Mr. Speaker, in the few minutes I have, I would like to talk about efficiency and effectiveness in public administration.
I tabled today, as hon. members know, a Bill which would allow the Auditor general of Canada to prepare ad hoc reports on audits conducted by his office. At the present time, the Auditor general can only table an annual report. We know that it usually is a substantial tome which captures the interest of the media for about 24 hours, 48 hours at the most, and is then forgotten. Very few people are following up on the recommendations made with respect to the management of public spending.
Yet, those reports contain many recommendations to improve public administration and save substantial amounts of money for Canadian taxpayers. If Bill C-207 tabled today is passed by this House, it could strengthen government administration. It will be more efficient and more effective if the House of Commons and the general public are better informed, on a timely basis, on the problems encountered by a large and complex administration like the federal government.
This pre-budget debate provides us with an opportunity to talk about economic recovery, job creation and deficit reduction. Some argue that in order to reduce the deficit, we have to cut spending drastically. The Reform Party wants a 6 per cent cut, an amount which would have, in my opinion, a serious and negative impact on the poor, the elderly and the less well-off.
Others believe that a reduction of the deficit can only be achieved by increasing revenues and creating jobs. I will talk in a moment about solutions which seem appropriate to me in order to reduce the deficit.
I am among those who believe that in the present situation, we must increase revenues to create jobs and ease our financial problems.
If we want to get rid of the deficit and the debt, without compromising existing benefits and disappointing Canadians, we must act quickly.
As we all know, the federal debt now exceeds $500 billion; it represents 70 per cent of the GDP. This year only, servicing the public debt will probably cost more than $40 billion or 6 per cent of the GDP. The debt management program, the largest the government administers, costs $40 billion. The amount of taxpayers'money used to pay off what we borrow drains the economy, there is no doubt about that. Because of the debt, we cannot afford to take advantage of many opportunities for growth. The billions of dollars we spend on the debt could be put to a much more productive use. Hence, the urgency to balance our budget.
I believe we can grow out of our deficit. We can get out of our financial and fiscal difficulties through growth. Tough decisions will be needed. We have to be more efficient so we can be more competitive.
We are re-evaluating some existing programs at this time. Social programs are under scrutiny. Our defence and foreign policy programs will each be under public review soon. Why not evaluate some of our fiscal programs? Why not look at all government programs to ensure that they are efficiently provided and just as importantly they are effectively reaching the goals that were set by Parliament when we adopted those programs?
Our debt management program, the largest program this government administers, has never been evaluated as to its efficiency or effectiveness. This huge program should be critically examined by Parliament as soon as possible.
I can speak with some knowledge of the subject because I chaired the public accounts committee for about three years. We continually came back to the House and said it was absolutely essential that a program the size of the debt be managed as efficiently and effectively as possible. We recommended the program be subjected to that kind of program evaluation. It has
not been and I ask the government to listen attentively to this recommendation.
We should examine the type of instruments we use to borrow; Canadian funds versus foreign funds, long term versus short term. We dipped into the employee pension funds last year to the tune of $75 billion. This year we borrowed $7.2 billion to pay off our deficit.
Is it the appropriate thing to do? Is it efficient? Is it effective? I do not know. I know we are doing it. I would like to have the House look at this program and evaluate it as to its efficiency and effectiveness.
We must review the government's fiscal expenditures, all of them, and assess how appropriate they are. Some of them have become tax loopholes costing the federal government several billions of dollars. Due to such shortfall in tax revenues and public mismanagement, honest taxpayers are paying increasingly higher taxes and receiving decreasing services.
I hold federal public servants in high esteem. I have a lot of respect for the loyalty and commitment of federal public servants who, as we know, were mistreated by the previous government for several years.
To increase the productivity of public servants we must empower them with authority, give them clear objectives, effective policies, which will then give us an efficient administration. We must insist on program evaluation in an aggressive manner, to identify and eliminate or improve programs that are less than efficient and do not respond to the needs of Canadians.
There are two ways of reducing public expenditures. On the one hand, the government could cut expenditures by a certain percentage across the board, regardless of consequences, as the Reform Party is asking. Personally, I call that the easy but stupid way out.
On the other hand, the government could and must evaluate the appropriateness of its programs and activities.
For a long time I have supported the principle of program evaluation. It makes it possible to know whether the raison d'être, the goals, anticipated and actual results and program designs are satisfactory.
If one does not do this then we are a bunch of navel gazers and will not succeed in bringing better administration to this country. When such evaluations are made public they increase the accountability of this House with the people of Canada, with government officials, by allowing the Auditor General to publish regular reports as he should to give all of us more information as to the administration of public funds.
It is essential in the context of budgetary restraint that we have in place a good program evaluation of our administrative practices. It is one of the best ways to improve the allocation of ever scarce resources. I am not the only one who is saying this. It is in the report of the Auditor General, and I invite members to read it. That may be difficult because it is a lengthy document but it is worth while for any new member of Parliament at least to try. The report will tell you where we are going and how the administration of this government or the past government has been lacking in certain areas. It is not always easy. It requires time but I would recommend that members do read the report.
Managing the debt presents specific problems. As a percentage of the GDP, government revenues dropped from 18.1 per cent, in 1991-92, to 17.6 per cent, in 1992-93. Such a downturn is due in part to a decrease in revenues from personal and corporate income taxes.
Personal income tax accounted for 48 per cent of all revenues in 1992-93, compared to 50.2 per cent in 1991-92.
Instead of cutting public expenditures blindly, the government should protect its tax base by evaluating the efficiency, appropriateness and raison d'être of all tax expenditures and eliminating tax loopholes.
Before assessing how pertinent tax expenditures are, we must first ascertain whether or not they are having the desired effect. For example, in 1992, the Auditor General reported that multinationals were abusing the rules allowing them to take home profits tax-free thanks to tax havens. Hundreds of millions of dollars were lost from corporations operating abroad and bringing back non-taxable dividends. We said then that this loophole should be eliminated. I hope it will be.
In its twelfth report, published last year, the Public Accounts Committee, which I chaired, recommended that the Finance Department review the list of designated countries. It also asked that we examine if it would be appropriate to transfer home, tax free, any income of subsidiaries or divisions operating in these tax havens.
The list is very long. Some 25 countries are identified as tax havens. When we asked them to define a tax haven, they said it was a developing country. Two former committee members will be my witness on this. Do you know what a tax haven is? Any developing country. Switzerland a developing country? Sure! Bermuda a developing country? Why not? This is total nonsense. Mr. Speaker; we must examine this list, we must tighten up our practices. We must be serious in the evaluation of government programs.
I know my time is almost up, but do I have a few minutes left?
