House of Commons Hansard #59 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was riel.

Topics

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10 a.m.

NDP

Lorne Nystrom Qu'Appelle, SK

moved:

That this House condemns the government for promoting an economy where the gap between the superrich and ordinary Canadian families is widening, risking the future of our youth, and strongly urges the government to introduce in the coming budget measures ensuring every Canadian an opportunity to share in a new prosperity.

Mr. Speaker, we have introduced a topic in the House for debate today which is a very important and growing issue right across the country, the issue of increasing inequality.

For many years in the sixties and seventies the gap between the rich and the poor was narrowing in this country and we were proud of some of the progress we had made. New social programs like the Canada pension plan and universal health care had narrowed the gap between the wealthy people and the poor people of this country. It was a legacy that we were all proud of as Canadians.

I remember very well back in 1968 when the then leader of the Liberal Party and the prime minister of the country, Pierre Elliot Trudeau, campaigned across this country about a just society and decreasing these disparities. That went on for a while, but in the last 10 years or so, and in particular since this Liberal government came to power, we have seen the creation of what I call the unjust society where the gap is widening once again between the wealthier people and the poorer people in Canada.

As we are only two weeks away from the budget, it is important that we start putting some of these issues into the public record and debate what I think is a big issue in this country, two classes of Canadians, the wealthy Canadians, the very wealthy Canadians and the rest of Canadians, particularly the poorer side of the spectrum.

What I want to do this morning very briefly is put some information into the House and hopefully put some parameters on the debate we are having today.

Since 1989, which I am going to use as our base year, average family incomes in Canada have fallen by roughly 5%. They have gone down, not up. This is despite the fact the Minister of Finance says the economic fundamentals are right, unemployment is finally starting to go down, inflation is below 1%, that the budget is going to be balanced and there will be a fiscal dividend.

Despite all that and despite the fact the economy, as the minister says, is doing better, the question is better for whom. It is certainly not better for the average Canadian family whose income has gone down by 5% in the last seven or eight years.

Since 1989 we have 538,000 more children living in poverty in this country, one of the wealthiest countries in the world. The number of food banks has tripled in Canada since 1989. The number of people filing for bankruptcy has tripled since 1989.

We also see that the number of low income persons in 1996 was 40% higher than in 1989. What we are seeing now, I maintain, is the creation of an unjust society that is going to be the legacy of this Minister of Finance unless he changes his priorities and starts to redistribute income and opportunities in Canada. That is what this debate is all about this morning.

What are the reasons for this? I think there are four or five very obvious reasons. One has been the determination of the Bank of Canada over the last number of years, with the support of this finance minister and previous finance ministers, to fight inflation and put inflation ahead of the creation of jobs and economic growth. That has slowed down the economy, created unemployment, made the borrowing of money more expensive and slowed down the expansion of small businesses and the farm economy right across the board.

Second, there is no priority in this country to create jobs. There are no targets for reducing unemployment and poverty like we have had targets for reducing inflation in Canada. The big one has been the cutback by this Minister of Finance in the transfers to the provinces on health and education. This has increased disparities right across the country.

In addition to that, we have had the gutting of the unemployment insurance system by the Minister of Finance in an effort to save money to balance the budget.

Finally, I suppose the symbolism of what is happening where the rich are getting richer and the poor are getting poorer was the announced proposed merger of the Bank of Montreal and the Royal Bank about two weeks ago. I predict that unless the Canadian people and the Liberal backbenchers in Parliament get up and speak about this, the Minister of Finance will acquiesce to this demand of his friends in the Bank of Montreal and the Royal Bank come about October or November of next year.

These are some of the reasons why the disparity is growing. I have had a chance to look at focus groups over the last couple of months and a major concern has been the growing gap between the rich and the poor, growing inequities which have created despair and poverty and crime and the social unrest we are starting to see not only in our big cities but right across the country.

When we talk about income disparity, this is something we should all be concerned about. Last year the top 20% of the Canadian people saw their incomes go up by almost 2%. The bottom 20% had a decrease in their incomes of around 3%. The disparity widens and it widens under the tutelage of the Minister of Finance. We see tremendous disparities.

Chief executive officers had a 14% increase in salaries in the last year while their workers had an increase in salary in those same factories and same companies of some 2.1%. CEOs received 14% and workers received 2.1%.

The CEOs of the Toronto stock exchange 300, those companies in TSE 300, who exercised their stock options in 1996 enjoyed an average increase of $653,700 in the last year, up from $238,000 in the previous year. In contrast, the wages of the CEOs' employees were raised by an average of 2.1 % in 1996, again a tremendous disparity that all Canadians should be concerned about; once again, the creation of what I call the unjust society.

Another good example is the whole question of some of the salaries of some of the leading CEOs in the country. I can mention Matthew Barrett, the president of the Bank of Montreal or John Cleghorn, the head of the Royal Bank in Canada. Both of them, with stock options and salaries and bonuses, enjoy salaries of well over several millions of dollars each and every year.

Then of course there is our good old friend Frank Stronach, the president and CEO of Magna International. I want to tell a little about Frank Stronach, the friend of the minister across the way of financial institutions. Frank Stronach had compensation last year of $43.2 million. Frank Stronach said: “If I add up all the hours I've spent working over the last 40 years, I probably haven't made much more than the minimum wage”. That salary is $43.2 million.

Let us do a little calculation. At $7 an hour, minimum wage, it would take Stronach, even if he worked 24 hours a day each and every day of the year, some 688 years to make some $43.2 million. And the ministers across the way just smile and they say that is fine, they contribute to our party. That does not matter. We are friends of Frank Stronach, we are friends of John Cleghorn, friends of Matthew Barrett. Whatever they want they will get.

These growing disparities in our country ought to be of great concern to us. It is not just Frank Stronach or the Cleghorns or the Matthew Barretts, but wealthy 2% or 3% of the people in this country are increasing their salaries, increasing their compensation, increasing their bonuses month after month and year after year and the disparity is widening. That is not a very good legacy to leave to the next generation.

I want to close, because I want to share my time with the member for Vancouver East, by pointing out some international statistics that we should take note of in terms of the gap between the rich and the poor. This is based on household income. We will find here that Canada has the second largest gap of the seven or eight countries in the OECD.

In the United States the gap between the rich and the poor is over $54,000. In Canada it is $42,500. It is the eighth largest gap of these nine countries. We are the second worst in terms of the gap between the rich and the poor.

I plead with the minister who is going to respond today on behalf of the Minister of Finance, the minister of financial institutions, to get up and tell us how they are going to create in this country more equality and more fairness between the rich and the poor. It is an extremely important issue. It is a sad commentary on our country, a country of great prosperity, with great potential, to see that out of the nine leading countries like France and Britain and Germany and the United States, we have the second largest gap between the rich and the poor.

What we are seeing now is the creation of the unjust society, the legacy of this Minister of Finance and the legacy of this Prime Minister.

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10:10 a.m.

Reform

Ted White North Vancouver, BC

Mr. Speaker, the member spoke at length about CEOs and how much they earn. I wonder what he is exactly suggesting here. Is he suggesting that we just print money and pay everybody $2 million a year? In which case we know for certain that it will not be long before we will be like Russia, communism all over again with total collapse of the economy, no incentive to work, no incentive for private enterprise or business whatsoever. I would like to know if he is suggesting that. If not, I would like to know whether he is suggesting that we reduce everybody's wages to $10 an hour, in which case I hope he and his colleagues would set an example by getting out of their business class seats on their flights back to Vancouver and by starting to act like socialists.

Surely they can see that 30 years of government overspending to get us $600 billion in debt did not create any jobs. We had the worst unemployment when we had $40 billion deficits every year. It is only now that unemployment is coming under control, thanks to Klein and thanks to Harris who finally have brains in their heads unlike the socialists who were in power.

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10:15 a.m.

NDP

Lorne Nystrom Qu'Appelle, SK

Mr. Speaker, I am always very happy to receive a comment and a question from the Reform Party. People watching the debate should know that Reformers are against this motion. They want to create more inequalities, more disparities, more money for the rich and less money for the poor. That is exactly what he is saying in criticizing our approach.

We are not talking about printing money. That is where he came from: Social Credit and funny money back in B.C. and Alberta many years ago. That is not what we are talking about.

We are talking about a Canada in which disparities will be decreased as they were in the 1960s and 1970s when the disparities between the rich and the poor were gradually decreasing because of programs and tax policies that were of more benefit to lower income people than they were to wealthy people.

That is the direction we want to go in. We can do it through the tax system. We can do it through emphasizing growth and the creation of jobs. We can do it through the federal government spending money on health and education. That is what Canadians want according to all the polls we have seen and all the people we have spoken to. They want more money put back into health and education.

The Minister of Finance has cut back on health and education. Reformers would want even more cutbacks on health and education. They worship at the altar of Mike Harris. They worship at the altar of Ralph Klein. They worship at the altar of the far right in the world like Margaret Thatcher and Ronald Regan, but that is not the way the Canadian people want to go.

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10:15 a.m.

Bloc

René Canuel Matapédia—Matane, QC

Mr. Speaker, I listened to the comments made by my two colleagues, one from the Reform Party and the other from the NDP, and I see two worlds. One is the capitalist world so aptly described by my colleague from the NDP, which is heartless and would have us take as much as we can out of the pockets of the poor.

Let me give you an example. There was a report in yesterday's Le Soleil about a family of five in Rivière-à-Martre, in my riding, that had lost their home. This happened just recently. This is not a hypothetical case. They lost their home because someone did not have enough hours to qualify for employment insurance, which to me will always remain poverty insurance. This morning's Le Soleil reports the case of a lady in Carleton who also lost her home. These are facts.

My hon. colleague from the NDP said that banks are allowed to make billions while the government is withdrawing from everything. Would he agree that—incidentally I congratulate him on his speech—when we try to help out a small business, there is so much red tape and government standards are so high that we end up doing more harm than good. I would like to hear what he has to say about this.

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10:15 a.m.

NDP

Lorne Nystrom Qu'Appelle, SK

Mr. Speaker, I fully agree with my hon. colleague from Quebec.

From time to time, things do get too complicated at the federal level and in many provinces. I also agree with my colleague when he says that the Reform Party stands at the extreme right of the ideological spectrum in this country. It is an old-style ideology, a Margaret Thatcher ideology. We saw how the Reform Party reacted when I mentioned Margaret Thatcher and Ronald Reagan. The Reform Party is also good friends with the likes of Frank Stronach and Conrad Black, the very rich in this country. Those are differences. But the extreme right is not at all the position held by the people of Canada.

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10:20 a.m.

NDP

Libby Davies Vancouver East, BC

Mr. Speaker, the NDP opposition motion before us today is an important one because it comes just before the introduction of the budget. It gives us an opportunity to take stock of the reality facing most Canadians.

There is more than enough evidence to show why the government should be condemned for promoting an economy where the gap between the rich and ordinary Canadians is widening. As my colleague, the hon. member for Qu'Appelle, has so eloquently pointed out, there is enormous statistical information and evidence in our local communities about what the impact of Liberal government policies has been in every part of the country.

The reality is that between 1973 and 1993 the richest 30% of Canadian families saw their share of the nation's income increase by 5.4%, while the poorest 50% saw their share drop by 9%. This represented a $14 billion transfer from low and middle income Canadians to high income Canadians. We have information and evidence to show that over the last decade there has been an enormous growing disparity, something that Conservative and Liberal governments have abysmally failed to deal with.

We hear a lot of rhetoric in the House about the growing concern for children living in poverty. We have to understand that because of the policies of the government we have seen an increase in the number of poor families in Canada. Most of us would find it shocking to know that in this wealthy country we now have five million Canadians who live below the poverty line. Recent statistics from the Canadian Association of Food Banks show that the number of Canadians who depend on food banks is now something like 2.5 million people.

At our last caucus meeting we had a delegation from the Canadian Association of Food Banks that rightly told us its mandate was to see that food banks were eliminated. The main issue in terms of what causes the need for food banks is income inequality, the lack of income for poor people, the working poor and the unemployed. That has to be addressed in the upcoming budget.

The reality is that in Canada there are now half or more children living in poverty. In a country such as Canada that has tremendous wealth and resources this is something we simply cannot tolerate.

We have to ask what are the reasons for this growing inequality. It was very interesting to read a recent Angus Reid poll in the Globe and Mail which showed that 69% of Canadians felt that the federal government was deliberating pursuing economic policies that were widening the gap between rich and poor Canadians. This growing understanding within local communities and within Canadian society as a whole has been completely ignored by the Liberal government.

The Minister of Finance and other members of government continue to say that they are the defenders of social programs, young people, seniors or the unemployed. The real evidence is in the changes to our employment insurance program. The report tabled yesterday in the House demonstrates in a very tragic way that 37% of people who contributed to EI are now eligible for it, whereas a few years ago it used to be 87%.

We have seen a situation where the cuts in the Canada health and social transfer have had a devastating impact on our health care and education programs. More than that, we have seen debate take place about the multilateral agreement on investment. There is a seriousness about that debate. Canadians understand the Liberal government is pursuing with an aggressiveness we have never seen before a race to the bottom or a race for globalization, which means there will be a transfer of power to vary powerful corporations and a growing income disparity within our country and in global terms.

The hon. member who spoke before me addressed the very serious situation of the last few weeks with the merger of banks or the proposal to merge two of Canada's major banks. It was a real test to see whether or not the Liberal government was willing to stand up for the people of Canada and to say that the merger was not in the best interest of any Canadian, that it was not in the public interest.

Instead we saw a response that was ambiguous, that was waffling, and that called for review and study. We want to see leadership such as we have seen from the New Democratic Party. The government should state clearly that the merger of these banks will fail the Canadian people and will increase the growing inequality in our country.

I wanted to spend a few minutes talking about some of the local impacts of the policies of the government and why its economic policies should be condemned by relating them back to my own riding. My riding of Vancouver East includes the lowest income neighbourhood in Canada, the downtown east side. Every day I meet constituents who come to me with their issues and concerns.

I am reminded of Frank who came in to see me and told me that his income was $770 a month. Of that he is paying $540 a month in rent. That is an issue of being one step away from homelessness. That is an issue of stark reality in my riding. It is not just my riding. It is right across the country.

There is also a man I meet on the street from time to time whose name is Gary. He lives in a cardboard box. He is homeless. He wishes the federal government had not abandoned the social housing program, our national program for housing, in 1993.

In my riding of Vancouver East every day I meet people who are living in what is called single occupant rooms in incredibly substandard housing that in any middle income or middle class community would not be tolerated. Yet the reason people are living in this kind of housing is that the federal government abandoned its social responsibility and its fiscal responsibility to provide a social safety net to make sure that no person goes hungry or homeless.

That is the real evidence of what I see in my riding of Vancouver East in an urban community as a direct impact and result of Liberal government policies.

I have also met many students at Carleton University, the University of Toronto, the University of British Columbia and Simon Fraser University who have told me about their rising debt load. They are now carrying debts of $25,000, $30,000 and $40,000 as a direct result of the massive cutbacks to post-secondary education by the Liberal government of $2.29 billion since 1993.

Being a new member of the House and listening to the debate, I have heard many times members of the Liberal government talk about their professed concern for young people and the future. Young people are sick to death of waiting. They are fed up with the rhetoric. Their debts are climbing. Their inaccessibility to post-secondary education is growing. They understand clearly it is as a result of Liberal policies that have eroded our public education system.

A few months ago the NDP held a number of round table discussions across the country. One of them was on youth unemployment. Again the message was the same. Young people were saying they were fed up with government programs that provide a few months of training or a job opportunity and then there is nothing.

In speaking to the motion today as to why we should condemn the government for its policies, we want to say roundly and strongly that its policies have had a devastating impact on low income people, on poor people and on the middle class.

We have an opportunity today and in coming days to reorder the priorities and say that we are willing to set targets to reduce unemployment. We are willing to set targets to reduce poverty. We are willing to ensure there is a national child care program. We are willing to say there is a national housing program. As has been demonstrated by the alternative federal budget, these things are affordable to us if we have the guts, the courage and the leadership to say they are our priorities.

That is why we are condemning this government for the policies it has enacted.

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10:30 a.m.

Reform

Ted White North Vancouver, BC

Mr. Speaker, Reform actually agrees with the NDP that the Liberal government made a big mistake cutting transfers in support of education and health. Since 1990 it has always been Reform policy that we would not cut those transfers and that has always been printed in our policy. So it is one thing we do agree with.

However the NDP is constantly bleating about the growing gap between the rich and poor but it does not offer any solutions other than taking other people's money in the form of taxes and spending more. We do not help the poor by killing the rich. We do not help the poor by destroying the rich. We do not help people get jobs by destroying businesses.

New Zealand, which is the country I emigrated from, found out in 1983 that socialism does not work. I had a two hour meeting with the prime minister at the time, Mr. David Lange. He was an NDP equivalent. He told me that he had learned that without a vibrant private sector there were no social programs. It just does not work.

Capitalism does have a heart, but we see a different way of getting there. If we do not have businesses with good job creation we have not got any social programs whatsoever.

I ask the hon. member to give some solutions please. Stand up and tell us how we get to where she wants to be. We have a plan to get there and it is beginning to work. We can see it in Alberta and in Ontario. Unemployment nationally is going down. Let us hear her solution and tell us of a country where it has actually worked.

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10:30 a.m.

NDP

Libby Davies Vancouver East, BC

Mr. Speaker, I thank the hon. member for his question. Frankly I am very surprised to hear that the Reform Party agrees that cutting transfers was a huge mistake and it has had a very negative impact on Canadians right across the country.

What we have heard from the Reform Party time and time again is that it also takes a slash and burn approach. When the member offers up Ontario and Alberta as examples of what should be done, my goodness, is there any other evidence that we need to understand the direction the Reform Party wants to drive us in in terms of throwing everybody into unemployment or into low wage jobs.

In response to the question as to what are the solutions, I would suggest the Reform Party might join the NDP in having the courage to stand up and say that to have banks which make profits of $7.5 billion is obscene, that there is wealth in this country and the solution is in how that wealth is distributed. If we could harness that wealth and make sure it is reinvested and redirected to help ordinary Canadians, then we would be a lot better off.

The response to the question is that we need to have fair taxation. The Reform Party promotes an agenda and a program of unfair taxation by basically letting off profitable businesses and saying that somehow this will not create jobs. The reality is that what this country needs is a program of fair taxation whereby businesses and corporations pay their fair share of the need to support a public infrastructure which is something that benefits all of us whether we are rich or poor.

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10:30 a.m.

Bloc

Gilles-A. Perron Saint-Eustache—Sainte-Thérèse, QC

Mr. Speaker, I am pleased to rise today, February 13, for two reasons. First, it is my mother's birthday. Happy Birthday, Philomène. Second, I strongly support my colleagues to my left, the members of the New Democratic Party.

I particularly support the tax system they are advocating. I think the Canadian tax system is unfair. Here is an example. Why is a single mother earning less than $30,000, who sends her child to daycare, able to deduct $170 per $1,000 of income while someone earning $60,000 under the same system gets a tax break of $290 per $1,000 of income, a difference of $120?

Do not give up, we are behind you. We too think the gap between the rich and the poor has to be narrowed.

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10:35 a.m.

NDP

Libby Davies Vancouver East, BC

Mr. Speaker, I would like to thank the hon. member for his comments. We in the NDP agree with the comments that have been made. The evidence before us in the House concerning the growing disparity particularly for families and for working people is something we should be ashamed of.

The hon. member mentioned the need for child care. I am sure we would agree that this is a priority which has been completely lost in the government's agenda. I remember well the promises that were made to women and families of this country, that the need for a national child care program was a key ingredient in ensuring that women could become part of the workforce and in ensuring that families were able to cope in today's society. This has been completely abandoned by the federal government.

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10:35 a.m.

Willowdale
Ontario

Liberal

Jim Peterson Secretary of State (International Financial Institutions)

Mr. Speaker, the NDP has raised a very important issue for all Canadians as well as for people in other countries. It is the issue of income disparity. Unfortunately there have been no solutions presented today. Is the NDP solution to regulate and cap salaries and profits?

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10:35 a.m.

NDP

Lorne Nystrom Qu'Appelle, SK

Fair taxes.

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10:35 a.m.

Liberal

Jim Peterson Willowdale, ON

Fair taxes. If fair taxes is the issue, then let us look at Canada's overall tax structure.

We all know that in the global world we have to have a tax structure which is relatively competitive with those of our neighbours. When we look at Canada among the G-7 countries, we are square in the middle of the seven. Our total tax burden is 36% of GDP. At the highest end there is France where it is 43%. At the lowest end there is the U.S.A. where it is 28%.

The competitive realities are that we cannot get too far out of line with the Americans to the south. Our overall tax burden is about 30% higher than that of Americans. However, I would never advocate that we should go down to American levels. Part of the difference is because we have a health care system which the Americans do not have. It gives Canadians tremendous security and it also gives us a competitive edge over the Americans.

Nevertheless when we consider our comparative tax levels we will find that the personal income tax in Canada is 13.4% of our gross domestic product and in the U.S. it is 9.8%. In Japan it is 6.4%. On top of that we have a capital gains tax which is among the highest in the western world.

The progressivity of our tax system is something which I think hon. members from the NDP should take into consideration. They have great envy for the rich. Maybe a lot of people do. However, these are the facts. Only 2% of tax filers in Canada have incomes over $100,000 and they pay 21% of all federal taxes. The lowest 60%, those with incomes under $25,000, pay only 4% of our taxes. We believe that a highly progressive tax system is an ingredient in creating equality of opportunity and fairness, and we do not back away from that one bit.

What have we heard in terms of solutions? I have talked about their cry for tax fairness. Do they want to tax the rich more? That alternative is there. Ours is still the most highly progressive personal income tax system in the western world.

If the concern of NDP members is for those who have been marginalized in our society or for those who have the greatest difficulty in coping, then we have no dispute with them. We would hope that they would support the measures that we have brought forward.

One of our major concerns has been low income working families. The Caledon Institute and studies by the finance department revealed that there was a welfare wall. A family on welfare taking in all of the benefits provided by governments was about $3,000 ahead of a family with two children and parents working at low wage levels.

That is what was called the welfare wall. It was a barrier to leaving welfare and going into the workforce. We addressed the matter not by lowering benefits to the lower income people on welfare but by increasing the tax incentives for those who were actually working.

This is why we brought in the working income supplement. This is why in an agreement with the provinces we have entered into the national child tax benefit. This government has committed $850 million to the child tax benefit which goes to those low income families. We promised during the course of our mandate to beef that up by another $850 million. This is at a time when all parties in this House recognize that our deficit and debt are major economic problems and challenges for us.

At the same time, we have increased the tax incentives available to Canadians with disabilities. We recognize that the costs of working and being disabled, or existing and being disabled are very high.

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10:40 a.m.

Reform

Rob Anders Calgary West, AB

Why don't you brag about raising taxes 38 times?

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10:40 a.m.

Liberal

Jim Peterson Willowdale, ON

Would the hon. member please show a little bit of respect if he has nothing intelligent to contribute. If the Reform Party member has nothing better to add to this debate than inane accusations not based on fact and shouting and screaming, I wish he would—