Bill C-48 (Historical)

An Act to authorize the Minister of Finance to make certain payments

This enactment authorizes the Minister of Finance to make certain payments out of the annual surplus in excess of $2 billion in respect of the fiscal years 2005-2006 and 2006-2007 for the purposes and in the aggregate amount specified. This enactment also provides that, for its purposes, the Governor in Council may authorize a minister to undertake a specified measure.

An Act to Authorize the Minister of Finance to Make Certain Payments

[Vic Toews, Conservative, Provencher, MB]

Mr. Speaker, I know there are some enthusiastic members, but they will have their opportunity to ask me some questions when I am finished.

Now the Liberals are saying, “We rescued Canada”. On what basis did they rescue Canada? There were two policy initiatives that brought money into the coffers of the government. What were those two initiatives? The GST and free trade. Again, both were initiatives by Mr. Mulroney. Whether we like him or dislike him is quite irrelevant: those initiatives brought the money into the treasury and have made the prior finance minister, now Prime Minister, look good. All he had to do was collect the money. That is essentially what happened.

At the same time, of course, the Liberals were raising taxes and spending, spending, spending. I find it interesting that at the same time as all the money was rolling in, some of my colleagues were in provincial governments. We bore the brunt of the finance minister's cuts in health care, education, infrastructure and all of those matters. We had to balance the books while they balanced their books on the backs of the provinces and the municipalities.

Some of their socialist friends still do not understand what free trade has done for the country. In my riding, there is a New Democrat candidate who said he is proud to be a member of a party that is opposed to free trade. On the front page of my weekly newspaper there is a New Democrat saying he is proud to be a member of a party that opposes free trade. In my riding, 80% of the manufactured goods go across the line into the United States. If free trade was shut down, thousands of my constituents would be out of work. I dare say the same is true for many of us here. Yet we have a New Democratic Party that is opposed to free trade, that wants to shut down trade.

Just recently, in fact, we had a member of the House stand up and call for sanctions against the Americans because of the international water dispute over Devils Lake. I disagree with what the Americans are doing on Devils Lake, but to simply say “let us impose trade sanctions against the Americans” when we are sending 80% of our manufactured goods across the line is the kind of philosophy that has generated this $4.6 billion spending spree. Those people actually think the money would occur, as it did in the Trudeau years when it was just printed. If we run out of money, we just print it, that is the philosophy. Inflation runs up. Interest rates run up. People suffer.

That philosophy of the NDP against free trade, against the workers in my constituency, has infected this Liberal government and the evidence is in Bill C-48.

[Vic Toews, Conservative, Provencher, MB]

Mr. Speaker, I appreciate seeing you in the chair again, first in respect of Bill C-38, and now in the context of the House with respect to Bill C-48.

I too want to make a few comments here. I think some of my Liberal colleagues have a lack of understanding as to what the function of Parliament actually is. Going back to the time of the Magna Carta, Parliament was simply a device that would hold the king accountable for the spending of money. The nobles at that time simply revolted and said they would not pay any more money unless the king took their needs into account.

Parliament is essentially that concept. The role of the opposition, and indeed the role of everyone outside of the executive, is to hold the executive accountable. I see at least three members of the executive here tonight. It is our responsibility as members of the opposition, as well as the responsibility of backbenchers in the Liberal Party, to hold the government accountable.

This is not an issue of Liberals asking Conservatives questions or New Democrats asking Conservatives questions; it seems the only ones who are prepared to stand up and speak about this issue are the Conservatives. Every party should be standing up and holding the executive accountable for the money. We are talking about $4.6 billion; no, $4.5 billion, I am sorry, that is correct. Hanging around Liberals one begins to think of money in that kind of way. In my riding, $100 million is still a lot of money, never mind $4.5 billion.

That is our responsibility here: to ask the executive what it is doing with $4.5 billion. I dare say that if I stood up and read the bill into the record as part of my speech, Canadians would be no wiser as to what the executive is actually going to do with their money.

I was a little disappointed to hear the socialist colleagues of the Liberals state that we are somehow wasting time by standing up in Parliament and debating this issue and asking these questions. Wasting time, that is what was said. It has been mentioned that thousands of dollars in overtime is being spent because of this debate. Let us put that into a realistic context.

That is thousands of dollars in overtime when we are talking about the expenditure of $4.5 billion. What we are doing here tonight in terms of overtime does not come anywhere near to what that money could gain in terms of interest or, indeed, if it were put back in the pockets of Canadians. So yes, there is a price to democracy. Yes, there is a price to running Parliament, but our obligation to the people of Canada is to ask questions of the executive to determine exactly where that money is going.

The point was made also that in another lifetime the Conservatives were spendthrifts and spent all kinds of money. I just want to make a short point here. As I understand it, before the Conservatives came into power, the debt and the deficit were run up by the Liberals. It was a huge debt, especially for that time.

If we look at the spending during the Mulroney years, if we took into account what we had to pay in terms of interest on the debt that the Liberals accumulated during the good years, and if we took that interest away, out of the payments, the Mulroney government would have run a balanced book every single year. That is the reality.

There are some of us in the Conservative Party today who were not happy with Mr. Mulroney. We were unhappy with Mr. Mulroney for other reasons, but in fairness to Mr. Mulroney, he balanced the books. If it had not been for the Liberal debt, running this deficit would not have occurred. That is absolutely clear. Now the Liberals are saying--

[Roy Cullen, Liberal, Parliamentary Secretary to the Minister of Public Safety and Emergency Preparedness]

Mr. Speaker, I listened to the member for Renfrew—Nipissing—Pembroke and wondered if she had actually been apprised of what is in Bill C-48, because she talked about the fact that there are no surpluses. Perhaps she thinks the surpluses that the government has produced for Canadians for the last seven years are imaginary as well.

The government has consistently posted surpluses, which has meant that debt is being paid down, and in fact by some $50 billion, which is saving Canadians some $3 billion or so each and every year as an annuity on the debt service costs. The government also has helped to create the economic climate that has been good for business, with business development at roughly 3% growth every year. Unemployment is down to the lowest levels in years, to below 7%. There was the largest tax cut in Canadian history, of $100 billion, in the year 2000. The fact is that people are able to go out and buy homes for the first time because of the low interest rate regime that the government has helped create. There is low inflation.

I think fondly back to the days when my colleague, Hector Cloutier, represented that area. I am sure that Mr. Cloutier had a better understanding of these bills as they came to the floor of the House of Commons.

Perhaps the problem is this. I understand that the Conservative party gutted the entire bill at committee. Perhaps when the member for Renfrew—Nipissing—Pembroke read the bill, there was nothing in the bill because the committee, on the recommendation of the Conservatives, had gutted the bill. Maybe she saw the bill, there was nothing in the bill and she drew a blank, because she clearly does not understand the bill. She does not understand the fiscal performance of the government.

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

Mr. Speaker, after a speech like that I wonder whether the hon. member has actually read Bill C-48. It is kind of pathetic that she is opposed to spending $4.6 billion. The bill does not call for spending $4.6 billion, or $4.5 billion, to be more accurate about it, unless and until there are certain contingencies achieved. If in fact there is a surplus beyond such and such an amount, namely $2 billion, then the government will spend in these areas. It is called unplanned surplus legislation.

I want to know from the hon. member what she has against affordable housing. Does she think the government should not spend in areas like that? Does she think we should not be spending money on the environment? Does she think we should not be spending on matters to do with post-secondary education? Is there something wrong with spending on foreign affairs and things of that nature?

If the hon. member had actually read the legislation, she would know that there is no commitment to spending unless a certain contingency is reached. If that contingency is reached, then there will be spending. The member is completely misleading in her speech in trying to have people believe that this is wild, reckless and crazy spending.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, I rise in strong opposition to the $4.6 billion tax increase that Bill C-48 proposes to collect from all Canadians.

I remind the Liberal-NDP socialist coalition that contrary to what misinformation is spread about business taxation and who does or does not benefit when business taxes are reduced, corporations do not pay taxes. People pay taxes.

What this socialist pact accomplishes in Bill C-48 is a double hit. By reducing productivity and maintaining the high level of taxation on business, while at the same time increasing taxes on Canadians by $4.6 billion, the net effect of the damage is magnified.

Forget about the discussion of a surplus and the Liberal-NDP illusion that the $4.6 billion is spending, not new taxes, that it is the budget surplus, the budget surplus is a myth. There is no budget surplus. The long term debt for Canada exceeds half a trillion dollars.

Canada has a serious deficit when it comes to health care, our military, municipal infrastructure and services, just to name a few. There is no surplus. Talk of a surplus is a hoax that is being perpetuated on the people of Canada by a scandal ridden administration that is out of control and reduced to buying votes with taxpayer dollars.

The Liberal-NDP out of control spending coalition is hoping that most Canadians have forgotten or do not remember the last time this pair teamed up to ruin the country's finances. The last time there was a minority government where the NDP propped up the Liberals was in 1972.

Between 1972-73 and 1974-75 fiscal years, spending jumped by 50%. While spending jumped by 50%, taxes jumped by 52% over the same period of time. From October 1972 to July 1974, the inflation rate more than doubled, from 5.2% to 11.1%.

The rise in inflation led to chartered bank prime rates almost doubling. They climbed from 6% to 11% and the rate on a five year mortgage during the same time climbed to 11.37%.

Canadians need to look at the fiscal record of the last Liberal-NDP accord to appreciate why I and the Conservatives oppose and have consistently opposed the totally irresponsible way the finances of Canada are being run by a government intent on buying support from the NDP in order to cling to power.

We should make no doubt about it, Bill C-48 represents crass, last minute deal making of the worst kind. What makes thoughtful Canadians critical of the Liberal-NDP spending pact is that it represents a huge tax increase. In this case, the Liberal Party is throwing taxpayer dollars at the NDP to buy its support.

The worst part of this misuse of taxpayer dollars is that while lofty goals are being stated on where the new taxes will be spent, there has been no thought and no plan that the intended spending will actually end up in the pockets of those who are the intended recipients.

Of particular interest to my constituents in the riding of Renfrew—Nipissing—Pembroke is the plan for families with children and helping those children receive a post-secondary education.

I have been listening with interest to the comments made by the NDP finance critic when the statement is made that the $4.6 billion tax increase will benefit students. Specifically, it is alleged that the Liberal-NDP budget would allocate $1.5 billion to lower tuition costs for students. However this is false because with the hasty way this deal to increase spending was put together, there was no indication of how the $1.5 billion would be spent, much less where.

Let us contemplate for a moment that cash was allocated to reduce tuition, which is the line being pushed by the NDP. In an example provided by Mr. Alex Usher, vice-president of the Educational Policy Institute, let us consider the following.

Let us take a student of sufficient affluence with no grants or loans. Let us assume the student's tuition and fees are about $5,000. Her net cost is $5,000 minus the value of her tuition tax credit, to net out at about $3,800. Now let us give this same student a 10% reduction in tuition. Her cost now would be $4,500 with a net after tax benefit of $380. With a $500 tuition reduction, the affluent student would be better off by $3,800.

Now let us take a high needs student, such as a single independent student, with costs minus resources of $9,000 in Ontario. This student has tuition and fees of $5,000. As with the more affluent youth, the net cost after tax would be $3,800. Now if he has $9,000 in loans, of which anything over $7,000 would be remitted at the end of the year, meaning that effectively he would be carrying a $7,000 loan and a $2,000 grant.

Let me show members what happens when tuition costs are lowered by 10%, which may or may not be the percentage in the budget payoff to the NDP to prop up the Liberals. At a 10% tuition reduction, costs would go down by $500. Therefore the need drops by $500, dropping the student's loan from $9,000 to $8,500. In Ontario, because the threshold remains the same, this student would still have a $7,000 loan but $1,500 in grants. Therefore by not planning or consulting with the province, the student is no better off because the $500 gained through the lower tuition fees would get clawed back by the student aid program, and it does not end there.

Thanks to the tax department, both students would lose $120 of the $500 benefit due to the decrease in the tax credit. Therefore giving a high needs student a $500 break on tuition would mean taking away $500 in grants and $120 in the tuition tax credit.

To summarize, reducing a high needs student's tuition by $500 would make him worse off by $120. What we now have is a Liberal-NDP education policy for post-secondary students where the students are worse off than before the decision was made to increase taxes by $4.6 billion. The $1.5 billion, according to the NDP finance critic, being directed at tuition costs is doing more harm than doing nothing at all. This is a policy where kids who do not need something benefit while the students actually in need lose something.

That is but one example of why Bill C-48 is bad public policy. Bill C-48 hurts students. This budget tax increase hurts all Canadians. The Liberal-NDP approach to spending, without an adequate plan, is something we oppose in the Conservative Party.

I urge all members of the House to opposed Bill C-48, this $4.6 billion tax increase. It hurts all students and it hurts their families.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Mr. Speaker, I was elected to represent and protect the taxpayers of the riding of Stormont—Dundas—South Glengarry. I came here as a member of Parliament for the Conservative Party of Canada to represent it and the values conservative Canadians believe in.

The Conservative Party of Canada believes that our goal should be to give Canadians the highest standard of living in the world. Our goal is that every Canadian who wants a job should be able to get a job. Our goal is that every region of the country should enjoy economic growth and new opportunities for the people of those regions. Our goal is to make Canada the economic envy of the world.

We want every mom and dad in Canada to go to bed at night knowing that their children will have the chance to live the Canadian dream, get post-secondary schooling, find a good well-paying job, afford to start a family, buy a house, save for their retirement, and ensure that they have a bit left over for summer camps and vacations. Maybe they will want to start a business. They can only do that if government does not tax too much and does not spend too much.

When I rise to speak on a substantive issue in the House that is brought before the House in good faith, I always begin my speech by saying what an honour it is to address the issue. However, I cannot honestly call it an honour to speak to this sham of a budget bill. Bill C-48 can hardly even be called legislation. It is not a spending plan. It does not lay out any strategy for dealing with substantive issues. Bill C-48 is only two pages long and proposes to spend $4.5 billion.

Two pages is not enough to lay out a responsible plan for spending that much money. Not one of the cabinet ministers called by the Conservative Party to appear before the finance committee would actually come to the committee to explain how their departments would spend the money this bill allocates to them. Obviously, they do not even have a plan, or at least they are not sharing it with Canadians. When ministers are spending $4.5 billion of the taxpayers money, they owe them an explanation.

The Liberal-NDP coalition will tell us that this bill is all about the environment and aboriginal affairs and all kinds of things, but simply saying that it will spend a bunch of money on something is not a real plan and it will not solve any real problems. In fact, this bill proves that the only result the Liberals care about is staying in power just a little while longer and they do not care how much it costs Canadians.

The sponsorship scandal proved that the Liberals are more than willing to use Canadians' money to buy power, and this bill is just more of the same. Canadians should be outraged and horrified by this kind of reckless, ad hoc, back room legislation. The $4.5 billion proposed spending means about $300 from the pocket of each and every taxpayer in Canada. That is not the kind of thing a government can reasonably or responsibly address in a two page bill drafted in a hotel room.

The finance minister did not even have any input into the deal, yet Buzz Hargrove, an unelected and undeniably biased individual, did. In fact, the finance minister had already tabled a pretty fat budget because the government did not expect, quite frankly, to last this long. The original budget was a Liberal tax and spend pre-election budget that would have increased program spending by 12% in a single year.

The extra money promised in this bill simply goes too far. The Canadian Chamber of Commerce says that to say the program spending is out of control would be an understatement. The Chamber of Commerce, the Canadian Taxpayers Federation, chartered banks, the Canadian Federation of Independent Business and virtually every other economic expert in the country have expressed very serious concerns about the bill, and for good reason.

The Liberal-NDP government says that this agreement has to be passed now by Parliament to provide immediate relief to all kinds of issues. That is simply disingenuous. In reality, no matter when the bill is passed, if in fact it does pass, none of that money will start to flow until at least August 2006, if ever.

That is because the bill says $4.6 billion can only be taken from the federal surplus in each of the next two fiscal years and only after $2 billion per year has gone to debt reduction. The government will not know if it has a surplus until August of next year which also happens to be well after the federal election.

The Liberal government is misleading Canadian taxpayers. The vague promises and massive expenditures in the bill are nothing but premature campaign promises which will probably never bear fruit. Even those few who support the bill, including the NDP, should be worried about whether the Liberals will ever follow through. At best this bill is a hoax against the NDP and at worst it is a fraud against taxpayers, not to mention seniors, students, the homeless, aboriginal Canadians and all other Canadians mentioned in the bill.

The $1.6 billion to be allocated for relief of the homeless will only be spent, if ever, starting in August 2006 on affordable housing including housing, whatever that means. There are no plans, no definitions and no details. In the area of tuitions, the bill is to provide for an amount not exceeding $1.5 billion for supporting training programs and enhancing access to post-secondary education to benefit Canadians. That is far from an iron-clad commitment to lowering university tuitions.

The bill is simply bad for Canada's economy. Even the OECD is warning that the extra spending included in this bill will lead to high inflation and high interest rates. Canada's economic health and reputation will suffer under this legislation. In short, my Conservative colleagues and I will do everything in our power to oppose the bill because it is bad for Canadians, including those it purports to help. I call on all members to put the interests of Canadians ahead of the political interests of those who concocted the bill and vote against Bill C-48.

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

Mr. Speaker, I was a little nervous as the member was speaking because she was trying to convince me and talk me out of the fact that I voted for Bill C-43 by saying there was less detail and less concrete things in it. I will not be quite persuaded of that this evening, but I will reiterate what I said before, we have a concern with Bill C-48 because there is very little attention to detail in respect to these things.

I have been, as a student for many years, in the realm of needing assistance with respect to loans and grants and those kinds of things. It took many years to pay it off. We do need dollars in those areas, but we must ensure that we get those dollars to the students. I am not convinced by what I see in respect to the details to which she speaks on those particular items that it is in fact going to get through to those who most need it as well as the environment, housing and the other areas. We do not have concrete details to actually even suggest that it will get through.

I would suggest that it will be a matter of promise made, promise broken between these two parties. It is a coalition that will make a promise, but also break it as readily.

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

Mr. Speaker, I would suggest to my hon. colleague from the Conservative Party that he might want to read other budget bills and begin with the one he just supported, Bill C-43. In that bill many of the clauses requiring allocation of very large sums of money have even less detail than that entailed in Bill C-48.

For the information of the member, he should know that it is not uncommon to actually spell out in broad terms the provisions, knowing full well that it is this Parliament that will hold the government to account and scrutinize spending.

I would suggest in fact that the Conservatives are in so desperate need of an issue that they are prepared to gloss over the facts, misrepresent the actual situation and provide a lot of innuendo and hearsay, none of it having any basis in truth.

How does the member feel about the $50 million that was allocated in Bill C-43 to the Cattlemen's Association without any specific details in terms of how that money should be spent? Does he have the same concerns about many provisions in other budget bills as he does with respect to Bill C-48, or is it the fact that he just does not like to see any money going to students who are trying to get an education, or to families who are trying to deal with smog and pollution, or to people who just want to get--

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

Mr. Speaker, I am pleased to add my name to the list of those who are fiscally responsible members in Canada, those who oppose the New Democratic budget, Bill C-48.

I joined my party to vote in favour of Bill C-43, the original bill. It was hard enough in some ways to vote for that bill. Yet there were some measures in it that were some lukewarm attempts to imitate Conservative Party policy. For that reason it seemed to be the expedient and proper thing to vote for that bill. It seems these days the only time the Liberal government is not involved in corruption is when it is imitating our party, when it is trying to mirror something that the Conservative Party would do. We wanted to affirm those halting attempts to be fiscally responsible, hoping that the government would speedily implement those measures that are really to the full advantage of Canadians across the country.

When we get to the other bill, Bill C-48, on the other hand, it is really irredeemable. Many members in my party, and I assume in the other parties, have made comment, and especially the Bloc has objections and problems with the bill as well.

Bill C-48 even makes the finance minister gag. He has to hold his nose I would imagine each time that he dutifully expresses his support for the bill, for that irresponsible piece of legislation which was thoughtlessly thrown together at the last minute by the NDP leader and also by his right-hand man, the Prime Minister. The Prime Minister tried to get this coalition together to keep his corrupt government in power. He is clinging to power with the help of a political party that is prepared to look the other way.That is what the NDP-Liberal government is prepared to do. It is prepared to look the other way when we see some of the things from this worst corruption scandal in the recent memory of this country.

The Liberals are willing to spend billions of taxpayers' dollars to fund this addiction for power and that they should be in power at all times in the history of our country. This is a direct result of the loss of their moral authority to govern. Not only should this bill not be passed, but the finance minister should resign for tabling it. We have called on him to do that. The NDP leader has more influence it would seem on the budgetary framework than the Prime Minister's own Minister of Finance.

Bill C-48 is heavy on the public purse but it is quite light on details. It is quite scant and sketchy. It commits hundreds of millions of dollars in broad areas without any concrete plans as to how that money would be spent. Bill C-48 authorizes cabinet to design and implement programs under the vague policy framework of the bill to make payments in any manner it sees fit.

The government has reserved the right to use the first $2 billion in 2005-06 and 2006-07 budget years from the federal surplus, presumably for federal debt reduction. Any surplus that exceeds $2 billion can be used to fund programs related to the bill.

The government would actually need to post $8.5 billion in surpluses over the next two fiscal years to fully implement the NDP's Bill C-48.

The areas addressed in the bill largely fall under provincial jurisdiction. It is more intrusion, more of the camel sticking its nose into the tent, more of moving into the provincial realm of authority.

Bill C-48 also violates a principle held by the NDP as was presented in its own prebudget report, that Parliament should have an opportunity to decide on the allocation of any budget surplus.

The Conservative Party has consistently opposed the Liberal approach of spending without an adequate plan. This is probably the biggest fault with Bill C-48. The Liberal approach is cruel not only to taxpayers, but more importantly to those who depend on those promised services.

The Auditor General has raised some very serious concerns about the ability of certain departments to actually deliver the programs effectively. Even if the dollars were shovelled off to a particular department, there is a pretty serious question whether in certain areas it would actually be able to make the best value of that, including Indian and northern affairs and the Canadian International Development Agency.

In addition the Office of the Auditor General has stated that it currently is auditing the Government of Canada's climate change expenditures which will be finally released in 2006.

The Conservative Party wants to ensure that the social needs of Canadians are met. Our party recognizes that many Canadians are not receiving the level of federal assistance that they deserve. That is a direct result of the Liberal government's approach to problem solving, which is basically to spend money without an adequate plan.

In most Canadian families both parents need to work, one just to pay the taxes. These Canadian families are receiving less and less each year for the taxes they are forced to hand over to the government. They are receiving less and less in the way of social programming and social services. The Conservative Party has long held that a dollar left in the hands of a homemaker or an entrepreneur is more beneficial than a dollar left in the hands of a bureaucrat or a politician.

It would be very irresponsible and cruel to Canadians in need to throw more money at programs that are not meeting those objectives. The responsible approach would be for the government to ensure that existing money is spent effectively to improve programs and to improve services to ensure that nobody is left behind.

Let us look at the Liberal record in respect to spending without a plan. Canada could have more better paying jobs and a much higher standard of living, but Ottawa taxes too much and spends too much.

Since the 1999-2000 program year, spending has gone from $109.6 billion to $158.1 billion, an increase of some 44.3%, a compound annual growth rate of 7.6%. The economy itself managed to grow by only 31.6%, a compound annual growth rate of about 5.6%. Once the Liberals had our money, they could not resist spending it even faster than the economy was growing. It is not surprising that there is so much waste with the government.

Often the government responds to problems in a knee-jerk way by throwing more money at those problems. The Liberals too often unfortunately confuse spending money with getting results. The Liberal government seems to have no true interest in getting results for low and middle income Canadians. As the Gomery inquiry has demonstrated, the Liberal Party is only interested, it seems, in getting results for the rich and the powerful, and for those who can return the favour.

A recent poll shows far more support for the Liberal Party among wealthy Canadians than among low and middle income Canadians. The Liberal Party has declared war on low and middle income Canadians, exploiting them to the advantage of its special friends and for any scheme that guarantees Liberal control over the reins of power in the Dominion of Canada.

Here are three examples of the Liberal government's wasteful and knee-jerk spending on programs that do not work.

We have heard for years now that the wasteful gun registry is the way to deal with the criminal use of firearms, but with no explanation of how this would prevent criminals from getting and using guns. The registry was to cost $2 million. Media reports say that the actual cost is around $2 billion at present and it is adding on as well.

The public saw television reports showing children high on gasoline. The Liberals threw money at Davis Inlet without a plan. The community was moved into new housing a few miles away at a cost of $400,000 per person, but the problems simply moved along with them as they relocated to that new location.

The Quebec referendum is another example which shocked the nation. The Liberals responded by throwing money at it, but without a real plan. The result was the sponsorship scandal, a $250 million waste of money, $100 million illegally funnelled off to Liberal friends and the Liberal Party. Even worse, it has reinvigorated Quebec separatism and hurt the face of federalism in the province of Quebec.

In 1966-67 real federal program spending per capita was $3,466. It will have risen to $4,255 in 2005-06, an increase of $800 per capita in volume terms, or $3,200 for a family of four. Current Liberal-NDP spending plans will take it to $4,644 by 2009-10, an increase of almost $1,200 per person.

Increases in real government spending do not necessarily equate to solving problems or even getting better results. That is the major concern we have with Bill C-48. It was written up quickly and is very scant on detail. There is not much there. As a result, the Liberals want to put it through quickly because they say it is very short. Because it is so very short is the reason it needs rigorous evaluation, assessment and scrutiny. It is also why it deserves our full condemnation and rejection at this point.

Much more could be said, but suffice to say that the Conservative approach would be rather different. It would be a responsible and detailed plan that would reflect rather different priorities and rather different results for the Canadian tax paying public.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Mr. Speaker, I am pleased to rise today on behalf of the constituents of Fleetwood—Port Kells to participate in the debate on Bill C-48, an act to authorize the Minister of Finance to make certain payments. The bill is better known as the Liberal-NDP budget.

Bill C-48 seeks to enact $4.5 billion of the $4.6 billion deal struck by the Liberal government with the NDP to make payments in 2005-06 and 2006-07 from surplus moneys exceeding $2 billion. The money would be used to fund environmental initiatives including: public transit; an energy efficiency retrofit program for low income housing; training programs; enhanced access to post-secondary education to benefit, among others, aboriginal Canadians; affordable housing, including housing for aboriginal Canadians; and foreign aid.

All of this is unplanned spending and the Liberal government has proven time and time again that when it spends without a plan the result is inevitably waste and mismanagement. We have seen it with health care, the gun registry, Kyoto and infrastructure spending.

Billions of dollars have gone from the treasury without noticeable improvements to our health care system, the environment or our nation's highways. It all boils down to a government that liberally throws money at an identifiable problem without ever having a clear idea of how to fix it. Now the government wants to spend another $4.6 billion of taxpayers' hard-earned money without a plan. Canadians have a right to feel nervous.

The Liberals only agreed to this bill to save their political skin. This is a $4.6 billion deal using taxpayer money to keep a corrupt party afloat in government. A government mired in scandal has teamed with the NDP to write a fiscal plan for the nation on the back of an envelope. This is a recipe for economic disaster. If all of the spending in Bill C-48 was such a wonderful idea, then why was it not included in the February budget?

The Prime Minister has abandoned his party's so-called balanced approach to governing, which was to offset spending increases with some debt repayment and modest tax relief. We must keep in mind though that the balance was always tilted heavily in favour of spending anyway as taxpayers can attest. Now, with his budget pact with the NDP, the Prime Minister has given up all pretense of a balance. The deal squanders the budget surplus and flouts responsible budgeting in favour of irresponsible spending.

Even before this deal, federal spending was running out of control. Last year the finance minister projected program spending of $148 billion for 2004-05 and it ended up being over $10 billion more than that. As a result, between 2003-04 and 2004-05, government spending increased by over $17 billion. At 12%, this is the largest single spending increase in over 20 years and the fourth largest in the last four decades. Since 2000, program spending has soared by 44% and, judging from this year's budget, Canadians should hang on to their seats because they have not seen anything yet.

In the first few months after he seized the Liberal leadership, the Prime Minister and his minions spoke of “financial responsibility and integrity”. He promised Canadians to “better control spending”. That is yet another broken promise by the government.

Including the new spending contained in Bill C-48, the Liberal government has announced over $28 billion in spending since the Prime Minister went on national television in April to plead for his job. This spending has everything to do with his struggle to remain in office and nothing to do with improving the lots of Canadians. In the world of the Liberal Party, the poor voter is a secondary consideration.

By choosing spending over tax cuts and debt repayment, the Prime Minister is putting Canada's long term financial future at risk.

The federal government must become more aggressive in reducing Canada's $500 billion debt. Interest payments soak up approximately $38 billion annually, almost 18% of each tax dollar. This is the government's single largest expenditure. By paying more on the national debt, the government would have lower servicing charges, leaving more money for other more fulfilling purposes. Our debt to GDP ratio is still very high relative to other countries and our own past.

Prior to the mid-1970s, when Liberal governments first started ramping up spending, the debt to GDP ratio had always been at or below 20%. Now we are at twice that level. A responsible government would realize that today's surpluses will not last long. There is a chance of a recession or a prolonged rise in interest rates.

As well, we know that the baby boom generation will be retiring, placing increased burdens on our pensions and health care. If we do not act quickly to tackle the debt and bring it down to manageable proportions it may quickly become unmanageable.

The Conservative Party believes that the federal government should move to pay down the mortgage, which the huge national debt places on the shoulders of our children and grandchildren. This should be accomplished by introducing a debt repayment plan, with the main part of budget surplus being allocated to debt repayment in order to have a debt to GDP ratio well under 20%.

Steps must now also be taken to address Canada's falling standard of living and an unemployment rate that remains stuck above 7%. Improvements will only come with changes to the tax regime.

Our tax burden is too high. It saps productivity, deters wealth creation and remains a visible competitive disadvantage. The miserly tax relief announced by the finance minister in this year's budget will save every taxpayer only $16 in personal income taxes in 2005. That is not good enough.

What Canadians need is immediate and long term broad based tax relief, starting with reducing personal income tax rates and substantially raising both the basic personal exemption and the spousal exemption under the Income Tax Act. Reducing personal income taxes will hike the take home pay and raise the living standard of all Canadians.

The Conservative Party of Canada believes that the goal of the federal government should be to give Canadians the highest standard of living in the world. Every Canadian who wants a job should be able to get a job. Every region of the country should enjoy economic growth and new opportunities for its people.

Canada should become the economic envy of the world. All of this will only happen if the government spends within its means and does not tax too much.

The Liberals have pledged tens of billions of dollars without providing much detail. This is the same approach that causes sponsorship scandals and gun registry boondoggles.

The government has lost control over the federal finances. It will spend, say or agree to anything to cling to power. The Liberal-NDP budget is proof of that.

The Conservative Party wants to ensure that Canadians have access to affordable, high quality education, to initiatives that create a clean environment, to affordable housing and to other high priority programs. That is why it would be irresponsible to support a government that throws public funds at these initiatives without a plan.

Canada faces numerous competitive challenges and yet the government remains committed to massive spending, rather than a balanced approach that secures our standard of living, which is why I cannot support Bill C-48.

[Charlie Penson, Conservative, Peace River, AB]

Mr. Speaker, I would like my colleague from Souris—Moose Mountain to address the issue. I know he is on to the Liberals in this business of Bill C-48 providing the funding that the NDP wants for bankruptcy protection.

It sounds like a noble goal. I was on the industry committee for a number of years. We heard a lot about small and medium sized businesses not being able to get the kind of credit they wanted from the banking industry. If somehow they are not to be ranked as secured creditors, if wage earners are to be ranked ahead of them, I think it will be more difficult.

Could the member for Souris—Moose Mountain comment on that?

[Shawn Murphy, Liberal, Parliamentary Secretary to the Minister of Fisheries and Oceans]

Mr. Speaker, I have a question for the member about his comments on the wage protection process. He has valid concerns and I share them. This, no doubt, will be an extremely complex issue when it comes before the House.

We are dealing with the interplay between federal jurisdiction and provincial jurisdiction and whether the company is under the Bankruptcy Act, or under the CCAA or insolvent. We do not want to develop or create an impediment to companies seeking financing in Canada.

My understanding is this is not in Bill C-48. It would require separate legislation or a major amendment to existing legislation. It would have to come back before the House. I assume it would be debated extensively, dealing with a separate appropriation.

Why would the member hold up this bill, which seems to have broad approval from across Canada, for that issue?

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, I too will speak with respect to Bill C-48 and highlight some of the issues of concern.

Initially the NDP leader posed a question in the House to the finance minister as to whether or not there was any chance he might modify the first budget, Bill C-43. The Minister of Finance indicated that he might consider some technical changes, in the sense of being technical.

The leader of the NDP went fishing a little further and asked whether he might consider some substantive changes to the initial budget. The finance minister indicated he would not because, he said, one cannot start changing the budget. He had consulted with many people. He had consulted with all the Canadian interests. He had heard from the various interest groups. He had taken all that into consideration and, outside of technical changes, he could not do anything.

In fact, the Minister of Labour and Housing had proposed in advance of the budget that there would be $1.5 billion allocated over the next five years for housing and he was shut out. It was the minister who had proposed that to the finance minister. The finance minister said it would not be prudent given all the circumstances that he knew of. He said did not want anyone to “cherry-pick” the budget, to take any portions out of the budget. It was what it was, he said, he had come to a balanced approach and there was not any room to move.

Suddenly there was a $4.6 billion movement. That is not something that could be called a technical change to the budget. That, to my mind, is be very substantive.

However, when he was asked by the leader of the NDP whether he would be prepared to make any changes, he said he would not buy a pig in a poke. He said he would need to know exactly what was being talked about. When we look at Bill C-48, I am not so sure that the NDP did not sell itself for a pig in a poke.

When we look at the bill itself, it indicates that the minister “may, in respect to the fiscal year 2005-2006, make payments” with respect to the items indicated, provided there is a surplus of $2 billion, and similarly for the period of 2006-07. However, the budget agreement itself said the investments would be booked in the years 2005-06, again, only if there is a surplus and only if the minister decides that the money will be spent. We do not know exactly what it will be, but we know it will not be in excess of $4.5 billion.

When we read the initial budget agreement, which many have said was prepared hastily in a period of 24 hours, without essential consultation with the finance minister, we find that it actually was meant to be $4.6 billion. It is missing $100 million. Part of that $100 million was with respect to the investment that the NDP required for the protection of workers' earnings in the event of their employers' bankruptcy. That is not in the bill.

The Minister of Labour has been in charge of the area of workers' protection for some time; it has been in the House for a period of nine years. I ask, what has pricked the social conscience of the minister? The minister first of all agreed to the fact that it would be in the budget bill agreement of May 3, 2005, and then not in the act but in a separate piece of legislation.

That separate piece of legislation is a proposed amendment to the Bankruptcy and Insolvency Act. Let us see what the minister actually proposes in that bankruptcy act. He is suggesting that workers be given a superpriority, ahead of the banking industry and secured creditors, to the extent of $2,000. He then proposes that there be a wage protection fund totalling $3,000, with the understanding that in the case of the bankruptcy when the worker applies to that fund and gets paid, the worker assigns or subrogates all of the worker's rights to Her Majesty the Queen or the federal government, which then takes the place of the worker and collects back the $2,000 at the expense of the secured party.

If that bill should pass, anyone attempting to start up a business and to provide jobs for workers would find himself or herself being able to obtain a far smaller loan than before the legislation. If he or she had 50 employees at $2,000, the financial institution would deduct about $100,000 from a line of credit. That business may never start. In fact, existing businesses may have a hard time maintaining their lines of credit if the legislation were to pass.

I make that point to make this one. The Minister of Labour has indicated this legislation will cost somewhere between $30 million and $50 million. A good half or more of that would be recoverable by taking the funds from secured creditors by virtue of the preferred position. Therefore, in the net there was not $100 million, as agreed to in the budget bill agreement, but perhaps something like $16 million over the next year and another $16 million over the following year. That is an indication of the Liberals living up to their promises.

At the same time, we find there has been a piling up of dollars in various crown corporations such as CMHC. It is charging first time home buyers an insurance fee that results in profits being made by the organization to the tune of $800 million. In 2005 it is expected to rise again. In 2009 it is expected to rise to $1.175 billion, which should help first time buyers to buy a home. The government has made promises that require the funding of various programs, the use of multi-dollars, but primarily for the purpose of not helping those on the other side of it, but to help the Liberals stay in power, to help them cling to power.

As we heard my learned friend from Edmonton East, we have had a great amount of dollars spent in the housing area, but we have not seen any affordable units built. He indicated 25,000 or less housing were built after many years of Liberal spending. Where has that money gone? The minister has indicated that over $1 billion has been spend on what is called “protective care” or to look after those who are homeless or lack affordable housing. However, he has not provided the amount and type of units that are required.

The minister spoke recently in an interview. He realized that most of the moneys the Liberals had spent so far had been for emergency shelters. He also realized that the area of housing, first and foremost, it was a provincial jurisdiction. Yet when we look at Bill C-48, or the bill that was made on the napkin, it indicates that the money allocated for housing would be utilized without the agreement of the provinces. In other words, the federal government would decide where it will spend it.

In the interview to which I referred, the minister was asked how many permanent housing units the money would buy. The interviewer said, “I still do not have an answer to my question: $1.6 billion, how many units of affordable housing will you be building with that?”

Here is the Minister of Labour's answer, “A lot”. We know a few is seven or eight. What would a lot be? A lot would be more than seven or eight. When $50,000 or $80,000 is spent to subsidize a unit, or as my learned friend from Edmonton East said, to build a few number at great expense, it is not a wise use of money. She asked if he had a number and he never answered.

He said that once the budget passed, and he was in the process of working and meeting with his provincial counterparts, they would not have to put in a dollar. She asked him again if he was not going to delay. He replied that since July $700 million was still in the bank. It had been there for the past three or four years. The provinces had not taken the money already in place. What did he do? He met with them individually and collectively and asked them what it would take to start spending the government's money. He said that the government was starting to spend the money and, in his words, “building units like crazy”.

The point is it is not hard to spend money. Anyone can spend money, but spending it wisely and achieving the maximum return for that dollar is very important.

Behind all of this is the fact that while old money is not used up, new money is put in place to have a corrupt government cling to power and for no other purpose. When we divide the $4.6 billion by the number of members in the NDP, that is a pretty expensive buy.

[Peter Goldring, Conservative, Edmonton East, AB]

Mr. Speaker, I am pleased to speak to Bill C-48, the NDP budget, and to remind people that in the 2000 Liberal red book the government promised to build up to 120,000 units of affordable housing for $680 million by the year 2005. To date, there are less than 25,000 units of housing that have cost over three times that allotted funding that have been built, some $2.1 billion.

Bill C-48 commits $1.6 billion, with no plan and no number of housing units the government expects to build. It just simply does not know how many it would be able to build.

The current hodgepodge Liberal approach to affordable rental housing and homeless emergency shelters for single people is both financially wasteful and appallingly ineffective. Homeless emergency shelter usage and affordable housing availability for singles are interrelated concerns. A shortage of available low-cost, entry level rental units for singles leaves many no option but to seek very costly emergency social shelter space. Any discussion on housing needs must include a basic understanding of the most needy, the single people who dwell in Canada's emergency shelters.

It might be impossible to individually categorize all the sheltered homeless because some have varied levels of mental capabilities and addictions that generally inhibit independent, unsupervised living, let alone employment. Most of those living in homeless shelters are fully capable of paying their own way in modest, independent living and affordable homes, but none are available.

Canada's sheltered homeless population can be broken down by cause. Some 25% are what we call the de-institutionalized from the '70s. They are singles who are really in need of institutional care. Some 25% more are unemployable. They are hard-to-house singles with addictions. However, 50% are simply low-income singles in need of affordable rental housing.

Statistics Canada in 2001, the last year it took the statistics, said there were 14,150 homeless single persons in Canada's emergency shelter system. In Edmonton, there are 590.

Canada needs affordable rental housing for low-income families, but for those 14,000 singles in emergency shelters across the country who are able to live independently, the need is great for simple, entry level, single-room housing. Research has indicated that 50% of those residing in the shelters are actually low-income individuals with some income but with no independent living rental housing alternatives.

Federal funding flows into replacement emergency shelters, assisted living, transitional social shelters, but not into the building of independent living, private, singles homes.

Nationally, 75% of all private, single-person, entry level rental housing has been torn down or closed down over the last 30 years and has not been replaced. During the same period, singles homeless emergency shelters have been expanded and are now one of Canada's fastest growing industries.

Unavailable, private, $350-per-month, self-paid, and entry level singles homes have now been replaced out of necessity by $1,500-per-month emergency shelter and transitional social shelter, industry-taxpayer paid emergency beds.

One contributing problem is that affordable housing funding agents are very disconnected from the emergency shelter funding agents and, sadly, neither prioritize the true need for private, basic, entry level, singles, independent living rental homes.

New, multiple unit, family rental apartment housing numbers have also drastically declined over the last 30 years while new multiple unit condo ownership apartment housing numbers have grown. Over 30 years ago, 90% of all multiple unit housing being built were rental units. Today, 90% of all multiple unit buildings are condo ownership apartments and the very few rental apartments being built are not entry level, economical apartments but upscale, expensive, luxury units.

While Canada's population has grown greatly, society's most basic housing need has not changed. Virtually all of us first leaving home are low income earners and rent because we cannot afford the down payment to buy a house. The need for affordable, entry level rental housing is great, but assistance by government to help create more should not be made in isolation from private, professional rental owner market forces.

The decline in the new rental construction market and an increasing need for affordable rental units must be explored statistically to determine what went wrong with the marketplace. The private rental market knows that affordable rental housing begins by building economical basic entry level housing, with fees, levies and taxes no higher than those for home ownership, and allowing private developers to access funding meant to encourage construction of new affordable housing.

Private developers of economical, multi-unit rental projects are discouraged by the barriers against building new rental units, such as proportionally higher property taxes, higher construction fees and levies, as compared to ownership condo units. Excessive city planning aesthetic requirements unnecessarily add considerably to costs of economical basic housing.

Research would show that these barriers are more numerous and much higher than they were 30 years ago. In short, fees, levies, grand municipal architecture vision and taxes have together served to halt development of building basic rental apartment units, while artificial rent controls and rent subsidies made certain new development would not start.

The federal Liberal government position on affordable housing and homeless funding is little different from the NDP's 1% solution, other than that the Liberals put more money into it. The federal government has failed to provide provinces and municipalities with statistical guidance that would help them understand the barriers and offer solutions to affordable rental home development. Instead, the Liberals bring out the federal chequebook, which, with poor guidelines and no remedial long term measures, actually exacerbates the problem and loads more taxation burden on the fewer and fewer unsubsidized rental taxpayers.

Proper statistical analysis of the cause and effect of taxation, fee burdens and subsidies would point to long term solutions for governments to recognize the problems and then work toward correcting them.

Once again, in the 2000 election red book, the promise was to create 120,000 homes for 680 million before 2005. Less than 25,000 have been committed to construction to date.

Non-profit landlords have many times received up to 100% of the project funding from multi-sourcing of taxpayer funding grants, pay no property taxes and charge just slightly less than market average rents. Liberal funding mismanagement is quickly destroying what little is left of the private competition in rental housing. The problem is that the federal Liberal government has no more idea of how to effectively control these funds than does the NDP.

Most of these funds were disbursed over the last five years and very little housing has resulted. Properly planned and disbursed, the $2.1 billion, partnered with provinces, could have helped build over 150,000 new homes and could have half emptied Canada's emergency shelter spaces.

Over 50% of Canada's 15,000 emergency shelter units have some money and could pay themselves for moderate entry level single room homes, but none have been built, and sadly, the $2.1 billion has leveraged no more than 25,000 homes, most of them social non-profit housing. Meanwhile, private developers would build, pay taxes and rent apartments at less than market rents for a fraction of the grants now being made, but they are discouraged from applying.

We need to return to the competitive enthusiasm of the private rental building construction market of the 1970s, where literally thousands of very affordable modest apartment buildings were built for entry level renters. The cause of today's affordable rental housing crisis is that we no longer build significant quantities of very necessary affordable housing for entry level renters.

Statistically identifying and then working with the federal-provincial-municipal departments to remove the barriers that inhibit private rental development should be the first priority. Then we must work with the provinces on a plan to proceed with workable guidelines to encourage competitive private enterprise to return to the business of building, owning and renting affordable entry level housing.

Throwing more billions of dollars at the problem without a plan most certainly will not address the housing needs of low income and homeless Canadians. It will only continue a trend of policy incoherence and ineptitude.

The promise made in 2000 was a promise broken. The government did not create a fraction of the homes promised. The money grew to $2.1 billion and produced less than 25,000 units. Of the provincial-federal share, that is approximately $170,000 per unit produced, a colossal mismanagement on a monumental scale. Shamefully, this bill is not about building housing. This bill is all about buying votes.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Speaker, the $4.6 billion that was promised in the original budget and taken out of Bill C-43 was going to be targeted toward corporate tax relief to make our industry more competitive, to create more opportunity for reinvestment and job creation. We like to throw out rhetoric as to what is meaningful, but any dollar that we can put back in the pocket of Canadians is meaningful. I will trust Canadians any day of being able to spend their money more wisely than the government. We need to give them that opportunity and put those dollars back in their hands.

We have been debating the bill for some time now along with Bill C-43 and I have not heard anything from the other side that would convince me that if Bill C-48 were so important, that the Liberals would have put it in the original budget. They have never come out and said that it is a good idea. Bill C-48 represents only one thing and that is to buy NDP votes to ensure that the Liberals stay in power. That is what it is all about.