment and the compensation for land prices. I underline the fact that the WGTA has been in effect since the turn of the century. It was the cornerstone of agricultural policy in the west.
I accept the changes but we must recognize the impact. There will be impact in areas other than financial areas such as highways, car allocations, quality control, the wheat board, et cetera. We have to listen to the producers so they can outline to us the changes they want.
These are different times. We must get our financial house in order. The real solutions will be found in the country, in the hearts and minds of the people who will be affected. We as MPs must continue to consult with constituents to find solutions.
Budget Implementation Act, 1995
Philippe Paré Louis-Hébert, QC
Mr. Speaker, when a bad decision is made, nothing could be more justified than to try to delay its implementation. That is why the dilatory motion put forth by the hon. member for Saint-Hyacinthe-Bagot is relevant and why I support it.
In the next few minutes, I will try to demonstrate how appalling the finance minister's budget is as far as the drastic cuts to official development assistance it contains are concerned. This decision without vision makes it clear why the government did not want to make any commitments in early February, when the Canadian foreign policy statement was released. Also, the excessive focus on trade in this new foreign policy is brought to light in the budget tabled on February 27.
The early 1990s signalled the end of any measure that would have enabled Canada to reach the target of 0.7 per cent of GDP for official development assistance. In the 1991 budget, aid spending on Eastern European countries and the Commonwealth of Independent States was increased at the expense of ODA.
In his 1992 economic statement, the Minister of Finance cut $50 million in the international assistance envelope. The 1994 budget called for international assistance to be reduced by another two per cent in 1994 and 1995, but what this budget says is quite different. Ignoring this commitment to cut only 2 per cent, the Minister of Finance decided to cut 21 per cent, or $532 million, from the development assistance budget.
In addition, the cuts announced between now and 1997-98 represent a shortfall of $1.3 billion for our international co-operation programs. As I said, these cuts mean a 21 per cent reduction in the total development assistance budget. I would point out to this House that the cuts to the Department of National Defence represent only 14.2 per cent. Surprising for a government that acknowledged the threats to our society in the post cold war period come, in large part, from development problems.
In 1994, the development assistance budget corresponded to 0.4 per cent of Canada's GNP; in 1997, the figure will drop to less than 0.3 per cent. This will make Canada one of the least generous of the industrialized countries, because this figure will be below the average of the OECD countries.
The budget of the Export Development Corporation grew by $155 million, whereas the budget of the voluntary sector of official development assistance will be cut by $45 million. Where is the logic in all this? The cuts to the budgets of NGOs lucky enough to still receive support are estimated at about 15 per cent.
The Bloc Quebecois' position on development assistance has always been clear, unlike the Liberals' position in their red book. It has remained consistent from the speeches by the Leader of the Opposition during the 1993 elections to debates in the House and in committee. Should I point out that the Liberals had set 0.7 per cent of the GNP as an objective for official development assistance?
We can understand, in a time of budget restraint, the government's making major cuts in the development assistance budget.
However, in light of the work done by the special joint committee, that assistance programs for volunteer organizations will be hardest hit by these cuts is totally unacceptable.
Last Friday, CIDA announced a 100 per cent cut in funding for NGOs working in the area of public awareness of international development among Canadians. This will take effect on April 1. The Bloc Quebecois obviously objects to these measures and to the way they were announced, with only one week's advance notice. I do not understand this budget measure. The savings the cut will generate only account for 0.5 per cent of the total official development assistance budget. The consequences and the chain reaction that this measure will set off on the international solidarity and co-operation network are inestimable.
One thing we can already be sure of is that the future of close to one hundred small NGOs which are mostly located in the outlying regions, already raise 50 per cent of their funding from other sources and co-ordinate the activities of thousands of committed volunteers, is in danger.
For a few years now a world-wide consensus has been emerging that these non-governmental organizations, which do remarkable work at little cost, are very efficient. It is in this context, and despite the speeches and commitments it made in front of international forums, that the Canadian government quite unexpectedly cut the funding of close to one half of the country's NGOs and is reducing by 14 per cent the funding of the remainder.
But most of the witnesses heard during the vast consultations led by this government on Canadian foreign policy were saying the opposite. Following these consultations, the Special Joint Committee Reviewing Canada's Foreign Policy recommended in November 1994 that public participation be considered a priority for official development assistance.
After rejecting the joint committee's recommendation, the government went so far as to cut this program's funding and seems to want to perpetuate the ambiguous mandate of CIDA, which is becoming increasingly interested in promoting international trade and less interested in accomplishing its main mission: promoting sustainable human development in the poorest nations of the world. Particularly as Quebecers and Canadians are adopting a new world vision of solidarity and sharing rather than building up armed defence.
It should come as no surprise that the Canadian Council for International Co-operation and the Association québécoise des organismes de coopération internationale represent more than 100 humanitarian agencies. These NGOs depend on the generosity and dedication of thousands of volunteers who donate their time and money to help the poorest and neediest men, women and children on this planet. Development aid must help reinforce co-operation between institutions and Canadian citizens and those in the third world, and the best vehicle to achieve that is the NGOs, whose people become part of the community they are helping.
Are we to conclude that with these new budgetary measures, the government has abandoned this network of solidarity between Canadians and the people of the third world?
Canada's annual budget for National Defence is around $10 billion; while the budget for development aid is only $2 billion. We can assume that the defence industry is anxious to keep it that way. However, the Canadian government cannot aid and abet these questionable choices indefinitely. To maintain this kind of gap between military spending and development aid is unacceptable.
If they are not prepared to be generous, the political leaders of this country should at least realize that development aid can be profitable for industrialized countries. In Canada alone, development assistance creates 45,000 jobs, supports 2,000 businesses and provides economic spinoffs for 80 colleges and universities. Every dollar invested, and it is indeed an investment, directly generates $6.42 in Canada.
Budget Implementation Act, 1995
Rey D. Pagtakhan Winnipeg North, MB
Mr. Speaker, I am pleased to rise and speak on Bill C-76, an act to implement certain provisions of the budget tabled in Parliament last February 27.
The finance minister has put forward a ground breaking budget that has struck a delicate balance within fiscal toughness and sensitivity to people.
The response from the Canadian public has been positive. In my home city of Winnipeg our largest daily newspaper, the Free Press , carried the headline the day after the budget: ``Tough plan boosts buck, raises hopes''.
A column in the February 28 edition of the Montreal Gazette read: ``[The] budget sets the country on a new course, one in which the national role of the federal government must be rethought, renegotiated and rediscovered. It's a good start''.
The Globe and Mail agreed: ``Canadians, and those abroad who wish us well, must hope that this brave beginning-will now be sustained''.
What is this brave beginning? It is the mark of a government coming to grips with a cumbersome national debt which threatens to foreclose on the futures of our children and grandchildren. It is the mark of a government committed to ensuring the needy among us from all walks of life continue to receive the assistance they need. It is the mark of a government that recognizes the need to streamline its own operations, eliminating duplication and waste while improving delivery of all services.
How will the government achieve these ends? First, it will realize $29 billion in savings over three years: $5 billion in 1995-96, $10.6 billion in 1996-97 and $13.3 billion in 1997-98. These measures are necessary to ensure that regardless of the direction financial markets take in coming years, the government will meet its target of reducing the deficit to 3 per cent of the gross domestic product by year 1997-98.
These tough measures have proven the government is serious about reducing spending and doing so only, in contrast to other parties, after an exhaustive review of government programs aimed at identifying priorities and eliminating waste and duplication.
World financial markets reacted favourably by sustaining our AAA credit rating. The importance of this rating must not be underestimated. Had it fallen, interest rates could have risen and the interest Canada would have been required to pay on its debt would have increased dramatically.
As crucial as these deficit reduction measures were to the 1995 budget, Canadians also expected something more. They wanted to be reassured that savings would not be achieved through deep cuts in Canada's cherished social programs, particularly medicare.
Indeed, one vital component of the budget provides for improved delivery of health care and enhanced research on biotechnology as well as retaining funds necessary to ensure improvements in the Canada assistance plan and to student financial assistance.
The introduction of so-called block funding in the form of the new Canada social transfer will enable the provinces to exercise greater control over how moneys are allocated, thereby allowing them the flexibility to fund programs according to local demands for services. The delivery of social programs is the constitutional responsibility of provinces and that they will have. It is also the claim of provinces that they should have this flexibility and that they will have.
This approach will bring health care closer to communities. At the same time, the system allows the federal government to continue to uphold the five principles of medicare enshrined in the Canada Health Act: universality, accessibility, comprehensiveness, portability and public administration. The Minister of Finance said that flexibility does not mean a free-for-all.
These principles of medicare are not subject to federal-provincial negotiation. They are not negotiable, as the two levels of government implement the agreement on the Canada social transfer. Rather they are fundamental pillars of Canadian society. They are the foundation on which our health care system is constructed.
The government has vowed in no uncertain terms that the Canada social transfer "will not sacrifice the quality of service available to Canadians". We must remember that it is possible not only to maintain our current delivery of health care at the current level of funding but to effect improvements. In other words, we can do more with as much.
Key to this strategy is the practice of substituting equally effective lower cost treatment approaches for traditional ones. For example, we can make increased use of out-patient care, encouraging patients to see family physicians before consulting specialists and allowing non-medical health care processionals to substitute for medical doctors in defined areas of care.
The same flexibility within the new social transfer which can lead to improved health care also bodes well for the future of the Canada assistance plan or CAP. The incorporation of the CAP into the Canada social transfer provides the provinces with the freedom and flexibility they require to deliver social programs most efficiently and effectively. Again, the goal is to do more without increasing actual government expenditures. This is an attainable goal.
I mentioned earlier that the government has shown determination to ensure a sound future for youth. This determination is exemplified by the deficit cutting initiatives that relieve our children and youth of some of the burden of the national debt but it is found in other areas in the budget as well.
The federal contribution to university and college funding will be rolled into the Canada social transfer, again guaranteeing the provinces the freedom to distribute funds according to need and using the savings achieved through avoidance of duplication.
The government's continuing commitment to fund granting councils which support the direct costs of university research and which support the Canada student loans program as well as post-secondary education for Indian and Inuit students all attest to the government's commitment to our youth.
There is much in the budget to guarantee Canada both a prosperous present and an even more prosperous future. Part and parcel of that prosperity will be the maintenance of the social programs which have served Canadians well in the past by keeping our nation competitive and our citizens protected from social catastrophe. Under this tough, yet sensitive budget, Canadians can be assured that programs will become even more responsive to their needs in the future.
The government faces a daunting task as it leaves the 20th century and enters the 21st century. If government had simply slashed spending without due regard for the underprivileged among us, it would have turned its back on principle. If it had continued to spend without due regard for the future of the nation and the future generations it would have turned its back on reality.
Instead, as has been the case so many times since it took office, the government has taken the middle ground approach and avoided extremist solutions suggested by the two parties opposite. This balance is what ultimately will enable it to succeed where other governments have failed.
Budget Implementation Act, 1995
Jim Gouk Kootenay West—Revelstoke, BC
Mr. Speaker, I am going to limit my remarks on the budget today to transport, which is appropriate since I am the transport critic for the Reform Party and the Reform Party being, of course, the national opposition party.
Generally transport is an area that has great potential in reducing government costs and the devolution of government services to the private sector. In this area transport is generally moving in a direction that I agree with. One item that is being changed that I particularly agree with is the privatization of air
traffic services. This is a good move, especially now that the government has more or less agreed to go to the not for profit concept, as opposed to the crown corporation concept it was initially pushing.
Airport devolution is a generally good idea although I have some concerns about skimming. When I speak of skimming, I am talking about when they take all the revenues from 26 national airports, put them into a group and apply them for the most part to their general funding. At the same time they dump on to various provinces and regions all the costs of the subsidies to smaller airports. In most cases they are much less than the revenues the government is realizing from national airports.
One big area in the recent budget is the WGTA, the grain transportation subsidies. I have always supported the concept that they could be reduced and ultimately eliminated, with the caveat that the government must deal with many items that cost producers money. These are items that do not produce revenue for the government but take money out of the pockets of producers. I speak specifically of things like rail car allocation and labour disruption.
In a document the Minister of Transport put out coinciding with the budget he explained and recognized a problem with rail car allocation. He said it was something they would look into but that they would not do anything with at this time. It cost Canadian grain producers a tremendous amount of money. It is not a cost factor for the government but it should have been dealt with in conjunction with the reduction and elimination of the WGTA.
Likewise we have labour disruptions; the shutting down of ports, particularly the port of Vancouver; and rail strikes. We had a strike in the port of Vancouver last year. The government legislated the people back to work but did nothing to deal with future problems.
We had another one this year. Again the government legislated the people back to work but did nothing about a long term solution. Immediately on the heels of the Vancouver strike this year we had a national rail strike. Again the government legislated people back to work but did nothing about a long term solution.
These are matters that cost Canadian taxpayers and citizens money but do not provide any revenues for the government. These are matters the government should not be ignoring, which has unfortunately been its method of dealing with them.
I turn to the subject of Pearson airport. It will be a great surprise to many people that I would talk about it. Pearson airport has major ramifications on this year's budget. A bit of misleading information is coming out with regard to it and to the budget.
The government is currently looking at putting in a new runway, at a cost of something in the vicinity of $150 million. On top of the cost of the runway a possible lawsuit is in the works by the council on concerned citizens. It is concerned because building the runway is in direct contradiction to the findings of the Environmental Assessment Review Panel. It is entering into a lawsuit and the government will have the cost of dealing with the action, over and above the cost of the runway if it is built. In addition we have the development contract regarding terminals 1 and 2 at Pearson airport.
At minimum it will cost about half a billion dollars in combination of cancellation costs and court costs dealing with the cancellation. Even after it is all over with we still have to rebuild terminals 1 and 2, which two years ago was to cost the private consortium $750 million. We can be assured that if the government built it at the same time it would cost more and now we are talking two years later. We are talking of a minimum in the vicinity of $1 billion for that aspect. In total we are talking about an expenditure at Pearson of some $2 billion. It is interesting that none of that money is in the budget.
Let us talk in terms of the Liberal budget. Is it good? Is it bad? Does it do enough? We have to consider what it said and what it should be saying. This covers a couple of items in the transport portfolio alone. If the same type of misleading information applies with all other departments in government, what other surprises lie ahead of us? We have not seen the full picture. Unfortunately Canadian taxpayers will not get the rest of the facts until it is too late.
The budget does not explain the true situation in Canada. It does not deal with the true problem in Canada. As a result there will be further problems ahead that have not been spoken as yet.
Budget Implementation Act, 1995
Len Taylor The Battlefords—Meadow Lake, SK
Mr. Speaker, I rise to speak on second reading of Bill C-76, an act to implement certain provisions of the budget tabled on February 27, 1995. For my constituents the bill should be known as an act to kill the Crow or an act of unfairness to the prairie economy.
Bill C-76 is the legislation that will allow for the payment of compensation to the owners of farmland in the absence of the Crow benefit. I quote National Farmers Union President Nettie Wiebe:
The federal budget delivers a double hit to Canadian farmers. They are increasing farmers' costs by cutting transportation subsidies and then hitting us with fewer funds for farm safety nets, less money for dairy subsidies and reducing the budget overall.
I will direct my remarks to two points. First, I will look at the principle of withdrawing federal support from grain transportation. Second, I will address the specifics of the payment of the $1.6 billion outlined in the legislation before us.
I have said previously in questions in the Chamber, in comments to other speakers and in response to inquiries from the media that the elimination of the federal financial commitment to the transport of grain destined for export is the single most devastating element in a very difficult budget.
On February 27 the federal finance minister announced the elimination of the transport support program which, just two years ago, was providing $720 million a year. The grain on the prairies is grown on land that is farther from port than in any other export oriented grain growing country in the world.
I have been consulting with farmers and community leaders in areas supported by the farm economy. During the consultations we took out our pencils and calculators and looked at the implications of the elimination of the Crow benefit in real, personal and community terms. The only word to describe the implications of the federal government measure was devastating, the word I used earlier.
In the province of Saskatchewan the loss of the Crow benefit will mean that delivery costs from virtually every delivery point in the province will increase by about $1 million a year. Producers who deliver grain to local elevators will have additional freight costs deducted at the elevators equalling collectively about $1 million a year. With reduced incomes of some significance there is a net community loss that is unlikely to be made up elsewhere.
That is the point the federal government failed to address in the budget. The withdrawal of federal support will have an immediate effect on countless communities, most of which will have neither the resources nor the ability to make up the lost funds.
In spite of my questions and the questions of others, the federal government has not produced a single page of study, evaluation or analysis to indicate or prove the contention of the finance minister that the elimination of the financial support will lead to greater crop diversification or enhanced value added production capacity in these communities.
I draw attention to the speech yesterday of the Parliamentary Secretary to the Minister of Finance who talked in glowing terms about the elimination of the subsidy encouraging the development of value added processing and the production of higher value goods. He said that the elimination would result in a more efficient grain handling and transportation system. He said that the elimination of the Crow benefit would help maintain our market access for grain sales in foreign countries.
No evidence has ever been produced to prove these contentions. What is there? What analysis has been made to substantiate these claims? Absolutely none. Not one shred of evidence has been produced to give us any confidence that the investment to replace the lost income from increased freight costs will magically materialize. Every delivery point in Saskatchewan must find $1 million a year in new revenues just to remain where they are today. How many more peas can we grow? How many more pigs or cows can we produce? How many new flour mills, ethanol plants or breakfast cereal plants can we build by this time next year to replace the $1 million per community that is being taken out of our province by this single move in the budget?
There are a lot of unanswered questions which deal with the future of my province and even the uncertain future of the Canadian Wheat Board that are not being answered. Yet the government is proceeding with great abandon to ensure that the Crow benefit is gone before the end of the crop year. It is sheer madness.
On virtually every other issue the Liberals talk about their election promises, the red book promises, the guide to direct them in policy matters, but nowhere in the red book do we see a promise to get rid of the Crow benefit and bankrupt agricultural communities with such swiftness. I quote the red book: "Our goal is reducing input costs to make farming more valuable". What have the Liberals done? They have increased costs, not reduced them as promised in the red book.
I have asked the Minister of Agriculture and Agri-food and the Minister of Finance to postpone any actions on the elimination of their commitment and responsibility to the west until the long term implications are well known, thoroughly reviewed, and mitigating measures are outlined and debated. It is absolutely crucial that we look at what the long term implications will be before the decisions are taken in the Chamber by the members who are sitting here today.
In the legislation before us the government is barrelling ahead with the decision to kill the Crow without knowing what it will mean to those most affected. The legislation gives the government the authority to make a transition payment to the owners of farmland in western Canada in lieu of the Crow benefit. Once the legislation is passed and the process of making the payments is in place, it will be very hard, indeed it will be impossible to go back and assess how bad the damage will be. We have to defeat the legislation if we are to make the proper assessments.
At the same time it is important to look at the specifics of Bill C-76. There are three main problems with which I would like to deal: the principle of the idea, the payout, and the process of regulations. In principle the idea of providing $1.6 billion in a payout is wrong. First, as I said, it should not be done. Second, if the government insists on making the payout obviously it is very inadequate.
Every member of the Chamber is aware that the Crow deal was originally a condition of building the railway in return for being given a lot of land on which they have made a lot of money over the years. In return for the government building the railway itself, the railway companies promised to ship grain from the
prairies to the port. It was a very simple condition. It can almost be called a condition of Confederation for western Canada.
Many farmers are very upset the government came along and out of the blue announced the deal was no longer in effect. The farmers have to pay once again for a service that was paid for long ago, and the railways once again get off scot free. In principle that is grossly unfair.
The $1.6 billion is an arbitrary figure that means virtually nothing. "Where did the government get this figure from", farmers ask. The prairie pools have made their calculations. They said if the Crow benefit were to be eliminated and replaced with a fair payout to farmers the bill should be providing authority to pay $7 billion rather than the inadequate $1.6 billion which will do very little to compensate the landowner or the shipper, no matter how we look at it.
Another problem with this section of the legislation is the fact that it proposes to pay the $1.6 billion to landowners rather than to producers. It seems the Liberals think that compensating for the loss of land value, which they acknowledge will result from the loss of the Crow benefit, is more important than compensating farmers for the additional costs associated with increased freight rates. Paying money to landowners means that about 40 per cent of the payout destined for Saskatchewan will go to the banks and other financial institutions such as the Farm Credit Corporation.
Although the Liberals say that these institutions should pass along the payout to those who lease land from them, there is no guarantee, no certainty that anything will get passed on. At the same time the legislation makes the payout to landowners including the banks tax free; but money that finds its way to farmers who lease their land, if the money gets to them, becomes taxable. Obviously this means that the Liberals seem to have much more sympathy for the poor banks than they do for the poor farmers.
Third and last in this section, the legislation before us leaves virtually all the details about how this is going to be handled to t