Bill C-30 (Historical)

Budget Implementation Act, 2004

An Act to implement certain provisions of the budget tabled in Parliament on March 23, 2004

Budget Implementation Act, 2004

[Andy Burton, Canadian Alliance, Skeena, BC]

Mr. Speaker, I will be sharing my time with the member for Calgary Southeast.

I rise today to comment on Bill C-30, the budget implementation act. I must say off the top that I am disappointed that this document regurgitates promises already made and makes many for the future. If we look at the track record of the government, promises made are all too often promises broken.

It is time for change, time for a government that will live up to the expectations of Canadians, a government that will be truly accountable and responsible. The past decade has seen unbelievable levels of waste and misspending by the Liberal government.

Where do I start? There was the HRDC billion dollar boondoggle. The cancelled helicopter contract cost the taxpayers of Canada $600 million, and we still need the helicopters. That was just money down the drain.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I am pleased to speak to this bill today. Unfortunately, it is a bill that does not do much to advance the cause of equality between the men and women of Canada, particularly in one aspect, namely the whole issue of Bill C-30 that extends the pillaging of the employment insurance fund.

I think it is important to explain once more how the government managed to misappropriate the $45 billion it took out of the pockets of workers, employers and the unemployed, and then did not have to account for its use of this money.

Between 1993 and 2001, the federal government sucked $45 billion out of the pockets of workers, employers and the unemployed by cutting their benefits. In a report, the Auditor General told the government that what it was doing was contrary to the letter and the spirit of the law. She said it was impossible to have accumulated a surplus of $45 billion and not to have put it back into the system. The law itself provides that the contribution rate is set by the Employment Insurance Commission in response to the needs of the employment insurance system. In other words, based on economic activity, they assess the amount of contributions required to pay for benefits and training. Eventually, over the economic cycle, the surpluses are put back into the system.

For 10 years, the federal government has sucked up the surpluses. It has used them to fight the deficit and to pay down the debt. Today, faced with the Auditor General's remarks, the government is trying to think something up; otherwise, it will be in a completely illegal situation.

So, two years ago, it was decided to draft a bill stipulating that the contribution rate would no longer be set by the commission but by the government itself, depending on its needs. Basically, this authorized the theft, the misappropriation of the employment insurance fund by saying, “We did it for ten years; now that the Auditor General has determined that we are not allowed, we will give ourselves the right, through legislation, to do the same thing by setting what will be the equivalent of a payroll tax”.

This year's budget has just prolonged the abuse. The government initially set itself two years for using this mechanism, and promised us a new method for determining EI contribution rates, a new approach. The former finance minister, the hon. member for Ottawa South, held consultations that ran for one and one half years. This year, when we were expecting a new method of setting the contribution rate, there is an extension for another two years.

The resulting situation is like having one's house broken into. People see it happening, but organize things so that it can continue, by lending it some kind of legal, though not legitimate, status. This is what this bill today is all about.

I see this as even more scandalous than the sponsorships. Of course the sponsorship scandal has a lot to do with ethics. A system was set up so that the federal government could pay for sponsorships with a share going to ad agencies for work that was not done. Then that money ended up back in the coffers of the Liberal Party of Canada. A very well balanced system and one in which the percentages can pretty well be determined: 12% for the agency, and then 10% of that 12% to the Liberal slush fund. So well organized that we can pretty well determine the amounts involved down to the last cent.

This shocks a lot of people, of course. People have trouble paying their income tax, but when we do pay our taxes and then our tax dollars are wasted the way this government is wasting them, that is unacceptable.

What I find even more appalling in the employment insurance scandal is that they fought the deficit with money that belongs to people in our society who are the worst off. Seasonal workers who work 10, 12 or 15 weeks a year have to make up for the other 35 weeks. In the past, the employment insurance system allowed them to put in their time and have enough income to support their family for the entire year. Now, with the new system put in place by the Prime Minister, with his blessing when he was finance minister, we are in a situation where people who work only 10, 12 or 15 weeks no longer receive any income during the winter. That is the reality for seasonal workers who work in forestry, agriculture or tourism. In other regions, this may occur in the summer, but it is the same problem.

Last week I asked the member for Chicoutimi—Le Fjord about this problem and he said, “Yes, but we lowered taxes”.

Indeed taxes were lowered, but unfortunately seasonal workers do not earn enough in a year to benefit from lowered taxes. They have the pleasure of knowing that they contributed the most to fighting the deficit, but they have yet to see a return on their investment.

While people like us, the middle class, at least had our taxes lowered, those who earn only $20,000 or $25,000 a year did not benefit from this tax reduction. They had to take a hit in their employment insurance benefits. They have had to live with this, and are still living with this, while the government accumulates a surplus year after year.

This year, in all probability, there will be another surplus of approximately $8 billion. In any case, it was $7 billion in January. This is a great deal of money. People who are earning $15,000, $20,000 or $25,000 per year and realize that their benefits have been cut and that the number of benefit weeks has been lowered are unhappy. Often, they have even been disqualified, because the increased number of hours needed to qualify resulted in many people having been eliminated from the system. They have to pay contributions—it is Machiavellian—from their first hour of employment.

Young people entering the workforce must make contributions starting with their first hour of employment. To qualify for benefits, they have to work 910 hours. If they have not worked enough hours, they are told to come back another year, because they are not eligible.

Consequently, young people entering the workforce and women returning to work after several years' absence contribute to the employment insurance system but they are not entitled to benefits. This whole system has long been condemned and is judged by the public as unacceptable.

This year in the budget, we expected the government to say, “The time we can misappropriate funds like that is over. We owe the workers $45 billion, and here is how we are going to pay it back”.

We were not asking them to pay back it all back tomorrow. It took them ten years to steal it. Repaying it will obviously take several years. At the very least, they should give us hope that the system will be able to benefit from this money. However, there is nothing to that effect in the current bill.

That is why I consider this a dreadful scandal. People are having trouble accepting this very harsh reality. It has an impact not only on individuals, but also on regional economies. I have some examples. In the Lower St. Lawrence, when people in the tourism industry have to work more hours to access employment insurance, at some point, they are forced to leave to go work in the big cities. Once they leave, they never come back. The next year, there are job openings, but there is no one to fill the positions.

Consequently, these situations have a negative impact on individuals and regional economies. But seasonal industries are here to stay. In our economy, we cannot limit ourselves to biotechnology and new sciences. Of course, we must encourage the modernization of the economy. But the traditional industries are still present and they allow people to earn a living. They must continue to do so, whether in tourism or in the agriculture and forestry sectors.

At present, people are not getting value for their money. They would have liked a self-sustaining employment insurance fund. If contributors—employers and employees—ran the system, it is certain that the surplus would not be used to pay for the government's general operating expenses. There would be a balanced system.

If the surplus were very large, contributions could be suspended or benefits improved. If there were deficits, contributions would have to increase. It is a standard practice in insurance, but none of this is found in the current budget.

Last year, during his leadership campaign, the finance minister proposed a new way of looking at it. He came to Charlevoix and said, “We will sort out the status of seasonal workers. You will see. I will take care of it”. We saw the results yesterday in this House. It was terrible, but it was very instructive.

A member of the Bloc Quebecois, the member for Charlevoix, has introduced a motion to establish special status for seasonal workers, regardless of the economic region in which they live.

We are asking for this because even if the economy in one region is very healthy, the seasonal workers always do the same number of hours of work. Then, no matter how active the economy is, they cannot work any more weeks. That is what we are seeking to correct.

The bill before us, which implements part of the budget, is unacceptable to me. Yesterday's vote, when the Prime Minister voted against implementing a system for seasonal workers, is a very clear demonstration that he is not prepared to change a single thing in the current system.

Accordingly, I will vote against this bill.

[Werner Schmidt, Canadian Alliance, Kelowna, BC]

Mr. Speaker, it is a privilege to address the debate on Bill C-30, the budget implementation act.

I would like to draw a couple of contrasts to what we find happening here in the House and to what is happening in the community of Kelowna in my constituency.

Kelowna is a jewel that lies in the middle of the Okanagan Valley, that place where people have experienced the joys of many friends coming to visit them from all parts of Canada and many different countries of the world. People have chosen this place because they have recognized its beauty, its tranquility and as a place where they would like to be at home. It will be a privilege, and I am humbled, to be able to contest the next federal election on behalf of the Conservative Party in this beloved constituency called Kelowna.

Into this constituency last summer came a voracious fire where 238 homes were lost. That fire respected neither time, place nor person. The fire brought us together as nothing else I have ever experienced. Even the Governor General of Canada came to visit Kelowna and recognized the spirit of compassion, consideration, kindness and friendship that was developed as a result of the coming together at that fire.

There were 238 homes lost and there were so many things that happened in terms of the individuals and the kind of help they gave to one another. They came together and they helped one another. Into this context we had the launching of the United Way appeal by Mel Kotler, who is the chairman. I have to give special credit to him. He said “our goal this year is to be $1 million and $1 for the United Way campaign. That was an unheard of goal for our community and a lot of us were cynical and said “This cannot be, after the devastation of the fire and all the other things that had come about. You cannot now expect us to raise that”. What happened? Not only was the goal met, it was exceeded by almost $10,000.

In contrast to that kind of benevolence and compassion that we find in our community, we had a Speech from the Throne followed by the budget, the implementation of that budget we are now debating. That Speech from the Throne, that budget said that we shall have an address to the democratic deficit and that there will be “more free votes”. A real test was presented to the House very shortly after the new Prime Minister came into office. It was to allow MPs to exercise the free vote in establishing and supporting more money for the long gun registry.

A little digression is absolutely essential here. One billion dollars had already been spent on this and it looks like it will be closer to $2 billion. I must put this into context for the people in British Columbia. If that $2 billion had not been spent on the gun registry, it could have been used to help people. It could have paid the tuition for every university student in British Columbia to the tune of a bursary of about $37,000. What is more important, helping our our young people to get an education or registering a hunter's rifles? In that kind of contrast, it is a waste of government money.

It looked like MPs would not support the gun registry. They recognized the foolishness of that particular registry and that we should not put another bunch of money behind it. The government had already wasted a lot of money on it. However, because of a fear that members would not support it, what did the Prime Minister do? Instead of saying that it should be a free vote, he whipped them into shape and told them to vote in favour of the allocation of additional money. Is that a free vote? No. That was a broken promise one week after Parliament came into session under the new Prime Minister.

This morning the Prime Minister was in Vancouver appointing persons to run under the Liberal banner in the next federal election. The constituents who make up the local Liberal association do not have the right to choose their own candidates. The Prime Minister is the one who will appoint the candidate. Is that democracy? That sounds an awful lot more like dictatorship than democracy.

When the Prime Minister was running for the leadership of his party he indicated clearly that there would be some kind of suitable system to vet the candidates for appointment to the Supreme Court, which now has two vacancies. What was one of the first things the newly appointed Minister of Justice said in response to the question: What will the vetting process be? He said that he did not know and that he was not quite sure whether it would be done at all. Yesterday it appeared as if there might be a process of vetting the appointment of those judges.

What are we supposed to make of these obvious missteps at the very beginning of the “new government” under the “new Prime Minister”? Thankfully, there will be an election soon and Canadians will be able to speak and say that it is time for a change.

We need a new government, a true new government, a government that believes that free votes are necessary, that democratic reform can be accomplished, and not in the way the current Prime Minister is doing it.

We need to move on from there. We need to recognize that as one reflects upon the contents of the Speech from the Throne and the budget, one is struck by the glaring omission of certain things.

First, there was no mention of the rights of victims of crime. Does the new Prime Minister not realize that the current justice system often protects the rights of criminals to a greater degree than the rights of victims? Has he forgotten or chosen to ignore the fact that victims of crimes also have rights? Does the criminal justice system exist to protect innocent Canadians from those who would perpetrate suffering, pain and loss of property, and sometimes death? Does the Prime Minister not realize that our justice system is much more of a legal system than a system of justice for the victim as well as the criminal?

The other omission is that no serious consideration was given to a plan to pay down Canada's debt. Each year something like $35 billion or $36 billion is paid out in interest to service that debt. Based on the 2002-03 budget of the British Columbia government, that is enough money to pay for the public health system in British Columbia for three years. If that debt were half of that, then the interest required to be paid would be half of that. It is obvious that if we maintain that debt and have no plan to pay it down, we will continue to have that burden and that burden will be carried forward to our children and grandchildren.

Another conspicuous absence in the Speech from the Throne and in the budget was the definition of marriage. That matter was referred to the Supreme Court of Canada by the previous minister of justice. Rather than deal with the matter, the new Prime Minister has submitted a further question and that matter will not become an issue in the immediate future.

What will the new Prime Minister do? Why does he do this? Is he afraid? Does he not have any courage of conviction based on a strong set of values? Is he so devoid of value commitment that he would relegate effective legislation for this country to the courts? If that is so, will he admit that under his watch Parliament is but a shadow of government and that the real governing is placed in the hands of those whom he has appointed to the bench of the Supreme Court of Canada?

What about his personal ethics? Could he really not have put into gear a flow of information that would have immediately corrected the error of some $160 million that CSL received from the Government of Canada?

The time has come for us to recognize that we cannot wait to see what the Prime Minister will do. He has an opportunity to become a new Prime Minister. Will he do it? The opportunity is his but he must do much more than what he has done thus far. As with all people, we must recognize that doing the right thing exults a nation but doing the wrong thing is a disgrace to any people.

[Gary Schellenberger, Progressive Conservative, Perth—Middlesex, ON]

Mr. Speaker, I am pleased to speak to Bill C-30 and I would like to inform the House that I will be sharing my time with my colleague from Kelowna.

As I listened to the budget speech the other day, I was very interested, coming from a rural riding, with the $1 billion that was pledged to agriculture. My agriculture constituents were very enthused

While the money for agriculture is appreciated, this has been a problem since last May. Why did it take almost a full year to take this kind of action? The border with the U.S. remains closed and this continues to be the most important issue that remains unresolved.

I have received numerous calls from area beef and dairy farmers expressing serious concern over the recent assistance package announced as part of the budget. In the strongest possible terms I want to express my disappointment in the new package.

While beef producers seem to have been compensated fairly, it appears as though dairy producers have been either forgotten or abandoned. The figure of $56 per dairy heifer is absolutely unsatisfactory.

As with previous programs, this plan is far too narrow in scope and does not offer to help numerous sectors of the agriculture industry suffering the effects of BSE. In effect, the new program, when considered in the context of the entire agriculture industry, is of little value and unfair.

If we take the cull cow program that was presented by the government last fall, there was about $200 million set aside for culled cows and the second line in the cull cow program said that farmers did not have to kill or cull the cow. I do not know how it was even a cull cow program. If the Liberals had listened to the Conservative Party, we planned to eliminate 700 cull cows with $500 for each cow.

On the EI premiums, where is the economic relief Canadians need? The government could have lowered EI premiums and made a very positive impact on the economy. This inaction represents a real opportunity missed.

Regarding the environment, though justifying the sale of Petro-Canada shares to invest in the environment, the reality is that the budget virtually ignores important environmental issues. The sale is expected to generate more than $3 billion and yet the government's announcements only amount to $1 billion.

There are no initiatives encouraging the clean up of the Great Lakes and no invasive species legislation. Smog control and clean air were also ignored.

This is the fifth time I have heard the government announce the $2 billion health care transfer to the provinces. While I am pleased to see the government honour the agreement reached in the 2003 health accord with the provinces, it is important to point out that announcing it five times does not increase the amount of money that gets placed into the system.

Some more money, yes, but the government continues to avoid seriously addressing the issues plaguing the health care system in Canada. Throwing money into the system is not the answer. We need to start taking a hard look at the system while always maintaining the principles outlined in the Canada Health Act.

I was surprised, that in a year during which Canada will be participating in the Olympics in Athens, there was effectively no mention in the budget of increased support for Canadian athletes. Investing money now to encourage Canadians to participate in sport would result in health benefits for Canadians and translate into overall lower health care costs down the road.

With Canada set to host the 2010 Winter Olympics, this would have been an ideal time to start a program encouraging Canadians toward healthier lifestyle choices. I will read certain passages from a letter that I received from the Canadian Olympic Committee. It states:

As we discussed during our meeting on February 19, 2004, we believe sport plays a significant role in the lives of Canadians.

The role that participation in sport plays in our personal development and well-being is widely acknowledged.

Sport is an important and growing feature in projecting our nation's image abroad and offers a demonstrable return on investment in terms of reduced health care costs from participation in physical activity and in the economic benefits of hosting sporting events in Canada.

The roles played by Sport Canada, national sport federations, provincial governments, the private sector and others is very important for the development of sport in Canada from fitness and leisure sport through to the development of world-class athletes bringing home medals from international and Olympic competitions.

Canada has been especially successful in playing host to many international sport competitions, including summer and winter Olympic Games. Again in 2010, Canada will have the honour of hosting the Olympic Winter Games in Vancouver-Whistler and it is vital that our athletes be prepared.

We are pleased that the government has invested an additional $10 million in sport this year--

However, beyond the additional $10 million and sustaining the current funding level, the sport community has recommended an urgent need for at least $50 million in increased federal funding for sport--

During our recent round of meetings in Ottawa...we recommended that the government announce, as a first step in this initiative, an additional $8.5 million per year to be provided in the upcoming budget to Sport Canada to enable them to begin immediately providing an increase in direct financial support to Canadian athletes.

Finally, we would like to request that the government set aside reserve funding in the fiscal framework of the balance of the recommended funding, that is $41.5 million per year, pending completion of a review and report on this important initiative: namely to promote a more active and healthy population through fitness and athletic development and to foster excellence and improved international standing by Canadian athletes in high-performance sport.

We believe this is key in assisting to build Canada's preparedness for a solid showing in 2010--

The $7 billion GST relief to municipalities will trickle from Ottawa at a snail's pace over a decade. The Prime Minister has been talking for a long time about offering some of the gas tax to municipalities. There is no specific plan present in the March 23rd announcement.

All these programs, a few million here and a few million there, but what they do not mention is that they are spread out over a decade. Many people hearing these funding announcements will be dead by the time these programs pay out in full.

An issue that continues to be largely ignored by the government is the state of rural Canada; specifically its economy and its infrastructure. There was nothing in the budget to help rural community groups seeking funding assistance for projects such as recreational facilities and cultural centres.

Riding the coattails of the veterans, the Liberal government is promising to send money to build a monument at Juno Beach that the veterans have already built. This is the same government that ignored the veterans several years ago when the funds were desperately needed. The monument was almost not built, and now that it is, the government wants to step in at the last moment and take credit it does not deserve.

Essentially, this budget is a blueprint for underachievement. After the release of the budget the important question Canadians need to ask themselves remains the same, do they have confidence that the government can honestly and effectively manage their money?

The Liberal candidate in my riding recently boasted he was going to be coming after me in the next election. He is quoted as saying that I got lucky in the byelection, that my victory on May 12th was a protest vote against the Liberal government. Well, here is to being lucky. From what Canadians have seen, since the people of Perth—Middlesex sent me here, there is more reason now than ever for a protest vote.

When frustrated farmers from my riding call me now and ask me what they should do, I tell them that there is only one thing left that they can do, and that is to help the Conservative Party change the government in the next election.

Business of the House

[Jacques Saada, Liberal, Leader of the Government in the House of Commons and Minister responsible for Democratic Reform]

Mr. Speaker, this afternoon, we shall continue debate on Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on March 23, 2004. If this is completed, we will commence second reading of Bill C-28, an act to amend the Canada National Parks Act.

Tomorrow, we will debate a motion to refer to committee before second reading Bill C-25, an act to establish a procedure for the disclosure of wrongdoings in the public sector, including the protection of persons who disclose the wrongdoings, and hopefully deal with the Senate amendments to Bill C-8, an act to establish the Library and Archives of Canada, to amend the Copyright Act and to amend certain acts in consequence.

When the House returns on April 19, any of this business that is unfinished will be taken up, along with Bill C-11, an act to give effect to the Westbank First Nation Self-Government Agreement, Bill C-12, an act to amend the Criminal Code (protection of children and other vulnerable persons) and the Canada Evidence Act, and Bill C-10, an act to amend the Contraventions Act and the Controlled Drugs and Substances Act, Bill C-15, an act to implement treaties and administrative arrangements on the international transfer of persons found guilty of criminal offences, Bill C-28, an act to amend the Canada National Parks Act, Bill C-23, an act to provide for real property taxation powers of first nations, to create a First Nations Tax Commission, First Nations Financial Management Board, First Nations Finance Authority and First Nations Statistical Institute and to make consequential amendments to other acts, and the bill introduced yesterday, Bill C-31, an act to give effect to a land claims and self-government agreement among the Tlicho, the Government of the Northwest Territories and the Government of Canada, to make related amendments to the Mackenzie Valley Resource Management Act and to make consequential amendments to other acts.

I should like to wish my colleagues a happy and pleasant holiday period and to express my hope that they return refreshed and ready for a full legislative agenda for the spring.

Budget Implementation Act, 2004

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, the hon. member for Argenteuil—Papineau—Mirabel is absolutely right. I will give a figure that illustrates the situation very well. If Quebec had received its fair share of R and D expenditures over the years, we would be in a position to do secondary and tertiary resource processing. Quebec is known for its very rich natural resources. Here is that one figure: public expenditures in R and D in Ontario are 80% federally funded, while in Quebec the percentage is 39%.

This is a very revealing figure. If the public funding of R and D in Quebec were at Ontario's 80% level, we would be far more able to develop technologies and methods for processing our natural resources, particularly in the regions.

Such is the history of Canadian federalism. It is, moreover, also the reason why increasing numbers of Quebeckers have chosen the path of Quebec sovereignty. Through it we will be able to repatriate all of our means and all of our tax money so as to be able to have positive investments. Equalization payments are a lesser evil, but I would remind hon. members that equalization is included in the Canadian Constitution. I will read you the excerpt, and will close with that. It states that the provincial governments should have sufficient revenues

to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

That is what is written in the Canadian Constitution, but it is not what the federal government, the Liberal government, is doing.

The equalization formula therefore needs to be reviewed in light of what is stated in the Constitution. As long as Quebec remains within Canada—and we hope that is not for long—the federal government will have to respect its commitments. This is not the case with either Bill C-30 or the budget. I can assure you that the people of Quebec will make this government pay for its ineffectiveness, and then some.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, first, I would also like to join in congratulating the hon. member for Edmonton North. I do not know her very well, because I am from the class of 2000, but I think that everyone who meets her knows she has extraordinary energy and I am convinced that, as her life continues, she will have an opportunity to use it very productively for Canada and for her community.

Twenty minutes to talk about the scandal of this budget and Bill C-30 is not a long time. Bill C-30, the bill to implement certain provisions of the Finance Minister's budget, is actually the bill to institutionalize the fiscal imbalance. It is a bill that institutionalizes the state of affairs denounced by everyone in Quebec, whether federalist or sovereignist.

In my speech on the budget, I indicated that we had been victimized twice by the sponsorship scandal twice. The first time, obviously, we were the victims of the sponsorship scandal because public funds were used for purposes that were questionable to say the least.

The amount of $250 million was used to unduly increase the visibility of Canada—to sing the praises of Canadian federalism. At the same time, this federal government visibility campaign was accompanied by commissions paid to advertising agencies of about $100 million, or 40% of the total cost. With respect to that, I would say that the public reaction, particularly in Quebec but all over Canada as well, has been at least what this scandal deserves.

Yesterday, I was at the nomination of the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, who is the candidate for the Bloc Quebecois in Rivière-du-Loup—Montmagny. It was quite interesting watching the people in attendance try to figure out what the three letters PLC meant. Of course, all of us here know they stand for Parti Libéral du Canada, the Liberal Party of Canada. But the imagination exercised by people at that nomination meeting was quite interesting. For example, someone suggested to me that PLC could mean “parti du libre copinage”, or party of liberal cronyism. We know what they are talking about.

In light of Jean Chrétien's remarks this week, with his barely veiled criticism of the Prime Minister, another person proposed that PLC might stand for “parti des longs couteaux”, or party of the long knives. And finally, the classic “parti libéral pour les commandites”, or Liberal sponsorship party, comes up constantly at our meetings across Quebec.

So, the first time we were the victims of the sponsorship scandal is well known. The judgment passed by the public is very harsh. Indeed, a survey published this morning in La Presse showed that 61% of Quebeckers are dissatisfied with the current government, the federal Liberal government, which is rather extraordinary only four months after the new Prime Minister came into office.

That was the first time we were victimized by the sponsorship scandal. The second time was when the budget was brought down. The budget was designed by the Minister of Finance and the Prime Minister in reaction to the sponsorship scandal. They wanted to project the image of a prudent and rigorous government. However, this image was fashioned at the expense of our fellow citizens, in Canada and in Quebec, especially the most vulnerable members of our society.

In reality this budget is not rigorous. It is irresponsible towards those who need health care, young people who need education, the elderly who need adequate income security, working families who need support, and the regions which also need to have the means to ensure their development.

This budget is irresponsible because there is nothing in it to meet the concerns of Quebeckers, and I believe the same is true of the rest of Canada.

This budget is not prudent either, because it fudges the numbers and does not give a true picture of the federal public finances. Once again, the surpluses have been underestimated. I know, it is sad to have to denounce that fact for the seventh or eight time, but we do not have a choice. When we are made to believe that, for the current fiscal year, starting today, 2004-05, the surplus will be $4 billion, we are being taken for fools.

Last year, despite SARS and mad cow, the blackout in Ontario and forest fires in western Canada, and the 20% rise in the Canadian dollar, in other words, despite numerous factors influencing economic growth, the surplus was still $5.4 billion. It will probably be more lie $7 billion once all the figures are known.

They would have us believe that although the economy is improving, next year, the surplus will be lower than it was this year. This makes no sense. It is truly scandalous. It is even more scandalous, as I said earlier, since this cover-up, this attempt by the federal government to hide the surplus comes at the expense of the most vulnerable members of our society, particularly those needing support and financial assistance, be they seniors or individuals unfortunately experiencing financial hardship or living in poverty, as well as young families and students.

We are paying a second time for the sponsorship scandal. Not only through the taxes we pay, but now as a result of this government's irresponsibility.

Obviously, the sponsorship scandal is the backdrop. But, this scandal must not make us forget all the other scandals during the overly long reign of the federal Liberal Party.

The employment insurance scandal resurfaces in Bill C-30. The government is once again institutionalizing the theft from the employment insurance fund: $45 billion was misappropriated for something other than employment insurance. In other words, $45 billion in contributions was not allocated as benefits.

We must not forget that, with the reform implemented by the Liberals, only four out of ten people contributing will have access to benefits, since eligibility requirements have been severely restricted, particularly for young people, women and new entrants to the labour force.

In addition to $45 billion having been stolen—I am forced to use this word—or misappropriated from the employment insurance fund, most of which was used to pay down the debt, the contribution rate is being held at $1.98 this year when, according to the actuary, it should be $1.80 to meet the needs of the system. Consequently, once again this year, there will be a nearly $3 billion surplus in the employment insurance fund, which will be used for other purposes.

The government could have improved the system, but it did not, nor does it want to. This was proven yesterday when the member for Charlevoix, who will soon be the member for Manicouagan, proposed fixing the situation for seasonal workers—workers in seasonal industries who are currently going through the spring gap.

People from Charlevoix and the North Shore—my brother lives there—call me and say, “Do something. This makes no sense. Year after year we slip further and further into poverty”.

This situation has to be rectified. The member for Charlevoix made a proposal to fix the gap situation and the vast majority of Liberal MPs, particularly those from Quebec, voted against his motion. That said, during the election they will try to tell us, “Trust the federal Liberals. Once we win the election, we will come back to the House and correct the situation”.

We will not have a repeat of what happened in 2000, when the President of the Treasury Board went to Chicoutimi and promised aluminum plant workers, in particular, and construction workers that they would see a change in employment insurance. The President did not follow through on his promise. It is absolutely scandalous. Some $45 billion is owed to employment insurance fund contributors and claimants and this should be corrected as soon as possible.

Nonetheless, that is not what Bill C-30 will achieve. It institutionalizes the fact that it is the government that unilaterally sets the contribution rates. This year the rate is being held at $1.98, which will generate a surplus. Moreover, the government is giving itself the power to set the rate for 2005.

I remind hon. members that in 2001, on the eve of the election, the government gave itself the temporary right for two years to set the contribution rate in order to review the mechanism for determining employment insurance contribution rates. That was in 2002-03. In 2004, the government set the rate. The former finance minister set the rate. He promised that for 2005, the budget would include an announcement of a new rate setting mechanism.

It did not happen. Bill C-30 is telling us that for two more years, the government will take it upon itself to unilaterally determine the contribution rate. Even in 2004, this practice is questionable. How could the government set the contribution rate despite its own commitment and despite the fact the legislation allowed this just for 2002-03?

That is unacceptable. The contribution rate should depend primarily on the type of coverage we want from the EI fund.

We expect from the EI plan better coverage for workers who are temporarily out of a job by raising the number of benefit weeks and improving accessibility. Bill C-30 and the vote against the motion of the hon. member for Charlevoix by Liberals yesterday are not taking us in that direction. Voters from the North Shore area and all of Quebec and all of Canada, I hope, will remember this and will have the Liberals pay the price of the EI scandal.

Tax havens are another scandal. We would have thought that, at least in this budget, the finance minister would make an announcement about tax havens. We have been told a process was underway. Probably a process similar to the one for the sponsorship scandal. So, we have tax havens, particularly Barbados, which is the tax haven designated by the Canadian government for Canadians.

As a result of the tax convention between Canada and Barbados, Barbados has become the third ranking destination, after the United States—understandably—and Great Britain, for direct Canadian investment. If I remember correctly, the amount going to Barbados is around $25 billion or $30 billion.

Might I know what the Canadians who send those $25 billion or $30 billion to Barbados do with it? Is that small island capable of supporting such large investments in terms of manufactured goods or services? Certainly not. We are not fools, and neither is the general public.

This is money diverted from the income tax these people should be responsible for paying in Canada. They have been provided with a loophole. It has been made legal. This Prime MInister is the one who legalized it when in finance, and he has personally benefited from it. That is common knowledge.

The Prime Minister had at least 13 companies in tax havens, Barbados and Bermuda in particular. They no longer belong to him, but to his sons. We have traced one of these companies, Canada Steamship Lines Inc., headquartered in Barbados, and have been able to calculate that, in recent years, it was saved from having to pay $100 million in tax dollars to the Canadian government and the provincial governments concerned. This has never been denied by either the Prime Minister or Canada Steamship Lines.

This is absolutely scandalous, and there is absolutely nothing in the budget to close this tax loophole. The public will remember that as well. Most of us, most of the voters in Quebec—and this goes for Canada as well—have to pay their income tax. They have no such loopholes. They do not have the means to send their money to Barbados in order to avoid their responsibilities as citizens.

If everyone did, we would not be able to have the public services to which we are entitled. As well, you and I are paying more taxes as a result. When the federal government needs money, it taxes those I call the captive taxpayers, those unable to take advantage of such loopholes.

So, one would have expected the budget to close this loophole, and particularly to terminate the tax convention with Barbados.

There is another scandal, the one that involves the guaranteed income supplement. I know that the hon. member for Champlain will talk about it later on, so I will not get into details. However, depriving people of $6,000 by not properly informing them of their rights is a very serious matter. Here again, the government targeted the poor.

Jean Lapierre, the Prime Minister's lieutenant in Quebec, reportedly boasted about sampling wines that cost $3,000 per bottle. So, the price of two of those bottles of wine is equivalent to the guaranteed income supplement that a significant number of seniors did not get, because they were not informed of their rights. And Mr. Lapierre has the nerve to brag about drinking two bottles of wine, or more, with Lafleur, who was the president of Lafleur Communications, one of the companies involved in the sponsorship scandal. So, there is also this scandal, but I will not elaborate any further, because I am sure that the hon. member for Champlain will address the issue.

Then there is the scandal of those Quebec families that do not enjoy the much needed federal support that they should be getting under two programs. There is the parental leave program, which Quebec wants to set up and on which there is a consensus. Indeed, all the parties in the National Assembly support this initiative. This is a more generous program than the one that exists under the federal employment insurance program; is also broader and more accessible since workers, particularly self-employed workers, are covered by it.

Nevertheless, the federal government refuses to transfer the $700 million to which Quebec is entitled. This amount also includes the compassionate leave, which is very poorly thought out in Ottawa at present. The taxpayers of Quebec are paying this amount and they ought to be getting it back, but the federal government stubbornly refuses to transfer it, even though it lost in court.

The Government of Quebec went to court, and the court found that it was within Quebec's jurisdiction and therefore the federal government had no business getting involved in that field. Consequently, it was obliged to transfer the money to Quebec.

But there are worse things in this budget. Day care is now at $7 because the federal government is not transferring the money Quebec needs, to provide the range of services that we want to have available. The $7 a day child care program loses $250 million a year for Quebec's families and taxpayers. Since it is partially publicly funded, the federal government does not allow the deduction, the total tax credit, for child care expenses.

The federal government is saving $250 million in tax refunds. Since the program has been operating, there has been a clear shortfall of $1 billion for families and all taxpayers in Quebec. We have been asking for a long time to have this situation corrected, to transfer this money back to Quebec, but the federal government says no; it will not listen.

In the budget, we were told they will invest $150 million all across Canada. Where does this amount—which is inadequate—come from? It comes from the $250 million of which taxpayers and families in Quebec have been deprived. The government will send back a few crumbs to Quebec—some $30 or $35 million—and it would want us to say thank you. We have $250 million stolen and get $35 million back, and we should be saying thank you? We will not say thank you. We will make our voice heard and demand a correction. The scandal of families, therefore, is another scandal for the Liberal government.

Let us talk about the gun registry scandal. This project was supposed to cost $2 million, but it has cost close to $2 billion. What I have noticed, and the Auditor General has shown this again this week, is that the federal government wants to encroach on every provincial jurisdiction. It wants to tell the provinces what to do and it always knows better than everyone else when it comes to health and education.

Just starting up the Canadian Learning Institute cost $100 million. That money could have been used for many other things. When we look at health, they want to set standards, and so on, and it just keeps adding up. Nonetheless, in their own jurisdictions, it is nothing but incompetence, inefficiency and waste.

For instance, we know that the $7 billion allocated for security after the tragic events of September 11, when the Prime Minister was finance minister, was spent in a completely inefficient and inconsistent manner. Border security, which is a federal government responsibility, is inadequate in Canada. It is porous.

This morning, all the newspapers in Quebec are talking about it in their editorials. It is a joke. It is a porous border. The means are not there. Where did the money go? Some have benefited from this $7 billion. Perhaps it was cronyism, perhaps some totally useless procurements were made but benefited friends of the government. I do not know, but I find it strange that this money did not produce the desired results.

An amount of $7 billion is not peanuts. It could be used to build 35,000 social or affordable housing units in Canada and in Quebec, since there is a shortage of such units. The lack of housing policies is another flaw in the budget.

So, the federal government is totally ineffective in its own jurisdictions. It gets a big zero in terms of effectiveness.

I will conclude by talking about equalization. The government would have us believe, with Bill C-30, that the equalization program is generous. In fact, it does not at all meet Quebec's expectations, as Minister Séguin said last week.

I will quote a few figures on Quebec's expectations. This is from a document entitled “Correcting Fiscal Imbalance” in relation to Mr. Séguin's 2004-05 budget.

For this year, that is 2004-05, Quebec was hoping that the federal government's contribution to health would represent $471 million. Quebec wanted the $2 billion to be a recurrent amount. Ottawa's response is zero dollars.

As for equalization, Quebec was hoping to get $2.872 billion. The federal government's response is $70 million, which is almost nothing. Next year, the Quebec government would like to get $814 million for health. The federal government's response is zero. As regards equalization, Quebec was hoping to get $3.009 billion. The federal response is $70 million, which is peanuts.

For all these reasons, we cannot support Bill C-30. Not only can we not support it, but we must strongly condemn it and tell voters that, very soon, they will have the opportunity to do some spring cleaning.

[John McKay, Liberal, Scarborough East, ON]

Because hon. members opposite have memory loss from time to time.

This will bring our commitment to health care renewal to $36.8 billion. In the context of announcing that, the Prime Minister reiterated that he would like to meet with the provincial premiers in the summer to work out how health care will be sustainable over the short, medium and long term.

Clearly the government's commitments in health care are not sustainable. Of all our program spending, that money is going in at twice the rate of the growth in the economy. If the economy is growing at 4% and commitments are running at 8%, over the short, medium and long term that is not a sustainable position. I am hoping, as is the Minister of Finance, that the Prime Minister and the premiers will work out a sustainable path going forward.

In addition, the budget attempted to respond to the SARS outbreak, which showed some limitations in our public health care system. The budget takes this action by providing funding to improve Canada's readiness to deal with public health emergencies. It authorizes $400 million in payments to a trust to be provided to the provinces and territories over three years.

Of this amount, $300 million is targeted for a national immunization strategy. In my community that has been particularly well received. We were one of the sites of SARS. It was a very major strain on our hospitals and the people who worked in our hospitals. The new funding will build on the $45 million provided in the 2003 budget to improve the safety and effectiveness of vaccines, enhance coordination and efficiency in immunization procurement, and ensure better information on immunization coverage rates within Canada.

The $300 million will support the introduction of new and recommended childhood and adolescent vaccines as proposed by the National Advisory Committee on Immunization. That advisory committee has recommended the introduction of the meningococcal conjugate vaccine, pneumococcal conjugate vaccine, varicella, which is the chicken pox vaccine, and acellular pertussis booster for all adolescents.

The other portion, $100 million, will relieve stresses on provincial and territorial health care systems that were identified during the SARS outbreak. It will help the provinces and territories address their gaps in the public health capacities by supporting frontline activities, specific health protection and disease prevention programs.

The budget has measures to ensure that the public health system has the information technology systems needed to deal with future public health outbreaks or epidemics. Specifically, the bill authorizes the payment of $100 million to Canada Health Infoway for its use to allow the provinces and territories to invest in software and hardware with the goal of assessing, developing and implementing a high quality, real time public health surveillance system.

When I did a tour of our local hospital the CEO pointed out that when an assessment was done on the $3.5 million that ended up in our local hospital, one of the weaknesses was that one machine could not communicate with another machine, which could not communicate with another central machine. I hope that this money will assist doctors and nurses and all of the other health professionals to communicate in real time so that information is readily available wherever they go.

The equalization program is renewed for a further five years. It has a very complicated formula involving 30-odd collection points of tax information over 10 provinces and each province has its unique interest. It is a very difficult formula. It is renewed and the objective is to do five year renewals.

The key changes include tax base changes, including a fundamental redesign of the property tax base. There is the introduction of a smoothing mechanism. Also, given the transition to the new system, there are payments of $150 million. The changes will mean an additional $1.5 billion over five years.

I see that my time is up. In closing, I recommend to hon. members opposite that they support Bill C-30.

[John McKay, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, it is my honour to lead off this debate. Before discussing Bill C-30, I want to briefly review the focus of the budget which was just presented.

As hon. colleagues know, the 2004 budget takes an integrated approach to social and economic policy while emphasizing the bedrock commitment to financial integrity.

The approach includes building blocks to promote the new agenda for achievement as set out in the Speech from the Throne. It is an agenda based on the principle of government living within its mean by balancing its books, controlling spending, cutting debt and improving accountability through stronger financial controls.

May I say that as the minister and I went across the country, one of the points we heard over and over again was that the government must live within its means and it must balance its books, so I am pleased that we have in fact done that.

Equally important and central to Bill C-30 is an agenda that aims to give Canadians greater means to advance their well-being by taking important steps in key areas such as communities, learning, health care and innovation. In other words, it is an attempt to respond to those other legitimate concerns of Canadians while living within our means. If I may, I will turn to some of those measures shortly, but in any discussion of government spending we need to note the fiscally prudent spending as set out in budget 2004.

This will be the seventh budget in a row, the first time since Confederation, that the Government of Canada has run a surplus. We achieved that in spite of a whole series of economic shocks: SARS, BSE, the Ontario blackout, B.C. forest fires and hurricane Juan, all of which in their own ways hammered the Canadian economy and reduced growth in our domestic economy by some considerable billions of dollars.

This performance--and our continuing commitment to balanced budgets in the better years ahead--underscores why the budget plan maintains the yearly $3 billion contingency reserve and rebuilds prudence in 2004-05 and 2005-06.

May I say that every one of these fiscal shocks ripples its way through the economy. Not only do they ripple in the fiscal year 2003-04, but they go into 2004-05. It is estimated that we in effect lost something in the order of $25 billion worth of economic activity, and that is economic activity that has just disappeared, that will never be replaced.

The government sets its budget based upon a series of assumptions. It assumes that there will be a GDP growth rate of x or y . In the last budget, the previous finance minister anticipated, based upon private sector economists, that the growth rate would be something in the order of about 3.5% of GDP. With all of these shocks it turned out to be about 1.7% of GDP.

Members would be interested to know that every one point reduction in GDP reduces the government's revenues by something in the order of $2.5 billion, so when we drop from 3.5% to 1.7% in the course of a year, members can do the math themselves and realize how much money that cost the government in terms of revenues that it anticipated and budgeted for but does not have.

Other assumptions are in the area of inflation. Just a simple drop of one point in inflation between what the minister sets the expectation at in the budget and what it actually turns out to be over the course of the year will cost the government something in the order of $1.4 billion in revenue. A drop in interest of one point actually will save the government about $800 million in costs.

These are all assumptions that are built into the budget. It is a fairly fluid set of assumptions and that is why the government retains the best and the brightest of private sector economists to give us advice in terms of what we can expect in the future.

Regardless of this, over the last number of years since running surpluses, the government has been able to pay down the national debt by $52 billion. That in effect has delivered savings in the order of about $3 billion on an annual basis, allowing this money to be freed up for use in communities and health care and other priority items of the government.

The government intends to continue down this path and run further surpluses, which will effectively reduce the debt to GDP ratio to 25% over the course of the next 10 years. We think this is a sustainable path, not only by virtue of our fiscal discipline but also by virtue of the anticipated growth in the economy.

In 10 years, the baby boom generation will obviously be 10 years older and the boomers will be at the front wave of collecting their pensions. Canada is the only nation, to my knowledge, that has a fiscally sound and sustainable public pension system. That will be a considerable relief for our children and our grandchildren.

There is another area which I do not think has been discussed very much in the House. If we do maintain this path of debt to GDP ratio going down to 25% over 10 years, the government's financial shape in 10 years will be arguably one of the best, if not the best, in the world.

I do not think that as a matter of principle we are wedded to the concept that we always have to run surpluses, but if we maintain this fiscal discipline over the next 10 years and realize that the front end of the baby boomers will be 65 and therefore contributing less to the economy, the government then will be in shape to provide those calls upon it for health care and other issues that this bulge in the baby boom demographic will create for government finances.

Thus, we are in a strong fiscal and financial position. As I hope I have pointed out in my remarks, that is simply not an end in itself. It is forward planning.

The budget also introduces measures that we will be debating today, measures designed specifically to ensure that we can meet the needs of tomorrow. As I have suggested, tomorrow is not just next year or the planning horizons of the political expediencies of the day. The planning horizons for this budget are upwards of 10 or 15 years.

One of the issues that came up over the course of our deliberations had to do with assistance to communities. For the vast majority of Canadians, communities are the nexus or the meeting place of personal, family and public life. That is where lot of people, certainly politically, get very involved: at the municipal level. It was clear that Canadians want affordable housing, good roads, public transit, safe neighbourhoods and abundant green spaces. If my constituency is any example, those are the concerns of Canadians. I expect other members' constituency offices reflect the same thing. That is why municipalities are facing increasing pressure to maintain and renew their infrastructure and ensure that the necessary social programs are available to residents.

Yet most of us recognize that there are real limits to the extent to which the property tax base, the single most important source of revenue for municipalities, can finance these spending pressures. Certainly Mayor Miller of Toronto and Mayor Murray of Winnipeg have made it abundantly clear to us that their own source revenues have their limitations. The federal government is starting to respond in a meaningful way to that.

We want to ensure that Canadian municipalities have reliable and predictable long term funding. We want to make sure that they can provide more effective program support for pressing infrastructure and social priorities in their communities, in other words, local solutions for local problems.

Prior to the budget, on February 1 the Government of Canada through the Prime Minister and the Minister of Finance announced the GST rebate. One hundred per cent of the goods and services tax and the federal component of the harmonized sales tax will be rebated to the municipalities.

In the city of Toronto that means to the budget chief something in the order of $50 million to $52 million that he was not anticipating as being available to him. I know he will be grateful. I know that the mayor will apply that to the most urgent needs of the people of Toronto. That story has been repeated over and over again throughout the municipalities across the nation.

To ensure transparency, the Minister of National Revenue will have authority to disclose the amount of the incremental rebate paid to individual municipalities. Over the next 10 years these municipal governments will receive an estimated $7 billion in GST relief, or approximately $580 million in the first year alone.

That was not the only response by the federal government. Again using Toronto as an example, members will recollect that this week the Prime Minister went to the 50th anniversary of the TTC. He joined with Premier McGuinty and Mayor Miller in announcing a further $1 billion available to the TTC, which is easily the largest rapid transit system in our country.

The budget also recognizes the importance of communities, but it is also built on the foundation of creating opportunities for individuals. Hon. members know that the federal government, in partnership with the provinces and territories, plays a key role in supporting the Canadian health care system.

The CHST provides support for health, post-secondary education, social assistance, social services, et cetera. The CHST will be separated into two categories effectively today. One will be the Canada health transfer and the other will be the Canada social transfer.

The upcoming social transfer supports social assistance and social programs, including early childhood development, early learning and child care services. They are impacted by this bill. Ensuring that all children receive the best possible start in life is clearly a goal of the government.

Over the years the Government of Canada, in partnership with the provincial and territorial governments, has developed a strong agenda in support of Canada's children. Bill C-30 increases funding to the provinces and territories under the Canada social transfer by $150 million over the next two years, implementing the multilateral framework on early learning and child care.

The member for Don Valley West has worked very hard on this issue for many years. I am sure it is of considerable satisfaction to him and others in our caucus to see that work being recognized.

The framework was agreed to in March 2003 by federal, provincial and territorial ministers responsible for social services. The ministers committed to improve access to affordable, quality and provincially regulated early learning and child care programs.

For this year and next, there will be an increase of $75 million per year over the previously committed funds. That would provide resources for up to 48,000 new child care spaces, or up to 70,000 fully subsidized spaces for children from low income families.

Members have heard much comment by the minister, the Prime Minister, members on this side and indeed members on the other side about the $2 billion announcement for health care. The federal government will follow through with its commitment. I am sure that hon. members realize that this cannot be repeated often enough.

[Jim Peterson, Liberal, for the Minister of Finance]

moved that Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on March 23, 2004, be read the second time and referred to a committee.

[Ralph Goodale, Liberal, Minister of Finance]

moved for leave to introduce Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on March 23, 2004.

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