Richard Bélisle

[Committees Of The House, March 5th, 1997]

Mr. Speaker, further to the comments by the chair of the Standing Committee on Finance, I would like to add a few comments on the Bloc Quebecois' dissenting opinion.

I would like to add that the Bloc Quebecois supports the concept of harmonizing sales taxes, but cannot support the Liberal government's wasting everybody's time and energy with a half-baked and unfair scheme.

In the current state of affairs, there is no proof that Bill C-70 simplifies and improves things. On the contrary, as regards the rules governing the display of prices, consumers may find an item bearing four different prices in a catalogue or on a retailer's shelves.

Bill C-70 will considerably complicate the lives of individuals and businesses. So the big questions remained unanswered, because the Liberals are putting their electoral interests before the interests of the taxpayers. We also think that the government should redo its homework and go over Bill C-70.

[The Budget, February 20th, 1997]

Mr. Speaker, I have the following comment for the hon. member for Saint-Denis. Will the hon. member promise, on behalf of her government, that the federal government will stop reducing transfer payments once and for all? Could she promise, on behalf of her government, that these cuts will be stopped once and for all?

The government is trying to balance its public finances, and this is not easy. I think it will manage. There is a budget plan. At the summit last year, there was an agreement with employer associations and unions in Quebec. There was a consensus to the effect that Quebec's budget would be balanced by March 31, 2000. I think we are on the right track.

However, if the federal government keeps reducing historic transfer payments to Quebec, it will be well high impossible.

[The Budget, February 20th, 1997]

We have had more than enough welfare, social assistance and unemployment.

[The Budget, February 20th, 1997]

Mr. Speaker, I want to thank the hon. member for Saint-Denis for her question.

Speaking of propaganda, I hardly think we can criticize the Government of Quebec, when we consider the 23 million flags distributed by the Minister of Canadian Heritage.

The hon. member for Saint-Denis asked me how the Quebec government will balance its books at the end of the current fiscal year and in the years to come, to help the disadvantaged. Well, it will not be easy. The Quebec cabinet is involved in a series of complex accounting exercises. They may have to renegotiate collective agreements with unions in the public and parapublic sector, and that will not be easy.

Now, if the federal government were to send, as soon as possible, a first instalment on the $1.9 billion the federal government owes to Quebec for harmonizing the GST with its provincial sales tax, that would be a good start.

If the federal government then sent another cheque as a first instalment on the $2 billion in transfer payments that were cut in the case of Quebec, over the past few years, we would be well on our way to balancing the budget, and we could go ahead and give people additional protection.

As I said before, historically, the percentage of disadvantaged people and poor people has always been higher in Quebec, because the federal government never did the kind of strategic spending it did in Ontario and the other provinces.

What Quebecers want is research and development and investment in technology.

[The Budget, February 20th, 1997]

Mr. Speaker, I thank the member for Saint-Denis for her question. My colleague spoke of myths. She said we were perpetuating myths. I would like to tell her that the biggest myth circulating in Quebec and in Canada is the one about centralizing federalism as practised in Canada for the last 30 years, during 20 of which the Liberals were in power. That is the biggest myth.

The Government of Quebec is having difficulties because the federal government is offloading its deficit onto the backs of the provinces.

Let us take the example of research and development. Over the last ten years or so, Quebec has received approximately 17 per cent of federal research and development grants, while the neighbouring province of Ontario has received 50 per cent. Historically, the federal government has always put less money into economy building measures.

What Quebecers want is not just transfer payments to help subsidize welfare and assistance to the less fortunate members of society. What they want from the federal government is spending that will have an impact on the economy, such as Ontario has seen for ten years or so. Historically, Quebec has never received its fair share.

When there are massive cuts by the federal government in transfer payments, such as we are now experiencing, Quebec is more severely affected than Ontario or other provinces. The federal government has not put money where it would have allowed Quebec to have proportionately fewer people living in poverty. When this kind of spending is cut, people are hard hit.

Finally, the flexible federalism, the decentralized federalism we keep hearing about from the Prime Minister and the federal government is always based on a double standard. If this is the kind of distinct society the Liberal government wants to talk to us about, we are not interested.

Take the case of the GST. The maritimes received $1 billion in compensation for harmonizing with the GST. Quebec did the same thing in 1991 without a cent of compensation, when it should have received approximately $1.9 billion. If that is what they mean by distinct society, treating Quebec differently where taxes are involved, I can understand that Quebecers are increasingly considering sovereignty.

I would also like to tell the member for Saint-Denis that what the Bloc Quebecois most dislikes about the Minister of Finance's budget is its scattershot approach. The amounts involved are small, a few million dollars, and they have been ladled out all over the place. Rather than watering down the impact of the $1 billion available in the 1997 budget, why did they not target one or two specific areas in order to produce a bigger bang in terms of jobs and wealth?

[The Budget, February 20th, 1997]

Mr. Speaker, this fourth budget brought down last Tuesday in the House by the Minister of Finance is election minded and centralist.

It is centralist because the areas it addresses are all, without exception, provincial in jurisdiction: literacy, tax benefits for children, tourism, higher eduction, students, the disabled, health and medical expenses.

It is election minded because it consists of a scattering of timid measures and a few million dollars tossed out to attract groups that are generally anti-Liberal.

Let us take the example of tourism, in which they will invest $15 million annually. As Alain Dubuc pointed out yesterday morning in the editorial in La Presse , the interest alone on the federal debt is over $125 million daily.

Seventy million dollars will be spent this year on the child tax benefit, less than the cost of servicing the debt for 17 hours, corresponding to 53 cents per child per week. There will be a 10 cent reduction in UI premiums for every $100 of insurable earnings.

In addition, the Farm Credit Corporation will receive $50 million to support diversification in rural Canada, and $10 million in funding will be provided to help connect rural areas to the new information highway.

You will observe that all these areas come under provincial jurisdiction or are areas in which Quebec has been trying to defend its jurisdiction for years, with no success, given Liberal policy.

The Liberals' strategy could not be clearer. After cutting transfers to the provinces by several billion dollars and forcing them to struggle with increased deficits and, in the case of Quebec, to manage downsizing in education and health, with all that that represents in terms of management of collective agreements and workforce reduction, the federal government is tossing a few scraps the way of the provinces to increase its visibility in the months leading up to the election.

This budget is Machiavellian, because it leaves the dirty work of cutting back program spending to the provinces. Because, year after year, the federal government has dipped into the $5 billion surplus in the unemployment insurance fund, deficit reduction is also supported by employers, for whom it is a sort of payroll tax in disguise, and by the workers, for whom it represents a hindrance to employment. The unemployed who are still searching for employment are 1.5 million strong, and there are another 1.5 million who are no longer in the unemployment statistics, having given up hope of finding a job.

The tax burden has increased by $22 billion in four years. Over that time, expenditures have decreased by $14 billion, over half of that the result of decreased transfer payments to the provinces.

The Minister of Finance is concealing his true margin of manoeuvrability from us. It is impossible for his deficit to decrease by only $2 billion next year, when it has already gone down close to $10 billion this year. The minister is hiding several billion dollars up his sleeve, just for the purpose of justifying his approach to cutting the deficit.

There is nothing for employment, nothing for the battle against poverty. The government will earmark $800 million for the creation of a Canadian foundation for innovation. As if by chance, this amount of $800 million comes from transfer payments to the provinces, which are precisely $800 million less than what was forecast for 1997-98 in the 1996 budget, essentially due to an improved economic situation.

This foundation duplicates services already provided by the provinces. Creating a new foundation instead of reinforcing existing research bodies would give the Liberals a chance to put in their own people, people who will act as a kind of liaison in connection with future appointments and fundraising for the Liberal campaign, now the election is only months away.

There is no provision for compensating the Quebec government for harmonizing the GST in 1991, while the maritimes will be entitled to $1 billion in return for doing what Quebec did six years ago, without any compensation at all.

The minister is reactivating some good news that was announced a few months ago, and prefers to remains silent on the cuts that will kick in this year and were included in last year's budget.

Instead of reducing duplication and overlap, the federal government increases these as well as the inefficiencies for which it has been criticized by the Bloc Quebecois for the past four years. However, there may well be no more duplication and overlap in the future.

As transfers to the provinces are reduced, the provinces will have to hand over entire components of their mission to the federal government. That is not how the provinces and Quebec taxpayers would like to see duplication and overlap eliminated.

The 1997 budget elbows the provinces aside even more, so there will be more programs flaunting the maple leaf. What matters most to the government on the eve of an election is the visibility of the maple leaf on printed matter sent to Quebec and Canadian households between now and June 9, and the government is even happier if this mailing perhaps includes a cheque.

Notwithstanding the increase in tax revenues over the past four years, the reduction in transfer payments to the provinces and the appropriation of the unemployment insurance fund, the minister does not expect his deficit to drop by more than $2 billion next year. The minister therefore retains considerable flexibility, and the measures to deal with unemployment and poverty are minimal, compared with the actual spending capacity of the federal treasury. They could even forecast a zero deficit for the year 2000 or even 1999.

The Bloc Quebecois estimates that today, the Minister of Finance has about $8 billion to use as he sees fit. The minister is a year ahead of schedule in his fight against the deficit. If he refuses to disclose the real numbers, it is because he wants to prevent any action by the provinces, community groups and unions which would certainly ask him to refinance social transfers to the provinces.

If we look at how the budget has changed in the past four years, we see that 52 per cent of the $14.2 billion reduction in federal government spending involves transfers to other levels of government, primarily the provinces. Only 21.1 per cent, or one dollar in

every five, of this reduction comes from direct government expenditures.

The Minister of Finance says he did not raise taxes in his 1997 budget. Since the Liberals have been in power, personal income taxes have continued to increase and at a rate greater than the GDP year in and year out. This increase in the personal tax burden especially on the middle class is not the result of a review of the tax system aimed at improving tax equity. Not at all. It is the result of several subtle increases, such as the non indexation of the tax and tax credit tables, causing individual income tax to rise every year in Canada.

The minister talks of an improvement in the child tax benefit, which will not have a real impact until 1998, thus after the election. Will the Liberals give the child tax benefit the same treatment they gave the promises on the national child care system they promised in the last election?

After impoverishing their parents through massive cuts to social transfers and unemployment insurance, will the Liberal government in a gesture of cynicism ease the lives of the children of these families?

Family policy and the fight against poverty are provincial matters. The continued and even expanded federal intrusion into areas of provincial jurisdiction is not acceptable and hampers the implementation of coherent policy in Quebec. While ministers Harel and Marois in Quebec are struggling to find the millions required to help children, families and the jobless, the federal finance minister is trying to develop a family policy, an area that does not come under the responsibility of the federal government and for which it does not have the necessary expertise, since this has traditionally been a provincial jurisdiction, in Quebec and in the other provinces.

Looking at this cynical and centralizing budget, one stops wondering why a majority of Quebecers long for a sovereign Quebec. It is to finally be free from this perpetual state of confusion where the level of government that controls the purse strings does not know what the needs are and does not have the human resources to serve a public which is, at any rate, far away.

Leading anti-poverty organizations estimate that at least $2 billion more would be required every year to put up a serious fight against poverty. But starting in 1998, the government will be spending only $850 million per year on the fight against poverty. This is therefore not nearly enough, especially since the federal government has considerably impoverished the provinces.

It has been announced that unemployment insurance premiums will be reduced by 10 cents starting January 1, 1998. This is an announcement that is normally made in November. Knowing him as we do, we can expect the Minister of Finance to announce this good news twice. In addition, this reduction is much smaller than what employers' associations have asked for and what it should have been, given the huge surpluses in the unemployment insurance fund.

The Bloc Quebecois asks that the government substantially reduce UI premium rates and improve the employment insurance program, which has become too restrictive and is, unfortunately, forcing onto welfare people who, as job seekers, should continue to receive benefits.

The accumulated surplus is large enough to allow eligibility rules to be relaxed and the premium rates to be reduced even further. Any annual surplus is a hidden tax paid by employers and employees. A 10 cent reduction of the 1998 premium amounts to $700 million. With a $5 billion surplus forecast for 1998, it should be possible to reduce the premium rate by 70 cents. The $15 billion surplus accumulated by the end of 1998 should even translate into a tax break, since it is in fact an employment tax of $2.10 for one year.

One can see the feeble attempt made by the Minister of Finance to help job creation. The minister claims that serious studies estimate at somewhere between $10 billion and $15 billion the reserve required to prevent another recession. Just look at what will happen when the next recession occurs. Since the reserve is already being used to reduce the deficit, the minister will suddenly and drastically increase the premium rate, because the reserve will have disappeared.

In November, the Bloc Quebecois released a comprehensive study on corporate taxation, so as to make an honest and objective contribution to the debate and to provide suggestions to the minister, who is often bereft of ideas.

Today, it is obvious that the 1997 Estimates include no changes to corporate taxes. There is no tax measure to promote job creation. The minister is clearly showing that he did not want to change the corporate tax system to promote employment. The minister's inaction regarding the corporate tax issue reflects his inability to adjust to the current economic context and to make job creation his top priority.

In conclusion, I feel the minister has turned a deaf ear to the Bloc Quebecois' recommendations regarding obsolete tax deductions for business. Obsolete tax shelters and deductions should be replaced by a tax system designed to promote employment. But nothing of the sort was done. The Bloc Quebecois suggested using up to $3 billion in ineffective tax deductions to create jobs instead.

Given the current economic context, job creation should be the main thrust of the corporate tax policy. However, under the budget,

corporate tax revenues will only fluctuate by $205 million, of which $175 million is the result of a mere accounting exercise.

The only other measure affecting corporate taxation is the decision to extend the temporary tax on large deposit taking institutions. This represents $25 million. Given the sky-high profits made by Canada's major banks, it is a very small contribution on their part to the community's well-being.

[Main Estimates, February 20th, 1997]

Mr. Speaker, as the minister said a few minutes ago, in 1997-98, the federal government will budget nearly $106 billion for program spending, 2.9 per cent less than in the current fiscal year.

In his speech, the President of the Treasury Board seems to be looking at the world through rose coloured glasses, and what he says is far removed from the experience of thousands of public servants who have been laid off or whose professional future is uncertain.

Take, for instance, the situation at the cheque printing centres, where employees, non-unionized and in a vulnerable position, were given the choice of accepting a 40 per cent drop in salary or staying home, when their service was privatized.

The minister's self-congratulatory tone is hardly appropriate, considering the unemployed who are getting poorer because their benefits were cut as a result of unemployment insurance reform, while today, the Minister of Finance is using the UI fund surplus to reduce his deficit artificially.

The minister tells us, and I quote: "We are working to put the country's financial house in order". How can the minister say that when we know that 50 per cent of spending cuts represent cuts in transfer payments to the provinces? Similarly, putting the country's financial house in order explains only 21 per cent of spending cuts, in other words, $1 out of every $5 committed by the government.

The minister went on to say, and again I quote: "In the span of four years, we have significantly reduced the deficit". What the minister should have said in the House this morning is that, in addition to the provinces, the unemployed have also significantly reduced the deficit, when we realize that the other major weapon in the battle against the deficit is the unemployment insurance fund.

The minister also said: "This year, we can achieve our financial goals without announcing any new reductions". However, as a result of cuts in transfer payments, the provinces will have to cut funding themselves and do the minister's dirty work.

Of this $14 billion in spending cuts, only $3 billion is directly the result of spending cuts within the federal government. Does the absence of new reductions mean the end of federal house cleaning before the election?

Making the provinces pay and thus take the blame for spending cuts in health care, education and social services and making the unemployed pay as well, is that the beginning of a new culture in public financial administration the minister has been bragging about?

The minister also said the government was treating its employees with civility and respect as it moved through the public service reduction process. Where is the civility and respect in refusing, as the minister himself did, to invest the $18 million required to align the federal employee drug plan with the plan under which all Quebecers will be covered once the Rochon plan is in place?

In Quebec, maximum insurance coverage is $760 per year. This means that federal employees who suffer from a serious medical condition will have to pay 20 per cent of their drug costs however high they may be, which could amount to thousands of dollars every year.

In response to a question on this particular situation, the minister told this House only 2 per cent of federal employees living in Quebec may be affected. If so few of them are affected, why not put them on an equal footing with the other 98 per cent, those who are blessed with better health?

The minister added that, between April 1995 and the end of December 1996, the federal public service shrank from 225,000 to 195,000 employees. We will have to check how much contracting-out the government did during the same period, especially now on the eve of a federal election.

This old Liberal habit of spending money they have not earned yet is obvious here. Where is this financial independence the minister is referring to when he tells us, as he did a moment ago, that he does not need polls to tell him that Canadians are pleased with regaining their financial independence, when the accumulated debt is $600 billion? The only good news is that the debt collector is no longer knocking at Canada's door? Thanks to the contribution of the unemployed and the provinces, the threat of bankruptcy and insolvency is not as imminent as it was four years ago.

Go ask the unemployed, those who despaired of ever finding work and dropped out of the labour market altogether, and the provincial finance ministers. Where is the financial independence the minister is boasting about this morning?

Here is an example of this old Liberal habit-one might even call it an atavistic trait-to spend other people's money.

At page 2-14, Part III, of the 1997-98 Estimates, we read the following:

The government is considering obtaining four UPHOLDER class submarines from the Royal Navy.

I hope Canada is no longer buying the old tubs that the British Navy wanted to get rid of a few years ago. It goes on to say:

Delays in approving this project resulted in expenditures which were paid through the operating budget, to support an additional program to overhaul OBERON class submarines.

There is also $8.6 million to buy a patrol frigate by March 1997; $61.3 million to buy sophisticated air-to-surface missiles. However, as regards spinoffs for the Canadian industry, the defence department document says: "Since the weapons, pods, testing material and spare parts will be bought through the American government, the Canadian industry will not be directly involved in the contracts".

In other words, this document, the Estimates, is drafted in Canada, but benefits the American industry.

Meanwhile, the minister is proud of these results.

Granted, the minister is an intelligent person. However, he does not live in the same world as we do, he does not live in the same world as Canadians do. That is the tragedy.

[The Budget, February 19th, 1997]

Mr. Speaker, last November, the Bloc Quebecois released a corporate tax analysis, which clearly showed that up to $3 billion could be recovered and recommended this amount be invested in job creation incentives.

How does the minister justify not having done his homework in that area, in spite of this recommendation?

[The Budget, February 19th, 1997]

Mr. Speaker, my question os for the Minister of Finance.

Yesterday's budget epitomized this Liberal government's inaction in the area of taxation. Three and a half years after taking office, the Minister of Finance has made no major changes; he has no real tax reform to propose to the people of Canada. Taxation is a powerful tool available to the Minister of Finance to achieve social or economic objectives.

How can the Minister of Finance explain that, despite a golden opportunity to create jobs through taxation, nowhere in his budget did he use either personal or corporate taxes to do so?

[Petitions, February 12th, 1997]

Mr. Speaker, I have a second petition which asks Parliament not to increase the federal excise tax on gasoline in the next federal budget that will be tabled by the Minister of Finance on February 18.