House of Commons Hansard #79 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was federal.

Topics

Journals

10:05 a.m.

The Speaker

Hon. members must be disappointed they did not receive their Journals this morning. I must inform the House that they will be available only toward the end of the morning.

I also wish to advise hon. members that the voting lists appearing in Hansard may not be entirely accurate. The verified voting list will be found in Journals which will be available, as I indicated, later this morning. Hon. members can understand there might have been some difficulty given the number of votes and the number of changes that hon. members made in stating their positions during the course of the evening.

Canada Customs and Revenue AgencyRoutine Proceedings

10:05 a.m.

Thornhill Ontario

Liberal

Elinor Caplan LiberalMinister of National Revenue

Mr. Speaker, in accordance with Standing Order 32(2) I have the honour to present, in both official languages, the Canada Customs and Revenue Agency's summary of the corporate business plan for 2003-04 to 2005-06, entitled “Innovations”.

Main Estimates, 2003-04Routine Proceedings

March 27th, 2003 / 10:05 a.m.

Niagara Centre Ontario

Liberal

Tony Tirabassi LiberalParliamentary Secretary to the President of the Treasury Board

Mr. Speaker, I have the honour to table, on behalf of the President of the Treasury Board, part III of the Estimates consisting of 87 departmental reports on plans and priorities. These documents will be distributed to members of the standing committees to assist in their consideration of the spending authorities sought in part II of the Estimates.

Government Response to PetitionsRoutine Proceedings

10:05 a.m.

Halifax West Nova Scotia

Liberal

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

Mr. Speaker, pursuant to Standing Order 36(8) I have the honour to table, in both official languages, the government's response to four petitions.

Committees of the HouseRoutine Proceedings

10:05 a.m.

Liberal

Sue Barnes Liberal London West, ON

Mr. Speaker, I have the honour to present, in both official languages, the third report of the Standing Committee on Finance, entitled “Large Bank Mergers in Canada: Safeguarding the Public Interest for Canadians and Canadian Businesses”.

With regard to the government response, also pursuant to Standing Order 109, the committee requests that the government table a comprehensive response to the report. However, notwithstanding the deadline of 150 days stipulated in Standing Order 109, the committee requests that the comprehensive response to this report be tabled within 90 days of the presentation of the report to the House.

Foreign AffairsRoutine Proceedings

10:05 a.m.

Canadian Alliance

Jason Kenney Canadian Alliance Calgary Southeast, AB

Mr. Speaker, there have been consultations among all party House leaders and I believe that if you seek it you would find unanimous consent to adopt the following motion. I move:

That, in the opinion of the House, the government should endorse international efforts to bring to justice Saddam Hussein and all other Iraqi officials responsible for genocide, crimes against humanity and war crimes, including through the formation of an international criminal tribunal.

Foreign AffairsRoutine Proceedings

10:05 a.m.

The Acting Speaker (Mr. Bélair)

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

Foreign AffairsRoutine Proceedings

10:05 a.m.

Some hon. members

Agreed.

(Motion agreed to)

PetitionsRoutine Proceedings

10:10 a.m.

Bloc

Michel Guimond Bloc Beauport—Montmorency—Côte-De- Beaupré—Île-D'Orléans, QC

Mr. Speaker, I am pleased to table petitions bearing 2,311 signatures of residents of the riding of Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans.

These petitioners have one thing in common: they are all pacifists. They consider that peaceful disarmament of Iraq is the preferred solution to the present crisis. A war in Iraq would lead to destruction and would endanger the lives of thousands of Iraqi civilians. There would be disastrous effects on the entire Middle East.

The petitioners are calling upon Canada to oppose any participation in a war in Iraq.

Questions Passed as Orders for ReturnsRoutine Proceedings

10:10 a.m.

Halifax West Nova Scotia

Liberal

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

Mr. Speaker, if Question No. 133 could be made an order for return, the return would be tabled immediately.

Questions Passed as Orders for ReturnsRoutine Proceedings

10:10 a.m.

The Acting Speaker (Mr. Bélair)

Is that agreed?

Questions Passed as Orders for ReturnsRoutine Proceedings

10:10 a.m.

Some hon. members

Agreed.

Question No. 133Routine Proceedings

10:10 a.m.

Canadian Alliance

John Reynolds Canadian Alliance West Vancouver—Sunshine Coast, BC

For the fiscal years 1993-1994, 1994-1995, 1995-1996, 1996-1997, 1997-1998, 1998-1999, 1999-2000 et 2000-2001, from all departments and agencies of the government, including crown corporations and quasi/non-governmental agencies funded by the government, and not including research and student-related grants and loans, what is the list of grants, loans, contributions and contracts awarded in the constituency of West Vancouver—Sunshine Coast, including the name and address of the recipient, whether or not it was competitively awarded, the date, the amount and the type of funding, and if repayable, whether or not it has been repaid?

(Return tabled.)

Questions on the Order PaperRoutine Proceedings

10:10 a.m.

Halifax West Nova Scotia

Liberal

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

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

Questions on the Order PaperRoutine Proceedings

10:10 a.m.

The Acting Speaker (Mr. Bélair)

Is that agreed?

Questions on the Order PaperRoutine Proceedings

10:10 a.m.

Some hon. members

Agreed.

Budget Implementation Act, 2003Government Orders

10:10 a.m.

Malpeque P.E.I.

Liberal

Wayne Easter Liberalfor the Deputy Minister and Minister of Finance

moved that Bill C-28, an act to implement certain provisions of the budget tabled in Parliament on February 18, 2003, be read the second time and referred to a committee.

Budget Implementation Act, 2003Government Orders

10:10 a.m.

Oak Ridges Ontario

Liberal

Bryon Wilfert LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, it is my honour to present Bill C-28, the budget implementation act, 2003, for second reading today.

In the course of preparing his budget, the Minister of Finance was advised by Canadians that it must be more than a tallying of accounts: that the budget must reflect the sum of our values as well. The budget the minister presented to the House in February meets the challenge in three arenas of national life.

First, it builds the society Canadians value by making investments in individual Canadians, their families and their communities.

Second, it builds the economy Canadians need by promoting productivity and innovation while staying fiscally prudent.

Third, it builds the accountability Canadians deserve by making government spending more transparent and accountable.

Just as important, the government is able to meet these challenges and pursue significant new investments, without risking a return to deficits, because of our continuing commitment to sound fiscal management. This commitment to fiscal responsibility is real and rigid, not just rhetoric, as demonstrated by the fact that we have already delivered five consecutive surpluses, a $47 billion reduction in the federal debt and the $100 billion tax reduction plan.

The 2003 budget is a budget based on continuity: maintaining the prudent, balanced approach to fiscal planning that has contributed so much, so directly, to Canada's economic stability and success. At the same time, it is a budget marked by milestones and major new commitments.

Economic success and fiscal discipline are only part of good government. They are a means to the much more important end of building the society that Canadians value, where compassion and social responsibility are constant, concrete facts of national life.

No social policy is more vital to Canadians than our publicly funded health care system.

The 2003 accord on health care renewal, agreed to by the Prime Minister and provincial first ministers in February, reflects a common commitment among governments to work together to improve access to the health care system, enhance accountability of how health care dollars are spent, and help ensure that the system remains sustainable in the long term.

Budget 2003 confirms $34.8 billion in increased funding over five years to meet the goals outlined in the health accord. Bill C-28 implements these measures.

First, in terms of increased support through transfers, the budget builds on the significant federal support for health care already provided to the provinces and territories through the Canada health and social transfer, the CHST.

Following the September 2000 agreements on health and early childhood development, the federal government provided provinces and territories with a predictable and growing five year funding framework to 2005-06 through the CHST. Now, this established funding will be further increased by $1.8 billion and extended for an additional two years. As a result, total yearly cash transfers to the provinces will rise to $21.6 billion in 2006-07 and $22.2 billion in 2007-08. Again, let me emphasize that this is over $22 billion for that one year.

Next, an immediate $2.5 billion supplement to the CHST will help relieve existing pressures in the health care system. This funding will be on an equal per capita basis, with provinces and territories having the flexibility to draw down their allocated share of funds, as they require, up to the end of 2005-06.

But the sustained renewal of Canada's health care system needs positive structural change as well as further financing. That is why the first ministers also agreed to restructure the CHST into two separate transfers, a Canada health transfer and a Canada social transfer, effective April 1, 2004.

Creating distinct transfers for health and other social spending will provide Canadians with information on the federal government's long term contribution to health care. At the same time, first ministers reaffirmed the importance of the equalization program in ensuring that all provinces have the ability to provide comparable levels of public services at comparable levels of taxation.

To strengthen the program, the federal government agreed to permanently remove the ceiling on equalization payments beginning in 2002-03.

All of these measures will provide a predictable, sustainable and growing long term funding and planning framework for transfers to the provinces and territories in support of health care and other social programs.

Bill C-28 would also implements other investments agreed to in the health accord.

In terms of health reform transfer, first ministers identified primary health care, home care and catastrophic drug coverage as priority areas where the provinces and territories needed to accelerate and reform to help their residents. The budget responds with a five year $16 billion health reform transfer to help in these priority areas with funds to be distributed on a per capita basis over a five year period beginning on April 1, 2003.

In terms of the diagnostic and medical equipment fund, the first ministers also recognized that more needed to be done to improve access to diagnostic services. The availability of equipment is a key factor in ensuring timely access to quality health care.

Building on the $1 billion provided for medical equipment in 2000, the 2003 budget responds with an additional investment of $1.5 billion over three years. This funding will enable provinces and territories to acquire diagnostic and medical equipment and train specialized staff to operate increasingly sophisticated equipment. Again funds will be distributed on an equal per capita basis and drawn down as provinces require up to the end of 2005-06. Under the accord, governments agreed to report annually on both the health reform transfer and the medical equipment fund so that Canadians can gauge the impact of the new investment.

Another area identified as a priority concern are electronic health records, which are an essential building block for a modernized, more innovative health care system. Under the September 2000 agreement on health, the government announced $500 million to expand the use of health information and communication technologies, including the adoption of electronic health records.

Canada Health Infoway will receive an additional $600 million to accelerate the development of EHRs, common information technology standards, across the country and the further development of tele-health applications.

Without a doubt, research is a vital component of Canada's health care system. The federal government currently provides significant funding for health research through its support for students, researchers, universities, research hospitals and other institutes and also undertakes research in its own laboratories. The 2003 budget recognizes that more can be done. Two such measures are included in this bill.

The first concern is the Canadian Foundation for Innovation, the CFI, which was established to support the modernization of research infrastructure in Canadian universities and colleges, research hospitals and other non-profit research institutions across Canada. The budget allocates $500 million to the CFI to enhance its support for state of the art health research facilities. At the same time, Genome Canada will receive $75 million for applied health genomics. It is perhaps the most exciting sector of biological research in today's world and one where Canada has developed a global reputation.

In terms of other health initiatives, the budget provides significant funding to support a range of other initiatives fundamentally linked to health reform. For example, the budget provides $205 million over five years for governance and accountability initiatives, including funding for the Canadian Institute for Health Information to enable better public reporting on the health system and the health of Canadians.

Funding will also be provided to support the establishment of a new Canadian patient safety institute, as well as to improve the timeliness of Health Canada's regulatory processes with respect to human drugs, to pursue a national immunization strategy and to better assess the use of new diagnostic and treatment technologies.

Another initiative covered by this legislation involves a compassionate care benefit under the employment insurance program to help ease the economic problems facing families who must deal with grave illness. The government recognizes that income support and job protection are key for workers who take time off to care for seriously ill family members, as they often lose income and benefits due to time loss from paid employment.

As a result, starting on January 1, eligible workers will be entitled to a six week paid leave to provide care or support to a gravely ill or dying parent, spouse or child. Also, to enhance its flexibility, the benefit can be shared among eligible family members. The compassionate leave benefit underscores a fundamental social fact, that central to the life of every Canadian is the welfare of their family.

There is no more important investment that we can make than in the opportunities we create for our children. Working through the bill before us, budget 2003 strengthens our longstanding commitment to Canadian children and families in several key areas.

First, annual assistance for children and low income families is increased through the Canada child tax benefit, the CCTB, to $10 billion by 2007 with annual benefits increasing to $3,243 for the first child, $3,016 for the second child and $3,020 for each additional child.

Next, the government recognizes that caring for children with severe disabilities imposes a heavy burden on families. To that end, a new indexed $1,600 child disability benefit, effective July 2003, will provide additional assistance of up to $1,600 annually to low and modest income families with a disabled child.

A third measure provides $80 million per year to enhance tax assistance for persons with disabilities, drawing on the evaluation of existing disability tax credit and the input of a technical advisory committee.

The budget also adds to and builds on the tax measures introduced in previous budgets to provide support to persons with disabilities. More infirmed children or grandchildren will now be able to receive a tax deferred roll over of a deceased parent's or grandparent's RRSP or RRIF proceeds.

The budget expands the list of expenses eligible for the medical expense tax credit to include, for example, certain expenses for real time captioning and note taking services and voice recognition software. In addition, individuals with celiac disease who require a gluten free diet will now be able to claim the medical expense tax credit for the incremental cost of gluten free food products.

Our ability to make major long term investments in boosting the quality of Canadian life without jeopardizing our fiscal balance rests on a healthy, growing economy. However better economic performance tomorrow requires a more productive, innovative and sustainable economy today.

As we know, improved skills and learning are vital to improved productivity, competitiveness and a better life for all Canadians. Budget 2003 takes action to help give Canadians opportunities to gain new skills by committing $60 million over two years to improve the Canada student loans program to put more money in the hands of students and better enable post-secondary graduates to manage their debt. In addition, individuals who are in default of the Canada student loans or have declared bankruptcy will now have access to interest relief. As well, protected persons, including convention refugees, under the Immigration and Refugee Protection Act, will be eligible to Canada student loans.

Canada's high calibre workforce deserves the support of a competitive tax system. That is why in the 2000 budget the government launched a five year $100 billion tax reduction plan, the largest in our country's history. This plan continues to deliver growing tax relief, about $24 billion this year and $30 billion in 2004.

To help sustain our economy, the budget further improves the tax system through incentives to save and invest, to help small and medium sized enterprises and boost Canadian competitiveness.

The legislation promotes savings by Canadians by increasing registered retirement saving plans, RRSPs, and registered pension plans, RPPs, limits to $18,000 over four years and indexing these new limits.

As well, we are providing concrete assistance to our country's entrepreneurs and small businesses, a key source of economic growth and job creation in Canada.

Employment insurance contribution rates will be cut by 12¢ to $1.98 per $100 of insurable earnings for 2004. This is the tenth premium rate cut since 1994 and will give a yearly savings for workers and employers to over $9 billion. While this rate reduction will apply to everyone, it will be particularly beneficial for small businesses.

The federal small business tax rate of 12% will be extended to business income between $200,000 and $300,000 over the next four years. This will result in an annual saving of up to $9,000 for many local Canadian companies.

Another measure eliminates the $2 million limit on the amount of small business investments eligible for the capital gains rollover. This will help small firms to assess the risk capital they need to expand and grow.

The bill reduces business costs and complexity by improving the tax treatment of automobile benefits for employees and auto expenses for employers.

A competitive tax system is necessary to attract investment to Canada and to encourage entrepreneurs to create and grow their businesses and the jobs that they bring.

The government's five year tax reduction plan is putting in place a tax advantage for businesses in Canada as a basic part of the strategy to foster a strong and productive economy. With the tax cuts implemented to date, the average federal-provincial corporate tax rate in Canada is now below the average of the U.S. rate. The budget builds on that advantage over the next five years, totally eliminating the federal capital tax, which is currently levied on all corporations with more than $10 million of capital used in Canada. The first step in the phase out will be to raise the level of the capital at which a firm begins to pay tax to $50 million.

As members can see, the scope of our budget plan is dramatic, and yet I have only covered a portion of the measures in the legislation before us.

We are also taking action in such vital areas of public concern and support as climate change, the environment and agriculture. For example, Bill C-28 includes $250 million to the Sustainable Development Technology Canada Foundation for the development of climate change and clean air technology. Bill C-28 includes $50 million to the Canadian Foundation for Climate and Atmospheric Sciences to increase climate and atmospheric research activities including research related to northern Canada. The bill also includes $20 million to support venture capital investment by Farm Credit Canada in the agriculture sector.

Bill C-28 also includes additional tax measures to confirm the increase in the federal taxes on tobacco products effective June 18, 2002 as part of the government's strategy to discourage tobacco consumption. The bill removes the 4¢ per litre federal excise tax on diesel fuel from bio-diesel. It also provides authority for voluntary arrangements with interested first nations to levy a broadly based sales tax consistent with the GST on first nation lands.

The budget provides important new investments to build the society Canadians value and the economy we need. Canadians have also made it clear that these investments must be backed by enhanced accountability to Parliament and the public. Several new steps will help to make government spending more accountable and transparent.

The budget follows up the government's commitment to review the air travellers security charge to ensure revenue from the charge remains in line with the cost of the enhanced air travel security system through 2006-07. Now that the review has been completed, the government is reducing the charge to $7 from $12 each way for domestic flights. That is by more than 40%.

Accountability is also the anchor of the new health accord. The accord sets out an improved accountability framework that includes a commitment by all governments to report regularly to Canadians. This framework will give Canadians more information about how their tax dollars are used to bring about reform in the health care system.

The government is also making a number of changes to improve the accountability of foundations to Canadians and parliamentarians. Most of these changes can be made through changes to the funding arrangements with the foundations.

However the Canada Foundation for Innovation, the Canada Millennium Scholarship Foundation and the Canada Foundation for Sustainable Development Technology were established through federal statute. Under the existing legislation, unspent funds are distributed among the eligible recipients that receive grants, but the Auditor General believes these moneys should be returned to the government. There will now be provisions that the responsible minister may, at his or her discretion, recover unspent money in the event of winding up a dissolution of these three foundations and return the funds to the consolidated revenue fund.

Finally, the budget terminates the debt servicing and reduction account, the DSRA, which was established to pay interest on the public debt and ultimately reduce the debt. There is no longer any need for this account since the DSRA revenues must ultimately be disposed in the consolidated revenue fund.

Budget 2003 delivers a dramatic range of action while maintaining our commitment to prudent fiscal planning for balanced budgets. The budget takes serious steps forward in the quest to build the society that we value, the economy we need and the accountability we deserve. It is based on sound fiscal management and responsible stewardship of our resources, but is rooted in our values as we seek to give Canadians the tools they need to realize their potential. Above all, it recognizes the crucial link between social and economic policy and how an integrated approach produces policies that benefit all Canadians. The result is a better, more compassionate and competitive Canada today and an even stronger, more prosperous Canada in the years ahead. I urge all hon. members to support the legislation.

Budget Implementation Act, 2003Government Orders

10:30 a.m.

Canadian Alliance

Charlie Penson Canadian Alliance Peace River, AB

Mr. Speaker, I am happy for the opportunity to speak today to the budget implementation act, Bill C-28, but I must say that the Canadian Alliance has a lot of concerns about the budget which was introduced in the House on February 18.

The new finance minister could have chosen to change the course set by that of his predecessor in the last several years but he chose not to do that. One has to wonder why that is, although most reasonable people might expect that it had something to do with the Prime Minister's legacy program. When someone has been in office for 40-some years and he still has to buy himself a legacy in the last year out, that seems like a pretty sad commentary, but that seems to be part of budget 2003.

In addition to that, the finance minister perhaps is launching a leadership bid and that may be part of it and may partly explain why we see the kind of spending increases that we have identified in budget 2003: $25 billion in new spending over the next three years. It is not just spending, it is a smorgasbord of sloppy spending. Other than the $5.3 billion this year for the health care increases, it is spread so thinly in so many areas that it may be of little benefit to anybody.

What we have seen from the government is a pattern over a long period of time of trying to buy votes and not really caring what the outcome of the legislation will be as long as it looks good on the surface. It is like the Hollywood storefront image that we see in the westerns; nothing behind it.

The budget includes $2 billion in unspecified Kyoto projects and $1.5 billion again shovelled out to unaccountable foundations. The Auditor General had a considerable amount to say about that in the past, that this was not the type of corporate accounting that we accept in the corporate sector so why should we accept it from the Government of Canada?

The budget contains $1 billion for the national child care system which will bring it to roughly $10 billion. That money has to come from somewhere. Six billion dollars will be spent on the federal bureaucracy, an increase in spending that seems reminiscent of the 1970s.

The budget contains little tax relief and what tax relief there is, it is spread over several years. I am thinking of the capital tax, of which one portion will be phased out. I heard more about the capital tax than any other thing when our committee was travelling across the country. When I was the industry critic for our party we heard that this was a very discouraging tax on investment, but the government is only taking one part of it out and only doing that over five years. That is the type of example we see in budget 2003.

Many commentators have suggested that the budget was really the end of fiscal discipline in Ottawa, but I would like to demonstrate why that simply is not the case at all. It really is a return to old Liberal values. The fiscal discipline only took place in about 1996-97, for two years, because the government was driven to the wall and had to do something about it. I will make that case.

I submit that this is really a continuation of the Liberals' tax and spend policies that put political expediency ahead of good policy, wasteful spending over restraint and accounting trickery over transparency.

The reality is that since 1993 the Chrétien-Martin tag team increased personal and corporate income taxes 53 times.

Budget Implementation Act, 2003Government Orders

10:35 a.m.

The Acting Speaker (Mr. Bélair)

I am sorry to interrupt but you referred to the Prime Minister by his name, as well as the former minister of finance by his name. You are a veteran of the House. Please refrain from doing so.

Budget Implementation Act, 2003Government Orders

10:35 a.m.

Canadian Alliance

Charlie Penson Canadian Alliance Peace River, AB

Mr. Speaker, the reality is that the tag team of the Prime Minister and the former finance minister increased personal and corporate taxes 53 times since 1993. Budget 1994 increased spending $1.7 billion and increased taxes by $1.3 billion. Let us remember that the early budget of the former minister of finance had a deficit of $37 billion in it, $37 billion adding to that national debt. It was not until the budget of 1995 that the Liberals were forced to reduce spending but still managed to increase taxes by $1.4 billion. Then again, the deficit for that year was $28 billion.

The early years of the former finance minister, the member for LaSalle—Émard, what was his record? It was to increase taxes, increase spending and run another deficit. When those guys inherited the government from the Mulroney team the national debt, which is the accumulated deficit, was $508 billion. What did they do? They ran it up to $583 billion before the message got through that we simply could not do that any more.

What caused this change? What were the events that led up to the change in the Liberal philosophy of actually having some fiscal discipline for a few years? I think they were forced to the wall. There was the Mexican situation where the peso was in crisis in 1994, fears that New Zealand would fall into insolvency and Canada's own debt was downgraded by many of the debt rating agencies. The message was pretty loud and clear that the Liberals had to do something.

They did take some action. What did they do? This is important. Was it done fairly? No, not really. The former finance minister and his team took the easy way out. They offloaded their problem by slashing transfers to the provinces. According to national accounts, federal spending decreased by just 9% or $11.3 billion. This was a time of crisis. They had to get a hold on this so they decreased their own spending by 9% but slashed the transfers to the provinces for things such as health care by over 20%.

The crisis that we see in health care today, the money that had to be pumped in and today's fiscal problems between the provinces and their municipal governments, are a product of the Liberal government. It is a product of the government offloading its big problem to the provinces.

As soon as the Liberals had an opportunity, and once we started to get to the stage where we were no longer deficit spending, when the U.S. economy was growing by leaps and bounds, when 87% of our exports were going to the United States and when roughly 40% of our GDP came from exports, we were dragged along.

What did the Liberals do when they had the opportunity and things improved? They did not make the fundamental changes that were required. They returned to their old practices. They returned to their old tax and spend ways. It did not take very long. The aberration was only two years.

Federal program spending has been on the rise since 1997 and has increased dramatically since 1999. Those are all years that the former minister of finance was here. The tag team of the Prime Minister and the former minister of finance did it together.

Over the last two years federal spending has increased by 6% on average. That outpaces the formula for population growth and inflation by roughly 4%. Those are the kinds of things that put us into the difficulties in the 1970s to begin with.

The current finance minister, as I said, could have changed course but instead he opted to spend and spend. Federal spending is forecast to increase 83% faster than population and inflation growth between 1999-2000 and 2004-05.

I submit that budget 2003 is not an aberration at all. It really just ups the ante of the old Liberal spending patterns. As soon as the Liberals had a little cash in the bank, instead of improving the fundamentals, they went back to their old ways of tax and spend.

The Minister of Finance likes to brag about how Canada is a true northern tiger. He must know, as do many in government and the private sector, that despite recent reasonable economic times there is still considerable distance to make up for the bad public policies that the government and other governments have engaged in since the 1970s.

The industry committee conducted three separate studies in terms of Canada's productivity and competitiveness. What it found was a long standing decline in Canada's competitive position in the world going back 30 years. I submit that it is not an accident. This has a direct correlation to public policy. That public policy is just bad government not recognizing what Canada should be doing.

Thirty years ago the United States was number one in terms of productivity which equates to living standards. Canada was number two. That is a long term historical fact. The United States has not changed. It is still number one in terms of productivity and living standards, but Canada has fallen to 13th place in terms of productivity in the world.

In the Globe and Mail today, Canadian Manufacturers & Exporters reported that Canada's competitiveness has fallen to 50% of the G-7 average. The report prepared by Canadian Manufacturers & Exporters said:

The competitiveness of Canadian industries continues to fall compared with their G-7 counterparts, although this country's businesses no longer hold last spot--

It is no longer in last place. That is some consolation. It does not really address the issue of Canada and United States. Canadian Manufacturers & Exporters went on to say:

--the so-called excellence gap between Canadian industries and those in other Group of Seven nations has widened “significantly” since the period before the Sept. 11 terrorist attacks in the United States.

It continued:

The CME's last assessment, undertaken in the summer of 2001, put Canada's performance at 62 per cent of the G-7's overall best practice. Its most recent analysis, however, shows that figure has fallen to 50 per cent.

We have had a long term decline in the economy in Canada. We have seen it; we know it is there. We recognize it because the Canadian dollar is in big part a reflection of that. But this is 30 years of decline and 30 years of bad management by the government.

In the 1970s and onward we saw huge increases in government spending and in the design of government programs. Deficit spending was characteristic of the government and, in fact, it ran up the accumulated deficit to $583 billion. It now has it down to $536 billion and it is cheering that it is some kind of victory. I say it is not very much.

Decades of spending increases have increased Canadian tax burdens so now government represents 42% of all of the GDP of Canada. That is how much it is sucking out of the life blood of Canadians. Compare that with the United States where government takes 29%. If that was productive spending maybe we could accept that, but what do we have? We have waste in the government. We have a lot of misdirected industrial policies where it is pumping billions of dollars into so-called winners. I suggest that those winners are showing the tendency to be more losers these days than winners.

We have the aerospace sector, for example. The government has poured literally billions of dollars into that sector. I believe that it should not be involved and the Canadian Alliance believes that we should not be in the business of trying to pick winners and losers in our society.

Our standard of living has fallen to only 70% of that of the United States over a 30 year period. Canada has one of the highest personal income tax rates in the entire G-7. Once a historical home for direct foreign investment, our share of direct foreign investment has been falling over 30 years. Investors see other countries as better places to reap a profit. It is no wonder with the taxation levels on the corporate and personal side that we have in Canada.

Even Canadians are looking increasingly outside our borders, particularly in the United States, as a good place to invest. There is an article in the National Post today to that effect. Canadians are investing billions of dollars outside our country. Why? Because they see it as better place to get opportunity to have return on their investment. That should not be the case. It is tragic that it is actually happening.

Yes, they should have opportunity to look outside our country, but they should also have the opportunity to get good rates of return here. The government's response has been to devalue the dollar. We have become the big discount sale house of OECD countries. Our dollar has seen a little bit of strength in the last couple of months as the U.S. dollar is depreciating against European currency, but still we have seen a decline to where we are at 68¢ U.S. today. We have been as low as almost 60¢ and it is no accident that the dollar is a reflection of Canada's productivity and standard of living.

A National Post article today by Jacqueline Thorpe talks about the Conference Board study and what it is saying. Is it not ironic that our industries are now saying “Do not let the dollar go too high because we cannot compete”. Why can they not compete? They cannot compete because the government has not taken advantage of good times to make the fundamental changes that are necessary to allow that dollar to naturally rise and exporters to be able to benefit.

I am talking about tax decreases. Let us get off the backs of the corporate sector. Let them make a profit and we will see more investment in Canada. We will gradually see our Canadian dollar rise as it should. But the government has not taken that opportunity in good times. If it does not take the opportunity and make the fundamentals right in good times, when will it ever happen? It certainly will not happen in a downturn which we may be seeing.

This is the kind of problem that I am talking about, long-term historical problems where we see a Liberal government that has a total disregard not only for the economy and Canadian standard of living but also for its constitutional mandate.

It is clear what the division of powers were when the Fathers of Confederation designed the Constitution . The provinces were largely responsible for social areas and the federal government was responsible for foreign affairs, defence, trade, monetary policy and security. However, we have a federal government that has muscled its way into provincial jurisdiction. We see it in the budget of February 18 with all kinds of intrusions into provincial social areas, but what is the government's record in its own areas? I say it is dismal.

Let us take foreign affairs as an example. This House is being consumed with that issue in the last several weeks but it goes further back than that. Our place in the world has slipped dramatically. What are we doing to protect Canadian industries in trade agreements? What about agriculture, where we have been beaten up really badly? What about softwood lumber and defence policy? The government has deliberately gutted the Department of National Defence so it could use the money that it would save in the budget to throw at some of its special pet projects and patronage.

We have seen waste in government, and waste in the gun registry of $1 billion and running to $2 billion shortly. We have seen waste in the HRDC scandal where the minister was largely credited or discredited with blowing $1 billion, not knowing what happened to it. We have seen advertising scandals. And this is just the tip of the iceberg.

Together with waste and misdirected policy no wonder Canada has been in decline. We need the opportunity to get this country back on track. We need political parties that would get the federal government into the areas that it is responsible for and work cooperatively with the provinces in areas that the provinces are responsible for. That would seem to make perfect sense in a federation, but instead, that is not the case.

This country could get back on its feet fairly quickly if we had a party that would stand up for the things that Canadians should be standing up for and exercising responsibility that is really required. The Canadian Alliance has a totally different view than the Liberal government. We do not believe in intervening in the economy. We believe that we need to put the framework in place for business to do well, that we should be the stewards for Canadians, that we should not be interfering, and that we should not be investing in business.

It seems to me that the time has come for that to happen to get Canada back on track. We can no longer afford to have the kind of interventionist government and a poor public policy that has put us in this deep hole. It is a deep hole that I am concerned about. We are not recovering. In fact, it threatens our economic security.

It makes us so dependent these days that we have trouble acting. We are in a huge trade dispute. What is our answer? We have trouble defending our own economic sovereignty. The government has put us in a hole where we are $536 billion in debt. Out of every tax dollar 21¢ goes to Ottawa to pay interest on the debt. That makes us very vulnerable. The government did not do anything about it in good times, when is it going to? That is going to represent a bigger part of the total scene when things get bad and it may well happen.

The United States economy has not recovered. It had 12 years of growth and in any economic cycle we will see that growth period followed by a period of stagnation before it can happen again. Canada has not really entered into that although I believe that we are vulnerable.

These policies that we have in the budget would not protect us. They would not give us the kind of tax relief that we need to have to make this a more viable situation for Canadian individuals and companies.

We must ask the question, why would a party think that government needed to increase in size? Historically that has not been the case. In fact, we are pretty much out of the loop in terms of the business cycle in North America. At one time there was never a period when the economies of Canada and the United States did not act in a similar way. We can chart that over a hundred years. There are people that do that. It is an analytical way to approach business. They chart when business cycles are on the upturn, when there is inflation, and when there is a decline.

Up until about the 1970s we can see that the economies of Canada and the United States have been very closely together in terms of that economic cycle. However, after the 1970s there started to be a divergence which became fairly acute. People have been doing a lot of work to decide why that took place, what is this aberration?

Former Prime Minister Trudeau was successful in increasing the size of government with his public policies. There were a lot of social programs that were introduced. Even in Ottawa, during the days of the 1970s, the growth was phenomenal in the city, particularly the growth in government buildings.

Let us look at the employment insurance program, for example. It became not an employment insurance program any more because it also had a social element to it. Maybe there is a role for government in that, but we would not think that the government would expect employers and employees to fund it. However, that is exactly what it did.

The result is that Canadian unemployment figures are about 3% to 4% higher than that of the United States all the time. In good times and bad times they are 4% higher. That was not the case up until 1970. It was roughly the same. Our cycle might have been out a little bit but it was basically the same. Why is that?

The reason is that we have built a lot of components into the system. There are something like 40 different areas in Canada where qualifying for employment insurance is different. Maternity benefits are just one example of that and there are many others.

In addition to that, what did the government do with employment insurance when it came to power in 1993? It decided this would be the vehicle to generate a fair amount of money for the government. Even though the chief actuary said that in order to ride out a cycle in the economy we probably needed about $15 billion in the employment insurance account, the government decided that this was a cash cow that it simply could not resist. What did it do? It overcharged Canadian employers and employees to the tune of over $30 billion.

Supposedly, there is a fund somewhere that has $45 billion in it for employment insurance. We all know that is not the case because it went into general revenues and has long been spent. The government took advantage of this cash cow and how did it decide to spend this money? It spent the extra $30 billion of employers' and employees' money in a number of ways that I am not sure that employers and employees would think was reasonable.

There are regional development programs in many areas that take up billions of dollars a year. The Auditor General has been very critical of those programs from coast to coast. Whether it is western economic diversification or something else, no matter where it occurs, it is like pouring money into a hole in the ground.

In many cases once the money is gone and the business is no longer collecting the money, it cannot exist. In fact, some businesses receive money from regional development programs that their competitor down the street does not receive. For example, if someone receives a government grant and builds a service station and the existing one down the street goes out of business, is there any net gain to society? The Auditor General does not think so.

Billions of dollars have been wasted in that program, as well as billions of dollars in economic development programs. I do not think government is very good at this. That is one reason I do not think government should be in business.

Businesses in Canada have benefited from programs like technology partnerships Canada to the tune of billions of dollars. The aerospace industry, I pointed out earlier, is just one of those. Companies such as Pratt & Whitney, General Electric, Bombardier, some of the biggest companies in the world are receiving money from Canadian taxpayers.

In addition to the technology partnerships program, what else is there? There is Export Development Canada, a bank owned by the taxpayers of Canada. It subsidizes the credit so those companies can sell their products to Air Wisconsin and United Airlines in the United States at a lower than market price in terms of interest rates. Who pays the bill and who has the vulnerability if something goes wrong? There have been all kinds of cancellations for aircraft orders not only in Canada but in places like Brazil which have similar regional development and economic development programs. I understand our aerospace sector makes up something like 70% of the exposure at the Export Development Corporation these days. If something goes wrong, who pays for that?

Those are the kinds of misguided public policies which I think have gotten us into trouble. It shows why the government is addicted to having more taxes rolling in all the time. The government is going to have $195 billion in tax money coming to Ottawa in the next year.

The growth in the size of government is unprecedented. It is returning to the levels of spending and taxation of the 1970s. For 25 years the government seemed to be drunk with power and had to expand the economy not only in government, but in all kinds of pet projects that it thought was best for the country, such as economic development in certain areas, whether it was through business or regional development. Those are the kinds of programs that have to stop.

Canada has been a member of the World Trade Organization and the OECD. They are critical of a lot of those kinds of programs. They are critical of export credit. They want to move away from that. Canada should be a leader. Canada at one time was a leader, but I think we have abdicated our responsibility pretty seriously.

What is the role for government? What role should government really play? The Canadian Alliance feels that government has a very serious responsibility. It is pretty clear in the Constitution how it is set out. Traditionally Canadian governments moved into other areas such as health care. We do not disagree that health care funding needed to be brought up to new levels. We recognize the need for that. When the government in the 1970s brought in the Canada Health Act, it said that federal government funding for that program would never fall below 50%. What happened over time is the provinces could not trust the federal government. They simply could not trust it.

Spending levels by the federal government last year fell to something like 12%. Provincial governments were left with the balance, having to struggle with that even though they had this guarantee from the federal government that they would never fall below 50%. No wonder provinces are knocking at the door telling the government that it is putting the constraints on them in asking them to have a national system, which they accept, but the federal funding levels have dropped.

As I pointed out, it was a pretty easy target in the mid-1990s when the tag team of the former finance minister and the Prime Minister decided they had to do some cutting. They were sort of at the wall and were being downgraded in terms of credit and they had to do something about it. What did they do? They cut transfers to provinces. What is the largest transfer to the provinces? It is health care and $25 billion was taken out of the health care system during those years.

No wonder the provincial governments had trouble with their municipalities and their own services. Imagine a federal government that would hardly do anything in its own backyard in terms of cutting spending, but it would attack the easiest target. That was the easiest target, so it cut the transfers to the provinces. That is the type of thing that worries Canadians for the future.

The commitment made in the budget that the federal government put about $35 billion into health care is the kind of commitment that was needed to increase the health care funding to the required level. The provincial premiers and others must wonder what will happen the next time there is a bit of a downturn. What is the commitment worth from the federal government? The experience from the mid-1990s under the former finance minister was not that good. The government took the easy target.

The role of government must be to recognize the jurisdictions given to it in the Constitution and actively work hard to improve things such as relations in foreign affairs. Our relationship with our major trading partner is in serious decline. Historically we have had an excellent relationship with the United States. We are a next door neighbour to the United States. As I have said, our trade relationship has grown greatly, which seems to be a natural outreach.

Mr. Trudeau back in the 1970s decided that he wanted to distance himself from the United States. He wanted to direct business so that there was more trade between Europe and Canada and less dependency on the United States for trade. It was a pretty superficial look at it. At the same time the European countries were busy developing the European Union, which is a very inward looking organization. They were not looking at trade with Canada. In fact their trade with Canada declined dramatically during that time.

The natural consequence of being close to the United States and having similar cultures means that trade between Canada and the United States has grown dramatically. During the 1970s, 60% of our exports were to the United States and today it is 87%.

It would be nice to diversify that, but that is a pretty easy place to do business, or it has been until now. The government seems intent upon sticking its finger in the eye of the United States and souring that relationship. I wonder how much support there will be for the government when people start to lose jobs as a result of what members on the other side of the House have been saying recently about our closest ally and closest trading partner. It seems to me to be a pretty silly policy to tweak the noses of our friends in the United States, our major trading partner, because that is the kind of relationship we need.

Instead of working in the areas the federal government was given in the Constitution, in foreign affairs, to improve trade relationships, to do something about improving things so Canada is not hit with trade actions any more on a number of issues, what is it doing? Tweaking the nose of Uncle Sam. It is not good enough. The government has to do better. A Canadian Alliance government would take this role a lot more seriously.

We do have a place in the world. We are not a superpower but we are certainly a midsize power. There is an increasing capacity in the country, a potential to reach a much bigger proportion than we have today in terms of influence and also economic size. However it will not be done with a government that has such inward looking policies and policies of trying to be interventionists in a control command economy.

A free market economy is a very powerful engine. We should unleash it and let it work. We should take the constraints of high interest rates, high income taxes and high regulation out of the government, off of our industries and let them work. That could have a dramatic effect, but it seems the Liberals across the way do not share those views. They think that this sector has to be controlled.

Canada has a whole set of regulated industries. A lot of them are looking for the harness to be thrown off. Our telecommunications companies are asking for foreign investment limits to be removed. They want access to foreign capital. That has not been the case. The transport sector has been highly regulated and look at the results of that. It looks like the government is going to be pumping more money into Air Canada.

It seems that the Liberals have not grasped the idea of a market economy. Maybe there is a reason. Maybe they feel they have to have their hands on the levers of power so they can stay in power and grease enough palms along the way that the money will come back. That seemed to be working pretty well up until now, but it does not serve Canadians well.

Defence is an area of responsibility given to the federal government. A lot of people in the defence industries and analysts say that the defence department needs about $2 billion a year to help out in its capital expenditure to get it back to some reasonable level so our forces can perform in peacekeeping or peacemaking operations. It is sad that our fighting men and women who belong to this organization do not have the ability to get over to the operations. We do not have the ability to fly them there. We have to rely on the United States to do that for us.

We rely pretty heavily on the United States for our defence. We are a member of NATO. Our funding level for our military in terms of GDP is the second lowest of all NATO countries. Luxembourg is the only country lower than us. Either we belong or we do not. This latest conflict in Iraq and the war on terrorism point to the need for Canada to do something to improve the morale and the conditions for our service men and women and improve the equipment for them.

The responsibility for defence was given to the federal government in the Constitution. Instead of working to improve things in foreign affairs and defence, what is it doing? The government is getting involved in provincial jurisdictions. It sees its role as being more that of a provincial government. Maybe that says something about the mentality of the government. It needs to respect the constitutional authority it was given and do something. It needs to improve the conditions. It needs to work in the areas it was given responsibility for, such as foreign affairs and defence.

What more could the government do in trade policy? In the next little while Canadian Alliance members will be speaking more specifically about a number of areas. Trade policy is one of them.

We need to be moving in areas such as agriculture. The Uruguay round only made small changes in agriculture. Huge subsidies are still being given by the European Union and the United States. Our Canadian farmers have been beaten up badly as a result. In addition, even with the small amount of progress that was made, 15%, in the Uruguay round, what did the government do? It went beyond the cuts that were necessary according to our contribution level and it cut heavily in the area of agriculture.

Some would argue that New Zealand does not have any subsidies and that is a good thing. However, when other countries are subsidizing very heavily, such as the United States and the European Union countries, we get frozen out of market share. There is work to be done to bring some discipline and some trade rules to other sectors of the economy in agriculture in other areas such as the European Union and the United States. Canada has a dyslexic position and I do not think it is respected very much. More work needs to be done in trade areas.

Let me talk about monetary policy for a moment. Canada has a 68¢ dollar today versus that of our major trading partner, the United States. That is higher than it has been for some time. A lot of people think that the U.S. dollar needs to be lower than it has been because the U.S. has a fair amount of deficit in its current account. People thought it would come down over time. Not too long ago our dollar was almost as low as 60¢ and it could well go back there. What does that do to Canadians? Let me talk about farming for a second because I was on that subject.

Combines do not cost $100,000 any more, but let me take a figure of a piece of farm equipment that would cost a Canadian farmer $100,000. That same equipment made in the United States would cost a farmer $68,000, and most of the equipment is made there, so we have to import a lot of product into Canada. That puts us a disadvantage.

Some would argue that of course we have our exports that take advantage of the low Canadian dollar. Yes, they have, but to some extent it has been a bit of a crunch. The proof is when we see the Canadian dollar start to go up a bit, Canadian companies start to get concerned. They say that they cannot compete because taxes and regulations are too high.

I want to introduce a motion, but just before that I want to conclude by saying that things could be a whole lot better. Public policy is directly related to how well the country does and how our badly our standard of living has slipped. The Canadian Alliance will be outlining that over the next few days in this debate. I move:

That the motion be amended by deleting all the words after the word “that” and substituting the following: “therefore Bill C-28, an act to implement certain provisions of the budget tabled in Parliament on February 18, 2003 be not now read a second time but that it be read a second time, this day, six months hence”.

Budget Implementation Act, 2003Government Orders

11:15 a.m.

The Acting Speaker (Mr. Bélair)

I declare the amendment to be in order.

Budget Implementation Act, 2003Government Orders

11:15 a.m.

Bloc

Pauline Picard Bloc Drummond, QC

Mr. Speaker, I am pleased to rise today to speak to the Budget Implementation Act, 2003.

In the days after the federal budget was brought down, there was generalized criticism of it, and justifiably so.

There is nothing reassuring about this budget, because it marks a return to the irresponsible habits that brought Canadian public finances to the verge of bankruptcy. Was it not necessary to require a very considerable effort by the taxpayers in order to balance the budget and eliminate the deficit?

For 2003-04 alone, the budget announces a record rise in expenditures in the order of 11.5%. The last hike like this was also of the Liberals' doing; 20 years ago, in 1983-84, the finance minister of the day raised expenditures 12.8%. So, you might say, nothing ever changes.

The budget documents also call for substantial increases for subsequent fiscal years. In all, there will be an increase of $25.3 billion between 2002-03 and 2004-05.

How can such expenditures be justified, when the government refuses to acknowledge the existence of fiscal imbalance within the Canadian federation?At any rate, only the Minister of Intergovernmental Affairs still believes, and still states at every opportunity—to people's amusement—that there is no fiscal imbalance.

However, from one end of the Canadian federation to the other, all the stakeholders, ministers, and even the provincial premiers, are in agreement and admit that there is a fiscal imbalance.

The Liberal government has a habit of announcing that the federal debt is higher than provincial debt. We could have understood the government keeping a tighter grip on the public purse. It is true that the debt is the government's largest expenditure.

But the Minister of Finance is sending a clear message by deciding to untie the purse strings. There is money and lots of it.

Some seasoned financial observers have called this budget a spending orgy. Despite the conflict in Iraq and tensions in the Middle East, the government has opened the floodgates and started to spend. Its timing is quite unfortunate, since we do not know the economic repercussions of the war led by the American-British forces.

I would like to review each item in this budget. Health care gets most of the headlines these days. Health care represents the biggest expenditure for each province, along with education and social services.

In Quebec, currently, health care represents 42% of the government's total budget. In a few years, the budget for health care, education and social services will represent at least 80%—in any case, more than 75%. There will probably be 15% left for the other expenditures, such as transportation. This is unacceptable.

Expenditures, particularly in health care, are growing faster than provincial revenue streams, which depend in part on federal transfer payments to the provinces.

When the premiers came to Ottawa, they spoke of the consequences of the federal government's withdrawal from health care funding. The needs are great: Quebec requires $1.6 billion for service delivery. However, after numerous protests and despite Ottawa's enormous surplus, the federal government has granted Quebec a measly $800 million.

During this meeting, the Liberal Prime Minister told the premiers, “It is my wallet, and you will take what I give you, period”. That is disgraceful.

This is a clear indication that health is not a priority for the federal government. The numbers speak for themselves. The federal government announced a $6 billion investment over three years, yet it is sitting on a $30 billion surplus.

Once again the federal government tried to overestimate the true value of its reinvestment in the health system, not to mention that it tried to shove its health reform down our throats with huge ad campaigns.

The measures announced are inadequate to meet the provinces' health needs. Health costs are enormous and the federal government refuses to give the provinces enough money to pay for them. Health is a provincial responsibility. The Liberals need to understand that once and for all.

There is no greater disappointment than what happened with employment insurance. The minister was unable to be transparent and meet our demands to stop pillaging the fund. Instead of creating an independent fund, he chose to form a consultation committee. If ever there have been consultations, it was for employment insurance.

We agree with the principles that were announced to make the contribution calculations transparent and to ensure balance between revenues and the cost of the program. However, all this has already been largely agreed to. It has been settled. Why does the Minister of Finance keep flip-flopping? He should have the courage of his ambitions and set up an independent employment insurance fund. Instead, he is going to continue consulting and in the meantime, continue to pillage the fund, help himself to the surplus, let it build up, and have us believe in some sort of virtual accounting. Under this type of accounting, money goes directly to the debt. The surplus is not mentioned when it comes to consultations or priorities in terms of what the public needs.

I agree with the Liberals' claim that this budgetary item has seen a $2.3 million reduction, but this is not fair. There is nothing planned for accessibility to employment insurance. There is nothing to help older workers who lose their jobs; nothing for the many families in Quebec who are suffering financially because of the softwood lumber dispute.

The unions said they were especially upset by the Minister of Finance's plans for the employment insurance system. The president of the Centrale des syndicats démocratiques, François Vaudreuil, said:

The minister sidestepped the real problem. Instead of improving access for the unemployed—six out of ten unemployed people do not qualify—he reduced the premiums by an amount that was laughable.

Social groups have also demonstrated their disagreement. The spokesperson for the Mouvement des chômeurs de l'Estrie, Denis Poudrier, had nothing good to say about the announced decreases in EI premiums. He said:

In 1989, 93% of unemployed persons qualified for employment insurance. Now only 40% qualify. Instead of lowering premiums, the federal government should freeze them and strengthen the program, to re-establish access to the plan for 90% of the unemployed.

Among those who are dissatisfied with the situation is Nathalie Saint-Pierre, the head of the Union des consommateurs, who said:

Lowering the premiums is all well and good, but no one qualifies anymore. The government should have allowed access to this source of income for workers who do not qualify because of increasingly strict rules. Particularly since the fund is overflowing and that Ottawa has been dipping into it freely in recent years.

There is only one small consolation with regard to EI, when it comes to the budget. The government has agreed to establish six weeks of benefits coverage for compassionate leave.

It is too bad that this comes so late and that implementation is a long way off. It is premature to congratulate the government for this; we need to know the exact criteria that will determine what will be considered a serious illness. And, the worker will have to have accumulated at least 600 insurable hours of work in order to qualify. The self-employed again are not included.

It must be said that the provinces are ahead of the federal government on this. Quebec already provides coverage. Parents are eligible for five days to take care of a minor child who is sick, and in May, they will be granted 12 weeks coverage to care for an immediate family member with a serious injury or illness.

Given that the provinces are doing more than Ottawa, why would the federal government not reach an agreement with the provinces whereby compassionate leave would be granted under a provincial program, to which the federal government would transfer the necessary money?

Now for air security. In the aftermath of the tragic events of September 11, 2001, the Liberal government decided to address national security on an urgent basis, as was its duty. But the unfortunate part of this is that the now former Finance Minister, the member for LaSalle—Émard, rushed in a new tax, a new direct tax on air travellers. Things were already going pretty badly in the airline industry and they did not need one more tax. This was shameful.

The member for LaSalle—Émard has admitted that he did not carry out any impact study before imposing this tax. How did he come up with the figure of $12 for a one-way trip and $24 for a round trip? The Lord only knows, and he did not tell us, as they say.

The former Minister of Finance has never been able to demonstrate his logic to us; instead he took refuge behind the promise to review the air passenger security charge later on. This is later on, yet we still do not really know what the money collected with this tax has gone for. We do not know whether the new systems are all in place and are effective.

But here we have the new Finance Minister announcing a reduction in the charge, from $12 one way to $7, but only for domestic flights. If someone has to go out of the country, the charge remains $12. In most cases, the same airport, sometimes even the same airline, is used. This is a very odd situation.

Air passengers are entitled to wonder whether they are being had. Where does the $329 million being used to reduce passenger charges come from? We are entitled to wonder whether the government has not been able to purchase the necessary security systems. Is that why they have surplus money on their hands?

I am quite amused by the note that Department of Finance officials took care to add at tab 6, page 2 of the briefing book they prepared. Among the questions and answers, one finds this: “During the process—of reviewing the amount of the charge—no substantive questions as to the amount or the structure of the reduction were raised by sector representatives.

Representatives of this sector are not stupid. When they came to Ottawa for prebudget consultations in the fall of 2001, they were told that there was nothing particularly scientific about how the amount had been arrived at. I remember the jaws of Department of Finance officials dropping when my hon. colleague for Saint-Hyacinthe—Bagot and I asked for impact studies and the guidelines used in deciding on the amount.

I remember also the waffling of the member for LaSalle—Émard, the former Minister of Finance, who finally admitted that no such study existed. He had nothing to justify his decision; not a thing. And to think that he wants to be the next Prime Minister. This is not very reassuring.

In summary, this debate is letting us shed some light on the fact that the government has announced insufficient additional investments in high need areas, such as health care, and given funds to programs and organizations that are infringing in areas of provincial jurisdiction.

The federal government clearly has no intention of doing anything about the fiscal imbalance. The creation of new organizations, programs and other initiatives will only make intergovernmental financial relations more dysfunctional.

The public's needs will never be adequately met because the provinces are not getting sufficient resources from the federal government.

When we vote on the Budget Implementation Act, 2003, many of our constituents will be disappointed. The list of measures that were not announced in the budget is long. There is no cut in the excise tax on gas or in the GST per litre of gas. The higher gas prices climb at the pump, the more the federal government pockets in sales taxes. Lord knows the price has jumped in recent weeks.

There are no new income tax cuts; no noticeable short-term increases in RRSP contribution limits; no increases in pension adjustments; nothing for seniors or women; and no significant decrease in EI premiums—just a measly $231 million from now until 2005. There are no increases in old age security—and Lord knows that seniors need this money because, although they founded our society, they are its most disadvantaged members—and no new measures to increase taxes on hidden salaries.

Directors of publically traded companies have cashed in at least $1 billion in recent years by selling shares acquired at bargain prices thanks to lucrative stock options. This is allowed, yet salaries are taxed at a combined federal and provincial rate of 48% in Quebec, while the earnings from cashing in options are taxed at only 24%.

The budget contains no tax deductions for volunteer work, and no additional deductions for charitable contributions.

In the end, there is not much to write home about in this budget and its implementing legislation.

We had hoped for more. However, since the era of the member for LaSalle—Émard, budgets have been characterized by extreme caution, which has always resulted in underestimated surpluses that get put toward debt reduction without any sort of debate.

In closing, our constituents have not noticed any changes to their paycheques. There are no new tax cuts on top of the $100 million announced by the member for LaSalle—Émard in 2000. At most, there is a two cent decrease in premiums per $100 of insurable earnings. That will be effective in 2004, so only next year.

There is nothing in this legislation to extend accessibility to the program or increase benefits. There is nothing to allow a taxpayer to contribute more to his RRSP.

I am also thinking about comments from retirees who feel completely ignored. One of them said:

We as middle class retirees did not benefit from $5 daycare, maternity leave, student grants and loans. We did not have a $13,500 RRSP limit, let alone $18,000. Yet, we pay a surtax on our old age security pension. Between 1994 and 2002, the cutoff for the pension went from $53,215 to $56,698, which is less than the increase in the cost of living. They said this surtax was meant to reduce the deficit. But these are just words from politicians whom we longer trust.

It is sad.

For once in Quebec, the three political parties were on the same wavelength in denouncing the federal intrusions contained in the budget that will become reality through the implementation act.

I will stop here, with an example not from someone in Quebec this time, but from Ontario's Minister of Finance, Janet Ecker, who basically said that the federal government was taking more money from taxpayers than it needed in order to fund its programs, while the provinces were having a terrible time funding the two largest programs in Canada: health and education. If this is what Ontario thinks, then the people on the other side will have to admit that fiscal imbalance indeed exists.

The Prime Minister's legacy budget is nothing more than a tool for political visibility. It is so scattered that Canadians have a hard time figuring out which direction it is taking.

Instead of this terrible situation, Quebec is offering a clear direction to its people; a plan that is also taking hold in western Canada. We propose to them the only true alternative: sovereignty.

Budget Implementation Act, 2003Government Orders

11:35 a.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North Centre, MB

Mr. Speaker, I am pleased to be able to participate in the debate on Bill C-28, the budget implementation act. You will know already, Mr. Speaker, that the members of the federal New Democratic Party caucus stand in clear opposition to the Liberal budget of 2003. We express again today our lack of confidence in the government and its current budget. That will not come as a surprise to you, Mr. Speaker.

I want to indicate to the House that while we have a lack of confidence in the budget before us today, we will work very hard and do everything we can through the legislative process dealing with Bill C-28 to make improvements and to try to convince the government to make the necessary changes that will reflect the realities of Canadians.

One would think in listening to the Liberals today and in the weeks preceding this debate that they have had an awakening, that they have had a sudden new enlightenment about the priorities of Canadians and have presented us with a budget that will correct the errors of their ways in the past and put us on a new course.

This is the question for us today: Is this truly an awakening or is it a snow job?

Many have commented on the real meaning of the budget, despite all the spin and some of the positive media coverage. In fact, I want to reference some analyses of the budget that may not have appeared in the mainstream media or have been covered by national media outlets. Here is the question that Andrew Jackson of the Canadian Labour Congress put to Canadians: Is this budget “a real U-turn or just a curve in the road to a much harsher Canada which we have been on for so long?”

That is an important question for us today. Is this a new beginning or is this simply a twist in the road that does not address the systemic issues and barriers facing Canadians' full participation in the life of this great country?

In an article posted on February 25 of this year, Andrew Jackson goes on to say:

There has certainly been a re-ordering of Liberal priorities from debt reduction and tax cuts to social spending. But this is still a Budget which continues the tax cut agenda, and will pay down debt. The brakes on new spending can be quickly applied. It is far from clear if we have seen a real break in the long-term trend towards erosion of the public sphere.

That is an important commentary on the bill before us today.

Let me go further and quote from an article that may also not have appeared in the mainstream media and the national journals of the day, one by Bruce Campbell and Todd Scarth, who are both with the Canadian Centre for Policy Alternatives. They wrote an article on February 18 entitled “The Real Chrétien Legacy Budget”. Pardon me, Mr. Speaker. I realize I should not use the name of the Prime Minister in the House and I will try to quote from this article without doing so. The authors of this article state:

In reality, the plan the Liberals announced yesterday is fiscally conservative dressed up as socially conscious, and fails to make needed social reinvestments. In other words, it is an appropriately weak legacy for a Prime Minister who oversaw the shrinking of program spending levels, relative to the size of the overall economy, to levels not seen since the early post war years.

Finally, I will quote the national president of the Canadian Union of Public Employees, Judy Darcy, who, I might add, has recently made an announcement that she will be retiring from her position as president of the Canadian Union of Public Employees.

I want to take this moment to put on the record the appreciation of members in the House, I assume from all sides, for the work of Judy Darcy over the years in representing members of her union but also for her leadership on social justice issues and her ongoing contribution to the struggle for equality in our society today and for a universally accessible publicly administered health care system and justice in the workplace.

Let me put on the record her words in response to the federal budget. She said, after welcoming the new funding for social programs, as all of us in the House have done, that the budget doesn't erase the Prime Minister's real legacy: a decade of budget cuts that have been devastating for Canadians. She stated, “After years of bread and water, a Timbit looks like a feast”.

I think those comments reflect what we are really dealing with. Those particular insightful looks at the federal budget put this debate in perspective, because there has been a tremendous amount of spin around the budget, a tremendous amount of hoopla and a clear suggestion that the budget represents a whole new direction which will ensure that the priorities of Canadians are addressed in full and that our country is now on a path to economic security and prosperity.

In reality, as these analysts have stated so well, through this budget the government in actual fact says to Canadians that if they have pressing social needs, they can wait. This is not, as the media or the Liberals themselves have said, a “spending spree” budget.

Let us put it in context. In the year 2001-02, federal program spending was running at 11.2% of GDP. With all the budget's heralded new spending, by 2004-05 it will only rise to 11.8%, and that is well below the 16.5% when the Liberals took power. So let us be real: This is not a big shift in terms of social spending. The government has created the illusion, perhaps, of big spending, but in real terms, in ways that will meet the needs of Canadians, this budget cannot be categorized in that light. It should also be noted that the headlines seldom point out that massive Liberal tax cuts will result in government revenue being lowered over the next two years from 15.7% to 15.2% of GDP.

One of the issues we have to deal with in the debate, which is particularly relevant today as we near the end of this fiscal year this coming Monday, is what the government has done in terms of the surplus and how it has tried to fool Canadians about the money it has collected from Canadians in terms of expenditures on their priorities.

I think the first question we have to ask is, which surplus? The government in fact makes Enron look like amateurs when it comes to keeping two sets of books. There is the initial fictional version and then later the non-fictional version. Sometimes one would think the Liberals just pick a number out of the hat. It is like Liberal election promises, would we not agree? Before the election is the fiction, then over the next five years they release the non-fiction version of what they really intend to do.

Let us remember that since 1993 the government has underestimated the surplus each and every budget year. We are talking about billions of dollars of surplus that have not been reported to Parliament and to Canadians. The government has exceeded its official budgetary targets for eight years in a row, by as much as $15 billion in one year. That is not an easy thing to do, but we have to call the government to task on it. What kind of game is it playing? Why is it lowballing the surplus? What does it mean in terms of this supposed set of estimates before the House reflecting the values of Canadians?

For this fiscal year, which ends on Monday, March 31, it is estimated that the surplus for the federal government is at least $4 billion. There are varying estimates and we will not know the real figures until well into the next fiscal year, but let us keep in mind that the alternative federal budget, which has been accurate year after year in forecasting the budgetary surplus of the government, predicted that the government would have a budgetary surplus for this year of $8.9 billion. That is not far out from the Conference Board of Canada, which said $8.7 billion. We cannot forget the TD Bank, which said $5.8 billion. The government's own economic and fiscal update said $4 billion.

Even if we take into account the fact that some of that surplus has been spent on programs, and even if we take into account the fact that there is, as the government states, an intention to put some of this money aside in the name of prudence on a contingency basis, it would appear that, come Monday, the end of this fiscal year, there will be $3 billion in surplus that will end up going toward the debt: not toward the priorities of Canadians, not into filling the Romanow gap on the health care front, not in terms of the growing concerns around the spread of HIV and AIDS, not in terms of child care and meeting the demands of working mothers trying to juggle parenting and work responsibilities. No, it will go to the debt.

We must keep in mind that it was this government that said in the 1997 election it was going to follow a balanced approach whereby half the surplus would go to the debt and half to new social programs. Did that happen? I do not think so, not by a long shot.

That pledge was repeated in the 2000 election, but let us look at the actual facts. I want to reference a study by the Canadian Centre for Policy Alternatives. Those who would question the validity of this study should keep in mind that the Centre for Policy Alternatives has been accurate each and every budget year in terms of the government's budgetary surplus. The CCPA found that over the whole period from 1997 to 2001 only 2% of the underlying surplus was allocated to genuine enhancements in program spending. The other 98% went to debt reduction.

We also know that the Auditor General has raised the issue about the reporting of the budgetary surplus. On November 4, 2002, the Auditor General accused the government of deceiving the public about the government surplus. She disputed the Prime Minister's assertion that “Under the acts of Parliament, at the end of the year, the surplus is automatically applied to debt reduction...”. She went on to say, “There is no law, there is no accounting rule, that says you have to pay down the debt by the amount of the surplus”.

All we are asking for today is that the government live up to its 1997 and 2000 election promises to take the surplus and split it in terms of half going to social spending and programs that need reinforcement and support from the government, and the other half going to the debt.

I could make a strong case for why I think the whole amount should go to social spending, given the fact that the focus has been on debt reduction over the years, and given the fact that our debt to GDP ratio is at an appropriate and manageable level, and that the money available today could in fact deal with the social debt for a change and deal with some of the gaps in services and programs that are still there after the budget is said and done.

I think we are dealing with a serious issue of budgeting by stealth. The way in which the government handles the surplus is one example. There are many others. Let me reference, in fact, how the government talks about increased transparency yet is slinking around outside of the budget limelight bureaucratically reallocating $1 billion in government spending over the next year without any public disclosure.

It creates a great deal of suspicion in the government's budgeting process. It calls into question its commitment to advance the ideas of transparency and accountability when on the one hand it gives us a budget, wraps it all up in nice ribbons and wrapping paper and says it is spending in terms of the priorities of Canadians and, on the other hand, turns around and demands that all departments come up with $1 billion over the next two years.

What kind of impact does that have? What does that mean? Let me give the example of the weather services in this country. Over the last 10 years the government has reduced the weather services budget by 40%. By its own reports, the system and the service is in bad repair. There are serious problems because of that kind of cutting, hacking and slashing. What does the government do at a time of some fiscal flexibility and a budgetary surplus? It chops the weather stations from 14 to 5. It puts the safety and security of Canadians further at risk.

How does that make sense? Would it not be reasonable to expect that the government would first do a cost benefit analysis to provide that information to members of the House and to Canadians? That is one example. There are many other examples of how the government has it both ways.

Let me give the example of employment insurance. It has a $45 billion surplus as a result of the government's changes to the EI program and the fact that it removed so many people from the EI rolls because of changes in policy, and yet it has the gall and the nerve to propose that all job search kiosks be shut down. That is what was done. I know because I happen to have in my constituency a job search kiosk in a public place that is the most heavily utilized in Canada. People turn to job search kiosks to do what the government wants them to do, which is to find a job.

How does it make sense for the government, with a $45 billion surplus as a result of cuts and changes to the EI program, to turn around and chop job search kiosks? It is certainly my hope that because of the community uprising and in light of this proposal that the government will change its mind and have second thoughts about that kind of silly decision making.

There are many other examples but what we really need to focus on in the few minutes that I have left are the priorities of Canadians and how the government has failed to live up to the fundamental issues so important to Canadians.

If the government were truly concerned about dealing with the social debt, surely it would tackle poverty, surely it would put in place a meaningful national childcare program, and surely it would allow women who work part time because they have to look after young children to collect employment insurance benefits.

Why in heaven's name would Kelly Lesiuk from Winnipeg need to go to the Supreme Court of Canada to get her rightful entitlement? This is a woman who worked part time so she could care for her children did not quite have the 700 hours required by the government. She won her case at the adjudication level and the government appealed it. Now the case has gone to the Supreme Court. Is that not a waste of money when what we are talking about is the fundamental right of equality and requires the government to simply rethink its arbitrary cuts and changes to ensure that women who work part time, and who do so on an ongoing basis, and who are part of the permanent labour force, are able to collect employment insurance?

Let me just fit in two more issues before my time is up. The government promised child care for 10 years. This year it says that it has done it. It has allocated $935 million for all the provinces and territories over five years, which means $25 million for this year. That means 3,000 childcare spaces over the next couple of years will be created, which is hardly commensurate with the demand and the need of working families and mothers who need quality, licensed childcare.

Let me put that in perspective and tell members what that means for Manitoba. It means $24 per month per staff or $12 on each pay cheque, or three-quarters of a space more per child care centre. Does that make sense? Is that a national child care program?

In conclusion, the government has failed in terms of ensuring that the Romanow blueprint on the future of health care was accepted and acted on. There is a Romanow gap in terms of funding and in terms of accountability which means privatization will continue. In fact, it means that our medicare system, our cherished national health program, is still in jeopardy.

Budget Implementation Act, 2003Government Orders

11:55 a.m.

Progressive Conservative

Norman E. Doyle Progressive Conservative St. John's East, NL

Mr. Speaker, I am pleased to say a few words in the debate today on budget 2003.

First, the budget does include some good news dispersed throughout various parts of the budget. The first piece of good news is that the child tax credit was increased in the budget. The House is on record as being committed to the eradication of child poverty. We all remember back to a number of years ago when we said that we would eradicate child poverty by the year 2000. Of course that deadline has long passed and we are certainly playing catch up on our commitment to eradicating child poverty by the year 2000.

About three years ago I was part of a committee that travelled the country between Newfoundland and Vancouver looking into the issue of poverty and child poverty in particular. We held public hearings all across the country. It was a real eye opener for me. A number of people who came before our committee told us personal stories about poverty and how an individual or a family could get into a cycle of poverty from which they could not escape. A lot of it has to do with the fact that the federal government, and governments generally, are not coming up with good programs to address the whole issue of poverty in the country.

The faces of poverty are many in this country. We have the working poor. We have people who cannot find jobs and who sometimes live in a state of poverty from which they cannot escape. Children, in particular, are hurt by poverty. Impoverished children, as we are all very much aware, come from impoverished families. The government is not entirely blameless when it comes to the various causes of poverty that we see today.

In my part of the country, in Newfoundland and Labrador, people were negatively affected when the fishery closed down a number of years ago. We also had people who were negatively affected by some of the programs brought in by the federal government, namely the employment insurance program, which the government cut back on drastically. It was probably instrumental in causing the out migration of roughly 70,000 people over a seven or eight year period. These were people working in seasonal industries and who had seasonal employment.

I have always been disappointed to see some of the policies of the federal government as it pertains to seasonal employment. We have to recognize that in certain parts of the country seasonal employment is very important. The fishery is important but, by its very nature, it is seasonal and therefore employment is seasonal. It cannot be done sometimes in winter months in some areas. The same can apply to the forestry or mining industries. The federal government has hit those industries particularly hard because of the various changes that it has brought about through employment insurance.

Another area for which I have been concerned has to do with the massive cuts to the federal transfers to the provinces for health care. That has hurt a lot of provinces and the territories. It has hurt people of all ages.

The cuts in transfers to post-secondary education is another area on which we need to concentrate. These cuts to post-secondary education, for instance, have resulted in provincial student grants being changed to provincial student loans. It is heart-rending to see students coming in to my office on occasion who have just graduated and who have a $50,000 student debt. They are looking for jobs and very often the first job they acquire is a low paying job because of lack of experience and what have you.

When we speak of poverty we have to look across the spectrum. We will see that many students out there today are living in poverty after they graduate because of the massive debtloads they are carrying and trying to pay off. How do we expect the average graduates to get homes, mortgages or cars which they will need to travel back and forth to work? How do we expect them to marry and raise families when they are carrying those kinds of massive student debtloads?

Those are important areas and contribute to the various steps that we see regarding the number of people who are living below the poverty line. The government in essence helped create a generation of impoverished students and debt-ridden graduates, which is not fair. The federal government should be looking at that a little more closely.

Any kind of government initiative that puts more money into the hands of low income families with children will get my applause. The child tax credit increase is an initiative that I was pleased to see. As well, I applaud the funding for day care and early childhood education. It will help low income families. When our committee travelled these were things that we heard. Single mothers told us that it was very difficult to find a good day care for their children so that they could go out and pursue employment and try to get out of debt and the cycle of poverty in which they find themselves.

I am pleased as well that the budget incorporates the latest arrangements between the premiers and the Prime Minister on revitalizing our national health care care system. While the current health care arrangement is an improvement, most commentators today, as I am sure members have heard, indicate that much more funding is necessary if we are going to fix our health care system and bring it back to what it was prior to 1992.

Because the funding is done on a strictly per capita basis, again I have to refer back to the effect that it will have upon my own province because the funding is done on a strictly per capita basis. Newfoundland's slice of the multibillion dollar pie is a paltry $200 million over a three year period, or about $70 million a year. That is not a great deal of money when we put it into context, because the population is aging and shrinking at the same time, and it is spread over a huge geographic area. This is definitely a losing formula for Newfoundland and Labrador.

The government, as we are all very well aware, replaced the established program financing formula, the old EPF system of transfers, with the Canada health and social transfer, called the CHST.

Under the old EPF system of financing, moneys were transferred specifically for health care and the formula would take into account the difficulties of delivering health care to the many scattered communities all over Newfoundland and Labrador.

The CHST which is allocated to the province is without regard to the age of the people or population or how the population might be spread over a very large geographic area. In our case, we have 400,000 square kilometres with 520,000 people. That is quite a large area.

The old EPF system took into account the huge geographic area to which it had to deliver these health care dollars. However the new formula, the CHST, does not take any of that into account. As a result we are under a losing formula when it comes to CHST.

The simple fact of the matter is that in the province, as I said, we have an aging, shrinking and geographically dispersed population. The health care transfer system needs to be adjusted to reflect that fact. How many times have we said that? That would be fair. It is only fair to reflect the fact that there is a huge geographic area to deliver limited health care dollars. These are a few of the areas for which I have some concern.

When we speak of health care, recently the Prime Minister went on record as saying that the per capita funding formula does not serve well in the case of the territories. I could say to him as well that it is not only the territories. He is right when he says that it does not serve the territories very well, but it does not serve large areas of the country that will receive limited health care dollars. As I said and will repeat, there are 400,000 square kilometres in Newfoundland and Labrador.

Another area which I want to touch on is the whole area of equalization. How many times in the six years I have been here have I spoken on the current equalization formula. I would imagine I have spoken on that one subject alone at least 20 times. The budget was silent again on equalization and the clawback provisions in the equalization formula.

Newfoundland and Labrador does not reap the full benefits of development of our natural resources. What else is new? For example, the income from oil or mining royalties is clawed back through reductions in the equalization formula. In other words, we have a formula whereby if a dollar is earned, a dollar is also lost. A dollar will be clawed back by the federal government from the resource revenues that are generated. It may not be exactly a dollar, but it is almost a dollar. It is a formula that one could accurately describe as: earn a dollar, lose a dollar.

Today in my province, we are bringing down a $4 billion the budget. Guess what? It will have a real deficit of about $600 million on a $4 billion budget. The only reason that the credit rating agencies are keeping the credit rating of the province in a fairly good position is the fact that our growth has been quite good over the last three years in particular. I believe we led the country in growth over a three year period. I know we are leading the country in growth this year and probably did last year as well.

Here is a little province with a $4 billion budget leading the country in growth. It has a $600 million deficit and a decent credit rating because its future looks pretty good. We have a Voisey's Bay development coming on stream in the next couple of years, the largest nickel find in the world. We have an oil industry. We have a crab and a shrimp industry that is worth in the neighbourhood of $1 billion. We are doing decently well in mining and forestry. Therefore we are generating quite a lot of revenues. However that revenue was clawed back by the federal government dollar for dollar, practically.

We have a $4 billion budget, a $600 million deficit, we are leading the country in growth and we are the poorest province in Canada. How do we figure that one out? Producing oil, producing the largest mining operation in the world like Voisey's Bay, $1 billion crab and shrimp industry, only 500,000 people, people leave the province in droves, $600 deficit and we are the poorest province in Canada. Obviously it is because of the way the funding formula for equalization is set up: earn a dollar; lose a dollar.

We very often hear the federal government say that it cannot do anything about changing the formula because provinces like Ontario or Alberta would not agree, provinces which are net contributors to the country but are not really getting too much out of equalization. I cannot figure out how it is in the best interests of the federal government, Alberta or Ontario to have a province like Newfoundland and Labrador as the poorest province in Canada when it is producing so much in the way of fish, oil and mining royalties.

It is not in the best interests of the country to have that equalization formula punishing the poorer provinces like Newfoundland and Labrador, Nova Scotia, Prince Edward Island or New Brunswick.

The government has said that it cannot act unilaterally on equalization to improve the clawback to the equalization from the poorer provinces. That did not stop the government from unilaterally lifting the ceiling on the total cost of the equalization program back in the year 2000, which was an election year. The government lifted the cap on equalization unilaterally, then once the election was over, it unilaterally again reimposed the program ceiling. So much for the theory that it needs widespread consent.

This has always been the thing, the government needs widespread consent from places like Ontario or Alberta to change the equalization formula, but it changed the ceiling unilaterally back in the year 2000. It did not stop the federal government tinkering with the equalization program back then, and once the election was over it tinkered again and put the cap back on equalization.

Yes, it can unilaterally change the equalization formula to make it a bit easier on the have not provinces like Newfoundland, Nova Scotia and the Atlantic area generally. We should deal with this terrible formula of the province earning a dollar and the federal government taking a dollar. By doing that a bit of fairness can be injected into provinces that are struggling, that are making money, that are working very hard, but cannot keep the money because of this despicable formula, this unfair way of dealing with provinces like Newfoundland and Labrador.