Guy Côté

[Budget Implementation Act, 2005, April 12th, 2005]

Mr. Speaker, indeed, the Subcommittee on Fiscal Imbalance met in Quebec City yesterday.

The situation is Quebec is extremely clear, and numerous witnesses presented the same political analysis. What we have seen, particularly since 1995-96, is the government's withdrawal in terms of transfer payments to the provinces. This has had a ripple effect.

The federal government has cut transfer payments to the provinces. The provinces have a social mission to provide services in areas, such as health and education, that often consume between 60% and 70% of provincial budgets. As a result, they have had no choice but to make cuts in other areas.

A few years later, the federal government has a surplus. What does it do? It makes conditional reinvestments in areas that have been somewhat neglected, after cuts imposed by that same government, and it passes itself off as the saviour. Naturally, it often concerns pan-Canadian programs that do not meet the specific needs of any one province or Quebec.

For Quebec, the situation is relatively simple. The solution to the fiscal imbalance requires, first, a comprehensive reform of equalization. It means moving from the five province standard to the ten province standard. All revenues in all provinces must be included. It means better assessing the fiscal capacity with respect to taxes. That is the first thing; we must restore the role of equalization, which is to ensure tax fairness across Canada.

Second, the transfer payments are often conditional and subject to the government's will. One word comes to mind and, if we heard it once yesterday, we heard it 50 times. It is this government's “unilateralism”. “Unilateral decisions” are constantly being made.

Quebec is proposing, in exchange for transfer payments in health and education, that it recover the taxation field occupied by the GST. At present, these amounts are approximately equal. Thus, we would no longer be subject to the unilateral actions of this government, and the provinces and Quebec, where my interest lies, would be in a better position to make better choices in these areas of jurisdiction.

[Budget Implementation Act, 2005, April 12th, 2005]

Mr. Speaker, I would like to thank the parliamentary secretary for his question. I have two or three quick answers for the parliamentary secretary.

In regard to the impossibility of ever making the members of the Bloc Québécois happy, I would simply point, as I said in my speech, to the unanimous report of the Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities calling for in-depth reform of the employment insurance system. The report was unanimous. If the government had had the courage to implement these measures, the Bloc Québécois would have been happy and would have voted in favour of such a bill. That is the first thing.

Second, regarding the agreement between Quebec and Newfoundland and Labrador, we in the Bloc Québécois, in contrast to the Liberal Party, do not interfere in provincial affairs. We are on the federal level. This was a contract between two parties. If the parties want to renegotiate it, they should do so. However that may be, these are matters for Quebec and the provinces and we will not interfere in that.

Let us turn to the special agreements with Newfoundland and Labrador and Nova Scotia. As the parliamentary secretary knows very well, a subcommittee of the Standing Committee on Finance, namely the Subcommittee on Fiscal Imbalance, is currently on a cross-Canada tour that will end soon. Allow me to draw a somewhat hasty conclusion in light of the various witnesses who have appeared: the equalization system has been completely perverted by this government , among other ways through special agreements. Equalization is supposed to be a matter of equity to ensure that the provinces can provide comparable services. So as they get richer, their equalization goes down. That is only natural.

These equity principles are called into question, though, by the agreements with Newfoundland and Labrador and Nova Scotia. These are agreements that completely upset the equalization system, which was already in difficulty as a result of the policies of this government.

Furthermore, we are now witnessing attempts to reach more special agreements, in particular with Saskatchewan and Ontario. Rather than trying to solve the problem piecemeal by signing agreements that only accentuate the inequities, why does the federal government not undertake an in-depth reform of the equalization system and solve the problem of the fiscal imbalance? That is the question.

[Budget Implementation Act, 2005, April 12th, 2005]

Mr. Speaker, on February 23, the Liberal government tabled a budget that was and still is unacceptable to Quebeckers because it fails to consider their priorities.

Naturally, we cannot oppose a budget and support the bill to implement it. So, it is clear that the Bloc Québécois has the duty, on behalf of Quebeckers, to oppose Bill C-43 to implement the February 23 budget.

However, the government could have and indeed should have used the opportunity presented by Bill C-43 to make major improvements consistent with Quebec's interests to the budget. However, the Liberal government, in addition to rejecting improvements to EI and the fiscal imbalance, even went so far as to add items that are totally unacceptable to Quebec, such as the special agreements on equalization with Newfoundland and Labrador and with Nova Scotia, and the polluter-paid principle under the Kyoto protocol.

Furthermore, the minority government should have made compromises. Instead, it has chosen arrogance and actions befitting a majority government. It has behaved like a government itching for a snap election. If this bill results in the dissolution of the House, the Prime Minister will have to tell Quebeckers why, and the government members will take the fall in a new election. For all these reasons, we cannot support this motion.

I said earlier that the Bloc Québécois, on behalf of Quebeckers, was opposed to the budget. We will oppose this bill too. Why? We have held a broad-based consultation in Quebec on the real needs and priorities of Quebeckers. We have reached a number of conclusions, namely that, in Quebec, the fiscal imbalance is a major issue that must be resolved.

What do Quebeckers want? In the long term, they are calling for the transfer of tax fields. In the short term, they are calling for increased transfer payments for education and social assistance. They want increased equalization payments along with changes consistent with the demands of the Quebec government, such as the use of the ten province standard instead of the five province standard.

What do we have in this budget as far as the fiscal imbalance is concerned? We have a Minister of Finance who announces no additional measures to loosen the financial stanglehold on Quebec, a problem the Liberal Party refuses to acknowledge. We have agreements on health and equalization payments that are clearly inadequate and in no way resolve the fiscal imbalance. God knows,with its enormous, virtually scandalously huge surplus, the federal government has the financial means, at this time, to resolve this issue.

All workers in Quebec, and naturally—I am tempted to say “unfortunately”—the unemployed, have one priority. That priority is employment insurance. The Bloc Québécois called for an independent EI fund and commission; improved coverage including reducing the eligibility criteria to 365 hours; more weeks of benefits; a new program to assist older workers.

Once again, there is precious little in the budget on this and almost nothing relating to employment insurance, despite the recommendations of the Standing Committee on Human Resources Development, Skills Development, Social Development and the Status of Persons with Disabilities, which called for a far more sweeping reform, and despite reports which had, I might point out, unanimous support in committee. Unanimity means that Liberal MPs voted in favour of those reports. Nevertheless, there are no improvements that could, for instance, apply immediately to seasonal workers.

As far as seasonal workers are concerned, there is of course one markedly inadequate measure involving some pilot projects. That may amount to $300 million spread across Canada. In addition, the 2005 budget prevents any actual improvements to the EI program because the main objective in changing the fund is to eliminate the annual surplus.

Earlier, I mentioned Kyoto, and I am sure my colleague from Rosemont—La Petite-Patrie will speak much longer on it than I will.

I will however mention quickly that Quebec has called for substantial expansion of the wind energy support program,; tax deductions for public transit passes, the abolition of tax incentives for non renewable and nuclear energies and even the creation of tax credits for the purchase of hybrid vehicles. And what do we find? We find a budget that confirms the choice already expressed by the federal government of a voluntary approach to the Kyoto protocol, which will not lead to the achievement of the objectives for the reduction of greenhouse gases and will place the financial burden on the taxpayers rather than the major polluters.

There are absolutely no tax measures in the transport sector. This oversight will not help Quebec to improve its greenhouse gas reduction record. These measures are not appropriate to Quebec.

In recent years, Quebec has had a serious crisis in agriculture. The expectation was that the federal government would help farm producers struggling with the mad cow crisis, for example, in terms of the compensation needed to reach the floor price. There is the situation with cull cows in Quebec. Here again, the government's record is pretty poor in the context of the budget and Bill C-43. It is simple. There is nothing for agriculture. There is only the small sum of $17 million for slaughter, which in fact is not new money. This government has completely ignored the situation of farmers across Canada and Quebec.

The government keeps telling us about all its funding for the military. As in health care, I think that prevention will always produce better results. We expected this government to take concrete action to achieve the UN goal of increasing international aid to 0.7% of GDP by 2015. What are we seeing? We are seeing an extremely timid commitment from the government, which will in no way allow us to reach that goal. As things stand, we will not achieve 0.7% of GDP in 2015 but rather in 30 years. We are far from the mark.

An extremely important issue for Quebec is respect for its areas of jurisdiction. With regard to the child care initiative, Quebec is asking for the right to withdraw from the federal program, unconditionally and with full compensation. With regard to parental leave, the transfer payments must be made as soon as possible to the Quebec government so that it can finish implementing the initiative it had presented. The negotiations with the municipalities must be terminated. The gas tax revenues should not go directly to the municipalities but rather directly to Quebec, so that the latter can determine the terms and conditions and its allocation among the municipalities.

These are Quebec's traditional demands, and it is difficult sometimes to understand why the Liberal government will not listen to reason since it has been told the same thing for years. So what do we see in the budget? We see a final agreement on parental leave between the Government of Quebec and the federal government. It should not be forgotten, though, that this is Quebeckers' money that the federal government is using to invest in one of Quebec's jurisdictions. So this agreement is only fitting. It does not prove that asymmetrical federalism works. Instead, it is the result of a struggle that the Bloc Québécois has waged in this House since 1997. It took eight years to finally reach an agreement on parental leave, despite all the historic announcements about this program every month, to the effect that this matter was about to be settled.

As far as child care is concerned, the Prime Minister agreed to give Quebec its share of the federal funding with no conditions attached. However, we should recall that the federal budget speaks about Canada-wide standards and reporting. The transfer of part of the gasoline tax to municipalities may well be carried out under conditions that are unacceptable for Quebec. There is talk of strategic objectives, Canadian results and bilateral agreements specifying how the municipalities will share the funds.

Well, these three areas are very clearly within the jurisdiction of the provinces and Quebec. Once again, Quebec's demands regarding Bill C-43 and the budget have been disregarded.

Social housing is another area where the government's management has been so sad that it makes you want to cry. The federal government was asked to ultimately devote the equivalent of 1% of its program spending to contribute to the development of new social and community housing. So what do we see? Nothing. There is nothing at all for social housing. If there is one sector that has just been forgotten in this budget, that is it.

As I say, it is enough to make you cry. Families are having difficulty finding adequate housing. Some families in Quebec spend about 60% of their income just on housing. Meanwhile, this government has the nerve to bring down a budget with nothing for social housing.

For the Bloc Québécois, it is also important that this budget not neglect our francophone friends in the rest of Canada. We felt that the federal government ought to follow up on the budget requests from francophone associations in the Canadian provinces and raise to $42 million the budget allocated to them under the Canada-communities agreements. That budget, incidentally, is currently $24.4 million. Once again, there are no provisions for the Canadian francophonie, which is most unfortunate.

Yet the government had the means to do far more. The federal Liberals had enough financial leeway to do far more. According to the Bloc Québécois forecast, that leeway will attain the $50 billion mark, more or less, within three years, not the meagre $15 billion figure the Minister of Finance has given for that same period.

The federal government therefore had all the leeway necessary, but not the political will. It is as simple as that. Once again, the Minister of Finance turned Prime Minister is up to the same old tricks, giving priority to paying off the debt—they are talking about $15 billion over five years—at the expense of the people of Quebec.

That is the general situation. Now I will touch upon some of the more specific aspects of this bill which are of particular significance to me.

I will start with part V, which concerns the Federal-Provincial Fiscal Arrangements Act. This allows the transfer of up to $700 million to a trust to help Quebec and the provinces develop their child care system in keeping with the following principles: quality, universal inclusiveness,accessibility and development.

The Bloc Québécois calls for an unconditional right to opt out, with full financial compensation, from implementation of the federal child care program. Adoption of part V of Bill C-43 just as it stands would mean that the money in trust available to Quebec and the provinces would suddenly be tied to the application of four national standards in an area over which Quebec and the provinces have exclusive jurisdiction. While all Liberal ministers involved promised that all this would respect everyone's areas of jurisdiction, in reality this budget includes an obligation to meet national standards.

Such legislation means Quebec would have to meet national standards set by the federal government in an area outside federal jurisdiction. This also means Quebec would have to be accountable to the federal government for the proper application of these national standards.

Quebec is being heavily penalized by this bill. Quebec parents are still waiting for additional funding, while the Government of Quebec is ready to receive this funding and use it for improving its own system.

I remind this House that the Bloc Québécois is in Ottawa to protect the interests of Quebeckers. The federal government's interference in Quebec's jurisdictions and its foot-dragging in signing a bilateral agreement with Quebec so as not to penalize it for having one of the best child care systems in the world, are not the best ways to achieve this.

I am talking about early childhood, but this government's handling of the Old Age Security Act is hardly any better. I am referring to Part 23 of Bill C-43. The government is quick to remind everyone that it injected money into old age security, but the governing party forgets—I am being polite—to dig a little deeper to look at what this money represents.

First, the increase in funding will not begin before January 2006. The situation for seniors will not improve immediately. This will not begin until January 2006, or almost a year after the budget was tabled.

Second, there is also an increase of $18 monthly for single pensioners. As if eighteen dollars a month really improves the life of seniors. I should rush out and dance in the street to show my delight. Eighteen dollars a month is a scandal. The federal government had the means to do a lot more for seniors.

In addition, this bill makes no reference to the money seniors have been deprived of over the past 11 years, because of the government's failure to provide the information they needed to receive the guaranteed income supplement. I believe seniors in Canada lost out on $3 billion and those in Quebec on $800 million for lack of information. This is really scandalous, in my opinion. The bill makes no provision for this aspect of an extremely serious situation.

I have spoken of young people and seniors. Let us talk about workers now, people in the labour force, who, often for distressing reasons or sometimes for economic reasons, need financial support from the government, in the form of employment insurance, for example.

Previous Liberal governments have turned the employment insurance fund into an employment tax, which has enabled them to pay down the debt and eliminate the deficit. This bill contains no provision on access to the plan. Imagine an insurance company where only 40% of those paying premiums manage to get benefits when they need them. This is what is happening with employment insurance. The few amendments in the bill have nothing to do with access to the plan. They have nothing to do either with extending EI benefits. Only slightly, through pilot projects, do they have anything to do with extending benefits for seasonal workers. This bill, overall, responds to none of Quebeckers' needs.

In conclusion, I point out that this budget, tabled on February 23, is totally unacceptable. It completely ignores the priorities of Quebeckers. The federal Liberals have behaved exactly like a government looking for a quick election. We voted against the budget. We have a duty on behalf of Quebeckers to vote against Bill C-43.

[Course de la banquise Portneuf-Alcoa, March 24th, 2005]

Mr. Speaker, the second annual Course de la banquise Portneuf-Alcoa, an ice canoe race, took place on February 12.

Nearly 200 canoeists in 35 teams in the competition category and 6 recreation teams put their skills, endurance and willpower to the test to cross the ice-covered St. Lawrence between the Portneuf marina and Pointe-au-Platon, in Lotbinière.

Over 2,000 spectators came out to encourage their favourites and support this event, which promotes athletic performance, the great outdoors, our traditions and recreational tourism.

Such an event would be impossible without the support of volunteers, the municipality of Portneuf, the excellent work of the dedicated organizing committee and its visionary general director, Pierre de Savoye.

Congratulations to all the teams and, of course, the winners deserve a special mention: Croisières Lachance as best recreational team; Choix du Président-Solnat as best women's team; Ciment-Québec won the company challenge award; and Château Laurier-Junex won in the competition category.

[Supply, March 22nd, 2005]

Mr. Speaker, once again, a large part of the problem with the Conservative motion is that it examines only one aspect, namely the revenues from the development of non-renewable natural resources. It looks only at the revenue side. We must not forget, though, that all Canadians and Quebeckers contributed through their taxes to the development and the expenditures incurred to produce these revenues. This is why I find it unfortunate that the motion looks at only one aspect of the issue.

For example, Newfoundland and Labrador gets revenues from the development of its resources, and that is entirely as it should be. However, since we all contributed to the outlay, it seems to me that it would be fair if we could all participate in the benefits, even if only indirectly. We are speaking here of indirectly, we are speaking of equalization. We are not asking for a percentage of the revenues and profits from the development of coastal oil. We are just asking for this to be taken into account when it comes to equalization. It is as simple as that.

[Supply, March 22nd, 2005]

Mr. Speaker, I would like to thank my colleague for this excellent question, which raises some very important points.

Actually, one cannot help agreeing on the face of it with the member's statement that the resources are non-renewable and, once developed, will have disappeared forever. However, we must never forget that these resources are not developed in a vacuum; the wealth that their development generates for the various provinces is re-invested in infrastructure and services for people and will make it possible to reduce taxes.

Non-renewable resources are not in fact developed in an economic void where money is collected but not re-invested elsewhere. Thus the development of non-renewable natural resources brings wealth to the various provinces.

I feel that it is on this basis that we should calculate the entire potential in order to ascertain all the revenues. That is the first thing.

Second, when one thinks of Alberta and of the Hibernia project, for example, all Canadians contributed to the exploratory phase and to the development of the resources in various ways. As a Quebecker, some of my taxes went to developing these natural resources. Now I am told that, on the one hand, I helped to finance the development of non-renewable natural resources, but on the other, I cannot enjoy any of the benefits of that development.

Although the member may seem to be right, when we examine his suggestion a little more closely, we realize that it is very unfair. This is why I ask my Conservative friends once again to give this some more thought.

[Supply, March 22nd, 2005]

Mr. Speaker, unfortunately, we will not be able to support this motion of our Conservative friends for certain reasons that I would like to explain today.

As has been said in this House several times, equalization is a pretty complex matter. People often joke that only a few Canadians and Quebeckers actually understand the system. In fact, though, the system is relatively simple, so simple actually that the goal of equalization was even enshrined in the Constitution. The goal of equalization was to ensure that public services could be provided of basically comparable quality and at basically comparable tax levels.

Nonetheless, it could not be as simple as that. Equalization has existed since 1957, but it has been modified several times both in order to reflect new realities, which is entirely to be expected, and occasionally for reasons that were more political than economic in nature. The result, especially over the last ten years, has been an equalization system that has ceased to play its role as the great equalizer. Instead, in several regards, the system has aggravated the disparities between the various provinces and Quebec.

We will not be able to support this motion for several reasons. It does not go far enough. What is needed for equalization is really in-depth reform. Nowadays, unfortunately, the equalization system no longer meets its original goal for various reasons, including the application of what is called the five province standard. This standard, according to which an average is calculated on the basis of only five provinces, results in an artificially low average. Some provinces are excluded from the calculation. Consequently, certain provinces that might have been entitled to equalization find themselves excluded.

As far as the government is concerned, it is a less expensive program. The government can therefore boast at the same time about having enormous surpluses while failing to meet the needs of the public.

The equalization system calculations also do not take all the revenues of the provinces into account. Certain revenues that should be considered in the calculation of equalization are excluded in sometimes arbitrary ways.

In addition, the equalization amounts are highly unpredictable. Even the October 2004 agreement fails to totally correct this situation because it is spread over several years, which is pretty sarcastic in my view.

Once again, the government is not getting at the root of the problem. It tries to find temporary solutions just in order to buy time, have it both ways, instead of getting at the heart of the problem and finding effective solutions.

In the current situation, faced with this very imperfect system, the government had no other choice than to negotiate special agreements with various provinces. As I said earlier, these special agreements have existed since the beginning of the equalization program. However, the recent agreements with Newfoundland and Labrador and with Nova Scotia have crystallized in a way the iniquities in the equalization system and highlighted virtually everything that does not work in the calculation of equalization.

It is important to say that we are not unhappy but actually very happy for the people of Newfoundland and Labrador and of Nova Scotia. Thanks to these special agreements, they will be able to improve their economy, enhance their prosperity, and develop their various industries more effectively while avoiding the fiscal clawback that can result from economic growth based on non-renewable natural resources.

At the same time, we should not forget that these agreements will provide the province of Newfoundland and Labrador with $2.6 billion and the province of Nova Scotia with about $1.1 billion by 2012. The result is an enormous increase in their tax revenue potential, which is not included in the equalization calculation.

This accord makes us happy for the residents of the provinces concerned, but it highlights what is wrong with the equalization system and skews data completely.

The Conservative motion seeks to extend this model to all the provinces and Quebec. I think this would spell the end of equalization. It would completely alter the nature of this system, which, while imperfect, is not beyond reform, at least that is our position.

Also, the second part of the Conservative motion does not go far enough in proposing only transitional measures.

Moreover, this motion penalizes in a roundabout way those provinces which have made a different choice, choosing to develop clean and renewable energy sources—I can think of hydro power in Quebec for instance—instead of basing their economic development on non-renewable and much more polluting energy sources.

The Conservative motion addresses a very real problem. Equalization is showing signs of age and is no longer achieving its mission. Instead of providing an efficient solution to these issues, the motion will increase the iniquities in the system.

That is why I encourage our Conservative friends to continue their consideration of the matter, up to a point, because the transitional measures put forward in the motion are clearly inefficient. The exemption of non-renewable resource revenues from equalization clawback should be extended only in combination with a comprehensive reform to restore fiscal balance to the provinces which have opted for alternatives to non-renewable resource development or those with not as great a potential as others in this area.

Let us not forget that this reform of equalization is part of a larger picture, which is the whole issue of fiscal imbalance. The motion completely overlooks the major impact of such things as federal transfers, the formulas for the calculation of land wealth or potential tax revenues from mining.

In recent months, the fiscal imbalance subcommittee has had the opportunity to visit a number of provinces and provincial capital cities. What was striking in the presentations by the various stakeholders was the realization that equalization is no longer the great equalizer. More amazingly, while there are real problems in every one of the provinces we have visited so far—Nova Scotia, Ontario, Saskatchewan—the problems vary from one province to the next.

Naturally, at first sight, it may seem like a good idea to say that, since each province is experiencing different problems, special agreements must be negotiated. However, I repeat that these special agreements are destroying the equalization program. This is quite unfortunate. Equalization enables each province to provide comparable services, services to which all Canadians and Quebeckers are entitled.

There is a history to this and, once again, we see that the different actions taken by this government have served to further destabilize the equalization program. For example, at the conference last October, the provinces were forced to accept an agreement on equalization. I come back to this once again: the special agreements with Newfoundland and Labrador and Nova Scotia have further destabilized the equalization program.

Ultimately, the Conservatives' motion is proposing an end to equalization. If the agreement on non-renewable natural resources were extended to all the provinces and there were to be no indepth reform, we would say, “Forget equalization and okay to the special agreements for all parties”. The Conservatives believe—as is their right—that this is the solution. We do not agree, obviously.

We believe that the Conservatives are making a mistake because equalization is supposed to ensure equity; it is supposed to ensure that the provinces provide comparable services. As a result, someone living in Quebec, Ontario, Saskatchewan or any other province or territory is guaranteed access to similar services in health and education, regardless of the revenue sources of Quebec, the province or the territory.

One of the effects of equalization is that, all too often, when there is development, there is a clawback.

We were in Regina yesterday, and the Premier of Saskatchewan and the leader of the opposition gave an extraordinary presentation, which exposed clearly the problem with equalization: when a number of economic developments take place, the rate of tax clawback compared to equalization could on occasion be in excess of 100%.

To simplify the figures somewhat, let us take the following example. If, after some economic development, the province earns an additional $1 million in revenue, it could lose $1.1 million or $1.2 million in equalization payments, in other words, more than the revenue generated by the development.

Understandably, in some cases this is not an incentive to economic development. On the other hand, the Premier of Saskatchewan explained very clearly to us that the government had never avoided moving on an economic development because of the clawback implications, and we must congratulate them on that.

So, under this equalization system, which has not worked all that well for some years, and even less well since last October's agreement and the specific agreements with Newfoundland and Labrador and with Nova Scotia, is again being threatened by the Conservative motion. This motion will inevitably increase the iniquities and create new ones as well. It will further complicate a program that needs instead to be simplified. This motion does not address the real problems of equalization, which require a thorough reform.

That thorough reform might address data better reflecting reality and giving an average of the tax potential of the various provinces and of Quebec. For example—and it seems to me that our Liberal friends ought to be able to understand this—when the average has been calculated based on five provinces only, it is not really a Canadian average, but rather an average of five provinces. If the standard were to be changed to ten provinces, the average would then reflect the economic reality and the reality of the tax potential of all of Canada.

To calculate equalization, we would need a better way to calculate property tax capacity. Here again, creative calculations are used to determine property tax capacity. In the calculation of equalization, all provincial revenues should be included. There might have been a time when it was necessary to exclude certain non-renewable resource revenues, but, in my opinion, that time is past. To determine actual capacity, all provincial revenues should be included. In a word, there are a number of solutions available.

With an ounce of goodwill, the government could implement these solutions without challenging the work of the expert panel on equalization established on March 21. This panel will focus mainly on the allocation of equalization payments, not on the functioning of equalization per se; not on the calculation method, but rather on how the amounts will be allocated.

As I said earlier, the equalization issue is part of a broader picture: the fiscal imbalance. Unfortunately, the government does not recognize this reality, and I must say that, as time goes by, I am increasingly getting the feeling that the government is alone in this position.

In Quebec for instance, we have 200 elected members: 125 members of the National Assembly and 75 federal MPs. Out of these 75, only 21 Liberal MPs fail to recognize the fiscal imbalance. During our tour, we heard presentations in Halifax. Many provinces recognize the fiscal imbalance as a problem. In Toronto, the Ontario premier recognizes the fiscal imbalance. I was in Regina, and the Premier of Saskatchewan recognized the fiscal imbalance. I do hope that this government will eventually realize how isolated it has become in its stubborn refusal to recognize these facts.

Changes to equalization are needed to try to resolve part of the fiscal imbalance. What does this mean? For now, it means improvements to equalization. Transfer payments for health and education need to be increased considerably. These are issues that are very important to our constituents.

In addition to addressing equalization and transfer payments, the government must transfer tax fields. One solution, for example, could be to transfer the GST tax field, or some of the personal income tax, or tax points for Quebec, while eliminating some other transfers. The government could consider these solutions, but it refuses to do so.

We currently have a minority government in Parliament. This allows us to help the government in its work. Naturally, I am referring to the Speech from the Throne. Although the resolution on the fiscal pressures—what some call the fiscal imbalance—is very weak, it is a step in the right direction. The creation of the Subcommittee on Fiscal Imbalance of the Standing Committee on Finance is an extraordinary step in seeking solutions to this problem. I am really looking forward to June 2, when the Subcommittee on Fiscal Imbalance tables its report.

In conclusion, the Conservative motion we are considering today will in no way resolve the equalization problem. In fact, it might make matters worse and increase the inequities. Rather than focus on special agreements and transitional measures, we should conduct a thorough reform of the equalization system, which would allow us to determine the real situation for all the provinces and to have a functional equalization system that meets the transfer needs of the provinces and Quebec.

[Taxation, March 9th, 2005]

Mr. Speaker, the political lieutenant in Quebec seems to have a great fondness for rainbow coalitions. Such a coalition exists at the National Assembly.

Before being elected he said that Ottawa was swimming in surpluses. How would he respond to the Quebec finance minister, who said the only one to deny the fiscal imbalance is the one that benefits from it directly and that is the federal government?

[Taxation, March 9th, 2005]

Mr. Speaker, the 21 Liberals from Quebec, including the Minister of Human Resources and Skills Development, the Minister of Transport and the Prime Minister himself, continue to deny the existence of the fiscal imbalance. Yet, all the Liberals in the National Assembly and all the other parties voted unanimously in favour of a resolution confirming its existence.

I want the ministers who claim to be representing Quebec to tell me this: how can they go against a unanimous decision of the National Assembly of Quebec?

[The Budget, March 7th, 2005]

Madam Speaker, I sincerely think that the government should take steps to allow as many people as possible to receive employment insurance benefits when they lose their jobs.

Previously, a new entrant to the labour force could have to wait for up to two years before he or she could apply, because a minimum of 910 hours of work were required. Granted, the government has taken a baby step by reducing the requirement to 840 hours. But that is clearly not enough. Why not have a uniform requirement? Why not set it at 600 hours or 400 hours?

The whole idea is for workers to contribute to the employment insurance program so that, when they need it, they can continue to have an income. They are not asking for handouts; it is just a matter of allowing recipients to continue paying their mortgages, feeding their children and having a decent living. As many people as reasonably possible should have access to benefits. Ideal conditions have to be put in place for that to happen.

My hon. colleague opposite talked about paying down the debt. We are not against paying down the debt. But we do object to this House not being able to debate the matter. The Minister of Finance said he wanted to have a contingency reserve, a reserve for economic prudence, a reserve to allay anxiety and that, if he did not need this money, he will put it toward debt repayment. Should he decide to put $1 billion, $2 billion, $3 billion, $4 billion or $5 billion toward paying down the debt, the Minister of Finance should have the courage to make it an item in his budget. Such is democracy. This way, we could have a debate about it in this House.

Instead, what does the government do? It creates budget items to be used for other things. It puts money into foundations. This year, some $7.7 billion invested in foundations has yet to be spent. That is $7.7 billion that escapes the scrutiny of parliamentarians. Even the Auditor General cannot check how this money is used.

The government must take steps to promote the distribution of wealth and to help those who need help. That is what is important.