House of Commons Hansard #147 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was provinces.

Topics

Petitions
Routine Proceedings

10:10 a.m.

Canadian Alliance

Charlie Penson Peace River, AB

Mr. Speaker, on behalf of Peace River constituents, I would like to submit a petition with over 200 signatures calling upon Parliament to pass legislation that would recognize the institution of marriage in federal law as being a lifelong union of one man and one woman to the exclusion of all others.

Most people living in my riding believe that marriage is the best foundation for families and the raising of children. They are also aware that this institution is being threatened. They wish to ensure that protection is provided to marriage.

Petitions
Routine Proceedings

10:10 a.m.

Liberal

Paul Szabo Mississauga South, ON

Mr. Speaker, I am pleased to present a petition, following many others on the same subject, again signed by constituents in my riding of Mississauga South.

The constituents of Mississauga South overwhelmingly have come out against the Ontario Court of Appeal decision; and that the definition of marriage being the legal union of one man and one woman to the exclusion of all others is in fact constitutional and the will of Canadians.

The petitioners would also like to point out that section 33 of the charter provides an override, which is also referred to as a notwithstanding clause.

The petitioners therefore call upon Parliament and the government to invoke the notwithstanding clause so that only two persons of the opposite sex can be married.

Petitions
Routine Proceedings

10:15 a.m.

Bloc

Richard Marceau Charlesbourg—Jacques-Cartier, QC

Mr. Speaker, I have two petitions to table. The first one is as a result of my meeting a man, Reverend Paul Corriveau, who impressed me very much. He asked me to table a petition asking Parliament to take every necessary step to maintain the current definition of marriage, that is the union of one man and one woman to the exclusion of all others. This is the first petition I table as a result of my commitment to him.

The second petition is on the same topic, but from the opposite point of view. The petitioners ask Parliament to enact legislation to allow same sex couples to marry.

Parliamentarians have the duty to allow petitioners to present petitions, regardless of their own position, and this is what I decided to do.

Petitions
Routine Proceedings

10:15 a.m.

Canadian Alliance

Ken Epp Elk Island, AB

Mr. Speaker, pursuant to Standing Order 36 I am honoured to present a petition from a number of people, both in my riding and from the city of Edmonton, some of whom will be in the riding that I will represent, hopefully, after the next election.

The petition concerns child pornography. The petitioners demand that the government take all necessary steps to ensure that all materials which promote or glorify pedophilia or sado-masochistic activities involving children are outlawed.

Petitions
Routine Proceedings

10:15 a.m.

Canadian Alliance

Inky Mark Dauphin—Swan River, MB

Mr. Speaker, it is an honour to rise this morning to present four petitions on behalf of the good people of Dauphin—Swan River.

The first petition calls upon Parliament to request that Parks Canada take immediate action to save the elk herd and protect the surrounding livestock and wildlife by eliminating disease within the elk herd.

Mr. Speaker, the next petition calls upon Parliament to reduce national park fees and camping fees.

Petitions
Routine Proceedings

10:15 a.m.

Canadian Alliance

Inky Mark Dauphin—Swan River, MB

Mr. Speaker, my next petition requests that Parliament move to freeze further spending on the implementation or privatization of the national firearms registry and appeal Bill C-68 in its entirety.

Petitions
Routine Proceedings

10:15 a.m.

Canadian Alliance

Inky Mark Dauphin—Swan River, MB

Mr. Speaker, in the last petition petitioners call upon Parliament to immediately hold a renewed debate on the definition of marriage and to reaffirm, as it did in 1999, its commitment to take all necessary steps to preserve marriage as the union of one man and one woman to the exclusion of all others.

Petitions
Routine Proceedings

10:15 a.m.

NDP

Alexa McDonough Halifax, NS

Mr. Speaker, it is my privilege to table in the House a petition signed by hundreds of Canadians, adding to the tens of thousands who have already done so, regarding Canadian involvement in the U.S. national missile defence program.

The petition specifically calls upon Parliament to declare Canada's objection to the national missile defence program of the Bush administration and, second, to play a leadership role in banning nuclear weapons in missile flight tests.

The petition takes on added urgency as this Parliament appears to be ready to wind down and as the prime minister in waiting has seen fit to declare his support for this as his very first public announcement as the official leadership candidate.

Questions On the Order Paper
Routine Proceedings

10:15 a.m.

Halifax West
Nova Scotia

Liberal

Geoff Regan Parliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, I ask that all questions be allowed to stand.

Questions On the Order Paper
Routine Proceedings

10:15 a.m.

The Acting Speaker (Mr. Bélair)

Is it agreed?

Questions On the Order Paper
Routine Proceedings

10:15 a.m.

Some hon. members

Agreed.

Federal-Provincial Fiscal Arrangements Act
Government Orders

October 30th, 2003 / 10:15 a.m.

Beauce
Québec

Liberal

Claude Drouin for the Minister of Finance

moved that Bill C-54, an act to amend the Federal-Provincial Fiscal Arrangements Act and the Federal-Provincial Fiscal Arrangements Regulations, 1999, be read the second time and referred to a committee.

Federal-Provincial Fiscal Arrangements Act
Government Orders

10:15 a.m.

Oak Ridges
Ontario

Liberal

Bryon Wilfert Parliamentary Secretary to the Minister of Finance

Mr. Speaker, I appreciate the opportunity to speak today at second reading of Bill C-54, which amends the Federal-Provincial Fiscal Arrangements Act with respect to the equalization program.

Briefly, the bill would provide the Minister of Finance with the authority to continue to make equalization payments according to the current formula for up to a year in the event that new legislation is not in place by April 1, 2004.

Let me stress “in the event”. The fact is that the minister has had very productive meetings with his provincial and territorial counterparts in October of this year and this is simply an insurance so that if in fact for some reason by April 1 we do not have in place a new agreement, when April 16 rolls around, we can continue to pay. Therefore, it is nothing more than an insurance policy.

I am sure all members of the House would want to ensure that this is in place so that on April 16 the payments can continue.

Before reviewing the measures in Bill C-54, I first want to set the legislation in context. No discussion of the equalization program can take place without a discussion of the overall federal transfer system and the role of equalization within that system.

As hon. members know, the federal government, in partnership with the provinces and territories, plays a key role in supporting the Canadian health system and other social programs. The provinces and the territories deliver their own health care, education and social services, while the federal government provides them with annual financial assistance through transfer payments.

In 2003-04 it is expected that provincial and territorial governments will receive $51.6 billion in federal transfers. Because of transfers, all Canadians can expect equal access to public health care, a safety net to support those most in need and the freedom to move throughout the country to seek work, higher education and training available to all who qualify and reasonably comparable services in whatever province one chooses to live.

The federal government provides the large majority of the transfers to the provinces and territories through four major transfer programs: the Canadian health and social transfer; equalization; territorial formula financing; and the new health reform transfer, which was created as a result of the February 2003 first ministers health care agreement.

I would like to briefly review each of these programs beginning with the Canada health and social transfer, the CHST. A block fund, the Canada health and social transfer is the largest federal transfer providing provinces and territories with cash payments and tax transfers in support of health care, post-secondary education, social assistance and social services, including early childhood development.

The CHST upholds the five medicare principles of the Canada Health Act: universality, comprehensiveness, accessibility, portability and public administration. It also ensures that no minimum residency period is required to receive social assistance. In 2003-04 the federal government will provide $37.9 billion to the provinces and territories through the CHST and the CHST supplement.

Hon. members will recall that the CHST will be restructured, as of April 1, 2004, into separate transfers: the Canada health transfer, the CHT, and a Canada social transfer, the CST, to increase transparency and accountability.

I want to speak for a moment about tax transfers because this is one of the least understood aspects of the CHST, despite the fact that tax transfers are absolutely fundamental as to how the program functions.

A tax transfer provides the same support as a cash transfer. The tax transfer component of the CHST occurred in 1977 when the federal government agreed with provincial and territorial governments to reduce its personal and corporate income tax rates, thus allowing them to raise their tax rates by the same amount.

As a result, revenue that would have flowed to the federal government began to flow directly to provincial and territorial governments. The net impact of the tax point transfers on taxpayers is zero, but the impact on the federal-provincial governments is real.

The second transfer is the health reform transfer through which the federal government will provide $16 billion over five years to assist the provinces and territories in accelerating health care reforms, which were identified in the 2003 first ministers accord. These reforms include primary health care, home care and catastrophic drug coverage.

The federal government will ensure that the level of funding provided through the health reform transfer is integrated into the new Canada health transfer starting in 2008-09.

I would also like to mention that federal government funding under the CHST and the new health reform transfer is provided on an equal per capita basis to ensure equal support to all Canadians regardless of their place of residence.

An equalization program, which I will discuss in more detail in a moment, is the third major federal transfer. This program ensures that the less prosperous provinces will have sufficient revenue to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

The fourth federal transfer is the territorial formula financing, the TFF, which recognizes unique challenges and costs of providing services in the north. The TFF ensures that the territorial governments can provide a range of public services to their residents comparable to those offered by provincial governments. In 2003-04 federal payments provided under the TFF will total almost $1.7 billion.

Hon. members may be interested to know that the federal cash transfers are forecast to grow at an average rate of 7.7% between 2000-01 and 2004-05, substantially higher than projected growth in federal revenues.

Let me turn now to a more detailed discussion of the subject of today's debate, equalization.

I hope my colleagues on the other side of the House will really understand that this is simply an insurance policy, and not anything else, to ensure that those revenues continue to go to provinces after April 16. In many ways equalization is a program that expresses the generous spirit of Canada.

Equalization has been in existence since 1957 and has played an important role in defining the Canadian federation. It is unique among federal transfers in that its objective was entrenched in the Canadian Constitution in 1982.

According to the Constitution, the program's purpose is to ensure that the less prosperous provinces can provide reasonably comparable public services without their taxes being out of line with those of the more affluent provinces.

At present eight provinces qualify for federal support under equalization: Newfoundland and Labrador, Prince Edward Island, Nova Scotia, New Brunswick, Quebec, Manitoba, Saskatchewan and British Columbia. Ontario and Alberta are not eligible.

The fact that equalization was one of the few programs which was exempt from restraint measures during the mid-1990s illustrates the importance that this government attaches to this program. The government clearly understands what equalization means to receiving provinces.

I should also mention that equalization payments are unconditional. Receiving provinces are free to spend the funds on public services according to their own priorities. In 2003-04 provinces will receive approximately $10.1 billion in funding equalization payments from the federal government.

Hon. members may be interested to know how the program works.

Let me begin by pointing out that equalization is the most important federal program for reducing the differences in the abilities of provincial governments to raise revenues. Equalization payments are calculated according to a formula set out in federal legislation to respond to economic developments in the provinces.

When a province's economy is booming relative to the standard provinces, its equalization payments decline under the formula, reflecting the increase in wealth of that province. Conversely, when a qualifying province's fiscal capacity declines relative to the standard due to a slowdown in the economy, its equalization transfers increase. As well, equalization payments are subject to a floor provision. Until recently they were subject to a ceiling provision too.

The floor provision provides protection to provincial governments against unexpected large and sudden decreases in equalization payments. The floor limits the amount by which a province's entitlements can decline from one year to the next, according to a formula based on the equalization standard.

The ceiling provision was the other side of the coin. It provided protection to the federal government against unexpected increases in equalization payments. In order words, the ceiling permitted changing economic circumstances unaffordably driving equalization payments through the roof. The ceiling thus ensured that the program remained sustainable in the long run.

As part of the February 2003 first ministers accord and in light of improved federal fiscal circumstances, the Prime Minister announced that the government would permanently remove the equalization ceiling on an ongoing formula basis beginning with the fiscal year 2002-03. This provision was announced in the 2003 budget and legislation in Bill C-28, the Budget Implementation Act of 2003, received royal assent in June of this year.

Federal and provincial officials review the program on an ongoing basis to ensure that these differences are measured as accurately as possible. In addition, the legislation is renewed every five years to ensure that the integrity and fundamental objectives of the program are preserved, the last renewal being in 1999. As we know, new legislation must be in place by April 1, 2004.

The purpose of Bill C-54 is to ensure, and I underline this for all of my colleagues in the House, an uninterrupted stream of equalization payments following March 31, 2004, the date that the existing legislation is set to expire. As I said earlier, it is an insurance policy to ensure the continuation of payments for up to one year in the unlikely event, and I stress unlikely event, that renewal legislation does not obtain parliamentary approval before the expiration of the existing legislation.

As the Minister of Finance stated about the bill, the equalization program reflects the core values of our federation, and I believe it is important to give this matter the consideration that it deserves.

The minister went on to say that this measure was a precautionary one to ensure that the payments on which the provinces depended were not interrupted. As the minister has said, we are committed to tabling full renewal legislation in time for passage by March 31, 2004 deadline, but we must protect the public services that the provinces fund through the equalization program for the benefit of their citizens.

Without a doubt, passage of the bill will ensure uninterrupted equalization payments to the provinces in the unlikely event that new legislation is not in place by March 31, 2004. As well, in the event that the government continues payments under the current legislation, the proposed bill will ensure that the floor payments will continue to be made.

I suggest to hon. members that they view the measures in Bill C-54 as extra insurance, given that the impacts on receiving provinces could be very significant without the legislation. Of course, the renewal legislation, when passed, will supercede this extension. I want to emphasize that.

I will say a few words about the renewal legislation which would ensure, for my hon. friends across the way, and I know they will support this, that the program remains up to date and that the best possible calculations and data are used to determine equalization payments.

The government has identified three key principles in this renewal. First, the government is committed to a strong equalization program that allows provinces to provide reasonably comparable levels of public services at reasonably comparable levels of taxation. This is our constitutional commitment. I believe that the current program does that.

Second, the government is committed to improving the predictability and the stability of the equalization program. Equalization payments to the provinces should not destabilize provincial fiscal planning, something with which I am sure we all agree.

Third, the government is committed to maintaining the integrity of the equalization program. This principle is founded in the premise that payments have to be based on an objective formula, thereby ensuring equal treatment to all provinces. Maintaining the integrity of the program requires periodic revisions to reflect the most up to date figures and, obviously, current provincial taxation practices, while ensuring long term stability of the program.

As hon. members know, equalization is not static. Rather, it responds to the changing fortunes and circumstances of provinces over time. Indeed, since the program's inception, all provinces except Ontario have received payments to varying degrees, but always in accordance with objective calculations at the time.

In short, the government's commitment to equalization renewal is about making appropriate, fair and accurate changes. It is not about cutting or enriching the program.

Before closing, I want to take a moment to review the government's response to some of the provincial concerns. I am pleased to say that the federal government has listened, particularly with respect to their concerns about the ceiling, strengthening the equalization program, as well as further work to ensure the stability of payments.

As I indicated before, as part of the February 2003 first ministers accord, the Prime Minister announced that the government would permanently remove the equalization ceiling on a going forward basis from that time. This addressed a key provincial concern and, as I said, that was dealt with by the Prime Minister earlier this year.

We also know that in consultation with the provinces the federal government is working toward a new equalization legislation for the five year period beginning in April 2004. The program is being reviewed to ensure that it continues to accurately measure fiscal disparities and the capacity of provinces to raise revenue.

As well, with the provinces, the federal government is also working on how best to improve the stability of equalization payments. We agree with the provinces that it is important to improve the stability and the predictability of payments under this program. I am sure my colleagues across the way are delighted to hear that.

In closing, let me mention a few key points. We know that all parts of the country cannot generate the same revenues to finance public services. Federal transfers therefore help to ensure that important programs are adequately funded. Transfers also help to ensure that all Canadians receive reasonably comparable levels of public services no matter in which province they reside.

Canada's equalization program reflects the values of our federation, ensuring that all Canadians can have access to quality public services no matter which province they live in.

The bill underscores the priority the government places on equalization and will ensure that the receiving provinces continue to have resources to provide the services their people need and want, if necessary.

This is an insurance policy. This is not rocket science. It simply means that in regard to an unlikely event after April 1 payments would continue. I want to assure all members that the discussions the minister had earlier this month went very well, but the fact is that it is always prudent to have an insurance policy. I would hate to be in a position where payments did not flow on April 16, so I would urge all members of the House to give quick passage to the legislation.

Federal-Provincial Fiscal Arrangements Act
Government Orders

10:35 a.m.

Bloc

Pauline Picard Drummond, QC

Mr. Speaker, I heard the government member's explanation. I would like to remind him that this is the first time the Canadian government has put forward such legislation. I believe this shows beyond a doubt that the Parliament of Canada is totally paralyzed right now. Everything is at a standstill.

The negotiations that are currently under way have been going on for 20 years. This is totally unacceptable. The equalization process is so complex that it has been called abstruse. That means it is sheer madness.

Even the Quebec finance minister had his hopes up. He stated that he was expecting many changes, not a one year extension. We were expecting that the negotiations would be completed during this Parliament, before the next equalization payments were due. Instead of that, we have a one year extension.

My question for the member is: Does he believe that Quebec and the provinces are being penalized by the infighting between the Prime Minister and the member for LaSalle—Émard?

Federal-Provincial Fiscal Arrangements Act
Government Orders

10:40 a.m.

Liberal

Bryon Wilfert Oak Ridges, ON

Mr. Speaker, obviously the member's question is predicated on a false premise. The fact is that we are taking precautionary measures and making contingencies just in case. However, I am sure the hon. member would rise in her chair on April 16, 2004, and complain bitterly if in fact there were no insurance policy, no agreement and no money flowing to the Province of Quebec and every other entitled province.

The fact is that this is a prudent thing to do. The negotiations are continuing. Anyone who paid attention to the Minister of Finance's meetings with his counterparts on October 10 knows that they went very well. Those discussions are continuing.

We do not expect there to be a problem, but the fact is, of course, that it is only prudent to have this legislation in place in the unlikely event, and I would think that the member would in fact appreciate that and would realize that without this, if there were no agreement, there would be no moneys flowing after April 16. That is not something she wants to see and it is certainly not something the government wants to see.