House of Commons Hansard #85 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was israel.

Topics

The Economy
Oral Question Period

2:25 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, on behalf of all of us in the House, I would first like to welcome the leader of the Reform Party to the debate.

The fact is that had the leader of the Reform Party been paying attention, he would have noticed that right from the beginning when we took office we had a two track approach on the whole question of cleaning up the balance sheet. The first was certainly to get Canadians back to work. As a result of that, the Prime Minister embarked on several trips abroad with Team Canada which brought a great number of new jobs to this country. He would have also noticed that we extended concessional financing. We have invested in R and D. Through the Department of Human Resources Development we put money into summer jobs for students and re-entry jobs for students.

The fact is, in addition to the substantial interest rate decreases which have occurred as a result of this government's action, 750,000 new private sector jobs have been created since we took office. That indeed is something for Canadians to be proud of.

The Economy
Oral Question Period

2:25 p.m.

Reform

Preston Manning Calgary Southwest, AB

Mr. Speaker, if the finance minister wants to debate, he has to face unpleasant facts.

The unpleasant facts are the Liberals have cut transfer payments by 40 per cent. They have cut health care payments by $3 billion. They have cut benefits to seniors. They are dismantling social programs to pay the interest on the ballooning $600 billion federal debt. The finance minister has gone through all of this without being able to translate it into benefits of lower taxes and more jobs for Canadians.

My question again is: Why has the finance minister failed to give Canadians lower taxes and more and better jobs?

The Economy
Oral Question Period

2:30 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, I would simply ask the leader of the Reform Party to hark back to Reform's first budget. When he does so, he will see that what Reform recommended in terms of health care, what it recommended in terms of transfers to the provinces, and what it recommended in terms of old age pensions was to simply kill the patient.

It really is the height of something that would be unparliamentary in terms of language for the Reform Party leader to stand up now and talk about what we would do. I would simply ask him to carry his thought one step further. The leader of the Reform Party has said that we should cut taxes. Fine. Let him now stand up and tell us where he would cut in our programs. What social programs would he cut in order to justify a cut in taxes?

The Economy
Oral Question Period

2:30 p.m.

Reform

Preston Manning Calgary Southwest, AB

Mr. Speaker, in this House we ask the questions and the finance minister can bluster all he wants. He can avoid the question all that he wants, but he cannot escape the fact that he has failed to deliver on the government's promise for jobs. The reason he has failed is that he cannot deliver on tax relief.

I will ask him one more time. Why has the finance minister failed to deliver tax relief to Canadians and the more and better jobs that tax relief would bring?

The Economy
Oral Question Period

2:30 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, in every one of our budgets we have brought forth tax relief for specific areas. In terms of unemployment insurance, we cut the costs over the last two years by $1.8 billion. We have provided tax credits for poor families with children. We have provided tax credits for people in school.

The leader of the Reform Party says that they ask the questions in this House. In terms of the basic question of what social programs would you gut to pay for your tax programs, the Canadian people will insist that you answer that question.

The Economy
Oral Question Period

2:30 p.m.

The Speaker

I remind you my colleagues to address your statements to the Chair.

The Deficit
Oral Question Period

October 10th, 1996 / 2:30 p.m.

Bloc

Francine Lalonde Mercier, QC

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

If the federal government can prove it has the deficit under control, it is because it is reducing it mostly on the backs of UI contributors by accumulating a surplus of at least $5 billion a year through payroll taxes, which, as we know, are paid mainly by workers and discourage job creation.

Will the minister admit that, by asking lower and middle income workers, the unemployed and businesses-especially small businesses-to build up this surplus and pay for the deficit, he is dangerously and unfairly taxing employment?

The Deficit
Oral Question Period

2:30 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, when we came to office, there was a $6 billion plus deficit in the unemployment insurance fund. We had to make it up and we did. This year, we have a $5 billion surplus.

According to Human Resources Development Canada's chief actuary, we need a surplus of $10 billion to $15 billion so the fund can sustain another economic downturn or recession. Second, it is clear that if we lower premiums, every five-cent reduction would cost us $350 million, and we would have to find this money somewhere else.

There is a question I sincerely want to ask the hon. member. There are several kinds of payroll taxes, not only employment insurance, but also taxes for health care, training, the CSST. If this is true, I hope the hon. member will also ask the provinces to lower their own payroll taxes.

The Deficit
Oral Question Period

2:35 p.m.

Bloc

Francine Lalonde Mercier, QC

Mr. Speaker, as the commission's chief actuary said, the accumulated surplus will amount to at least $5 billion a year, whereas during the worst of the recession, when benefits were higher and more unemployed people had access to unemployment insurance, it was close to $6 billion. This increase makes no sense at all.

Since what really matters is employment, will the minister admit that, beyond his fine-sounding words, Canada's citizens are in fact poorer according to Statistics Canada, as the real disposable income per person has dropped by more than $1,000 since 1989? Will he admit that Canadians have become poorer?

The Deficit
Oral Question Period

2:35 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, first of all, if the hon. member looks at her figures, she will see that, according to Statistics Canada, Canadians did get poorer-she is right about that-but it happened before we came to office. Since we came to office, the situation has stabilized, which means we made significant progress. We would like to increase Canadians' income, but before we could do so, we had to stabilize it.

Second, yes, there will be a $5 billion surplus at the end of the year. This does not mean that the surplus will keep growing forever. But we do need a surplus to protect ourselves against a recession.

As I said earlier, according to the auditor general, this money is included in our figures. When we lower premiums as we did last year and as we intend to do this year and hope to do in the years to come, it certainly costs us money.

Having said that, I want to ask the hon. member, because I myself cannot ask my provincial counterpart, Mr. Landry: Will she ask Mr. Landry, will she thank Mr. Landry, who said yesterday-

The Deficit
Oral Question Period

2:35 p.m.

The Speaker

Your time has expired. The hon. member for Capilano-Howe Sound.

The Deficit
Oral Question Period

2:35 p.m.

Reform

Herb Grubel Capilano—Howe Sound, BC

Mr. Speaker, yesterday's fiscal update needs a critical update. Only in the never never land of Ottawa is there celebration over a deficit of $29 billion. Only in the never never land of Ottawa is there celebration over deficit reduction by downloading on the provinces.

Why has the Minister of Finance burdened provincial health, education and welfare programs with cuts of $6 billion while he lets his own government get away with cuts of less than $2 billion a year?

The Deficit
Oral Question Period

2:35 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, it was made very clear in the presentation yesterday that while we were very proud of having bettered our targets for the second year, and while I think all Canadians can take great pride in the control which we now have over the nation's finances, we made it very clear that victory was not yet won. The fight ahead of us is going to be very tough, and we are going to stick with it. I think the hon. member should understand, and I would hope that he would join with this side of the House and with all Canadians as we stick to what is going to be a very difficult fight.

I would also hope that perhaps he would get his numbers just a little more correct. The fact is that in the period 1994-95 to 1997-98 in terms of our own spending as opposed to transfers to provinces, we have cut by $8.3 billion, and total entitlements to the provinces have only been cut by $4.1 billion.

The Deficit
Oral Question Period

2:35 p.m.

Reform

Herb Grubel Capilano—Howe Sound, BC

Mr. Speaker, I guess we will have to look at the record of what his deputy minister said yesterday. As of yesterday it was $6.3 billion.

I wonder how this works out. Coming from British Columbia, creative accounting in federal fiscal updates scares me. Creatively, last year's fictitious deficit was improved by a fictitiously large windfall. By a very mysterious coincidence, projected declines in revenues, exactly dollar for dollar, match projected declines in interest costs.

How many more such fictitious numbers and creative accounting are behind the minister's assurance that he is hitting his unchanged and unchanging targets?

The Deficit
Oral Question Period

2:40 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, the hon. member knows there is no fictitious accounting. Our books are certified by the auditor general. The auditor general goes through them and it is according to generally accepted accounting principles. I do not think that it behoves the hon. member to cast aspersions on the federal government's numbers because he knows the implications of what he is saying.

I would like to go to the member's question of transfers. We all have to understand something. When we cut, whether it is transfers, which we do not want to do, or in our own backyard, it impacts on the provinces. It really is slightly bogus to talk about cutting this way and cutting in our own backyard as if it does not cut the provinces.

If military spending is cut and a base is cut in a province it is a cut in that province. Is the hon. member saying that we should cut old age pensions? We will not do it. However, if we ever did, it would impact on welfare in the provinces. Is he saying we should cut R and D? If we did, it would affect the universities.

There is nothing the federal government does that does not impact on the country. That is why we will not cut old age pensions, why we will not cut research and development and why we will not savage this country.