Mr. Speaker, it is with a great sense of responsibility that I rise to speak on yesterday's budget presented by the Minister of Finance.
Yesterday, the government missed a golden opportunity to fundamentally change the state of finances and the state of the economy in Canada and Quebec.
The $15 billion in spending announced yesterday for the next two years shows that the federal government had ample leeway to respond to the concerns of Canadians, Quebeckers and the provinces with respect to some of the basic issues that have been debated for the past two or three years.
Rather than tackle the real problems, the government and the Minister of Finance, not unlike the Prime Minister, chose to take an all-over-the-map approach. I found 74 different areas of spending.
He chose to invest in provincial jurisdictions. Once again, he chose to create new initiatives, without really tackling the issues raised by Quebeckers, Canadians and the provinces, especially Quebec.
Although I am extremely disappointed to see that the Minister of Finance and the government did not take advantage of this golden opportunity, given that they had the means to correct a certain number of fundamental problems, I am nonetheless pleased to see that the public and the media, in particular, were not taken in.
In the headlines this morning I noticed for instance that the budget handed down by the Minister of Finance was described as a budget for everybody and a budget for nobody.
One newspaper indicated in its article on the budget that he is trying to please too many people. Another headline referred to hidden defects. A third was entitled, “Promises, Promises” and another, “The Urge to Spend”. Finally, there was one that I found especially striking describing yesterday's budget as a chicken with its head cut off. The government is running around in all directions and has produced a budget without a master plan.
The first thing to note in considering yesterday's budget speech and related documentation is that it has shown the extent of the fiscal imbalance. I think the federal government should have made it a priority to correct this imbalance, whereby this government has much greater financial resources than it needs to fulfill its responsibilities, especially those recognized under the Constitution Act, 1867.
There is also the fact that the needs are in the provinces and that, over time, the past few decades in particular, these needs have caused expenditures to grow, sometimes exponentially.
With respect to health, given the aging of the population, the new technologies and drug costs, we know that health costs are growing faster than the collective wealth, the gross domestic product.
So, the needs are in the provinces, while the money is in Ottawa. This became obvious yesterday when the Minister of Finance announced an additional expenditure of $6.4 billion to be made within a matter of weeks— we are not talking about years or decades here—that is by March 31. That is five weeks from now, six at most.
This goes to show that,unfortunately, the federal government has again kept information from the public, information on the real anticipated surpluses for the current fiscal year in particular. I will come back later to the fact that, for the next fiscal year also, we think that the surpluses will be much larger than those announced yesterday by the minister.
To illustrate this fiscal imbalance, since the Liberals took office, revenues raked in by Ottawa have increased from $123 billion in 1993-94 to $185 billion on 2003-04. That is a 50% increase.
We are not talking about several decades. We are talking about ten years at most, during which the federal government saw its overall revenues increase by 50%.
I think we all agree that this is a lot of money, considering the responsibilities of the federal government.
As I mentioned, for the current year, the minister had told us, in his economic statement, about a $1 billion surplus for strategic planning. Let us be generous and add to that $1 billion for strategic planning the $3 billion contingency reserve. This amounts to a $4 billion surplus.
Yesterday, not only was the minister able to maintain the $3 billion reserve, but he also announced, as I mentioned earlier, additional spending of $6.4 billion by the end of the fiscal year.
The minister himself admits that the surpluses will not be around $1 billion, if we exclude the reserve, or around $4 billion if we include it, but, rather, around $9.4 billion.
Based on the forecasts of the main Quebec and Canadian banks and financial institutions, we had anticipated that the surpluses would be closer to $10.4 billion.
Indeed, for the past several weeks, the Bloc Quebecois has been telling the public, through the media, and also here in the House, that the surplus would be closer to $10.4 billion.
Now, we must also take into consideration the changes tof accounting procedures announced by the minister yesterday, at the specific request of the Auditor General. Following these changes, this year's surplus will increase by $3.1 billion.
While the minister admitted yesterday that the surplus would not be $4 billion but, rather, $9.4 billion, I can assure the House that at the end of the fiscal year, once all tax revenues and expenditures have been calculated, the surplus, before the measures announced yesterday, will be around $13.5 billion instead.
The government is still hiding from the public the real state of public finances. This is totally unacceptable, particularly on the part of a minister who prides himself on being transparent.
This reminds me of a saying that has been around for generations in Quebec and that has to do with culture. We often say that culture is like jam: the less one has, the more one spreads it. It is somewhat the same thing with transparency. The less one has, the more one boasts about it.
I think that the minister and the current government are back up to their old tricks, incapable of acting with transparency and providing accurate information to the public. The best I heard was one commentator who said that it was true that the current Minister of Finance was underestimating the surplus, but not to the extent that his predecessor was. We could at least give him that.
This is not what Canadians and Quebeckers want to see. They want to know the true state of affairs.
As I mentioned earlier, we are projecting a surplus this year of around $13.5 billion. Next year, unlike the minister who has announced an $8.8 billion surplus, we believe that the surplus will be around $12.3 billion.
Yesterday in his budget, the Minister of Finance announced a surplus of $18.2 billion over two years, based on the spending and contingency reserve he indicated; however, we project a surplus of over $25.8 billion for this same period. That is a difference of approximately $7 or $8 billion.
Not only is this observation a sign that the government lacks transparency, but the size of this surplus is eloquent testimony—and no one on the government side can say otherwise—to the existence of a fiscal imbalance. Instead of spreading this $15 billion all over the map, they should have fixed the structural problem of fiscal imbalance once and for all.
Remember that, next year, 7 out of 10 provinces in Canada will be running a deficit. Only Quebec, Manitoba and Alberta will avoid this situation. There is something wrong when the federal government has doubled its revenues over the past 10 years, while most of the provinces, except Alberta, which is a very special case, are running a deficit. Even Quebec and Manitoba are just managing to keep their heads above water. A economic downturn could push us back into a deficit.
I was saying that except for Alberta, Manitoba, and Quebec, all the other provinces are running a deficit. Even Ontario will run a deficit next year.
It is the same taxpayer. It is not a taxpayer with a split personality who has one way of looking at the taxes he pays to Ottawa and another way of looking at the taxes he pays to Quebec City. It is the same taxpayer who pays in both cases.
As I mentioned earlier, we would have liked the federal government to withdraw from part of the tax base and allow the provinces to independently and democratically assume their responsibilities, especially in health, post-secondary education and income security.
The first observation we must make about this budget is the extent of the fiscal imbalance, which was once again demonstrated by the Minister of Finance himself.
The other observation is that since the government has too much money and not enough responsibility, it is inventing responsibilities. I think the second thing we must take from yesterday's budget is that a good portion of the money is going to the wrong priorities.
After the first ministers meeting a few days ago when the Prime Minister of Canada announced $2.5 billion in new money for the Canada health and social transfer, and with the size of the surplus now out in the open, although not news to us, we would have expected the federal government to have done a little more for health.
But it stuck firmly to the agreements that were reached barely ten days ago. As I was saying earlier, we have to use money we set aside for priorities that are questionable, to say the least. I will come back to this.
By the way, just in terms of interference in provincial jurisdictions, in Quebec in particular, with regard to the $15 billion that I talked about earlier, we identified $4.5 billion in new spending in areas that do not remotely come under federal jurisdiction.
This will result in squabbles, confusion and waste. The taxpayers of Quebec in particular, and those in the rest of Canada as well, agree that there was no need of it. The needs are so great, social needs in particular, that this money could very well have been used for more positive purposes, particularly, as I have already said in my first point, to correct the problem of fiscal imbalance for once and for all.
While they were busy invading areas of provincial jurisdiction, and funding a whole series of initiatives in a multitude of areas, many different segments of the population of Canada and Quebec who need immediate assistance failed to receive it.
I am thinking, for instance, of the workers, communities and companies that are victims of the softwood lumber dispute at this very time. There is absolutely nothing in the budget to address this dispute, which has now dragged on for over a year and half, almost two years.
I have asked the question of the minister, but he was not able to answer. He stayed in his seat and deferred to the Minister for International Trade.
We would have expected a number of measures for self-employed workers, particularly in connection with employment insurance. It is as if they did not even exist. We know very well that, within a few years, what is termed non-standard work, that is work that is not regular or not full time, will become the norm. As far as the federal government is concerned, however, it is as if it never existed. They are still living in the 1950s or 1960s, and have not noticed that the labour market has changed.
There is absolutely nothing for aboriginal people in this budget either. I will be told, of course, that there is plenty of money for health. That, however, will not make any fundamental change in the relationship between the federal government and aboriginal people.
In the coming year, the unemployed and the workers contributing to EI will again be having to make contributions that will be used for purposes other than protecting their income if they lose their jobs.
So, a lot of areas have been ignored. There are, of course, some measures that may at first seem worthwhile, in particular the higher limit for RRSPs, registered retirement savings plans. Despite the fact that the limit has been raised to $18,000, it must be kept in mind that only 1.5% of Quebec taxpayers are already contributing the maximum allowed amount of $13,500.
I noticed that several financial analysts have highlighted this initiative, but this does nothing to solve the problem of retirement savings. Approximately 80% of the population is unable to contribute enough to RRSPs. These people have no access to additional pension funds and they may end up in poverty when they retire. In response, the federal government preferred to implement a measure that, at first glance, seems to be good, but that will only help a small minority of people in the end.
I spoke of misplaced priorities earlier. We know that since 1998, the defence budget has increased 53% and there is an additional $1 billion in spending for next year.
Of course we are not against defence spending in principle, but we need to know what this money will be used for. There has not been a review of Canada's defence policy in more than ten years. The debate on Iraq only proves that we do not know what Canada will do; the position of the Government of Canada is unclear. Before throwing billions of dollars at defence, I think we should have had this debate.
And there are other priorities. Take the example of post-secondary education. Federal transfers for education have decreased 30% since 1996. I think that this is a priority need for Quebeckers and for all Canadians. This need could have been met immediately.
I do not have much time left, and a number of my colleagues will have the opportunity to touch on different aspects of the issue, but I would like to talk about the minister's proposal regarding employment insurance premiums.
The minister has made much ballyhoo about the drop in premiums, from $2.10 to $1.98 per $100 in insurable earnings. In fact, he already announced the greater part of this decrease last October during his economic statement, where he said that he would be lowering premiums from $2.10 to $2.00. Now he is announcing that it will not be $2 but $1.98.
In fact, what the Minister of Finance announced yesterday was a decrease in EI premiums of two cents more than previously announced. He will give up $100 million and continue to collect between $2.5 and $3 billion in excess premiums. Obviously, this is before holding consultations. We shall have to keep an eye on the government on this one.
I would like to read from a release by the Department of Finance issued on February 2, 2001—that was just two years ago—which said the following, with respect to the EI premium rate:
In December 1999, the House of Commons Finance Committee concluded that the rate setting process needed to be revised. When Bill C-44 was introduced in September 2000, the Government of Canada announced that it would undertake a thorough review of the EI premium rate setting mechanism.
The same promise was made two years ago by another finance minister, and nothing came of it. What is scary is that the then Minister of Finance could well become the Prime Minister in a few months.
Would it not have been better to immediately resolve the issue of the process to set rates by creating an independent fund? That is what the unions are requesting, as are a good many employers' associations, to ensure that those contributing are the ones managing the fund and making decisions about premium rates and coverage.
Instead, what is announced is a consultation process, which I can predict will go nowhere. Meanwhile, the government will keep dipping into the EI fund and using this money, billions of dollars, for other purposes.
This budget is therefore a big disappointment. It provided a golden opportunity to resolve, in Canada and Quebec, a number of fundamental problems such as fiscal imbalance, misappropriation of EI funds, infrastructure—for which municipalities are requesting huge amounts of money—Kyoto and many others.
As I said, in the next few days, several of my colleagues will have the opportunity to demonstrate that this budget is utterly unacceptable.
Accordingly, I wish to move an amendment to the amendment put forward by the leader of the Canadian Alliance.
That the amendment be amended by adding after the word “Minister” the following:
“that, among other things, deny that there is a fiscal deficit between the federal government and the provinces, and conceal budget surpluses to the detriment of democratic debate, and”.