Debates of Feb. 1st, 1999

Finance

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, it is a pleasure to rise in this debate.

It really is not a prebudget 1999 debate. It really is a prebudget year 2000 debate. I think we all know that the budget for this year is pretty well carved in stone, as it were. We really should be directing the government toward what the government should be doing in its budget for the year 2000. Governments need a lot of time to prepare the budget. I think eight to ten months is the normal timeframe that this government works on in preparing its budget.

There are two issues I would like the government to address in the course of this year in preparation for next year.

One pertains to charities. I think I am well known as someone who has advocated very strongly that the government should reform the charitable sector, should create rules of transparency, should create better corporate governance and also should redefine what charities are.

I draw attention to a supreme court ruling which came down just this past week. It called upon the government no longer to rely on the courts to define what a charity is, but to bring the matter before parliament and before all Canadians to look at the whole issue of the not for profit sector. I am confident that the government has taken this issue very seriously. I am aware through my own contacts that various government departments are working on this issue.

The new issue I would like to bring before the House has to do with the government's relationship to the aboriginals and the fact that we are spending a lot of money on trying to help the aboriginals in all parts of the country. There seems to be a problem. We still have a widespread indication of poverty and hardship among aboriginals both on reserve and off reserve.

I sit on the Standing Committee on Aboriginal Affairs and Northern Development. The Assembly of First Nations came before the committee in April this past year. It made the observation in its report that the average income of aboriginals was about $14,000 and the average income of non-aboriginal Canadians was around $24,000. The assembly actually made an error which it later corrected in correspondence and noted that the average income of Canadians was actually $20,000.

I took it upon myself, as sometimes is my wont, to examine these figures in greater depth. I set the Library of Parliament on the problem. I wanted to know not just what the average income of aboriginals versus non-aboriginals was, but the average real economic benefit of society that is accruing to both groups of Canadians.

I do not find it very comfortable to actually look at any group of Canadians based on racial background, but we have this problem in this particular instance where the aboriginals are defined separately in the Constitution and they receive separate treatment by the Government of Canada in many respects. That makes this question one which we should and can address.

Let me give a few of the figures. The first figures I have are the average incomes. The document which the Assembly of First Nations quoted from is a report produced by the Department of Indian Affairs and Northern Development in 1991 or 1992. It deals with per capita incomes of aboriginals and non-aboriginal Canadians as of 1990.

An interesting aside is that one of the things the report notes is that between 1985 and 1990 the income of aboriginal persons rose from $10,000 to $14,000. The precise figures are $10,833 to $14,198. It is interesting to note that this is an increase over that period of some 31.1%, whereas over the same period the incomes of non-aboriginal Canadians only rose by 6.9% to $20,264. There are two figures, $14,198 average income per year per capita for aboriginals and $20,264 a year per capita for all Canadians including aboriginals.

I have something else here which is part of the Library of Parliament study which it did at my request. It contains Statistics Canada data and various data from other very good sources. It points out that as of 1992-93 total federal government spending on aboriginals was $6 billion and some change. The provincial and territorial spending was $5 billion. This totals $11.628 billion.

This is all very well and good but this chart I have before me averages it out to show that per capita spending on aboriginals both on reserve and off reserve in 1992-93 was $15,714. Members should hold this figure in their minds because this chart also did the same work to determine how much is spent on all Canadians during the same period. When we talk about spending we are talking about education, income transfers, housing, health care and social services, everything a government does for its people.

The average for all Canadians from the federal and provincial governments is $10,026 per year per capita. Just to repeat what I said, all governments spend an average of $15,714 per year for aboriginals and all governments spend an average of $10,026 per Canadian.

In order to get a picture of the real situation with our aboriginals and with the spending of all governments on aboriginals, we add the figure for spending on aboriginals and all Canadians to the figure for income of aboriginals and all Canadians. The wealth we derive from society is what we can earn with our own labour and what we receive in the form of social services from the government.

When we add up those figures we find that the total per capita economic benefit per aboriginal is $29,912. The total per capita spending for all Canadians is $30,290, a difference of only $378. Something is terribly wrong. For some reason the total economic benefit going out to all aboriginals and to all Canadians is within $378. Yet we have problems all across the country on and off reserves with widespread poverty and people living in social conditions that are an embarrassment to the rest of the world. Canada has difficulty holding its head high when we speak of how we treat our aboriginals.

I hope the government is listening. The problem revolves around not how much money we are spending in terms of benefit or how much income the aboriginals are getting per person. What is wrong is that somewhere there is a major glitch. The $11 billion as of 1993 from this government and the provincial governments is not getting to the people effectively. It revolves around issues of accountability and re-examining the entire structure of how we fund the aboriginal community both on and off reserve.

We have here one of the most crucial and most difficult problems that affects Canadians and that every Canadian should worry about. I hope the government will look at my figures and consider what it should do.

[Howard Hilstrom, Reform, Selkirk—Interlake, MB]

Mr. Speaker, the hon. member who just spoke has probably given one of the best accounts of the situation with aboriginal people in Canada today that I have heard in parliament since I came here in September 1997. I cannot speak to the 1992 and 1993 statistics and all those things. Figures can be twisted around so that we are not too sure what they actually reflect.

The fact is that with the wise use of financial resources we can make some immediate impact for poor people both on and off reserve. The accountability issue is something that poor people on reserves across the country have been raising. Accountability is seen by the simplest explanation I have heard: “The chief lives across from me in a $200,000 house. I am living in a house with no running water, no sewage and very little insulation in some cases”. The funding that went into reserves for housing has been well documented over the years. Why do some have so much and some so little? This is the funding the hon. member is talking about.

Will the member keep speaking to the Minister of Indian Affairs and Northern Development and pressing his government along the lines he spoke about today? If he does I would be pleased to support him.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, I would like to share my time with the member for Mississauga West. I thank the member for his very kind comment.

Aboriginal affairs issues are very difficult because they involve money and the privacy of individuals. We do not want to interfere and deprive people of the ability to spend money in a way in which they control their destiny. As I see the problem, governments have been far too sensitive about that issue and have not required the sort of performance guarantees we require of other sectors of the community.

I tell the member opposite that I like the government's attempt to bring self-government to various aboriginal communities across the country, provided those self-governments have the same level of transparency and accountability that we expect of every other level of government and organization in the country that is dependent on shareholders or the support of the people.

The government is moving in the right direction. There is a lot of resistance. There is a lot of fear. There is a lot of worry that we will upset the aboriginal community. However we know that it has not been working in the past. In this one area of politics we should all be on side, on all sides of the House, to try to solve the problem in a compassionate and effective way.

[Howard Hilstrom, Reform, Selkirk—Interlake, MB]

Mr. Speaker, seeing as we have a minute left I would like to ask one more question.

Does the member who just spoke see any opportunity for having an auditor general type of accountability for moneys that go from the federal government to aboriginal reserves to be used in common for everyone?

That is what seems to be lacking at this time. There is the lack of an independent auditor who cannot be controlled by the people who are handling the money, in this case the chiefs and the councils.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, the problem is that we would require an auditor general to oversee the spending of the municipalities. Basically aboriginal self-government is the creation of the municipalities by the federal government. They are not really nation states; they are really like municipalities.

The real answer in my mind is to require these organization to have the same type of rules of disclosure that exist in something like the access to information act or freedom of information. It is the elected people who have to determine whether a government at any level is doing its job properly. If we do not have those rules of transparency the people will never know and cannot act responsibly.

[Steve Mahoney, Liberal, Mississauga West, ON]

Mr. Speaker, it is delightful to be back. I thank my hon. colleague for leaving me some time to discuss some of the issues around what we are calling prebudget.

The member made an interesting point. He said we were debating two things at this stage, given that the actual budget will be released in this place on February 16. We are talking about the budget in the year 2000 and we are also explaining to Canadian people the impact the 1998 budget has had on the economy and on our country as a whole.

We heard members opposite calling quite loudly for tax relief. It is my sense that there will be some additional tax relief in the budget. I am hopeful there will be. There was over $7 billion in tax relief in the 1998 budget, something that members opposite tend to gloss over. The Canadian people know because they can see it. They can see the actual benefits they get.

Just to share some of them with members, for example, there was an increase in the child tax benefit from the $850 million announced in the 1997 budget. An additional $850 million was put into that. That will go directly to benefiting low income Canadians who need assistance to go to work and to provide proper care for their children.

In addition a caregiver credit was provided in the 1998 budget. We do not hear members opposite talk about its importance. We can think about health care and the impact on families of providing care giving situations to their parents or other relatives. The government recognized it in 1998 as important. To give the detail, a caregiver credit will reduce federal tax by up to $400 for Canadians caring for an elderly parent or a family member with disabilities. This is significant tax relief targeted to help people who specifically need it. I hope we will see more of that kind of budgeting in the budget coming up later this month.

In addition there was an exemption on GST and HST for expenses incurred in the provision of temporary care to someone who by reason of infirmity or disability needed the particular care.

Once again we would think we would hear members in this place telling the Canadian people that this is good budgeting, good financing to help the people who need it most.

Also in that budget the Canadian opportunities strategy provided tax assistance for Canadians who wished to advance their learning. It did a number of things. It provided tax relief for interest payments on student loans. We heard from students at various committees and in our offices. They have written letters talking about the incredible burden of graduating from school with a debt burden of $25,000 or more from student loans. We provided some assistance and even an opportunity, if hardship could be shown, where that particular interest could be written off entirely.

There was an opportunity in the last budget for tax free RRSP withdrawals for lifelong learning. In today's society with the downsizing and the changes that have occurred there are many Canadians, many of them middle income Canadians, who cry for tax relief. Many Canadians have suddenly found themselves going from being middle income to being no income simply because they have been downsized, their company has changed their method of doing business or whatever. In many instances they are not only middle income but are also middle age.

This allows them an opportunity to tap into an RRSP fund that is available for their retirement to allow them to take courses so they can perhaps readjust and create new employment for themselves. It is tax relief with some sense behind it to say it will directly benefit those people who need the help. There is also an education credit and child care expense deduction for part time students.

In the last two budgets of the government there was a real move toward providing some tax relief that made sense. It was targeted to help people in either adjusting their lifestyle, taking care of dependants who might be ill, infirm or disabled in some way, or helping them provide education for younger members of their families.

When we talk in terms of the next budget perhaps we as parliamentarians will have some access to it. I believe, as my colleague mentioned, this budget has been put to bed. Being only a couple of weeks from now perhaps there are some i's to dot and t's to cross, but at the end of the day the budget policies have been hashed out in this place. The policies have gone before parliamentary committees. They have been taken to caucus. There has been input from Canadians. This budget is probably done. The next budget will be for the year 2000.

It is interesting that this is really about fighting over the spoils. When the government was first elected in 1993 it walked into a situation where people were describing us in cities like New York, Washington and others around the world as a third world country because of the size of our deficit at $42 billion. I stress the deficit being the overdraft, the deficit being the shortfall in the operating budget, not the debt. It is a different concept. It is important that Canadians understand that in 1993 the government was spending $42 billion on an operating basis more than it was bringing in in revenue.

The world was looking at us and saying that for the size of our country of 30 million people, for the size of our GDP, for the entire output of our nation, a $42 billion debt was unacceptable. We were being referred to as a third world nation.

That does incredible damage. It is not just the psyche and the problem it creates for Canadians who are proud of their country. Canadians continually hear others outside the country saying we are the greatest nation in the world. Canadians know that but were very uncomfortable feeling that no one was properly managing the financial store. I am sad to say that I think it was true. The proof was in the pudding. The reality is that the deficit has been eliminated and the government has retired $13 billion in marketable debt. For the first time perhaps since the days of Mike Pearson we see in a chart that there is a downward trend in the debt. There is an upward trend in the economy. Canadians are feeling proud not only of being from this great country with a health care system, quality of education, our standard of living and being proud of our flag, they are proud that this government has dedicated itself to fiscal restraint and at the same time has put in place opportunities to assist Canadians who need it through our tax relief programs. We are going to see more of the same and the country will continue to grow and prosper. Canadians know that and they speak about it in resounding numbers every day. Things are strong and will get stronger.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I listened with interest to the remarks from the member for Mississauga West when he talked about fighting over the spoils of the surplus budget and resounding numbers of our economy.

As we know if we have watched television or read newspapers lately, we see there are some resounding numbers in our economy. Homelessness, for example, is at a record level. It is almost a national disaster and it is certainly a national embarrassment. This is something the Liberals have been architects of, so I agree with the member for Mississauga West about that resounding number.

The member should look at the resounding numbers of people living in poverty. There are more than half a million children living in poverty and in hunger since 1993 than before the Liberals were elected. Those are resounding numbers and they are resounding in the sense of absolute embarrassment of the Liberal government's policies.

We are hoping that in the coming budget these issues will be addressed. In Regina the employment insurance benefits for people who deserve benefits because they are unemployed and have paid into the system are no longer being provided. The worst record in the country is in Regina where only 19% of unemployed people who have paid into the employment benefit system qualify for benefits. The government arbitrarily has attacked those people who need the insurance help the most from the employment insurance program. These are resounding bad numbers of the government.

I wonder what the member for Mississauga West has to say about these issues which are very disastrous for the Liberal government and what are its plans in the budget to address the issue of homelessness, poverty and the unemployed who are not receiving the benefits they deserve.

[Steve Mahoney, Liberal, Mississauga West, ON]

Mr. Speaker, the member might find it surprising that I agree with him on a couple of points.

We do have a national housing crisis. However, I separate the issue of housing and homelessness. The problem of homelessness needs to be tied more to health. Anyone who lives on the street in Canada in February is not a well person and we have to address issues around mental health.

We have seen the cuts. The member talks about his home province. Let me talk about my province. We have seen the cuts that have happened in mental health. We have seen the people who are on the streets because the current Conservative government in the province of Ontario has used its 30% income tax cut and taken that money out of the health care system.

We can blame the federal government for downsizing the transfers to the provinces. We have to accept collective responsibility as a nation for some of that. The reality is that it is the provincial Government of Ontario that has closed mental health beds right across the province and those people find themselves on the street.

I too would like to see a national housing policy. I believe that all levels of government need to get back into providing a social housing framework that makes sense for all Canadians. I will support that and I will work toward that. If it does not all show up in this budget, the government will work toward seeing there is some equity and some housing put back in the marketplace.

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Mr. Speaker, I am sure the hon. member said he was proud of Canada's health system. No matter where we go the health system throughout Canada is a national disgrace. It is a disgrace in my home province. So please do not refer with any degree of pride to the biggest social problem facing Canadians. It will be a problem for some time.

I wanted to make that point. I believe I heard the hon. member say that. If it is not so I will withdraw that statement.

[Steve Mahoney, Liberal, Mississauga West, ON]

Mr. Speaker, if I did not say it I wish I had said it. I probably did say it. If I recall correctly I said that Canadians are proud of their health care system. Yes, there are problems with it.

It is quite interesting to have a Reform member stand here. We heard Reform's solution that 50% of the surplus would go to tax cuts and 50% would go to debt repayment. I guess the third 50% would go to health care. Maybe that is Reform math.

[John McKay, Liberal, Scarborough East, ON]

Mr. Speaker, if no one else will pick up the cudgel then certainly I will. I will speak about three things this evening, tax cuts, debt reduction and transfers on the CHST.

First is the issue of debt reduction which in my submission has been ably done by the finance minister. We have gone from a situation where we had about $42 billion in deficit to a situation where we are now running a surplus estimated at anywhere between $4 billion and $8 billion. The question is really one of how Canadians want to deal with the surplus which is their own creation, a tribute to Canadian taxpayers.

I am more of a debt hawk than the finance minister. I would allocate more moneys to debt reduction. I consider the debt to be a burden on us and our country. To my mind the $3.5 billion commitment is a minimal gesture given the size of our national debt. I am something of a minority in this view. This commitment to steady debt reduction is a first step and is something the finance minister needs to be commended for.

I am very impressed by the finance minister's ability to see the gross debt to GDP ratio reduced from something in the order of 73% down to something in the order of 66% to 67%. That is an amazing accomplishment, an accomplishment for which he is to be commended.

When the finance minister presents his budget I urge him to restate the debt so it is somewhat more comparable to our competition. When those people in red suspenders from Switzerland, talked about by our Prime Minister, actually compare our debt to GDP ratio with the ratios of other countries, they will realize this is quite an accomplishment. When we are more comparable we will achieve some savings in absolute terms on interest rates. I hope that will prevent the dead loonie bounce. We have achieved a great deal in absolute terms in the reduction of the debt and I commend the finance minister on his commitments.

I urge the finance minister to make it very public in this Chamber in two weeks that we have reduced or paid off market debt by $13 billion this year alone.

This is quite an accomplishment and a significant sum of money. This means that Canada, as a government, is no longer on debt reduction. It is no longer in the market for debt.

The direct effect is that we will make the moneys that heretofore had gone for government financing available to the private market.

I was fortunate to have a conversation with Governor Thiessen on this very point. He was saying that because Canada no longer borrows money it therefore has money available to the nation in general and also to private investors for corporate borrowings.

As we all know, borrowing on a bond market or borrowing in debt instruments is a cheaper way of borrowing money than going to the equity markets and borrowing on the equity market.

We have passed on to Canadians generally a tremendous benefit to those who need to borrow in order to carry on the capitalization of their companies.

That in and of itself is probably a bit of an unsung consequence of doing things right in a fiscal fashion. This government in my view has done it right. We have reduced debt in absolute terms. We have committed ourselves to reducing debt in a steady downward trend.

We have achieved a downward trend from 73% to 66% or 67%, which hopefully by the end of this mandate will be either in the low 60s or the high 50s. That in and of itself is a tremendous accomplishment.

Finally on the issue of debt, I urge on the finance minister two things, that he restate the debt to GDP ratio in a comparative fashion so that it is readily comparable to our competition, and that he celebrate Canadians' accomplishments in the absolute reduction of our national debt by something in the order of $13 billion this year.

I now to turn to tax cuts. If there is a budget in which to accomplish tax cuts, I would like to suggest this is the budget.

Surely the beleaguered middle class taxpayer deserves something of a break. The surtax can be removed at this stage. This was a tax imposed on Canadian taxpayers in order to fight the deficit. The fight for the deficit is now over. Deficit reduction has been completed and we are now into the realm of debt reduction. The rationale for that tax no longer exists. I urge the finance minister that this should be a priority tax cut.

In addition, 10% of the taxpayers pay 50% of the taxes. As difficult as it may seem, we need to recognize these are the people who carry the financial burdens of the country. When someone is carrying the financial burdens of the country such as this 10% group is they need to be recognized on this level of taxation.

I was somewhat disappointed that the finance minister found himself a little politically boxed in with respect to the EI cut. As members know, 10 cents costs the government $700 million. This is a shocking figure.

The government found itself in a situation where it had to pass on an EI cut. We ended up cutting 15 cents or just over $1 billion. That in and of itself uses up room for doing other tax cuts.

There is a good argument to be made that other kinds of tax cuts could have been done in priority to the EI cut.

If we looked at a variety of charts with respect to the taxes that Canadians pay, consumption taxes, corporate taxes, employment taxes and personal taxes, we would note that as a general proposition we are fairly competitive with other G-7 countries in virtually all categories, with the sole exception of personal taxes where we compare somewhat unfavourably with our nearest competitors, the Americans. There is something in the order of a 4% gap between where we would like our competitive taxes to be and where they are presently.

I for one would have liked that $1 billion in EI cuts to have been applied to personal income taxes as opposed to employment taxes. A dollar is a dollar is a dollar. However, on the other hand it would have been nice to have spread those dollars over a greater number of Canadians.

The additional cuts that I would like to see are in the area of thresholds. I know there has been a great deal of discussion about bracket creep. I suggest to hon. members opposite and indeed on this side of the House that bracket creep is a little understood concept. However, an area that is easily understood is that of thresholds.

Our tax system, generally speaking, is fairly competitive up to about $60,000 or $70,000. After that our competitiveness with respect to our thresholds erodes rather rapidly, in particular as it relates to our nearest competitors, the Americans. While we cannot expect that changing thresholds will in fact solve all problems, the only thing the Government of Canada can control is the area of its taxation systems. We cannot control how much a young engineer from Waterloo University might be paid by Microsoft versus a Toronto or a Regina based company; however, we can have some impact on the taxation system.

Therefore I would have liked to have seen something done in the area of thresholds. My suggestion would be that we move the highest threshold up to around $70,000 or $80,000 as the maximum threshold and that we move the middle threshold up from $29,000 to about $35,000. That, in and of itself, would provide considerable tax relief so that we would not be taxing Canadians too quickly. If in fact the finance minister has the budgetary room to be able to do that, I would think that is an area which should be seriously explored.

There is also a certain level of hypocrisy in our approach to this. As we see it, we are moving ourselves from a resource based economy to a knowledge based economy. When we move from a resource based economy to a knowledge based economy we can reasonably anticipate that some Canadians will do very well indeed.

How are we going to expect people to put the effort into improving their knowledge base if in fact the tax system takes it out at the other end? We need to address this as a country as we do our budgeting over the course of the next number of years.

The final area I would like to address has to do with the CHST, the Canada health and social transfer. This is of course the big block of cash and tax points which is transferred to the provinces. It is in the order of $25 billion to $26 billion.

We will have noticed in the newspapers a great deal of whining on the part of a variety of premiers concerning “reductions in the CHST”. The biggest whiner of them all is the premier of my province who is blaming his entire incompetence and mismanagement of Ontario's economy on a reduction totalling something in the order of $938 million from the federal government over the course of six years. What he neglects to point out in the course of generating his argument is that Ontario's revenues have actually risen over the past six years to somewhere in the order of $10.5 billion. Even with what we call Mike Harris math in Ontario, he is ahead by something in the order of $9 billion. However, when one philosophically commits oneself to tax cuts in priority to all other priorities, one will in fact generate a situation where one has to deal with other areas. One has to make cuts to health care and education and one has to ratchet up the debt.

Surprise, surprise, but that is what has happened in Ontario. The debt has risen under Mr. Harris' stewardship to something in the order of $20 billion to $30 billion. Depending on when he calls the election, it may be as high as $30 billion. Right now it is around $20 billion. This year alone tax cuts will cost the Ontario treasury something in the order of $4.5 billion. Those tax cuts alone would wipe out the deficit and provide a small surplus, if properly managed.

As other members opposite have said, there is some disgrace in our health care system. It is not the system that we would wish it to be. Those tax cuts could have been applied to educational priorities, but they have not been applied to educational priorities.

Therefore, when one ideologically commits oneself to tax cuts in priority to all other priorities one necessarily mismanages the government's finances, and when one necessarily mismanages the government's finances one has to blame somebody. Why not blame the federal government which has cut back the CHST to Ontario by a total of $938 million over the course of six years?

We must not neglect to point out that the effect of proper management at the federal level has brought interest rates down. The interest rate reduction benefit to Ontario alone is something like $1.3 billion, which more than offsets the minimal reductions to the CHST.

In government management there is always a choice in priorities. What priorities are we going to take? If one looks at the priorities of this government, first of all it gave priority to the reduction and elimination of the deficit. That has been achieved. It is a tremendous accomplishment to go from a deficit of $42 billion to a surplus of something in the order of $4 billion to $8 billion in the course of six budgets.

This government then gave priority to reducing the debt in absolute and real terms. Thirteen billion dollars off in one fiscal year out of the market is an enormous accomplishment.

It then prioritized tax cuts and last year made a number of tax cuts at the low end. I applaud the government for doing that. Now I would like to see the upper end receive its tax cuts.

Finally, this government has done all of this with a minimalist approach to the reductions in the CHST and it has accomplished it over the course of the six years with a great deal of notice.

Canada is more than ten little fiefdoms with one taxing authority. Canada is a nation. The priorities of our nation have been set by this government and I support those priorities.

I urge this government to continue the absolute reduction of the debt, to provide tax cuts to Canadians who have borne most of the burden and to continue to prioritize the needs of our country in the fashion that I have outlined.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Madam Speaker, I am pleased to be able to raise some questions with the member for Scarborough East. He has stood in this House and has talked about the priorities that he believes the Liberal government has. He also outlined for us, in a surprising fashion, that it actually has health care as a priority. I just want to review that for a moment.

As I recall, in the 1993 federal election the Liberals had three priorities: to abolish, get rid off, cut and eliminate the GST; to re-negotiate and roll back the Canada-U.S. free trade agreement, which they then embraced; and to support our health care system.

I am a member of parliament from Saskatchewan. The hon. member opposite talked about the Ontario experience. In terms of Liberal priorities, the Saskatchewan experience has been interesting to say the least, but they would not be viewed in Saskatchewan terms or in any other terms as priorities.

For example, we used to have a 50% cost sharing arrangement with the federal government for health care. Do members know what it is now? It is not 50%. It is not 40%. It is not 25%. It is not even 15%. The federal share of funding for health care in Saskatchewan has dropped to 14%. That is how the Liberals define priority for health care. They slash, hack and cut medicare so it is bleeding from a thousand cuts. Fourteen per cent means that 86% of the cost of health care is funded by Saskatchewan people for Saskatchewan people. This is a priority that I hope the member will address in the upcoming budget.

In five years we have seen $1 billion taken out of our health care system by the Liberal government which has prioritized health care. How much would it have taken out if it was not a priority? Maybe it would have been $5 billion. We are not sure. A billion dollars in Saskatchewan is $1,000 for every man, woman and child. That is what we have lost from our health care system. But the NDP government, in its wisdom, found that $1,000 per man, woman and child and did not pass on the cuts the feds made to the health care system. We backfilled every dollar into health care which those members opposite said was a priority.

We have also seen their wonderful priority in terms of tax cuts for Saskatchewan people and other Canadians. They have eliminated the Crow benefit, which is another $1 billion that has been taken out of the Saskatchewan economy. On top of that they raised railway transportation costs by between 25% and 33% to every farmer selling and shipping their products by rail. That is a priority.

When we look at the issues of health care, transportation and agriculture, what we see in Saskatchewan is that even the provincial Liberals are saying that health care is a priority and that the NDP in Saskatchewan is not doing its job with respect to health care. The NDP found $1 billion that this government cut, but the Liberal cousins in Ottawa continue to attack the health care system.

Will the hon. member put his seat on the line? If health care is not the priority that he says it is come the budget, will he resign his seat?

[John McKay, Liberal, Scarborough East, ON]

Madam Speaker, I cannot speak with any authority on the numbers with respect to Saskatchewan. However, the hon. member forgets, as does Mr. Harris of Ontario, as does almost every premier of Canada, that the CHST, which is the big block transfer, is a combination of cash and tax points. I know that in Ontario the combination of cash and tax points has not amounted to a $6 billion reduction in moneys, as Mr. Harris would argue, but has been slightly less than $1 billion. In the process, the government's finances have been put back in order.

I would think that in Saskatchewan, which is arguably in unemployment terms one of our better provinces, the numbers would be similar and that in fact there has been very little reduction in terms of the CHST.

I also note to the hon. member opposite that the equalization payments have not been cut over that period of time, at considerable sacrifice to this particular treasury and to the taxpayers of Canada.

As well, cash reductions in the CHST were stopped at $12.5 billion, even though all of the provinces had signed on to a cash floor of $11 billion. As a consequence, $7 billion was back in the pot for all of the provinces to obtain.

I also note in the last budget $150 million was put into the health transition fund. There was a further $50 million for the Canada health information system.

Over the course of our deliberations the idea of a variety of report cards on how the best health care dollar can be obtained is being floated. I was shocked to learn that Manitoba's system does not compare to Saskatchewan's system which does not compare to Ontario's system.

Canadians spend something in the order of $80 billion annually on their health care system and they have no idea what they are getting for it. It is something like 9% of the GDP. Comparable health systems in other countries spend something like 7% of their GDP. How is it that they obtain a sophisticated, well managed, accessible system for something in the order of 7% of their GDP when we have to spend 9% of our GDP?

I would applaud the health minister who insists with the premiers and with the respective health ministers that they be accountable for the moneys that are to be put into the CHST.

[Jim Jones, Progressive Conservative, Markham, ON]

Madam Speaker, it is always interesting to listen to the member for Scarborough East and his sidekick from Mississauga West. The trouble with Liberal members is that we cannot pat them on the back because they are patting themselves on the back.

With respect to the prosperity in Ontario, last year 73% of all the net new jobs in the private sector was created by the province and a high percentage of the remainder was created by the province of Alberta. Is it not ironic that the two provinces with the lowest taxes have created the majority of the jobs and probably have also made the biggest contribution to reducing the deficit.

I heard the member from Scarborough say that the Ontario government had an increase in revenues of almost $10 billion with a 30% tax increase. Is it not ironic that tax increases or decreases increase the revenue. I would like the hon. member to comment on that.

The hon. member said that he was a debt hawk. Would he then agree that if we had locked the $3 billion contingency reserve into a repayment schedule with the servicing costs we could pay the debt back in 35 years? Would the hon. member support that type of a lock?

[The Acting Speaker (Ms. Thibeault)]

The hon. member has a minute left.

[John McKay, Liberal, Scarborough East, ON]

Madam Speaker, I do not know whether within a minute I can deal with the simple-minded correlation between the issue of tax cuts and proper management of the economy.

It is true that Ontario at this point is experiencing something of a renaissance and that there is a great deal of job creation. However, there is not a correlation with tax cuts. I respectfully submit to the hon. member that that is about as simple-minded a correlation as he is going to find.

In fact Ontario's economy is booming because of a great deal of investment in a knowledge based economy and a great deal of investment in other areas of the economy and its location vis-à-vis the United States. The tax cuts do not necessarily correlate as the hon. member thinks they would.

All that it has done over the course of the period of the premiership of Mr. Harris has been to ratchet up the debt by $20 billion to $30 billion. That $20 billion to $30 billion has to be serviced on an annual basis. Even at the minimal interest rates that we have now achieved by the good management of the federal government, that is still going to add about $1.5 billion in service costs on to the taxpayers of Ontario.

[Bev Desjarlais, NDP, Churchill, MB]

Madam Speaker, I am sure when the government releases its budget it will sell it as the answer to everything, the answer to the government's failure to support our health care system, the answer to its failure to improve child poverty. As it has for the past year, the government will talk of the surplus and the need to decrease the debt.

Canadians are tired of the government's doublespeak. Canadians knew with the budget last year that by not going ahead with further cuts the government was not putting dollars back in health care.

Canadians know that dollars paid by workers and employers should not be used for government favours. Canadians know that the finance minister's surplus should not include EI dollars. We do not need to abuse the EI fund to put an armoury in Shawinigan. We do not need to use EI dollars to have a millennium scholarship fund as a golden calf for the Prime Minister. Without those EI dollars, the finance minister's surplus dwindles. His pat on the back should be resulting in a small burp, not the belching we must continually listen to.

In reality there should be no pats on the backs on the government benches. The social deficit in Canada has reached an all-time low. Let us recap a few of the government's wonderful contributions since the Liberals took the helm. All that is missing is the iceberg.

Child poverty has increased by $500,000. Homelessness is a national disaster. Every province has called on this government to react to the critical state of our health care system and then the member for Scarborough East calls it whining.

Government members have taken a year to clean out their ears, or is it just so bad that even they are feeling the shame and embarrassment of Canada's drop in social standing?

I want to read from a letter that I received over the break:

It is very tough to survive on old age pensions in present times. My wife and I are trying to do just that. My lady is 70 years old and I am 76. The price of necessities is rising daily and it is so hard to make ends meet.

In 1998 the government raised our medical target $300, so we now must pay $600 before we get any discount on the price of drugs. We are both on medication. This is a low blow.

The cost of living in the north is horrific. We pay top dollar to operate our cars. We cannot afford a holiday which we should be entitled to.

The federal government has seen fit to forgive a $700 million tax bill to people who are already billionaires. This will certainly fall in the laps of the average taxpayer to fill in the void.

This is the Liberal legacy as we enter the new millennium. The government had best make a good showing with the next budget. We cannot afford for conditions to get any worse. Canadians will not tolerate this Prime Minister's lack of vision. This government must make a serious commitment to the people of Canada. What are the options to improve the sorry state of Canada's social condition?

As a bare minimum, $2.5 billion must be put back into the health care system. The bare minimum. Put the EI payments back into the program. We have all heard the disgusting statistics throughout Canada as to the number of workers no longer able to collect benefits, not because the dollars are not there but because the government changed the rules so less and less can receive benefits. What good is an insurance plan if it is not able to be collected by the people who most need it?

My colleague for Regina—Lumsden—Lake Centre mentioned the deplorable numbers for his riding. Only 19% of the unemployed are able to collect EI benefits. Some employment insurance. In my riding $16.9 million less is being paid out in EI benefits.

Cut the GST by 1%. This along with dollars put back into EI are the greatest encouragements to job creation and boosting local economies. This way all Canadians benefit: workers, the unemployed, the sick, local businesses, not just the billionaire who got the $700 million tax write-off.

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Madam Speaker, I would like to direct a comment and a question to the hon. member for Churchill.

I agree with much of what she has said. One thing bothers me with the talk leading up to the transfers, and I am sure the hon. member will agree with this. Somehow with the transfers we now need what this government says is accountability. I have some problems with that because when the government says it needs accountability, what the government is saying is that it has not had it in the past.

Who knows best how to deliver a health care system in my province in my constituency than the people who live there? What is the point of demanding accountability? Are you going to create an army of people to say this is where your health dollars go, this is where your education dollars go and this is where the welfare dollars go?

I would not have any idea at the present time how to deliver a health care system to a village on the coast of Newfoundland. Does the hon. member agree with the government that says this is how much money you are going to get but you are going to be accountable to us as to how it is going to be spent, as if you are not capable of spending your own tax dollars?

[Bev Desjarlais, NDP, Churchill, MB]

Madam Speaker, I do not have a problem with accountability. Canadians want accountability for their tax dollars, but reasonable accountability is what we are talking about.

It seems again I am talking of the doublespeak that the government uses. We all read the comments of the transport minister when he talked about certain dollars that were signed away and that the process really was not there to keep track of it and there are toll highways in New Brunswick because things were not accounted for. It is important to recognize that we have to be accountable and the things that happened were wrong in that case.

We did not have a problem within the health care system in Canada. There was not a serious problem until this government took the helm and dollars became so scarce that the government had to get on somebody's case over where the dollars were going. We did not hear Canadians complain about the things they are talking about now, of not getting surgery for six months to a year and of not getting treatment for breast cancer until three, four or five months down the road. That is the legacy of the Liberal government and it is not because of accountability.

[John McKay, Liberal, Scarborough East, ON]

Madam Speaker, I thought I heard that the member opposite wished to obtain a tax cut in the area of the GST. Does the member know how much the GST raised for the federal government? What was the net effect of the moneys that were raised? How much did that contribute to the federal treasury? Has the member contemplated how much a one point reduction in the GST would cost the federal treasury? Is that one point reduction in the GST a priority the member would put in precedence to all other priorities?

Does the member know whether the consumption taxes set out in this country are comparable to consumption taxes in other jurisdictions?

[Bev Desjarlais, NDP, Churchill, MB]

Madam Speaker, to get to the end result I am not aware of all the figures regarding consumption taxes in every area.

I for one have never begrudged paying my dues for what I receive. I personally have never begrudged my tax dollars. I have benefited greatly as a Canadian. My family has benefited through public schools, through roads and through the health care system. Personally I pay my taxes and I do not begrudge them when I receive the goods but that has not been the case.

With regard to the 1% on the GST, there is no question that the benefits to the local economies and to individuals will be benefits that will reach everybody if we use the 1% GST cut. That is not the case when one person receives a tax break. That is the problem Canadians want to address in the tax system. They want something that is going to be fair for everyone.

[The Acting Speaker (Ms. Thibeault)]

Order, please. Pursuant to special order made earlier today, the House will continue consideration of Government Orders.

Railway Safety Act

[Fred Mifflin, Liberal, for the Minister of Transport]

moved that Bill C-58, an act to amend the Railway Safety Act and to make a consequential amendment to another act, be read the third time and passed.

[Stan Dromisky, Liberal, Parliamentary Secretary to Minister of Transport]

Madam Speaker, I am pleased today to rise and speak in support of Bill C-58 which has received consideration by the Standing Committee on Transport last November and has been finally referred back to the House for third reading. I commend my colleagues for their diligent work on this significant piece of legislation.

Two in depth reviews have been conducted to date by independent and departmental safety experts on the Railway Safety Act. One was in 1994 and more recently another in 1997. These reviews confirm the validity of the underlying principles of the act. In both cases the overall excellent safety record of the Canadian rail industry was clearly acknowledged, and we are very proud of that.

However these reviews also identified opportunities to further enhance the legislation aimed at building and improving on this effective safety framework. The amendments proposed in the legislation were prepared following a thorough consultative process with the railway industry, railway unions, the Federation of Canadian Municipalities, the Canadian Safety Council, Transport 2000, provincial officials and other interested parties, and there was a great number of them.

Consultations were held as late as October of last year. These sessions provided stakeholders with an opportunity to reach a consensus on the intent of these proposed Railway Safety Act amendments which reflect best practices used in safety regimes from other modes of transportation.

The benefits of full consultation were amply demonstrated by our stakeholder success in seeing their views integrated into the improved legislative package. As a result they expressed to the standing committee their high level of comfort with the bill.

I am pleased to inform the House that the proposed legislative changes in Bill C-58 as approved by the Standing Committee on Transport will enhance our ability to give assurance to Canadians of the continuing health of railway safety in the country.

Some of the most important changes in the bill have been made in order to make our railway system much safer. Among other things these changes include a new policy statement; authority to require railways to implement safety management systems with an auditing process; authority to require railways to report safety critical information, an absolute must; a new safety compliance order targeted at safety management system deficiencies; increased authority for railway safety inspectors which is lacking at the present time; and an improved consultative process with all partners concerned.

We believe that these and other measures proposed in the bill will benefit Canadians greatly through the continuous improvement of all elements of the railway system.

I can assure the House that Transport Canada considers railway safety to be of utmost importance. As the Transportation Safety Board has noted, Canada enjoys a commendable rail safety record. To maintain this record departmental rail safety inspectors will continue to monitor all railway company safety performance across Canada.

Transport Canada will also continue to take action to attend to any safety deficiencies that may arise to ensure that the safety of the Canadian transportation system is not compromised.

The history of this act is characterized by co-operation among concerned parties. Railways and unions, provinces and municipalities and professional associations have all contributed to the development of this act over time.

At the Standing Committee on Transport last year many witnesses came forward to voice their support of what they felt to be a good piece of legislation. Stakeholders, industry and labour commended the process by which the legislation had been developed. In particular, they appreciated the opportunity to fully voice their concerns and to see these concerns being addressed.

For example, as a result of comments made by stakeholders to the Standing Committee on Transport the government was very pleased to add a new section to the bill, section 26.2, which states that railway equipment has the right of way at highway crossings. This provision has the wide support of stakeholders and was satisfactory to concerned parties.

It may seem obvious that railway equipment has the right of way when one considers the mass of a train compared to that of a measly motor vehicle. However, setting this out in clear language may help Canadians to realize that railway vehicles, unlike motor vehicles, require long distances to come to a stop. This section will therefore help in raising public awareness and advancing crossing safety.

Technical amendments put forward by members of the standing committee have also been incorporated into the bill. The Standing Committee on Transport has helped through its considerable efforts to improve an already sound piece of legislation.

The bill contains a very innovative approach to the problem of train whistles in our communities. The whistle signals the approach of a train to a crossing. This very simple device has historically been an effective safety warning. Yet it can be very disruptive to people who live close to the railway line, especially if the whistles are blowing at three o'clock or four o'clock in the morning. Over the years railways have ceased whistling at crossings in a number of communities. This was initiated following strict guidelines established by Transport Canada.

The scheme set out in the bill, which was endorsed by municipal representatives and in particular by the Federation of Canadian Municipalities, will require railways to stop whistling where a local government has passed a motion approving whistle cessation and if the location meets Transport Canada's standards as set out in legislation. We believe this will foster a co-operative approach to solving problems between railways and communities.

To conclude, Transport Canada's first priority is the safety of the transportation system in Canada. I believe these amendments to the Railway Safety Act will strengthen the regulatory framework governing safety in this critical mode of transportation and will provide the means to ensure that Canada's railways will continue to improve their safety performance as we head into the 21st century.

I urge all hon. members of the House to give quick passage to the legislation so that it can be considered by the other house.

[Lee Morrison, Reform, Cypress Hills—Grasslands, SK]

Madam Speaker, on December 7, 1998 Bill C-58, an act to amend the Railway Safety Act, was passed unanimously at report stage. Because the intent and general terms of the bill are beneficial, my Reform colleagues and I held our noses, gritted our teeth and voted for a bill that had been pushed forward with indecent haste and had not received full and proper consideration in committee.

Contrary to what the parliamentary secretary has just said, there were stakeholders who were unable to be heard. Moreover, I am unaware of any amendments proposed by the opposition parties having been even seriously debated in committee, much less passed.

If the practice of adapting the committee's schedule to the convenience of the minister's office is the shape of things to come, I can assure the minister and the House that the official opposition will be less indulgent in the future.

Tonight I bring to the attention of the House a deficiency in the Canada Transportation Act which came to my attention as a result of an alleged breach of safety relating to a level crossing.

In August 1997 Ms. Linda Meyer and a companion were walking across a private railway crossing known locally as the Donatelli Crossing near Mission, B.C. I have seen photographs of the location. The right of way is not fenced and the crossing is marked with a stop sign. From a safety standpoint the amount of brush along the approach is certainly unacceptable, but that is not the issue I wish to raise right now.

The couple were stopped on the crossing by a Canadian Pacific Railway police constable dressed in civilian clothes and driving an unmarked van. They state that the officer informed them without warning or preamble that they were under arrest for trespassing. They further claim that when they protested Ms. Meyer's companion was pepper-sprayed and she was restrained with such force that she required medical attention.

When I heard this story my initial reaction was to wonder if the Prime Minister had been moonlighting as a railway policeman. However, the incident took place a few weeks prior to the APEC summit and it is therefore extremely unlikely that he would have been in western Canada at that time.

The trespassing charges are still before the courts and I understand that criminal charges against the constable are pending. This legal escalation need not have occurred if section 158 of the Canada Transportation Act contained a provision for an independent tribunal to review complaints against railway police officers.

As it stands, citizen complaints are only dealt with internally by other railway employees. In an age where almost every public police force in Canada is subject to some sort of civilian overview, it is an aberration in my view that a private force is exempt from control or is exempt from external scrutiny. Even the RCMP is subject to its actions being reviewed by the allegedly impartial public complaints commission. It is unconscionable that the security force of a private corporation does not have this type of public accountability.

When Ms. Meyer's complaint was not dealt with to her satisfaction by the railway company she appealed to government and found herself in a Kafkaesque runaround where nobody seems to be responsible for anything.

The Minister of Transport initially passed the book to the Canada Transportation Agency. The Canada Transportation Agency and the Minister of Justice both directed her to the solicitor general who in turn directed her, correctly I believe, back to the Minister of Transport where the matter rests.

As an aside, I gather from the response by the Minister of Justice that she is not even aware that trespassing on railway property is a breach of federal law under the Railway Safety Act, but nobody is perfect.

In summary, I urge the Minister of Transport to introduce legislation to amend section 158 of the Canada Transportation Act to establish an independent commission to review and adjudicate complaints against railway police constables.

Further, although we are now in the process of passing what is supposed to be the be all and the end all of railway safety, I suggest that the rather nebulous section 26.1 of the Railway Safety Act be further amended in accordance with last year's recommendation by the Transport Canada project team that “the responsibilities of all concerned parties with respect to crossings and trespassing be clarified”. This is less important to me than the issue of lack of accountability of the railways for actions of their constables, but it is nevertheless a matter of public interest.

I would add that the potential, no matter how slim, for a trespasser on a railway track to be charged with an indictable offence pursuant to section 41 is overkill which should be addressed in conjunction with the review of section 26.1 of the Railway Safety Act.

If the minister would bring forward the necessary legislation to address the inequities in the Railway Safety Act and in the Canada Transportation Act to which I have drawn the attention of the House, my colleagues and I would be very happy to support the initiative.