House of Commons Hansard #133 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.

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The House resumed consideration of the motion that Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, be read the second time and referred to a committee, and of the motion that this question be now put.

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5:50 p.m.

Conservative

Dean Del Mastro Peterborough, ON

Mr. Speaker, I listened to what was quite a technical speech by the member.

Several things keep coming back as being obvious such as, if the Atlantic accord is better, the budget allows the government of Newfoundland and Labrador to keep the Atlantic accord exactly the way it was and we will continue to honour that accord. It also instills some fairness in the equalization program. It is a principled equalization process. Thank God we got back to principles on equalization because it is a redistribution of federal tax dollars. These are not dollars that are taken from any given provincial government. These are federal revenues that are redistributed. Why should any province receive additional money over and above the fiscal capacity of Ontario, my home province? Why should federal tax dollars go to make one region wealthier than another region? It absolutely should not. The federal government has brought forward a principled approach on equalization, one which we can stand behind.

I believe the government of Newfoundland and Labrador should take whatever deal is best for it. If it is the Atlantic accord, wonderful. Take it 100% and we will gladly honour that accord, but we will also stand up for all Canadians in all other parts of the country who deserve a federal government which deals with equalization on the basis of principles.

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5:55 p.m.

Conservative

The Acting Speaker Royal Galipeau

I would like the attention of all members. We are having a question and comment period and I will recognize all members, but the rule of thumb should be that if I can hear the speaker, then everything is okay, but if I cannot hear the speaker, it is because too many people are speaking.

I recognize the hon. member for Bonavista—Gander—Grand Falls—Windsor.

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5:55 p.m.

Liberal

Scott Simms Bonavista—Gander—Grand Falls—Windsor, NL

Through you, Mr. Speaker, I would like to address this to two members in the House, to the member of Parliament for South Shore—St. Margaret's and to the member of Parliament for Avalon who are present here.

Did they hear what was just said? How dare we actually go beyond the level of prosperity of Ontario. Let us look at the situation we have here. The fiscal capacity cap which the Conservatives illustrated so eloquently during the campaign that this was not an issue and that they would never impose it, yet here we have it right in our laps.

I do not think the member really understands the true nature of the Atlantic accord and the whole nature of being principal beneficiaries of which his leader preached for years, not just Newfoundland and Labrador, not just Nova Scotia, but Saskatchewan as well and British Columbia and the whole country. Yet the Conservatives have created this fiscal imbalance that exists between provinces. That is what they are doing, juxtaposing one province against the other. This is not the way this federation is supposed to work, yet they turn it around.

I would suggest to the hon. member in this situation that the Atlantic accord is not protected. As my hon. colleague pointed out a few weeks back, he probably does not know the difference between the Atlantic accord and a Honda Accord for goodness' sake. He seems to think it is protected but the independent economists says it is not. And there are caps implied within it.

I suggest at this point that the hon. member touch base with his hon. colleagues from Atlantic Canada who do understand what this is about.

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5:55 p.m.

Conservative

The Acting Speaker Royal Galipeau

Order, please. Before I recognize another member, I would like to point out to the hon. member for Bonavista—Gander—Grand Falls—Windsor page 522 of Marleau and Montpetit on mentioning the presence or absence of other members. I hope this is the last time I have to mention this.

Questions and comments, the hon. member for Scarborough Centre.

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5:55 p.m.

Liberal

John Cannis Scarborough Centre, ON

Mr. Speaker, I am sure those comments from the member for Peterborough are going to cost a few votes for his colleagues from Newfoundland and Labrador and Nova Scotia.

I listened very carefully to the member for Bonavista—Gander—Grand Falls—Windsor as he eloquently presented the statistics. He knows very well that when the Liberal government brought forward the Atlantic accord, the then opposition Conservative Party voted against it. Why did Premier Danny Williams not stand up and speak then? He knew he had an accord. How did he sell it to the voters of that region to vote against the Liberal government which said that it believed in fairness? Now the premier is saying that the Conservatives cannot be trusted and that they lied. What happened? Could the member elaborate? My constituents in Scarborough Centre are very confused and upset.

I am glad that he mentioned that Alberta and the provinces should have the right to build on their resources and build their economies. The Atlantic region should also have the opportunity to prosper and provide for its people, seniors and youth especially. Could the member elaborate on that for me?

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6 p.m.

Liberal

Scott Simms Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, I thank you for reminding me of the rules. I would like to extend my apologies to all members in this House.

In response to my hon. colleague's question, indeed it has been a tumultuous event over the last three years to say the least. When the whole idea of being principal beneficiaries started, we talked about the fact that under the Atlantic accords we would be able to prosper much like Alberta did back in the 1950s and the 1960s and become an economic powerhouse. The Prime Minister pointed out, and as a matter of fact the current Minister of Intergovernmental Affairs pointed out the same facts and she was quite right. I would be disappointed if I lived in Saskatchewan which is next door to Alberta because Saskatchewan with its oil resources now faces the cap. It was not faced by Albertans way back when. There is a question of fairness to be resolved.

In the case of Newfoundland and Labrador and Nova Scotia, the deals were signed. The offsets were agreed to right up to 2020 which covers a substantial part of development certainly for the oil and gas sector off Newfoundland and Labrador. The second part of that also helped in the case of Nova Scotia, which would be particularly disconcerting for it given that it is now in jeopardy.

Buried within the details as the economists point out is the implementation of these accords which the government says it is protecting. In fact, even the Minister of Finance said in a CBC interview that after 2012 we are done and that is it. Whatever happened to 2020? As I pointed out, even if it goes to 2020 under the new formula, we are getting $1 billion less despite the fact that there were no caps, there were no hindrances whatsoever. We were 100% beneficiaries.

The government even said that the province would not be worse off, yet we are getting $1 billion less. One billion dollars sounds like quite a bit of money. I am sure my colleague from Cape Breton would agree.

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6 p.m.

An hon. member

It is a lot of money.

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6 p.m.

Liberal

Scott Simms Bonavista—Gander—Grand Falls—Windsor, NL

It is a lot of money, Mr. Speaker.

Nobody on that side would agree. We have to sell what we put out there, which is perhaps the politics of deception at its best.

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6 p.m.

Liberal

Brian Murphy Moncton—Riverview—Dieppe, NB

Mr. Speaker, after the comments from the member for Peterborough I suppose I should meekly get up and say on behalf of Atlantic Canada that we are proud to be part of Canada. We are proud to be part of a Canada social transfer program, CST, that was developed in 1977, that transferred tax points to the provinces, and which has been very favourable to all provinces.

I wonder what my Newfoundland colleague thinks about keeping the Canada social transfer--

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6 p.m.

Conservative

The Acting Speaker Royal Galipeau

The hon. member for Bonavista—Gander—Grand Falls—Windsor has 30 seconds to respond.

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6 p.m.

Liberal

Scott Simms Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, therein lies the crux of one of the problems, equalization and the fair principle of it. The Constitution talks about equal services provided across the country based on a needs basis. Certainly the measures taken in 1977 with tax points, or as those members called it, back door equalization, was not back door for us. It--

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6 p.m.

Conservative

The Acting Speaker Royal Galipeau

Resuming debate. The hon. member for Argenteuil--Papineau--Mirabel.

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6 p.m.

Bloc

Mario Laframboise Argenteuil—Papineau—Mirabel, QC

Mr. Speaker, I am pleased to rise today to speak to Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007. For the benefit of the Quebeckers and Canadians who are watching, this is the budget implementation bill, which must be voted on and passed.

Obviously, once again, the Conservative Party needs the Bloc Québécois to see this bill pass, just as it needed the Bloc for the budget to pass. It always makes me smile when other members call into question the presence of the members of the Bloc Québécois, my colleagues here in this House. Once again, this only proves the importance of our presence today. If the Bloc Québécois had not supported this budget, there would be no debate regarding the budget implementation. Lastly, the most important reason for the Bloc's support of this budget has to do primarily with the partial correction of the fiscal imbalance.

If I may, I would like to go over a bit of history with the House. As we all know, Quebec's motto is “Je me souviens”—I remember. Quebeckers certainly remember the Conservatives' excessive spending of the 1980s, which is what drove Canada into debt. I am sure we all recall the cuts in transfer payments to the provinces that the Liberal Party was forced to make, cuts that jeopardized Quebec's entire fiscal balance. I was affected by those cuts—not as a privileged witness, but on the front lines.

My background is in municipal government, so I remember the first deep cuts very clearly because the Government of Quebec had to pass on some of the costs to the municipalities. Those with experience in municipal government will remember the first reform, known as the “Ryan reform”. The entire secondary road network was transferred from the Government of Quebec to the municipalities, which had to pay and are still paying the bill for Sûreté du Québec. Quebeckers are well aware of this when the time comes to pay their municipal taxes. There is a nice little “Sûreté du Québec” item on the tax bill for people in the regions who have to pay for the Quebec provincial police. Obviously, the big cities were already paying for their municipal police forces.

I would just like to remind my colleagues that the Atlantic Accord and the agreements the federal government signed with the provinces are all well and good, but that since the federal government cut provincial transfer payments in 1993-94, it has begun to reinvest.

Perhaps I will have an opportunity to explain to what extent. However, I would like to paint a picture for you with respect to the 2007-08 budget, which is before us today, and the federal government's provincial transfer payment increases. Since 1993-94, when deep cuts forced municipalities and school boards to shoulder many new responsibilities, Quebec has recuperated 55% of what it lost, while elsewhere in Canada, the other provinces have recuperated 66%.

Today in Quebec, despite the restoration of fiscal balance, the Liberals and the Conservatives are at each other's throats. Nonetheless, many agreements, including the Atlantic accord and other natural resource revenue agreements, have been signed with the other provinces. I hope that my colleagues in this House, whether Conservative, Liberal or New Democrat, will never forget that Quebec has always paid for one quarter of all investment in oil, but that the rest of Canada has never contributed to the development of hydroelectricity in Quebec, which is our trademark and which Quebeckers have paid for through their electricity bills.

We received nothing from the federal government. We developed our own energy with our own money even though we paid for 25% of the cost of developing the energy of other Canadian provinces. In addition, they share the resources and the profits from these energy sources that we do not have. Today, the blame is being placed on the resolution of the fiscal imbalance, which is considered acceptable for the 2008 budget. Once again, there is a long way to go, because Quebec wants its due.

With the drastic cuts of the 80's and 90's, and the accumulation of debt by the Conservatives, who put Canada in the poor house, the provinces were the ones to pay. Quebec made a major contribution to repayment of the federal deficit.

Today, Quebec is asking for what it is owed. There is a reason why the Bloc Québécois has always called for a solution to the fiscal imbalance. It was neither the current Conservative government and its Prime Minister nor the Liberals who invented it. It was Bernard Landry's Parti Québécois government that set up the commission. Those who followed the debate in Quebec will remember the Séguin commission that presented its report in 2001 and declared that there was a large fiscal imbalance in Canada. That is easy to figure out. Ottawa has too much money compared to the provinces.

We must realize that the federal government does not look after health, education and transportation. So what does it do? Health, education and transportation are a large part of a citizen's life. The rest—the water from taps, waste and so forth—are municipal responsibilities. The federal government looks after security.

Here again, when we look at the gaping holes in Canada's security, we see that the government has not always done its job. It is not meeting the real, everyday needs of Canadians. It is only natural that Quebec, which feels it has contributed too much in the past, should want to correct this imbalance and have most or all of the 52.8% of taxes that Quebeckers pay the federal government come back to them. We know that the government keeps a lot for itself, but a portion has to come back to Quebeckers, and not in formulas invented for Quebec. We are not asking for anything new.

What the Bloc Québécois asked for and what the federal government has done in part is to modify the equalization formula. It was clear that the equalization formulas had to take into account the revenue of all 10 Canadian provinces, which was not the case previously.

The balance had to be right, and the revenue of all the provinces had to be calculated so that equalization would be fair. That is part of Canada's constitution, the famous constitution that Quebec never ratified, whereby the have-not provinces are compensated by the others.

Quebec would like to be a province that contributes more and that gives rather than receives. That is our goal. Quebec would like to stop seeing the aluminum ingots produced in Quebec taken to make cars in Ontario.

The only automotive industry in Quebec was closed and all the jobs associated with it were eliminated. In addition, we often manufacture our products and offer competitive hydro rates paid for out of Quebeckers' pockets. Here again, nothing comes from the federal government. We make products that are then processed in the other Canadian provinces. The people in those provinces have the good jobs. They think it is only natural that they should have the good jobs.

We are seeing this again with the Boeing contracts. Between 55% and 60% of the aerospace industry is in Quebec. Boeing negotiated an agreement for 30%, while the federal government required that just 15% of the spinoffs go to Quebec. But 55% to 60% of the aerospace industry is in Quebec. As the member for Mirabel, I know what I am talking about. Part of the industry is located my riding and elsewhere in Quebec: in Longueuil, Montreal, and in the greater Montreal area.

Once again, when contracts are negotiated, the Conservative ministers from Quebec stand up and say that private companies have to fend for themselves. They are probably glad because the private sector does more than it is asked to do. They are glad to leave private companies to fend for themselves. The Conservatives wanted 15% of the economic spinoffs to go to Quebec, but Boeing wanted 30%.

I am dumbfounded that such things still go on. Quebec will be penalized and 70% of the industry will go elsewhere with the contracts for the C-17s and the Chinooks. Military investment in the aerospace industry will go to other Canadian provinces and will create jobs. It will also create an even bigger imbalance.

There will always be hon. members in this House who will stand up to say that Quebec is always at the mercy of the rest of Canada. That is why the members from the Bloc Québécois would one day like to leave this chamber and for Quebec to become a country so that it can take care of its own affairs and stop being told it is piggybacking on the others.

When we are gone, they will understand that they are the ones who were piggybacking on Quebec, with its natural resources, its raw materials and all they transform outside of Quebec and for which we pay a good part.

The budget now recognizes the fiscal imbalance the Bloc Québécois had estimated. Indeed, the Léonard committee produced a report ordered by the Bloc and it estimated the fiscal imbalance at $3.9 billion. Even the former Quebec Liberal finance minister agreed with that estimation. So nobody should be surprised by it. That was the amount we requested to resolve the fiscal imbalance and the amount the government is giving us. We gave the Prime Minister another chance after last year's budget. He had said that he needed one year to review, analyze and study the issue and that he would propose a solution to the fiscal imbalance this year. I will remind the House that he promised to hold a first ministers conference. Finally, that never happened because he was unable to do it.

We ended up with the $3.3 billion we now see in the budget to resolve the fiscal imbalance. We asked for $3.3 billion in three years. The Bloc has always been a fair player. It has always showed great openness by acknowledging that this was not easy to do and that there were difficult decisions to make. We gave ourselves a three year deadline to get that issue solved. We got $3.3 billion when we were asking for $3.9 billion in 2003 dollars. No need to say that indexation had not been included. We did not want to risk being accused of all sins in the world. But the fact is that we would have considered $3.9 billion a real solution to the fiscal imbalance. However, the proposed $3.3 billion remains a useful amount and that is why the Bloc Québécois has given its support to the budget.

This started at the time of Bernard Landry's Parti Québécois government with the Séguin commission, which was followed by the Léonard committee, set up here by the Bloc Québécois. The committee used the federal government's numbers. No other party wanted to do it, and none of the parties in Quebec were able to do it because it meant taking a close look at the federal administration's inner workings. The Léonard committee spent a year studying all of the data to justify that figure, which, as I said, has not been challenged yet. So that resolves the fiscal imbalance in part. Fixing the fiscal imbalance for Quebec fixes it for the other provinces. Fixing equalization for Quebec fixes it for the other provinces too.

Thanks to agreements signed by other prime ministers, including the former Liberal Prime Minister, other provinces have received additional revenue. Those provinces want to keep getting the same equalization payments as before in addition to new money. It is never-ending. That is why I am saying that because it is so complicated to understand how Canada works, Quebec would be better off as its own country, taking care of its own business. That would be the ideal solution. It would save the rest of Canada a lot of trouble, and it would save us the eternal frustration of constant recriminations. Quebec is always wrong, regardless of the fact that its natural resources are taken away to be processed in other Canadian provinces, which rake in the cash and refuse to give any of it back. This has to end sooner or later. One day, the other provinces will understand. When Quebec leaves, they will miss us a lot because they will finally understand to what extent our natural resources prop up their economies.

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6:10 p.m.

An hon. member

They can come visit us.