Bill C-28 (Historical)

Budget Implementation Act, 2003

An Act to implement certain provisions of the budget tabled in Parliament on February 18, 2003

Budget Implementation Act, 2003

[Rahim Jaffer, Canadian Alliance, Edmonton Strathcona, AB]

Mr. Speaker, I rise to speak on Bill C-28, the budget implementation act of 2003. This is another budget brought forward by the Liberals that has failed Canadians. In fact, in my address in the reply to the budget on February 26, I enumerated several reasons why the budget has failed Canadians.

I spoke of the government's complete refusal to address GST fraud, which we all know is quite a large issue. I looked at the government's failure to address security concerns at our airports as well as the steps it has taken to punish those saving for their retirement through RRSPs. Payroll taxes such as EI and exorbitant income tax rates continue to kill the Canadian economy.

Still, the government claims that the budget is a success. It is not. The government should be ashamed of itself.

We are debating a bill that if passed will implement this failed budget. Needless to say, I, along with my colleagues from the Canadian Alliance, will be voting against this.

Why will I be voting against it? As I have already expanded in my previous speech on the macro reasons why this budget is a failure, let me instead focus today on one specific department within the government and on why the budget has failed that department and hence failed to protect the security of Canadians.

Specifically I would like to talk about the members of the Customs Excise Union, who do a great job at Canada's borders as front line customs officers and inspectors. Customs inspectors are part of the Canada Customs and Revenue Agency but do much more than the average CCRA employee. The fact is that our customs officers do a tremendous job, especially when we look at the number of statutes they are charged with enforcing, their limited resources and their inability to protect themselves from the potential dangers inherent in border protection.

We believe that Canadians and our customs officers would be better served by moving Canada Customs out of the tax collection agency it now falls under into a new law enforcement department or under the Solicitor General of Canada. Just as Canada Customs now enforces the statutes of several departments, it will continue to enact National Revenue's policies of trade liberalization.

The revenue minister has announced more money and the hiring of customs officers. She has fallen very short in addressing the deficit that existed prior to September 11, never mind today. The customs union is calling for 1,200 new officers. It is getting 130, but these new officers still will be unable to adequately protect our border because they will lack the tools to do their job.

It is evident that CCRA is a department focused on streamlining accounting systems and collecting revenues. It is not focused on security. The logical question is why the government continues to treat our border guards, Canada's first line of defence, as bean-counters.

Mr. Speaker, you are a logical person. If you witnessed a crime in progress would you call the police or your accountant? Clearly you would call the police. Why? Because they have the training, the knowledge and the tools to protect society and enforce the laws.

What do our customs officers need to do the job? They need full authority as peace officers to enforce the statutes they are charged with. That includes a need for side arms for their protection. The first step is to move customs away from revenue and create a police force at our border. Canada Customs enforces over 70 federal statutes from numerous government departments, including the justice, health, agriculture, immigration and finance departments, and the Solicitor General's department. The recent focus on Canada's porous border is not necessarily a reflection of Canada Customs as much as it is a deficit of legislation, mandate and resources focused on security and protection.

Bill C-7, passed in the 35th Parliament, moved the Canada Customs Agency under the jurisdiction of Revenue Canada, thus creating the Canada Customs and Revenue Agency. We were opposed to this move to facilitate trade and tourism while expediting the remittance of revenues to the Crown because of the lack of focus on security and protection.

The U.S. Department of Homeland Security believes that its primary function is law enforcement, whereas unfortunately Canada Customs claims to have a dual mandate: processing revenues and border security.

A greater focus on security is required to harmonize customs standards with those of the United States, which cannot be achieved under the current CCRA. The Canadian Police Association proposal of a national border protection service should be considered seriously as legislation. The association is calling for a border protection service to provide strategic and coordinated protection and enforcement across Canada's borders and points of entry, separate from the Department of National Revenue. Such a service must be endowed with full peace officer status and equipped with the required technological aids, including CPIC and FOSS computer systems as well as NCIC and Interpol and access to vital statistics.

Right now, and the House will be shocked, 45% of our borders do not have access to these law enforcement tools. Customs officers have no way of knowing if the person in front of them has a criminal record or is on the terrorist watchlist. There should be an immediate network hookup of all computers and all customs software at all ports of entry across Canada. It is unacceptable for some customs officers in ports across Canada to have limited or no access to electronic customs systems that provide intelligence and support to customs officers who must undertake interdiction and detention decisions and actions.

Indeed, the current attempt to share information with our government departments has been a complete failure. There should be an agreement among immigration, RCMP and CSIS to share information daily. Information should then be further shared with our American neighbours regarding exit and entrance data and criminal background checks.

The government must provide customs officers with the authority, support and equipment necessary to do their jobs. One piece of equipment that is necessary is side arms so that customs officers can protect themselves and Canadians. This should be done regardless of whether Canada Customs becomes its own separate agency or stays a part of CCRA. This is an issue of safety for these customs officers. I have already outlined how these officers are basically police without the formal title. They are police without the protection of the law.

The Canadian Alliance takes this issue seriously, but unfortunately the Minister of National Revenue does not. In the past she has called these agents nothing more than glorified bank tellers. As recently as March 26 she said to the House, “...giving guns to customs officers would be like giving 3,000 accidents an opportunity to happen”.

On March 28 I asked her to clarify her remarks in the House, and her response was to call me “Charlton Heston”. I do not mind being compared to Moses nor do I mind living here in what seems like the Planet of the Apes , especially with the government across the way, but to have the minister making light of the issue was an insult to customs agents. In fact, my office has received numerous e-mails and letters from irate customs agents asking me how the minister can make so much fun of them. My answer, unlike that of the Liberals, is that the Canadian Alliance has always believed and will continue to believe in respect for these people.

This issue of firearms is not one that the Canadian Alliance has invented on its own. It actually comes from a report by ModuSpec, which was commissioned by the government to examine this very question. The interim report called for an armed presence at our border and especially at some higher traffic border crossings where our customs agents are at higher risk.

What does this all boil down to? I will use four points to conclude.

First, there are not enough people, as I have outlined. There are one-person ports when there always should be two people working together. Currently there are ports that close at 10 p.m. and we argue that they should be open for 24 hours, especially some of the more remote ports where proper barriers are not even put in place once they close down in the evening. There are chronic staff shortages and not enough staff to accommodate shortages if training needs to be done.

Second, we often do not have the right people. Students do not belong at the front line without proper supervision and/or proper training.

Third, there is not the right equipment. There is no CPIC at the front line and there are no computers at 45% of our border crossings. As well, some facilities need rebuilding. For example, in Victoria they are working out of a 30 year old trailer at the ferry terminal, where almost a million people travel yearly.

Finally, they do not have enough pay. CCRA admits that its job classification system is archaic and fails to fully assess the value of jobs. CCRA is moving to a new classification standard. What about the fact that customs officers have been underpaid for years, up to and including today?

All these issues still have failed to be addressed by the minister. Quite frankly I think the minister has been an embarrassment because she has not represented the interests of security and protection for Canadians at our border.

[Rob Merrifield, Canadian Alliance, Yellowhead, AB]

Mr. Speaker, it is a privilege and a pleasure to speak to Bill C-28, the budget implementation act.

As senior health critic for the Canadian Alliance, it is very important as we look at this implementation act to discern just how many dollars are actually going from taxpayers' pockets into health care. It is very important that we discern where the numbers are. I would like to talk a little about how those numbers break down and what we need to do with those extra dollars that go into health care, whether or not they are adequate, and the state in which we find the health care system right now.

Before I get into that, it is very important that I spend a minute explaining our position with regard to the SARS virus that is presently upon our nation and the world. I am a little frustrated because last week the Canadian Alliance wanted to be very non-partisan in dealing with an issue of utmost importance that goes beyond any political issues. As an act of good faith, I talked to the Minister of Health and gave her the actual questions I was going to ask in question period with regard to this issue, so that she could put forward her message and relieve the pressure and the fear on most Canadians' minds with regard to the outbreak of the SARS virus.

That is the first time that has ever happened to my knowledge. It certainly is the first time I have done that. This is a political arena. We have tried our very best to non-politicize something that is of such importance in the national interest. Those are the facts.

The minister has been very weak in coming forward to alleviate some of the fears most Canadians have about the SARS virus. The quarantines act was implemented in 2000 to limit the amount of mosquitoes coming in on bamboo. An act was implemented to limit bamboo and mosquitoes yet the government is reluctant and very shy about imposing the quarantines act to deal with what could potentially be, as the World Health Organization stated, one of the largest crises the world has seen to date, spread by airlines.

I do not understand the reluctance of the government being so shy to do this. I want to spend a minute or two on that to explain our position. We will work to hold the government's feet to the fire to assist it in getting its message out to alleviate the fears regarding this virus and also to encourage it to not be shy in doing what needs to be done.

The issue is twofold. The spread of SARS has to be dealt with but even more important, we have to limit the collateral damage of a nation that could become quite phobic about how this is being dealt with. We have to discern both sides of it. There could be more individuals, more Canadians who would die because of waiting lists, those who are on waiting lists but are not able to receive the service, than actual numbers that would perhaps not make it through an attack of the SARS virus.

That is important as we discern the budget implementation act and the number of dollars going into our health care system. We have to look at the state our health care system is in nationally. Waiting lists have increased to unbelievable numbers. Tens of thousands of Canadians lack access to family physicians. Actually when we talk to most Canadians they say if they get to the service, Canadian health care services are actually very good and the service providers do their very best to provide the services needed. The problem is trying to get to those services.

A study was done at one of the hospitals in Hamilton last year where 50 patients died just waiting for heart surgeries. Therein lies the dilemma and one of the problems we have in our health care system.

It is very important that we stop the rhetoric and the dispute between the federal and provincial governments when we look at how money is being spent. This comes out of the health accord which provinces say they did not sign and the federal government says they wish they would have signed. It does not really matter. They took the money. They got up from the table having agreed on a process and at least $12 billion, and I will talk about the numbers in a minute, but $12 billion more going into the core funding of the health care system.

The important thing is to stop pointing fingers and blaming anyone. Let us start implementing the best measures possible so that we can have an efficient sustainable health care system into the 21st century. That is what is important. That is what we will hold both levels of government to because of what they did in the health accord.

There are some good things in the health accord and there are some things we wish were not there. Nonetheless, let us talk about some of those things.

The official opposition welcomes a lot of the measures in the health accord. It moves forward the agenda of health care reform in the sense that it does not limit the provinces from implementing reforms that would put health care on a sustainable footing in the foreseeable future.

It also would help to change the paradigm shift needed in health care away from the health care system to putting the patient's needs first and building a system that would provide services for the individual who is sick. The patient is the individual who pays for the system. That is what we really need to refocus our energy and our thought process to as we look at our health care system into the 21st century. It is very important that we discern that. It is very important that we get around the rhetoric and start reflecting on that whole idea and what is very positive about that.

We are very nervous about some of the health care reform measures. They could open up the system into home care, pharmaceutical care and palliative care, all of which are good and all of which the provinces provide in varying degrees in their respective areas.

Nonetheless, when we apply it through federal money and if we apply the federal money inappropriately and do not leave the flexibility, we will waste the precious health care dollars. We do not want to waste them. We want to make sure that every dollar that comes out of the taxpayer's pocket with regard to health care is spent in the most efficient way possible. Therein lies the ultimate goal.

Believe me, if people think that the system is stressed and stretched now, just wait until the demographic shift hits our health care system. Think of when the high costs and the dollars spent on our seniors at age 65 and beyond hit our system. As the bulging baby boomer generation hits that system over the next decade, the problems we see in health care now will look small in comparison.

We need to get over the rhetoric and deal with how we can effectively contribute to the debate on health care renewal and reform. That is very important. If we were to look back at the last decade, we would see a federal government that not only stopped contributing more money into health care but actually pulled money away from health care and allowed it to falter and drift into crisis. That is what we have seen over the last decade.

Some of the critics on the other side would say that is not true, that the health accord of 2000 solved that problem. Not really.

I was sitting on a regional health authority at that same time. We had to deal with the reduction in money coming from the federal government. What happened to the system at that time was absolutely devastating. Nonetheless we worked through it.

Almost 40% of provincial program spending is on health care. Mr. Romanow said that this year's federal contribution is 12% of every dollar that the provinces spend on health care. It is very important to understand the difference between the two and that the federal government has really neglected to apply the money.

The health accord of 2000 was a five year program. As of today we are into the fourth year of that program. The money did not got into the system until now. It was an illusion to think that the money would deal with health care problems at that time in the 2000 accord. It was more about winning an election.

Unfortunately, the Canadian health care system has suffered because of that lack of foresight. Hopefully that will not happen again. That was a missed opportunity in 2000 and there is another missed opportunity with the health accord right now.

Health care in Canada is all about values. Our values in Canada are that we will not allow an individual to lose their home or their security because of a serious illness. The Americans have a different value system. They say, “We will make sure that you stay healthy. We will provide the health care but we will allow you to pay for it and you could lose your home”. That is a different value system. I do not judge theirs and I am sure they do not judge ours.

We need to protect our values in our health care system and make sure that we sustain it. To do that over the next decade, we will have to use our resources not in a fight but in reforms that would actually sustain our health care system in the 21st century.

We need to put the patients first. It is high time we did that. It is high time we got there in health care.

[Werner Schmidt, Canadian Alliance, Kelowna, BC]

Mr. Speaker, there are days when it is a pleasure to rise in the House to say some positive things about what is happening but, unfortunately, Bill C-28, the implementation of the budget, is not one of those times. In fact this budget is an HEC budget. It is hypocritical, embarrassing and confiscatory.

Why do I use those descriptors? First, I believe the budget denies the principle of being proud to be a Canadian. It is hypocritical because it pretends to do something which it really fails to do. I believe the Minister of Finance said that Canada needs to become a country that is competitive, that will compete successfully with other nations in the world.

Not long ago the executive director of the Business Council on National Issues published a book together with a fellow by the name of Stewart-Paterson. They did some very interesting things in the book. They showed very clearly that Canadians were not competitive in the global economy and that if we were to be competitive in the future, that we had better have a good look at that.

Let me give the House one particular illustration that I found most dramatic. It compares the competitive advantage of a Canadian earning $65,000 and an American earning $65,000. I will give some numbers and those people who are listening will find those numbers interesting. A Canadian earns $65,000 and we will assume he or she has a dividend income of $2,000. On $65,000 and a $2,000 dividend income the Canadian would pay a tax of $498 on the dividend. On a salary of $65,000 the Canadian would pay $15,160, leaving a discretionary income of $51,342 out of $65,000 plus $2,000 dividend income.

Let us compare that to the American. This is based on the recently proposed budget of President Bush. A U.S. taxpayer earning an income of $65,000 plus a $2,000 dividend income would pay zero dollars on the dividend income and on the $65,000 salary would pay $3,795, leaving a discretionary income of $63,200.

Let us compare those numbers now. The comparison of discretionary income with $65,000 and a $2,000 dividend income would be $51,342 for the Canadian. The American's income would be $63,205, so the American taxpayer would have $11,863 more than the Canadian. Even if we were to double the tax for the American taxpayer, which would then bring it up to $7,590, it would still not be comparable with the $15,000 the Canadian is taxed.

To say that we are making Canadian workers more competitive is simply false. It is hypocritical to make a statement that we are helping people in Canada to become competitive. Is it any wonder that some of our best educated, best trained and most skilled people are leaving Canada for the United States? We can give lots of examples of this.

The point here is that the finance minister said that he would do one thing but in fact he created a budget that does the opposite. Not only is it bad, it is also embarrassing.

My hon. colleague recently talked about how little money there was in the budget for the Department of National Defence, which is $800 million. The Auditor General said that what was needed was $2 billion. That is almost three times as much as what is in the budget. The Prime Minister built on this and said that we were not in the war. Yesterday, however, the Minister of National Defence admitted that we have soldiers at the front and ships in the gulf. This creates the ironic situation of having our armed personnel participating in a war that the government is not supporting. This is embarrassing.

I found out something last weekend that hit very close to home and it involved Canadians who were visiting Florida. On their way down to Florida they stopped at a service station to buy some gas. The service station attendant noticed their Canadian licence plate and told them they had better move on. He said that there was no gas for sale to Canadians at his station. I am sure that is not a common occurrence but it did happen, and that is embarrassing. What do we do in situations like that? How can we support a budget that does those kinds of things to Canadians?

I want to add a third description to the budget. It is a confiscatory budget. It confiscates money. We have already compared a U.S. taxpayer with a Canadian taxpayer. However the far more serious issue, because the government does not have a plan to repay the debt in this budget, is that it is not only confiscating our income, it is confiscating the potential income of our children and our grandchildren. That is where I draw the line.

What is happening here is that there are some expenditures included in the budget for which we are not prepared to pay. Somebody might say that the budget is balanced right now and that there is even a bit of a surplus. Yes, that is true, but that is because the government listened to what we had to say. The point is that the present debt is cutting into our current revenues in a major way. Service costs on the budget run around $40 billion to $42 billion a year. Imagine what would happen to the health care budget if we did not have to pay out the $42 billion in service charges. That would be a great advantage. The government is taking money that it should not take and it has no plan to pay the debt.

Some people might say that this is a prudent budget; $3 billion worth of prudence, and it is in the budget for emergencies. If there is an emergency, the money will go toward it. If there is no emergency, the money will be used to pay down the debt. Is that the way a prudent house manages its mortgage payments? Is that the way a prudent business manages its loan payments? No. They carefully analyze the situation and make sure money is available to pay down their debt on a systematic and regular basis.

The budget is called a prudence factor but it is not a prudence factor at all. It does not protect future citizens from paying the services charges on the debt. It bothers me a lot that there is no plan to pay down the debt.

I would now like to speak to the budget in a broader sense. The budget was supposed to be a budget that would help us to be more responsible in expending funds. What has the government done? It has increased spending by some $17.4 billion. It tells us that we will receive great tax breaks. It tells us that we will receive $2.3 billion worth of tax cuts. That is a net increase of $15 billion. Is that telling the truth about what is happening?

We also need to talk about health care. This is an example of another hypocritical position taken by the government. The government has said “Look at all the money we are putting into health care”. It is true, it is putting a lot more money into health care. In fact, it brought it up to the point of where it was at in 1993-94 when it took all the money out. However there is no accounting for the inflationary increase during that time. The government has misled Canadians into thinking it did a great and wonderful thing. It has done nothing of the kind. It simply brought the figure back to where it was and even shortchanged it by the inflation that is involved.

The time has come for us to be very clear and to recognize that this budget is hypocritical, it is an embarrassment to Canadians and it confiscates the income of future generations.

[Gerald Keddy, Progressive Conservative, South Shore, NS]

Mr. Speaker, I am pleased to be recognized to speak on Bill C-28, the budget implementation bill.

I listened to the comments of the members who spoke previous to me. Since there was no opportunity for questions and comments, I will add a few comments during my speech to the budget.

It was interesting to hear the member from the Northwest Territories speak about diamonds. It is an extremely new and valuable industry for Canada. Without question, I think there is probably as much opportunity or more opportunity in the diamond industry today than probably any other sector of the economy in Canada. It holds great promise for northern Canada, our aboriginal peoples and the newcomers to the north.

However an issue about diamonds, which the member did not bring up, is the fact that the diamond industry has flourished basically on its own. The government has ignored it. Perhaps that is to the benefit of the industry. Most things that the government pays too much attention to become overburdened with red tape.

If the member is really interested in the diamond industry, there are a couple of things she could pursue, and I would suggest she does. First, traditionally it has taken four and a half years to permit a new mine, which is ridiculous and entirely too long. Understand that these mines are environmentally friendly. They do not use a lot of noxious chemicals and they are in isolated areas. In some instances that process has been shortened to two years. With an industry that does not pollute, mines should receive environmental permits within a 12 month period, and everybody would be happy with the process.

Second, the government has ignored for so long the cutting and polishing industry. Finally we have a fledgling industry in the NWT in Yellowknife and in Edmonton. We should get rid of the excise tax. This tax is no longer relevant on manufactured jewellery and stones in Canada. It is time to get rid of the excise tax. If the government really wants to encourage an industry, then it has to do something about the tax system that holds that industry back. If the member would like to work on those issues, I am sure she would get some benefit and gain for her constituents.

The budget will be known as the Liberal spending budget of billions of dollars that Canadian taxpayers will be paying for a great many years.

What is in Bill C-28 is almost as noticeable as what is not in the bill. The Alliance member who spoke previous to me said that it was a shotgun approach. Those are exactly the same words I intended to use. It is a shotgun approach where a person has a shotgun with a load of No 8 shot, stands back about 25 yards points at the target and hits just about everything on that target. What is hit on the target is important. However what is even more important is what has not been hit on this target.

Our trading relationship with the United States has not been hit on the government target. It has been ignored. For example, again a member speaking to this budget bill mentioned the Canadian Food Inspection Agency. What has been the response from the CFIA on the American bioterrorism bill? Where are we in this country with north-south trade?

I will tell the House where we are with north-south trade after the actions of the government in recent weeks. We are in serious trouble with it. We are also in serious trouble in lack of response and lack of infrastructure to deal directly with the bioterrorism bill.

The basis of the American bioterrorism bill is to ensure food quality and food safety of all food products entering the United States. Part of the bill would mean that any exporter in Canada would have to give 12 hours' notice. There are all kinds of products that come out of Canada without 12 hours' or 24 hours' notice. The majority of Canadian products are on less than 12 or 24 hours' notice.

Fish products that come out of southwestern Nova Scotia from the South shore are about six hours from the Canadian border. They cross on the ferry in Digby, which is two hours from Calais and the American border. Fresh products destined for New York or Boston markets are expected to be there on same day delivery. Exporters cannot afford to have a 24 hour, 36 hour, 72 hour delay or whatever it may be. That delay is there now.

The best thing that the budget could have done would have been to shore up and guarantee our continued trade and therefore our continued prosperity with our major trading partners.

Let us take one example out of the budget which is the roughly $68 million which was voted for the gun control bill. The Liberals continually call it the gun control bill. It is not a gun control bill. It is for a registry that has milked money from Canadian taxpayers and if this bill passes through the Senate it will continue to milk money for generations and it will never stop.

It is even more interesting what the present and former ministers of finance are saying about this. The former minister of finance, when he was minister of finance, thought this was fine. It was okay to hide money from the Canadian public. It was okay to take money that was supposed to be in the main estimates and put it in the supplementary estimates. It was okay to move money from department to department through the Treasury Board. It was okay to hide the truth from Canadians.

Now, that same former minister of finance is saying that all members of cabinet must bear responsibility and that he is prepared to accept his share. That is a big statement to spend $68 million of taxpayers' money and $800 million in total, soon to swell to $1.2 billion, soon to become even more swollen to $1.4 billion, $1.6 billion, $1.8 billion, $2 billion and on into perpetuity.

What else did the former minister of finance say? He said that the cost overruns were revealed to Parliament. That would be incorrect. The cost overruns were not revealed to Parliament. Parliament found out about them.

He said further that what we must get the report the minister commissioned and w must ensure this kind of thing never happens again. Well, it happened on that former finance minister's watch. That is every bit a juvenile response to an excessive amount of overspending under the former finance minister's watch as the juvenile response that the present Minister of Finance has given to a similar issue dealing with Canadian security.

All of a sudden the present Minister of Finance is interested in talking about a perimeter with the United States for trade that would protect the Canadian economy in years to come. The Progressive Conservative Party has always supported a perimeter for trade. We think it is a smart idea. How much money, of the billions spent in the last budget, went into looking at a safe perimeter for trade and safety for the people of North America, Canadians, Americans and Mexicans? Zero.

I appreciate having the opportunity to speak to the bill and I am sure that there are many other members who will want to.

[Ethel Blondin-Andrew, Liberal, Secretary of State (Children and Youth)]

Mr. Speaker, it is my pleasure to speak to the budget implementation act, Bill C-28.

Budget 2003 reflects our government's commitment to make Canada a land of ever widening opportunity for all our citizens. It acts on the promise in the Speech from the Throne that benefits of the new knowledge economy will touch every community, every family and every Canadian.

When the House was not in session for two weeks recently, I took the opportunity to go to my riding. There are over half a million square miles to cover. I took the opportunity to travel to the upper part of my riding. I have 33 communities. I went to Paulatuk, Sachs Harbour and Holman Island. These are very remote communities but very thriving. In remote communities the cost of living is very high. Everything the government does really impacts on the lives of the people who live in the remotest regions of our country.

In the community of Sachs Harbour I was blessed to meet with the mayor and council and talk about some of their needs. It is interesting that the issue of policing came up. There are no RCMP stations. Mayor Andy Carpenter was very well pronounced on that issue.

We addressed the issue of aboriginal policing in the budget. That was very appropriate and might prove to be very useful.

I also went to Banks Island where there are 50,000 muskox. The Inuvialuit people of that region have taken it upon themselves to cull some of the herd. They use every part of the animal basically for food. They brought in a food inspector from Alberta to go through the whole food inspection process from the beginning to the end.

The hide of the animal is taken to a shearer in less than 15 minutes so it does not cool off. They use what is called the qiviut, wool of the finest quality that comes off of the animal. It is rendered into a wool that is like mohair. It is called qiviut in the Inuvialuktun language. It is an absolutely fabulous industry.

I wish I were wearing my sweater today. I know we are not allowed to use props but qiviut sweaters are absolutely beautiful. I was given one by Nellie Cournoyea, the chair of the Inuvialuit Regional Corporation. These products are rendered from all of the byproducts of the animal. The hide itself is rendered into different leather products. It is very stylish and classy.

One of the people who is forging ahead and working with the different government departments on this initiative is a guy by the name of Patrick Schmidt. The work this man does on behalf of the Inuvialuit is outstanding.

I am so proud of those people. The people in Sachs Harbour live in a small remote community. The weather was very bad but the plane landed in close to blizzard conditions. Travelling is an enormous undertaking. We provide some very good opportunities and good facilities for their undertakings. There is an airport.

I went on to Holman Island, the home of printmaking. It is absolutely fabulous. The land is so beautiful. As I flew from Sachs Harbour to Holman, I could see Cape Parry or Pin Main where the distant early warning system is quite evident. We get all of our information for the military in the remote regions of Canada through this system.

It is tremendous to think of the role my riding and the occupants of those lands play in the whole issue of Arctic sovereignty. That is very important as well.

Not all of the issues that relate to the military are necessarily financial ones. A lot of technically complicated international agreements speak to the kinds of things that are happening up there.

I also went to Paulatuk. Paulatuk is interesting because it has a young population, as do most of those communities. It is looking to build a youth centre. It is working with its young people to help develop the community.

I am supposed to be talking about the budget, but the budget relates to the way people live across the country.

Going back to Holman Island, the interesting thing about Canada is the kind of travel that people do. We went to the school in Holman. The teacher in charge is an Inuit woman who speaks the Inuit language. We went through all the cultural classes and looked at the quality of education the kids are receiving. It is awesome.

I also noticed that there is a high number of people from Newfoundland. Think of the distance between Newfoundland and Holman and how far those people have come. Those people are really resilient. The Atlantic sends a lot of people to that region.

It is awesome to do this during my time off because it really puts me in touch with the people at the community level. There are perhaps another 15 communities to visit before I have completed the cycle. The riding is so huge and the transportation costs are enormous.

Someone told me in Paulatuk that it costs $9 for a grapefruit. Imagine paying $9 for a grapefruit. Imagine what people pay to feed their families properly. That is why the communities are highly reliant on caribou and country foods. It is a very healthy way for the community to sustain itself and it is also why issues that affect that are really important to them.

The region I come from has a very young population. There are many things happening. We live in one of the most beautiful parts of Canada. All of the Northwest Territories comprise my riding. It reaches out toward Yukon, into the high Arctic, over to Nunavut and down to the Alberta-Saskatchewan-B.C. borders. It is absolutely phenomenal what is in the territories and the potential that exists right now.

The $2.5 billion annual federal investment on the national child benefit has helped to reduce poverty to the lowest level in 20 years. It has had a really good impact. That is important for my riding because it has a very young community.

I noticed another thing in my community. If we are going to do resource development, we have to invest money. I do not think we are a sinkhole for money in the Northwest Territories. We have the greatest opportunity to become self-sustaining. We need infrastructure. We need money to make it cheaper, for instance, for us to build a pipeline.

If we have a completed road, it will be cheaper for us to build the pipeline that we are talking about. I am convinced in my heart of hearts that we are going to build the Mackenzie Valley pipeline first. We need to get behind it and support it. It would be good for the north and for all of Canada. It is something we need to do to sustain our energy needs.

Along with infrastructure, I also wanted to talk about how we have managed to work with the new industry that has hit Canada. I am not sure we have done enough. There is a lot more to do with the diamond industry.

On July 15 I believe we will be opening the second diamond mine in the Northwest Territories. We are the top fourth diamond producing jurisdiction in the world and may end up being the first. We are exponentially putting money back into the fiscal coffers to the tune of hundreds of millions of dollars. We need to invest in that industry. We need to help those people to do a better job. We need to help the syndicated jewellers and the value added industry build a stronger economy in the north because the opportunity is there.

The other thing is in the north we have the absolutely best opportunity to set a template for the rest of Canada and the world because it is majority aboriginal populated. To build something that will sustain itself, the government will get money back if it invests in the north. That is absolutely important, and the budget speaks to that.

[Rick Casson, Canadian Alliance, Lethbridge, AB]

Mr. Speaker, it is with a feeling of responsibility that I rise today to address Bill C-28, the budget implementation bill and to voice my opposition to the bill. I will get into some of the reasons why as I go through the bill.

In simple terms for all Canadians the bill is a blueprint for the Liberals to spend freely taxpayers' hard earned dollars, establish a legacy for the retiring Prime Minister and create an even larger and more bureaucratic government. The last time I checked with any of my constituents, none of these priorities were at the top of their wish lists.

The Canadian Alliance believes that rewarding the taxpayer should be the primary goal in the country. The Canadian Alliance has not forgotten who pays the bills in Ottawa. It is a shame that the Liberals have.

In fact it is the middle to low income Canadians who need all the help and benefits that a strong federal government should provide for them. There was certainly more than enough surplus to finally reward these hard working Canadian families by lowering the GST and personal income taxes. Instead, the government has ignored the priorities of average Canadians and has created more slush funds for grand scale promises that inevitably will be mismanaged.

Before I jump ahead of myself to oppose the irresponsible spending promises of the Liberal government, let me take a moment to realistically look at the figures of the budget.

The budget announces $17.4 billion in new spending initiatives over the next three years but cuts taxes by only $2.3 billion. This represents an increase in program spending of 88%, an 88% increase in spending in comparison to a mere 12% for tax reduction. We cannot afford in Canada to keep building budgets that outstrip more than the economy is growing. By outstripping growth, we will be back in a deficit position if we continue to do this.

Why does the government consistently misspend and mismanage money from the taxpayers today, while ensuring that taxpayers tomorrow will be paying for these programs indefinitely. When I look at newly born granddaughter, I do not want her to foot the bills of this free spending Liberal government in the years to come.

The new finance minister had a golden opportunity to put the brakes to free spending and chart a new and rewarding course for the majority of Canadians. Unfortunately, this minister has opted to continue the path created by his predecessor. The Liberal track record of broken promises and boondoggle after boondoggle speaks for itself.

We have seen a 500-fold overrun in the net cost of the firearms registry, $1 billion spent and growing on fraudulent and inadequately administered human resources development grants and millions of dollars in advertising contracts that are now under investigation by the RCMP. It is a long list and it is not a list of which to be proud.

I would like to quote the leader of the Canadian Alliance on the government's wasteful record. He said, “Each wasted billion was a billion wasted opportunities for Canadians”. That is exactly what that is. For every dollar wasted--

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, I am happy to be recognized and appreciate the opportunity to speak to Bill C-28.

It was my intention to ask the hon. member to expand somewhat on the NISA program and the $4 billion that he maintains could be put to better use or put into the pockets of farmers instead of being lost to the bureaucracy. Even though I represent an area of downtown Winnipeg, I would not want to see an agricultural assistance program being used to create bureaucratic jobs or to do anything other than to provide much needed income maintenance for beleaguered prairie farmers.

I appreciated the hon. member's comments. He was bang on. Perhaps in another speech he will be able to enlighten us more about the five pillars he made reference to.

I would like to speak at some length to the last point the Alliance member spoke about, the EI program.

The federal government is very proud of its announcement of $100 billion in tax cuts. As the member pointed out, it seems that any of the government's good news announcements are sequenced and timed to come into play over a period of three years or five years. The amount is not as huge an amount of money as people might expect when spread out over that timeframe. The erosion of that amount of money during that period of time due to inflation also has to be factored in. That $100 billion will not really mean as much five years from now as it did when it was announced. The government is trying to get the maximum political bang for its buck.

We should point out to people who are listening today where that $100 billion the government has put into tax cuts came from. I can say that $45 billion of it can be traced to the pockets of hardworking Canadians and their employers. As people should know, the EI fund is strictly made up of contributions from employees and employers. The federal government puts nothing into that fund. Canadians have clearly overpaid into the EI fund to the tune of $45 billion cumulatively over the last couple of years.

If there is a surplus in the EI fund, there are two ways of looking at it. One legitimate argument was put forward by the Alliance that premiums should be reduced. We are paying in too much in terms of what is being paid out in benefits. The flip side of that coin, the NDP's argument is that benefits should be increased or the eligibility requirement should be lowered so more people who pay in would be eligible. Either one of those arguments is legitimate.

What is not legitimate is to use that money for some purpose other than income maintenance for unemployed people. I would go further and say that to deduct something from a person's paycheque for a specific purpose and then to use that money for something completely different is out and out fraud. At the very least it is a breach of trust.

A trust relationship has been created with that individual. When that individual allowed the government to deduct money from his or her paycheque for a specific purpose, a trust relationship was formed. That person trusted that the government would hold that money until such time as he or she became unemployed and needed it. To do anything else with that money is a breach of trust. To use money paid into the unemployment insurance fund to build roads, or for health care, or to give tax cuts to somebody, is a breach of the fiduciary trust entered into with the Government of Canada as employees.

I cannot emphasize enough our continued disappointment, shock and horror at the flagrant misuse and abuse of what was supposed to be an insurance program for unemployed workers.

I appreciate that there are still MPs in the House of Commons who raised that as an aspect of their comments on the budget. To not do so would be to resign ourselves to the fact that the Liberals have managed to get away with something again. Some of us are not prepared to do that.

To put in context the size of the surplus, I am fond of reminding people that the EI program is running a surplus of $700 million a month, not per year, per month. Every month that ticks by, people are contributing $700 million more than is being paid out in income maintenance to unemployed workers. Talk about a cash cow. Talk about the gift that keeps on giving.

The Liberal government cannot believe how lucky it is. It seems to have gone under the radar on this one. Most Canadians are not upset about it. We are upset. Those of us who know about it in the House of Commons are upset. We are trying to alert Canadians to the fact that they are being gouged, but seemingly the public has not really got up in arms.

Unemployed people are up in arms, but unemployment is relatively low these days with 7% unemployed. That is not enough to form a mass movement of people to object to the abuse of the fund. Unfortunately when Canadians do find themselves in the unfortunate position of being unemployed, they will also learn that under the current EI rules, less than 40% of them will be eligible for any income maintenance whatsoever. The EI rules are structured in such a way that only 40% of unemployed people qualify. What kind of insurance fund is that?

What if people were obliged to pay into a house insurance fund with mandatory contributions and if their house burned down, they would have a 40% chance of collecting any benefit?

Business of the House

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, as you know there is no time allocation motion on the agenda. There is however a notice, should that notice need to be exercised.

It is the intention of the government to continue this afternoon and tomorrow with Bill C-28, the budget implementation legislation. I wish to confirm to the House that it is my intention to continue to do so notwithstanding the opposition's dilatory motion to stop the bill from proceeding which was introduced in the House earlier this day.

If and when the bill is completed, we will then turn to Bill C-20, the child protection bill, either tomorrow if the budget bill is completed, or if not, on Monday. This will be followed by Bill C-23, the sex offender bill.

I then propose to bring back to the House for third reading Bill C-13 on reproductive technologies, which was concurred in by the House yesterday. That would probably bring us at least some way into next week and there will be further consultations at that point.

There have been discussions among parties and it has been agreed that the House shall not sit next Friday, April 4. Given that is the case, I now seek the consent of the House pursuant to that consultation to move the following motion. I move:

That when the House adjourns on April 3, 2003, it shall stand adjourned until Monday, April 7, 2003.

Budget Implementation Act, 2003

[Geoff Regan, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I will be splitting my time with the hon. member for Algoma—Manitoulin.

It is my pleasure this afternoon to join in the debate on the 2003 budget, the budget implementation act, Bill C-28. This gives me a good occasion to talk about the recent budget tabled by the Minister of Finance last month and some of the important measures that are in this bill.

There are a variety of topics that I am interested in and are covered in the budget including things like health care, infrastructure, defence, the environment, and many other issues, such as help for the homeless people in our country.

The budget process is the most important process of the year for the federal government and budget day is the most important day because it is the day when the decisions are announced on a process that begins many months before. In fact, shortly after the previous budget is announced the process begins for different departments, different interests, and different groups who have ideas about what should be in the budget. Whether they be groups of members of Parliament or groups in departments, they begin their initiatives to get their priorities included in the budget process by trying to get as much funds as they can for the initiatives they want to see funded.

When the budget day is announced, it is the accumulation of a long process of working through all these priorities and announcing what the priorities are for the government, and how the resources of the government and taxpayer dollars will be spent that year. It is an important day and an important process.

This particular budget was important in a variety of ways. First, it was important in terms of health care. I had a number of meetings in my riding of Halifax West in January of this year to talk about health care. I had a series of four forums across different parts of Halifax West and heard from people in my riding about their needs and concerns: to make health care our top priority and to keep health care a publicly paid system. They did not want a private system of health care. People in my riding have strong views about this and strongly stated that they want to maintain the publicly paid and publicly delivered system.

The increase in transfers for health care to the provinces in the federal budget was very satisfying. It was good to see that. Of course, we always want to see more money and the government puts in as much as it can. We must recognize that health care, while it is the number one priority of Canadians, is also one of many priorities. There are other important priorities like the environment, our cities and many other things.

Let us talk about some of the things that the budget did in relation to health care. It provides, for example, a five year, $16 billion health reform fund. This is the key to this because I heard, throughout the forums that I held with people in Halifax West, that people wanted to see the kind of thing that Roy Romanow talked about in his report. They wanted to see money being put into health care to buy change, to make a better system, and to build a system that is more sustainable for Canada.

That is exactly what this $16 billion health reform fund is all about. It is for the provinces and territories to target primary health care, home care and catastrophic drug coverage. Those are certainly areas of concern that I heard about from people in my riding. I also heard about it elsewhere, whether in letters to me, e-mails, or from people I run into at the local mall or wherever. These are big issues, particularly in relation to home care. I had a lot of people call me with their concerns about caring for elderly people, about getting home care for themselves, and about not having an adequate system in our province of Nova Scotia.

The problem in Nova Scotia has some similarities to the rest of the country. There are challenges in home care across the country, but I can tell members that in our province, where we have a $13 billion debt for a very small province, there is no question that it is a crushing burden on the ability of the provincial government to pay for services like this. Now, there are things that the province could do better, perhaps provide better services and do a better job on home care, but there are things this money would enable the province to do that it could not do before. Nationally, this $16 billion would be very important in terms of helping move forward the area of home care and other areas, in particular primary health care.

In fact, I am going soon to a clinic in the north end of Halifax which is already an operating example of primary health care in action. I look forward to seeing that because it is important to look at new ways to do things which will make more sense, provide better long term health care and also provide us with the maximum bang for our buck in our health care dollars.

Another item that is part of the health care expenditure is $9.5 billion in increased cash transfers to the provinces and territories over the next five years. That is important because clearly the provinces and territories have their own challenges to face in terms of meeting their current needs. It is one thing to put money in, change the system and create a better system. However, while we create that new system, we also have to maintain the existing system and obviously pay for the acute care that is so important to Canadians.

There is also an immediate investment of $2.5 billion through Canada health and social transfer to relieve existing pressures in the health care system. That is immediately, in this fiscal year which ends in a few days. That will be very helpful in the current fiscal year.

There is the $1.5 billion over three years for a diagnostic medical equipment fund to improve access to publicly funded diagnostic services. One vital thing is these funds are not only to be used to pay for new MRIs, CAT scans and even PET scanners, which I have learned about recently, but they also will be used to help provide new technicians and doctors who are trained to manage or to run these systems and to interpret what the diagnostic systems tell them. It is important that we move forward in this area because clearly one of the big concerns people have is waiting lines.

Not only is it important to have more people trained to run these machines and interpret and work with the machines but it is also important to co-ordinate better the system of using these machines. One thing Mr. Romanow talked about was this. How long people wait to get an MRI or CAT scan is not always a question of how many are available or how long the wait is overall. Sometimes it can be a question of people's doctors and how long their lists are. Really there ought to be more co-ordination among hospitals and doctors. There needs to be a better information system so that people are in line one after another and not depending on which doctor they have. There should be a proper system to get them there as quickly as possible. I think this will help to do that.

Another item is $600 million to accelerate the development of secure electronic patient records. One thing we heard through the process on the review of health care in Romanow report and the Kirby report was that patient information was not always shared properly. There needs to be a quicker way to do that. Putting money into electronic records will help doctors share information quickly with other doctors or hospitals. It will get information to a person's file quickly so medical personnel know about their health background and will enable them to help more quickly and avoid problems as well.

Another item is $500 million for research hospitals for the Canada Foundation for Innovation. Clearly putting money into research in a health care area is another priority for Canadians and another area in which they think is very important for us to spend.

I know I only have a short time left and there are many other issues I would like to cover. There are so many other things that are funded in the budget. I am pleased that I could talk about health which is clearly the top priority of Canadians. However there are other things we should talk about for a moment.

I want to talk about infrastructure because the budget provides more funds for infrastructure. I would like to see more over the long run. I hope we can increase those funds in the coming years. In ridings like mine, Halifax West, it is probably the fastest growing area east of Ottawa. The growth is not being met with the kind of facilities we need, whether it be roads, rinks, schools or various other kinds of facilities. We do not pay for schools through this program, but obviously there are other kinds of things which would be important to assist a growing area like mine that needs those kinds of facilities. Therefore I am pleased to see the increased investment on top of the $5.25 billion already allocated in recent budget for infrastructure.

After my work on the Prime Minister's task force on urban issues, I see this as a very important area. We have to keep working on this.

I am pleased to see money for the environment. I want to see us put more money into things like transit. I look forward to progress in these areas.

[Judy Wasylycia-Leis, NDP, Winnipeg North Centre, MB]

Mr. Speaker, I am pleased to be able to participate in the debate on Bill C-28, the budget implementation act. You will know already, Mr. Speaker, that the members of the federal New Democratic Party caucus stand in clear opposition to the Liberal budget of 2003. We express again today our lack of confidence in the government and its current budget. That will not come as a surprise to you, Mr. Speaker.

I want to indicate to the House that while we have a lack of confidence in the budget before us today, we will work very hard and do everything we can through the legislative process dealing with Bill C-28 to make improvements and to try to convince the government to make the necessary changes that will reflect the realities of Canadians.

One would think in listening to the Liberals today and in the weeks preceding this debate that they have had an awakening, that they have had a sudden new enlightenment about the priorities of Canadians and have presented us with a budget that will correct the errors of their ways in the past and put us on a new course.

This is the question for us today: Is this truly an awakening or is it a snow job?

Many have commented on the real meaning of the budget, despite all the spin and some of the positive media coverage. In fact, I want to reference some analyses of the budget that may not have appeared in the mainstream media or have been covered by national media outlets. Here is the question that Andrew Jackson of the Canadian Labour Congress put to Canadians: Is this budget “a real U-turn or just a curve in the road to a much harsher Canada which we have been on for so long?”

That is an important question for us today. Is this a new beginning or is this simply a twist in the road that does not address the systemic issues and barriers facing Canadians' full participation in the life of this great country?

In an article posted on February 25 of this year, Andrew Jackson goes on to say:

There has certainly been a re-ordering of Liberal priorities from debt reduction and tax cuts to social spending. But this is still a Budget which continues the tax cut agenda, and will pay down debt. The brakes on new spending can be quickly applied. It is far from clear if we have seen a real break in the long-term trend towards erosion of the public sphere.

That is an important commentary on the bill before us today.

Let me go further and quote from an article that may also not have appeared in the mainstream media and the national journals of the day, one by Bruce Campbell and Todd Scarth, who are both with the Canadian Centre for Policy Alternatives. They wrote an article on February 18 entitled “The Real Chrétien Legacy Budget”. Pardon me, Mr. Speaker. I realize I should not use the name of the Prime Minister in the House and I will try to quote from this article without doing so. The authors of this article state:

In reality, the plan the Liberals announced yesterday is fiscally conservative dressed up as socially conscious, and fails to make needed social reinvestments. In other words, it is an appropriately weak legacy for a Prime Minister who oversaw the shrinking of program spending levels, relative to the size of the overall economy, to levels not seen since the early post war years.

Finally, I will quote the national president of the Canadian Union of Public Employees, Judy Darcy, who, I might add, has recently made an announcement that she will be retiring from her position as president of the Canadian Union of Public Employees.

I want to take this moment to put on the record the appreciation of members in the House, I assume from all sides, for the work of Judy Darcy over the years in representing members of her union but also for her leadership on social justice issues and her ongoing contribution to the struggle for equality in our society today and for a universally accessible publicly administered health care system and justice in the workplace.

Let me put on the record her words in response to the federal budget. She said, after welcoming the new funding for social programs, as all of us in the House have done, that the budget doesn't erase the Prime Minister's real legacy: a decade of budget cuts that have been devastating for Canadians. She stated, “After years of bread and water, a Timbit looks like a feast”.

I think those comments reflect what we are really dealing with. Those particular insightful looks at the federal budget put this debate in perspective, because there has been a tremendous amount of spin around the budget, a tremendous amount of hoopla and a clear suggestion that the budget represents a whole new direction which will ensure that the priorities of Canadians are addressed in full and that our country is now on a path to economic security and prosperity.

In reality, as these analysts have stated so well, through this budget the government in actual fact says to Canadians that if they have pressing social needs, they can wait. This is not, as the media or the Liberals themselves have said, a “spending spree” budget.

Let us put it in context. In the year 2001-02, federal program spending was running at 11.2% of GDP. With all the budget's heralded new spending, by 2004-05 it will only rise to 11.8%, and that is well below the 16.5% when the Liberals took power. So let us be real: This is not a big shift in terms of social spending. The government has created the illusion, perhaps, of big spending, but in real terms, in ways that will meet the needs of Canadians, this budget cannot be categorized in that light. It should also be noted that the headlines seldom point out that massive Liberal tax cuts will result in government revenue being lowered over the next two years from 15.7% to 15.2% of GDP.

One of the issues we have to deal with in the debate, which is particularly relevant today as we near the end of this fiscal year this coming Monday, is what the government has done in terms of the surplus and how it has tried to fool Canadians about the money it has collected from Canadians in terms of expenditures on their priorities.

I think the first question we have to ask is, which surplus? The government in fact makes Enron look like amateurs when it comes to keeping two sets of books. There is the initial fictional version and then later the non-fictional version. Sometimes one would think the Liberals just pick a number out of the hat. It is like Liberal election promises, would we not agree? Before the election is the fiction, then over the next five years they release the non-fiction version of what they really intend to do.

Let us remember that since 1993 the government has underestimated the surplus each and every budget year. We are talking about billions of dollars of surplus that have not been reported to Parliament and to Canadians. The government has exceeded its official budgetary targets for eight years in a row, by as much as $15 billion in one year. That is not an easy thing to do, but we have to call the government to task on it. What kind of game is it playing? Why is it lowballing the surplus? What does it mean in terms of this supposed set of estimates before the House reflecting the values of Canadians?

For this fiscal year, which ends on Monday, March 31, it is estimated that the surplus for the federal government is at least $4 billion. There are varying estimates and we will not know the real figures until well into the next fiscal year, but let us keep in mind that the alternative federal budget, which has been accurate year after year in forecasting the budgetary surplus of the government, predicted that the government would have a budgetary surplus for this year of $8.9 billion. That is not far out from the Conference Board of Canada, which said $8.7 billion. We cannot forget the TD Bank, which said $5.8 billion. The government's own economic and fiscal update said $4 billion.

Even if we take into account the fact that some of that surplus has been spent on programs, and even if we take into account the fact that there is, as the government states, an intention to put some of this money aside in the name of prudence on a contingency basis, it would appear that, come Monday, the end of this fiscal year, there will be $3 billion in surplus that will end up going toward the debt: not toward the priorities of Canadians, not into filling the Romanow gap on the health care front, not in terms of the growing concerns around the spread of HIV and AIDS, not in terms of child care and meeting the demands of working mothers trying to juggle parenting and work responsibilities. No, it will go to the debt.

We must keep in mind that it was this government that said in the 1997 election it was going to follow a balanced approach whereby half the surplus would go to the debt and half to new social programs. Did that happen? I do not think so, not by a long shot.

That pledge was repeated in the 2000 election, but let us look at the actual facts. I want to reference a study by the Canadian Centre for Policy Alternatives. Those who would question the validity of this study should keep in mind that the Centre for Policy Alternatives has been accurate each and every budget year in terms of the government's budgetary surplus. The CCPA found that over the whole period from 1997 to 2001 only 2% of the underlying surplus was allocated to genuine enhancements in program spending. The other 98% went to debt reduction.

We also know that the Auditor General has raised the issue about the reporting of the budgetary surplus. On November 4, 2002, the Auditor General accused the government of deceiving the public about the government surplus. She disputed the Prime Minister's assertion that “Under the acts of Parliament, at the end of the year, the surplus is automatically applied to debt reduction...”. She went on to say, “There is no law, there is no accounting rule, that says you have to pay down the debt by the amount of the surplus”.

All we are asking for today is that the government live up to its 1997 and 2000 election promises to take the surplus and split it in terms of half going to social spending and programs that need reinforcement and support from the government, and the other half going to the debt.

I could make a strong case for why I think the whole amount should go to social spending, given the fact that the focus has been on debt reduction over the years, and given the fact that our debt to GDP ratio is at an appropriate and manageable level, and that the money available today could in fact deal with the social debt for a change and deal with some of the gaps in services and programs that are still there after the budget is said and done.

I think we are dealing with a serious issue of budgeting by stealth. The way in which the government handles the surplus is one example. There are many others. Let me reference, in fact, how the government talks about increased transparency yet is slinking around outside of the budget limelight bureaucratically reallocating $1 billion in government spending over the next year without any public disclosure.

It creates a great deal of suspicion in the government's budgeting process. It calls into question its commitment to advance the ideas of transparency and accountability when on the one hand it gives us a budget, wraps it all up in nice ribbons and wrapping paper and says it is spending in terms of the priorities of Canadians and, on the other hand, turns around and demands that all departments come up with $1 billion over the next two years.

What kind of impact does that have? What does that mean? Let me give the example of the weather services in this country. Over the last 10 years the government has reduced the weather services budget by 40%. By its own reports, the system and the service is in bad repair. There are serious problems because of that kind of cutting, hacking and slashing. What does the government do at a time of some fiscal flexibility and a budgetary surplus? It chops the weather stations from 14 to 5. It puts the safety and security of Canadians further at risk.

How does that make sense? Would it not be reasonable to expect that the government would first do a cost benefit analysis to provide that information to members of the House and to Canadians? That is one example. There are many other examples of how the government has it both ways.

Let me give the example of employment insurance. It has a $45 billion surplus as a result of the government's changes to the EI program and the fact that it removed so many people from the EI rolls because of changes in policy, and yet it has the gall and the nerve to propose that all job search kiosks be shut down. That is what was done. I know because I happen to have in my constituency a job search kiosk in a public place that is the most heavily utilized in Canada. People turn to job search kiosks to do what the government wants them to do, which is to find a job.

How does it make sense for the government, with a $45 billion surplus as a result of cuts and changes to the EI program, to turn around and chop job search kiosks? It is certainly my hope that because of the community uprising and in light of this proposal that the government will change its mind and have second thoughts about that kind of silly decision making.

There are many other examples but what we really need to focus on in the few minutes that I have left are the priorities of Canadians and how the government has failed to live up to the fundamental issues so important to Canadians.

If the government were truly concerned about dealing with the social debt, surely it would tackle poverty, surely it would put in place a meaningful national childcare program, and surely it would allow women who work part time because they have to look after young children to collect employment insurance benefits.

Why in heaven's name would Kelly Lesiuk from Winnipeg need to go to the Supreme Court of Canada to get her rightful entitlement? This is a woman who worked part time so she could care for her children did not quite have the 700 hours required by the government. She won her case at the adjudication level and the government appealed it. Now the case has gone to the Supreme Court. Is that not a waste of money when what we are talking about is the fundamental right of equality and requires the government to simply rethink its arbitrary cuts and changes to ensure that women who work part time, and who do so on an ongoing basis, and who are part of the permanent labour force, are able to collect employment insurance?

Let me just fit in two more issues before my time is up. The government promised child care for 10 years. This year it says that it has done it. It has allocated $935 million for all the provinces and territories over five years, which means $25 million for this year. That means 3,000 childcare spaces over the next couple of years will be created, which is hardly commensurate with the demand and the need of working families and mothers who need quality, licensed childcare.

Let me put that in perspective and tell members what that means for Manitoba. It means $24 per month per staff or $12 on each pay cheque, or three-quarters of a space more per child care centre. Does that make sense? Is that a national child care program?

In conclusion, the government has failed in terms of ensuring that the Romanow blueprint on the future of health care was accepted and acted on. There is a Romanow gap in terms of funding and in terms of accountability which means privatization will continue. In fact, it means that our medicare system, our cherished national health program, is still in jeopardy.

[Charlie Penson, Canadian Alliance, Peace River, AB]

Mr. Speaker, the reality is that the tag team of the Prime Minister and the former finance minister increased personal and corporate taxes 53 times since 1993. Budget 1994 increased spending $1.7 billion and increased taxes by $1.3 billion. Let us remember that the early budget of the former minister of finance had a deficit of $37 billion in it, $37 billion adding to that national debt. It was not until the budget of 1995 that the Liberals were forced to reduce spending but still managed to increase taxes by $1.4 billion. Then again, the deficit for that year was $28 billion.

The early years of the former finance minister, the member for LaSalle—Émard, what was his record? It was to increase taxes, increase spending and run another deficit. When those guys inherited the government from the Mulroney team the national debt, which is the accumulated deficit, was $508 billion. What did they do? They ran it up to $583 billion before the message got through that we simply could not do that any more.

What caused this change? What were the events that led up to the change in the Liberal philosophy of actually having some fiscal discipline for a few years? I think they were forced to the wall. There was the Mexican situation where the peso was in crisis in 1994, fears that New Zealand would fall into insolvency and Canada's own debt was downgraded by many of the debt rating agencies. The message was pretty loud and clear that the Liberals had to do something.

They did take some action. What did they do? This is important. Was it done fairly? No, not really. The former finance minister and his team took the easy way out. They offloaded their problem by slashing transfers to the provinces. According to national accounts, federal spending decreased by just 9% or $11.3 billion. This was a time of crisis. They had to get a hold on this so they decreased their own spending by 9% but slashed the transfers to the provinces for things such as health care by over 20%.

The crisis that we see in health care today, the money that had to be pumped in and today's fiscal problems between the provinces and their municipal governments, are a product of the Liberal government. It is a product of the government offloading its big problem to the provinces.

As soon as the Liberals had an opportunity, and once we started to get to the stage where we were no longer deficit spending, when the U.S. economy was growing by leaps and bounds, when 87% of our exports were going to the United States and when roughly 40% of our GDP came from exports, we were dragged along.

What did the Liberals do when they had the opportunity and things improved? They did not make the fundamental changes that were required. They returned to their old practices. They returned to their old tax and spend ways. It did not take very long. The aberration was only two years.

Federal program spending has been on the rise since 1997 and has increased dramatically since 1999. Those are all years that the former minister of finance was here. The tag team of the Prime Minister and the former minister of finance did it together.

Over the last two years federal spending has increased by 6% on average. That outpaces the formula for population growth and inflation by roughly 4%. Those are the kinds of things that put us into the difficulties in the 1970s to begin with.

The current finance minister, as I said, could have changed course but instead he opted to spend and spend. Federal spending is forecast to increase 83% faster than population and inflation growth between 1999-2000 and 2004-05.

I submit that budget 2003 is not an aberration at all. It really just ups the ante of the old Liberal spending patterns. As soon as the Liberals had a little cash in the bank, instead of improving the fundamentals, they went back to their old ways of tax and spend.

The Minister of Finance likes to brag about how Canada is a true northern tiger. He must know, as do many in government and the private sector, that despite recent reasonable economic times there is still considerable distance to make up for the bad public policies that the government and other governments have engaged in since the 1970s.

The industry committee conducted three separate studies in terms of Canada's productivity and competitiveness. What it found was a long standing decline in Canada's competitive position in the world going back 30 years. I submit that it is not an accident. This has a direct correlation to public policy. That public policy is just bad government not recognizing what Canada should be doing.

Thirty years ago the United States was number one in terms of productivity which equates to living standards. Canada was number two. That is a long term historical fact. The United States has not changed. It is still number one in terms of productivity and living standards, but Canada has fallen to 13th place in terms of productivity in the world.

In the Globe and Mail today, Canadian Manufacturers & Exporters reported that Canada's competitiveness has fallen to 50% of the G-7 average. The report prepared by Canadian Manufacturers & Exporters said:

The competitiveness of Canadian industries continues to fall compared with their G-7 counterparts, although this country's businesses no longer hold last spot--

It is no longer in last place. That is some consolation. It does not really address the issue of Canada and United States. Canadian Manufacturers & Exporters went on to say:

--the so-called excellence gap between Canadian industries and those in other Group of Seven nations has widened “significantly” since the period before the Sept. 11 terrorist attacks in the United States.

It continued:

The CME's last assessment, undertaken in the summer of 2001, put Canada's performance at 62 per cent of the G-7's overall best practice. Its most recent analysis, however, shows that figure has fallen to 50 per cent.

We have had a long term decline in the economy in Canada. We have seen it; we know it is there. We recognize it because the Canadian dollar is in big part a reflection of that. But this is 30 years of decline and 30 years of bad management by the government.

In the 1970s and onward we saw huge increases in government spending and in the design of government programs. Deficit spending was characteristic of the government and, in fact, it ran up the accumulated deficit to $583 billion. It now has it down to $536 billion and it is cheering that it is some kind of victory. I say it is not very much.

Decades of spending increases have increased Canadian tax burdens so now government represents 42% of all of the GDP of Canada. That is how much it is sucking out of the life blood of Canadians. Compare that with the United States where government takes 29%. If that was productive spending maybe we could accept that, but what do we have? We have waste in the government. We have a lot of misdirected industrial policies where it is pumping billions of dollars into so-called winners. I suggest that those winners are showing the tendency to be more losers these days than winners.

We have the aerospace sector, for example. The government has poured literally billions of dollars into that sector. I believe that it should not be involved and the Canadian Alliance believes that we should not be in the business of trying to pick winners and losers in our society.

Our standard of living has fallen to only 70% of that of the United States over a 30 year period. Canada has one of the highest personal income tax rates in the entire G-7. Once a historical home for direct foreign investment, our share of direct foreign investment has been falling over 30 years. Investors see other countries as better places to reap a profit. It is no wonder with the taxation levels on the corporate and personal side that we have in Canada.

Even Canadians are looking increasingly outside our borders, particularly in the United States, as a good place to invest. There is an article in the National Post today to that effect. Canadians are investing billions of dollars outside our country. Why? Because they see it as better place to get opportunity to have return on their investment. That should not be the case. It is tragic that it is actually happening.

Yes, they should have opportunity to look outside our country, but they should also have the opportunity to get good rates of return here. The government's response has been to devalue the dollar. We have become the big discount sale house of OECD countries. Our dollar has seen a little bit of strength in the last couple of months as the U.S. dollar is depreciating against European currency, but still we have seen a decline to where we are at 68¢ U.S. today. We have been as low as almost 60¢ and it is no accident that the dollar is a reflection of Canada's productivity and standard of living.

A National Post article today by Jacqueline Thorpe talks about the Conference Board study and what it is saying. Is it not ironic that our industries are now saying “Do not let the dollar go too high because we cannot compete”. Why can they not compete? They cannot compete because the government has not taken advantage of good times to make the fundamental changes that are necessary to allow that dollar to naturally rise and exporters to be able to benefit.

I am talking about tax decreases. Let us get off the backs of the corporate sector. Let them make a profit and we will see more investment in Canada. We will gradually see our Canadian dollar rise as it should. But the government has not taken that opportunity in good times. If it does not take the opportunity and make the fundamentals right in good times, when will it ever happen? It certainly will not happen in a downturn which we may be seeing.

This is the kind of problem that I am talking about, long-term historical problems where we see a Liberal government that has a total disregard not only for the economy and Canadian standard of living but also for its constitutional mandate.

It is clear what the division of powers were when the Fathers of Confederation designed the Constitution . The provinces were largely responsible for social areas and the federal government was responsible for foreign affairs, defence, trade, monetary policy and security. However, we have a federal government that has muscled its way into provincial jurisdiction. We see it in the budget of February 18 with all kinds of intrusions into provincial social areas, but what is the government's record in its own areas? I say it is dismal.

Let us take foreign affairs as an example. This House is being consumed with that issue in the last several weeks but it goes further back than that. Our place in the world has slipped dramatically. What are we doing to protect Canadian industries in trade agreements? What about agriculture, where we have been beaten up really badly? What about softwood lumber and defence policy? The government has deliberately gutted the Department of National Defence so it could use the money that it would save in the budget to throw at some of its special pet projects and patronage.

We have seen waste in government, and waste in the gun registry of $1 billion and running to $2 billion shortly. We have seen waste in the HRDC scandal where the minister was largely credited or discredited with blowing $1 billion, not knowing what happened to it. We have seen advertising scandals. And this is just the tip of the iceberg.

Together with waste and misdirected policy no wonder Canada has been in decline. We need the opportunity to get this country back on track. We need political parties that would get the federal government into the areas that it is responsible for and work cooperatively with the provinces in areas that the provinces are responsible for. That would seem to make perfect sense in a federation, but instead, that is not the case.

This country could get back on its feet fairly quickly if we had a party that would stand up for the things that Canadians should be standing up for and exercising responsibility that is really required. The Canadian Alliance has a totally different view than the Liberal government. We do not believe in intervening in the economy. We believe that we need to put the framework in place for business to do well, that we should be the stewards for Canadians, that we should not be interfering, and that we should not be investing in business.

It seems to me that the time has come for that to happen to get Canada back on track. We can no longer afford to have the kind of interventionist government and a poor public policy that has put us in this deep hole. It is a deep hole that I am concerned about. We are not recovering. In fact, it threatens our economic security.

It makes us so dependent these days that we have trouble acting. We are in a huge trade dispute. What is our answer? We have trouble defending our own economic sovereignty. The government has put us in a hole where we are $536 billion in debt. Out of every tax dollar 21¢ goes to Ottawa to pay interest on the debt. That makes us very vulnerable. The government did not do anything about it in good times, when is it going to? That is going to represent a bigger part of the total scene when things get bad and it may well happen.

The United States economy has not recovered. It had 12 years of growth and in any economic cycle we will see that growth period followed by a period of stagnation before it can happen again. Canada has not really entered into that although I believe that we are vulnerable.

These policies that we have in the budget would not protect us. They would not give us the kind of tax relief that we need to have to make this a more viable situation for Canadian individuals and companies.

We must ask the question, why would a party think that government needed to increase in size? Historically that has not been the case. In fact, we are pretty much out of the loop in terms of the business cycle in North America. At one time there was never a period when the economies of Canada and the United States did not act in a similar way. We can chart that over a hundred years. There are people that do that. It is an analytical way to approach business. They chart when business cycles are on the upturn, when there is inflation, and when there is a decline.

Up until about the 1970s we can see that the economies of Canada and the United States have been very closely together in terms of that economic cycle. However, after the 1970s there started to be a divergence which became fairly acute. People have been doing a lot of work to decide why that took place, what is this aberration?

Former Prime Minister Trudeau was successful in increasing the size of government with his public policies. There were a lot of social programs that were introduced. Even in Ottawa, during the days of the 1970s, the growth was phenomenal in the city, particularly the growth in government buildings.

Let us look at the employment insurance program, for example. It became not an employment insurance program any more because it also had a social element to it. Maybe there is a role for government in that, but we would not think that the government would expect employers and employees to fund it. However, that is exactly what it did.

The result is that Canadian unemployment figures are about 3% to 4% higher than that of the United States all the time. In good times and bad times they are 4% higher. That was not the case up until 1970. It was roughly the same. Our cycle might have been out a little bit but it was basically the same. Why is that?

The reason is that we have built a lot of components into the system. There are something like 40 different areas in Canada where qualifying for employment insurance is different. Maternity benefits are just one example of that and there are many others.

In addition to that, what did the government do with employment insurance when it came to power in 1993? It decided this would be the vehicle to generate a fair amount of money for the government. Even though the chief actuary said that in order to ride out a cycle in the economy we probably needed about $15 billion in the employment insurance account, the government decided that this was a cash cow that it simply could not resist. What did it do? It overcharged Canadian employers and employees to the tune of over $30 billion.

Supposedly, there is a fund somewhere that has $45 billion in it for employment insurance. We all know that is not the case because it went into general revenues and has long been spent. The government took advantage of this cash cow and how did it decide to spend this money? It spent the extra $30 billion of employers' and employees' money in a number of ways that I am not sure that employers and employees would think was reasonable.

There are regional development programs in many areas that take up billions of dollars a year. The Auditor General has been very critical of those programs from coast to coast. Whether it is western economic diversification or something else, no matter where it occurs, it is like pouring money into a hole in the ground.

In many cases once the money is gone and the business is no longer collecting the money, it cannot exist. In fact, some businesses receive money from regional development programs that their competitor down the street does not receive. For example, if someone receives a government grant and builds a service station and the existing one down the street goes out of business, is there any net gain to society? The Auditor General does not think so.

Billions of dollars have been wasted in that program, as well as billions of dollars in economic development programs. I do not think government is very good at this. That is one reason I do not think government should be in business.

Businesses in Canada have benefited from programs like technology partnerships Canada to the tune of billions of dollars. The aerospace industry, I pointed out earlier, is just one of those. Companies such as Pratt & Whitney, General Electric, Bombardier, some of the biggest companies in the world are receiving money from Canadian taxpayers.

In addition to the technology partnerships program, what else is there? There is Export Development Canada, a bank owned by the taxpayers of Canada. It subsidizes the credit so those companies can sell their products to Air Wisconsin and United Airlines in the United States at a lower than market price in terms of interest rates. Who pays the bill and who has the vulnerability if something goes wrong? There have been all kinds of cancellations for aircraft orders not only in Canada but in places like Brazil which have similar regional development and economic development programs. I understand our aerospace sector makes up something like 70% of the exposure at the Export Development Corporation these days. If something goes wrong, who pays for that?

Those are the kinds of misguided public policies which I think have gotten us into trouble. It shows why the government is addicted to having more taxes rolling in all the time. The government is going to have $195 billion in tax money coming to Ottawa in the next year.

The growth in the size of government is unprecedented. It is returning to the levels of spending and taxation of the 1970s. For 25 years the government seemed to be drunk with power and had to expand the economy not only in government, but in all kinds of pet projects that it thought was best for the country, such as economic development in certain areas, whether it was through business or regional development. Those are the kinds of programs that have to stop.

Canada has been a member of the World Trade Organization and the OECD. They are critical of a lot of those kinds of programs. They are critical of export credit. They want to move away from that. Canada should be a leader. Canada at one time was a leader, but I think we have abdicated our responsibility pretty seriously.

What is the role for government? What role should government really play? The Canadian Alliance feels that government has a very serious responsibility. It is pretty clear in the Constitution how it is set out. Traditionally Canadian governments moved into other areas such as health care. We do not disagree that health care funding needed to be brought up to new levels. We recognize the need for that. When the government in the 1970s brought in the Canada Health Act, it said that federal government funding for that program would never fall below 50%. What happened over time is the provinces could not trust the federal government. They simply could not trust it.

Spending levels by the federal government last year fell to something like 12%. Provincial governments were left with the balance, having to struggle with that even though they had this guarantee from the federal government that they would never fall below 50%. No wonder provinces are knocking at the door telling the government that it is putting the constraints on them in asking them to have a national system, which they accept, but the federal funding levels have dropped.

As I pointed out, it was a pretty easy target in the mid-1990s when the tag team of the former finance minister and the Prime Minister decided they had to do some cutting. They were sort of at the wall and were being downgraded in terms of credit and they had to do something about it. What did they do? They cut transfers to provinces. What is the largest transfer to the provinces? It is health care and $25 billion was taken out of the health care system during those years.

No wonder the provincial governments had trouble with their municipalities and their own services. Imagine a federal government that would hardly do anything in its own backyard in terms of cutting spending, but it would attack the easiest target. That was the easiest target, so it cut the transfers to the provinces. That is the type of thing that worries Canadians for the future.

The commitment made in the budget that the federal government put about $35 billion into health care is the kind of commitment that was needed to increase the health care funding to the required level. The provincial premiers and others must wonder what will happen the next time there is a bit of a downturn. What is the commitment worth from the federal government? The experience from the mid-1990s under the former finance minister was not that good. The government took the easy target.

The role of government must be to recognize the jurisdictions given to it in the Constitution and actively work hard to improve things such as relations in foreign affairs. Our relationship with our major trading partner is in serious decline. Historically we have had an excellent relationship with the United States. We are a next door neighbour to the United States. As I have said, our trade relationship has grown greatly, which seems to be a natural outreach.

Mr. Trudeau back in the 1970s decided that he wanted to distance himself from the United States. He wanted to direct business so that there was more trade between Europe and Canada and less dependency on the United States for trade. It was a pretty superficial look at it. At the same time the European countries were busy developing the European Union, which is a very inward looking organization. They were not looking at trade with Canada. In fact their trade with Canada declined dramatically during that time.

The natural consequence of being close to the United States and having similar cultures means that trade between Canada and the United States has grown dramatically. During the 1970s, 60% of our exports were to the United States and today it is 87%.

It would be nice to diversify that, but that is a pretty easy place to do business, or it has been until now. The government seems intent upon sticking its finger in the eye of the United States and souring that relationship. I wonder how much support there will be for the government when people start to lose jobs as a result of what members on the other side of the House have been saying recently about our closest ally and closest trading partner. It seems to me to be a pretty silly policy to tweak the noses of our friends in the United States, our major trading partner, because that is the kind of relationship we need.

Instead of working in the areas the federal government was given in the Constitution, in foreign affairs, to improve trade relationships, to do something about improving things so Canada is not hit with trade actions any more on a number of issues, what is it doing? Tweaking the nose of Uncle Sam. It is not good enough. The government has to do better. A Canadian Alliance government would take this role a lot more seriously.

We do have a place in the world. We are not a superpower but we are certainly a midsize power. There is an increasing capacity in the country, a potential to reach a much bigger proportion than we have today in terms of influence and also economic size. However it will not be done with a government that has such inward looking policies and policies of trying to be interventionists in a control command economy.

A free market economy is a very powerful engine. We should unleash it and let it work. We should take the constraints of high interest rates, high income taxes and high regulation out of the government, off of our industries and let them work. That could have a dramatic effect, but it seems the Liberals across the way do not share those views. They think that this sector has to be controlled.

Canada has a whole set of regulated industries. A lot of them are looking for the harness to be thrown off. Our telecommunications companies are asking for foreign investment limits to be removed. They want access to foreign capital. That has not been the case. The transport sector has been highly regulated and look at the results of that. It looks like the government is going to be pumping more money into Air Canada.

It seems that the Liberals have not grasped the idea of a market economy. Maybe there is a reason. Maybe they feel they have to have their hands on the levers of power so they can stay in power and grease enough palms along the way that the money will come back. That seemed to be working pretty well up until now, but it does not serve Canadians well.

Defence is an area of responsibility given to the federal government. A lot of people in the defence industries and analysts say that the defence department needs about $2 billion a year to help out in its capital expenditure to get it back to some reasonable level so our forces can perform in peacekeeping or peacemaking operations. It is sad that our fighting men and women who belong to this organization do not have the ability to get over to the operations. We do not have the ability to fly them there. We have to rely on the United States to do that for us.

We rely pretty heavily on the United States for our defence. We are a member of NATO. Our funding level for our military in terms of GDP is the second lowest of all NATO countries. Luxembourg is the only country lower than us. Either we belong or we do not. This latest conflict in Iraq and the war on terrorism point to the need for Canada to do something to improve the morale and the conditions for our service men and women and improve the equipment for them.

The responsibility for defence was given to the federal government in the Constitution. Instead of working to improve things in foreign affairs and defence, what is it doing? The government is getting involved in provincial jurisdictions. It sees its role as being more that of a provincial government. Maybe that says something about the mentality of the government. It needs to respect the constitutional authority it was given and do something. It needs to improve the conditions. It needs to work in the areas it was given responsibility for, such as foreign affairs and defence.

What more could the government do in trade policy? In the next little while Canadian Alliance members will be speaking more specifically about a number of areas. Trade policy is one of them.

We need to be moving in areas such as agriculture. The Uruguay round only made small changes in agriculture. Huge subsidies are still being given by the European Union and the United States. Our Canadian farmers have been beaten up badly as a result. In addition, even with the small amount of progress that was made, 15%, in the Uruguay round, what did the government do? It went beyond the cuts that were necessary according to our contribution level and it cut heavily in the area of agriculture.

Some would argue that New Zealand does not have any subsidies and that is a good thing. However, when other countries are subsidizing very heavily, such as the United States and the European Union countries, we get frozen out of market share. There is work to be done to bring some discipline and some trade rules to other sectors of the economy in agriculture in other areas such as the European Union and the United States. Canada has a dyslexic position and I do not think it is respected very much. More work needs to be done in trade areas.

Let me talk about monetary policy for a moment. Canada has a 68¢ dollar today versus that of our major trading partner, the United States. That is higher than it has been for some time. A lot of people think that the U.S. dollar needs to be lower than it has been because the U.S. has a fair amount of deficit in its current account. People thought it would come down over time. Not too long ago our dollar was almost as low as 60¢ and it could well go back there. What does that do to Canadians? Let me talk about farming for a second because I was on that subject.

Combines do not cost $100,000 any more, but let me take a figure of a piece of farm equipment that would cost a Canadian farmer $100,000. That same equipment made in the United States would cost a farmer $68,000, and most of the equipment is made there, so we have to import a lot of product into Canada. That puts us a disadvantage.

Some would argue that of course we have our exports that take advantage of the low Canadian dollar. Yes, they have, but to some extent it has been a bit of a crunch. The proof is when we see the Canadian dollar start to go up a bit, Canadian companies start to get concerned. They say that they cannot compete because taxes and regulations are too high.

I want to introduce a motion, but just before that I want to conclude by saying that things could be a whole lot better. Public policy is directly related to how well the country does and how our badly our standard of living has slipped. The Canadian Alliance will be outlining that over the next few days in this debate. I move:

That the motion be amended by deleting all the words after the word “that” and substituting the following: “therefore Bill C-28, an act to implement certain provisions of the budget tabled in Parliament on February 18, 2003 be not now read a second time but that it be read a second time, this day, six months hence”.

[Charlie Penson, Canadian Alliance, Peace River, AB]

Mr. Speaker, I am happy for the opportunity to speak today to the budget implementation act, Bill C-28, but I must say that the Canadian Alliance has a lot of concerns about the budget which was introduced in the House on February 18.

The new finance minister could have chosen to change the course set by that of his predecessor in the last several years but he chose not to do that. One has to wonder why that is, although most reasonable people might expect that it had something to do with the Prime Minister's legacy program. When someone has been in office for 40-some years and he still has to buy himself a legacy in the last year out, that seems like a pretty sad commentary, but that seems to be part of budget 2003.

In addition to that, the finance minister perhaps is launching a leadership bid and that may be part of it and may partly explain why we see the kind of spending increases that we have identified in budget 2003: $25 billion in new spending over the next three years. It is not just spending, it is a smorgasbord of sloppy spending. Other than the $5.3 billion this year for the health care increases, it is spread so thinly in so many areas that it may be of little benefit to anybody.

What we have seen from the government is a pattern over a long period of time of trying to buy votes and not really caring what the outcome of the legislation will be as long as it looks good on the surface. It is like the Hollywood storefront image that we see in the westerns; nothing behind it.

The budget includes $2 billion in unspecified Kyoto projects and $1.5 billion again shovelled out to unaccountable foundations. The Auditor General had a considerable amount to say about that in the past, that this was not the type of corporate accounting that we accept in the corporate sector so why should we accept it from the Government of Canada?

The budget contains $1 billion for the national child care system which will bring it to roughly $10 billion. That money has to come from somewhere. Six billion dollars will be spent on the federal bureaucracy, an increase in spending that seems reminiscent of the 1970s.

The budget contains little tax relief and what tax relief there is, it is spread over several years. I am thinking of the capital tax, of which one portion will be phased out. I heard more about the capital tax than any other thing when our committee was travelling across the country. When I was the industry critic for our party we heard that this was a very discouraging tax on investment, but the government is only taking one part of it out and only doing that over five years. That is the type of example we see in budget 2003.

Many commentators have suggested that the budget was really the end of fiscal discipline in Ottawa, but I would like to demonstrate why that simply is not the case at all. It really is a return to old Liberal values. The fiscal discipline only took place in about 1996-97, for two years, because the government was driven to the wall and had to do something about it. I will make that case.

I submit that this is really a continuation of the Liberals' tax and spend policies that put political expediency ahead of good policy, wasteful spending over restraint and accounting trickery over transparency.

The reality is that since 1993 the Chrétien-Martin tag team increased personal and corporate income taxes 53 times.

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, it is my honour to present Bill C-28, the budget implementation act, 2003, for second reading today.

In the course of preparing his budget, the Minister of Finance was advised by Canadians that it must be more than a tallying of accounts: that the budget must reflect the sum of our values as well. The budget the minister presented to the House in February meets the challenge in three arenas of national life.

First, it builds the society Canadians value by making investments in individual Canadians, their families and their communities.

Second, it builds the economy Canadians need by promoting productivity and innovation while staying fiscally prudent.

Third, it builds the accountability Canadians deserve by making government spending more transparent and accountable.

Just as important, the government is able to meet these challenges and pursue significant new investments, without risking a return to deficits, because of our continuing commitment to sound fiscal management. This commitment to fiscal responsibility is real and rigid, not just rhetoric, as demonstrated by the fact that we have already delivered five consecutive surpluses, a $47 billion reduction in the federal debt and the $100 billion tax reduction plan.

The 2003 budget is a budget based on continuity: maintaining the prudent, balanced approach to fiscal planning that has contributed so much, so directly, to Canada's economic stability and success. At the same time, it is a budget marked by milestones and major new commitments.

Economic success and fiscal discipline are only part of good government. They are a means to the much more important end of building the society that Canadians value, where compassion and social responsibility are constant, concrete facts of national life.

No social policy is more vital to Canadians than our publicly funded health care system.

The 2003 accord on health care renewal, agreed to by the Prime Minister and provincial first ministers in February, reflects a common commitment among governments to work together to improve access to the health care system, enhance accountability of how health care dollars are spent, and help ensure that the system remains sustainable in the long term.

Budget 2003 confirms $34.8 billion in increased funding over five years to meet the goals outlined in the health accord. Bill C-28 implements these measures.

First, in terms of increased support through transfers, the budget builds on the significant federal support for health care already provided to the provinces and territories through the Canada health and social transfer, the CHST.

Following the September 2000 agreements on health and early childhood development, the federal government provided provinces and territories with a predictable and growing five year funding framework to 2005-06 through the CHST. Now, this established funding will be further increased by $1.8 billion and extended for an additional two years. As a result, total yearly cash transfers to the provinces will rise to $21.6 billion in 2006-07 and $22.2 billion in 2007-08. Again, let me emphasize that this is over $22 billion for that one year.

Next, an immediate $2.5 billion supplement to the CHST will help relieve existing pressures in the health care system. This funding will be on an equal per capita basis, with provinces and territories having the flexibility to draw down their allocated share of funds, as they require, up to the end of 2005-06.

But the sustained renewal of Canada's health care system needs positive structural change as well as further financing. That is why the first ministers also agreed to restructure the CHST into two separate transfers, a Canada health transfer and a Canada social transfer, effective April 1, 2004.

Creating distinct transfers for health and other social spending will provide Canadians with information on the federal government's long term contribution to health care. At the same time, first ministers reaffirmed the importance of the equalization program in ensuring that all provinces have the ability to provide comparable levels of public services at comparable levels of taxation.

To strengthen the program, the federal government agreed to permanently remove the ceiling on equalization payments beginning in 2002-03.

All of these measures will provide a predictable, sustainable and growing long term funding and planning framework for transfers to the provinces and territories in support of health care and other social programs.

Bill C-28 would also implements other investments agreed to in the health accord.

In terms of health reform transfer, first ministers identified primary health care, home care and catastrophic drug coverage as priority areas where the provinces and territories needed to accelerate and reform to help their residents. The budget responds with a five year $16 billion health reform transfer to help in these priority areas with funds to be distributed on a per capita basis over a five year period beginning on April 1, 2003.

In terms of the diagnostic and medical equipment fund, the first ministers also recognized that more needed to be done to improve access to diagnostic services. The availability of equipment is a key factor in ensuring timely access to quality health care.

Building on the $1 billion provided for medical equipment in 2000, the 2003 budget responds with an additional investment of $1.5 billion over three years. This funding will enable provinces and territories to acquire diagnostic and medical equipment and train specialized staff to operate increasingly sophisticated equipment. Again funds will be distributed on an equal per capita basis and drawn down as provinces require up to the end of 2005-06. Under the accord, governments agreed to report annually on both the health reform transfer and the medical equipment fund so that Canadians can gauge the impact of the new investment.

Another area identified as a priority concern are electronic health records, which are an essential building block for a modernized, more innovative health care system. Under the September 2000 agreement on health, the government announced $500 million to expand the use of health information and communication technologies, including the adoption of electronic health records.

Canada Health Infoway will receive an additional $600 million to accelerate the development of EHRs, common information technology standards, across the country and the further development of tele-health applications.

Without a doubt, research is a vital component of Canada's health care system. The federal government currently provides significant funding for health research through its support for students, researchers, universities, research hospitals and other institutes and also undertakes research in its own laboratories. The 2003 budget recognizes that more can be done. Two such measures are included in this bill.

The first concern is the Canadian Foundation for Innovation, the CFI, which was established to support the modernization of research infrastructure in Canadian universities and colleges, research hospitals and other non-profit research institutions across Canada. The budget allocates $500 million to the CFI to enhance its support for state of the art health research facilities. At the same time, Genome Canada will receive $75 million for applied health genomics. It is perhaps the most exciting sector of biological research in today's world and one where Canada has developed a global reputation.

In terms of other health initiatives, the budget provides significant funding to support a range of other initiatives fundamentally linked to health reform. For example, the budget provides $205 million over five years for governance and accountability initiatives, including funding for the Canadian Institute for Health Information to enable better public reporting on the health system and the health of Canadians.

Funding will also be provided to support the establishment of a new Canadian patient safety institute, as well as to improve the timeliness of Health Canada's regulatory processes with respect to human drugs, to pursue a national immunization strategy and to better assess the use of new diagnostic and treatment technologies.

Another initiative covered by this legislation involves a compassionate care benefit under the employment insurance program to help ease the economic problems facing families who must deal with grave illness. The government recognizes that income support and job protection are key for workers who take time off to care for seriously ill family members, as they often lose income and benefits due to time loss from paid employment.

As a result, starting on January 1, eligible workers will be entitled to a six week paid leave to provide care or support to a gravely ill or dying parent, spouse or child. Also, to enhance its flexibility, the benefit can be shared among eligible family members. The compassionate leave benefit underscores a fundamental social fact, that central to the life of every Canadian is the welfare of their family.

There is no more important investment that we can make than in the opportunities we create for our children. Working through the bill before us, budget 2003 strengthens our longstanding commitment to Canadian children and families in several key areas.

First, annual assistance for children and low income families is increased through the Canada child tax benefit, the CCTB, to $10 billion by 2007 with annual benefits increasing to $3,243 for the first child, $3,016 for the second child and $3,020 for each additional child.

Next, the government recognizes that caring for children with severe disabilities imposes a heavy burden on families. To that end, a new indexed $1,600 child disability benefit, effective July 2003, will provide additional assistance of up to $1,600 annually to low and modest income families with a disabled child.

A third measure provides $80 million per year to enhance tax assistance for persons with disabilities, drawing on the evaluation of existing disability tax credit and the input of a technical advisory committee.

The budget also adds to and builds on the tax measures introduced in previous budgets to provide support to persons with disabilities. More infirmed children or grandchildren will now be able to receive a tax deferred roll over of a deceased parent's or grandparent's RRSP or RRIF proceeds.

The budget expands the list of expenses eligible for the medical expense tax credit to include, for example, certain expenses for real time captioning and note taking services and voice recognition software. In addition, individuals with celiac disease who require a gluten free diet will now be able to claim the medical expense tax credit for the incremental cost of gluten free food products.

Our ability to make major long term investments in boosting the quality of Canadian life without jeopardizing our fiscal balance rests on a healthy, growing economy. However better economic performance tomorrow requires a more productive, innovative and sustainable economy today.

As we know, improved skills and learning are vital to improved productivity, competitiveness and a better life for all Canadians. Budget 2003 takes action to help give Canadians opportunities to gain new skills by committing $60 million over two years to improve the Canada student loans program to put more money in the hands of students and better enable post-secondary graduates to manage their debt. In addition, individuals who are in default of the Canada student loans or have declared bankruptcy will now have access to interest relief. As well, protected persons, including convention refugees, under the Immigration and Refugee Protection Act, will be eligible to Canada student loans.

Canada's high calibre workforce deserves the support of a competitive tax system. That is why in the 2000 budget the government launched a five year $100 billion tax reduction plan, the largest in our country's history. This plan continues to deliver growing tax relief, about $24 billion this year and $30 billion in 2004.

To help sustain our economy, the budget further improves the tax system through incentives to save and invest, to help small and medium sized enterprises and boost Canadian competitiveness.

The legislation promotes savings by Canadians by increasing registered retirement saving plans, RRSPs, and registered pension plans, RPPs, limits to $18,000 over four years and indexing these new limits.

As well, we are providing concrete assistance to our country's entrepreneurs and small businesses, a key source of economic growth and job creation in Canada.

Employment insurance contribution rates will be cut by 12¢ to $1.98 per $100 of insurable earnings for 2004. This is the tenth premium rate cut since 1994 and will give a yearly savings for workers and employers to over $9 billion. While this rate reduction will apply to everyone, it will be particularly beneficial for small businesses.

The federal small business tax rate of 12% will be extended to business income between $200,000 and $300,000 over the next four years. This will result in an annual saving of up to $9,000 for many local Canadian companies.

Another measure eliminates the $2 million limit on the amount of small business investments eligible for the capital gains rollover. This will help small firms to assess the risk capital they need to expand and grow.

The bill reduces business costs and complexity by improving the tax treatment of automobile benefits for employees and auto expenses for employers.

A competitive tax system is necessary to attract investment to Canada and to encourage entrepreneurs to create and grow their businesses and the jobs that they bring.

The government's five year tax reduction plan is putting in place a tax advantage for businesses in Canada as a basic part of the strategy to foster a strong and productive economy. With the tax cuts implemented to date, the average federal-provincial corporate tax rate in Canada is now below the average of the U.S. rate. The budget builds on that advantage over the next five years, totally eliminating the federal capital tax, which is currently levied on all corporations with more than $10 million of capital used in Canada. The first step in the phase out will be to raise the level of the capital at which a firm begins to pay tax to $50 million.

As members can see, the scope of our budget plan is dramatic, and yet I have only covered a portion of the measures in the legislation before us.

We are also taking action in such vital areas of public concern and support as climate change, the environment and agriculture. For example, Bill C-28 includes $250 million to the Sustainable Development Technology Canada Foundation for the development of climate change and clean air technology. Bill C-28 includes $50 million to the Canadian Foundation for Climate and Atmospheric Sciences to increase climate and atmospheric research activities including research related to northern Canada. The bill also includes $20 million to support venture capital investment by Farm Credit Canada in the agriculture sector.

Bill C-28 also includes additional tax measures to confirm the increase in the federal taxes on tobacco products effective June 18, 2002 as part of the government's strategy to discourage tobacco consumption. The bill removes the 4¢ per litre federal excise tax on diesel fuel from bio-diesel. It also provides authority for voluntary arrangements with interested first nations to levy a broadly based sales tax consistent with the GST on first nation lands.

The budget provides important new investments to build the society Canadians value and the economy we need. Canadians have also made it clear that these investments must be backed by enhanced accountability to Parliament and the public. Several new steps will help to make government spending more accountable and transparent.

The budget follows up the government's commitment to review the air travellers security charge to ensure revenue from the charge remains in line with the cost of the enhanced air travel security system through 2006-07. Now that the review has been completed, the government is reducing the charge to $7 from $12 each way for domestic flights. That is by more than 40%.

Accountability is also the anchor of the new health accord. The accord sets out an improved accountability framework that includes a commitment by all governments to report regularly to Canadians. This framework will give Canadians more information about how their tax dollars are used to bring about reform in the health care system.

The government is also making a number of changes to improve the accountability of foundations to Canadians and parliamentarians. Most of these changes can be made through changes to the funding arrangements with the foundations.

However the Canada Foundation for Innovation, the Canada Millennium Scholarship Foundation and the Canada Foundation for Sustainable Development Technology were established through federal statute. Under the existing legislation, unspent funds are distributed among the eligible recipients that receive grants, but the Auditor General believes these moneys should be returned to the government. There will now be provisions that the responsible minister may, at his or her discretion, recover unspent money in the event of winding up a dissolution of these three foundations and return the funds to the consolidated revenue fund.

Finally, the budget terminates the debt servicing and reduction account, the DSRA, which was established to pay interest on the public debt and ultimately reduce the debt. There is no longer any need for this account since the DSRA revenues must ultimately be disposed in the consolidated revenue fund.

Budget 2003 delivers a dramatic range of action while maintaining our commitment to prudent fiscal planning for balanced budgets. The budget takes serious steps forward in the quest to build the society that we value, the economy we need and the accountability we deserve. It is based on sound fiscal management and responsible stewardship of our resources, but is rooted in our values as we seek to give Canadians the tools they need to realize their potential. Above all, it recognizes the crucial link between social and economic policy and how an integrated approach produces policies that benefit all Canadians. The result is a better, more compassionate and competitive Canada today and an even stronger, more prosperous Canada in the years ahead. I urge all hon. members to support the legislation.

[Wayne Easter, Liberal, for the Deputy Minister and Minister of Finance]

moved that Bill C-28, an act to implement certain provisions of the budget tabled in Parliament on February 18, 2003, be read the second time and referred to a committee.

[John Manley, Liberal, Deputy Prime Minister and Minister of Finance]

moved for leave to introduce Bill C-28, An Act to implement certain provisions of the budget tabled in Parliament on February 18, 2003

(Motions deemed adopted, bill read the first time and printed)