House of Commons Hansard #15 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was budget.

Topics

The Budget

1:30 p.m.

Reform

Jake Hoeppner Lisgar—Marquette, MB

Mr. Speaker, I always like the positive rhetoric I hear from the other side, especially when it comes from the member for Hamilton West.

Looking at the Environics poll, if things are so positive how come only 14 per cent of the people think the recession is over and 86 per cent believe we have a recession? Statistics Canada said that in 1995 we had a record number of bankruptcies at 78,000.

That does not sound quite as positive to me and maybe I could be filled in on some of those things which I have not taken in from the hon. member's speech.

The Budget

1:30 p.m.

Liberal

Stan Keyes Hamilton West, ON

Mr. Speaker, I wonder if the honourable member could tell me the date that poll was taken and the number of people in the poll.

The Budget

1:30 p.m.

Reform

Jake Hoeppner Lisgar—Marquette, MB

January 11, 1996.

The Budget

1:30 p.m.

Liberal

Stan Keyes Hamilton West, ON

The budget came out on March 6. The budget was so popular among Canadians that I can almost bet the honourable member opposite that when the next poll is taken, which I hope is after Canadians have had time to absorb all the fantastic news contained in the budget, the honourable member opposite will be eating humble pie.

The Budget

1:30 p.m.

Reform

Jim Silye Calgary Centre, AB

Mr. Speaker, I would like to ask the Parliamentary Secretary to Minister of Transport about that aspect of the budget which a number of his colleagues have touched on, the rewriting of the Tax Act with respect to custodial payments or payments for child support.

How does he rationalize the change in the Income Tax Act which to me, if he will listen to his logic, appears to be a tax grab because payment now for child support is no longer deductible?

It is acknowledged by the finance minister that there will be extra revenues to the government. It makes it sound like it will really do something with that money in the budget. It will increase the child tax credit.

If in the current system before it made this change the agreement between the couple was taxable, deductible, all that money was within the family.

Now the government has taken this issue and said: "Not all the money that will be shared between the two of you will be within your family. We will make it non-deductible, keep some of it ourselves and help a whole bunch of other people".

I have been trying to speak slowly to clarify my logic. Does that not mean that some of the money that would have been available for the children within that family will now be redistributed to other families?

The Budget

1:35 p.m.

Liberal

Stan Keyes Hamilton West, ON

Mr. Speaker, I thank the hon. member for his serious question. I believe rationalization comes in the knowledge that children will be better served. The spouse who looks after the children in most cases is the woman. The estranged husband will no longer be able to take advantage of the tax system; instead it will be the woman looking after the children. It is the children we are looking out for and the supporting parent will not have to declare that as income.

I think that is a bold step forward by the government, a progressive step forward by the government, one which will again serve the children of this country.

The Budget

1:35 p.m.

Reform

Leon Benoit Vegreville, AB

Mr. Speaker, how does the member reconcile his statement that the budget has brought no tax increase with the reality that as a direct result of the budget over $700 million more in tax will be paid? It sounds like double talk. How can the member reconcile his statement with the reality of the budget?

The Budget

1:35 p.m.

Liberal

Stan Keyes Hamilton West, ON

Mr. Speaker, the member forgets the government is on the positive side of the ledger, seeing the glass half full. As a direct result of the budget brought forward by the Minister of Finance the Canadian economy will take off, jobs will be created, people will be buying products made in Canada by those who will work in Canada in jobs to provide those products. That will provide the government with the income the member is wondering about.

The Budget

1:35 p.m.

Bloc

Jean H. Leroux Shefford, QC

Mr. Speaker, the purpose of my remarks today is to offer some few clarifications concerning the 1996 federal budget tabled on March 6 by the Minister of Finance.

We must admit that, overall, this year's budget was perceived in a very positive light by the people of Quebec and of Canada. Their general impression of it was there there will be no new direct tax increases for individuals this year.

This is a budget that did not make any serious waves, and left everyone feeling that they had been let off the hook, but appearances are deceiving. The Minister of Finance pulled it off very well, we must admit. He pulled off a really good one this time.

This year, the deficit will be a mere $32.7 billion, which shocked few people. According to most of the experts, the Minister of Finance has presented a good budget, because the taxpayers of Quebec and of Canada were expecting the worst.

I would like to point out, too, that the Minister of Finance has managed to have a lesser deficit than his predecessors, which seems to be a great accomplishment. It was managed in two main ways. First, by passing the buck. The buck was passed on to the provinces by reducing transfer payments for education, health and social programs by $7 billion over two years, which means $1.2 billion in additional cuts for Quebec alone, or possibly more. Second, by dipping his hand into the surplus in the unemployment insurance fund, to the tune of over $5 million.

In concrete terms, this means no tax reform, no public debate on social programs, no intention to review the question of tax havens for those who are not paying taxes.

Furthermore, this budget provides absolutely no measures to revive the labour market. Nothing new to create jobs. Already they have run out of ideas; the Liberal government is already worn out.

The government continues to hold out for a long-overdue economic recovery to carry it along. Why are the Liberals in Ottawa not delivering the promised jobs? Page 89 of the Budget Plan tabled in the House of Commons provides, and I quote: "-the average level of output in 1996 is forecast to be 1.9 per cent higher than in 1995-" This means that the federal government expects a moderate growth of 2.5 per cent for 1996. Reality, however, is quite different from the budget plan the government drew up for itself in order to create the jobs that never materialized in 1995, but were the watchword of the red book of the 1993 election. Unfortunately, in 1995, growth was no more than 0.6 per cent. However, in the 1995 budget, the government forecast a significantly higher level of growth, a level of real growth of 3.75 per cent, which is six times less than forecast. What a minister.

The fact of the matter is that, since the Liberals came to power at the end of 1993, the economy has not stopped collapsing, and the deficit has not stopped growing exponentially, despite appearances of sound management of public funds and reforms that have not stopped expanding the gap between rich and poor. It is a very sad state of affairs.

The cost of the public debt of the federal government is the prime component of federal spending, representing 29 per cent of all expenditures in 1995-96. In 1996-97, debt charges will represent over 30 per cent of the federal budget. I should also point out that 36 cents out of every dollar of tax revenue collected in 1995-96 currently goes to paying interest on the federal debt. It is written in black and white on page 121 of the Budget Plan. At this rate, less than two years from now, debt charges will be the federal government's single largest item of expenditure.

In 1993-94, the first year the Liberals were in power in Ottawa, the deficit was $42 billion. The second year, it was $37.5 billion. And the third year, $32.7 billion. After three years of Liberal

government, we have accumulated $112.2 billion in debt. That is a large sum of money. What the government is doing is playing the financiers' game. Lenders are getting rich at our expense.

Just to service the debt in 1993-94, Canada has paid its creditors $38 billion. In 1994-95, creditors were paid $42 billion and, in 1995-96, we paid $47 billion to service the debt. Since the last election, in 1993, the government in Ottawa has added $112.2 billion to the deficit; as a result, the people of Quebec and Canada have paid more than $127 billion to our happy creditors. And they would have us believe that the deficit is being reduced. On the contrary.

Debt charges will be increasing faster, even if the annual government deficit is getting lower. Interests are making the deficit increase at an alarming rate. The total federal debt for the past fiscal year was $578.4 billion. This means that, next year, debt charges should be about $47.8 billion, or an $800 million increase over last year, in spite of cutbacks.

For 1997-98, according to government forecast, debt charges should be $49 billion, or a $1.2 billion increase in just one year.

At this rate, the federal government's debt will climb to $603 billion by this time next year. This is the unfortunate reality of Canada's public finances. Where does all this money go? Who benefits? Who pays the bill at the end of the day? It is taxpayers like you and me, more specifically the middle class. These people are getting sick and tired of being squeezed like lemons. Taxpayers are fed up with random reforms that do nothing to address the problem so that, at the end of the day, it is still the same people, and especially the middle class, who get stuck with the bill.

This year, individual Canadians will pay a total of $60.5 billion in income tax. Workers and employers will contribute $18.5 billion to the UI fund. Taxpayers will shell out over $17.2 billion for the GST. In 1995-96, taxpayers in Quebec and Canada will pay a total in excess of $130.6 billion into the federal government's coffers.

Does the government realize what it is asking taxpayers, and more specifically the poorest in our society?

Here are some realistic suggestions to help the government reduce its deficit and thus restore confidence. First of all, this year, the Governor General of Canada will cost taxpayers over $9.8 million and the Senate, $40.7 million. How much longer can we afford such luxury?

Do we still need a budget of more than $10.5 billion for national defence? There is still $6.4 billion in unpaid taxes this year. What is the federal government doing to collect these unpaid taxes? How long must we wait for the federal government to close the numerous tax loopholes, including family trusts that shelter billions of dollars.

In conclusion, why should the federal government not cut Canadians' tax rate? Is this an unrealistic or silly idea? Not at all. Reducing the tax rate would help stimulate the economy by increasing consumption, thus creating jobs while raising government revenue.

The Budget

1:45 p.m.

Outremont
Québec

Liberal

Martin Cauchon Secretary of State (Federal Office of Regional Development-Quebec)

Mr. Speaker, you will understand that, having listened to such ridiculous remarks, remarks that have nothing to do with the reality and are in fact an insult to the intelligence of Canadians, I just had to respond.

The subject of transfer payments was raised earlier; I will just touch on it because I know that we are short on time. In discussing this issue of federal transfers to the provinces, the people opposite fail to mention that the Quebec finance minister had made forecasts regarding transfer payments and that those announced in the budget speech are $600 million higher than anticipated by the Quebec government.

They fail to mention that, for the very first time, a Canadian government has had the courage to develop a five-year plan to ensure stable, and not just stable, but progressively higher transfer payments by establishing a cash transfer threshold.

They also fail to mention, which is unfortunate, that equalization payments keep growing from year to year and that the province of Quebec greatly benefits from these payments. The subject of employment was also raised, to complain about the lack of employment measures.

You will understand how staggering it is for me to hear such a thing, given the fact that the federal government's role is to form partnerships and create a climate conducive to good investment. Deficit reduction fosters job creation. Technology Partnerships Canada, the program announced by my colleague from Industry Canada, is much appreciated by Canadian industry and small business. And so is the program geared toward young people; $315 million are allocated to this program. There is also the export financing program involving the Export Development Corporation.

These are measures which prove that the government is headed in a direction leading to the development of a sustainable economic safety net that will foster the creation of steady jobs.

To conclude, regarding the employment insurance, the amounts that will be set aside as a result of the proposed reform will be invested in this employment insurance, to maintain stable contributions and build a reserve to sustain this stability even through an economic recession. It should also be pointed out also that this

government is the first government to hit its 3 per cent of GDP deficit reduction target. Those are the real figures.

The Budget

1:50 p.m.

Bloc

Jean H. Leroux Shefford, QC

Mr. Speaker, the secretary of state tried to be insulting. He tried to promote his doctored budget. He did not pay any attention to my comments.

The Budget

1:50 p.m.

Liberal

Martin Cauchon Outremont, QC

Just read the budget.

The Budget

1:50 p.m.

Bloc

Jean H. Leroux Shefford, QC

I did read the budget, as he suggests. Some facts are undeniable. Regardless of what the secretary of state may say, the debt has gone up $112 billion, and that must be pointed out. That upward trend seems endless. The federal government offloaded its deficit onto the provinces. It took $5 billion from the UI fund. Do you think this is how we will solve the problem in a lasting way and create jobs in Canada? Absolutely not.

Of course, the secretary of state will not agree with the suggestion I made toward the end of my comments, because he is satisfied with small traditional methods that do not work. However, if we managed to lower the rate of taxation, more money would circulate; people would spend and invest more. In the end, there would be a lot more money for the government.

The Budget

1:50 p.m.

Bloc

Jean-Guy Chrétien Frontenac, QC

Mr. Speaker, since 1970, Canada showed discipline by setting up a supply management system in the agricultural sector. Over the last 25 years, dairy, poultry and egg producers had to show self-discipline and comply with strict rules under this supply management system.

These producers have quotas which they must reach but not exceed. Everyone benefits: the producers, the processors and the consumers. Producers are guaranteed a stable price for their product, and processors benefit from a reliable, quality and stable supply; As for consumers, they benefit from a very high quality product at a fair and reasonable cost.

But then our good Minister of Finance decided to get involved. In March 1995, one year ago, he announced that subsidies to industrial milk producers would be reduced by 30 per cent over a two-year period. Twelve months later, the same Minister of Finance, a Liberal member representing the urban riding of LaSalle-Émard, once again targets industrial milk producers, and particularly Quebec's 12,000 industrial producers, who provide close to 50 per cent of the country's industrial milk.

To make things worse and even more unfair, in his 1995 budget, the minister not only reduced the subsidy by $560 million, thereby committing an injustice, but he also allocated close to $3 billion to western producers.

And in order to save the full amount of the milk subsidy he is abolishing, in order to save $160 million, he comes up with nothing to compensate the milk producers. These folks should not expect to be defended by Liberal members of this House.

I recall the Liberal candidate who won the election in Brome-Missisquoi, who is sitting here. There he is, looking at me obviously. He went around his riding saying: "I am going to Ottawa to defend you, to represent you", and this was in a largely rural riding. What does he have to say about these unfair cuts to milk producers? He remains silent. He does not say a word. And again on Friday, Saturday and Sunday, I visited five ridings to meet with milk producers. They asked me: "Where are our government members in Ottawa?" Let us face it, MPs from the western provinces and the Maritimes will not be heard defending milk producers here. They hardly have any in their provinces: 50 per cent of milk producers are in Quebec and 30 per cent in Ontario.

But in Ontario, of 99 MPs, only one is a member of the Reform Party. I ask the 98 Liberal MPs from Ontario, what have you said in defence of your industrial milk producers? Nothing. We have not heard a peep out of you.

Last year, you managed to find $3 billion in compensation for western grain producers, but for milk producers in Quebec and Ontario, you came up empty.

So, the only ones you will see speaking out in this House against this unfair situation are the members of the Bloc Quebecois.

I remember very clearly at the time of the last referendum in Quebec hearing the leader of the opposition, a Liberal, say in the riding of Portneuf: "You cannot vote no, you are getting a subsidy from the government in Ottawa for your industrial milk". As it happens, I have been to see one of my friends, a producer, who told me about the subsidy he received for the month of January.

Mr. Speaker, would you like me to continue after question period?

The Budget

1:55 p.m.

The Speaker

Yes, my dear colleague. You may continue after question period. You have approximately four or five minutes remaining. I would remind you that we may not use props in the House of Commons.

We will now proceed to statements by members.