House of Commons Hansard #166 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was atlantic.

Topics

53rd Report of Procedure and House Affairs Committee
Points of Order
Routine Proceedings

3:20 p.m.

Bloc

Louise Thibault Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, I will be very brief. First of all, I would simply like to say that I support the hon. member for Thunder Bay—Superior North and, second, that we should be very pleased here in this House, if a process becomes truly transparent. That is the foundation of democracy. Furthermore, I would like to point out to the Leader of the Government in the House of Commons that, yesterday, I raised another issue, that is, if this were ever approved, even with the amended version, we would have three kinds of members: members who belong to a party, party members who are not recognized in this House and are not recognized as independent members, and lastly, the independent members. I think we must continue to resist this.

The House resumed consideration of the motion.

Business of Supply
Government Orders

3:20 p.m.

Liberal

The Speaker Peter Milliken

Prior to oral question period, the hon. member for Jeanne-Le Ber had the floor. He now has ten minutes left for questions and comments on his speech.

The hon. member for York South—Weston.

Business of Supply
Government Orders

3:20 p.m.

Liberal

Alan Tonks York South—Weston, ON

Mr. Speaker, I was following the discussion and the presentation made by my colleague from the Bloc. I am sure the House would be interested to hear a restatement of the relationship that the Atlantic accord has to the problem that is created with respect to equalization.

I ask that question deliberately because the Bloc is the party in this House that protects and stands to protect provincial rights. It seems to me that it was a recognition through the Atlantic accord that there in fact had been a longstanding shortage of equalization for the Atlantic provinces and that there was an agreement through the Atlantic accord to come to terms with that issue.

Yet, we find the Bloc is still resisting supporting this resolution and through the budget the continuation of the accord. Voting against the budget would at least show that the Bloc supports those provincial rights.

Would the member restate the reasons why the Bloc finds that the Atlantic accord is contradictory to the very essence of equalization and the fiscal balance that we in a federal state are attempting to achieve for the provinces?

Business of Supply
Government Orders

3:25 p.m.

Bloc

Thierry St-Cyr Jeanne-Le Ber, QC

Mr. Speaker, the equalization program was put in place so that every province could provide equivalent services for equivalent tax rates.

The general idea is this. Each province's revenues and fiscal capacity are examined and compared to the Canadian average. Provinces whose fiscal capacity is below the Canadian average receive funds from the federal government to bring them up to the average. That is the principle.

The problem lies in how fiscal capacity is calculated. Under the Atlantic accords, the fiscal capacity of the Atlantic provinces is underestimated to make them appear poorer than they are, when the calculation is done, so that they receive more money than they would normally get if the principle were honoured.

The Bloc Québécois believes that this has nothing to do with ensuring that the Canadian federation works well. Rather, it is a purely arbitrary choice. The government decided to exclude non-renewable natural resources simply because that favoured a few provinces. It could have excluded other sectors of the economy that would have benefited Quebec.

I am sure that if the government had decided to exclude hydroelectricity and aerospace, for example, from the equalization calculation, many people would have stood up and asked why the government was deviating from the principle just to please Quebec. And they likely would have been right.

We believe that the same rule should apply to everyone. If we are going to compare the provinces' fiscal capacities, we have to do so without playing with the figures, without excluding one sector or another of the economy to benefit one province or another.

Overall, equalization has nothing to do with the fiscal imbalance because equalization is a budget transfer. With the latest equalization formula and other transfers, the Government of Quebec receives more money than before. This does not correct the fiscal imbalance, because it is not a real transfer of tax room, such as the GST or tax points.

In the next budget, the federal government can take back what it gave to Quebec, as it just took back what it had given to the Atlantic provinces. This shows that the problem of the fiscal imbalance has not been resolved at all. Even though we do not basically agree with the Atlantic accords, they are eloquent proof that, in a system based on equalization, the provinces are all at the mercy of the federal government’s benevolence at any given time for their finances. That is what we do not like and have been fighting for a very long time.

Business of Supply
Government Orders

3:30 p.m.

Conservative

Dean Del Mastro Peterborough, ON

Mr. Speaker, I listened to the hon. member's comments. I was interested to hear his comments and in fact I would like to ask him a question that I think is also pertinent to today's debate. It is regarding fiscal balance.

I would like to know about the previous government's tenure, but I know he is going to speak about the province of Quebec. However, it applies to all provinces. Because of the fiscal imbalance, how difficult was it for provinces to provide health care, education, post-secondary education, in addition to other types of strains? Why is it important to have a principled approach toward fiscal balance in Canada in order to provide capacity to the provinces to provide these services?

Business of Supply
Government Orders

3:30 p.m.

Bloc

Thierry St-Cyr Jeanne-Le Ber, QC

Mr. Speaker, my colleague is quite right. For 13 years, the Liberal government did not even recognize the existence of a fiscal imbalance, and the Liberal Party still does not recognize it. They refuse to admit that there is a fiscal imbalance. People say that Quebec and the provinces have been hard hit by this, but it is really the people of Quebec and the provinces who have suffered. We cannot say that it is just the provinces and so we do not really care. People have gone without services because of the imbalance between the constitutional obligations of the federal and provincial governments and their respective revenues.

Even though the Conservative Party, for its part, recognizes that there is an imbalance in the federation, it does not really see that the imbalance is fiscal in nature. The fix it provided in the last budget took the form of cash transfers. This means that, every year and for every budget, Quebec is ultimately at the mercy of the ideological and political choices that the federal government may make in light of the political situation at the time, regardless of whether the Conservatives, the Liberals, or some other party is in power.

That is the nub of the problem. That is why Quebeckers of all political stripes in the National Assembly, regardless of whether they are Liberals, ADQ or Parti Québécois, are demanding a genuine fiscal solution. That was the thrust of the Séguin commission which asked, for example, that the GST be transferred to the provinces. Equalization would have to be re-worked, of course, if the direct transfers to the provinces were cut by this much. If there is a tax transfer to the provinces, however, they will have stable, predictable revenues over which they have full control and which are not subject to every whim of the federal government.

This is really the nub of the issue. The Liberals have never even acknowledged the existence of a fiscal imbalance, and even though the Conservatives acknowledge it in theory, they still do not understand the real nature of it. We are working hard to get this fixed in the next budget.

Business of Supply
Government Orders

3:30 p.m.

Liberal

Paul Zed Saint John, NB

Mr. Speaker, I will be pleased and honoured to split my time with the courageous hon. member for Cumberland—Colchester—Musquodoboit Valley.

Having served in the House for seven years, I have never seen such a blatant disregard for the economic prosperity of an entire region such as the way the government and Prime Minister have treated Atlantic Canada.

The Prime Minister came to office trumpeting a new approach and a new relationship between the federal government and the provinces. He called it open federalism. He said that a Conservative government would be more sensitive to the differences between provinces and regions.

He broke promises to the governments of the Atlantic provinces and decided that the welfare of our people was not his concern. He continues with his campaign of pitting region against region.

With this budget, the Prime Minister has wielded his knives on Atlantic Canada and tried to give truth to his lie about a certain “culture of defeat”.

The numbers I find in this budget simply speak for themselves. Quebec receives a 29% increase, or almost $700 million more in equalization payments. New Brunswick, on the other hand, receives a mere 1.8%. Atlantic Canada receives only 4% of all new money spent on equalization. For the second straight year, the Atlantic Canada Opportunities Agency does not even receive a mention in a 478-page budget document.

This callous disregard for New Brunswick and all of Atlantic Canada adds to the government's list of broken promises on income trusts, the slashing of literacy programs, the failure to fund affordable housing in my city of Saint John, and the cancellation of the court challenges program. These pile onto the broken promises of the Atlantic accord.

The government simply does not understand Atlantic Canada, though the Prime Minister believes ACOA could be for wasteful projects, unnecessary spending, projects that are not of vital important to Atlantic Canadians.

It is true Atlantic Canada does not have the financial security of Alberta or the industrial base of Ontario. Ours is a region trying hard to promote itself as a destination for 21st century business and industry.

A new generation of political leaders, including my premier from New Brunswick, Shawn Graham, has taken up the challenge of reaching for full economic self-sufficiency. However, provinces like New Brunswick need help from the federal government today in order to put tomorrow's economic blueprints in place.

The former government proposed a plan that would have brought $830 million, new dollars for infrastructure and new program funding for New Brunswick, at the same time that the Atlantic accords were signed. This plan served as the baseline of funding for the province in its effort to achieve a goal of self-sufficiency. Our plan had a similar goal to the deal that was reached with Alberta in its drive for self-sufficiency 30 years ago.

The hon. member for Fredericton crafted a plan to put New Brunswick on the road to requiring less equalization from Ottawa.

What happened instead was that the former New Brunswick premier, Bernard Lord, changed from a Progressive Conservative to a Reformer. He decided he would rather deal with a Conservative government in Ottawa. The result was piecemeal projects instead of a comprehensive plan, each garnered less money than the Liberal plan.

The people of New Brunswick said no to that approach. They fired Bernard Lord for tearing up the child care agreement and saying no to $115 million in new federal spending on early learning and child care in our province.

In the months since the Prime Minister came to office, he began treating Atlantic Canada as an afterthought of Confederation. A distinct trend has swept across Atlantic Canada. In Nova Scotia the Progressive Conservative premier ranks third in popularity behind the New Democrats and the newly minted Liberal leader, Stephen McNeil; in New Brunswick, a new dynamic Liberal leader has swept aside a two time Conservative majority government; in Prince Edward Island, a new Liberal leader, Robert Ghiz, won a landslide victory over a three term Conservative majority government; and in Newfoundland, a Progressive Conservative stalwart premier goes on television every day and has three simple words for Canadians: anybody but Conservative.

These should be ominous signs for the government finding itself out of ideas after only 18 months in power and sitting across from a new, renewed, and reinvigorated Liberal Party under the leadership of the member for Saint-Laurent—Cartierville.

Things have only gotten worse this week for the government. As the hon. member for Cumberland—Colchester—Musquodoboit Valley has shown, not every member of the Conservative government's Atlantic caucus is willing to stand aside and let their province be sold out by the federal government.

As every member in the House is aware, in voting against the government, the hon. member from Nova Scotia made a great political sacrifice. He was bullied. He was maligned by his cabinet members and colleagues. He was kicked out of caucus and has since had his constituent files seized by the Conservative Party. Some new government.

Why has this happened? This has happened because the member took the word of the Prime Minister when he wrote to the premier of Newfoundland and said:

We will remove non-renewable natural resources revenue from the equalization formula to encourage the development of economic growth in the non-renewable resources sectors across Canada. The Conservative Government of Canada will ensure that no province is adversely affected from changes to the equalization formula.

He believed the Minister of Finance when he said, “We will respect the Atlantic accord”. He trusted that the hon. member for St. John's East knew what he was talking about when he said, “The Atlantic Accord will not be adjusted. It's written in stone. It's signed, sealed, delivered, and it's something that the province need not have any fear”.

Despite the claim by the foreign affairs minister, the member for Central Nova, that no member of his caucus would be removed for voting against the budget, the hon. member for Cumberland—Colchester—Musquodoboit Valley sits as an independent for voting his conscience and voting to defend the interests of his constituents.

Over and over again the government and the Prime Minister have pledged to defend the economic interests of Atlantic Canada. They said it to get elected. They said it to prepare for an election. When it came time to govern, Atlantic Canada simply has not fit into their plans.

New Brunswick has a right to be treated with equality. Atlantic Canada has that same ambition. Canadians want all of us to treat each other with respect, dignity and equality.

Business of Supply
Government Orders

3:40 p.m.

Liberal

Robert Thibault West Nova, NS

Mr. Speaker, my colleague is an experienced member of the House. It is not his first time around the block. He will recognize that there are certain government bills which require members, by tradition, to vote with one's party, the Speech from the Throne being one of them and the budget being another.

Exceptions can be made. Has the member ever heard of a case where a government has made an exception, where a senior minister of government has stood in the House and said that its members could vote their conscience and would not be kicked out of their caucus if they voted against a bill?

Has he ever heard a minister make that promise in the House of Commons? Has a member of his party followed his or her conscience, voted in the interests of that member's constituents, and been kicked out of caucus?

Business of Supply
Government Orders

3:40 p.m.

Liberal

Paul Zed Saint John, NB

Mr. Speaker, I must say that the member is a very experienced member, and he too well knows that it would be beyond possibility to think that a member of the governing party's cabinet would have ever made such a statement as the member for Central Nova made and then have the complete opposite effect occur.

I am, like a lot of Canadians and like a lot of members of this House, frankly shocked at such a betrayal, shocked at such a treachery that could possibly have occurred, and frankly I think it does this place a weakness when our words are not honoured, the way the member for Central Nova spoke about his own colleague.

Business of Supply
Government Orders

3:45 p.m.

Conservative

James Rajotte Edmonton—Leduc, AB

Mr. Speaker, I want to pose two substantive questions to the member opposite.

First, the O'Brien panel was appointed by his government, by the former government. The former deputy minister from Alberta Al O'Brien chaired this panel. Does he and does the Liberal Party accept, or does the Liberal Party reject, the recommendations of the O'Brien panel? That is the first question.

The second question is with respect to fiscal capacities of provinces. Without naming any province, we could have a situation in the future with the equalization system. Does he believe that taxpayers in one province with a lower fiscal capacity than another province should be paying into equalization, while those people in another province are receiving equalization even though their fiscal capacity is higher?

On those two substantive questions, could he just indicate where he stands and where the Liberal Party stands?

Business of Supply
Government Orders

3:45 p.m.

Liberal

Paul Zed Saint John, NB

Mr. Speaker, the hon. member will know that in the speech that I just gave, I specifically cited his own province from 1957, 50 years ago, when it was allowed above the cap under equalization.

What is really important for all Canadians to understand is that we believe in Atlantic Canada and in these reinvestments, the Atlantic accord, the people-building New Brunswick document, which were going to reinvest in the province of New Brunswick $800 million.

The member for Fredericton had crafted a document with the previous Liberal government and had a document ready that would be part of helping out a province like New Brunswick which, moving forward into the 21st century, wants to say that it does not want to be taking the same draw on the national treasury for equalization. It believes in self-sufficiency, just exactly like the national government helped out the province of Alberta 50 years ago.

Business of Supply
Government Orders

3:45 p.m.

Independent

Bill Casey Cumberland—Colchester—Musquodoboit Valley, NS

Mr. Speaker, I represent the flat earth party and we have a position on this.

I am pleased today to debate this issue and I will focus most of my remarks on the Atlantic accord aspect of the debate today.

I want to address the comments made by the very distinguished member for Edmonton—Leduc who tried to provide the perspective perhaps from Alberta. However, the part of the debate that I am focused on is not whether equalization is right or wrong or what is best for this province or that province. My focus is on the fact that I think the Government of Canada should honour a signed contract.

I believe that when the Government of Canada signs a contract this should be gold-plated. It should be bulletproof. When the Government of Canada signs its name, with the little red flag, on a piece of paper, whether it is a person in Tokyo, in Moscow, in Halifax or in St. John's, Newfoundland, the person should be able to count on that signature as being solid gold.

The contract we are talking about today, the one that has been amended so much in the budget, Bill C-52, was only signed in 2005. It is a 14-year contract signed by the Government of Canada and the Province of Nova Scotia. We are only two years into the contract and the government has decided it does not like it. Consequently, the government has put 12 amendments in the budget. I want the members opposite to notice, because what they say is not accurate, but under consequential amendments there are 12 paragraphs of amendments to the Atlantic accord.

If we go further, there are six paragraphs of amendments to the offshore revenue agreement that John Hamm signed two years ago in 2005. The government is now taking the contract signed by the Government of Nova Scotia and the Government of Canada and amending it with six fundamental changes to the contract. This is simply right or wrong and I think every Canadian has an interest in this. This is not just in the interest of Nova Scotia or Newfoundland. Every member of Parliament in this House should insist that if the Government of Canada signs a document, no matter if it is a Liberal government, a Conservative government, an NDP government or, heaven forbid, a Bloc government, the Government of Canada should honour the contract, no matter what, for the life of the contract. It is not flexible and it is not amendable. I honestly think the member for Edmonton—Leduc would agree with that.

I was just given a news article containing a comment by the Prime Minister at the G-8 a few minutes ago. He commented about my voting against the budget. He talks about how good the budget is.

I do want to say that it is a good budget and it is good for my riding. Many things in the budget do support and help my rural riding. However, that does not give the government permission to break a contract. Just because the government does some good things, it does not give it permission to break a contract. My opposition to the budget and the reason I voted against it was that I am 100% convinced that the budget does break this contract.

The Prime Minister said that the budget actually gives the Province of Nova Scotia $95 million in equalization over and above the Atlantic accord, but that is not right. He also said: .

That's one of the reasons Mr. Casey voted four times for the budget so obviously I don't think much of him changing his view the fifth time.

In all fairness, he knows better than anybody that we met with him and with the Minister of Finance over and over again. We put proposals on the table and got legal opinions. We raised it in caucus and we raised it in the House. We have done everything we can.

A week ago yesterday I realized that we were not making any headway. I wrote to the Prime Minister and put it right in his hand and said, “We're not making any headway with this by working behind the scenes. I am going to start speaking out publicly”. He took exception to that. I said, “We have to put pressure on it to make it move ahead”. I gave it to him in writing. I did not want to broadside him. I waited two days and then I made my first statement. Again, we made no progress.

On Monday morning, I wrote the Prime Minister a letter and said, “I cannot support this bill because it breaks a contract between the Government of Canada and the Government of Nova Scotia and I will not vote for it”. I made it very clear. I said it in two places in the letter.

The Prime Minister knows exactly why I voted for the budget the first time. We were in negotiations trying to find a solution but they went absolutely nowhere.

The Prime Minister says that Nova Scotia will get $95 million more in equalization, but that is not true. If the Atlantic accord were honoured, it would get the $95 million, plus the benefits of the offset that are not included in this. That is the fundamental part of the problem.

We believe the Atlantic accord could be changed with four or five words. The problem is that the budget and the accord have different wording. I have pointed this out to the Prime Minister and the finance minister several times. The accord says that the calculation of the payment will be based on the equalization formula that exists at the time. Any time the Government of Nova Scotia wants to calculate its offset payment, it would use the equalization formula that exists at the time.

Now, if we change it in 2010, it is that formula. If we change it in 2015, it is that formula. If we change it in 2019, it is that formula. That is what the accord says, which is a signed agreement and agreed to by both sides.

However, if we go to page 115 in the budget, it says that from now on it will be based on the previous formula. Instead of the vision of the accord, which is to follow along as the equalization formula evolves and changes, the budget locks it in at the previous formula. It, therefore, amends and changes the Atlantic accord fundamentally.

I asked the Minister of Finance today if he would stop saying that Nova Scotia has the option of the new formula or the old Atlantic accord, because it does not. He said it a thousand times. Many of the ministers have. I said it myself, because I believed it, until I got into this. However, it is not true. The Province of Nova Scotia and the Province of Newfoundland and Labrador do not have the option of the new formula or the old Atlantic accord. Everybody in this House has heard the Minister of Finance say that a dozen times. It is not true because the budget changes both Atlantic accord agreements. Twelve paragraphs in the accord are changed and amended and six paragraphs on the John Hamm agreement that was negotiated in 2005.

If the government wants to be honest and accurate, it should say that the Province of Nova Scotia has the choice of the new formula or an amended Atlantic accord, but that it does not have access to the old Atlantic accord.

I had hoped the minister would take my advice and be accurate and say that if that is the case. When I asked that question, he pointed out that I said that the budget was good. I did say the budget was good and that it was good for my riding but it does not give anybody the right to break a contract. We all sign contracts and we all honour them. All Canadians honour contracts. The Government of Canada should honour its contracts, no matter who signs them, whether it is the Liberals, the Conservatives, the NDP or whichever party is the government at the time. I feel very strongly about that.

I will go back to this nine paragraph agreement called the Atlantic accord. It was signed and agreed to by John Hamm and the very distinguished minister of fisheries and oceans at the time, the member from Halifax. It is a simple agreement but a very meaningful one to Nova Scotia.

Newfoundland and Labrador has a similar agreement and it means the world to Newfoundland and Labrador, as it does to Nova Scotia.

The member for Edmonton—Leduc took exception to the agreement but every province has exceptions and every province has special deals. This is our special deal and we value it tremendously.

We just signed an agreement with British Columbia to give it hundreds of millions of dollars for the Pacific Gateway. Manitoba did not get a Pacific Gateway fund, neither did Ontario nor did Digby.

Nova Scotia's special deal is the Atlantic accord and we are not flexible on it. We will continue to demand the Atlantic accord. It is only nine paragraphs long but it is a work of art. I did not realize how good it was until we got into this debate and I started to study it. It is really neat. I was moved to call John Hamm, the former premier of the province, because it is magic. I sold cars for 20 years and made a lot of deals but I could not make a deal as good as this one. It is an excellent deal and John Hamm deserves the credit.

John Hamm also agrees that this budget changes the purpose, the intent and the spirit of this agreement. I have great faith in John Hamm and his comments on it. He has helped me a great deal through this as I have learned to understand how it all evolved and how it came to be.

I am again asking the government to not only honour this signed contract, but to honour every contract. When the Government of Canada signed that contract it should have been gold-plated and recognized around the world as Canada.

Business of Supply
Government Orders

3:55 p.m.

Liberal

Geoff Regan Halifax West, NS

Mr. Speaker, I want to thank and congratulate my hon. colleague from Cumberland—Colchester—Musquodoboit Valley for his comments today and for taking part in this debate. I also thank him for his decision this week to vote against the budget, which was a very courageous move. Nova Scotians are very proud of the actions he has taken. I just wish the other Conservative members from Nova Scotia would show the same kind of intestinal fortitude.

I know the member has been carrying around for weeks a copy of the offshore accord and he referred to it at some length in his recent comments. I know he is aware that it talks about the fact that it is to apply to the equalization formula as it exists at the time. It seems to me, as I have heard comments from Conservative members today, that there has been a failure to comprehend that, a failure to comprehend what the accord is actually all about and what it means. The fact that no matter how equalization might change in the future, the accord and its provisions and the payments under it were to apply so that there would not be a clawback of offshore resource royalties from Nova Scotia or Newfoundland and Labrador.

I think there has been a failure to understand that on the other side but it is time they did. It is time that they lived up to this signed agreement. The member is absolutely right when he says that when the Government of Canada signs a contract it should live up to it. I signed that contract on behalf of the Government of Canada, as he has pointed out to me a few times, and it is time for the government to live up to it.

Business of Supply
Government Orders

3:55 p.m.

Independent

Bill Casey Cumberland—Colchester—Musquodoboit Valley, NS

Mr. Speaker, I want to address one thing the member mentioned about the other members of the Conservative Party, with whom I formerly sat just a few days ago. The Prime Minister said in his note that I had voted for it four times before I voted against it. I just want to say that I worked hard to discuss it in caucus. I and many other members of the Conservative caucus met with ministers and with the Prime Minister. We all did the best we could.

I made an independent decision that we were not making any headway a week ago. I notified the Prime Minister that I felt we were not making headway and then I notified him on Monday that, as far as I was concerned, this was dead and that we were moving ahead. Some of the members think they can affect this decision more by staying in caucus and I respect that decision. I just made my decision to stand and vote against the budget because the contract is broken and I cannot live with that.