House of Commons Hansard #143 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was surplus.

Topics

Unanticipated Surpluses Act
Government Orders

10:35 a.m.

Liberal

Ralph Goodale Wascana, SK

First, on the third question, Mr. Speaker, absolutely. The Government of Canada will operate within its jurisdiction and it will respect the jurisdictions of other orders of government.

Second, the reason why surplus figures are sometimes higher than anticipated, and I believe the opposition finance critics would know, as they go through the arithmetic and see where the changes occur during the course of a fiscal year, is the numbers on both revenue coming in and expenditures going out often move over a period of 18 months. That is only logical and can be expected. Over the last number of years, the biggest movement has tended to be on the revenue side of the equation. That has been very good news from Canada's point of view, certainly from the government's points of view, and I would think from the opposition's point of view as well.

It is significant that none of the in-house economists who work for the Government of Canada, or the official opposition parties, or the provinces or the private sector have over the last number of years been able to anticipate the magnitude of improvement in the Canadian economy.

I believe two fiscal years ago we had a situation where corporate profit went up by about 17%. Corporate tax rates went down, but revenue from corporate taxation went up by about 25% or 26%, which is a very positive development. However, it shows that the fundamental factor underlying the change in the numbers is the underlying strength and success of the economy of our country.

On the issue of the alleged fiscal imbalance, I once again point out that over the last 20 years revenues flowing to provinces have been consistently higher than revenues retained by the Government of Canada. Transfer payments are now at their highest level ever in history. Over the next decade they are scheduled to go up by another $100 billion. The debt being carried by the Government of Canada, even though it is vastly improved today from what it was 10 years ago, is still roughly twice as large as the debt carried by all the provinces and territories combined.

For all those reasons, I do not think the hon. member can sustain the argument that there is a vertical fiscal imbalance. However, the Government of Canada will continue to be very proactive within its sphere of jurisdiction to invest in those priorities that make a real difference in the lives of Canadians. At the same time, we will balance the budget, pay down debt and reduce taxes.

Unanticipated Surpluses Act
Government Orders

10:40 a.m.

NDP

Alexa McDonough Halifax, NS

Mr. Speaker, I am intrigued by the chosen title for the bill, the unanticipated surplus act. It never fools Canadians that year after year the government deliberately lowballs the projection of surplus and then at the last minute it says that it has discovered several billion more dollars about which it did not know, which raises some concerns about financial management to say the least. Then it says that it has some money to roll out for whatever it deems to be the purposes for which it might receive the greatest political rewards. Could the minister comment briefly on that?

Second, I heard a lot of talk about the government's commitment to balance. I could use any number of examples, but where was the balance going into the 2000 election? This was after six great years of creating enormous deficits in health, education, literacy particularly, as this is an appropriate time note it, infrastructure, affordable housing, environment health and the list goes on. It also has created an immense deficit in the reputation of Canada, internationally, as a good global citizen, having driven our commitment to ODA from 0.5% down to 0.23%. Where was the balance in the 2000 election eve decision to give away $100 billion in tax cuts? The government attacks the ultracons for that all the time. Where is the consistency?

Unanticipated Surpluses Act
Government Orders

10:40 a.m.

Liberal

Ralph Goodale Wascana, SK

Mr. Speaker, I am really delighted that the hon. member asked that last question with respect to the 2000 five year tax reduction plan. It totalled just over $100 billion. Two-thirds of that was personal tax cuts and two-thirds of that was directed to the lowest income Canadians. That constitutes balance. That constitute fairness.

On her question about the definition of surplus, what is anticipated and what is unanticipated, I dealt with that at some length in my remarks, indicating that our standard budgetary objective is to balance the books and to run a surplus of $3 billion, the contingency reserve, which is then applied to debt reduction. Over the last number of years that has served the Government of Canada and the people of Canada very well. In fact, we are now saving more than $3 billion every year because of interest charges that we no longer have to pay.

Our definition of unanticipated surplus for the purposes of this legislation is any surplus that exceeds the $3 billion mark. Over the last seven or eight years, it has in fact exceeded $3 billion on a number of occasions. This legislation thereby provides the framework where, rather than letting the situation just go by default, Parliament will have an opportunity to have a say.

The hon. member questioned the spending restraint decisions that were taken in the mid-1990s and the impact of those upon various programs. Obviously that restraint did have an impact.

I would point out that the reductions in transfers to provinces which began in 1995-96 were always less than the restraint that the Government of Canada imposed upon itself. Indeed those restraint measures were entirely restored by 2001. Today the transfers to provinces are at an all-time record high. They are scheduled to increase by another $100 billion over the next 10 years.

On the international front, I am very pleased to say that in the 2005 budget we have provided the largest increase in foreign aid ever at $3.4 billion. We will double our aid to lesser developed countries around the world entirely by about 2011-12. We will in fact double our aid to Africa by 2008. Foreign aid is a priority of this government.

Unanticipated Surpluses Act
Government Orders

10:45 a.m.

Conservative

Myron Thompson Wild Rose, AB

Mr. Speaker, I rise on a point of order. It is always good when we have the minister present for questions following a speech. I think there are quite a few members who wish to ask a couple more questions. I wonder if we could get unanimous consent to extend the question and comment period by five minutes, if the minister would be so kind to do that.

Unanticipated Surpluses Act
Government Orders

10:45 a.m.

The Acting Speaker (Mr. Marcel Proulx)

Is there unanimous consent to have a further five minutes of questions and comments addressed to the Minister of Finance?

Unanticipated Surpluses Act
Government Orders

10:45 a.m.

Some hon. members

Agreed.

Unanticipated Surpluses Act
Government Orders

10:45 a.m.

Conservative

Myron Thompson Wild Rose, AB

Mr. Speaker, because we only have five minutes I will try to be very fast.

I congratulate the minister for finding a new term for the Liberals to use called “common sense”. For 12 years I have been wondering when that was going to come into play.

For one thing, when $1.9 billion is projected and it turns out to be $9.1 billion, does common sense not tell the Liberals that there is something wrong with the accounting situation and that there really has to be something that changes that?

Two, when literally hundreds of natives have to be evacuated from a reserve because the water is so contaminated with E. coli, does it not sound like there should be some common sense as to what in the world ever happened that it could not have been taken care of and why is it so severe today?

Does common sense not tell the minister and the government when farmers cannot sell their grain, cannot find cars to load it when they do want to sell it and there is no place for it to go, that the farmers are in desperate need and hurting severely and we need to help them?

Last--

Unanticipated Surpluses Act
Government Orders

10:45 a.m.

Liberal

David Anderson Victoria, BC

Mr. Speaker, on a point of order, the House generously gave unanimous consent to extend the question and comment period of the minister by five minutes. Instead, the generosity of the House is being abused by the hon. member who succeeds in making a speech on a series of subjects, none of which are directly related to the bill.

I suggest if he has no question that we move on to another questioner.

Unanticipated Surpluses Act
Government Orders

10:45 a.m.

The Acting Speaker (Mr. Marcel Proulx)

The hon. member for Wild Rose will get to the final point of his question within five seconds.

Unanticipated Surpluses Act
Government Orders

10:45 a.m.

Conservative

Myron Thompson Wild Rose, AB

Mr. Speaker, I would like an explanation from the minister as to why, with all the things we are deliberating in regard to the budget and the surplus, hepatitis C victims have not been compensated when eight months ago we agreed they would be.

Unanticipated Surpluses Act
Government Orders

10:45 a.m.

Liberal

Ralph Goodale Wascana, SK

Mr. Speaker, I first want to thank the hon. member for his words of congratulation to me on my common sense. I appreciate that.

With respect to the $9 billion in the surplus from the previous fiscal year, when that was announced was exactly the time when I indicated that Dr. Tim O'Neill would be invited to examine the fiscal forecasting process. He has made 14 recommendations. We are in the process of implementing those very recommendations.

The only one of his recommendations that we did not agree with was the one where he said it would be okay from time to time to run a deficit. We do not think that is consistent with the views of Canadians. We do not think it is consistent with the views of members of the House. We think the budget should be balanced or better every year.

Dr. O'Neill anticipated that we might not agree with his point that it would be okay every now and then to run a deficit, so he said that if we are going to stick to the no deficit rule, we have to have a mechanism to transparently deal with those extra surpluses. That is exactly what we are doing with Bill C-67.

On the aboriginal evacuation that is taking place in Ontario right now, I would point out that the responsibility for that evacuation is in fact under provincial jurisdiction. The Government of Canada's responsibility is to pay for it and in fact we are picking up the entire bill for that situation.

With respect to the issue about farmers, I am happy to tell the hon. member that during the time that I have been Minister of Finance, since December 2003, the Government of Canada over and above all of the normal safety net programming has invested an additional $2.8 billion to support agriculture in this country. We will stand by our farmers every step of the way.

On hepatitis C, the House discussed the process and the hon. gentleman, I am sure, is very aware of that process. It involves a court controlled fund that we are in the process of negotiating with the relevant parties. We are hopeful we can achieve the kind of solution that will in fact allow those revenues to flow.

Unanticipated Surpluses Act
Government Orders

10:50 a.m.

Conservative

Monte Solberg Medicine Hat, AB

Mr. Speaker, it is my pleasure to address Bill C-67, the surplus allocation bill.

I know the minister would not want to mislead Canadians about the true facts regarding either the history of his own government's performance or even the history of other governments' performances, so I just want to start by addressing some of the issues that he raised in his speech and then I will say a little more about the bill in particular.

First of all, the minister said a number of times that his government balanced the budget, but that is not true. In fact the taxpayers balanced the budget and they paid a very heavy price to do it.

As the minister knows, first of all his government cut health care. It made the deepest cuts in Canadian history to balance the budget. It did not cut all the transfers to spending for grants and contributions. It did not cut them at all. In fact those stayed steady through that period, but the government certainly cut health care. In other words, Liberal friends were well looked after during that period but health care had the deepest cuts ever in Canadian history. It really was not the government that balanced the budget. It was health care workers, patients and Canadians.

During that time, we saw a number of tax increases, 67 tax increases, typically small, sneaky tax increases through that period. Who bore the brunt of that? It was the taxpayers. It was not the government that balanced the budget. It was the taxpayers who balanced the budget.

I also have to point out that GST revenues were very important in helping to keep that budget in balance, and that is the government that said it was going to get rid of the GST. Last time I checked it was still there. We are still paying that 7%. I see it every time I purchase something. The government certainly counted on the GST to balance the budget, even though the Liberals said they would get rid of it.

I noted another thing, and the minister partially touched on this. He talked about all the revenues coming in. I note that many of them are resource revenues and in fact revenues from companies that do business in the United States all the time. They are bringing in lots of revenue. The Liberals said they were going to get rid of the free trade agreement. They were going to rip up NAFTA but thankfully it is still there and it is providing a lot of these revenues.

Therefore, I just reject the premise of the minister's argument.

Unanticipated Surpluses Act
Government Orders

10:50 a.m.

Liberal

Ralph Goodale Wascana, SK

Herb Gray would disagree with you.

Unanticipated Surpluses Act
Government Orders

10:50 a.m.

Conservative

Monte Solberg Medicine Hat, AB

Mr. Speaker, I know I sound like the Hon. Herb Gray but I have to point out that the minister is simply wrong when he says that the government balanced the budget. It is absolutely untrue. Of course it was the Canadian taxpayers who balanced this budget. The hospital workers balanced it. Patients balanced this budget. The minister is absolutely wrong to take credit for balancing the budget.

There are so many things I could touch on. The minister talked about the government's economic performance and I have to take issue with some of the things he said. He painted a pretty rosy picture of the economic performance, but a lot of people would disagree with that. I want to provide some evidence in the form of the report of the governor of the Bank of Canada who appeared before the finance committee just two days ago. He pointed out in his monetary report that productivity growth in 2003 in this country was zero. In 2004 it was zero. At this point in 2005 it is only 0.7%.

Productivity growth is critical to our ability to raise living standards in this country. If we do not improve our productivity as a nation then our standard of living cannot rise. We cannot defy gravity because when we talk about productivity, really we are talking about the ability of every person in the country to produce goods and services, to keep increasing the number of goods and services that they can provide. That is not done by working harder. That is the wrong way to do it. It is done by investing in education and by investing in technology. When we do that, we ultimately raise living standards.

Who pays the price when living standards keep falling further and further behind? It is certainly not Liberal friends. It is the people of Canada and their living standards are mired where they were a long time ago.

In January, Don Drummond, the former deputy minister of finance, produced a report showing that take-home pay in Canada has only gone up 3.7% in the last dozen years or so which amounts to less than $60 a year more in take-home pay. However the take for government has gone up about four times that amount.

When it comes to who is reaping the benefit of any increase at all in the output of Canadians it is not Canadians. They are not getting that money. It is going to the government and the government is keeping that money.

The minister argued in his speech that tax relief was not a panacea but for the people who need the money it is tremendously important. People want to raise their families and have enough money to send their kids to school.

My colleague across the way talked about jobs, and job creation is important, but it is also the types of jobs. In Ontario we have seen 100,000 manufacturing jobs disappear in the last little while. These are high value jobs that are being lost because the government has refused to act in important ways to ensure we can keep those jobs.

There is another thing the government has done, which the minister somehow failed to point out. I would think as a major economic initiative he might point to these things. I am sure he is very proud of his record. It is a little odd to me that he would not talk about things like the NDP budget deal that he cut, where for many weeks he argued against the very things that the NDP were proposing, only to adopt them in the end and raise spending by $4.6 billion. In his speech he criticized the NDP for always asking for more money and spend, spend, spend but that is what he did. In fact, spending last year went up 15% under the government, the largest increase since 1974.

That is not all. The finance minister also took out the tax relief for large employers. This goes to the point I was making a minute ago when I was saying that we are trying to preserve manufacturing jobs. The minister has reneged on his commitment in the budget to provide tax relief for large employers, manufacturers, to keep those jobs in Canada. How regrettable is that? He has flip-flopped on it about three times. He said that he would bring it back in the fall and then he said that he would not. Now he is floating it again. I do not know if we will ever see that.

However we need tax relief if we are going to preserve jobs in Canada. I am truly sorry that the finance minister has not followed through on that commitment in the budget. In fact, I am very surprised that he did not mention the deal that he cut because I am sure he is very proud of those kinds of things.

I could probably talk about all the things the minister raised in his speech that were a little misleading during the entire 20 minutes but I will not do that.

Unanticipated Surpluses Act
Government Orders

10:55 a.m.

Liberal

Ralph Goodale Wascana, SK

Try talking about the bill.