House of Commons Hansard #41 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was provinces.

Topics

Federal-Provincial Fiscal Arrangements Act
Government Orders

4 p.m.

The Acting Speaker (Mr. Bélair)

Is it the pleasure of the House to adopt the motion?

Federal-Provincial Fiscal Arrangements Act
Government Orders

4 p.m.

Some hon. members

Agreed.

Federal-Provincial Fiscal Arrangements Act
Government Orders

4 p.m.

Some hon. members

No.

Federal-Provincial Fiscal Arrangements Act
Government Orders

4 p.m.

The Acting Speaker (Mr. Bélair)

All those in favour of the motion will please say yea.

Federal-Provincial Fiscal Arrangements Act
Government Orders

4 p.m.

Some hon. members

Yea.

Federal-Provincial Fiscal Arrangements Act
Government Orders

4 p.m.

The Acting Speaker (Mr. Bélair)

All those opposed will please say nay.

Federal-Provincial Fiscal Arrangements Act
Government Orders

4 p.m.

Some hon. members

Nay.

Federal-Provincial Fiscal Arrangements Act
Government Orders

4 p.m.

The Acting Speaker (Mr. Bélair)

In my opinion the nays have it.

And more than five members having risen:

Federal-Provincial Fiscal Arrangements Act
Government Orders

4 p.m.

The Acting Speaker (Mr. Bélair)

Call in the members.

And the bells having rung:

Federal-Provincial Fiscal Arrangements Act
Government Orders

4 p.m.

The Acting Speaker (Mr. Bélair)

The division on the motion stands deferred until 6.30 p.m. tonight.

Budget Implementation Act, 1997
Government Orders

April 2nd, 2001 / 4 p.m.

Brant
Ontario

Liberal

Jane Stewart for the Minister of Finance

moved that Bill C-17, an act to amend the Budget Implementation Act, 1997 and the Financial Administration Act, be read the second time and referred to a committee.

Budget Implementation Act, 1997
Government Orders

4 p.m.

Etobicoke North
Ontario

Liberal

Roy Cullen Parliamentary Secretary to Minister of Finance

Mr. Speaker, I am delighted to have the opportunity to speak today at second reading of Bill C-17.

The bill amends the Budget Implementation Act, 1997, by providing funding increases for the Canada foundation for innovation. It also contains amendments to the Financial Administration Act relating to the Canada Pension Plan Investment Board and the borrowing power of federal departments.

I will begin my remarks by discussing the additional funding for the Canada foundation for innovation. I had planned to talk about the history of the Canada foundation for innovation but I think members in the House are familiar with the story. With the bill, funding for the foundation will rise to $3.15 billion. That demonstrates the government's commitment to fostering a knowledge based economy and a climate of innovation.

I will move to the specific measures of the bill which pertain to the CFI and I will explain the funding provisions in detail.

The $500 million announced last October will be invested in two ways. First, $400 million will allow the foundation to contribute to the operating costs of new awards. Second, $100 million will help support the participation of Canadian researchers in leading edge international research projects and facilities that offer significant research benefits to Canada.

The recent announcement of an additional $750 million for the CFI will build on that funding by providing additional stability to universities as they plan their future research priorities. At the time of the announcement the finance minister said:

Giving the knowledge economy of the 21st century a preferred home in Canada will lead to higher incomes, better jobs and increased opportunities for all Canadians.

In addition to establishing the Canada foundation for innovation with a series of funding initiatives that now total $3.15 billion the government has implemented other funding initiatives for research over the past four years.

The initiatives include: one of the most generous R and D tax regimes in the world; increased funding to the granting councils, including the creation of the Canadian institutes for health research, to maximize the advantage Canada enjoys in medical research; funding of $900 million over five years for the Canada research chairs program which would establish 2,000 research chairs at Canadian universities; increased funding for the network of centres of excellence; funding of $300 million for Genome Canada; the sustainable development technology fund; and a Canadian foundation for climate and atmospheric sciences.

As announced in the Speech from the Throne in January, the government is committed to at least doubling its current federal investment in R and D by 2010.

The Speech from the Throne also specified that during its mandate the government intends to increase investment in granting councils, accelerate Canada's ability to commercialize research discoveries and turn them into new products and services, and pursue a global strategy for Canadian science and technology so that Canada can be at the forefront of collaborative international research.

Increased funding for the Canada foundation for innovation, CFI, is not the only component of the bill. Bill C-17 also contains amendments to the Financial Administration Act which I will now discuss briefly.

I should first explain that the financial administration of the Government of Canada, the establishment and maintenance of its accounts and the control of crown corporations all fall under the purview of the Financial Administration Act, the FAA.

In addition, the Financial Administration Act sets out the statutory framework under which the government can borrow money. The Minister of Finance needs authorization from parliament through borrowing authority acts before the government can borrow new money. Authority to refinance maturing debt is contained in the Financial Administration Act. The finance minister is also responsible for debt management under the Financial Administration Act.

The first FAA amendment in the bill concerns the Canada Pension Plan Investment Board. When the Canadian Wheat Board Act was amended in 1998, the Canada Pension Plan Investment Board was inadvertently deleted from subsection 85(1) of the Financial Administration Act.

The error meant that legally the Canada Pension Plan Investment Board was subject to various crown corporation control provisions under the FAA which put it in conflict with its own mandate. Clearly that was not intended. Bill C-17 rectifies the situation.

The Canada Pension Plan Investment Board will again be included in the list of crown corporations exempt from part X of the Financial Administration Act. The change will be retroactive to December 1998 to ensure that the Canada Pension Plan Investment Board has always operated within the laws of Canada.

The second amendment reinforces the authority of parliament over any borrowing by or on behalf of the crown. It also strengthens the role of the Minister of Finance in ensuring the appropriate management of government indebtedness.

The amendment provides for greater certainty that it is parliament that specifically authorizes borrowings made on behalf of Canada. Bill C-17 ensures that all borrowings, not just money but instruments like capital leases, are covered under section 43 of the Financial Administration Act and are subject to supervision by the Minister of Finance.

In closing I will summarize. The amendments to the Financial Administration Act are designed to improve the operation of the act.

The changes to the Budget Implementation Act, 1997, to provide additional funding to the Canada Foundation for Innovation and extend its activities are consistent with the government's commitment to at least doubling its current investment in R and D by 2010.

The Canada foundation for innovation is about looking forward. It is about education and investing in the future. In other words, it is making a down payment today for a much greater reward tomorrow. Let me quote the Minister of Finance when he spoke on October 18. He stated:

—success in the new economy will not be determined by technology alone, but by creating an environment of excellence in which Canadians can take advantage of their talents, their skills and their ideas.

The Canada foundation for innovation and its successes reflect the minister's sentiments. The CFI deserves this increased funding so that it can continue to promote research in Canada and inspire young Canadian researchers, thus contributing to the environment of excellence.

I am confident that hon. members from all sides of this House will agree that investing in education, research and innovation is the most significant investment Canadians can make to foster future success.

Clearly the government is on the right track. I encourage hon. members to give this legislation their full support.

Budget Implementation Act, 1997
Government Orders

4:10 p.m.

Canadian Alliance

Jason Kenney Calgary Southeast, AB

Mr. Speaker, I am pleased to rise on behalf of the official opposition in the debate on Bill C-17. I thank the parliamentary secretary for mercifully abbreviating his remarks.

I will say at the outset that the bill, as the parliamentary secretary has indicated, deals with amendments to two statutes. One deals with funding for the Canada foundation for innovation and the other deals with amendments to the Financial Administration Act, the FAA. Neither are related, but the government has decided to parcel them together in the one bill. Both elements of the bill are evidence of how the government approaches legislation in an inappropriate fashion.

Let me address the bill as it concerns the Canada foundation for innovation. It proposes to give statutory authority to an announcement already made by the Minister of Industry to increase funding to the CFI by some $750 million.

I think many of my colleagues will share this sentiment: I find it troublesome, to say the least, that parliament is constantly putting forth legislation to authorize spending that has already been announced as a fait accompli by the government, in this case by the Minister of Industry.

Rather than coming before the House of Commons to seek the authority of parliament before making public and political commitments, the government ignores the ancient prerogatives of parliament and abuses its executive authority. It makes announcements outside this place and then later comes along to say it needs parliament's approval. After 900 years of parliamentary struggle to give representatives of the House of Commons the power to scrutinize, reject or authorize the spending plans of the crown, this is what we are facing. This is just part of an endless pattern of the centralization of power, the abuse of power and the contempt of parliament, not just by this Liberal government, but its predecessor governments, that increasingly diminishes the prerogatives of this place to authorize spending.

The government might say that it knows for sure that it will get these things passed anyway. How does it know that? The last vote which I was at in this place the government lost. We cannot be certain that announcements made by the Minister of Industry will end up as authorized appropriations by this parliament. There is no certainty in that. To assume otherwise is to exercise a great degree of arrogance.

Also I found it troublesome that the Minister of Industry, that very thoughtful, reflective gentleman and that great contributor to public policy debate in this country, announced this. The Minister of Industry, that great friend of industry, through the Voisey's Bay debacle acted like the dictator of a banana republic by telling a private company that it could not, after having received all regulatory authorization, benefit from its private investment in a major capital investment in his own province. It is an embarrassment that he is the Minister of Industry.

When the minister stood up about a month ago and made this announcement of $750 million for the Canada foundation for innovation, he did so in a context that was completely without any reference in the federal so-called mini budget, the finance minister's political statement of last October and in lieu of a conventional spring budget. He announced nearly $1 billion in new public spending without any broader fiscal context.

We find this troublesome. The fact that he did so at the very end of the fiscal year, which ended this past week, is part of the pattern of spend it or lose budgeting, or March madness, of which this government is a brilliant practitioner. Departments know if they do not fully exhaust money which is on the table or which is available in a given fiscal year, it will be returned and will not be available to them to spend in future years.

The government tells us that this $750 million, and I look forward to questioning representatives of the ministry at committee on this point, will be spent over the duration of something like 10 years. I asked officials in a briefing whether the $750 million would be spent in 10 years. They said “No, something like 10 years”. What does that mean? It is nearly a billion dollars of tax money and the government is not even sure over what duration this will be rolled out.

One thing is for sure. The government wants to book it all in this current fiscal year as part of the well established practice, which has been much criticized by the auditor general, of trying to diminish the size of the surplus in any given fiscal year for political reasons. Then the government can turn around and tell taxpayers that it is sorry it cannot afford to give more real, meaningful tax relief because the surpluses are just not big enough. Year after year we hear this sad story, precisely because the surpluses have been overwhelmingly consumed by huge spending projects and the March madness represented by the announcement which found its way into the bill.

Major spending commitments ought to come before this place in a budget speech in parliament before they are announced by a hyperpolitical minister, like the minister responsible for industry. They ought to be authorized by this place in the context of an overall, long term fiscal plan.

Many private sector economists are agreeing with the official opposition in its assessment that the government's spending program is out of control. Its spending this year will be $35 billion higher than it was projected to be the year before last. That is discretionary spending. That does not include things like the increases for CHST. Spending is out of control.

We see that Canada is headed into choppy economic waters. Growth projections for the current calendar year have been on average cut in half from where they were when the minister's political statement came out in October. At that time he projected a 3.5% growth. We are now looking at an estimated growth of something like 1.5% to 2% this year. That will clearly have an impact on government revenues.

Many economists suggest that in the second quarter of the year, which we are now entering, there will actually be a flat, if not negative growth in Canada. We have a dollar which is teetering on the brink of a near record historic low, having lost 25% of its value under the tenure of the government. Our dollar is now declining against that famed currency, the Mexican peso. The government's reaction is “don't worry, be happy” and that it does not need to bring forward a budget, as is the convention in the House, this spring or even next fall. When the Prime Minister decides by fiat that he is going to deign to come before parliament with a budget he will do so and not before then, notwithstanding that the entire economic landscape has changed dramatically since this government's political statement in October.

Instead of coming before us with a framework to control spending in light of these new realities what does the government do? It presents piecemeal major new spending programs which have not been accounted for in the overall fiscal framework and which have no recognition of the new economic circumstances in which we find ourselves, through the nearly $750 million proposed in the budget.

While we have great consternation about the manner in which this is handled, the amount of spending and the lack of a budgetary authority for it, the official opposition does in principle support the policy objectives of the Canada foundation for innovation. We believe that Canada needs to greater investment in both the public and private sectors in research and development, particularly with respect to hard applied sciences. We have long been an advocate of this kind of policy.

It has been widely remarked that Canada's expenditures and investments in research and development are significantly lower than the average in the OECD and the G-7. This is something we need to correct. Toward that end the Canadian Alliance policy states:

We will appoint a Senior Advisor on Technology with private sector technology experience to report directly to the Prime Minister. We will bring the best ideas in business, government, and universities together to facilitate the transition to the new economy and position Canada as a global leader. We will increase support to Canada's research granting councils and appoint a chief scientist of Canada to co-ordinate science activities in all government departments and ensure that science, not politics, prevails.

We also committed further to that in our election platform an increase in funding for research and development to the various granting councils of some $500 million, an amount far exceeded by the bill before us today. While we believe it is important that both the public and private sectors invest more in R and D, we think that must happen within the context of fiscal responsibility. That means every dollar must be watched with great care.

Another concern that my colleague, the member for Calgary Southwest and critic for science and technology for the Alliance, raised was the manner in which these public moneys were allocated through granting councils, such as the CFI. He interrogated the Minister of Industry on this point at the industry committee, that the government had no clear and impartial framework for granting moneys out of foundations such as the CFI. Also, there was no clear certainty that grants would be done in a completely non-political way and strictly on their merits, as pointed out by the auditor general.

There is no proper reporting on the administration of the grants at research institutes and universities, nor does parliament get proper feed back on the results so we can see what bang taxpayers are getting for their buck.

These are all things that need to be changed. The government constantly comes before parliament or its committees with new ideas about spending on science, technology, research or development. There is a proposal now for major new funding for astronomy. There are various other projects on the table, all which have been dealt with in a piecemeal fashion.

We in the official opposition, and I think my colleague from Calgary Southwest will later speak to in this bill, believe there is a need for a broader framework for funding of science, technology, research and development rather than the kind of political piecemeal approach which we have before us in this bill.

Let me turn my attention to the second section of the bill with respect to the legislation affecting the Canada pension plan investment board and its adherence to the Financial Administration Act.

I find it quite humorous because there are two things that happen in the bill. First, clauses 4 and 5 of the bill clarify the borrowing authority that departments, crown corporations and agencies have. They clarify what we all know ought to be the case, and thought was the case, that parliament delegates to the Minister of Finance the authority to borrow certain sums and he has the delegated authority to authorize or reject borrowing requests from various departments, agencies, boards and commissions.

It turns out that due to typical legislative errors on the part of the government, there are a couple of departments that are not covered by this convention, or legal tradition, of delegated borrowing authority. The Department of National Defence, apparently, had obtained a legal opinion indicating that it had the power to borrow money on its own without any authorization from the Minister of Finance or authorization by parliament. The legal officials in the defence department and the justice and finance departments had a great brouhaha over the past year about whether or not defence department bureaucrats could borrow money without proper legal authorization by this parliament and the minister.

How could we have let that situation get out of control? It is quite conceivable that they could have gone out, done so and contravened a long standing convention of parliament, which is a restriction on the borrowing authority. Because of the government's incompetence and oversights it has taken years to finally come forward with this amendment to tighten up and clarify the delegation of the borrowing authority saying that bureaucrats cannot charge money on the public credit card and tell taxpayers to “pick up the bill, see you later”.

Today it could happen. After this bill it will not be able to but this has stood for far too long without correction on the part of the government.

Then we get to my favourite section of the bill, clause 6. It is really quite marvellous. The government House leader is so proud of his legislative prowess. The problem is that he so often brings bills before this place that are riddled with drafting errors. I spoke about this in debate on Bill C-22. We were making all sorts of corrections to legislation to correct mistakes made in drafting errors in bills brought before parliament by the government.

Budget Implementation Act, 1997
Government Orders

4:25 p.m.

Liberal

Don Boudria Glengarry—Prescott—Russell, ON

They're legislative improvements.

Budget Implementation Act, 1997
Government Orders

4:25 p.m.

Canadian Alliance

Jason Kenney Calgary Southeast, AB

The House leader calls them legislative improvements. Sometimes they are euphemistically referred to as housekeeping amendments. It just sounds so pleasant.

The real ugly face of it is legislative incompetence on the part of the government. The House leader is the first, whenever the opposition drags out debate on a bill as we occasionally do, to raise the alarm about the cost to parliament and the value of debating time in this place.

We spend hours, days and weeks in every session debating bills such as this one, which are, in substance, corrections to legislative errors that the government made in the first place. If the government got these things right in the first place, we would not be spending scarce parliamentary time debating legislative errors such as those contained in Bill C-17.

Sometimes these errors are not just of a minor, technical or dilatory nature. Sometimes they are very serious and grave mistakes. The Canada Pension Plan Investment Board is a good example. In the immediate past parliament, the government introduced Bill C-2 in order to make some major changes to the Canada pension plan and to authorize and introduce the single largest tax increase in Canadian history. My colleagues will recall that massive tax grab that will cost tens of billions of dollars. They brought—