Bill C-43 (Historical)

Budget Implementation Act, 2005

An Act to implement certain provisions of the budget tabled in Parliament on February 23, 2005

Part 1 amends the Income Tax Act and the Income Tax Application Rules to
(a) increase the amount that Canadians can earn tax free;
(b) increase the annual limits on contributions to tax-deferred retirement savings plans;
(c) eliminate the foreign property limitations on tax-deferred retirement savings plans;
(d) increase the Child Disability Benefit supplement to the Canada Child Tax Benefit;
(e) allow for a longer period for the existence of and contributions to a Registered Education Savings Plan in certain circumstances where the plan beneficiary is eligible for the disability tax credit;
(f) increase the maximum refundable medical expense supplement;
(g) exclude emergency medical services vehicles from the standby charge;
(h) extend to January 11, 2005 the date for charitable giving in respect of the 2004 taxation year for the tsunami relief effort;
(i) eliminate the corporate surtax; and
(j) extend the SR&ED tax incentives to SR&ED performed in Canada’s exclusive economic zone.
Part 2 amends the Air Travellers Security Charge Act to reduce the air travellers security charge for domestic air travel to $5 for one-way travel and to $10 for round-trip travel, for transborder air travel to $8.50 and for other international air travel to $17, applicable to air travel purchased on or after March 1, 2005.
Part 3 amends Part IX of the Excise Tax Act to extend the application of the 83 per cent rebate of the goods and services tax (GST) and the federal component of the harmonized sales tax (HST) to eligible charities and non-profit organizations in respect of the tax they pay on their purchases to provide exempt health care supplies similar to those traditionally provided in hospitals. It also amends that Act to provide that a director of a corporation may, under certain conditions, be held liable not only for unremitted net GST/HST amounts, but also for GST/HST net tax refund amounts to which the corporation is not entitled. Finally, it amends that Act to allow, under strict conditions, the creation of a Web-based GST/HST registry to facilitate the verification of a supplier’s registration by a registrant for the purposes of claiming input tax credits.
Part 4 amends Schedule I to the Excise Tax Act to phase out the excise tax on jewellery through a series of rate reductions over the next four years.
Part 5 amends the Federal-Provincial Fiscal Arrangements Act to authorize the Minister of Finance to pay funds to a trust established to provide the provinces with funding for the purpose of early learning and child care.
Part 6 authorizes the Minister of Finance to pay funds to a trust established to provide the Territories with funding for the purpose of assisting them to achieve the goals of the Northern Strategy.
Part 7 amends the Auditor General Act to permit the Auditor General to conduct inquiries into and report on the affairs of certain corporations that have received at least $100,000,000 in funding from Her Majesty in right of Canada. This Part also amends the Financial Administration Act to extend the application of financial management and control provisions in that Act to wholly-owned subsidiaries of parent Crown corporations and certain parent Crown corporations.
Part 8 authorizes the payment of funds to various foundations, including the Federation of Canadian Municipalities for the purpose of providing funding to the Green Municipal Fund.
Part 9 amends the Asia-Pacific Foundation of Canada Act to focus the mandate of the Foundation, to modify its governance structure, to establish qualifications for the appointment of the directors and the President, to impose a duty of care on the directors and the President and to require that the Foundation offer its services in both official languages. It also amends the Act to specify the type of funds the Foundation may receive and the appropriate use of those funds and to require that those funds be invested in accordance with policies, standards and procedures established by the board. In addition, the provisions of the Act respecting auditing, annual reports and winding-up have been expanded.
Part 10 amends Part 1 of the Budget Implementation Act, 1998 to broaden the category of persons to whom the Canada Millennium Scholarship Foundation may grant scholarships and bursaries to include not only persons who are Canadian citizens or permanent residents of Canada within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act but also persons who are protected persons within the meaning of subsection 95(2) of that Act, for example, Convention refugees.
Part 11 authorizes the Minister of State (Infrastructure and Communities), pursuant to the initiative commonly known as “A New Deal for Cities and Communities”, to make payments for the purpose of providing funding, in the fiscal year 2005-2006, to cities and communities for environmentally sustainable infrastructure initiatives, in accordance with agreements to be negotiated with provinces, territories and first nations.
Part 12 enacts the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act. The legislation will implement the arrangements of February 14, 2005 reached with Newfoundland and Labrador and Nova Scotia on offshore revenues. To do this, the legislation will
(a) authorize the payment of equalization offset payments to Newfoundland and Labrador and Nova Scotia for 2004-05 to 2011-12, set out the conditions under which payments will be extended to any of fiscal years 2012-13 to 2019-20, and authorize payments for that period should those conditions be met;
(b) set out the manner in which the offset payments are to be calculated;
(c) authorize the making of a cash pre-payment in the amount of $2 billion in respect of the agreement with Newfoundland and Labrador and a cash pre-payment in the amount of $830 million in respect of the agreement with Nova Scotia; and
(d) implement all other aspects of the agreements.
Consequential amendments to the Budget Implementation Act, 2004 respecting offset payments to Nova Scotia will also be required to ensure that 100 per cent offset is being provided for in fiscal years 2004-05 and 2005-06.
Part 13 establishes an Agency, to be called the Canada Emission Reduction Incentives Agency, to acquire greenhouse emission reduction and removal credits on behalf of the Government of Canada.
Part 14 enacts the Greenhouse Gas Technology Investment Fund Act. That Act establishes an account in the accounts of Canada called the Greenhouse Gas Technology Investment Fund to which are to be charged amounts paid by the Minister of Natural Resources for the purpose of
(a) research into, or the development or demonstration of, technologies or processes intended to reduce emissions of greenhouse gases from industrial sources or to remove greenhouse gases from the atmosphere in the course of an industrial operation; or
(b) creating elements of the infrastructure that are necessary to support research into, or the development or demonstration of, those technologies or processes.
The Act also provides for the creation of technology investment units in respect of amounts that are contributed to Her Majesty for those purposes.
Part 15 amends the Canada Deposit Insurance Corporation Act to
(a) increase the deposit insurance coverage limit for insurable deposits from $60,000 to $100,000;
(b) repeal the authority of the Corporation to make by-laws respecting standards of sound business and financial practices for member institutions; and
(c) provide that the deposits of a federal institution shall automatically be insured.
Part 16 amends the Canada Student Financial Assistance Act to provide for the termination of the obligations of certain borrowers in respect of student loans in the event of their death or if, as a result of their permanent disability, they are unable to repay their loan without exceptional hardship, taking into account their family income.
Part 17 amends the Currency Act with respect to the Exchange Fund Account and the management of Canada’s foreign exchange reserves. These amendments include authorizing the Minister of Finance to establish a policy concerning the investment of assets held in that Account and to advance funds to that Account on terms and conditions that the Minister considers appropriate.
Part 18 amends the Department of Public Works and Government Services Act to provide the Minister of Public Works and Government Services with responsibility for the procurement of goods and services for the federal government, and to authorize the Minister to negotiate and enter into contracts on behalf of the Government of Canada and to make commitments to a minimum volume of purchases on its behalf.
Part 19 amends the Employment Insurance Act and the Department of Human Resources Development Act to allow the Canada Employment Insurance Commission to set the premium rate under a new rate-setting mechanism. In setting the rate, the Commission will take into account the principle that the premium rate should generate just enough premium revenue to cover payments to be made for that year, as well as the report from the employment insurance chief actuary and any public input. On an as-needed basis, the Commission may also contract for the services of persons with specialized knowledge in rate-setting matters. If it is in the public interest to do so, the Governor in Council may substitute a different premium rate. In any given year, the rate cannot change by more than 0.15% ($0.15 per $100) from the previous year’s rate, and for the years 2006 and 2007 must not exceed 1.95% ($1.95 per $100).
Part 20 amends the Employment Insurance Act, for the purpose of the implementation of a premium reduction agreement between the Government of Canada and a province, to allow for a regulatory scheme to make the necessary adjustments and modifications to that Act as required to harmonize it with a provincial law that has the effect of reducing or eliminating the special benefits payable under that Act. A consequential change is also made to the parental benefits provisions.
Part 21 amends the Financial Administration Act to provide the authority for the President of the Treasury Board to create a shared-governance corporate entity for the purpose of administering group insurance or other benefit programs. In addition, the amendments provide the authority for the Treasury Board to establish or modify those programs not just for employees of the public service but for other persons or classes of persons as well.
Part 22 amends the Old Age Security Act to increase the guaranteed income supplement by $18 a month for single pensioners and by $14.50 a month for each pensioner in a couple, effective January 2006. Also, the amendments increase the allowance by $14.50 a month and the allowance for the survivor by $18 a month, effective January 2006. In addition, the amendments provide for identical increases to the guaranteed income supplement, the allowance and the allowance for the survivor in January 2007.
Part 23 authorizes the Minister of Finance to pay funds directly to the provinces of Quebec, British Columbia and Saskatchewan and to each of the three Territories.

Budget Implementation Act, 2005

[Eleni Bakopanos, Liberal, Parliamentary Secretary to the Minister of Social Development (Social Economy)]

Madam Speaker, I very much appreciate this opportunity to express my support for Bill C-43, which implements the measures contained in budget 2005.

Before I continue, let me say that I will be splitting my time with the member for York West.

As my hon. colleagues mentioned in their remarks, in this year's budget, the government has taken major steps towards delivering on its commitments to Canadians. Indeed, that is the theme of budget 2005, “Delivering on Commitments”.

Canada is known internationally as a country with a strong social foundation. Canadians believe that everyone should have the opportunity to succeed, to achieve full potential and to participate fully in the promise of Canadian society. In this way, Canada's prosperity is shared by all. This belief drives the government's support for strengthening Canada's social foundations.

In my remarks today, I would like to focus on what this government has done to build on Canada's enviable reputation in this area. Our actions are based on the premise that economic and social policies of the government must reinforce each other.

Strong social policy provides the security for Canadians that is necessary to support sustained economic growth and provide opportunity for all. Strong economic performance has enabled Canada to build a solid social foundation and provide equal opportunity for all citizens. All this must be accomplished with an unwavering adherence to fiscal discipline now and in the future: a commitment to balance the government's budgets and to live within our means.

In its October 2004 Speech from the Throne, the government set out an agenda to strengthen and build a more globally competitive and sustainable economy. This agenda involves strengthening Canada's social foundations through investments in health care, child care, seniors, aboriginal people, Canada's cities and communities, culture, and the justice framework.

By the end of this year, we will have invested $13 billion in programs to support children and families. The Canada child tax benefit, which provides over $3,000, and over $200 for stay at home moms, is just one of those initiatives to support families and children. So when the hon. members of the opposition say there is nothing in the preceding budgets or the present budget in terms of stay at home moms or choices that are given to Canadians, this is one example.

Let us not forget the choice that the Conservatives are in fact giving Canadians. They call it a choice. If we cut the numbers out it is $2,000 as a tax cut, which provides only about 15% to low income families and about $200 or $300 per child. Let us try to find a space in a day care centre in Toronto or Montreal for that amount of money. Also, that does not build a system of early learning and child care.

Budget 2005 builds on the initiatives we have outlined. Let me take a moment and outline just how the government is delivering on its commitment in some key areas, such as early learning and child care, and seniors, which are both part of the social development ministry.

Child care and early learning opportunities are essential to support our children's physical, emotional, social, linguistic and intellectual development, and to set them on a path of lifelong achievement.

The Government of Canada's commitment to a new early learning and child care initiative—which we are working on with our provincial and territorial partners—recognizes the important role that early learning and spcial integration play in expanding children's horizons, as well as in building a more productive economy. Budget 2005 follows through on this commitment with new investments of $5 billion over five years to help build the foundations of this initiative across the country. Hon. members will recall that the federal, provincial and territorial ministers agreed on four interrelated, key principles, known as the QUAD principles, to help shape a shared vision for early learning and child care and go beyond earlier agreements and investments.

QUAD stands for: quality, universally inclusive, accessible, and developmental.

Quality refers to evidence-based, high quality practices relating to programs for children, training and supports for early childhood educators and child care providers, and provincial and territorial regulation and monitoring.

Universally inclusive means that the programs are open to children, without exception or discrimination. Accessible means that child care is available and affordable. And finally, the development principle ensures that child care is focused on enhancing early childhood learning opportunities and the developmental component of ELCC programs and services. These principles were already in place and constituted our commitments.

I know that, soon, we will put the finishing touches on a new national initiative under which the provinces and territories will have all the flexibility required to meet their own needs and be accountable to their own citizens. In the meantime, as a sign of our good will, we are establishing a trust fund, which will provide the provinces and territories with federal funding from now until March 2006, so that Canadians no longer have to wait to experience the improvements in early learning and child care programs and services. Bill C-43, which is now before the House, proposes that $700 million be paid into a third-party trust.

Canada's support for seniors is one of the major success stories of government policy in the post-war era. At the same time, it is an area facing new challenges resulting from the longer and more vigorous lives of seniors.

To address the evolving needs of seniors, the budget makes significant investments across a wide range of policies that matter to seniors from health care to income security programs, from assistance for people with disabilities, to support for voluntary sector activities by and for seniors.

As hon. members know, together with the old age security pension, the guaranteed income supplement, or GIS, provides low income seniors with a fully indexed benefit that ensures they receive a basic level of income throughout their retirement years. Proposals contained in Bill C-43 will increase maximum GIS benefits by more than $400 per year for a single senior and almost $700 for a couple. Half of this increase will take effect on January 1, 2006 and the remaining installment will effect the following year.

It is important to note that the increase will be of particular benefit to senior women who account for more than one million of the seniors receiving GIS benefits. And may I say at this point that this comes from recommendations made by committees of the government's caucus that did an extensive study across the country and came up with recommendations which were incorporated in previous budgets and in this budget in particular.

I would also point out that another proposal included in the bill to increase the basic personal amount to $10,000 over five years will remove some 240,000 seniors from the tax rolls.

In summing up, I will say, as I said at the outset, that Canada is a country that cares about all its citizens. This government has established a solid base for its commitment to strengthen and secure Canada's social foundations.

The initiatives in this bill, which my colleagues and I have briefly detailed today, illustrate that commitment by building on past actions.

I also want to note that we are talking about initiatives related to the social economy—which is an extremely important issue in Quebec. In fact, my province already has such child care programs in place. I am very proud that our government wants to reach an agreement with the provinces on something I consider so fundamental.

I therefore urge my colleagues to accord this bill speedy passage.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

Madam Speaker, this is the first time I have spoken since the birth of my new son Thomas, the newest constituent in Regina—Qu'Appelle. I have to be honest and say that this new constituent might receive a little bit more attention than other constituents in my riding. However I am sure the other inhabitants of Regina—Qu'Appelle will understand.

I would like to address a few aspects of Bill C-43. I think all members of the House will agree, and I think the members of the Liberal Party would agree if they had the boldness to be straightforward, that this bill should be divided into three separate bills.

The Liberals are playing games here with the budget bill by placing unrelated provisions into one single omnibus bill. This is not terribly surprising. We have seen this movie before. We have seen Liberals do this as part of the games they play in this House, but by all rights we should have a separate bill for the Atlantic accord, a separate bill for the traditional budget implementation measures and a separate bill for the Kyoto implementation measures.

I find it abominable that this government would sneak in, through the back door, Kyoto provisions when there has been no comprehensive plan laid out for Canadians. Canadians do not know what the government's intentions are nor do they know what it is going to do and how this will affect their actual quality of life, their economies and their jobs.

No plan has been outlined for Canadians about how the government is going to reduce greenhouse gases. We also have seen no plan to outline the Liberal Party's hidden agenda on buying hot air credits from other countries, including China, Russia and perhaps France.

What impact will Kyoto have on Canadians? Major economic and public policy groups are predicting the following: major increases in fuel taxes, a major increase in fuel prices, major increases in home heating costs and dramatic increases in home electricity costs.

For example, in the first few years it is predicted by many groups that there will be up to a 19% spike in gasoline prices, up to a 21% spike in home heating costs and up to a 35% spike in electricity costs. What this means for the average Canadian is a dramatic decrease in their disposable income. To drive their cars to work, to keep their homes warm in the winter and to power their homes and appliances it will cost more of their hard-earned dollars. More of their paycheques will be going toward utilities.

For my rural constituents it will be even more dramatic. They have seen the cost of diesel fuel almost double already and this is before any Kyoto implementation schemes. How much more will their fuel bills rise under the Kyoto plan?

I also want to mention that it is very disappointing to see the NDP position on Bill C-43. What the NDP is saying about the Kyoto implementation measures is that they do not go far enough. Can anyone imagine the New Democrats thinking that farmers in Saskatchewan should pay even more for their diesel fuel? I challenge any one of those members to come to my riding and look a group of farmers in the eye and say that their diesel fuel bills will increase and we are happy about it.

The farmers in my riding cannot afford the potential heavy costs of a Kyoto scheme that will see more of their tax dollars go to buy pollution credits, which will mean no actual reduction in greenhouse gases. It will simply mean a transfer of wealth from Canadian taxpayers to countries such as China, France and Russia.

China, by the way, has the world's largest military and an aggressive space program, and we are going to transfer our tax dollars to buy credits in China. This would not reduce greenhouses gases one bit.

The Liberal plan will have a particularly devastating impact on Saskatchewan in particular. We have seen Saskatchewan go from a have not province to a have province. This is not because of any good management on the part of the provincial NDP government. It is because of a huge boom in oil prices.

The extra revenues that come from the oil prices will keep our hospitals open, pave the roads in rural Saskatchewan and keep the utility costs where they should be for Saskatchewan residents. What impact will Kyoto have on Saskatchewan's oil and gas industry? If we lose just 10% of our revenues from these industries due to the hidden Kyoto taxes of the Liberal government, I think I can safely say that we will see more hospital beds closed as the revenues from that industry plummet.

I do not know why the federal NDP would want more hospitals to close. I know that the provincial NDP has a habit of closing hospitals. We all remember the closing of the Plains Hospital in Regina and the swath of beds closed just recently in rural Saskatchewan. This part of the bill really troubles me.

I would like to turn to the Atlantic accord very briefly and outline the duplicity of the Liberals in lumping that agreement in with this bill. Let us consider that the Liberals did not need to bring in an omnibus bill for the health accord. They did not have to wait for the budget to bring that in. I believe it took only 11 days for them to bring in the health accord in a stand-alone bill. Why can the government not do that for the Atlantic accord right now?

The finance minister is attempting to dither his way out of his obligations by lumping this in with the rest of the budget. The Liberals are holding the people of Newfoundland and Labrador and Nova Scotia hostage by linking that accord with this bill. We could pass that bill right now. We could have passed it the other day when my leader got up and challenged the government to bring it in. We would have given it unanimous consent at all stages and the people of Atlantic Canada would have seen the benefits immediately. The Conservative Party would do that.

We have seen a few other interesting facts come out of the proposed budget. We know that the Liberals misled Canadians when they attacked our campaign platform. They said our platform was fiscally irresponsible and then came in with pretty much the same level of spending we proposed, but without the substantial tax relief, which we knew we could afford because we knew the true size of the surplus and we were not playing games with Canadians by trying to underestimate the surplus.

It seems that the finance minister and the Prime Minister have numerical dyslexia, because they now have had the surplus wrong for seven years in a row, is it not? They have consistently given Canadians the wrong figures on the surplus and attacked our numbers based on their misinformation.

Tax freedom day for Canadians does not happen until sometime in July. It is unacceptable to think that every single hard-working Canadian working today is working for the government. Right now, for anybody off laying highway in rural Saskatchewan, about to get ready to start seeding or working any number of jobs, their paycheque is going to the government. The government does not let them keep any of their own money until the year is already half over. That is unacceptable.

I would like to touch just briefly on the issue of airport rents, which are having a direct impact on constituents in Regina. A major airline had to pull out of Regina, cutting back on its main line services because the airline industry is in trouble. It is in trouble because of excessive taxation on ticket prices through the air travel security charge. It is in trouble because of the various fees that are lumped in there. As a result, and we have seen this with Jetsgo, there are turbulent times in the airline industry. The airline industry employs thousands of Canadians.

I sit on the transport committee. The Minister of Transport came to our committee and said he is doing everything he can to get issues like airport rents addressed. Airport rents are costs that are passed on directly to air travellers. The cost of landing at an airport is directly related to the cost of the ticket. This means that travellers in and out of Regina, starting in 2006, will likely pay more for their tickets because those costs will go up. As well, we have seen airport workers in Regina laid off, essentially, and then hired back at half the wages.

This issue of airport rents is having a direct impact, not on the big corporations but on the individual people in Regina who are trying to travel in and out of the city on business or to visit family, and it is having a direct impact on those workers at the airports, who will now see a 50% reduction in their salaries.

Of course we know that the budget bill does very little for farmers. Most of my riding was hit by a devastating frost last August, which wiped out what was promising to be one of the best crops that the Regina--Qu'Appelle area had ever seen. Where is the aid? Where is the disaster relief?

The Minister of Agriculture came to Regina and outlined some spending which to date has not even been delivered. It took the government months to get out the forms from the last round of spending, and it took months to deliver them. I would like to see how much money was delivered from that.

Farmers in my riding need a direct assistance package that is meaningful. The latest one announced by the minister works out to about $4.80 per acre, I think, which will be just enough to pay the property tax increase that the NDP provincial government brought in for rural Saskatchewan.

We have a lot of work to do. Thankfully, there are enough Conservatives in the House that we can do some of this good work at committee. We will address these issues that I have outlined. We are going to try to do what the Liberals should have done and make this a better budget bill, because that is what Canadians need.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Madam Speaker, what I will say is that this party will not be supporting any initiative by the Bloc to take down the government on a vote of confidence vis-à-vis the budget or any other motion of confidence. We will be the party that decides whether or not Canadians want an election when Canadians tell us that they want an election.

In response to my hon. colleague, I will say that my criticism of the government's bill, Bill C-43, regarding the gas tax, stands. If he wishes to examine it further he may examine the blues tonight or Hansard later on.

[Mario Laframboise, Bloc, Argenteuil—Mirabel, QC]

Madam Speaker, I have a question for my colleague. I find he is given to contesting the content of this budget implementation bill, but, as we know, the Conservatives will support it. I therefore have a bit of a hard time with his message, especially with regard to the infrastructure program and the sharing of the gasoline tax, when, in the budget speech, which I have in my hands, the minister said, and I quote:

—5¢ per litre, or $2 billion, in 2009-10, and continuing thereafter indefinitely.

So the principle was that the cities would have an indefinite deal. Bill C-43 before us, however, provides:

For the fiscal year 2005-2006, pursuant to the Government of Canada’s five-year initiative commonly known as “A New Deal for Cities and Communities”—

The budget speech referred to an indefinite deal, which would continue on, and I repeat the quote, “—continuing thereafter indefinitely—” but the bill refers to a five-year plan, that is a plan for five years.

Does my colleague still agree with what C-43 is proposing compared with what the budget speech proposed?

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Madam Speaker, I rise today to address Bill C-43, the government's budget bill, which contains many flaws and recycled promises. I would like to address a number of different areas in the bill that I think are problems for Canadians and for the country.

The first area that I want to focus on is the gas tax commitment that the government delivered in its budget. To give the government some credit, it is going to deliver $600 million for the next fiscal year, which is about 1.5¢ per litre. It also announced a commitment to Ontario specifically of about $1.85 billion over the next five years. On that front, that is good news. However, there are absolutely no details on how that money would be distributed once the province receives the transfer.

Mayors and councillors from many municipalities have indicated to me that there are no details as to whether or not the money would be transferred to the upper tier of municipal government or to the lower tier of municipal government. Furthermore, there are absolutely no details as to whether or not the money would be given to more densely populated areas or be given out on a per capita basis, equitably distributed throughout the entire province. Those are serious concerns, especially for ridings like Wellington--Halton Hills.

The township of Centre Wellington with a population of over 22,000 has over 100 bridges. That township alone currently faces a bridge work backlog of close to $15 million, a huge number for a township that only has an annual operating budget of about $15 million.

In Halton Hills, which includes Acton and Georgetown, I have been told that there is a backlog in road work of $57 million, an equally big number for a community with only about 50,000 residents and an annual operating budget of only about $20 million.

Many municipalities are wondering if and when they will see this money. The budget and the bill, and its lack of details on how this gas tax would be distributed among municipalities and whether or not less densely populated areas would get their fair share leaves much to be desired.

The second area I am going to focus on is the budget's approach to child care. I think it falls short in this area. Excellent child care is important to me and to my community. It is also important to my party. I am very much in favour of working with families to obtain excellent child care, but the government's current plan for child care is seriously flawed.

First, the plan is far too vague and contains few concrete and workable details. It contains few details on how flexible the system can be and how to hold the provinces accountable. It also contains few details on exactly how many child care spaces would be created.

Second, the plan calls for the child care program to be a joint federal-provincial program. Programs based on that model have had a history of cross-jurisdictional difficulties that are hard to overcome and hard to manage.

Third, the plan would take too long to implement. For over a decade Canadians have been promised access to affordable child care: in 1993 in the red book; in 1997 in the red book; in 2000 in the red book; and in 2004. Canadians still do not have access to reasonably priced and accessible child care.

In the last election we proposed to provide families with a $2,000 year tax deduction per child under the age of 16. That is the solution to the child care issue in this country. The taxes refunded could be spent as deemed appropriate by parents. In the case of a dual income family, the money could be spent on child care either locally provided by for profit centres or not for profit centres. In other cases the money could be spent on clothes, education or other sundries.

Our proposal would avoid the difficulties of federal-provincial programs, would provide flexibility in meeting both rural and urban needs, and would allow for profit and not for profit involvement. Most important, our proposal would let parents decide what was best for their own children.

I believe our proposal is a better proposal and is more straightforward to implement. This is the best way to allow parents accessible child care. The budget does not address this problem.

The third area where the budget falls far short is on Kyoto. Conservative governments in the 1980s and early 1990s brought in environmental protection. It was a Conservative government in the 1980s that negotiated the acid rain treaty with the United States. We invested in and created organizations like the Ontario Centre for Environmental Excellence located in Elora.

We are often accused, as a party, of being anti-environmental. Nothing could be further from the truth. We believe strongly in environmental protection and share Canadians' concerns about a healthy environment for future generations.

However, the government's approach to Kyoto has been nothing short of a complete disaster. It took the government until today to deliver a plan for Kyoto even though it became the law of the land on February 16. It has announced billions in new spending on Kyoto without having a plan to implement them. This is simply risky and foolish public policy. Spending billions on a program without having a plan to implement it is simply foolish.

Our current Kyoto targets are entirely unrealistic and unattainable. In 1990 our emissions were about 28% below what they are today in terms of carbon dioxide emissions.

I believe that Canada should negotiate and work with other signatories to set real targets and then develop real plans to implement those targets. We need to do far more as a country to encourage energy and resource conservation. The use of fuels such as propane, natural gas, ethanol, and other biofuels should be encouraged. There should be greater funding for the development of alternative energies such as wind power and solar power.

All these steps that I have proposed here and that we as a party have proposed would address the real environmental problem we have in this country which is suffocating summer smog.

As a resident of Wellington--Halton Hills I know about smog. We have many residents who are subjected to issues around smog in the summer. We have issues around smog days that not only apply to the GTA but apply to places like Grand Bend in as far north as the Muskokas. It has terrible health implications. The government's Kyoto plan does nothing to address the cause of that smog, which contains nitrous oxides and sulphur oxides. On that count, this budget once again falls short.

Madam Speaker, before I go on, I want to mention that I will be splitting my time with the member from Saskatchewan.

As I go on to the fourth area of concern about the budget, it is about the budget surplus. The government has consistently underestimated the budget surplus over the last number of years. We have had surpluses in the last seven budgets. This year, for the budget that was just presented, we were told that we would have a $1.9 billion surplus. It turned out into a $9.1 billion surplus.

This is unacceptable because Canadians, when they are told that we do not have surpluses, are being robbed of an opportunity to have a real debate about what should be done with our hard-earned tax dollars, whether we should spend it on tax cuts or whether we should spend it on debt reduction or whether we should use it toward new program spending.

That debate does not happen in this country, and has not happened, because the government has consistently underestimated the size of the surplus. That is unacceptable.

Our party proposed in the last election, and we do now, that Parliament needs to implement an independent budget office that reports to Parliament, so we do not get into situations where the surplus is of a magnitude five to six times larger than what was originally forecasted.

The final area where this budget fails to address the real concerns of Canadians is in its inability to address one fundamental problem we have in our economy which is a lack of productivity growth.

Incomes across the border are growing more rapidly or are higher on a per capita basis than they are in this country. As a result, we are losing our ability to pay for the wonderful social programs that Canadians coast to coast to coast have come to enjoy.

Productivity is the single most important factor in long term prosperity. That is why the government needs to address the issue by taking a look at reforming capital cost allowances and by taking a look at real personal tax relief.

This budget fails to do both. This budget proposes a personal income tax cut of $19 this year. That is completely unacceptable. Let me finish by saying that the government's budget falls far short of what the residents of Wellington—Halton Hills expect, what my party expects, and what this country expects.

Committees of the House

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, I have the honour to present, in both official languages, the fifth report of the Standing Committee on Environment and Sustainable Development.

In accordance with its permanent mandate under Standing Order 108(2), your committee undertook a study of a draft report on the subject matter of Bill C-43, an act to implement certain provisions of the budget tabled in Parliament on February 22, 2005, and agreed to it on Tuesday, April 12, 2005.

Budget Implementation Act, 2005

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a pleasure to rise today on Bill C-43, the Budget Implementation Act, 2005.

If I may start with the previous discussion on post-secondary education, I will be pleased to forward today's Hansard to my provincial member of Parliament who has said that the federal government has shirked its responsibility and needs to do more for the province of Ontario. We have some of the most crippling student debt and costs related to post-secondary education.

The federal government's Liberal cousins seem to feel it is the federal Liberals who have shortchanged them. It is the federal Liberals, their cousins, who have created a funding gap. The responsibility has been shirked onto them unfairly by the federal government.

I will make sure that the debate is forwarded to them. That provincial member was at a meeting that we had locally at St. Clair College and said that Premier Dalton McGuinty actually supported post-secondary education, but the federal government which has a surplus is where the real problem is. The federal government is the one that has the recipe to solve the problems.

I am going to focus my comments regarding Bill C-43 on a couple of topics. This is a very wide-ranging bill. Bill C-43 disappoints me because it does not lead to the prosperity that is needed for the long term in economic policy.

We in the New Democratic Party will not be supporting the budge because it is a betrayal of Canadian voters who wanted progressive change. The country has to move past the malaise that has dominated this decade of Liberal rule. The NDP is fighting for a responsible rebuilding of the nation that made a difference in the world as a leader, not a follower, and offered a strong social identity to develop and foster economic prosperity that will raise the standard of living for all Canadians, not just a select few.

Although this Liberal minority budget is an improvement over the past majority budgets, it fails the test of breaking the troubling pattern of Liberal budgets that leave mainstream Canadians behind for the benefit of a few. The most glaring example of this injustice is the fanatical drive to continue to empty the public purse through corporate tax cuts which do nothing to ensure employment wages and standards, or job security.

Indeed, the Prime Minister's election ploy to vote Liberal to keep the Conservatives at bay because the Liberals have values similar to the NDP is fraudulent and insulting at best.

At a time when ordinary Canadians are struggling more than ever to feed their families, to send their children to college or university, and to pay off their debts, the Liberals are prepared to hand over more of the taxpayers' money to Bay Street. Canadian corporations earned record operating profits last year of $204.5 billion, which is up nearly 19%. At a time when corporations have reached record operating profits and after a decade of billions of dollars in tax cuts, at a time when we have massive infrastructure deficits, when Canadians are struggling the most and corporations are benefiting the most, the government has decided to shovel more money to the corporations, nearly $5 billion.

While mainstream Canadians are being asked to put personal goals and financial security aside, the government is emptying the coffers, at a time when we need to seize the industrial opportunities that will protect the environment, raise living standards and position our labour market in the world.

This glaring example demonstrates the gap of rhetoric of Liberal promises and final capitulation to Conservative policy goals. At the end of the day, they do not represent Canadian values and thus the budget fails to deserve the support of the NDP.

Despite all the rhetoric, it fails to address a national auto strategy, an aerospace strategy, shipbuilding or agricultural realities. Indeed, the budget does very little for those who build Canadian cars, airplanes or feed our country and the world.

Ask those Canadians if their insurance companies which realized record profits from increased premiums and reduced coverage deserve another tax break. They are getting it. In 2002 the insurance industry brought in $350 million in profits. In 2003 it brought in $2.6 billion in profits. In 2004 it has now brought in $4.2 billion in profits, yet the Liberals are giving them another break.

It is not right. I know that in my constituency young people struggle to pay premiums on their cars. In fact, some pay more for auto insurance than they do for leasing the vehicles.

It is not acceptable. It hinders our economy. It hinders the success of our young people. Those companies certainly do not deserve a reward.

Ask Canadians who watch the banks rake in record profits, close branch locations, raise fees, play fast and loose with our personal privacy and charge predatory interest rates on credit cards if the banks deserve a break.

Do Canadian values reside in this budgetary accomplishment? Apparently Liberals think so. If they cannot give the public money to their friends or back to the Liberal Party as the Gomery testimony indicates, they will reward the corporate sector at the expense of ordinary Canadians. They did not even have the decency to at least isolate areas where we might stop that from happening, areas that do not deserve money back and do not deserve the public trust with their dollars. They should be paying their responsible share.

The argument that policies of free trade, deregulation, privatization and tax cuts would trickle down to create investment has not borne fruit. Recent economic data demonstrates that this strategy has not resulted in new quality jobs. Rather, this failed government policy has required an ad hoc intervention policy in sectors like auto, air, textiles and agriculture to protect the status quo.

Overall Canadian productivity has stalled since 2002, coupled with a significant decline in capital investment as a percentage of the GDP. Why would we continue to reinforce this economic model that will not generate more investment, prosperity and quality jobs for Canadians? In fact, many corporations and businesses no longer profess the tax cut as a tonic for their survival or growth.

Take the auto industry, for example. It would rather see infrastructure items like the Windsor-Detroit corridor as budgetary priorities to ship and receive their goods and services along the U.S.-Canada border. This tax cut will not provide the infrastructure required, nor the staffing and security measures being demanded by the U.S. The duplicity of promise and action is best represented in this particular example.

In his budget speech, the Minister of Finance said:

Part of the productivity solution is also investing in public infrastructure, including in our cities and at crucial border crossings such as Windsor-Detroit--probably the most valuable transborder shipping point in the world--

Yet there is no funding for this infrastructure, despite the Prime Minister's call that he would provide cold hard cash.

In fact, industry, chambers of commerce, citizens and the labour movement have all called for the government to provide the proper infrastructure in the Windsor-Detroit corridor, the right costing for staffing and resources, the right oversight, the investment necessary to move the goods and services through an area that has approximately $1 billion a day in trade. The government has yet to act on unanimous support of a city council and county council report to improve the conditions of that corridor.

More important, a signal was sent to the United States that we are going to address our most damaging infrastructure deficiency which is stagnating and has created lost opportunities of investment in Ontario and other areas. We have lost that opportunity. The signal that was sent in this budget was that we have no plan, that we have no commitment.

We have a Liberal promise that the government might renew a project for border infrastructure funds later on, but we know what the public thinks about Liberal promises. We know what the record is on Liberal promises. At the end of the day the promises do not provide the confidence nor the commitment that will subsequently come from those who want to invest and have to move goods and services through that corridor. As opposed to Liberal promises, what is needed is a commitment of resources and the application of those resources to make sure the investment, prosperity and jobs that will result will be managed as a priority.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I wish to inform you that I will be sharing my time with the member for Windsor West and I appreciate the opportunity to speak to Bill C-43, the budget implementation bill.

I would like to start by flagging what is obvious to all of us. The games that were being played around this budget implementation bill have certainly changed in the few weeks since it was introduced. A few weeks ago we were being told that this bill had to be voted on and adopted by Parliament. If not, Liberals threatened to bring us into an election campaign.

We have seen with Gomery that things have changed quite markedly and that threat from Liberal members to bring down the House or to call an election has changed quite a bit now that we have seen the revelations of the continued misuse of public funds by the Liberal Party. As a result of that, it is very clear that the Liberals are approaching this whole question of the budget implementation bill a lot differently now than they were a few weeks ago.

I would like to talk a bit about the situation in Canada. The budget and budget implementation bill do not address the major issues that are out there on main streets across this country.

I would like to talk about 12 years of Liberal government and what that has meant to poverty and homelessness in this country. We have seen in the lower mainland of British Columbia, the area I am from, that homelessness has tripled over the past three years under policies of the federal Liberal Party and also policies of the B.C. Liberal party.

In my constituency of Burnaby—New Westminster we have seen more than 1,000 people a week having to rely on food banks. Food bank lineups are growing across the country as the crisis of poverty and homelessness increases.

We also know that 40% of aboriginal children live in poverty, 30% of children with disabilities now live in poverty, and that there are over 1.1 million poor children in this country. Fifteen years ago the member for Ottawa Centre actually brought forward a motion that was adopted by the House to eliminate child poverty by the year 2000. Here we are in 2005 and over 1.1 million poor children attest to the fact that this government has done absolutely nothing to address child poverty.

We also have a crisis in credit card health care. We have seen, with the increasing privatization of health care, Canadians increasingly pay out of pocket for health care. That should be a right that the CCF and the NDP pushed forward as fundamental to building Canadian society. We have seen that nothing has been done about that as well.

In terms of post-secondary education, we know that average young adults going into post-secondary education receive a $20,000 debt, a mortgage on their future, when they come out of post-secondary studies. That does not count the thousands of young Canadians who decide that they will not go into post-secondary studies because they simply cannot afford the cost. From the campaign last June, having knocked on over 6,000 doors in Burnaby and New Westminster, there were literally dozens of young people who told me that they could not afford to go to school. Their family could not afford it; they could not afford it. Their dreams and their future were cut off because of a lack of action by the government in the post-secondary sector.

There is also the environment. We had a plan 12 years ago to cut greenhouse gas emissions. We now find, even though the plan called for a cut of 20% in greenhouse gas emissions, in 2005 that we have actually seen an increase in greenhouse gas emissions. The budget does very little to address that.

We have seen the number of people with disabilities living in poverty growing. Many people with disabilities have no access to employment programs in order to further enrich their lives.

We talked this week about the situation in Canada and also talked about our fiscal projections. The IMF mentioned just a few weeks ago in its study that we were the least accurate of any of the major countries in the western world. The IMF study showed that Canadian fiscal projections were so far off under the Liberal government that they were the least accurate of any of the western countries studied.

We also have this week a crisis in rural Canada. We have communities struggling across the country due to the lack of support by the government to the agricultural sector and the lack of action by the government in reducing or trying to address some of the crises we face in getting our cattle or our softwood lumber across the border.

Rather than taking a strong line with the Americans to try to address, in tough negotiations, those issues, we have taken a very soft line that has led absolutely nowhere and has led to the loss of tens of thousands of jobs as a result of the lack of access of our cattle industry. In British Columbia where I come from, 20,000 jobs in the softwood lumber industry have been lost because of this inaction.

We also see a crisis in our cities. We have seen more boil water alerts. We have seen the underfunding of cities that has led to the lack of renewal of our infrastructure that is so important to the future of our country. We see increasing difficulties for our senior citizens.

We have seen cutbacks to home care in many provinces. For example, in British Columbia home care has been severely slashed and many senior citizens who would love to live independent lives with some support are forced to go into nursing homes, which costs more for the taxpayer and leaves them with a lower quality of life. If we had a home care program and that were effective, those seniors could continue to live independent, quality lives at home.

We also have seen increasing concerns about big box child care. We have had repeated promises over 12 years for a national child care system. What we have seen so far from the government is absolutely no response to the concern and fear about big box companies. Rather than have the money go to quality child care in our neighbourhoods, it will go to profits for big box foreign operators coming into the country.

With jobs, we have also seen a 60¢ loss in real wages per hour for the average Canadian worker over the last 10 years and fewer jobs with benefits and pensions. It used to be most jobs had pensions. The Statistics Canada study that came out in January showed less than 40%.

The government has encouraged more and more outsourcing. I recall getting off the plane in Washington to lobby members of Congress to support quality Canadian products. I was given a T-shirt by the government made in Mexico and a Canadian flag pin made in the People's Republic of China. I was supposed to take these to the members of Congress to say that we did good quality work. Outsourcing has been encouraged by the government and nothing in the budget addresses that.

What we have is a lower and lower quality of life for 90% of Canadians. That is the reality this week, when we look at the budget.

What did we get? The Leader of the Opposition certainly got what he wanted. He said that the major priorities in the budget implementation bill were Conservative priorities. We know the Leader of the Opposition got what he wanted in the budget, despite the fact that the Liberals campaigned saying that NDP values were close to Liberal values. The Liberal budget is a Conservative budget. What that means is the fat cats in the corporate sector got almost $5 billion in corporate tax gifts, a corporate sector that is at its most profitable level in its history.

We see that the wealthy got additional tax cuts of half a billion dollars.

There is nothing in the budget that addresses poverty, homelessness, post-secondary education and the crisis for seniors except for a buck a day that is given to address eroding pensions. There is nothing in it to deal substantially with the environment. The budget does nothing to address the substantive issues that people are having to deal with across the country.

This budget is billions for Bay Street and pennies for Main Streets across the country. For that reason and for so many others, we will vote against it.

[Bev Oda, Conservative, Clarington—Scugog—Uxbridge, ON]

Mr. Speaker, on behalf of Canadians and particularly those in my riding of Durham, I am pleased to have this opportunity to speak to the budget implementation act, Bill C-43. I will be sharing my time with the member for Calgary Centre-North.

It is imperative that all Canadians have a clear picture of the budget and how the government plans to implement its promises or not. A government's budget requires legislation to enable it to implement the promises made in the budget, promises made to the people of Canada on how their tax dollars will be collected, how they will be spent and, most important, when those promises will be acted upon.

To address the when, most of the budget promises will not be realized until later in this decade, if that. Only 7% of the total budget announced will be expended in the budget year 2005-06. Of the $42 billion announced, only $3 billion will go into programs and initiatives to serve Canadians this year. This is in spite of the fact that over $10 billion was collected in surpluses last year and some $6.1 billion is being forecasted as this year's surplus. These forecasts are almost double those forecasted by the government only six weeks ago in the budget.

What is the need to back end load so many budget promises with these kinds of surpluses? This type of deception or lack of clarity is the government's way of governing and it has Canadians losing their faith in government. The residents in my riding of Durham are tired of struggling to make ends meet when they see continuous waste and mismanagement of their hard earned dollars.

In part 1 of Bill C-43, income tax cut benefits are actually delayed for four years. The real benefit for this year is only $16 per average taxpayer. With the rising costs of hydro, gas, provincial and municipal taxes, government fees, for example passports, taxpayers ask, “Where is the benefit?” My constituents want a deeper cut this year, not in the year 2009.

Over the past 15 years the government's income has soared by 40%, while the real take home pay of Canadians has increased by only 3.6%. On top of that, we have seen a 77% increase in the cost of government bureaucracy since 1996-97.

In the last election, the Liberal Party criticized our party of committing to $58 billion in new spending and tax reductions over five years. This budget has made $55 billion of commitments in new programs with very little tax cuts.

Canadians are no longer satisfied with the government's idea of sound fiscal management. Sound fiscal management is more than sound bytes or quotes for the media. Canadians deserve better.

The government announced its budget in February. Today we are debating the budget implementation act, but Bill C-43 reveals that not everything announced is exactly as it was portrayed in February.

Two examples of this kind of shenanigans are, first, the budget stated that the amount of the share of the gas tax would rise to $2 billion annually until 2009-10. Bill C-43 authorizes payments for one year only. That really shows this government's commitment to long-term funding for municipalities that the hon. member was just speaking about.

Second, for seniors in subsidized nursing homes, the total amount of the increase in one's guaranteed income supplement, GIS, will not be paid to the seniors, but to the nursing home operator or to the province. In Ontario any increase in the GIS will be clawed back to a half. The largest increase in GIS that a senior in my riding will be eligible for is less than $18 per month. For many of these seniors, their fixed income is a decreasing income.

These seniors, as do all taxpayers in my riding, expect their government to be working on their behalf to assure them of a quality of life and a standard of living for which they are willing to work hard. They are not satisfied with so much arrogance and such deception that they can no longer trust anything being put forward to them by the government.

When they see how the government has manipulated the budget process by introducing other controversial elements into Bill C-43, they are appalled, controversial elements the government does not have the confidence to introduce under separate legislation to be debated and voted upon in the House on their own. This reflects the continuous manipulation by the government of the Canadian people, the lack of integrity in its dealings with the people in Newfoundland and Labrador and Nova Scotia and its real inability to bring forth bills that it is confident will serve Canadians well.

By including parts 13, 14 and 15 in Bill C-43 to deal with environmental issues and parts 12 and 24 to deal with the commitments to the two Atlantic provinces, demonstrates the games the Liberals are playing and have played on the people of Canada for over a decade. By linking Atlantic accord provisions into the implementation act, is the government again telling the people of Atlantic Canada that the Prime Minister's word cannot be trusted?

The budget does not reflect serious concern for the overall economy of Canada. Compared with the Americans, Canadian productivity accounts for an income gap of $6,078 per person. Compared with the Americans, that means a family of four living in my riding of Durham has some $24,000 a year less income to spend than the same family in the U.S.A. Canada must increase its productivity with measures that will be effective and redress this productivity gap.

I am compelled to point out that to promise only $130 million in the February budget for the entire agricultural community and the crisis that it faces is inexcusable, only to see the government once again play its games and make a $1 billion announcement shortly after the budget speech. Is this bad planning, disregard for the needs of the agricultural community or an “Oops, we forgot to put it into the budget?” The people of Canada will not and cannot continually be manipulated in this way.

The budget should go forward on its own for debate and follow the necessary procedural process to ensure that the programs announced can move forward. As part of the official opposition in the House, along with my colleagues I will continue to work in committee to strengthen the bill so that those in Durham and across Canada can once again regain their faith in government. In committee we will be ensuring that the dollars to be spent are spent responsibly with transparency and accountability.

The people of Durham are all proud to be Canadians. They recognize that we live in a great country and a province which has some of the best that Canada has to offer. They are willing to do their share. However, they are increasingly challenged to meet their own daily responsibilities financially. They will contribute to Canada's well-being, but are not willing to stand by and watch their tax dollars being wasted and mismanaged. Most of all, they want a government that does not play games and that can be held to the highest level of accountability and integrity. They want to be able to once again trust those elected to represent them and their interests and believe they are doing so, not only in the interests of one segment or one party.

On their behalf, I want to conclude by saying that the official opposition will continue to work in the best interests of all Canadians.

[John Godfrey, Liberal, Minister of State (Infrastructure and Communities)]

Mr. Speaker, I thank the House for the opportunity to speak in support of the 2005 budget implementation act. The theme of the bill before us today is “delivering on commitments” and that is exactly what this year's budget will achieve.

These commitments have been designed not only to face the challenges within our nation's borders but to meet global pressures and support the ever increasing ambition of our nation and our people.

As the only G-7 country to post total government surpluses in each of the past three years and the only nation expected to continue to be in surplus again in 2005 and 2006, the government's sound fiscal management model offers the rock solid basis upon which these and future commitments can be delivered.

Canadians expect nothing less, and we have decided to respond to such high expectations with an ambitious program promoting a marked increase in our overall quality of life and based on five mutually reinforcing commitments: healthy fiscal management, promoting a productive and growing economy, reinforcing Canada's social foundations, enhancing the sustainability of the environment and our communities, and reinforcing Canada's role abroad.

The proposals contained in this bill take major steps to deliver on all these commitments. What my opposition colleagues miss however is that this budget is an inter-related road map for sustained improvements to Canadians' quality of life, not some à la carte menu with no relationship between one item and another.

The days when the fiscal, social and foreign challenges facing Canada could be addressed by our government in isolation are over. The approach underlining this budget reflects this new reality. Unfortunately, our friends across from us, as they have been on so many occasions, are clearly stuck in the past.

I want to give an example taken from my own sector of responsibility, as Minister of State for Infrastructure and Communities.

During the election last summer, barely nine months ago, this government committed to implementing the new deal for Canada's cities and communities. Canadians elected us so we could fulfill that promise, among others.

In particular, mayors and municipal councillors across this country held forth the hope that the government would be capable of providing them with two equally important benefits that no other government had been capable of finding a way to provide to them before: first, long term, stable and predictable financing; second, development of new working relationships between federal, provincial and municipal levels of government with a view to developing better long term strategies for improving the economic, environmental, social and cultural sustainability of the places Canadians live.

How do I know this? When the Prime Minister first created the infrastructure and communities portfolio, what were we hearing from our municipal friends across the country? We were hearing that there was an infrastructure gap rapidly reaching an unsustainable level, that our cities, the face of Canada to the world, did not have enough institutional fora to express their views to the federal government, that fresh thinking was needed on how best to ensure our rural communities could remain viable and strong, and that new partnerships were needed between all three levels of government to begin to think about how best to move forward together.

Of course, while no one order of government can be responsible for meeting these challenges alone, what has the government been able to deliver as a response in less than 18 months?

In budget 2004, a GST rebate went to every municipality in this country. It was worth a total of $7 billion over 10 years. This source of funding will grow with the economy and can be used by municipalities for any priority they wish, namely, stable, long term, predictable financing.

Budget 2005 was the fulfillment of our pledge made during the last election to provide 5¢ of gas tax revenues over five years with $600 million coming as part of this bill, rising to a running rate of $2 billion a year in year five and every year thereafter, targeted at environmentally sustainable municipal infrastructure such as public transit, water and waste water treatment, and community energy systems.

We also committed to renewing existing infrastructure programs as necessary, programs which have combined to flow over $12 billion to municipalities over the past 12 years and have leveraged over $30 billion in total investment by all partners. Moreover, we more than doubled our contribution to the green municipal funds administered by the Federation of Canadian Municipalities to a total of $300 million for projects designed to deliver cleaner air, water, soil and climate protection.

All this means that the government has crafted a strategy for helping municipalities gain stable, predictable and long term funding to the tune of $22 billion over 10 years.

However, it is not just about money. The funding must be accompanied by new partnerships and a long-term vision enabling the transformation of these financial resources into a concrete reality that Canadians want and need. It is a matter of respect.

That is why the Prime Minister met with mayors from some of Canada's largest cities at 24 Sussex last fall and gave them a literal seat at the national table. That is why the finance minister and I met with another group of mayors from across Canada in formal prebudget consultations. That is why I met with each of my provincial and territorial ministerial counterparts in November. That is why I have and will continue to meet with elected and other municipal stakeholders from communities across Canada large and small as their advocate at the cabinet table. All this of course being entirely respectful of provincial jurisdiction.

If some politically motivated marriage of convenience between opposition parties would choose to prevent the fulfillment of these commitments by seeking to modify or defeat this bill, let me remind them of some of the reactions shortly after the budget was delivered, which they would surely pay the price for rescinding.

The president of the FCM said, “We have been waiting for this. The new deal is now a real deal. It is a good deal for our communities and for Canadians and also a commitment to a long term partnership”. The mayor of Toronto said, “Groundbreaking: the federal government has delivered respect”. The mayor of London, Ontario said, “Fantastic for municipalities”.

The mayor of Saguenay considers it a real godsend.

However, perhaps the denial of stable, long-term funding, and certainly intellectual focus, should not be too surprising coming from our Conservative colleagues. After all, that is the party that ran in the last election on a platform that was almost the opposite of what municipal leaders and Canadians in every province and territory were crying out for.

Their commitments were as follows: shut down Infrastructure Canada, the focal point for thinking on municipal issues in government and the open door municipalities need for getting their voices heard in Ottawa; cancel all infrastructure programs but one, programs designed to meet the specific needs of both large and small municipalities; and flow less gas tax without any thought given to the longer term partnerships needed between all three levels of government for making it truly work.

Perhaps the Conservatives could be forgiven for not having really thought through at that time, what with the focus of the election going in other places. However, the fact that at the inaugural Conservative convention members of that party decided to vote against sharing any gas tax with municipalities is surely not a good sign. They voted against it in their policy convention.

In fact, who knows where they could come out next, whether it is a further commitment to reducing the fiscal tools and productive relationships our municipalities need or a flip-flop, but the reality is that a lot of mayors are counting on the gas tax and infrastructure programs that are crucial for enhancing the places Canadians live, and the government has been resolute in its commitment to get the job done.

Finally, by adopting Bill C-43, we will be saying yes, not only to a complete and integrated strategy by which to implement this new deal, but also to achieving our social, economic and international objectives.

I encourage all forward-thinking MPs in the House to support this bill and to support the mayors, councillors and places where Canadians live.

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

Mr. Speaker, this is a very interesting debate on the budget. It is interesting how things can change in just a couple of weeks. Normally, the budget implementation bill is a rather perfunctory process. It is a rubber stamp after the budget debate has occurred, the vote has taken place, and it is simply a matter of housekeeping. It is interesting how much can change in just a short period of time.

It was just two weeks ago that the Liberal government decided to put the finishing touches on Bill C-43 and added interestingly a new aspect that had not been part of the budget debate at all. That was of course the amendment to the Canadian environment protection legislation. It was all done, as we understand now, to force some interesting divisions around the issue of Kyoto and the environment, and presumably to create a fight that might lead to an election. It was leaving the options open to consolidate its forces around Kyoto, and to divide and conquer in this place and possibly go to the polls on that issue.

That was on the assumption that we would not have heard too much from the Gomery commission at that point. It was pretty tame two weeks ago with not a lot of interesting stuff coming out. The Liberals were trying to act before that would happen to pre-empt the inevitable and get on the hustings before the truth came out.

Here we are with a whole new set of developments. The lay of the land has changed completely. A bill that is normally quite anti-climatic has become a focal point for just what is wrong with this government, what is wrong with its budgetary approach, and how it is linked to the scandal of the sponsorship program as it unfolds around us.

I want to speak today on the budget implementation bill, but I do so with the realization that this has become far more than the customary debate about budget items alone. It is interesting what has just happened. Liberal infamy has drawn the world's eyes upon us today like never before. In the world of 21st century technology, the stench of corruption spreads almost instantaneously to all corners of the globe. It has riveted attention particularly on the way Liberals handle all money transactions and economic matters, such as the budget.

The Liberal government's fiscal judgment is under the microscope and the world is watching. What does it see? I see the parliamentary secretary is anxious to know how the world perceives the Liberal government. Canada is seen as one of the wealthiest countries in the world and one of the most envied societies floundering on a rock of its own creation.

Canada is not an economic superpower like our neighbour to the south, but we are still looked to for leadership. We are still looked to for moral leadership, as a promoter of peace, development, greater social equality, and a builder in the best sense. The scandal swirling around the Liberal government has undermined that reputation. The Liberals' backroom agenda has become front page news, and that news is worrisome both to Canadians and to those beyond our borders.

People want to know if they can trust the Liberal Government of Canada. They are looking to this bill, the budget implementation act, for some answers. They are looking for answers on whether Liberals can be trusted to keep their promises to Canadians, answers about whether Liberals can be trusted to put Canadians' priorities before their corporate buddies, and answers on whether the Liberals can be trusted to keep their international promises and honour our Kyoto commitments.

[Guy Côté, Bloc, Portneuf, QC]

Mr. Speaker, on February 23, the Liberal government tabled a budget that was and still is unacceptable to Quebeckers because it fails to consider their priorities.

Naturally, we cannot oppose a budget and support the bill to implement it. So, it is clear that the Bloc Québécois has the duty, on behalf of Quebeckers, to oppose Bill C-43 to implement the February 23 budget.

However, the government could have and indeed should have used the opportunity presented by Bill C-43 to make major improvements consistent with Quebec's interests to the budget. However, the Liberal government, in addition to rejecting improvements to EI and the fiscal imbalance, even went so far as to add items that are totally unacceptable to Quebec, such as the special agreements on equalization with Newfoundland and Labrador and with Nova Scotia, and the polluter-paid principle under the Kyoto protocol.

Furthermore, the minority government should have made compromises. Instead, it has chosen arrogance and actions befitting a majority government. It has behaved like a government itching for a snap election. If this bill results in the dissolution of the House, the Prime Minister will have to tell Quebeckers why, and the government members will take the fall in a new election. For all these reasons, we cannot support this motion.

I said earlier that the Bloc Québécois, on behalf of Quebeckers, was opposed to the budget. We will oppose this bill too. Why? We have held a broad-based consultation in Quebec on the real needs and priorities of Quebeckers. We have reached a number of conclusions, namely that, in Quebec, the fiscal imbalance is a major issue that must be resolved.

What do Quebeckers want? In the long term, they are calling for the transfer of tax fields. In the short term, they are calling for increased transfer payments for education and social assistance. They want increased equalization payments along with changes consistent with the demands of the Quebec government, such as the use of the ten province standard instead of the five province standard.

What do we have in this budget as far as the fiscal imbalance is concerned? We have a Minister of Finance who announces no additional measures to loosen the financial stanglehold on Quebec, a problem the Liberal Party refuses to acknowledge. We have agreements on health and equalization payments that are clearly inadequate and in no way resolve the fiscal imbalance. God knows,with its enormous, virtually scandalously huge surplus, the federal government has the financial means, at this time, to resolve this issue.

All workers in Quebec, and naturally—I am tempted to say “unfortunately”—the unemployed, have one priority. That priority is employment insurance. The Bloc Québécois called for an independent EI fund and commission; improved coverage including reducing the eligibility criteria to 365 hours; more weeks of benefits; a new program to assist older workers.

Once again, there is precious little in the budget on this and almost nothing relating to employment insurance, despite the recommendations of the Standing Committee on Human Resources Development, Skills Development, Social Development and the Status of Persons with Disabilities, which called for a far more sweeping reform, and despite reports which had, I might point out, unanimous support in committee. Unanimity means that Liberal MPs voted in favour of those reports. Nevertheless, there are no improvements that could, for instance, apply immediately to seasonal workers.

As far as seasonal workers are concerned, there is of course one markedly inadequate measure involving some pilot projects. That may amount to $300 million spread across Canada. In addition, the 2005 budget prevents any actual improvements to the EI program because the main objective in changing the fund is to eliminate the annual surplus.

Earlier, I mentioned Kyoto, and I am sure my colleague from Rosemont—La Petite-Patrie will speak much longer on it than I will.

I will however mention quickly that Quebec has called for substantial expansion of the wind energy support program,; tax deductions for public transit passes, the abolition of tax incentives for non renewable and nuclear energies and even the creation of tax credits for the purchase of hybrid vehicles. And what do we find? We find a budget that confirms the choice already expressed by the federal government of a voluntary approach to the Kyoto protocol, which will not lead to the achievement of the objectives for the reduction of greenhouse gases and will place the financial burden on the taxpayers rather than the major polluters.

There are absolutely no tax measures in the transport sector. This oversight will not help Quebec to improve its greenhouse gas reduction record. These measures are not appropriate to Quebec.

In recent years, Quebec has had a serious crisis in agriculture. The expectation was that the federal government would help farm producers struggling with the mad cow crisis, for example, in terms of the compensation needed to reach the floor price. There is the situation with cull cows in Quebec. Here again, the government's record is pretty poor in the context of the budget and Bill C-43. It is simple. There is nothing for agriculture. There is only the small sum of $17 million for slaughter, which in fact is not new money. This government has completely ignored the situation of farmers across Canada and Quebec.

The government keeps telling us about all its funding for the military. As in health care, I think that prevention will always produce better results. We expected this government to take concrete action to achieve the UN goal of increasing international aid to 0.7% of GDP by 2015. What are we seeing? We are seeing an extremely timid commitment from the government, which will in no way allow us to reach that goal. As things stand, we will not achieve 0.7% of GDP in 2015 but rather in 30 years. We are far from the mark.

An extremely important issue for Quebec is respect for its areas of jurisdiction. With regard to the child care initiative, Quebec is asking for the right to withdraw from the federal program, unconditionally and with full compensation. With regard to parental leave, the transfer payments must be made as soon as possible to the Quebec government so that it can finish implementing the initiative it had presented. The negotiations with the municipalities must be terminated. The gas tax revenues should not go directly to the municipalities but rather directly to Quebec, so that the latter can determine the terms and conditions and its allocation among the municipalities.

These are Quebec's traditional demands, and it is difficult sometimes to understand why the Liberal government will not listen to reason since it has been told the same thing for years. So what do we see in the budget? We see a final agreement on parental leave between the Government of Quebec and the federal government. It should not be forgotten, though, that this is Quebeckers' money that the federal government is using to invest in one of Quebec's jurisdictions. So this agreement is only fitting. It does not prove that asymmetrical federalism works. Instead, it is the result of a struggle that the Bloc Québécois has waged in this House since 1997. It took eight years to finally reach an agreement on parental leave, despite all the historic announcements about this program every month, to the effect that this matter was about to be settled.

As far as child care is concerned, the Prime Minister agreed to give Quebec its share of the federal funding with no conditions attached. However, we should recall that the federal budget speaks about Canada-wide standards and reporting. The transfer of part of the gasoline tax to municipalities may well be carried out under conditions that are unacceptable for Quebec. There is talk of strategic objectives, Canadian results and bilateral agreements specifying how the municipalities will share the funds.

Well, these three areas are very clearly within the jurisdiction of the provinces and Quebec. Once again, Quebec's demands regarding Bill C-43 and the budget have been disregarded.

Social housing is another area where the government's management has been so sad that it makes you want to cry. The federal government was asked to ultimately devote the equivalent of 1% of its program spending to contribute to the development of new social and community housing. So what do we see? Nothing. There is nothing at all for social housing. If there is one sector that has just been forgotten in this budget, that is it.

As I say, it is enough to make you cry. Families are having difficulty finding adequate housing. Some families in Quebec spend about 60% of their income just on housing. Meanwhile, this government has the nerve to bring down a budget with nothing for social housing.

For the Bloc Québécois, it is also important that this budget not neglect our francophone friends in the rest of Canada. We felt that the federal government ought to follow up on the budget requests from francophone associations in the Canadian provinces and raise to $42 million the budget allocated to them under the Canada-communities agreements. That budget, incidentally, is currently $24.4 million. Once again, there are no provisions for the Canadian francophonie, which is most unfortunate.

Yet the government had the means to do far more. The federal Liberals had enough financial leeway to do far more. According to the Bloc Québécois forecast, that leeway will attain the $50 billion mark, more or less, within three years, not the meagre $15 billion figure the Minister of Finance has given for that same period.

The federal government therefore had all the leeway necessary, but not the political will. It is as simple as that. Once again, the Minister of Finance turned Prime Minister is up to the same old tricks, giving priority to paying off the debt—they are talking about $15 billion over five years—at the expense of the people of Quebec.

That is the general situation. Now I will touch upon some of the more specific aspects of this bill which are of particular significance to me.

I will start with part V, which concerns the Federal-Provincial Fiscal Arrangements Act. This allows the transfer of up to $700 million to a trust to help Quebec and the provinces develop their child care system in keeping with the following principles: quality, universal inclusiveness,accessibility and development.

The Bloc Québécois calls for an unconditional right to opt out, with full financial compensation, from implementation of the federal child care program. Adoption of part V of Bill C-43 just as it stands would mean that the money in trust available to Quebec and the provinces would suddenly be tied to the application of four national standards in an area over which Quebec and the provinces have exclusive jurisdiction. While all Liberal ministers involved promised that all this would respect everyone's areas of jurisdiction, in reality this budget includes an obligation to meet national standards.

Such legislation means Quebec would have to meet national standards set by the federal government in an area outside federal jurisdiction. This also means Quebec would have to be accountable to the federal government for the proper application of these national standards.

Quebec is being heavily penalized by this bill. Quebec parents are still waiting for additional funding, while the Government of Quebec is ready to receive this funding and use it for improving its own system.

I remind this House that the Bloc Québécois is in Ottawa to protect the interests of Quebeckers. The federal government's interference in Quebec's jurisdictions and its foot-dragging in signing a bilateral agreement with Quebec so as not to penalize it for having one of the best child care systems in the world, are not the best ways to achieve this.

I am talking about early childhood, but this government's handling of the Old Age Security Act is hardly any better. I am referring to Part 23 of Bill C-43. The government is quick to remind everyone that it injected money into old age security, but the governing party forgets—I am being polite—to dig a little deeper to look at what this money represents.

First, the increase in funding will not begin before January 2006. The situation for seniors will not improve immediately. This will not begin until January 2006, or almost a year after the budget was tabled.

Second, there is also an increase of $18 monthly for single pensioners. As if eighteen dollars a month really improves the life of seniors. I should rush out and dance in the street to show my delight. Eighteen dollars a month is a scandal. The federal government had the means to do a lot more for seniors.

In addition, this bill makes no reference to the money seniors have been deprived of over the past 11 years, because of the government's failure to provide the information they needed to receive the guaranteed income supplement. I believe seniors in Canada lost out on $3 billion and those in Quebec on $800 million for lack of information. This is really scandalous, in my opinion. The bill makes no provision for this aspect of an extremely serious situation.

I have spoken of young people and seniors. Let us talk about workers now, people in the labour force, who, often for distressing reasons or sometimes for economic reasons, need financial support from the government, in the form of employment insurance, for example.

Previous Liberal governments have turned the employment insurance fund into an employment tax, which has enabled them to pay down the debt and eliminate the deficit. This bill contains no provision on access to the plan. Imagine an insurance company where only 40% of those paying premiums manage to get benefits when they need them. This is what is happening with employment insurance. The few amendments in the bill have nothing to do with access to the plan. They have nothing to do either with extending EI benefits. Only slightly, through pilot projects, do they have anything to do with extending benefits for seasonal workers. This bill, overall, responds to none of Quebeckers' needs.

In conclusion, I point out that this budget, tabled on February 23, is totally unacceptable. It completely ignores the priorities of Quebeckers. The federal Liberals have behaved exactly like a government looking for a quick election. We voted against the budget. We have a duty on behalf of Quebeckers to vote against Bill C-43.

[Charlie Penson, Conservative, Peace River, AB]

Mr. Speaker, the member for Winnipeg North has a lot of bravado today about the budget vote that took place some time ago but my understanding was that if the Conservative Party had voted against the budget instead of abstaining, the NDP members would have been running for the hills so they would not have had to bring down the government.

There will be a time when the government will be brought down but we believe that Canadians are the ones who have to make that decision.

We were not happy with the budget either. It went some ways to satisfying Canadians about things like tax relief. That said, I have already pointed out in my speech today that they were not fast enough and they were not deep enough.

We are not in favour of Bill C-43, which would implement the budget itself, and I have just pointed out our reasons. We want three provisions separated out of the bill and then we will deal with those items separately.

[Charlie Penson, Conservative, Peace River, AB]

Mr. Speaker, I am pleased to take part in the debate today on Bill C-43, an act to implement certain provisions of the budget which was tabled just a short six weeks ago on February 23.

Unfortunately, this budget implementation bill is reflective of the Liberal government's arrogance that has plagued this Parliament for over a decade, back in 1993 when it was first elected. However, in this minority Parliament, it is time for the Prime Minister to stop behaving as if he had a majority and start governing, and take into account the best interests of Canadians. Unfortunately, that does not appear to be happening.

We in the Conservative Party have made it very clear that we believe the legislation contained in Bill C-43 should be divided into three stand-alone parts: first, legislation enacting Kyoto provisions; second, measures that fulfill commitments made to the provinces including the implementation of the Atlantic accord; and third, clauses traditionally found in budget implementation legislation.

Let me deal with the Kyoto measures first. We have a last minute decision by the government to include changes to the Canadian Environmental Protection Act and enabling legislation for a Canada emissions regulations agency. All it is, in this minority climate, is a crude bait and switch tactic that is not fooling anybody. I notice that the environmental community is not very happy about the government's tactic either, although the environment minister may have thought that he was going to have support there.

The Liberals knew the majority in the House however would not approve the Kyoto measures if they presented them in stand-alone legislation. That is why they attached it in a last minute amendment to Bill C-43. This move, at the very least, has delayed legitimate budget measures from implementation and may have even, depending on what happens in the next couple of months, put their very implementation at risk.

The government's cynical effort to divide and conquer has had the opposite effect. It does not matter what side people are on regarding the Kyoto debate. No one is prepared to swallow hasty, superficial and highly questionable Kyoto measures that are being presented in bad faith.

I would like to take a moment to talk about Kyoto and the whole business that was first developed in Rio back in the late 1980s. This is the government that sleepwalked its way to a very bad Kyoto agreement to begin with. Although it had left it for almost 10 years, it had to develop a position to take to Kyoto, Japan for the international conference that was taking place.

The Liberals hastily put a government position together. They went out and consulted with the provinces in about a week. They came back with a position the provinces could finally agree to, went to Kyoto, and doubled the amount of concessions that Canada was prepared to make, double what the provinces had just agreed to a week earlier. That is the kind of rocky start that they got off to, and quite frankly people are shaking their heads at the way that the government has handled this whole file.

From our point of view, these are not the same set of budget measures which the Conservative Party was presented with in the budget, and so we refused to defeat the government on the budget. Now we find this late amendment that has been brought in as a way to change things. It is a very strange approach.

Let me deal with the Atlantic accord. It is another problem we have with this budget implementation bill. I would say equally contemptuous is the Liberal tactic of holding the people of Newfoundland and Labrador and Nova Scotia hostage by linking the Atlantic accord provisions, which most members of the House support, with the obviously problematic Kyoto measures.

Members will remember the Atlantic accord. This was the promise that the Prime Minister made when he was slipping very badly in the last election, less than a year ago in June. He went to Newfoundland and Labrador to shore up his support and agreed that we had to make changes to the measures, especially on the offshore resource revenue. Then when the Premiers of Newfoundland and Labrador and Nova Scotia asked him to hold up his part of the bargain just a few months later, he was not prepared to do that. We all saw the negotiations that went on, including Danny Williams and his disgust at the way the Prime Minister had backed away from that agreement. Finally, under great pressure, the Prime Minister gave in.

We think the provisions of the Atlantic accord in Bill C-43 could be passed in one day in the House if the Liberals would table stand-alone legislation, but so far they have not agreed to do that very simple matter.

However, on April 6, just a short time ago, the leader of the Conservative Party rose in the House to seek unanimous consent for the following motion: “That, notwithstanding the Standing Orders or usual practices of the House, a minister of the Crown be permitted to table a bill without notice that implements the Atlantic accord; when such a bill is called for debate it be deemed read the second time and referred to a committee of the whole, deemed considered in committee of the whole, deemed reported without amendment, deemed concurred in at report stage, deemed read a third time and passed”.

Therefore, it is clear that the intent was to move this through very quickly. The accord was finally reached between the Premiers of Newfoundland and Labrador and Nova Scotia and the Liberal government after a great deal of pressure. However, the Liberals have linked it to the Kyoto amendment and this is problematic.

The member for Toronto—Danforth, the leader of the NDP, seconded this motion. We may disagree on many issues, but the Conservatives and the NDP share a sense of fair play and apparently the Liberals do not as they would not give their consent. Nevertheless, we remain united on this point. The Atlantic accord should be passed with no further delay, finally giving the people of Newfoundland and Labrador and Nova Scotia what they were duly promised in the last election campaign, which is a fair deal they so justly deserve.

The bottom line is that the Conservative Party does not believe in playing games with the well-being of Canadians and Canadians of that particular region on this issue. It is high time that the Liberals stop trying to score points and follow the lead of the Conservative Party by acting in the best interests of the people of Newfoundland and Labrador and Nova Scotia. We request that this be split away from this bill and if the government refuses to do so, we will try to accomplish that in committee when it comes to us.

Traditional budget measures are normally contained in these budget implementation bills. In the last election the Liberals campaigned against many of the Conservative initiatives which they seem to very strangely now accept, such as tax reductions. Our last platform, which the Liberals criticized as being fiscally irresponsible just about 10 or 11 months ago, committed to $58 billion in new spending and tax reductions over five years.

In budget 2005, the Liberals made $55 billion in new commitments for the same time period. Eerily and remarkably, almost exactly the same numbers. We could not afford them in June during the election campaign. They were highly irresponsible. Then the budget came down February 23, and strangely, the are exactly the same numbers. So it was just a crass political ploy at election time to discredit the Conservative Party. Now we see that it was affordable all along.

Unfortunately, many of the tax cuts embraced by the Liberals in the budget do not go far enough or occur fast enough to have a substantial impact on the well-being of Canadians. In fact, some people are calling the last budget “budget 2008” because many of the measures do not take effect until late in the five year period.

The personal tax relief measures in the bill are insufficient and back-end loaded. They amount to a reduction of no more than $16 next year. It is called the pizza of tax relief. One family could maybe buy a pizza with the tax relief it is going to get next year. So the Liberals back-end loaded many of these provisions and they are only going to be $192 when fully implemented in 2009. Not nearly enough, but it is the right direction.

The productivity enhancing measures in budget 2005 however are insufficient. They serve only to illustrate that the government is not taking the warning signs that Canada's high priority programs could be in jeopardy if comprehensive steps are not taken to grow the economy before the demographic crunch happens. I have been on the finance committee for some time. We have heard this story about the looming demographic change. We have an aging population in Canada. We will have less people paying the bills down the road. We believe that we have to take measures now to get Canada's economy going. We know that we are trailing our major trading partner, the United States, very badly in terms of productivity.

People may ask what that is, it really means we have a lower standard of living. It is not good enough. We have fallen behind very badly in the last 25 years. It means in real terms that people can understand that the average family of four in Canada has a take home pay of about $24,000 less than the average family in the United States.

What could people do with that? They could put some $2,000 a month on their mortgage payments. That is really what it amounts to in real terms. They could pay down their mortgage considerably faster if we had the same kind of standard of living as they have in the United States.

Why would we think that we should not aspire to have as high a standard of living? We have had it in the past. It is only in the last 25 years that we have drifted very badly. Our productivity has fallen so we are only about 75% as productive as the United States.

I would suggest that it is not the fault of Canadians. It is the fault of policy makers who put us into a whole bunch of areas of government spending in which we do not need to be involved any more.

Let us take some steps now to correct that before the big demographic crunch happens. Canada's productivity slack not only curtails the Canadian standard of living now but it puts the future affordability of our social programs into serious jeopardy. The time to fix a leaky roof is when the sun is shining, not to wait for a downpour to flood the house.

Some of the measures in the bill do not reflect how they were presented in the budget document. While the budget noted that each of the territories would equally share $120 million in trust, part 6 of Bill C-43 leaves the allocation up to the terms of the trust indenture. Maybe that is fine but maybe it is not. It does not spell it out.

Budget 2005 said that $150 million for the green municipal fund would be applied to clean up brownfields. We heard about the need for that many times but no stipulations to that effect were made in part 8 of Bill C-43, which I think is also an oversight or an error.

With regard to the much talked about gas tax transfer to the municipalities that the parliamentary secretary talked about a little earlier, part 11 of Bill C-43 only authorizes payments to the provinces regarding the gas tax until 2005-06 even though the budget stated that the amount of the share of the gas tax would rise to $2 billion annually by 2009-10.

I think some provisions still need to be cleared up.

Provisions to help low income seniors do not come out as beneficial as the Minister of Finance's budget speech would lead us to believe. For example, part 23 of Bill C-43 says that unless the provincial governments raise the comfort allowance amount, the total amount increased to the GIS, the guaranteed income supplement, would not be paid to seniors living in subsidized nursing homes but rather to the nursing home operator or the province.

There may also be provincial programs, such as GAINS in Ontario, which would claw back half of the GIS increase so that it may not be quite as rosy as the finance minister has suggested.

The area on which I am the most critical is the area of surplus projections. We just had the budget six weeks ago. The finance minister told us that the budget surplus for the year that just ended March 31, and he was only a few weeks away from it at the time, would be $3 billion. That has been changed many times this last year but we have heard him say there would be $3 billion.

Unfortunately, I suggest it is somewhat like the fiasco of last year when the finance minister stated that the budget surplus would be $1.9 billion and it magically turned out, after the election I might point out, to be $9.1 billion. A lot of people thought that maybe the finance minister was dyslexic or something when he got the numbers opposite but it turned out to be a huge advantage for the Liberal Party during the campaign. The Liberals said that they could not afford all the promises that were made by the Conservative Party but, alas, they could have afforded it all along because instead of a $1.9 billion surplus it turned out to be a $9.1 billion.

I am suggesting that the finance minister pull up his forecasting socks and stop hiding taxpayer dollars by lowballing surpluses.

Some people might want to know what is wrong with lowballing. What is wrong is that in the last seven years we have had seven consecutive budgets where the finance ministers have lowballed the surpluses and we actually had $80 billion more than the government said we had over the last seven years.

Why is that important? It is important because Canadians are shut out of the debate of how that money should be spent and what their priorities are, or, conversely, maybe too much tax money has been collected from Canadians. Eighty billion dollars would have been a pretty nice hit in terms of having tax relief.

Old habits die hard and the Liberals are at it once again using false numbers and saying that there would be a $3 billion surplus for 2004-05, the year just ending. We find those numbers strange because the fiscal forecasting group that the finance committee hired came up with a surplus of $6.1 billion. In terms of 2005-06, the Minister of Finance was saying that his estimate of the surplus would be $4 billion while the fiscal forecasters are saying $8 billion and that it could be considerably higher.

We know it is not an exact science, a point the parliamentary secretary has made many times, but it seems to me that if the government is going to be out it would be high as often as it would be low. However that does not seem to be happening. It seems to be quite a different process it has and it seems very deliberate.

I want to talk about the minister's fiscal update last November and how inaccurate that also was, which ties into this. What I am saying is that Canadians already have a problem. I remember when the Prime Minister was the finance minister he was in Toronto lecturing the business community about corporate malfeasance, how important it was that Canadians could rely on the numbers of the corporations and that they should be accurate in their projections so that when people wanted to buy stocks and bonds they could feel confident that these companies were providing accurate information.

Would that not also apply here? In fact, should this not be the place that sets the high standard on how projections are done? To that end, the finance committee, on behalf of especially the opposition parties that made amendments to the government's throne speech, asked that we have more accurate fiscal forecasting and asked that we look at an independent budget office.

We are in the process of doing that at committee. We have independent economists looking at the last two quarters of 2004-05. They have been able to give us timely updates, which is very important to parliamentarians in order to tell Canadians that we are reflecting their priorities and giving them the most current information.

The Auditor General has criticized the government in the past. The Conservative Party is working on the finance committee to bring truth and transparency to fiscal forecasting by establishing the independent parliamentary budget forecasting office. We believe it is in the public interest to have a healthy debate on what to do with the surplus, if there is one, and not play a game of hide and seek as to how big the surplus really is.

The Conservative Party will continue to hold the Liberals to account for spending that is unfocused and wasteful. Over a decade of Liberal waste, mismanagement and scandal has shown that billions of dollars sent to Ottawa could have been more effectively managed by Canadians themselves if left in their pockets. Canadians were overly taxed by $80 billion.

The Conservative Party has also said that it will strive to make this minority Parliament work so long as it is in the best interest of Canadians. Currently, the bill is not reflective of that principle. That said, we will try to turn the bill into pieces of legislation that are in the best interest of Canadians.

We can only hope the Liberals will keep those interests in mind and allow themselves to be guided by those same principles.

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

Mr. Speaker, thank you for the opportunity to introduce the 2005 budget implementation act at second reading. This is all about the government delivering on its commitments. That has been the theme of this year's budget and indeed it is the theme of the bill before us today.

Canadians expect the government to take major steps to deliver on our commitments and that is exactly what we have done. I hope over the next few minutes to demonstrate that this is exactly what we have done.

In the 2005 budget we have set out an ambitious agenda to promote national well-being, centring on five mutually reinforcing commitments: first, maintaining sound fiscal management; second, encouraging a productive and growing economy; third, securing our social foundations; fourth, promoting sustainable environment and communities; and fifth, strengthening Canada's role in the world. As I said, I hope that these five mutually reinforcing commitments will become obvious over the course of the next few minutes.

Proposals contained in the bill take major steps to deliver on these commitments, with action carefully paced over the next five years. I hope in the next few moments to illustrate how the measures contained in the bill reflect each one of these commitments. Before I do that, I think it is important to make a few comments about our economic situation, because this underlies each and every budget.

Canada is in an enviable position. Since balancing the federal budget in 1997, Canada has led the G-7 industrial nations with the best job creation record and the fastest growth in living standards.

Right now I can hear someone calling in their support, Mr. Speaker, so certainly there does seem to be someone who is agreeing with me on that very significant point.

Looking ahead, and based upon the average forecast by economists from the private sector, the real growth in 2005 is expected to be 2.9% of GDP, rising to 3.1% in the 2006. I would note in parenthesis, however, that since the budget has been proclaimed, private sector economists have actually rounded down the GDP growth for 2005 from 2.9% to 2.6%, so it gives us some sense that private sector economists are possibly not as robust as they were when the budget was being made. That of course is a concern to each and every one of us who considers a sound fiscal framework to be the cornerstone of our prosperity.

These forecasts are always subject to risk, including the evolving impact of the rapid rise in the value of our dollar. Canada is probably one of the most global trading nations, if not the most global, and because of that our risks are frequently risks that are outside of our control.

For instance, the principal risk is with the twin U.S. budget and account deficits. These could cause higher interest rates, slower U.S. growth and further depreciation of the American dollar, all leading to slower Canadian growth and some economic adjustment which could in many instances be quite painful for each one of us.

As I said, we do not have control over how the U.S. issues its budget or controls its current account deficit. These are principal risks to the forecasting which are completely outside of our control, similarly with the economy of China and with rising oil prices and things of that nature which are by and large outside the control of our economy.

It is the possibility of future risk that motivates the government's first commitment, and that is to sound financial management, with balanced budgets or better based on prudent fiscal planning. Even after dramatic investments in funding for provinces and territories and further new measures, budget 2005 projects a surplus for the current fiscal year ending March 31, a surplus for the eighth year in a row. That is the longest string of surpluses since 1867 and the founding of the nation.

The budget projects balanced budgets or better over the next five year period. The five year fiscal projection reflects the fact that the vast majority of the commitments it makes extend beyond the traditional two year planning horizon. This has further positioned Canada as a world leader and the only G-7 country to post total government surpluses in each of the past three years and the only nation that can expect to be in surplus in 2005 and in 2006.

Our strong performance has fueled a $60 billion plus reduction in Canada's public debt and a saving of more than $3 billion annually each and every year in debt servicing costs. This has led to Canada having a triple-A credit rating, producing lower interest rates for provinces, cities, businesses and families.

Again as a parenthesis, in my own community of Scarborough—Guildwood what we have noticed is a vacating of a lot of lower-end apartments while people get out and buy homes, because the interest rates are now such that the home which was heretofore unaffordable has become affordable. People are leaving the apartments and moving into their homes because their mortgage payments are the same as or less than their rental payments.

The combination of lower debt and lower interest rates has meant that the share of government revenue going to debt servicing or interest rates has been cut from almost 38¢ of each revenue $1; that is, 38¢ or well over one-third of every $1 was going to service debt. Now we are down to around 19¢. We have shaved it entirely in half. For the provinces, on average that has meant a significant reduction in their debt interest costs as well. Some provinces are down around an average of 12¢ of every revenue $1, and again, these are savings that are passed on to any entity that borrows money.

To sustain these benefits and to position Canada to meet future pressures such as our aging population, the government aims to bring down the debt to 25% of GDP within 10 years.

Balancing budgets and bringing down debt do not happen by accident. They require prudent fiscal planning. For this reason, budget 2005 again sets aside $3 billion in an annual contingency reserve. If not needed to keep our books in balance, these funds will go directly to reduce the debt.

We have also continued to build economic prudence into the budget plan, starting at $1 billion. If not needed, it will be used to invest in other priorities of Canadians.

Fiscal discipline also demands a rigorous approach to delivering value for the taxpayer dollar. That is why the government established the expenditure review committee of cabinet to scrutinize each and every line of government spending.

The committee has identified $11 billion in cumulative savings over the next five years. Almost 90% of that $11 billion comes from greater efficiencies in procurement, property management, service delivery and program administration. These savings have been incorporated in budget 2005 and are being reinvested in core federal programs and services.

The government's second commitment to Canadians is to encourage a productive and growing economy. Canada's current economic progress shows that we are on the right path, but increased prosperity and growth need constant improvements in productivity and our ability to compete in a fast-changing global environment.

Again in parenthesis, we have noticed in the last year some fall off in productivity, which is worrisome. I think it is largely reflected by the rapid appreciation in the Canadian dollar and that has made it very difficult for some businesses to adjust quickly. We can live with a higher Canadian dollar, but it is the haste at which that change occurs which makes it very difficult for businesses to adjust and build into their situation and productivity improvements that keep them competitive.

We face the challenge of a soon to retire baby boom generation followed by a much smaller generation of workers. This means we will no longer be able to automatically rely on labour force growth to boost the economy. It means that the workforce has to be as inclusive as possible, and we need the workforce to be as skilled and productive as possible to beat international competition.

Budget 2005 takes action to meet those challenges. This action starts with the understanding that quality child care and early learning is much more than just merely good social policy. It is also an investment in better productivity and economic success in the years ahead. I will reference this back to when I said that we needed an inclusive workforce. Clearly, men and women, as they raise children and work, need to have the most flexible arrangements possible for raising families.

Bill C-43 would provide for the creation of $700 million trusts for provinces to invest in early learning and child care programs. This amount is the 2004-05, 2005-06 portion of the $5 billion commitment by the federal government for five years to develop a shared early learning and child care initiative in collaboration with the provinces and territories.

We are also taking action to reduce taxes. A competitive tax system makes individuals more prosperous and firms more productive. That is why the federal government has cut taxes each and every year since the budget was first balanced in 1997, including the record five year $100 billion tax cut introduced in the year 2000.

The budget builds on these reductions by committing to increase the basic personal amount of income that all Canadians can earn to $10,000 by the year 2009. This will benefit all taxpayers, but in particular, it will remove 860,000 low income earners from the tax rolls, almost a quarter million of whom will be seniors.

Next, to help Canadians save for retirement, Budget 2005 boosts the overall contribution to the RRSPs and registered pension plans to $22,000 by the year 2010. This especially will benefit those who are entrepreneurs, the self-employed and small businesses, people who have no large pension entity to support them. As well, to expand the investment opportunities for Canadians, the government will remove the 30% foreign property limits, such as shares on RRSPs and pension plans.

Bill C-43 also takes action to maintain a competitive corporate tax environment to stimulate growth and jobs. It proposes to eliminate corporate surtax in 2008. This will benefit businesses, both small and medium sized. By 2010, the government proposes to reduce a 21% general corporate income tax rate to 19%. Even in the face of corporate tax reductions in the U.S., these measures will still maintain a tax rate advantage for Canadian businesses.

Further, a productive and environmentally sustainable economy is only part of the Canadian well-being. Budget 2005 also delivers on the government's fourth commitment to make further investments to secure social foundations. These investments build upon a $41 billion agreement for health care in Canada, which the Prime Minister entered into with the premiers last fall, and the new $33 billion framework for provincial equalization and territorial financing.

For example, the Prime Minister and the territorial first ministers have agreed to work together to develop a comprehensive strategy for the north. The north is entering into a time of unprecedented promise and opportunity, particularly with respect to the economic opportunities relating to oil, gas and diamond development.

Bill C-43 proposes to create a $120 million trust to help the territories meet the goals of the northern strategy, a joint initiative between the Government of Canada and territorial governments aimed at improving the quality of life for northerners.

Budget 2005 also recognizes our debts to seniors. Indeed, the budget makes significant investments across a wide range of policies that matter to seniors. An investment in health care, which was made in the fall, is of most benefit to those who are aging. People use up most of their health care allotment in the latter part of their lives. The health care investment is for us all, but is of particular significance to those who are seniors.

In Bill C-43 the increase in the guaranteed income supplement is a payment of $2.7 billion over five years, with improvements in place in less than two years. This will benefit 1.6 million seniors, the majority of whom are women. The maximum GIS will go up by more than $400 per year for a single senior and almost $700 for a couple.

The third commitment on the government's agenda is in recognition of the fact that a smart economic policy and environmental policy can go hand in hand, improving the quality of life, the health of communities and opportunities for growth. Budget 2005 introduces a $5 billion package of measures over five years to support sustainable environment. These include the new clean fund and a partnership fund to reduce greenhouse gas emissions.

Bill C-43 proposes to establish a new agency under Environment Canada to manage the $1 billion climate fund which will provide incentives for reduction and removal of greenhouse gases. Moreover, the bill proposes to amend the Canadian Environmental Protection Act to facilitate the future addition of greenhouse gases to the list of substances under the act. This will allow the Minister of the Environment to regulate emissions and implement the proposed large final emitter regime and emissions trading system.

Bill C-43 also would provide $300 million to the green municipal funds to support local environment projects. Of this amount, $150 million would be used to help communities clean up and redevelop brownfields.

A key element of the environment for Canadians is our cities and communities. Budget 2005 builds on the new deal for communities launched last year by providing municipalities with a growing share of the federal excise tax on gasoline. Bill C-43 proposes to provide initial funding of $600 million for this initiative, the equivalent of 1.5¢ per litre. This will grow to $2 billion a year for additional revenues over five years, delivering again on this government's commitment.

Canada's meeting its domestic needs should not obscure the fact that events like tsunami disaster emphasized that we in live in a global village. For example, when the tsunami struck southeast Asia last December, Canadians were deeply affected by this tragedy. Again in parenthesis, the Sri Lankan community, of which I have the honour to represent in my riding, is deeply affected by this tragedy. Canada responded very generously with an assistance package totalling $425 million.

In true Canadian fashion Canadians responded generously with their personal donations of approximately $200 million to charitable organizations and the government matched that.

Finally, the measures contained in Bill C-43 represent a comprehensive, integrated plan to enhance the well-being of Canadians. Over this period and over this budget, we have delivered on our commitments.