Bill C-30 (Historical)

Budget Implementation Act, 2004

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

Message from the Senate

[The Speaker]

I have the honour to inform the House that a communication has been received as follows:

Rideau Hall

Ottawa

May 13, 2004

Mr. Speaker:

I have the honour to inform you that the Honourable Adrienne Clarkson, Governor General of Canada, signified royal assent by written declaration to the bills listed in the Schedule to this letter on the 13th day of May, 2004 at 6:56 p.m.

Yours sincerely,

Barbara Uteck,

Secretary to the Governor General

The schedule indicates that royal assent was given to Bill C-24, an act to amend the Parliament of Canada Act--Chapter No. 18; Bill C-20, an act to change the names of certain electoral districts--Chapter 19; Bill C-28, an act to amend the Canada National Parks Act--Chapter 20; Bill C-15, an act to implement treaties and administrative arrangements on the international transfer of persons found guilty of criminal offences--Chapter 21; Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on March 23, 2004--Chapter 22; and Bill C-9, an act to amend the Patent Act and the Food and Drugs (The Jean Chrétien Pledge to Africa)--Chapter 23.

I also have the honour to inform the House that a communication has been received as follows:

Rideau Hall

Ottawa

May 13, 2004

Mr. Speaker,

I have the honour to inform you that the Right Honourable Adrienne Clarkson, Governor General of Canada, signified royal assent by written declaration to the bill listed in the Schedule to this letter on the 13th day of May, 2004 at 9:10 p.m.

Yours sincerely,

Barbara Uteck

The schedule indicates the bill assented to was Bill C-3, an act to amend the Canada Elections Act and the Income Tax Act--Chapter 24.

Budget Implementation Act, 2004

[The Acting Speaker (Mr. Bélair)]

It being 5:29 p.m., the House will now proceed to the taking of the deferred recorded division on the previous question at third reading stage of Bill C-30.

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

[Bill Casey, Progressive Conservative, Cumberland—Colchester, NS]

Madam Speaker, it is a pleasure to speak to Bill C-30.

I compliment the member for Dauphin—Swan River. He raised a lot of issues that tweaked my mind and reminded me of things I would like to talk about.

I sometimes wonder whether there is any point in discussing the budgets, presentations, throne speeches and all the announcements the Liberals make because they change them so fast and they do not keep their word.

Just a few months ago the government announced in a big flurry of activity a $750 million program for passenger rail service in central Canada. It was a big deal. There were lots of headlines and lots of coverage and within months they retracted it. They made it all go away. It is not going to happen now. It was just one of those announcements they made to get a few headlines, to get some support and then it fizzled away within months. It does not take long.

Let us look at some of the other things the Liberals have done. I remember the hep C program. They came out with a program to help fund a narrow window of victims of hepatitis C but when there was opposition to it and a lot of criticism, they changed it. They did not change it enough, but they changed it to include more people. There are still a lot of victims of hep C who do not have access to funding.

In the recent budget the Liberals announced a tax exemption for military officers serving in dangerous areas. They announced it in a big flurry but when there was opposition and criticism, they had to change it. They expanded it. It is the same with a number of things.

There were health care announcements in the recent budget. I could not believe it. In just days after the budget the Liberals were announcing new terms for health care and more money because everybody knows they shortchanged the provinces in the budget.

We cannot go by what they announce. We can only go by what they do and that is precious little. The Liberals do not do a lot.

The hon. member for Dauphin—Swan River mentioned a few things that I want to cover, such as the gas tax on highways. My riding has the only portion of the Trans-Canada Highway that has a toll on it. It costs me $8 to go from one side of my riding to the other. Every other four-lane highway in the province of Nova Scotia is free and every other part of the Trans-Canada Highway is free, but my riding has an extra tax. Nowhere else in Canada has this tax, except my riding of Cumberland—Colchester.

It happened when the Liberals were in power federally and provincially. The funding was put in place to build a four-lane highway. It was put in place by a Progressive Conservative federal government and was signed off by a Progressive Conservative provincial government. It was 100% funding.

What happened? When the Liberals got in, a Liberal minister on the federal side made a deal with the Liberal minister on the provincial side in Nova Scotia. They transferred that money from my riding to a completely separate issue, a different kind of road in Cape Breton. This was under the national highway program. I will never understand how they were able to do that but they took the money out of the national highway program and put it toward a tourist road in their own ridings.

That is the way the Liberals do things. What they say they are going to do matters not much.

The member for Dauphin—Swan River mentioned overtaxation in EI.

I find it incredible that the government taxes students in the summers. They have to pay employment insurance premiums but they have no access to employment insurance. They cannot get the benefit but the government taxes them. They are charged the employment insurance premium. I find it so discouraging and so offensive that the Liberals would do that.

That is just a part of the $44 billion to $47 billion overcharge in employment insurance which I consider to be fraud. I look at the paycheques of my constituents and right on them it says “employment insurance premium”. It is not a premium for employment insurance. It is strictly a tax. It is fraud. It is getting money under false pretences because it is not an EI premium. I think that account is up to $44 billion or $46 billion that has been overcharged. That is forty-four thousand million dollars the government has overcharged people for working.

Part of that is what the young people have been overcharged. Students who have to work in the summer have their paycheques reduced because of an employment insurance premium, which really is not a premium because they cannot get the benefit.

Students do not qualify for the benefit because they are not available for work. It is fraud. It does not even make sense that the Liberals do this, but they go on and do it.

In the budget proposals there is no allowance for submarines. It is an issue that I have been involved with. Canada bought four submarines six years ago. Not one of them works yet. Not one of them is deployable. Not one of them is ready to go to work after six years. It takes 18 to 24 months to build a brand new submarine. We have had these for six years. They do not work yet. Why do they not work? Because the government has not made the resources available to make them work.

I visited the dockyards and I was very impressed with the submariners who want to work on the submarines. They are committed to these subs; they believe in these subs. They are sure they can do the job for Canada but they do not have the tools; they do not have the parts; they do not have the production workers; they do not have the production managers. They do not have the will on behalf of the government to give them the tools.

We have four submarine crews that have not had a working submarine for seven years. They want to serve the country. They want to serve Canada. They are sure that if they are given the tools they can make these submarines work and serve their purpose. However they do not have those resources. I do not know why the government has done it but it has sidelined the submarine project. It has not given them the resources. The Liberals have actually taken resources away from them.

We see the sponsorship scandal and all the money that has been wasted that could have been put to good use. It is a shame that we have not taken the money that has been wasted on the scandal and put it into the areas where it is so desperately needed.

Imagine what the money that is taken in on the employment insurance overcharge, the $44 billion, could do for health care. The government makes a big deal about putting $1 billion into health care. The government has announced it 10 to 15 times. The Liberals make a big deal every time they are going to put $1 billion into health care. There is a $44 billion overcharge in employment insurance. Imagine what a fraction of that would do for the health care system. It would solve the problems. Instead, the Liberals continue on with the overcharge approach.

The sponsorship grants are absolutely incredible. I see the minister is here. I would like him to make a note that my all time favourite sponsorship grant is No. 699. It is called unforeseen events for Groupaction marketing of $200,000. I do not have a clue what it is. I do not know whether it is unforeseen events or whether it is an organization called unforeseen events. The list indicates that for unforeseen events there is $200,000. That is the way the Liberals spend our money.

If the minister could find out what that is for me I would be forever in his debt. I know he will because he is very good at getting information. That is my all time favourite. There are 721 on one list of sponsorship grants and there is a bunch more on another list. It is endless.

When I have to fight so hard to get a few dollars for a transition house in my riding or for Maggie's Place or for so many worthy causes that really need a few dollars, it is so disheartening to look at these grants of $2 million, $2.3 million, $1.2 million, $1.3 million, $2.3 million, $2 million, $1.2 million, $1.5 million, $1.6 million, $3 million and on and on. I am just going down the list. We need a few dollars to help a transition house to help battered women and we cannot get it.

In any event I think the Liberals have their priorities completely distorted. They are going in the wrong direction. We can give them some good ideas on how to better invest the money to serve Canadians better.

[Deepak Obhrai, Canadian Alliance, Calgary East, AB]

Mr. Speaker, it is a pleasure to speak for the second time to Bill C-30. I am speaking to the bill because it deals with a very important issue, the budget.

Mr. Speaker, I will be sharing my time with my colleague from Dauphin—Swan River.

When the Prime Minister took office after being elected as leader of the Liberal Party, he promised Canadians a new vision that would be different from the previous government. He promised in the throne speech that he would connect with Canadians and offer them an alternative.

We then moved from the throne speech into the budget speech, where, in all honesty, after taking everything into consideration, we saw it as band-aid solution budget. We all knew the Prime Minister wanted to call an election because he was riding high in the polls and he thought the steam engine of the Liberal Party could sweep the country.

Lo and behold, the record of the Liberal government smacked it right in the face, as the member of the NDP just pointed out. The scandal of the management of Canadian taxpayer dollars hit it right smack in the face. What happened? We are now in a holding pattern.

The Prime Minister wants to call an election but he does not know when to call it. The vision he talked about has disappeared. Where will this bill on the budget go? As we all know, we are waiting for the Prime Minister to call an election but he cannot even decide when to call it. Whether it will be on June 14, June 28 or July 5, nobody knows.

The country is now being run in a holding pattern while Canadians wait for important issues to be solved. The last thing on the minds of Canadians is an election. They expect the government to come up with a plan, the budget being one of those plans.

As the critic for international development, I see in the budget that $248 million will go into the international assistance development envelope, which would bring the CIDA budget to over $2.5 billion. People may not know this but CIDA has a budget of $2.5 billion, which is a lot of money, and yet CIDA operates without a legislative mandate. It is left to the mercy of the government or the Prime Minister and politics are being played.

As an international development critic for the last three years, I have seen four ministers at the head of that department and each minister has tried to pass on her or his own ideas and agenda. Why? The reason is that we now have legislation that directs where the money will go. It is left to the whim of the minister and the senior bureaucrats in CIDA. That is why questions keep being raised about where this money is being spent.

Canadians do not know what CIDA is doing. CIDA may have a good international name in countries where it does little patches of work but Canadians do not know where the tax dollars are going in international development. I keep asking that question in the House. Canadians are wondering why emerging economies in countries like China are receiving over $50 million.

Canadians shake their heads about why we are giving a country like China that aid. Every time I raise this question the answer is that there is poverty in China. Yes, we know there is poverty in China. We are very happy to see China as an emerging nation, but China is now in a situation where it has the resources to take care of its people.

Its leaders can take care of its people, but what do they do? They send people into space. They spend all that money for sending people into space. As well, there is an increase in their military expenditures of over 12%. They can do that, yet we stand here and use Canadian taxpayers' dollars and say there is poverty there that we need to address so we have to give them $50 million.

Would that money not be better spent in Africa or in Latin America, in the slums there? I do not understand why and how we can stand up and let the Chinese leaders off the hook. They should be responsible for their own people.

However, this highlights the problem, which I am trying to say is the way CIDA is structured, the way CIDA is operated and the way CIDA is giving out money. The question that comes up time after time is this one: What is happening and where is this money?

Sure, Canadians are very generous. They would like to assist the unfortunate around the world. I am very glad and very proud, and so are members of my party today, to stand up and vote for Bill C-9. I have to give credit to the government for introducing that legislation, but we were the party that was there right away supporting that bill, because we knew Canadians wanted that bill to be supported. That bill is going to give generic drugs to Africa to help in the fight against HIV, malaria and TB. Yes, based on that, we supported it.

However, we need to keep asking this question: Where does the money go?

It is very interesting that the Prime Minister just went down to Washington and made a speech there. He talked about international development assistance, but then what do we say? It is a simple answer: We are giving more money. We are giving more money so we are meeting our commitment to international assistance.

Really, giving more money and using money wisely and effectively is a challenge. It is a challenge unless and until there are structural reform changes that take place in CIDA. Most important, unless CIDA is legislated and is told that these are the areas in which we expect results--i.e., we expect to see money going to poverty reduction or education--only then can we say it is an effective use of dollars. Right now money is spread out as thinly as possible across 105 countries, with every kind of end use, some very good and some excellent, but the result is that nobody is happy.

Then we have CIDA-INC giving money for business ventures. It was proven by my colleague from Cypress Hill, at the time from the Reform Party, that the money was going to the companies with ties to the Liberal Party. The companies took advantage of that.

The bottom line is that while we speak about the budget, while we speak of giving money, it is critically important that the money be effectively spent. That is what Canadians are demanding from the budget.

Let me say very briefly that the budget does not address many of the issues that are most important to people in my riding. What are their issues? Of course one is health care and we are seeing the flip-flops coming out from the government on health care.

Also, I want to say to that New Democratic Party, once and for all, tell us, quote for us, give us the name of who has said for profit health care or private health care. Where did we say that? Tell the hon. member to tell us, Mr. Speaker. The hon. member stands up and blames the Conservative Party, but let her quote from where we have said that.

I also want to say that she knows what our most important issues are, and most important is tax reform, because unless and until Canadians have money in their pockets, only then will that be an effective use of money.

In conclusion, I say we are drifting. We are drifting because of this election and because this Prime Minister and this government have not been able to put forth the vision they promised to Canadians.

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

Mr. Speaker, I am pleased to participate in the wind-up of our discussion on Bill C-30, the budget implementation act.

Let me say at the outset that it is impossible to talk about budgets or budget implementation acts without addressing the matter of value for money. When it comes to value for money I think Canadians are increasingly disturbed and worried about the lack of regard that the government has for the fundamental principle, that Canadians receive value for their hard-earned tax dollars.

We can imagine how concerned Canadians are when they hear the kind of discussions that took place in the House today around the Auditor General's report. It is impossible to take the budget implementation bill seriously when in fact Liberals in the House tend to dismiss and take out of context the Auditor General's comments.

We all know that when it comes to the sponsorship file the Auditor General clearly said that she did not use the words “stolen” or “missing”. What she said was that Canadians did not get value for money for at least $100 million and maybe more. She said that we are talking about $250 million for which there are enormous questions that have to be answered.

What does the government do, what does it stand up in question period day in and day out and suggest? That the opposition is wrong to take up the call of the Auditor General to try to get to the bottom of this issue. How do we in fact address the budget implementation act when those guys over there will not even take this issue seriously. They get into macho politics saying, “Who is going to come out in the hall and challenge us? We will punch their lights out”. It is stupid, macho politics.

We are talking about upholding a fundamental principle for all Canadians. I get very frustrated with that kind of performance in the House. I find it absolutely reprehensible that the President of the Treasury Board and others--I will not single out the Minister of Public Works--but the President of the Treasury Board would stand up and deride the opposition and make fun of our questions when we are simply trying to find out what services were provided for at least $100 million. If we cannot get answers to that question, how the heck do we get very far in terms of holding the government to account for its budget?

That leads us exactly into what the budget is all about. We would have thought that in the days and weeks following the budget announcement the government would have been out, members of the cabinet would have been out describing, defining, enlightening Canadians as to what the budget does for Canada. Did we get that? No. We got another tremendous example of transparency and accountability on the part of the government.

We saw the Prime Minister go out on taxpayers' money and inform Canadians about what the government will do in the next budget or in the next Parliament and about which candidates are running where and what is happening on the political front. Taxpayers' money was used so the Prime Minister could go on a cross-country tour to build his case for calling and election and for trying to neutralize the horrific mess he has on his plate because of the sponsorship scandal.

Instead of accounting for the budget, the government is trying to pretend it does not exist. The ink was not dry on the paper before the Prime Minister was out selling something new on health care that was not even mentioned in the budget. It was not mentioned in the Speech from the Throne. The word “Romanow” did not appear.

He quickly realized how silly and irresponsible this was, so he was out suddenly announcing a 10 year health plan. He suddenly announced things that the Liberals would do which were not even mentioned in the budget. What kind of accountability is that? What is the purpose of this budget process when we see those kinds of shenanigans in this place?

All the while Canadians are wondering if anyone in the government is standing up and speaking for them. Canadians are struggling day in and day out and they are falling further and further behind. They see millions of dollars being wasted and the government says nothing whenever anyone asks the question.

We have to get answers and we have to start addressing their concerns. Canadians are concerned about making a living and providing for their families, but they are falling further behind. They have fallen steadily behind over the last 10 years.

It is an embarrassment. This country, one of the wealthiest countries in the world, has fallen from first place on the human development index, according to the United Nations, to eighth place, just in a few years, under the Liberals. We are now below even the United States where 40 million Americans have no health care whatsoever.

More and more Canadians are suffering and wondering when they are going to get a raise. More and more Canadians are wondering whether the government has any kind of handle on the economy. There is no job strategy anywhere in sight. We are at 7% unemployment, and it is higher in various regions. There is no mention even of the words job strategy. There is not a plan in place to deal with the fundamental issues of job security and economic security.

All the while, we see more families fall into poverty. Unemployment, as I said, is consistently above 6%. Some 38% of the unemployed are unable to collect benefits. There is a wider gender gap for full time full year work. Women's earnings are only 72% that of men's. Tuition fees are skyrocketing. Child poverty levels are virtually unchanged over the last 30 years. Single mothers and elderly women are more likely to be trapped below poverty. Canada's aboriginal people are still living in third world conditions.

A recent study by the Canadian Association of Social Workers took stock of the last Liberal decade. Women's pre-tax income is still 62% that of men's. Forty-two per cent of unattached women between the ages of 16 to 64 years live in poverty. Women's poverty has actually deepened under the Liberals. Single parent families headed by women remain on the very bottom economic rung.

So much for all that rhetoric from the Liberal benches about equality and being feminists. Women across the country would like to see, finally, the government translate some of its words into action.

Oxfam recently reported that half the women working in Canada earn less than $20,000 a year.

The Canadian Institutes of Health Research confirms that wealth means health, that one-third of single parent families headed by women are poor and that without a national child care program, low income children face a lifetime health and learning disadvantage.

We just received the latest report from the National Council of Welfare. Hot off the press, it is called “Income for Living?” and what does it show? Based on 2000 figures, child care in Ontario, as one example, would cost 42% of a minimum wage earner's take home pay or 33% of a low wage B.C. worker's take home pay.

The same report shows that in Ontario, a single parent earning minimum wage, with one child, would have to spend 67% of their take home pay to live in an average rental unit. Can members believe it? A single mother making even an average wage would still have to spend 40% of her take home pay on rent accommodations.

The list goes on. It is disgraceful. It is an embarrassment. Yet the government does nothing.

What did we see in the budget? Not a focus on giving Canadians a raise; not a focus on ensuring that their hard-earned tax dollars go to projects where there is value for money; not a commitment and a target to eliminate child poverty.

Yes, we have targets. We have targets to reduce the debt, which is great, and no one is saying that we should not reduce the debt, but why are we only focusing on debt reduction? Why is the government trying to get us down to 25% debt to GDP ratio in 10 years time when Canadians are falling further and further behind and many more are living in poverty? The gap between the rich and the poor is growing. Working people are struggling day in and day out and single parent families are always wondering why there is so much month left at the end of the money.

All we are asking the government to do is to finally listen to what Canadians want, do what is in the best interests of the country and address the human deficit, the issues that have been neglected by Liberals for the last 10 years, and start putting Canada back on the map as a nation with compassionate and humanitarian principles.

[Werner Schmidt, Canadian Alliance, Kelowna, BC]

Mr. Speaker, I want to approach the debate on Bill C-30 from a slightly different perspective than what we have had so far this afternoon and this morning. I want to approach it from three points of view. First, setting the tone from the top; second, some useful concepts to look at evaluating the management of government; and finally, the re-use of single use medical devices.

When it comes to setting the tone from the top, one has to pay special tribute to our Auditor-General. She has given a tone to this particular report that is very exemplary. There have been two reports. It is absolutely superb the way in which she has approached the evaluation and the management of certain government programs.

I would like to talk about setting the tone from the top. The top of course is the Prime Minister. There are various management consultants who have talked about leadership and management from the top, and the significance of the top in terms of an organization and its management.

One of these special consultants who works very heavily in this field is a fellow by the name of John C. Maxwell. He did an interview with Don Stephenson, who is the chairman of Global Hospitality Resources, Inc. Global Hospitality Resources, Inc. is called in by companies in the recreation and hotel area that are in financial difficulty to see if there is something that can be salvaged.

Here is what the interview results were. Don Stephenson said whenever there was a take over of an organization, two things were always done. First, all the staff were trained to improve their level of service to the customers; and second, the leader was fired. When he told me that, I was at first surprised. “You always fire the leader?” I asked. He said every time. I asked if he did not talk to the person first to check him out to see if he was a good leader. He answered no, if he had been a good leader, the organization would not be in the mess it was in. That was a very interesting comment.

As Mr. Maxwell says, this is an illustration of the law of the lid. The law of the lid states that leadership ability is always the lid on personal and organizational effectiveness. If the leadership is strong, the lid is high; however, if it is not, then the organization is limited. That is why, according to Maxwell, in times of trouble organizations naturally look for new leadership. When a country is experiencing hard times, it elects a new prime minister.

In Canada, the actual administration and operation of the management of the government's affairs is carried out by the Treasury Board. It plays a key role in developing and fixing the government's management, really refining and developing the management agenda and overseeing its government wide implementation.

We are speaking about the implementation of the budget. The budget is probably the single most significant policy document that an organization or government can ever put together and finally adopt.

In managing the government, the Auditor General provided some very useful concepts. In fact, she listed seven of them. I want to read them into the record because they are very significant. They are found in chapter 7 of the March 2004 Auditor General's report and they are:

Probity--The adherence to the highest principles and ideals.

Prudence--Skill and good judgment in the use of resources.

Economy--Getting the right amount of resources, of the right quality, delivered at the right time and place, at the lowest cost.

Efficiency--The minimum resources used to achieve a given quantity and quality of output.

Effectiveness--The extent to which the outcomes of an activity match the objective or the intended effects of that activity.

Transparency--Operating in a manner that is clear and easy to understand.

Accountability--The obligation to render an account, and accept responsibility for, one's actions, both in terms of the results obtained and the means used.

Let us examine this budget and some of the implementation practices that the government has used in applying these concepts.

Probity is the adherence to the highest principles and ideals. It would appear to me that one of the ways in which one can see evidence of probity being used in the management of government affairs would be to have the highest principles and ideals. One of them clearly would be to follow the rules that are there to be used by the bureaucrats. Guess what the Auditor General had to say? She said that virtually every rule in the book was broken on this ad scam program. Clearly that one did not work.

Prudence is the skill and good judgment in the use of resources. I cannot help but look at this in terms of the subsidies that are given to industry. One really asks the question, what is it that government does when it selects certain kinds of industries for subsidy and not others? In fact, one of the critics of this particular program asked and I quote:

I don't know why governments pick one industry to subsidize over another.

This is from a National Bank financial analyst, Steve Laciak. He further said:

They won't rule against steel imports being dumped into Canada, so you wind up watching Stelco, Ivaco and Slater Steel go bankrupt.

On the other hand, other ones are picked and given billions of dollars. Of course, the most recent one here is the one that came up yesterday, Rolls Royce and $30 million, and very closely allied to that is of course Bombardier, which has been getting this money for years.

John Williamson of the Canadian Taxpayers Federation said, of Bombardier, and I quote:

--we need to lower taxes to compete internationally, we'd be right there behind him.

I agree with that. He rejected outright the idea of creating more programs like Technology Partnerships Canada. He said:

Anyone who thinks TPC should be expanded should have his head examined. That program has been a total disaster and has only gotten a small fraction back--

I think the issue here is very clear. Subsidies given to certain kinds of industries mean that taxpayers' money is taken from other industries who also pay taxes. The government says that it will take our money now and it will give it to this other industry, which means that the burden falls on this group, and the other group actually gets the benefit.

If that is a wise use of resources, if that is prudence, and if that is skill in the management of resources, I think there is a very strong difference of opinion.

Economy is getting the right amount of resources, of the right quality, delivered at the right time and place, at the lowest cost.I wonder if there is anyone in the audience who would recognize or remember the firearms registry? How effective was that particular program? It was a billion dollars and now going beyond that. People are asking themselves, is it now going to get more money from this budget? Is that really an economical use of taxpayers' money?

Efficiency means the minimum resources used to achieve a given quantity and quality of output.We have the secret unity fund and we ask ourselves, what is it supposed to accomplish? If we do not know what it is supposed to accomplish, how could we ever measure whether in fact it is doing that. The HRDC boondoggle is another example.

Transparency is operating in a manner that is clear and easy to understand.We found that our Prime Minister who did own CSL, Canada Steamship Lines, actually found that there was $136,000 given to the company, only to discover later that it was actually a hundred million dollars plus. If it was really so transparent, then why was it that it was not known?

Finally, accountability, which is the obligation to render an account, and accept responsibility for, one's actions, both in terms of the results obtained and the means used.

One then has to draw attention to the fact that we had in the Department of National Defence some $160 million plus that was fraudulently billed because nothing happened. There was $160 million paid and nobody could figure out what it was paid for. That is not accountability.

One has to evaluate these and ask, from these examples alone, were these seven concepts or ways of evaluating things actually observed? Was there direction from the top that clearly said the highest principles and ideals would be observed in the management of our affairs and in the expenditure of taxpayers' money?

One has to conclude that this particular budget does not do that. The government has not done that. We have to ask, how likely is it that the government will manage $187 billion using these seven concepts? I would suggest that probably the answer is, no it will not.

I want to go now to the third point that has to do with the single use of medical devices and the reuse of single use medical devices. I am not an expert in this particular field so I am going to be reading in rather complete detail what has been said.

What kind of devices are we talking about?

Single use devices that come into contact with blood or normally sterile body cavities by penetrating the skin or mucous membrane, such as cardiac catheters or urinary catheters.

The reuse of single use devices is different from the reuse of devices designed for multiple uses because single use devices were not intended to be reused. Thus, their reuse creates a number of potential risks that include poor functioning after multiple uses or reprocessing, as well as concerns about sterilizing and disinfecting medical devices properly. Other concerns include the lack of informed consent by the patient and the liability of the reuser should something go wrong because of reuse.

The main reason that single use devices are reused is to reduce costs. There are two factors here.

Members have probably heard the news that the SARS situation in China, the most recent one, deals precisely with this very issue we are talking about right now. It is not just one disease we are talking about but other diseases as well in relation to single use devices.

The second point has to do with the cost involved. Why is there a preoccupation with the cost of reusing a single use medical device? If we had taken the $250 million that was spent on the ad scam program and put it into specifically this kind of area, that would have helped many people in not subjecting them to reused single use medical devices. We have some critical issues here that are very significant. It is stated that:

Because the reuse of single use devices can put the health and safety of Canadians at risk and because Health Canada is one of the entities responsible for protecting the health and safety of Canadians, we expected that it would take action to deal with this issue.

It is further stated:

While we recognize that this issue is a shared responsibility among various jurisdictions and professions, it is important that Health Canada as the federal regulator take action to manage the health and safety risks related to the reuse of single use medical devices.

That would have been expected. The Auditor General went on to say:

However, we found that Health Canada has not developed a position on managing the risks related to reuse of single use devices, although very recently it began examining its authority to regulate reuse practices. As a result, Canadians are not being protected from the health and safety risks created by the reuse of single use devices. Canada's failure to develop a position on this issue has created a regulatory vacuum.

This is pretty serious stuff. Health Canada has known about this for at least 10 years, and it is still talking about jurisdictional questions. Now it is going to re-examine this. The response to the Auditor General's recommendation was that by the year 2005 there may be something in place. How many people are going to be subject to having these single use medical devices inserted into their bodies, running the risk of contacting serious diseases and complications?

The time to act has passed. We need to act as quickly as possible now. These are very serious implications. I am so happy that we have an Auditor General who is not afraid to talk about these kinds of things and draw them to our attention. There is a person who is accountable, doing her job, doing it with probity and being prudent, accountable and transparent in what she is doing.

People ask where the trouble lies. Does it lie with the ministers who are in charge? Does it lie with the Prime Minister? Does it lie with the professionals? Does it lie with the taxpayers? Does it lie with the House? With the power that has been concentrated in the Prime Minister's office and with the fact that virtually every member on the government's side of the House can be whipped into voting against the wishes of their constituencies, there can be no other conclusion. These kinds of problems can be taken straight back to the very top of this organization, which is in the Prime Minister's office.

The time has come for us and for all Canadians to look very clearly at the way the government has been running for the last 10 years and why the Auditor General has come up with the kinds of conclusions and observations that she has. For these reasons that I have just mentioned, I cannot support Bill C-30.

The time has come for a new prime minister, a Conservative prime minister, a prime minister who will manage the affairs of the country and of the government with probity, with adherence to the highest principles and ideals, with prudence, demonstrating skill and good judgment in the use of the resources of the taxpayer money and the many resources that we as Canadians have, with the economy, with getting the right amount of resources of the right quality and quantity and delivering at the right time, in the right place and at the lowest cost.

He will be a prime minister who will be efficient so that the minimum resources used to achieve a given quantity and quality of output will be the ones that are used, not a surplus that is unnecessary. He will deal with effectiveness and will manage with effectiveness, that is, the extent to which the outcomes of an activity match the objective or the intended effects of that activity. When we say we want to do something in a program, we will get the results with transparency. The operation will be in a manner that is clear and easy to understand, and we will all know what is being done, how much it costs, who will do it, why they will do it and their competence to do it.

Finally, he will be a prime minister who will be accountable and will recognize the obligation to render an account and accept the responsibility for one's actions, both in terms of the results obtained and the means used.

These are tremendous challenges. One would look at that and ask if there a human being alive who could actually do this in its entirety. The answer is, we can try.

I remember so clearly a philosopher professor who said that we should all look at perfection and that is the way we should go. I have talked about seven concepts that are very useful. I submit that a Conservative prime minister, in particular the leader of the Conservative Party, would do that. We need to strive for that perfection. However, when we have a Prime Minister who is not trying to do that, then we need a change.

[Bernard Bigras, Bloc, Rosemont—Petite-Patrie, QC]

Mr. Speaker, I am delighted to continue my presentation on Bill C-30, the budget implementation bill.

Before oral question period, I had said that this bill created three imbalances. First, the obvious fiscal imbalance; second, the social deficit perpetuated by the budget tabled this past March and its implementation through Bill C-30; third, the environmental imbalance created by the federal government with Bill C-30.

I have spoken at length on the shortfall Quebec has experienced and continues to experience, particularly since 1994, as a result of the reduction in transfer payments to the provinces. This prevents Quebec, and of course other provinces, from delivering the health care and services that are essential for the well-being of our taxpayers.

As well, the conclusion that there is a tax imbalance is based on research carried out by Jacques Léonard, former president of the Quebec treasury board. Some days or weeks ago, the third component of this research was released, an analysis on the evolution of the four key federal government transfer programs, namely transfer payments, equalization payments, the employment insurance program, and even the old age pensions.

The main conclusions about this federal reality indicate that federal government revenues have risen 45%, while transfer payments to Quebec and the provinces have increased a mere 1.9%. Taken as a dollar amount per capita, federal revenues have increased $1569, and transfer payments for health, education and social programs have dropped $34.

Some members of this House, Bloc Quebecois MPs, were part of the Léonard Committee. I am thinking of my colleagues from Lotbinière—L'Érable, Joliette and Saint-Hyacinthe—Bagot specifically. The committee recently revealed one other finding: it reached the conclusion that the financial effort the federal government devotes to transfer payments to Quebec for health services has decreased 40%.

This fiscal imbalance is a natural occurrence, but one not acknowledged by the federal government, since it considers itself to be a new government. There is a shortfall for Quebec, no doubt about it.

There is another aspect to this growing social deficit. While it might have been expected that the government would eliminate the injustice which it created itself by changes in the employment insurance rules, nothing in this budget does anything to repair the gaps pointed out many times by the Bloc Quebecois, not only in this House, but with the workers. These gaps mean that the workers in seasonal industries are penalized. Young people and women are penalized by these changes in the EI system.

Workers pay their premiums to the EI system, but very often they cannot receive benefits. If the employment insurance fund were in a deficit position, that might be understood. But the accumulated surpluses in the EI fund are over $45 billion. That is three times as much as the Chief Actuary of Canada judged normal and sufficient to meet the needs.

She indicated that $15 billion would have been enough. The fund is in a surplus position. We have asked many times—there was a consensus among opposition parties on this—that the employment insurance fund be independent, that it be managed by the employees and employers and not by the government. Experience has shown us that the government manages this fund badly and that makes one think of a kind of theft.

The premiums are being raised. At present, they are $1.98 per $100, while the rate that would lead to equilibrium is $1.81. Clearly, there is overcharging, and that is why there are surpluses in the EI fund. Unfortunately, citizens are not able to enjoy the benefits.

Actually, part 5 of the bill before us today perpetuates the fact that it is the federal government which sets the premium rate. As I indicated earlier, we know that this rate often exceeds the rate of $1.81 that would ensure a balance. So, there is a social injustice created by an employment insurance fund that is far from benefiting the workers who contributed to it.

We could have expected the government to deal with another issue, namely social housing. The hon. member for Hochelaga—Maisonneuve, who is here right now, reviewed this issue with the hon. member for Terrebonne—Blainville. We would have liked the recent budget to provide for a reinvestment of some $2 billion. We would have liked to see 1% of the federal budget earmarked for social housing.

The reason is that in years past the Liberal government confirmed the withdrawal that had already been announced by the Conservative government in 1993.

One cannot speak from both sides of the mouth. On November 22, 1993, the current Prime Minister replied to the national coalition on housing. Here is what he said about reinvesting in social housing.

—I want to be absolutely clear—

The word “clear” was already part of the present Prime Minister's vocabulary, 11 years ago.

—I want to be absolutely clear that a Liberal government would commit to stable and guaranteed funding for cooperative and not for profit housing.

Things stood clear in 1993. The present Prime Minister, who was to become finance minister, committed to stable funding for the cooperative and not for profit housing sector. What happened after 1993, when the present Prime Minister became finance minister? Well, he literally stopped funding social housing.

There is another important date in 1990. At that time, the present Prime Minister, who became finance minister, shared his intentions and his vision on social housing.

In May 1990, in a report of the national Liberal caucus task force on social housing, the present Prime Minister stated, and I quote:

The Mulroney government has, from the start, cut housing programs and budgets. It has dumped its responsibilities onto the provinces.

That is what the present Prime Minister said in 1990.

The Mulroney government has cut housing programs and budgets. It has dumped its responsibilities onto the provinces without giving them the corresponding financial means. And it has been insensitive to the dire needs of thousands of Canadian households.

That was what the present Prime Minister was telling us back in May 1990. However, he has been the one mainly responsible for disinvestment in housing.

[The Acting Speaker (Mr. Bélair)]

Before proceeding to questions and comments, I would like to clarify for members of the House that the House is debating the amendment to the motion for third reading of Bill C-30 proposed by the hon. member for Toronto—Danforth, seconded by the hon. member for Scarborough East, that the question be now put.

Questions or comments? The hon. member for Prince George—Peace River.

[Alexa McDonough, NDP, Halifax, NS]

Madam Speaker, I am very pleased to have the opportunity today to briefly speak on Bill C-30, an implementation bill with respect to the government's most recently introduced budget. Sometimes the debate can seem to be somewhat ritualistic.

However, I am very pleased and I want to congratulate the member for Palliser for zeroing in on the issue of child poverty. If the current Parliamentary Secretary to the Minister of Finance, a supposedly Liberal member, is satisfied with this government's record in terms of reducing child poverty, then it illustrates, better than almost any other public policy issue that one could use, how little difference there is today between the Liberal government opposite, the no longer Liberal government opposite and the no longer Progressive Conservative opposition party.

I listened carefully to the words that were uttered by the member for Scarborough East. In itself it is telling that we have now within this so-called Liberal government a parliamentary secretary specifically assigned to advance, and I would presume accelerate, the rate of privatization taking place under this so-called Liberal government.

I listened to his speech on Bill C-30. I then listened a few moments later to the speech by the member for Prince George—Peace River. If we went back 10 years ago, his party was significantly different in terms of its policies and priorities than the Liberal government was at the time. However, when we listened to those two speeches side by side in juxtaposition in the House this morning, I would defy anyone to see any fundamental difference between those two political parties.

Canadians need a serious progressive alternative. That progressive government in power would have brought in a very different set of priorities in the budget we are now debating, and the implementation bill that is now before us.

I just about fell off my chair when I heard the prescriptions that were offered up by the parliamentary secretary for privatization to genuinely improve the well-being of Canadians. No wonder we are making so little progress in tackling child poverty. We heard the member for Scarborough East say that we needed to grow the pie. When did we last hear that as a banner headline all over this country? It came from one of the contestants for the leadership of the no longer Progressive Conservative Party.

The contention that Canadians are better off today because this Liberal government has pursued vigorously and conscientiously the policies advanced by the Conservative Party is exactly what is wrong with what is happening.

We heard that there were two ways to increase productivity. One is to have people working harder and the other is to have people working smarter. I want to take those two prescriptions and relate them right down on the ground at the grassroots level in my riding of Halifax as to what is happening in the lives of a good many Canadians. They are supposed to be better off as a result of this government's pursuit of those ultra conservative prescriptions to supposedly to do something to ensure that we eliminate child poverty, as this Parliament unanimously resolved to do in 1989.

Let me take first the example of child care. Child care workers in Halifax are working their guts out for terrible pay, and they cannot work any harder, despite the fact that they have taken the training that has allowed them to work smarter.

Child care centres are closing because governments have not increased the per diem funding for those child care centres serving low income families that are also working their guts out, harder and harder, for poor pay. It has not been possible to increase their operating budgets because per diems have not increased. The result is that we have child care centres closing all over the place. How that works to support working people in being able to better support their families and work harder and work smarter, I do not know.

I want to speak about the medical residents, just one example of health care workers in my riding who are working their guts out. They are often working 36 hour and 40 hour shifts to try to meet the needs of patients because hospitals are under-resourced and short-staffed, because the government has taken tens of billions of dollars out of our health care system. Yet the parliamentary secretary talks about people needing to work smarter and harder. Those medical residents with whom I met in the QE II Hospital in my riding on Sunday during a medical residents awareness week initiative could not work any smarter or any harder.

And do we know what? Their families are paying a terrible penalty for how hard the residents are working and they themselves are paying a terrible penalty in massive debt loads. In one case, a husband and wife team of medical doctors has a debt load of $212,000 before they even begin to earn the kind of pay that people imagine medical doctors earning.

I want to speak about disabled persons in my riding. I met with a disabled man in my riding who has been absolutely breaking his back trying to get employment. He has been trying to generate employment with supposed support from programs that have been so shrunken down he cannot even get a foot in the door to get a job to work harder and work smarter.

I am going to finish with a reference to what is happening to our senior citizens. Last Friday I had the privilege of attending a tribute dinner to Dr. F. R. MacKinnon, Fred MacKinnon, who served the Province of Nova Scotia and the people of Canada as one of the most senior long-serving deputy ministers in this country. For 55 years he served the people of my province of Nova Scotia and the people of Canada, driving progressive social policy. He had a lot to say about what is happening to seniors today, particularly as they reach their pension years.

He says they have been robbed of adequate pensions because of the policies corporations have been allowed to pursue due to inadequate government regulations, because of privatization, and because of policies pursued by government itself. Because of privatization, because of contracting out, because of shipping out the risk and shrinking down the benefits, people do not have the kinds of pensions that allow them to deal with the everyday demands of life.

The fact that the parliamentary secretary, presumably speaking on behalf of the government, can be proud of the results of the government's implementation of these ultra-conservative policies is very instructive to the people of Canada as we go to the polls in the next few days or weeks, as we surely will.

[Pierre Paquette, Bloc, Joliette, QC]

Madam Speaker, 20 minutes to comment on Bill C-30 is quite a lot. On the other hand, 20 minutes to comment on the budget and this government's financial management is not much.

In Bill C-30 we find elements related to equalization, and I shall look at those in particular. We also find elements related to the Canada Pension Plan, with which we agree, and elements related to the GST rebate for municipalities, with which we also agree.

However, we are worried about the fact that the health and education sectors were not included in the Liberal government's new approach. And in fact, we know the reason well. It is simply an election strategy; they are seeking to create an alliance above the provinces, above Quebec, in order to be able to get around provincial jurisdictions.

The final element is one which relates to extended deadlines, permitting the Canada Customs and Revenue Agency to recover unpaid taxes over a 10-year period, and we agree with this as well, with the exception of the air security tax. We are opposed to this tax, whose need has not yet been demonstrated, unless it is to increase the already large, indeed amazing, surpluses of the federal government.

Looking at equalization in particular, it clearly illustrates the approach of this government. Whether headed by former Prime Minister Chrétien, or the new PM and former finance minister, when it comes down to it, their approach to real problems involves only cosmetic measures that do not solve the underlying problem. Instead, they increase it by giving the impression to Quebeckers, and to Canadians, that they are trying to respond to their concerns, yet this is totally false.

As far as the overall budget and the overall policy of this government is concerned, their approach is to increase Ottawa's power over the provinces, and particularly over the Government of Quebec.

Looking at the equalization formula proposed in Bill C-30, we see first of all that the new formula does not in any way respond to the concerns and needs that have been made clear on a number of occasions by the provinces, Quebec in particular.

Then, as far as the overall transfer of funds from the federal government to the provinces is concerned, we can see that it resolves nothing whatsoever. These continue to decrease year after year.

Finally, and this makes no useful contribution to the debate on fiscal imbalance, we see that there is too much money in Ottawa for the responsibilities the federal level has under the Constitution, and not enough in the provinces, and in Quebec in particular, particularly for health, but also for education and social housing.

Not only does this equalization formula resolve nothing, it also takes away, for the next five years, money from those who are institutionalized. Through the Minister of Finance and the Prime Minister, the federal government has made a unilateral decision to impose this equalization formula on the provinces.

There is something totally aberrant about our having had to vote on Bill C-18 only a few weeks ago, to extend the present equalization formula for one year, supposedly to maintain payments during the negotiations with the provinces. So we voted on that bill—Bill C-18 if I recall correctly—and then, on March 24, along they came with a budget including a unilaterally imposed formula.

This is another example of the government's incompetence, of the fact that the Prime Minister, the Minister of Finance and this House cannot make a decision. A few weeks ago, they probably really thought that they could reach an agreement with the provinces and Quebec before the election. They saw that the provinces were standing up and that Quebec had demands that it wanted the federal government to meet. Mr. Séguin, Quebec's Minister of Finance, repeated it when he tabled his budget, shortly after the federal government had done the same thing; if memory serves, this was on March 30. When the federal government realized that it could not easily impose its views on the provinces during negotiations and that an election was coming, it decided to unilaterally impose its formula for the next five years.

This decision alone is totally unacceptable. The Prime Minister talks about the democratic deficit. This is a perfect example. The federal government did not care at all about the provinces and it did not negotiate seriously. It did not take into consideration the provinces' needs and demands; instead, it unilaterally imposed its own vision. As I said, this alone makes Bill C-30 unacceptable to the Bloc Quebecois.

The federal government did not at all take into consideration the concerns of the provinces. Most of the changes made by the Minister of Finance, the Prime Minister and the Liberal government of Canada are cosmetic.

The government also did not take into consideration the unanimous proposal made by the provinces, whereby the equalization formula should be based on the performances of the ten provinces, as opposed to those of five provinces, as is currently the case, since this formula excludes one rich province, with the result that Quebec is losing several hundred millions, if not a few billion dollars.

This should have been taken into account, as was the case in the past. This is not something new. For several years, the federal government's equalization formula was based on all ten provinces. It is probably when this formula began to benefit the provinces and Quebec, as it should, that the federal government changed the rules of the game to ensure that it would not have to pay too much money in these areas of responsibility.

Property tax was not considered an element of the tax base as it should have been. In the budget, it was suggested that property value would be taken into account when determining the wealth of the various provinces. In British Columbia, property value is extremely high. So, that would have a huge impact on Quebec. It would mean somewhere around $400 million in equalization.

Therefore, it was suggested that property value would be taken into account. That would be the case, for instance, in British Columbia. However, public servants who appeared before the Standing Committee on Finance told us that it would not really be done that way since experts—probably friends of the government—had argued that the value market could not be factored in, as it would lead to bias, distortions, and things like that. So, a halfway compromise was reached, but, in reality, absolutely nothing was solved.

I hope B.C. residents are shocked to realize they were used in that way. In Quebec, we are shocked because our demands and requirements were not met. Whichever way you look at it, Quebec stands to loose over $1 billion. Not only have we lost $1 billion, but we will continue to lose money through transfers.

Let me give the House some figures to illustrate what is really going on. In 2001-02, Quebec's equalization payments totalled $4.690 billion. In 2002-03, they decreased to $3.985 billion, as seen in the budget plan, a $705 million drop. In 2003-04, we are down to $3.802 billion, after another drop of $183 million. In 2004-05, we will get $3.761 billion, and that includes the $150 million in fiscal rebalancing the government has announced in the budget, which is the only real increase. In fact, it is not an increase at all, but a reduction of the decrease Quebec feared. So, for these three years, we are expecting a reduction of close to but not quite $1 billion in equalization payments from the federal government to the Government of Quebec.

Compared to the October 2003 estimates, however, these figures tell the whole sorry tale. In October 2003, transfers to Quebec were estimated at $4.662 billion, as I said, but now they are estimated at $3.985 billion, a $677 million decrease in one year.

In 2003-04, in October 2003 to be more specific—less than five or six months ago—Quebec expected to get $4.525 billion in transfers. Now, according to the budget plan, we are down to $3.802 billion, a $723 million drop.

We should accept this? That is impossible. For people who defend Quebec's interests, it is impossible to accept this. This year, with the shenanigans that the government has announced—the cosmetic part—there is a slight increase of $70 million, but, once again, this is compared to a decrease of $41 million. Thus, the government simply alleviated the decrease, thinking it would distribute a goodie to the provinces, and to Quebec in particular. In total, from 2002 to 2005, the decrease will be $1.330 billion. This is totally unacceptable.

The parliamentary secretary tells us that equalization increases and decreases, depending on economic times. The problem is, this is the only existing formula that takes the needs of the provinces into account.

In the past, the federal transfer was mostly based on the needs and investments of the provinces. For example, the Canada assistance plan ensured that, for every dollar put in by Quebec, the federal government would put in a dollar. Since we had—and still have—poverty problems that were slightly higher than the Canadian average, Quebec would be imaginative and invest based to its people's need. The federal government had to follow; it was the rule.

The federal government changed the rules of the game with the Canada social transfer. Now, it is not based on the needs, but on the percentage of the population. Consequently, whatever amount is transferred to the provinces, Quebec is always receiving a little less than 25%.

Within the Canadian federation, equalization is the only way to take the needs of the provinces into account. However, we told you that the formula is inadequate. The provinces, particularly Quebec and the Minister of Finance of Quebec, said this several times. The federal government cannot deny it. Even recently, I believe that Minister Couillard said that the fiscal imbalance problem was a parasite in the relations between Quebec and Ottawa. This is the reality. Liberals can turn a blind eye and put their heads in the sand, but Quebeckers are not fooled by this situation.

If equalization does not meet the provinces' needs, the formula will have to be reviewed. At present, the transfers for health and social programs are not in keeping with the needs. They are calculated on a per capita basis, and that is that. That is the greatest injustice in the year we have just completed.

On one hand, the federal government makes a lot of fuss about announcements it has already made three times. It is like the case of highway 175—and they think we are fooled. The Prime Minister is holding off the election call so he can make announcements that have already been made. We have heard that they will be going to the Chicoutimi region, probably, I suppose, to help the hon. member for Chicoutimi—Le Fjord, who must be in serious difficulties. They will announce again, for the third time, the investment in highway 175. It has already been announced by Mr. Chrétien and by Mr. Landry. They think that people will not see it is all a flimsy fabrication. Probably they will do the same thing for highway 30. I am just waiting for that. The election call has been delayed so they can announce again the things that have already been announced three or four times.

That $2 billion in transfer payments to the provinces promised by Mr. Chrétien, which the former minister of finance pretended not to be able to give, just like the new Minister of Finance, in order to set the scene economically and financially to enable the new Prime Minister to announce it, has finally been announced. It has even been passed in the House, finally. Thus, $2 billion in transfer payments will go to the provinces, on a per capita basis. Quebec will receive a little under 25% of that, around $460 or $470 million.

At the same time, we are told that, for the same period, there will be $2 billion less in equalization. They would have us believe that they have taken $2 billion away but that the same amount will be given back in transfers. Now look: Quebec receives half of the equalization budget. We therefore have lost half of the $2 billion amount, while we get $470 million through the Canada health and social transfer.

No one is fooled. The Atlantic provinces and Quebec have been the big losers in this Liberal shell game. People know it.

Overall, transfers are decreasing in amount. To give one example, a figure that came out last week in the committee chaired by Jacques Léonard, who was president of Quebec's treasury board. He is very familiar with the public finances of Quebec but also has a very clear picture of federal public finances. It was found that, between 1994-95 and 2002-03, the revenues of this government—with the present PM as Minister of Finance—rose 45%. That is nothing to be sneezed at when there is so much talk of belt-tightening.

Obviously, they used part of this money to increase their bureaucracy. Operating expenditures increased by 39%. I would remind hon. members that, at the time, inflation was around 16% and the population of Canada increased by a little less than 4%. If memory serves, the figure was 3.9%. So the increase was not because of increased needs.

In fact, the needs did increase in the provinces, but not the needs for federal bureaucracy. It was merely a Liberal strategy, of Pierre Elliott Trudeau and all those who followed him, to keep on building up the power of the central state in order to create a unitary state, by strangling the provinces financially.

The proof of this is that, while revenues increased by 45%, while bureaucratic expenses increased by 39%, government transfer payments to Quebec decreased by 7.6%. That is the truth. That is the reality. The rest is just smoke and mirrors.

The machine was beefed up, they made themselves indispensable, and they strangled Quebec financially. They will pay for that at the next election, if only they get their act together and call one.

They are wondering, “Will one week be enough to try and convince Quebeckers and the rest of Canada that we are a good government?” Well, of course not! They have been there 10 years. Taking stock of those 10 years, we realize that in the absence of a strong opposition, they are simply all over the map.

Therefore, in terms of overall transfers to Quebec, we are looking at a net loss of 7.6%. And just to give you some idea, with regard to health, when our present Prime Minister became Minister of Finance, for every tax dollar taken from our pockets, in Quebec as in the rest of Canada, he would transfer 4.5¢ to the provinces. Today however, for every tax dollar he gets, he transfers a mere 2.7¢. Which means that he takes in more and more money, while giving out proportionately less and less to the provinces and to Quebec.

What this means is that, ever since the Liberals have come to power, ever since the former finance minister and now Prime Minister has held the reins in finance, Quebec has been cut by a total of $10 billion. This represents a drop of $1,300. Small wonder then that the provinces and Quebec have been hard pressed to make ends meet. The sheer fact of having been able to eliminate the deficit is a miracle in itself under such circumstances.

This cannot go on forever, though. It is already no longer the case in a number of provinces. Ontario is in a deficit position, B.C. as well. Most of the Atlantic provinces have deficits. As for Quebec, it is experiencing—to use the finance minister's expression—some difficulties with its budget. This year, with sales of some assets, it has managed to balance the budget, but assets cannot keep on being sold.

The responsibility for this lies with the federal government. In this case, neither Mr. Charest nor Mr. Séguin are responsible. They have been strangled financially by this government, as the previous Quebec government was, and as the provincial governments currently are. We have a strike in Newfoundland, and a strike in the B.C. health system. There is not a single politician who would be in favour of a strike in the health sector, knowing what public opinion is on this. Yet they have to make hard decisions.

Having been involved with unions, I can tell you that I have seen governments forced to make hard choices. Sometimes they have to stir up confrontations, as was the case in Newfoundland and British Columbia. They are, however, not the ones responsible for the situation; the federal government is. There is nothing whatsoever in this budget to suggest that any corrections will be forthcoming in the next few years. In my opinion, the people of Quebec are going to have a very clear understanding of just how much it will be in their interests to send as many Bloc Quebecois members to Ottawa as possible in the upcoming election.

So that is what there is in Bill C-30. What is not in the bill, and in the budget, is equally deplorable. As far as employment insurance is concerned, $45 billion has been diverted, while people on the North Shore and in other areas are starving. For months, forestry workers in the northern part of Lanaudière have not seen a cheque. The sawmills have suffered because of the softwood lumber crisis, which is not settled even though we won. The Americans have still not opened their borders to us, and we have not got back the $2 billion they collected illegally.

Employment insurance reform is necessary, and the money is there. Now, on the eve of the election, the Liberals say it is coming. Let them table the legislation, since they are taking their time to call the election. We will vote in favour of a substantial improvement in employment insurance. If the Liberals do not do this, people will remember that, in 2000, the President of the Privy Council went to the Saguenay and told the construction workers, “We are going to improve the employment insurance system”, and then nothing was done.

I could go on and on. I have examples concerning families, the guaranteed income supplement, the sponsorship scandal, and gun control. And as for the sales of Petro-Canada stock, we cannot foresee exactly what will happen with that. Commissions will be paid out. That is worth about $3 billion. What brokerage firm will be hired to sell this stock? Probably some friends of the government. And so it will be exactly the same thing that happened in the sponsorship scandal.

Not only are the federal Liberals—the Liberal Party of Canada—more interested in defending the interests of the Liberal Party than defending federalism, but worse yet, they defend the private interests of certain friends of the government. Regarding the sale of Petro-Canada stock, we want to know who is going to sell the stock and how the brokerage firms will be chosen.

I did not have time to address the issue of tax havens and CSL International. I do not know if members had an opportunity to watch the program, Enjeux . The headquarters in Barbados is just an empty shell, and that is close to the line of illegality, in my opinion. But we will dig into that at another time. With all of this, I simply want to say that the real democratic deficit is the fact that Quebec is being strangled. The only answer for that is the sovereignty of Quebec, and the coming election will be a step toward that sovereignty.

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

Mr. Speaker, it is an honour and a privilege to speak to the bill and hopefully try to persuade hon. members that this bill is worthy of their support.

I thought that I might start off my conversation about Bill C-30 with an incident from my pre-political life. When I was a lawyer practising law in the east end of Toronto and the Durham region area, from time to time I used to do some real estate work, particularly for companies that were moving executives from place to place but also for a variety of other real estate clients.

One of the persons who was recruited by the Canadian Cancer Society was a physician from I believe Denver. We went through our usual real estate transaction and then I fell into a conversation with him about what he was going to be doing in Toronto, what research he was going to be conducting, and things of that nature. He was specifically hired as a physician researcher to track demographic and other patterns with respect to cancer. The question I asked him at the time was what the greatest indicator of health was. His comment was “The size of your pocketbook will directly relate to how healthy you are”. I thought it was kind of a crude comment, to be perfectly honest, but he went on to indicate that, by and large, wealthier people live longer, live healthier lifestyles, are more satisfied, have better access to medical services and are more up on trends that would enhance and lengthen their lives. That story sort of stayed with me.

I would put it to members that a government that creates wealth, in absolute and in relative terms, will also have the happy coincidence of creating health in its population. Over the course of the last number of years, that is exactly what the government has done. In fact, the wealth of this nation has been enhanced and increased, and we are, as a result, a healthier population.

It is not merely the $37 billion that the government has infused into the health care system. That is important money and significant money and if the Prime Minister gets an opportunity to meet with the premiers in the next few months, we are committed to putting that on a fiscally sustainable path. Similarly, the $2 billion that was allocated in this budget for additional funds into health is important money but I do not know if it actually tells the full story.

My argument will be that over the term of the government, indeed going back to 1993 when the prime minister and the then minister of finance started the arduous task of turning this nation away from a precipitous decline into third world status to now running seven surplus budgets in a row, the wealth of this nation has, in absolute and relative terms, grown, and therefore the wealth and the health of Canadians has increased, especially over the last seven years where we have run surpluses.

In all candour, the record is not uniformly good but in my view the good outweighs the bad. Strangely enough, there is an almost exact parallel between when the government started to run surpluses and the indices of wealth actually beginning to turn around.

There are essentially two ways to create wealth: people either work harder or work smarter. The way in which we have done it lately has been in improved labour participation. One of the interesting facts, when we start to parcel out the employment numbers, is that Canadians have actually been participating in the labour force in record numbers. We have actually increased our participation in the labour force and as a consequence we have improved our productivity numbers. Productivity numbers can also be improved by actually getting more involved with technology and improving the way in which goods and services are produced.

It is a gross generalization, but by and large our increases in standard of living have come because of the former, namely labour participation rather than the latter, which is increases in productivity due to investments in machinery and equipment. We have started to work harder with more labour participation and more numbers of people working rather than necessarily working smarter.

From 1980 to 1996, which is a 16 year period in which this government had the last three years of that period of time but the Conservative government had the bulk of that period of time, we ranked dead last in productivity in the G-7. Then from 1997 to 2003 we shot up to third. We are essentially in a dead heat with France and Japan. Going from dead last to third, is it any coincidence that simultaneously the government is running budget surpluses?

I will not argue that the standard of living tells us everything. Neither will I argue that it says nothing. What charts do say, however, is that ever since the government started to run surpluses our standard of living has in factual terms increased. We are wealthier and therefore we are healthier.

When we break it out by labour force participation, that is, working harder, during the period of 1960 through to 1996 we were fourth in labour participation. However, from 1997 through to 2003 we exceeded everyone, the U.S. included, and now we rank first. The joke is that Americans live to work and Canadians work to live. In fact, we are number one in the last five or six years in the labour participation rates of all of the G-7 nations.

That is both good news and bad. It is great that our labour participation rate has been good, but it is not sustainable. Demographics tell us that our labour force is aging and therefore people will be withdrawing and not contributing to the GDP as they have in the past. Our growth in productivity, which has been largely sustained by a participation in the labour force, is not a sustainable pattern over time.

From 1980 through 1996 our standard of living growth was second last. In other words, from 1980 to 1996, again a similar period of time of 16 years, we were second last in the G-7 in terms of standard of living growth. However, from 1997 through to 2003 we were first with an annualized rate of 2.7%. Is it simply a coincidence that those years were the same years that the Government of Canada ran surpluses and introduced the largest tax reductions in the history of the nation?

The effect of that has moved us from seventh in the OECD in 1996 to fifth in the year 2003 and second in the G-7. We still lag behind the U.S. by a substantial margin. However, we have started to close the gap. We are still about 14.5% behind the Americans in terms of standard of living, but we have substantially improved that from 18%, which is where it was in 1996.

A standard of living is not a measure of everything, that is, quality of life and other things that people consider to be very important, but it does measure something. The something that it does measure is of considerable importance to most Canadians.

The real question is, can we sustain this growth? The short answer is that our increases in productivity need to be less focused in labour participation and refocused on increases in working smarter.

How do we get smarter? The most obvious way is to get an education or to improve the educational attainment of the nation. Education is what unlocks the productivity chain. Adding just one year to the average education attainment in our country will add 5% to the GDP per capita.

Canadians are a fairly well educated lot. We have the second highest post-secondary attainment of any G-7 nation. However, it is not just any education. It has to be specific education. Not to put too fine a point on it, we need more degrees in science and fewer in law.

[Claudette Bradshaw, 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 third time and passed.

[The Deputy Speaker]

It being 6:30 p.m., the House will now proceed to the taking of the deferred recorded division at report stage of Bill C-30.

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

Canada National Parks Act

[Roy H. Bailey, Canadian Alliance, Souris—Moose Mountain, SK]

Mr. Speaker, things seem to change very rapidly in the House and this being a Friday it is expected that things get juggled around. However I was a little disappointed with Bill C-30, which was listed first and dealt with the budget, because I wanted to address the concerns of some people in Saskatchewan who were hurt by an audit that took place on amateur sports and which was not addressed in the budget. I brought this matter to the House two years ago and nothing has been done since then.

Even though this will probably be my last day in the House and last activity, I will not be done with that infraction against the province of Saskatchewan. I will have to take that up in public life.

When I first looked at Bill C-28 I could see nothing wrong with it. I could see that the bill, as it was presented to me, was to take some land from a park and add it to a reserve, mainly on the west side of Vancouver Island, to provide for additional housing and the growth of that particular community. That in itself I do not think any Canadian would deny.

The bill also deals with the Riding Mountain National Park in the province of Manitoba. There was an error there but I think that can be corrected. I do not think we will find any opposition to that.

When I look at the map of this area I see a number of little pieces of land which are listed as being Indian reserve land, IR, but nobody lives on them. They are not a place to live, even though they are on reserve, but what the bill would do for these 10 reserves is to provide that these people have additional land, as my hon. colleague mentioned, for the building of houses and so on.

What bothers me about this is that we have not heard anyone in the House talk about it. However I have not had this assignment long enough to know if indeed there has been any other action or opposition to the bill. I have never had the opportunity, and maybe that is my fault, to know if any environmental groups are opposed to it. I have not had the opportunity to know if all the other politically elected people, including in the province of British Columbia and the local municipal people, are totally in agreement with it.

One of the problems we have with the bill is that we are being asked to support the bill on the eve of an election and yet I, for instance, do not have all the information that I would like to have. I understand that access to the ocean and the beach will remain public but that point is one of the points that is under the memorandum of understanding and a memorandum of understanding is not a legal document. It can be cancelled at the snap of a finger. That causes me concern because, not only does that national park belong to the first nations who live there, but it belongs to everybody. Therefore, a memorandum of understanding, in my opinion, is not sufficient.

I do know that the Canadian Parks, the Wilderness Society and other groups have supported this but the Province of British Columbia has interest in the lands and I do not know for sure if it has totally given us the green light to go ahead with it. It concerns me a great deal when a piece of property within the province of British Columbia does not have the total okay of the provincial government. I think we should stop for a moment.

For instance, I know a family who lives just miles away from the Grasslands National Park in southern Saskatchewan. If there were to be a change or alteration, that would affect them a great deal.

Therefore, the first people who would be affected and consulted would be the RMs of Mankota and Glen McPherson, and then it would go on to affect the provincial government. I cannot find if it has the total consent of the province of British Columbia. That concerns me.

Second, there are also concerns with the land use agreement. To bring the land use agreement up at the eleventh hour, which we are in now, bothers me a great deal. We have only heard from the groups supporting the agreement. We have not heard from any groups who are opposed.

If there are no groups who are opposed, that would be great. However, I have been around this place long enough to know that there is always someone opposed and always someone from which the committee and the House should hear. from. We have not done that and that makes me walk very gingerly on this bill. We have not heard from those who are in opposition. I have not and I understand that others have not.

I hope, hidden in this beautiful piece of legislation about a beautiful part of Canada, with a great idea for expansion for native housing, that I do not pick up the paper five years from now or even two years from now and see that the bill had a bit of a cynical trick to it. I have concerns that this bill is coming before the House at the eleventh hour.

On its own, I can assure the House that I would have no reason to object to this, nor would my party. However, the procedure is questionable and I worry about that.

This could be one of my last speeches in the House and I would not want to dare say that I suspect there is something wrong on the other side. Do not clap yet, because I will come back, even as a ghost, to haunt the House if this changes. I will be like MacArthur. I will be back because the bill is too important.

The bill will go through the Senate. Knowing what the Senate did with Bill C-250, I do not trust it either.

In a report of the Auditor General it states, “To promote accountability for implementation measures, we support the annual reporting of treaties and land claims consistent with the recommendations of chapter 9”.

The bill does not do that and therein lies my concerns. Does the bill have to pass right now? Is it really necessary for the next election? I cannot see any reason. I do not know any reason why I should not support it, but we have some very deep concerns.

On comes the bill with very little discussion. I have not been assigned to this long enough to even know if it has been discussed in committee, let alone having the opportunity to invite people so we could have this discussion in committee. We have not had that.

In conclusion, I hope, as I have said, that I do not have to come back here, even as a member to appear before the committee. I hope the government does not deceive me, or the House or my party, on any of the things I have mentioned, including taking away access to the beaches. If that portion of a beautiful national park is destroyed, all on the basis of a memorandum of understanding, that is not good enough for me, and I do not believe it is good enough for the people of British Columbia or the people of Canada.

Is it possible to hold the bill for a short time until it goes through the legal process?

Budget Implementation Act, 2004

[Denis Coderre, Liberal, for the Minister of Finance]

moved that Bill C-30, as amended, be concurred in.

Criminal Code

[Vic Toews, Canadian Alliance, Provencher, MB]

Mr. Speaker, I would like to add my comments to this very important bill. The stated purpose of the bill is to modernize the mental disorder provisions of the Criminal Code to make it both fairer and efficient while preserving the overall framework of these provisions.

In June 2002 the standing committee tabled its report, calling for legislative reforms and looking at Department of Justice consultations on the mental disorder provisions of the Criminal Code. The extensive committee review that was conducted was as a result of the statutory requirement under Bill C-30, which had been introduced in 1991, after many years of consultation.

The report that was put forward in 2002 was approved by all parties. In fact the results of this review is an important example of how committees, when they are focused on the issue rather than politics, can work in a cooperative fashion. This report is a demonstration of that.

Bill C-30 had a significant reform provision relating to persons not considered criminally responsible. That bill replaced references to terms such as “natural imbecility” or “disease of the mind” with the term “mental disorder”. It extended its application to cover summary convictions for less serious offences as well. Instead of being found not guilty by reason of insanity, an accused could now be held not criminally responsible on account of mental disorder.

Such a finding no longer resulted in an automatic period in custody. That automatic period of custody was found to be unconstitutional in the Swain decision in 1991. Instead the court could choose an appropriate disposition or indeed defer the decision to a review board.

Furthermore, under that provision, the courts and the review boards were obliged to impose the least restrictive disposition necessary having regard to the goal of public safety, the mental condition of the accused and the goal of his or her reintegration into society.

Bill C-30 came into force in February 1992. The proclamation was delayed for three major initiatives. First was the capping provision that was referred to earlier. Second was the dangerously mental disordered accused provisions that would allow the courts to extend the cap to a life term. The third was the hospital orders provisions for convicted offenders who at the time of sentencing were in need of treatment for a mental disorder.

This bill takes into account the recommendations of the justice committee of June 2002. Bill C-29 addresses six key areas. These are all issues that were thoroughly considered by the committee. I understand that these are not necessarily exactly the way the committee has recommended them and that is why the committee will no doubt examine very carefully what has been put into the bill.

However, indeed the amendments address six key areas: first, the expansion of the review board powers; second, permitting the court to order a stay of proceedings for permanently unfit accused; third, allowing victim impact statements to be read; fourth, the repeal of unproclaimed provisions; fifth, streamlining of transfer provisions between provinces; and sixth, the expansion of police powers to enforce dispositions and assessment orders.

A couple of concerns have been raised with respect to some of these key areas, for example, the allowing of victim impact statements to be read.

In the case of a criminal trial where a person has been found guilty the concerns of the victim of course are very relevant. They are necessary in the sentencing provision to determine whether the impact on the victim should also be reflected in the sentencing.

Here we are dealing with a substantively different situation because we are not looking at the guilty mind of an accused. We are dealing with a mentally disordered person. We therefore have to be careful how we use these victim impact statements in this context. I think it is important for victims to have a voice but we have to remember that this does not form exactly the same role that it does in a criminal trial where a criminal may not express any regret after having been convicted and it is important for the victim to have his or her say in that context.

The streamlining of the transfer provisions between provinces is another issue. It is important that there be the appropriate consent of the jurisdiction to which the individual is being transferred. I understand the bill attempts to ensure that there is the appropriate consent in that context.

The repeal of the unproclaimed capping provisions and the like are important. Why were concerns raised over these sentencing provisions? They were raised because it seemed that where a person was found mentally disordered, the period of incarceration could be a lot longer than a comparable sentence in the criminal courts. Somehow there was a suggestion that maybe it would be unfair to have a mentally disordered person subject to a longer period of custody than someone who had been in fact convicted of a criminal offence.

Here again is the difference in the intent. With the criminal conviction, obviously punishment is a key goal of the criminal justice system, as well as rehabilitation. When we talk in the mentally disordered context, we are not talking punishment. We are not talking about rehabilitation in the same way where there is a cognitive element in terms of rehabilitating an accused. In the mentally disordered context we are trying to deal with the health of the individual. Therefore if it takes longer to help the person, so be it. The capping provision is simply not appropriate.

The Supreme Court of Canada ruled in the Winko decision that a potentially indefinite period of supervision of a mentally disordered person was not unconstitutional since it was not for the purposes of punishment. However there is the review process that provides a mentally disordered person with some safeguards.

On the issue of the stay of proceedings for the permanently unfit accused, there is some concern related to how the safety of the public can be guaranteed. I look forward to that particular discussion at the committee, because even if the person is not personally responsible for his or her actions because of the mental disorder, there is still an onus on society to ensure that the individual does not cause further damage to his or her fellow citizens.

As I indicated, the objectives of the bill are generally consistent with the recommendations of the June 2002 committee report, a report which members of both the former Canadian Alliance and the Progressive Conservative Parties approved. I look forward to having the discussion in committee.

Committees of the House

[Nick Discepola, Liberal, Vaudreuil—Soulanges, QC]

Mr. Speaker, I have the honour to table, in both official languages, the fifth report of the Standing Committee on Finance, concerning Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on March 23, 2004, as agreed on Tuesday, April 27, 2004, and to report it with amendments.

Budget Implementation Act, 2004

[The Deputy Speaker]

It being 5:30 p.m. the House will now proceed to the taking of the deferred recorded division on the previous question at the second reading stage of Bill C-30.

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

[Werner Schmidt, Canadian Alliance, Kelowna, BC]

Madam Speaker, it is a privilege to address you, sitting so finely in the chair, and to congratulate you on your elevation to that post in this august House.

I want to address three parts of Bill C-30, the budget implementation act that was presented some time ago, and I hope to get through all three parts. The first part concerns the budget generally. The second part concerns the equalization formula. The third part concerns the secret reserve.

First, with regard to the budget generally. Paul Martin and Ralph Goodale have taken government spending and taxing--

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

Madam Speaker, I want to confirm that this is a debate on Bill C-30, the budget implementation bill. I did not hear anything about the budget in the last speech. Every once in a while the hon. member should actually read the budget. It would probably be of some assistance to him.

I am going to narrow my remarks to annex 3 of the budget, which I again recommend to hon. members just in case they are interested in what is in the budget.

This is the seventh year in a row that the Government of Canada has posted a surplus, which is the first time since Confederation. It is quite a remarkable financial achievement given the difficulties that we had last year. That has been said quite a number of times. What might not be known is that, according to the Organization for Economic Co-operation and Development, OECD, Canada is projected to be the only G-7 country which will record a surplus in both 2004 and 2005.

It is also interesting to note that Canada has had the largest improvement in its budgetary situation among G-7 countries since 1992. That was just about a year before this government took over from the predecessors of the Alliance-Reform-Conservative, et cetera. That was the hole from which we had to dig ourselves out. If we are benchmarking, that is probably an appropriate place to start.

Over that period of time, the other governments, following the lead of the Government of Canada, started to realize that this debt situation could not continue. Therefore, over this period of time, Canada's total government sector debt--by that I mean the provincial and federal governments--has declined to an estimated 35% of gross domestic product, which is a remarkable turnaround, given that we were probably at that time about the second highest in the G-7 nations in terms of indebtedness.

In 2002-03 we posted a $7 billion surplus, much to the chagrin of my colleagues in the far end of the chamber. That was somewhere in the order of .06% of the overall gross domestic product. That contrasts quite favourably with our colleagues to the south and the co-religionists of members opposite.

The U.S. balance fell further into deficit in the same period of time to $375 billion or 3.5% of GDP. Actually, the story is somewhat worse than that because the Americans count their deficit by mixing their pension plan surplus money into the actual government revenues. Therefore, there is a better deficit picture in the United States than the way we project it here in Canada. We separate out the surplus that we have in the Canada and Quebec pension plans and keep them separate and apart from the actual government revenues. That in effect makes a substantial difference.

This year the government projects through its budget a surplus of $1.9 billion. Whether it turns out to be more than that or less than that we actually will not know until July or August of this year. Nevertheless, at this point that is what we are projecting, which is approximately 1% of the entire revenues of the government.

I hear members from the far end of the chamber from time to time say that the house is leaking and all we are doing is paying the mortgage. The mortgage is about 20% of the government's revenues. That is about $37 billion, just to pay the interest on the mortgage. The hon. members to the left on this factor say we cannot pay down any principal. Well, the principal payment in this particular year as projected in the budget is 1% of the entire revenues of the government. They say that is a horrible thing. Surely we should not pay down 1% on our debt. So I do not understand the thinking there.

As a result of continued surpluses at the federal level and the deterioration of U.S. finances, the federal debt to GDP ratio is expected to fall below the U.S. figure for the first time in quite a while, actually since 1977-78.

That is almost 30 years in which the Americans have had a better debt to GDP ratio than we had. This past fiscal year is the first year that we will have a better debt to GDP ratio than our colleagues to the south.

Members will be interested in some of the material that is contained in annex 3.

As I said, Canada was the only G-7 country to record a surplus in 2003 out of all the OECD countries. Canada's surplus for 2003 is estimated to be 1% of GDP, compared to an average deficit among OECD countries of somewhere in the order of 4.7%.

Let me just emphasize that because 4.7% is the average of what an OECD country will be having as a deficit, where Canada will be in a slight surplus, in spite of all the difficulties that we had in this past fiscal year. Those fiscal difficulties that we had with SARS, mad cow and all those other plagues and pestilences, as the minister has described, will be rippling through our 2004-05 fiscal year. We just do not recover from hydro blackouts and expect to instantaneously replace the loss on the gross domestic product.

Turning to the third chart that is in the annex, Canada's total government sector financial balance has improved when it recorded a 9.1% deficit of GDP, almost double the G-7 average. In other words, in 1992 we were 9.1% of GDP in a deficit position--one of the worst countries in the G-7.

We have already improved by being in the seventh year of consecutive surplus. From 1992, in other words the last period of time in which a conservative form of government was running the government of Canada, to 2003, Canada's total financial balance registered a turnaround of 10 percentage points. Before 1992-93, we were way below the G-7 average and making a real hash out of things. With a lot of hard work on the part of this government and on the part of Canadians, we have now turned it around to have the best financial situation of all the G-7 countries in the world.

The previous speaker talked about government spending and that we are just like drunken sailors. Unfortunately for him, the facts are somewhat different. When his previous incarnation of a political party ran the shop, Canada was in a bit of a mess. On a national accounts basis, our total government spending was well above the average for the OECD and the G-7. Since then, we have experienced sharp reductions in program spending and between 1992 and 2003, Canada's total government spending program, as a share of GDP, is estimated to have been reduced by 9.2%, which is a far greater reduction than any other country. So, between the Conservatives of 1992 and the Liberals of 2003, the difference is a reduction in actual program spending net of debt, I am not including debt in this, of 9.2%.

When we add the actual significant differences in debt, we were actually paying 28¢ out of every dollar on debt. We paid out $37 billion this year. We have actually taken that figure from 28% down to just a touch under 20%.

This is a remarkable story. It shows that, contrary to the nonsense we hear out of the other side, Canada is arguably the best managed country in the world. Frankly, if there is going to be an election, I am happy to go to the people of Canada on that record.

[Gurmant Grewal, Canadian Alliance, Surrey Central, BC]

Madam Speaker, I am pleased to rise today on behalf of the constituents of Surrey Central to participate in the debate on Bill C-30, the budget implementation act, 2004. This omnibus bill would put into law several measures in the March 2004 budget.

Last month's budget failed to deliver money for our hospitals. It did nothing to reduce spiralling tuition fees. It ignored the pressing needs of the Canadian armed forces. It neglected to put money back into the pockets of Canadian taxpayers.

Under the Liberals, spending has increased by $41 billion over the past seven years. Over the next two years spending is set to rise by another $13 billion, but almost none of the government's multibillion dollar spending will do anything to alleviate child poverty. It will not do much to improve health care, build new roads, help public transit or create jobs. Hospital waiting lines will continue to get longer. Students will continue to plunge deeper into debt. Our soldiers will be stretched as thinly as ever before.

The Liberals use weasel words like “prudence” and “accountability”, but waste and scandal more accurately describe their spending record. When the current Prime Minister was the finance minister we witnessed the billion dollar HRDC boondoggle, $100 million in GST fraud, a $1 billion cost overrun on the gun registry, the theft of $160 million from the defence department, not to mention the sponsorship scandal and the hundreds of millions of dollars given to Liberal friendly advertising agencies. Quite frankly, this is money that would be better off in the pockets of hardworking Canadians.

The aim of the equalization program is to shift resources from the have provinces to the have not provinces to ensure a reasonably similar level of service for health care and education across the country. Eight provinces receive about $10 billion annually. The amount is determined by a very complex formula which measures the ability of each province to raise revenue. B.C. receives about $440 million since it became a have not province under this government's watch.

Bill C-30 renews the equalization program for five years, to March 31, 2009. At their annual conference, all 10 premiers called on the federal government to calculate its standard for equalization by averaging the fiscal capacity of all 10 provinces.

The Liberals refused and instead unilaterally introduced their own changes for a new formula. It changes the way some revenue sources in the formula are measured, resulting in payment increases of about $265 million per year. It also introduces a three year moving average to the way the formula is calculated to smooth out year to year fluctuations in payment levels.

The budget announced a payment to the provinces of $300 million to support a national immunization strategy and $100 million to help improve public health facilities. The budget stated that this would be booked to fiscal year 2003-04 but that payment would be made over three years.

Bill C-30 also authorizes payments to a trust for these purposes but does not specify when they are to be made. Nor does the legislation specify the amounts to be paid to individual provinces.

The budget announced that a further $100 million would be provided to Canada Health Infoway Inc. While the budget said that the payment was to help the provinces invest in hardware and software for public health surveillance, Bill C-30 gave no direction as to its use. This brings the total funds advanced to the foundation to $1.2 billion, including its initial endowment of $500 million announced in September 2000 and $600 million announced in the 2003 budget.

In her April 2002 report, “Placing the Public's Money Beyond Parliament's Reach”, the Auditor General raised concerns about this foundation's accountability structure. Transferring money to funds and foundations so that it may be spent in future budget years was a popular way of doing business when the Prime Minister headed the finance department.

The Auditor General found that from 1996-97 to 2000-01 the government paid $7.1 billion through transfers to nine foundations to achieve various policy objectives of the government. The government treated the $7.1 billion in transfers to foundations as an expenditure, but as of March 31, 2001 almost the entire amount was still in the bank accounts and other investments of the foundations. Very little of it had actually been received by the ultimate intended recipients. The Auditor General concluded that “the $7.1 billion, or most of it, is not really an expenditure of the government”.

The recording of these transfers as expenditures enabled the government to report a lower annual surplus. It was hiding money. This is completely cooking the books.

I remember in the public accounts committee at that time discovering that the government was hiding money in a foundation which was not even in existence as of that date. The foundation came into existence a year later, but the government hid money to pay to that foundation which did not even exist. If a businessman were to follow this practice in his business, I would bet he would be in jail.

Why was the Prime Minister, who was the finance minister at that time, allowed to cook the books? The Auditor General took a strong step. The Auditor General refused to sign off on the government books. What the government did was completely, in my judgment, illegal and a violation of generally accepted accounting principles and should not be allowed to be done by the government.

The federal government also talked about employment insurance. The EI fund is a real scandal in Ottawa. The surplus of employment insurance overpayments has reached about $44 billion and another $3 billion surplus is expected. That surplus is not supposed to exist. This money belongs to employees and employers. The government does not need to accumulate money to the tune of a $47 billion surplus. The Auditor General and the chief actuary of the EI fund have said that it should not be more than $15 billion. The government is abusing its accounting powers and manipulating generally accepted accounting principles just to benefit the government and its Liberal friends.

On another issue, in Surrey at least 44% of what we pay for gasoline is the taxes on gasoline which the Prime Minister has been talking about. Last year the tax bite for B.C. totalled over $1.1 billion. In return the government transferred only $37 million to the province for infrastructure improvements, which is a paltry return of just over 3%. In contrast, the United States gives 95% of the money for infrastructure development projects. In Canada, it is about 3%, which is laughable. The government is carrying all that money into the general revenue, which is a complete black hole.

Discretionary spending increased a whopping 15% this budget year and the government wants overall spending to grow by another 8.8% over the next two years. Truth and transparency in fiscal policy is what we were promised, but we do not see it.

My time has expired, so in conclusion, I would like to say that the sponsorship program referred to by the environment minister's staff as a Liberal slush fund, and likely the unity fund as well, also known as the honey pot, funnelled money into Liberal ridings. We saw the same thing with the transitional jobs fund.

The rot extends far beyond a mere $100 million skimmed by a few advertising firms. It is the whole system of discretionary spending that we are concerned with that is corrupt and corrupting the system. It depletes the treasury, distorts the economy, incites envy, encourages special pleading, and rewards friends of the government.

With the tax filing deadline looming, Canadians should pay close attention to what the government is doing with their money. The Liberals are furiously spending in their bid for re-election and that is not acceptable.

[The Speaker]

The House will now proceed to the deferred recorded division on the amendment to the motion for second reading of Bill C-30.

Business of the House

[Mauril Bélanger, Liberal, Deputy Leader of the Government in the House of Commons]

Mr. Speaker, discussions have taken place between all the parties and I believe that if you were to seek it you would find consent for the following motion:

That the recorded divisions scheduled today at 3:00 p.m. be taken in the following order: first, referral to committee before second reading of Bill C-25; second, the amendment to second reading of Bill C-30, and third, second reading of Bill C-246.

Budget Implementation Act, 2004

[Sébastien Gagnon, Bloc, Lac-Saint-Jean—Saguenay, QC]

Mr. Speaker, I am pleased to address Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on March 23, 2004. This legislation seeks to bring about the legislative changes that are necessary to implement several measures announced in the budget speech.

This morning, I was on the highway, on my way here, and I was wondering what I would tell my constituents who are listening to my speech today on the budget. I am afraid I will disappoint them. For one thing, these people, who are paying 50% of their taxes to Ottawa, expect some tangible content in the budget, and particularly some concrete measures from the government. Today, I am sorry to have to tell them that there is not much for our riding, or for Quebeckers, in this budget.

This weekend, I attended a nice event in Jonquière, a brunch where a number of people had gathered to provide help and financial support to the poor in our society.

Many people asked me what was in the budget for workers in the softwood lumber industry, for the unemployed and for those young people who want to stay in our region instead of leaving to settle in large urban centres. Again, I had no choice but to tell them the truth, namely that there are not many concrete measures in the budget to allow my beautiful region to create opportunities for the future. This would require some leverage, but such leverage is non-existent.

Health is a fundamental concern in my region, and that includes everyone, every class of citizens, every individual, regardless of their age.

Currently, Ottawa is only contributing 14.7% of the total costs. With the $2 billion that it is investing, its contribution will stand at 16%. Ten years ago, before the Liberals took office, the federal government's contribution represented 25%.

What has happened is that in recent years they have cut back on health transfer payments to Quebec. They have impoverished the province, which must now deal with its lack of money. Instead of reducing their contribution, I think it would be necessary to increase it, in order to continue to provide the public with health care and ensure a decent quality of life and a decent level of care.

Instead, what they are doing is interfering directly in Quebec's fields of jurisdiction, and I am not the only saying this. The provincial Liberals all agree that, in fact, the federal government is determined to interfere in Quebec's jurisdiction. Why? Here in Ottawa, they have a huge surplus, but it is Quebec that needs the money. Rather than being stubborn or creating all sorts of more or less effective schemes, let them take the money and give it to Quebec, which will know how to use it.

In our beautiful region there are three main economic sectors, forestry, farming and aluminum. Two of the most important of these are affected. Not only are they seriously affected, but some families are being driven into poverty.

Let us take the softwood lumber crisis as an example. This is a major industry in our region. The region most affected by the softwood lumber crisis is ours: 2,948 jobs are directly affected by the crisis right now. Ironically, the minister, accompanied by my colleague the hon. member for Chicoutimi—Le Fjord, talked about 200 jobs. He said that the Bloc MPs make the problem look worse than it really is. That is too bad, but right now 2,948 forestry workers are directly affected by this crisis.

Instead of trying to minimize this crisis, the government should be coming up with concrete solutions. I met with representatives of the forestry industry. What they want are loan guarantees that would enable them to replace their equipment in order to move from a primary manufacturing stage to a different mode such as an entrepreneurial one, using various materials, for example in secondary and tertiary manufacturing.

In addition, we must not forget that those affected the most are the plant workers. Today, these workers cannot survive from one season to the next because they find themselves without work and without employment insurance. They no longer have the money to feed their families.

The employment insurance criteria also need to be adjusted to allow these workers to benefit from the important leverage that employment insurance represents.

There is also agriculture. Over the past year in particular, there have been serious problems. Hon. members will recall the closure of the Chambord plant. Capital investment was shifted to other regions in Quebec. Many farms went up for sale when farmers reviewed their accounts and saw that their income had dropped dramatically. And just recently, the mad cow crisis hit a large number of farmers in our region hard.

Once again, in the budget speech, the federal government boasted about having allocated nearly $1 billion for the mad cow crisis. Do you know how much money was allocated for farmers in Quebec? Roughly $50 million, which is totally inadequate and does not meet industry needs.

There was no mention—I pointed this out a few moments ago—of employment insurance. This is an important lever. Over the past few years, nearly $50 billion, some $46 billion was accumulated in the fund. What happened to this money? It was withdrawn and put directly towards the debt. In his speech, the Minister of Finance bragged about Canada being one of the leading G-8 nations because it has paid down its debt more quickly.

While the government wants to project a good image internationally, there are workers who are unemployed and a region that does not have all the necessary financial means that should be available to it.

Let us look at a few examples concerning seasonal workers. In my riding the reality is that blueberries do not grow when it is 25 degrees below zero. Construction work comes to a halt as well at that temperature in our region. It is not the workers who are seasonal, but the work, the industry that is seasonal. The workers need a lever that will provide relief and allow them to make it from one season to the next.

What does this mean? It would give our region the ability to continue to pursue an industry. The federal government is telling us to forget about our blueberries and find other work elsewhere or find another industry. That is not realistic. We need a lever that would help us become economically stable.

Here are some other examples. The number of hours of work required in the case of students was increased from 425 to 900 hours. Back home, the major problem is that young people are leaving the region. They are leaving to settle in large centres and find work. The Liberal federal government has an important tool, but it is not using it in the community.

We could simply take this number of hours, allow students to qualify—by doing seasonal work—and thus ensure that they have a decent income until they gain experience and make a contribution to the economic development of our region. At some point, this work will become permanent.

It is the same thing with entrepreneurship. More effective measures would allow entrepreneurs to create seasonal work and promoters to develop tourism initiatives that would also allow communities to develop a year round economy.

The overall impression is that there are many disappointments in this budget for my fellow citizens. This is a budget that missed the target. It could have been receptive to the needs of small regions. This is a budget designed for large urban centres such as Montreal, Quebec City and others.

Once again, there is little in it that deals directly or concretely with the softwood lumber industry. What is there in the budget for employment insurance? Absolutely nothing. So, I have no choice but to tell my fellow citizens that the budget is once again a huge disappointment. Voters will remember that during the next election campaign.

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, I am pleased to rise and speak in this debate, since it gives me another opportunity to express the concerns of the people in my riding.

This eight-part bill would amend a number of existing statutes, such as the Canada Pension Plan and the Income Tax Act. Many of these measures are particularly bad, and my Bloc Quebecois colleagues have already pointed them out to the House.

Today I would like to voice the concerns of the agricultural producers in my riding, the riding of Drummond, located in the Centre-du-Québec region.

Last week in my office, I received a delegation of cash crop farmers from the Centre-du-Québec. During that meeting, they told me about the unfair trading practices they are currently suffering and the impact on them of the federal government's withdrawal. And yet in the Speech from the Throne, the Prime Minister boasted, and I quote:

The Government is dedicated to Canada’s farm economy and to taking the steps necessary to safeguard access to international markets and to ensure that farmers are not left to bear alone the consequences of circumstances beyond their control.

The government is a long way from making its words reality. There was nothing in the budget to support this intention and, consequently, nothing concrete in Bill C-30.

When I met with farmers from my region they reiterated that grain producers in Quebec and Canada are in a very difficult, not to say impossible situation. Why? Because the price of grain remains ridiculously low. They are unable to cover their production costs, which continue to increase. Add to that the interventions by the U.S. and European governments, which have been subsidizing their farmers for several years.

How has Canada reacted? During the past 10 years that the Liberals have been in power, during which the current Prime Minister was finance minister, Canada has increasingly failed to stand behind its farmers. That is the case for grain producers. Hon. members might be surprised to learn that funding for the agri-food sector in the federal budget went from 3.9% in 1991-92 to 1.6% in 2001-02, while Quebec grain producers posted negative net incomes.

The Liberals will probably respond by saying that transitional measures were implemented, but these are clearly inadequate.

The reality is that the federal government, and this Liberal government in particular—whether that of the former prime minister or the current Prime Minister, the member for LaSalle—Émard—has abandoned farmers.

The transitional measures totalled some $600 million in 2001-02 but no more than $250 million in 2003. Grain producers in Canada and Quebec expected the government to provide its share of support: $1.3 billion for the grain sector alone. The budget implementation bill falls short of their expectations because it offers nothing.

Meanwhile, the United States and Europe heavily subsidize their farmers. Here, it is frightening how our farmers are being abandoned by the federal government.

I can already hear the reaction from the Liberals and the Minister of Agriculture and Agri-Food, who will brag about their farm income stabilization program. Allow me to say that in a letter dated April 15, 2004, Mr. Werner Schur, president of the Syndicat des producteurs de grandes cultures commerciales du Centre-du-Québec, which is my region, said that the latest program created to support farmers will instead impoverish large-scale farms in Quebec and Canada.

The budget and its implementation bill could have provided an opportunity to meet the needs of the cash crop producers. The grain and oilseed producers wanted to see some leadership from the federal government. This was a missed opportunity.

Every year, may I remind you, foreign subsidies result in a drop of more than $1.3 billion in income for Quebec and Canadian grain and oilseed producers. When will we see some policies to lessen the impact of this foreign interference on world markets?

I hope the Minister of Finance and his colleague, the Minister of Agriculture and Agri-Food, have taken proper notice of this situation. The producers, like myself, are waiting not just for answers but for concrete actions to remedy this situation.

In recent years, the Liberal government has been asking the public to help put public finances in order. The federal government, with its current Prime MInister, formerly finance minister, made huge slashes to the funding of a number of sectors, health among them. This disengagement was solely responsible for the strangulation of the finances of Quebec and the provinces. The present Prime Minister, none other than the father of fiscal imbalance, has but one objective: to create a single government in Ottawa, with administrative branch offices in Quebec and the rest of Canada.

Yet, at the very same time, the Liberals were shamelessly wasting taxpayer dollars on what we have brought to light: the sponsorship scandal. Not only the $100 million lost in the sponsorship scandal, but also the billion lost in the Human Resources Development scandal, and another $2 billion for the firearms registry. Over the past ten years, the Liberals have made it patently clear that they are incompetent to handle public funds properly and effectively.

The present Prime Minister can repeat all he wants that he knew nothing about the sponsorship scandal, but he cannot contradict the facts. He was there, sharing the responsibility for the poor Liberal administration, and we will keep reminding him of that all through the coming election campaign, if there is such a campaign of course. What is the Liberal leader afraid of? What are the Quebec Liberals afraid of? Does their track record embarrass them?

The Liberals have always used the same tactic: over-estimating government expenditures and under-estimating surpluses. The present Prime Minister would have done well to consult the Bloc Quebecois critics, the members for Joliette and Saint-Hyacinthe—Bagot, whose forecast figures have been far closer to reality.

As a result, billions of dollars went to paying down the debt while funding to Quebec and the provinces was cut. We must not forget all the intrusions by the federal government in areas outside its jurisdiction, which complicated the job of finance ministers across Canada. These intrusions and all the ad hoc interventions, through foundations set up by the Liberals, made financial planning for Quebec and the provinces extremely difficult. This cannot go on.

These are the results of ten years under the Liberals. Confirmation of this is provided by the budget implementation bill. The Liberals are unconcerned by what our constituents are experiencing. They are out of touch with the reality facing the unemployed, older workers losing their jobs, seniors who are often the most vulnerable members of our society, low income families who are unable to find appropriate housing because they lack the means, farmers abandoned to their fate who must show extraordinary creativity to weather the storm.

Since the federal government is no longer of any assistance, since it has the finance ministers of Quebec and the provinces by the throat, since it is withdrawing and running from its responsibilities, there is only one solution to ensure a sustainable future; Quebec must become a sovereign nation.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, I am glad to have the opportunity to speak to the budget implementation Bill C-30.

What the hon. member on the other side just said is, shall we say, questionable. He has indicated that we on this side are always against everything the government does. As a matter of fact, we have pressed very hard over the years for balanced budgets. We were the ones who first made it politically correct to even talk about stopping the endless borrowing.

Shall we say that we should praise the government for something. I will give the Liberals a reluctant nod of approval for the fact that they actually followed our advice and stopped borrowing money in order to top up the money that they collected from taxpayers in order to provide services to Canadians. We are glad the budget is balanced, absolutely. When the member says that we always criticize everything unequivocally, that just is not accurate.

Bill C-30 would implement some of the provisions of the budget that was handed down in the House in March. Some of the provisions are worth supporting and of course some we would somewhat criticize.

One of the things the bill would do is renew the equalization plan and make a few changes to it. I am sure we cannot persuade the Liberals to do this, but I would like to urge Canadians to write, phone or e-mail their members of Parliament and ask them for a copy of Bill C-30, the beginning pages that deal with equalization. If after having read these technical changes that are being made they can make heads or tails out of it, then we should recommend them for a Governor General's award, because it is a tremendously complicated and convoluted formula.

I will not waste my limited time talking about it but it talks about formulas: .016 times X1, times Y1, where X1 is the sum of two-thirds of the national per capita equalization. It goes on and on like that for about 10 pages. It makes fascinating reading.

I remember when I was on the finance committee we asked some officials from the Department of Finance to explain how the equalization worked, whereby the government collects money from all the provinces and then some of the provinces, currently every province except Ontario and Alberta, those provinces actually get money paid to them out of this equalization formula and it comes to the billions. Quebec, for example, typically receives around $10 billion a year out of equalization.

I am in favour of the principle of equalization. It is in our Constitution and I believe it is to the benefit of every Canadian and every province that the governments in the different provinces are able to deliver to their citizens comparable levels of services at comparable levels of taxation. If that were not done, then we would see a massive migration based totally on taxes and services. In other words, if a province were not able to deliver the services of health care and education, then clearly families would migrate to the provinces that could deliver them. So it is in our best interest to make sure that those services are delivered in every province.

Furthermore, if the provinces could only do this by massively increasing their rate of taxation, then again Canadians would react by migrating. It is just a natural human thing to move to areas or jurisdictions where the tax rates are lower, especially if people could not balance their household budget because the tax bite was so large.

We have learned this directly from our Prime Minister who, instead of paying the 40% to 50% that all Canadians pay in taxes in Canada, has arranged for his businesses to pay I think around 3% in Barbados and other countries. He obviously knows what it means to move to a better jurisdiction when tax rates are too high. Unfortunately, our farmers, business people and families cannot simply move their business interests and incomes to other countries and still manage to live here and enjoy the benefits of this country.

I would like to refer also to the fact that the bill deals with a number of other issues. One that is high on my personal agenda is EI. The bill once again gives to cabinet the sole right to set EI premiums. You have no idea, Mr. Speaker, how upset I am about this.

Just about all Canadian workers, because some are not covered, including our students who work in the summer, pay into the EI fund. Every dollar that is put in is matched by $1.40 by the employer. Can the students get their money back when they go back to school in the fall? No, they cannot. They are forced to buy this insurance from which they cannot possibly benefit. It is like forcing my mother to pay car insurance when she does not have a car. She can never collect that car insurance because she does not have a car. The same thing is true for students and many other people who pay into this, but because of their circumstances are unable to collect any money.

Bill C-30 gives to cabinet the right to once again set the premium rate. We know that it has been very high compared to the actual needs. As I recall, I believe with this budget and with the anticipated rates that the government will set, that fund probably will reach about $47 billion accumulated surplus over the last six or seven years. That was never the intent of the employment insurance fund. It was to be an insurance program to help people who had a temporary loss of employment, so they would have income while they looked for another job or while they were retrained. There are so many anomalies in this.

We hear many members, especially from this side of the House, draw to the attention of the government the shortcomings of EI in actually meeting the needs of people who become unemployed. They are either ineligible, the waiting periods are too long or the amount they receive is inadequate. Yet still people have to pay.

What does the government do? It rolls that money into general revenue. As a matter if fact, one could say that all of the surpluses that the government has enjoyed have come totally and solely on the backs of the employers and employees who blatantly are being overcharged on a program that is supposed to be self-sustaining.

The chief actuary of the EI fund has consistently recommended lower rates. The government has consistently overshot that target by a large amount in order to generate this money. Then the former parliamentary secretary to the minister of finance can gloat that it has balanced budgets. It is solely and totally on the backs of the members of the working public. I believe we need to correct that anomaly and we need to correct it very quickly.

Finally, there is this issue of the municipal GST rebate. Yes, indeed, all governments are cheering this. If one stops to think about it, it is only consistent with the principle that in Canada different levels of government are not to tax each other. The federal government has been taxing municipal governments through the nose for how many years and now finally it is going to stop doing it. Will I cheer that? Yes, indeed. Do I remind the Liberals about their promise on the GST in 1993? I cannot help but do it. They said that it would be gone for everybody, but it is still here.

My time has elapsed. I appreciate the privilege of being able to address this issue.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, I am pleased to participate in the debate on Bill C-30, the budget implementation bill.

I have to say that some things never change. Obviously the opposition again does not like this budget and again fails to recognize the tremendous progress the government has made, particularly in the area of managing the nation's finances. We have had seven balanced budgets or better for the first time in Canadian history. It is unheard of.

This is the only government in the western world that is paying down the national debt, which colleagues across the way have again failed to acknowledge.

The fact is that the government has made it very clear that prudent financial management is critical and we have been able to do that with seven balanced budgets or better while still investing in the social foundations of this country: investing in families, in communities and in health care while making sure that our programs are cost effective.

However we do not hear these things from opposition members because they would say that if they were in power they would do it differently. They are absolutely right that they would do it differently. They would gut social programs.

They refer back to 1993 spending levels. I would remind our colleagues in the House of the fact that one-third of government spending in 1993 was borrowed money. We are not into borrowed money. We are making sure that we have the resources to enable us to move forward on programs that are important to Canadians. I do not like hearing about the 1993 levels because clearly it is a fallacy.

On this side of the House we have cut our credit card in half. We will not go on the basis of previous Conservative governments or, indeed, of previous Liberal governments. Over the last 10 or 11 years we have said that we would make sure the finances of the nation were well managed.

We are the envy of the western world. It is unheard of to have seven balanced budgets or better. We are the only G-7 country paying off its national debt.

We are also being prudent. We are making sure we have that contingency fund back. I would ask members to remember last year when we had everything from hurricanes to fires to SARS and yet we were able to respond effectively and not go back into the red. Again, that is extremely important.

We have established for the first time a target on debt reduction. Last year $3.5 billion was saved because of debt reduction. What did that mean for the average Canadian? It meant we were able to invest money in needed social programs and to respond to issues that came along, such as SARS, the forest fires in British Columbia, et cetera.

We put over $52 billion down on the national debt and we have now set a target of 25% of GDP within 10 years, which may in fact occur before that 10 years. We have made that commitment.

This government and the Prime Minister, who was able to wrestle with and eliminate the national deficit of $42.5 billion, have made that commitment. We cannot forget that it was the Prime Minister, when he was minister of finance, who said that he was going to do it and has done it. That is extremely important.

What is also important is that the Organisation for Economic Co-operation and Development has said that we are the only G-7 country that will ever be able to again balance the books and reduce the debt, not only this year but next year and the year after. Again, other countries are looking to Canada and asking how we have been able to do this so successfully. We have done it because we have listened to the needs of Canadians.

What is one of those needs? One obviously is health care. We have heard criticism from the opposition about health care. The fact is that although we are responsible for the five tenets of medicare, the implementation is done by the provinces. What has happened over the years is that we have had agreements. Last year, as members know, we had a $35.4 billion investment, again over five years. We then added this year another $2 billion. The Prime Minister has now made it very clear that incremental actions like that are not the way to go.

What has the Prime Minister said? He has said that this summer we will meet as first ministers and we will get a funding agreement for 10 years and structural change. We cannot have one without the other. We cannot continue to put money into health care without making sure that the waiting lists are reduced and that those people who need MRIs get them. We will not do that by simply giving the provinces more money without accountability.

Therefore the Prime Minister has committed the government and has committed to Canadians that we will have that in place. He has told the first ministers that it will not be over lunch or over dinner. He has asked them to bring their bags because they will be there until we get it. This is what Canadians have said they want, what we have said we will do and what we will do this summer.

This will not be an incremental change. We will make real changes that Canadians will see. They will be measured, which is absolutely critical, so that every family that has a person who is sick, who needs to have an MRI or who needs to go to an emergency facility in a hospital, those needs will be addressed properly. That is important.

On the issue of communities, let us look at the record of the government on cities, towns and villages in Canada. There has not been a government, except for this one, that has responded so strongly to that agenda. Dating back to 1993, the establishment of the national infrastructure programs over the years, the strategic infrastructure program and the fact that the government said that it would give a 10 year commitment with $1 billion as a downpayment. It was in last year's budget. This year we have reduced it down to five years because we know that municipal governments and the Federation of Canadian Municipalities have been asking for that for many years. As a former president, I can say that it was certainly welcome news that we would be addressing those issues because cities deal in 5 and 10 year capital forecasts.

We have also said that there was an unfairness in the fact that cities, towns and villages pay GST. Yes, we negotiated with the Mulroney Conservatives when they were in. They wanted us to pay 100%. We were not happy but eventually we negotiated a 57.14% rebate.

The Prime Minister has listened and now cities, towns and villages will receive 100% rebate on any purchases that involve the GST. Again, this has a significant impact. It will be $7 billion over the coming year. It is extremely important in terms of a savings. My own municipality believes that it will save between $500,000 and $1 million a year because of that.

The Prime Minister has gone further. He said that we will develop a clear, consultative role with cities, just as we do with provinces, to ensure that if there is to be federal legislation that could have an impact on our cities, which we must remember is where 80% of our population lives, we will bring them into the process and work with them.

The Prime Minister has committed a portion of the gas tax or an equivalent. We should not forget that the gas tax is not a simple issue because we need to have the provinces involved. He realizes the important role the cities play, particularly our large cities in terms of the urban agenda and of being able to promote economic growth. He also has not forgotten rural communities. This will improve the lives of all Canadians.

We have worked very effectively, whether it is on the homeless question or on the issue of dealing with infrastructure, transit or housing. We have been able to sit down and work collaboratively with the provinces and cities. That is extremely important because the Canada of 1867, where 6% of the population lived in an urban environment, is not the Canada today where 80% of the people live in urban areas. We need to address that. The government has and continues to focus on that as one of the most important issues. The budget addresses that.

I would have expected members on the other side to stand up and say that is what we need and that they support that. However, as I said at the beginning, the opposition never, no matter what budget it is, support the provisions.

It is important that we do this all within a strong fiscal framework. To have those strong fiscal anchors is absolutely imperative. No one in the House wants to work in a deficit position in their own household. I certainly do not and I know the government does not. That is so important and probably the cornerstone of any economic policy.

There are many other areas in the budget that address the needs of Canadians. We have listened very carefully to what Canadians were looking for and we responded accordingly.

Regardless of the rhetoric we hear across the way and regardless of the naysayers across the way, the fact is that again we have seven balanced budgets or better and we are the envy of the world. It is about time that side woke up and read the budget for a change instead of criticizing it.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a privilege to speak to Bill C-30 and talk about some of the spending issues that are involved in the bill as well as the vision that it puts forth.

I have received a number of concerns, as a member of Parliament, from my constituency as well as from several hundred Canadians who have already e-mailed, phoned, faxed or provided some documentation to me about what has been pronounced by the government.

I want to first say that there are some good provisions for some things in Bill C-30. To get up and say that absolutely all of it is bad would not be right. One of the things that I do want to point out is the fact that there would finally be the elimination of environmental fines as tax deductions or business write-offs. That is one thing that we could not believe was happening. It was causing a national embarrassment.

I was getting correspondence from American elected officials about pollution coming from the Canadian side of Lake St. Clair and the Detroit River and other areas, that spilled out from Canadian factories and other sources. At the same time, companies were able to apply for a tax deduction on that, let alone the cleanup and the effect that it was having upon our American neighbours.

It is interesting to note that the government talks about improving relations with the United States. The first thing would be for our side to stop poisoning the water and to provide all kinds of progressive steps to clean the system up in partnership. The United States has actually been far more progressive in the Great Lakes by investing in their renewal in a couple of different fashions. It has been doing it, not only through its government, but through other means, for example, Robert Kennedy Jr. and his efforts have been through the legal system in order to provide some of the improvements that have been happening.

We have actually created some of those things on our side of the jurisdiction of the Detroit River with our river keeper announcement, from the public point of view, without the assistance of the government as an initiator of the project.

We saw the budget come out with basically an ideological attempt to reduce expenditures just for the sake of scoring political points.

The government did a set up here. It wanted to appear that it was shifting to the right to deal with the Conservative agenda but what it has done since then is to go out to the public to announce different projects in the multimillions after the actual budget was released.

It is a classic attempt to try to have it both ways. Quite frankly, it has been very good at getting it both ways until now because Canadians are starting to recognize that they each have different choices about things and they should be making those choices based upon principles as opposed to wishy-washy behaviour.

We are watching the privatization of health care. The New Democratic Party is really concerned about the fact that there were no new health care transfers.

The Prime Minister had plenty of time to address this as a former minister of finance and during the time of his leadership run-up. He talked about these issues a lot of times and said that it was very much a priority, but at the same time he did not actually have an action plan in his first official budget.

That is unfortunate because we believe that the Roy Romanow solutions that were proposed should have been specifically mentioned in the budget. There should have been advancement because Canadians are looking for accountability. They are looking for a single system of medicare that is not going to introduce a level of profit that will certainly mean a loss of service for people. It will make people who are vulnerable susceptible to longer lineups.

The lineup is important to note because I know of a community that is under serviced because the infrastructure has not been provided for the medical society to provide the actual services that are necessary on the ground floor. We are not getting the specialists and we have long waiting times.

That is important to note because specialists also relate to the quality of life and the productivity of the citizens we have in our community. If people are waiting for an exponential period of time to have their knees scoped or to have some type of minor operation, it certainly is a negative derivative when we look at the economy. We have more people who are off on sick leave. We have people who can further injure themselves and we also have family situations that become more complicated.

Whereas, if the investment were there, we would see the benefit of people returning to work earlier and have a healthier environment. I think that would be more productive for our economy and our country. We also have people who need those types of services in order to stay physically active in our society. The investment of that accountability and the investment in reducing waiting times would allow them to stay active and healthy.

I know of many seniors who have had to wait far too long to receive operations. It is unacceptable and unfair to them because their health deteriorates in the meantime. They have contributed a significant amount of money into the health care system over the years and they have certainly contributed to our economy. They have also been productive family members. To be in one's golden years and not have a required operation creates a lot of problems as it is stalled from month to month. That threatens their physical well-being as well as their mental well-being. The stress and the anguish that goes along with that is difficult as well.

I was out the other day talking with a constituent whose husband, a young worker, was waiting for a minor operation. He is now into his fourth week of waiting. He had to wait a series of days just to get an MRI done on his broken leg. If his leg is not treated properly, it could lead to a permanent injury. This is a result of long waiting lists.

A good investment for Canadians would be to have more money and accountability put back into our health care system in different ways such as those outlined by Roy Romanow. That would be a way of rebuilding this country.

I want to talk a bit about some of the things that could have been done in this budget and would have been influential in lowering the price of medications and eventually the costs associated with our health care system.

Last year, the industry committee spent a lot of time on notice of compliance, that is the evergreen that happens. Evergreening is when the 20 years in the pharmaceutical industry is extended by an automatic stay of injunction by the patent holder. This then delays the actual generic version of the drug being available on the market.

We saw delay after delay as these automatic injunctions compounded year after year. These injunctions prohibited generic companies from introducing a lower cost drug and which would have actually reduced the cost of medications in Canada. That money could then have been put back into health care and toward addressing other issues related to waiting times and services.

It has been quite amazing to see what has happened. A progressive Liberal, the member for Ajax--Pickering, sat on the committee. I give him credit for being so active on this case file. Some other sympathetic Liberals were also there. They were part of the Chrétien era, I suppose. After Chrétien resigned from his position, a new Prime Minister came in, and he has changed the committee. I am virtually the last member of that committee that is still talking about reducing the cost of medications, or at least trying to raise the issue.

It is unfortunate because a lot of time and taxpayers' dollars has been spent in having witnesses come forward and research done. A lot of time has been spent trying to get the Minister of Industry to respond. We have seen nothing yet. We are watching these studies become basically outdated. The studies that have been done are sitting on a shelf like so many other studies, even though the Romanow Commission noted that Canada should be doing something right away to lower the cost of prescription drugs.

It is also important to tie that in to the fact that we would like to see Bill C-9 passed. That bill would allow developing countries access to patent drugs, or generic versions of them, so they could address some of their horrible conditions of malaria, tuberculosis and HIV-AIDS. It would also assist those developing countries in dealing with their poverty issues.

One of the things that was outright shocking in the budget that I was very disappointed about, coming from an auto town, was the fact that it did not contain an auto policy or at least some indication of what was going to happen. There was no indication in the Speech from the Throne either. I immediately asked questions about that as did my colleague from Windsor as to why the auto industry was not mentioned in the Speech from the Throne. There are one in 7.5 Canadian jobs affected by the auto industry and one in 6 in Ontario. That was left out of the Speech from the Throne which was very shocking.

Mayors of municipalities have formed a committee to talk about this. The Province of Ontario, even though it is drowning in debt and complaining about its costs, has had to come up with $500 million for an auto investment strategy because there has been no national auto policy. I want to acknowledge the fact that the government had to admit that it still has one-quarter of the border funds available.

A community like mine is waiting for announcements, waiting for those improvements like the truck ferry service, for example, that can take trucks off the city streets and move them across the border to help our economy and our trade. We want to have the grid-lock taken care of, something that can happen in a matter of months. The Liberals do not have any resources or support for that; only the projects for their friends and the lobbying that has been happening.

With that, I want to say thank you very much for the opportunity to respond to the Speech from the Throne, subsequently the budget and Bill C-30. I look forward to seeing better progress. This was disappointing to building Canada which needs to happen now as opposed to giving it away.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I am very pleased to enter the debate on Bill C-30.

I listened to the member for Medicine Hat and others. Normally the member for Medicine Hat, being on the finance committee and vice-chair, is quite lucid on these topics. I heard something about the budget, but I did not hear much about Bill C-30.

Bill C-30 is an act to implement certain provisions of the budget tabled in Parliament on March 23, 2004. It deals with a number of the very specific ways and means to implement some of the very specific recommendations in the budget. The budget is followed at a later date with the estimates, which gets into departmental spending in a very specific way. We had the debate on the budget itself not too long ago in this chamber.

I am very excited about this particular bill because it implements a number of key provisions of the budget that was tabled by the Minister of Finance on March 23. One of them is the first down payment on the cities agenda, which will cause municipalities to be exempt from the GST, effective immediately. In fact, I think it was effective last month. That is the first phase of a new deal for cities that will be a real deal. As our Prime Minister announced just last week, he is hoping, and he will strive, to have a new arrangement with the provinces, the cities and the communities by the end of this year.

What does the elimination of the GST mean for cities? That is what is being enacted in Bill C-30. For a city like Toronto, where I come from, it means another $50 million each and every year for the City of Toronto. That is a fairly tidy sum of money. What can that money be used for? It can be used for a number of different priorities at the city level. It can be used to fight crime. It can be used to better fight fires. It can be used to put up affordable housing. It can be used to invest in public transit and improve the environment in the City of Toronto. Fifty million dollars a year in perpetuity is a very good start and I know that in working with the provinces and the municipalities in the months to come, there will be another arrangement.

The Prime Minister and the Minister of Finance have talked about a sharing of the excise tax on fuel. I am sure it will be something along those lines that will give more stable and secure funding for municipalities and communities. In the Province of Ontario, our municipalities, communities, and towns have been starved of funding by the former Harris and Eves government. It cut taxes, devolved responsibilities to the municipalities, the towns and the cities, but did not follow that up with the resources necessary to implement that agenda.

That is why we have to work with the provinces, the cities, the towns and communities to cut a new deal. This will be quite an earth shattering and revolutionary approach to better relations between the different orders of government.

The member for Medicine Hat seemed to forget the tax cuts that were implemented in the year 2000. There was a $100 billion tax cut, the largest tax cut in Canadian history. It is true that the last year of that package is being delivered this year. In fact, in this fiscal year, it is a $30 billion tax cut. The government will have to consider what further it does with cutting taxes.

As chair of the finance committee, we will be asking Canadians that question: What should follow the $100 billion tax cut? Should we have more tax cuts? If we do have more tax cuts, at what should they be directed? Should they be directed at reducing personal income taxes? Should they be directed at reducing corporate income taxes? Should they be directed at reducing the GST, et cetera, et cetera? That will be a very useful dialogue and debate that we will have.

Against all that, the government has a number of very serious priorities to deal with, the biggest priority being health care. That is where I found the comments of the member for Medicine Hat again slightly at variance with the reality of the situation.

In 2003 the government, along with the premiers and the territorial leaders, signed the health accord putting $35 billion into our health care system through the CHST. That was recently topped up by another $2 billion per year.

What does that mean? That means that over the next few years our contributions to the provinces and territories under the CHST will increase somewhere in the vicinity of 8% per year, when the economy is targeted to grow at around 3% or maybe 5%, somewhere in that range. That is a very sizeable contribution to health care, and that is only the start.

The Prime Minister has indicated that he will be meeting with the first ministers this summer. He has said they are not going to leave the room until they come up with a new deal on a sustainable health care system. That is vitally important.

I do not know about members opposite or Canadians in general, but when I go into an acute care hospital in my riding of Etobicoke North or into any nearby acute care hospital, I see elderly patients occupying acute care beds. Some may ask, what is the problem with that? There is no real problem in one sense. Those patients will not be put out on the street if they cannot be put into home care or put into lower cost alternative care, but why are we housing elderly patients in expensive acute care hospital beds? That might not be the best care for the patients because they may prefer to be in a slightly different environment such as their own home where they could be cared for by a nurse or by their family.

Why is it that after so many years of debate and discussion in Canada we still have this problem? We do not have the capacity in terms of long term care, extended care, home care and homemaker programs. We have been talking about this for years. Let us get on with it. Let us provide lower cost alternatives. Let us provide care levels that are appropriate for patients. While we are at it, why not deal with the huge cost pressure that is emerging, not only in terms of technology, but also in terms of prescription drugs? We need to look at this question in a much more fulsome way.

Collectively, we need to make some capital investments in capacity building. We cannot fool ourselves any longer. If we keep saying we need to have lower cost programs, then we have to build those programs. That might mean some one off spending up front. The provinces and the federal government and other orders of government need to work together to get the job done.

We have been talking for years about health education, health promotion, and lifestyle issues, but we have not been investing enough in those programs. We need to do some front end investment in those types of programs. If we do not deal with these types of issues, then we are not going to have a sustainable health care system.

A report recently came out that was commissioned by the Department of Finance. It was reassuring to some extent and indicated that the problem may not be as severe as we thought. However, the reality is that, given the demographics of our country, we do have more older people. I am going to be one of those at some point in time. In fact, some people may argue that I am one of those now. However, Canada has an aging population and we need to deal with that.

That is why we need to have a sustainable health care system. That is why we need to have a discussion with the premiers and the territorial leaders about how to get there. I look forward to that. That is really where we need to go. We need to provide sustainable, secure and stable health care funding to the provinces, but we cannot simply throw more money at it. We have to have a well managed system for the benefit of all Canadians.

The budget that was tabled by the Minister of Finance recently put into play more resources for public health. The member for Medicine Hat probably forgot that or maybe it was just a slip of his memory. Perhaps he is one of those individuals getting on in years as well. The government put another $400 million in new money into public health.

What will that new money do? It will provide a much more coordinated approach to the tracking and dealing with diseases such as the SARS outbreak that we had last summer. I think we handled it as well as we could but, unfortunately, there were different agencies and groups. This will bring that together in a cohesive whole, not necessarily in one building but in terms of a network and consolidating that expertise so that we are prepared for these viruses, epidemics and flus as they come into Canada. Hopefully we will not have them again but we have to be realistic and be prepared.

There also will be more money for municipalities for immunization programs, which is a very important feature.

Something often gets lost in this whole debate about our fiscal performance. We recognize that with the sponsorship program we have had some challenges that the government is dealing with. We will be centralizing and tightening up on the comptrollership function and we will be spending more money on internal audits.

When our government came into power in 1993 we had a $42 billion deficit and a lot of programs had to be cut. We tended to cut administration rather than programs. Programs affect Canadians on the front lines so we had to cut administration.

In hindsight I suppose the government might have said that maybe it had cut back too much of the administration, that maybe it should have left the comptrollership general's office there and all these accountants running around adding things up and making sure the controls were good. I suppose with the benefit of hindsight we could have done that but we wanted to make sure Canadians got the benefits of federal programs. However in this whole debate I am absolutely amazed that we take our eye off the ball and lose the big picture.

I want to remind members opposite here today of some of the big picture items. When we travel abroad and meet members of parliament from around the world, when they come here to Ottawa their first question is how we did it. They want to know how in Canada we dealt with the $42 million deficit in four years, that we are paying down debt, that we have such low interest rates and that the Canadian economy has generated so many jobs since 1993, in fact two million plus. Those are good questions which I think Canadians should be asking themselves.

The United States has had good economic performance until more recently. The economic performance in Canada has been equally strong. In fact, if we factor in job creation, there has been more job creation in Canada on a per capita basis by a long shot compared with the U.S. economy.

The U.S. economy has had some economic growth but with no jobs. In Canada we have had two million new jobs while at the same time paying $56 billion against the debt. What does that mean? It means Canadian taxpayers are saving $3 billion a year, each and every year moving forward. This is what we call an annuity. It is $3 billion into the future forever and the more we pay down we will be able to add to that.

What are the $3 billion being used for? They are being used for a variety of things. They are being used to put more money into health care, into post-secondary education and into national defence. I think my colleague, the Minister of National Defence, was very right in clarifying some of the defence expenditures over the last few years. Since December 2003 our government has put $7 billion more into our national defences.

The opposition goes on and on about $15 here or $20 there. We are talking about $7 billion into our national defence. Some of the members opposite say that was money already announced before. Well I am sorry, it is new money since December. They can talk about when it was announced, whether it was in the budget or whether it was announced again, but big deal. I think it is helpful when the Prime Minister or the Minister of National Defence visits our troops and talk about the realities.

I have been reading some of the press clippings and the troops are really excited about the new supply ships. They are also happy that we will not be taxing them when they go to dangerous areas. Not only will that be in areas like Afghanistan, it will also be areas like Bosnia and Haiti. When our troops go to those regions they will not have pay any income tax, which is a good thing.

I think the members opposite need to get their facts straight when they enter these debates.

We are debating Bill C-30 which would implement certain provisions of the budget. I am absolutely amazed that no one has talked about equalization because it is a big part of Bill C-30.

Equalization is a complicated program. What it achieves largely is to make sure that services and programs are available to Canadians in equal ways and forms no matter where they live in Canada. Therefore some of the have provinces transfer money through equalization to the so-called have nots.

There is a contentious issue. Let us take Newfoundland, for example. In the last few years we know that Newfoundland has come upon new resources in terms of its petroleum and natural gas wealth. The question on the table is that if Newfoundland is suddenly the beneficiary of new provincial revenues as a result of these newly developed resources, should it be penalized in terms of its equalization payment, which is moving money from the have provinces to the have not provinces?

That is a very fundamental question but I think that on balance we have to deal with it. I am perhaps using a poor analogy but if we are helping a family member, because that is what we are, a community, a family, and then suddenly the family member gets a job or has a new form of income, is it not realistic to say that we will reduce the amount that we were paying that family member? I think it is eminently reasonable. I suppose the debate would get into some of the details of that but I think in rough terms that is precisely the issue that some of the premiers have raised. Frankly, I think Canadians would be more inclined to agree with the government's approach on that.

The bill also entertains a number of provisions with respect to the Canada pension plan. This is an area that I find interesting and troubling in a sense. Many in my riding say that because people are getting old and the demographics are changing, the Canada pension plan will not be there for them.

I want to tell Canadians and those members in the House today that because of the actions of our government just a few years ago, where we did a complete review of the Canada pension plan with the objective of putting the plan on a sound actuarial footing, the last report by an independent actuary said that the Canada pension plan was actuarily sound until the year 2050. That was based on all the assumptions in terms of age, demographics, benefits and contributions, which is based on the package that we have implemented today.

Therefore Canadians should not be concerned about the viability of the Canada pension plan, and Bill C-30 would implement measures with respect to that.

The member also talked about high government expenditures. I think what the member for Medicine Hat perhaps forgot to point out was that we are now at a level of the lowest government expenditure in relation to GDP. In other words, if we look at federal government expenditures in relation to the size of the economy, today we are spending back to the levels of the mid-1950s.

I am sure some members in the NDP will argue that we should be spending more but I am of the school that says that we should spend when we can afford to spend. We know we have a lot of debt still to pay down and we know we have a lot of priorities. However for the member of the Conservative Party to argue that expenditure is out of hand, that is not aligned with the facts. Federal government spending, in relation to the size of the economy, is at a low; around the levels of the early 1950s. I think we should clarify that.

I certainly will be supporting Bill C-30 and I encourage my colleagues to do the same.

[Monte Solberg, Canadian Alliance, Medicine Hat, AB]

Mr. Speaker, it is my pleasure to rise and address Bill C-30. I want to start by reminding the House how hard Canadian taxpayers work to make their money. I think it is appropriate to talk about this given that we are talking about how the government spends a lot of the money that people make and work very hard for.

I want to begin by reminding the House that in the last number of years the government has driven spending to record heights. I know for a fact that we have never seen spending this high in the history of the country. Today in Canada the government spends more money per capita than it has ever spent in the history of the country. There is a tremendous amount of money that is being spent, supposedly on behalf of taxpayers.

I also want to point out that today in Canada the big problems that face this country are as big as they have ever been or, in many cases, bigger than they have ever been.

I have been here for ten years. I came here in 1993. At that time, I can tell members, the issue of health care was not nearly as big a problem as it is today. Despite the fact that this government and this Prime Minister have said that health care is his number one priority--and the government has talked about all the spending announcements it has made for health care--the problem has only become worse. Today people are waiting on waiting lists for all kinds of vital surgery and treatment. Despite the fact that the government has said this is its number one priority, the situation has only gotten worse and worse.

When I came here in 1993, the military was in a lot better shape than it is today, despite the fact that the government has said that it is a big priority. The Prime Minister made a big deal of going to speak to our troops in the last couple of weeks. His claim is that the military is a top priority for him. If that is the case, why are our troops so overstretched and under-equipped?

We must remember that he was the finance minister for nine years. He has been the Prime Minister for a number of months now, and certainly he was preparing to be prime minister for a long time, but the situation with respect to the military has only gotten worse in the decade that the Liberals have been in power.

When it comes to an issue like student debt, I can tell members that many of us in this place have children who are going to university. I have a son who is in university and many people are in the same boat. Over the last while many of us have had student organizations in our offices talking to us about the problem of student debt and the fact that not only are students going into debt, but there is just not the capacity in universities and colleges these days to accommodate all the people who want to go to university. As a result, we have universities placing very high standards on allowing people into university. A lot of people who do not have great marks cannot get in, and those from low income families probably cannot afford to get into university.

The Prime Minister has said that this is a top priority for him, but he has been here for nine years. He was here for ten years, nine of them as finance minister. Now he is the Prime Minister, but we are actually in worse shape today when it comes to the issue of accessibility to higher education than we were when the Liberals came to power ten years ago.

I could go on and on about the areas where there has been an actual decline, where the ability of people to have access to government services has gone down over the last ten years. Why is that? I want to argue that it is because this Prime Minister has no vision. He has absolutely no vision when it comes to addressing the big problems that face the country today. Frankly, I think we saw that reflected in the recent budget and of course Bill C-30 has to do with implementing the particular provisions of that budget.

I will argue that the government has done a terrible job of addressing these big priorities. I want to argue that taxpayers who pay 50% of their incomes to taxes--the average family pays something like 48% of its income to taxes these days--deserve better. When taxpayers pay half of their incomes to various levels of government, including a federal government that taxes way too much, they expect to get services when they need them.

They expect their military to have proper equipment and to have enough troops to address some of the hot spots in the world that Canadians have typically addressed and to fill the role as peacekeepers that they typically have filled in the past.

They expect that when it is time for their children to go to university those children will actually be able to get in: that there will be a spot for them in university and that tuitions will not be so high that they will be in debt for the rest of their lives. This is what people expect and it is not an unrealistic expectation.

I think I have laid out what some of the problems are and now I want to talk about what the government has been doing to address these things. Has it come up with some visionary plan to address an issue like health care? No. It says it is going to do that, but down the road. It will get together with the premiers down the road, and by the way, the government says, it will probably be after an election, so we should re-elect the government and then it will address that problem.

What about the military? The government has no plan for the military. In fact, in the budget all it had was some spending for particular missions that our troops are involved in right now in Afghanistan and in Haiti, but it has no plan to address the problems of the military, even though we all know how important that is, especially these days when we are fighting a war on terror.

When it comes to the issue of student debt, I think everyone would agree it had some very impractical ideas in the budget, things that really do not come close to addressing the issues of student debt, accessibility and all the problems that face higher education today. The budget did not address those things.

What about initiatives since the budget? What kinds of initiatives has the government undertaken? We know that in the first two weeks of the fiscal year it came up with about $1 billion that it wanted to spend, basically on pork barrelling, on funnelling money into the ridings of Liberal ministers and candidates in a blatant attempt to try to buy votes. Was this for high priority things like hospital beds or more money for the military? No. In one case, it was money for an archeological dig in a Liberal minister's riding.

I am not going to argue that if we have money left over those kinds of things are not important. They are important, but we do not have money left over. We are seriously underfunding all kinds of very important things today, including, again, health care, higher education and the Canadian military.

Let us consider this. Instead of taking that $1 billion the government just spent on all kinds of pork barrelling, why not leave it in taxpayers' pockets? Why not allow the people who work so hard in supporting their families to keep more of that money?

Mr. Speaker, you have probably heard me say this before, and forgive me if I have already gone through this, but I always like to ask this question. What would people do if someone came to them and said they were going to be given $1,000, but the only proviso was that they had to spend the money in a way that would benefit their families? My question is, would they give that money to the Minister of Human Resources and Skills Development to spend on their behalf to look after their families? It is more likely that they would say no. They would say that they know what their family's priorities are. They know that their son needs braces or they have to pay the bill to get their son into hockey, or their daughter into ballet or whatever it is, because families have a much better sense of their priorities than the government does.

Whenever the government is preparing to make a spending decision, it should ask itself, is this the best possible way to spend the money or should it be given back to taxpayers in the form of lower taxes so they can decide for themselves what their priorities are?

Today a lot of people have trouble paying medical bills. If parents have a sick child and do not have a great drug plan, they are going to be spending a tremendous amount of money out of their own pockets to look after things.

Whenever there is a question of whether this is a high priority item, why not leave that money in the pockets of taxpayers? I can guarantee the taxpayers will make better decisions about how to spend that money to benefit their families than a bureaucrat in Ottawa, or a politician. This pork-barrelling exercise of the last couple of weeks is a perfect example. We are typically seeing money going into all kinds of individual Liberal ridings to start to grease the wheels for an election campaign. Frankly, that is wrong and it should not happen. In fact not only is it wrong, it is exactly the same way Jean Chrétien used to operate.

The Prime Minister worked for 13 years to knock Jean Chrétien off and get him out of here. The expectation was he would come in and do things differently. However, he is doing things exactly the same. Jean Chrétien spent a bunch of money at the end of a fiscal year to buy a couple of Challenger jets. At the beginning of a fiscal year, this Prime Minister spends a bunch of money on things like archeological digs, because it is in a riding, or on some shelving for a library.

Again, those are well and good and they are fine things. Are they a higher priority than health care, or education or ensuring that our troops have proper equipment when they are putting their lives on the line? I do not think so. Those things are critical, and I think the Canadian public wants to see their hard-earned tax dollars go toward these vital projects.

I want to talk for a moment about the government's record when it comes to overall spending.

Right now down the hall a public accounts committee hearing is going on. To me this underlines not only how terrible the government has been when it comes to managing money, but in some case how corrupt it has been. We are in a situation where down the way we have a number of members of Parliament who right now are asking questions of executives from advertising agencies who were the recipients of $100 million in commissions for work that in many cases was never done or work that was of questionable value, to put it mildly.

I want to argue that this is a perfect example why the government cannot continue to come to the public and ask for more money. It is playing the public for suckers. It is basically saying that Canadians should give it their tax dollars and that it will take that money and line the pockets of a bunch of Liberal-friendly advertising firms. By the way, some of that money found its way back into Liberal Party coffers.

It is time for that to come to an end. When the government brings down a budget where it proposes to spend a bunch more money over and above last year, $4 billion more this year if I remember correctly, then we say no. What the government should do is go through the current envelope of spending, find where the waste and corruption are and get rid of that. Then at some point down the road, when it has gone through every department, when it has found all the waste and gets rid of the corruption, it might be justified to come to the public and say that it wants to have more money for a particular project.

Right now the whole country is watching as the advertising scandal unfolds in the room just down the hall. I think that is the most powerful possible argument there can be for not giving the government a bunch more money to spend on all kinds of projects that in many cases are simply not of very high priority. In fact in some cases they are completely wasteful and are things that the money should not be spent on at all.

It is not just the advertising scandal that saw $100 million paid out in commissions for things like delivering a cheque for public works to Canada Post. There are many other examples.

I mentioned the Challenger jets. That was $100 million situation where at the end of the fiscal year the government went mad and decided to buy a couple of jets, even though our troops in Afghanistan did not have proper equipment.

I could point to the firearms registry of $1 billion, heading for $2 billion. This is a situation where the government basically made the choice at some point that the best possible way to protect the public was to pour money into a database that would record where the shotguns of duck hunters were. It was supposed to cost $2 million. It is now on its way to $1 billion and, according to many sources, it will hit $2 billion.

I would argue that the government has made a terrible calculation when it comes to using that money to protect the public. It has not put the money where it should go in a way that will protect the public. I would argue that when money went missing in Human Resources Development, that boondoggle demonstrated that the government was not capable of managing the public's money very well. This was a situation where an internal audit showed that the government had no idea where money had gone when it came to particular grants and that kind of thing.

Has the government learned any lessons from that? No, it is doing exactly the same thing right now in spending $1 billion in the first two weeks of the fiscal year on all kinds of pork-barrelling and handing out grants to friends. That has to end and the only way that will end ultimately is not to just change chairs on the Titanic . It is to elect a new government.

I want to argue that my leader and the Conservative Party could make some positive changes. Those guys have had their chance. They have been here for 10 years and all we have seen is mismanagement, waste and in some cases, I am sad to say, outright corruption. That has to end.

That is where the new Conservative Party can make some very positive changes. We are advocating that the government be much more careful with taxpayer money and that we trim wasteful spending. We would get rid of the firearms registry. We would get rid of the huge amount of discretionary spending that is used by Liberal ministers to reward friends. All the grants and outright gifts to friends has to come to an end. Huge bureaucracies for crazy programs like the firearms registry have to come to an end.

We have to take the savings and put it into things that really do make a difference in the lives of people like cutting the waiting list for surgery, ensuring that students are not in debt up to their ears when it comes to higher education and of course properly funding our military and ensuring that it has the equipment it needs when it takes on dangerous missions around the world.

My time has just about come to an end. I will simply wrap up by asking the public to consider what we have discussed. We are in a situation where an election will be soon. The two parties will trot out their election platforms, which is fine. However, one thing we will not find on an election platform is this government talking about its records when it comes to spending. I think we will find that the Liberals will try to dodge that issue.

I move:

That the motion be amended by replacing all the words after the word “That” with:

“this House declines to give second reading to Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on March 23, 2004, since the principle of the bill fails to address the government's record of wasteful spending and does little to tackle the real priorities of Canadians”.

[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)