Unanticipated Surpluses Act

An Act respecting the allocation of unanticipated surpluses and to amend the Income Tax Act

This bill was last introduced in the 38th Parliament, 1st Session, which ended in November 2005.


Ralph Goodale  Liberal


Not active, as of Oct. 7, 2005
(This bill did not become law.)


This is from the published bill. The Library of Parliament often publishes better independent summaries.

The enactment authorizes the Minister of Finance to make, in respect of fiscal years 2005-2006 and 2006-2007, certain payments out of the annual surplus that is in excess of the sum of $3 billion and the amount paid in respect of that fiscal year under An Act to authorize the Minister of Finance to make certain payments, being chapter 36 of the Statutes of Canada, 2005. It also authorizes the Minister of Finance to make, in respect of fiscal years 2007-2008 to 2009-2010, certain payments out of the annual surplus that is in excess of $3 billion. The enactment allocates the amounts authorized to be paid as follows: one third to tax relief, one third to spending priorities and the remainder to reduce the accumulated deficit for the fiscal year.

The enactment also provides a mechanism for increases to the basic personal amounts under the Income Tax Act for taxation years 2007 to 2010 in addition to those implemented in the Budget Implementation Act, 2005, so long as the increases are considered to be fiscally sustainable.


All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Business of the HouseOral Questions

November 24th, 2005 / 3 p.m.
See context

Hamilton East—Stoney Creek Ontario


Tony Valeri LiberalLeader of the Government in the House of Commons

Mr. Speaker, I see the hon. member across the way is displaying his charm once more.

I also think the hon. member understands clearly that the call for the election and, ultimately, if there is an election caused, it will be the opposition members who will have to take responsibility since they will be voting to dissolve Parliament and we will be voting to sustain Parliament in order to continue the work that I will now lay out.

This afternoon we will continue with the opposition motion.

On Friday we will call consideration of the Senate amendments to Bill C-37, the do not call bill; report stage and third reading of Bill S-36 respecting rough diamonds; report stage and third reading of Bill C-63, respecting the Canada Elections Act; and second reading of Bill C-44, the transport legislation.

We will return to this work on Monday, adding to the list the reference before second reading of Bill C-76, the citizenship and adoption bill; and second reading of Bill C-75, the public health agency legislation.

Tuesday and Thursday of next week shall be allotted days. There are some three dozen bills before the House or in committee on which the House I am sure will want to make progress in the next period of time. They will include the bill introduced yesterday to implement the 2005 tax cuts announced on November 14; Bill C-68, the Pacific gateway bill; Bill C-67, the surplus legislation; Bill C-61, the marine bill; Bill C-72, the DNA legislation; Bill C-46, the correctional services bill; Bill C-77, the citizenship prohibitions bill; Bill C-60, the copyright legislation; Bill C-73, the Telecom bill; Bill C-60 respecting drug impaired driving; Bill C-19, the competition legislation; Bill C-50 respecting cruelty to animals; Bill C-51, the judges legislation; Bill C-52, the fisheries bill; Bill C-59 respecting Investment Canada; Bills C-64 and C-65 amending the Criminal Code.

In addition, there are the supplementary estimates introduced in October that provide spending authority for a wide variety of services to the Canadian public and we the government would certainly like to see this passed.

SupplyGovernment Orders

November 17th, 2005 / 1:05 p.m.
See context

Beauséjour New Brunswick


Dominic LeBlanc LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, I rise today to discuss the opposition motion presented by the leader of the New Democratic Party which proposes that the Prime Minister should ask the Governor General to dissolve Parliament during the week of January 2, 2006, and set the date for the election for February 13, 2006.

I must admit that it is a bit disappointing that the NDP has not put forward a substantive motion for debate today. Last time around, the NDP took a constructive approach to its opposition days by putting forward issues that matter to Canadians. For example, Canadians had the benefit of a full discussion on such matters as environmental aspects of automobile emission standards, access to employment insurance, which is obviously a big concern in my riding and in other rural communities across the country, and the health risks of trans fatty acids.

Today, the NDP wants to talk about scheduling, about how to ignore constitutional convention and speed up the next general election by a mere eight weeks.

Clearly, the priorities of opposition members have changed. Today, they are more interested in procedural tactics rather than substantive issues that Canadians want this Parliament to address. Opposition parties are not interested in the process of governing. The opposition day motion today is really about manipulating the parliamentary and electoral calendar to serve what are clearly partisan interests.

The motion calls for an election to be held on February 13, 2006, despite the fact that the Prime Minister has already promised to call an election in early 2006.

The Prime Minister made that promise to Canadians last spring. We all know by now that an election will be called within 30 days of the final report and recommendations of the Gomery inquiry, which are scheduled to be tabled on February 1, 2006.

According to the Prime Minister's promise, the next election will be held in March, or early April at the latest. By then Canadians will be familiar with Justice Gomery's recommendations and will be able to benefit from a much improved legislative environment.

Nonetheless, that is not enough for the opposition. They want to hold an election in mid-February, which is 8 weeks, at the very most, before the date the Prime Minister proposed to all Canadians on national television.

An election any sooner would be held before Justice Gomery has completed his work, and therefore, before Canadians have all the answers regarding the problems with the sponsorship program and—equally important—regarding the measures that will need to be taken to prevent such a situation from happening again.

It will be incumbent upon the opposition parties to explain to Canadians why they are disrupting the work, not only of the government, but also of Parliament, in order to force a premature election in the middle of winter, thereby going against what most Canadians want. In fact, Canadians are still waiting for a good reason for all this.

The opposition parties are saying they do not have confidence in this government. Yet, they want to use opposition days to confirm their confidence for a just few more months. This flagrant contradiction highlights the purely political motivation behind today's motion.

As the government House leader indicated, some opposition members seem to believe that the notion that a government must have the confidence of the House was somehow divisible, that we could have confidence today, but tomorrow? Maybe in a few weeks they would see if they had lost confidence. The government would continue to govern, until they decided to put that loss of confidence into effect.

I said a couple of days ago that the opposition members seemed to think that confidence in government, in parliamentary terms, was like Christmas lights. We turn them on in the evening, we turn them off in the morning and then we put them away in January. Canadians will not be fooled by that simplistic analysis.

When the first minority government in 25 years was elected in 2004, the government committed to doing things differently in Parliament. Canadians expected us, as members of Parliament, to work constructively together. The record shows in many cases we have been very successful. In just 19 months we have delivered on a broad range of initiatives that will advance the interests of Canadians and continue to ensure Canada's place in the world.

For example, we passed legislation to implement the 10 year plan to strengthen health care. A federal adviser on wait times was appointed. Steps continue to be taken so we can work with the provinces to protect Canada's public health system.

We passed legislation to implement fundamental reforms to the equalization program. This balanced approach ensured that all Canadians could benefit from social services and enjoy the same quality of life, regardless of the province in which they live. These improvements mean additional resources, additional moneys being transferred to my province, the province of New Brunswick. We already have seen an improvement not only in social services, education and health care, but improvements in infrastructure as well. The government and people of New Brunswick benefit by this cooperative approach.

We passed legislation respecting civil marriage to respect the fundamental values of equality and religious freedoms as well.

We passed legislation to implement a new deal for cities and communities. This unprecedented initiative brings together the federal government, provincial governments and municipalities to ensure that the infrastructure of our communities is responsive to local needs, culturally vibrant and environmentally sustainable. Again, small rural communities in my constituency benefit from this type of initiative.

We transferred, for example, the full refund of GST paid by municipalities as simply a down payment on the new deal for cities and communities. If the government of New Brunswick would organize itself to negotiate a deal with the federal government, municipalities in my constituency and throughout New Brunswick, as well as small rural communities, would benefit from this important initiative.

We passed legislation to implement our climate change plan and meet our Kyoto commitments. In two weeks, Canada will begin hosting the conference of the parties to the Kyoto Protocol in Montreal to make further progress on our important climate change commitments.

To ensure Canadians have the best opportunities to flourish, we passed legislation to implement early childhood learning and child care agreements, which we have reached with many provinces.

To keep Canadians safe, we passed legislation to protect them from pornography and Internet luring.

I am proud of the record of this Parliament so far. We were able to pass a budget bill that further accelerated our priorities in public transit, in housing, in post-secondary education, in national defence and in foreign aid.

We made major changes to improve the employment insurance system, something that is very important to seasonal industries in my constituency. We removed many of the disincentives to work, which created a bizarre situation where a worker in a seasonal industry would go to work for what might be a shortened work period for reasons beyond the control of the worker. If the lobster season was not as productive that week, if the weather did not allow a certain harvest to take place, the workers were disadvantaged by a system which calculated employment insurance based on recent weeks as opposed to best weeks. We changed that in this Parliament and the government has served the needs of seasonal industries and seasonal workers very well, certainly in my constituency.

Contrary to the opposition parties, I believe there is still much work to be done. A premature election could jeopardize over 40 bills currently in the House, bills that would provide important benefits to the well-being of Canadians and to the competitiveness of Canada.

For example, Bill C-67, the unanticipated surpluses act, reflects the government's balanced approach to fiscal management by providing a proportional allocation of unanticipated surpluses to permanent tax reductions, targeted investments and debt relief. Our ability to allocate surpluses is a direct result of the sound financial stewardship of the Minister of Finance and of his predecessors.

Bill C-68, Canada's Pacific gateway act, provides the foundations for expanding our trade with the growing economies of countries like China and India and other Asian countries. This has been a priority for our government. The government of British Columbia has urged us to take action on the Pacific gateway. This is what the government is doing to ensure that the Canadian economy as a whole can prosper by the great opportunities that these markets present.

Bill C-11, the whistleblower's bill, is currently before the Senate and provides vital protection for employees who courageously come forward to blow the whistle on wrongdoing in their workplace. The bill reflects the hard work of many members of Parliament, members from Vegreville—Wainwright, Winnipeg Centre and Rimouski-Neigette—Témiscouata—Les Basques. I do not think those members want Bill C-11 to die prematurely.

Bill C-37, the do not call list, is also before the Senate. It reached the Senate through the support of all parties. Jeopardizing this work for the sake of electioneering at Christmas time does not benefit Canadians.

Earlier this month the government supplementary estimates requesting from Parliament the funds needed to implement the programs that allow federal initiatives to operate. These supplementary estimates include additional investments for defence, immigration, climate change, infrastructure, public security, the health of first nations and federal-provincial partnerships.

For example, the estimates include $15 million to implement the veterans' charter; $36.4 million to alleviate and prevent homelessness; over $230 million for investments in first nations communities and first nations peoples; $102.9 million to mitigate the impact of BSE; $34 million to aid the softwood lumber industry; $74 million for the agricultural policy framework; and, $1.1 billion to enhance Canada's national defence.

This is only a sampling of the productive agenda the government has for the next few months and the government continues to move forward this fall to deliver on our commitments.

Next week we will have, for example, a first ministers meeting with aboriginal leaders in British Columbia to address the challenges faced by our first nations. First nations leaders have stressed how important this meeting is for their communities. It would be the responsibility of opposition parties to justify jeopardizing the results of that meeting with a premature election.

Later this month the Minister of Justice will unveil a package targeted at gun crime, which we all know is an important challenge for our cities and for the safety of our communities. This Monday the Minister of Finance presented his fall economic and fiscal update, which proposes significant tax reductions for Canadians and a prosperity plan for Canada's future.

Over the next five years more than $30 billion in tax relief is proposed and over 95% of that would be delivered through personal tax reductions. In addition, significant investments are proposed to create access to post-secondary education and encourage lifelong learning so Canadians can continue to be competitive workers in the global marketplace. Combined with investments and research, innovation and social capital, the economic update sets the stage for accelerated growth and prosperity for the nation.

It is important to highlight that student associations across the country were particularly pleased with the investments in access to post-secondary education. In my constituency I am fortunate enough to have Mount Allison University in Sackville, New Brunswick. The student groups there had spoken to me many times about the heavy financial burden of a post-secondary education. The measures announced by the Minister of Finance will help the students at Mount Allison University.

These measures will help students in my riding who are registered at the University of Moncton, for example. In fact, students across the country will benefit from these very important measures.

This is where the government's focus has been on governing. Canadians are tired of politicians playing partisan games. It is little wonder that cynicism about politicians is on the rise when people spend more time worrying about the timing of the next election than advancing the interest of their constituents in this Parliament.

Government members are here to represent their constituents and to work on making this Parliament successful. I have outlined the number of important initiatives that we have before us. We know there is an impending election that will follow the finance report of Justice Gomery. In the meantime Canadians expect us to roll up our sleeves and to get to work on delivering the commitments that we have all made to our electors.

The election will be at some point in early 2006. That was the Prime Minister's commitment. However, Canadians also want answers from the Gomery commission's final report before going back to the polls. That also was the Prime Minister's commitment. In the meantime, all parliamentarians should spend time working on the legislation that is before the House, that is in committee and that is in the Senate. They should be looking at many interesting private members' initiatives that are coming before Parliament.

In closing, I believe that Canadians want us to work together on what concerns them and on improving their lives and the lives of their families and fellow citizens. They hope the work we do here in Parliament will improve their quality of life. They do not want the debates to end in the partisan bickering that does little to honour this Parliament.

SupplyGovernment Orders

November 17th, 2005 / 11 a.m.
See context

Hamilton East—Stoney Creek Ontario


Tony Valeri LiberalLeader of the Government in the House of Commons

Madam Speaker, I suggest there are a number of fundamental problems with today's opposition motion. I will point to a few of them.

First, it is fundamentally inconsistent with the basic principles of a parliamentary democracy which in fact have guided us throughout the history of this institution. It is a serious matter to change long-standing principles and practices with no consideration to the future members of the House of Commons.

The opposition parties essentially are willing to play some political and partisan games with our constitutional conventions. We can hear them laughing across the way. It is exactly what Canadians expect from the opposition parties when talking about our Constitution, nothing more than heckling and laughing. Those parties have proven they do not have any respect for the Constitution.

I want to make a few points and then during the question and answer period we can allow the members opposite to stand and rant and rave, as we expect they will. Nonetheless, I would like the opportunity to make a few points.

We have seen a time when members have worked quite well and quite cooperatively in the House, even in the face of challenges with what the opposition parties were looking to do. Canadians ultimately want to see a House that works on behalf of their initiatives. The House of Commons needs to work on behalf of the citizens.

Canadians want their members of Parliament to work on public business, not the private ambitions of any one party leader. Canadians want parliamentarians to debate the issues that are important Canadians, to address their daily concerns and what they are worried about. In fact, Canadians have not been getting legislation or policy that might make their lives better, more prosperous perhaps, and secure. What they are getting from the opposition parties is endless partisan posturing, political games and positioning for electoral advantage, quite frankly.

Members opposite always quote Canadians to suit their particular position. I have talked to Canadians and they have said that things in Parliament are not going well and members are yelling and screaming at each other all the time. I continue to make the point that we put forward and passed what I believe are important initiatives. But we have a situation now where the opposition parties, in particular the leader of the NDP, has put forward a motion that in fact does not fit with the constitutional requirements of this country.

I have to say that it is not only I who might say that. I am not alone in asserting that today's motion is a violation of long-standing democratic principles and practices of Parliament. The official opposition has said, and I believe the opposition House leader just said that the government needs to have the confidence of the House. That is absolutely correct. That is the way our system works. It is based on long-standing democratic principles.

The opposition parties collectively, since they are all supporting this particular motion, through the leader of the NDP are saying they want to vote non-confidence in the government today, but they want to have the consequences essentially some time in January because it suits their political purpose. They are saying they do not want an election during Christmas, but they want to vote non-confidence today and have the election later on. In the meantime, while the House remains in session, the House presumably would be passing important initiatives for Canadians that we put forward as a government and they would be voting confidence in the government, all the while indicating that they have no confidence in the government. The opposition wants to defeat the government, but not for another month and a half or so.

Parliament does not work that way and Canadians understand that. We cannot divide confidence. Confidence is not divisible. It cannot be cut up into little pieces and apportioned over different periods of time saying, “It is okay to pass this piece of legislation which is a confidence bill and we understand that. We will pass that bill, but we do not have confidence in the government. The government should not be allowed to put forward programs that expend Canadian taxpayer money because we do not have confidence, but we will hang around while the government does that and then we will come back and say we do not have confidence in the government again in January”.

The government very clearly either needs to have the confidence of the House or not. It is very simple. It is the way the system has worked for a long time. It is very clear to Canadians that the government must have an ability to make decisions that have an impact on Canadians going forward and it must be able to do that knowing that it has the confidence of the House, or at least the confidence of the majority in the House. Even if there are people who do not have confidence in the government, if the government does not have the confidence of the majority of the House, then it is unable to function as a government.

The opposition parties, in what they are saying and what they are reporting in the media, are essentially saying that they do not have confidence in the government, but what they are afraid to do is to take responsibility for what that may cause.

When a motion of non-confidence is put on the floor of the House of Commons, when the opposition parties vote for that and the motion passes, there is an election. The opposition parties have to take responsibility for that. They should be able to say, “We are causing an election. It will be during Christmas. We are dragging Canadians back to the polls even though two-thirds of Canadians agree with what the Prime Minister is saying and his call for an election in the spring, within 30 days of Justice Gomery's report”.

The hon. member opposite said that we should wait another five months for that. He is perfectly free to say that, and I am not going to argue that position because that is the position the opposition parties have taken, but what they must do in that instance is put forward a motion of non-confidence, not a motion that suggests they do not have confidence now but the effect will take place some time in the future because they do not want to have an election at Christmas. They are trying to position themselves as not having to take responsibility for a Christmas election, but Canadians will know that is where the responsibility will lie.

The opposition parties have had an opportunity to put forward a motion of non-confidence. While they go out and speak to the media and say they do not have confidence, in the House, in this chamber, they had an opportunity to do that today and they did not. They had an opportunity to do it this past Tuesday and the opposition parties did not. They will have an opportunity to put forward that motion either next Tuesday or next Thursday. They have an opportunity to express no confidence in the government by voting down confidence bills or important bills to the government. They have an opportunity to express non-confidence and vote down the government's spending estimates which provide moneys for ongoing programs.

The fact that the opposition parties have sought not to do so clearly shows to Canadians that it is not just an issue of confidence that is truly at stake here, there are some partisan political considerations.

The leader of the New Democratic Party has cited a couple of constitutional experts, but the majority of constitutional experts have sided with the government's approach on this motion. The opposition parties continue to say that even in this minority government, the Prime Minister does not have the right to set the election date.

I will quote Ned Franks, a professor at Queen's University who said:

It is the Prime Minister's right and prerogative to go to the Governor General and ask for a dissolution of the House. It is not Parliament's. That's very clear.

David Docherty has said:

[The opposition's] saying, “We like the things you've done but unless you let the opposition decide when there's an election, we will pull the plug and not only not get things done that we think are important, but quite frankly, not get things done our supporters think are important”. In short, they simply can't do it. Parliamentary non-confidence is very specific. It's non-confidence when there is a vote of non-confidence. If it's a money bill, a speech from the throne, a matter the government says is confidence or there is a motion of non-confidence, those are the times that it's clear.

That is what we are saying. Canadians should not be fooled. There is a lot of political rhetoric that is swirling around this place, but the government either has the confidence or does not have the confidence of the House and it is up to the opposition parties to express that.

When Canadians elected their first minority government in 25 years they expected their representatives to work together. They still expect that. They also indicated they wanted us to continue working on their priorities, Canadian priorities, not the political priorities of opposition parties.

The Prime Minister made a commitment to Canadians. He went on national television and said that he would call an election within 30 days of the second Gomery report. He made that commitment and he wants to adhere to it.

I would say that Canadians want their government and their Parliament to deliver results and that is exactly what I have been trying to do and what the government has been doing. We have almost 90 bills before this Parliament.

The opposition parties have indicated that the House of Commons has no confidence in the government but the government has successfully met more than 40 confidence challenges and has been able to continue.

We have a strong record with respect to legislation passed on health care, equalization, a new deal for cities and communities, the offshore accords, climate change and early learning and child care. It is a strong record that we will take to the Canadian people and the Canadian people will decide.

We know Canadians want government and Parliament to focus on their priorities. They do not want a premature election. They do not want their representatives to be focused on political gamesmanship. They want the government and Parliament to deliver results, which is exactly what we are doing.

We are continuing to move forward with these priorities. The Minister of Finance has presented his fall economic and fiscal update that proposes further tax reductions for Canadians, a prosperity plan for Canada's future and it delivers more than $30 billion in tax relief in the current year and the next five years. Over 95% of that tax relief will be delivered through personal income tax.

Sadly, on the one opposition day available to the NDP in this supply cycle, it has chosen to focus on tearing this House down rather than building up this country. I have to say that the opposition day motion is an attempt by the opposition parties to demonstrate no confidence by not putting a motion before the House of Commons and saying that they have no confidence, but having that effect happen some time in January, is pretty convoluted. There has not been an expert out there who has been able to understand it.

We go back to the point of Gomery and when Gomery reports a second time. I know the opposition parties are arguing that can happen anyway and that this is all about some strategy.

The Prime Minister, when making that commitment to Canadians on national television, said that Canadians had the right to all of the facts of the Gomery Commission and all of his recommendations. However they also have a right to hear the response of the government and the response of the opposition parties before they cast their ballots. The opposition should be able to tell Canadians why they are afraid to wait for the final Gomery report before an election is called. If the opposition parties are not afraid, then they should be able to say that.

The commitment made by the Prime Minister was very clear. He said that within 30 days of the final report he would make that call. Obviously, it is not good enough for the opposition. They want an election to take place some time in February, which is four to eight weeks earlier than the Prime Minister's commitment to Canadians, but that is the choice they can make. What they should not do is try to hide behind some muddy motion that is not clear to Canadians.

We are talking about four to eight weeks and, if they want an election earlier than four to eight weeks, then they should stand in their place, put down their motion and have this place work the way it is supposed to work. If there is no confidence in the government, then drag Canadians back to the polls during the holiday season and have Canadians ultimately decide. That is the way it works.

The opposition parties are insisting that if we do not accept today's motion, then they will vote non-confidence in the government. They either have the confidence or not. We are focused on moving forward important government initiatives, not spending this day debating a motion that really has no effect.

As I have said, it is the opposition's right to defeat the government if they do not have confidence in the government, but let us consider for a moment the cost of defeating the government before we get through this legislative agenda.

We have Bill C-67, the unanticipated surplus bill; Bill C-68, the Canada Pacific gateway bill; the whistleblower bill in the Senate, which is essentially a bill that has come out of committee with a number of amendments that all parliamentarians provided; and Bill C-37, the do not call list, which is also before the Senate.

By defeating the government from passing its supplementary estimates, it would prevents $1.1 billion for the Department of National Defence, nearly $200 million for investments in public infrastructure and nearly $120 million to promote peace and stability in fragile states.

The opposition parties also jeopardize the possibility of real concrete action stemming from the first ministers' meeting with aboriginal leaders in Kelowna next week. Phil Fontaine, Chief of the Assembly of First Nations who is opposed to Mr. Layton's motion, said that Mr. Layton's pledge to defeat the government could erase “all of the good work that we've done”.

Business of the HouseOral Questions

November 3rd, 2005 / 3:05 p.m.
See context

Hamilton East—Stoney Creek Ontario


Tony Valeri LiberalLeader of the Government in the House of Commons

Mr. Speaker, this afternoon, we will continue the debate at third reading of Bill C-54, the first nations resources bill.

When this is complete, we will consider reference before second reading of Bill C-50, respecting cruelty to animals. I expect that this business will carry over to tomorrow. We will then add to the list second reading of Bill S-36, respecting diamonds and second reading of Bill C-44, the transport bill.

When the House resumes on November 14, we will return to second reading of Bill C-68, the Pacific gateway bill; Bill C-66, the energy bill; and Bill C-67, the surpluses legislation.

We will also then return to any business from this week that is unfinished and if time permits, consider second reading of Bill C-61, the marine bill.

November 15 and November 17, as the hon. member across the way would have known weeks ago had he been at the House leaders meeting, will be allotted days. On Tuesday evening, November 15, we will have a take note debate on the Canadian mission in Afghanistan.

Accordingly, I will propose the required motion pursuant to Standing Order 53.1(1). I move:

That a debate pursuant to Standing Order 53.1 take place on Tuesday, November 15 on the subject of Canada's military mission in Afghanistan.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 5:05 p.m.
See context


John Cannis Liberal Scarborough Centre, ON

Mr. Nunziata did not resign on that and the member knows that very well.

The member also said “squandered the money and nothing to show for it”. As I said earlier, thank God for immunity in this chamber. The member is known to be one of the greatest story tellers in this chamber.

Let me also tell him where we have indeed squandered this money. The national debt then was $562.9 billion. Today it is $499.9 billion. The debt to GDP ratio was 68.4%. Today it is 38.7%. Our foreign debt to GDP ratio was 43% in 1993. Today it is at 15%. The debt charges to revenues were then at 37.6% in 1995-96. Today they are at 17.2%. Unemployment, as I said, was 11.2%. Today it is at 6.7%. Over 3 million jobs have been created.

That is squandering? Take the almost $43 billion, the debt the government inherited from the true Progressive Conservative Party, and eliminate it. If the government takes almost 60-odd billion dollars that the debt has been retired by, that is over $100 billion. If that is fiction, then I must look that word up in their new dictionary. If we add over the past five years the $100 billion of tax relief to Canadians as a whole, that is almost $200 billion. Then add the various other investments in seniors with respect to GIS most recently, in housing, in health care, in Sports Canada, the offshore accord and the list goes on. These are not only hundreds of millions of dollars. These are billions of dollars.

We have the cities agenda, the GST rebates. The Federation of Canadian Municipalities has applauded the Liberal government continuously for the support it has been getting.

Then there is national defence. I happen to be the chair of the national defence committee. Almost $13 billion has been invested in national defence. We need to do more because now our obligations internationally have changed. If there ever were a time to support our men and women in uniform, this is the time to do it. I do not want to get off topic there.

Crimes rates, which were also very important, back then were about 7.5% to 7.8%. Today crime rates are hovering around 3%. What does this do? This allows our economy to move very positively. This allows young couples, for example, to buy homes. That quarter of a per cent or 1% makes a big difference in their monthly income.

For a moment, I want to talk about the EI situation discussed earlier. That is a very important issue for people to understand. I know I have heard comments from Bloc members who have said that we took money that did not belong to us.

I tend to look at the government or the country as one big family. I know when I was growing up and the revenue was coming into the household, my mother did not say that this was her share. Nor did my father. They did not say that this was her bank account and that was his account.

My parents said that it was one account because it was family. They looked at their expenses such as shopping, paying the mortgage and paying other expenses, et cetera. If there were money left over at the end of the year, they had the opportunity to go to the bank and pay down the mortgage in an accelerated way. This allowed the debt to be reduced as quickly as possible. Then whatever money would be left over would allow them to address other needs, whether it be in post-secondary education or a car for the household, or a vacation or whatever.

Why did I point that out? Because part of Bill C-67 would do exactly that. I was pleased when the Prime Minister, the then minister of finance, brought forward this program with the support of all of us as colleagues at that time, the contingency initiative of $3 billion. He said that we would go down the list of expenses. In addition, we had the contingency fund for a rainy day. That is good money management and proper thinking.

If the government does not use that money for unexpected expenditures, it then can take and pay down that mortgage or pay down that debt, which is what we have done year after year.

The government could not have done that. We could not have been in the position to do that if we had not made those tough decisions back in 1993, 1994 and 1995, to streamline government, to change the way things operated around here. Doing that has provided us with eight consecutive balanced budgets. It provided us with surpluses never heard of before in the history of our country. I do not think another country could say the same thing.

What have we done year after year? We have taken a good initiative toward retiring the debt. If the contingency fund is not utilized, that too will go toward addressing debt retirement.

Bill C-67 would go beyond that. It would let Canadians know that we have heard them. Constituents on my streets in Scarborough Centre repeatedly ask for a fair deal. They want a balanced approach. Meaning what? They want some tax relief. They want the government to invest in programs that they want. Some were addressed, and I mentioned them earlier. Canadians want us to look at debt retirement. That is exactly what Bill C-67 would do. In addition, a $3 billion contingency has been set aside. This is planning for a rainy day.

I am quite proud to stand here today almost 12 years later. I appreciate the comments from the member for Edmonton--Sherwood Park who pointed out that time flies. We both were elected some 12 years ago in 1993. We have enjoyed some good moments together and some heated debates.

I like all my colleagues feel very proud that we have put ourselves in the position where we can give the Minister of Finance the ability to bring forward something such as Bill C-67. This tells Canadians once again that we are listening to them, that the balanced approach we talked about in 1993 has continued.

This initiative is not revolutionary. This initiative is simply one of common sense. It makes a lot of decent sense. I do not want to hit below the belt, but I am compelled at this point in time to respond to my colleagues.

One reason I decided to seek political office in 1993 was this. I was tired of seeing good revenue come into the country, yet a Conservative government could not meet its budgets. In the late eighties and earlier nineties I was an independent businessman who did not mind paying taxes. I felt that if I were paying taxes, it meant thank God, I was doing okay. The Conservative government at that time was following this Reaganomics agenda. It did not meet one budget target in the nine years it was in government. I challenge those members to tell me that is not true.

The Parliamentary Secretary to the Minister of Finance quite eloquently pointed out how the Minister of Finance at that time, Mr. Wilson, wanted to do the right thing. Unfortunately, he kept having the rug pulled out from under his feet all the time and was not allowed to implement some of his proposals. Things might have been different. Why could that government not meet one budget target?

Bill C-67 is an add on to what we have been doing. It is showing accountability to Canadians. It is making things more transparent. We are judged on what we did yesterday. The $100 billion tax relief of 2005 is reflective of what we are doing here now. Canadians can rest assured that this proposal will come to fruition. It will show them the fruits of their consideration for us over the years. We will keep our word.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 5:05 p.m.
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John Cannis Liberal Scarborough Centre, ON

There we go. Those members even contradict each other. They cannot even agree on that side. One says that is a premium and the other says that it is a tax. It shows us what their policy is all about.

I want to touch upon the word “premium”. What has happened again is another reduction in the EI premium.

Back in 1993 our unemployment rate was 11.2% and 11.3%. The corporate world said to the government that it wanted to create employment, but it wanted the government to address EI and lower the rates. For so many consecutive years EI premiums have been reduced, and most recently again, with tens of billions of dollars less being paid by the employer and the employee.

If that is another fiction, then I challenge the member for Cambridge or anyone else across the way to talk to their constituents. Ask them if they were paying more then and less now. Members will get the answer. If they think it is peanuts, that is fine.

Members over there have the tendency to only complete half the sentence. The member talked about the GST. I state here and now that I am willing to take up the challenge with the member. In the 1993 red book we said that we would replace the GST with an equally revenue generating tax. He knows very well that unless we have revenue coming in, we cannot address areas such as Bill C-67, or Bill C-43, or Bill C-48, or $41 billion for health care, or money for post-secondary education, or money to address the concerns with respect to our environment or the close to $13 billion for our military. If this money is not generated, from where is that revenue going to come?

As I close my remarks, I first challenge the member to come and see me. I will show him the quote in the newspaper and the quote in the red book. Canadians until this very day are asking us why did we not get rid of the GST. We did not promise to get rid of the GST. We promised to replace it with an equally revenue generating tax, and that is in writing.

Second, the proof is in the pudding. Certain provinces have already harmonized. If other provinces were to pick up on that lead, it would be indeed a savings to the provincial governments.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 5 p.m.
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John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, before I speak to Bill C-67, I would like to respond to my colleague from Edmonton—Sherwood Park when he used the hockey team analogy. He was very right in his response to a question from the parliamentary secretary when he said that if a hockey team charged $1 million for a seat in a hockey arena, the arena would be empty and there would be zero revenue. He is absolutely right, but that is if $1 million is charged. That is the key. If a reasonable fee is charged that hockey arena will be filled. That is what the National Hockey League did recently. It came to that realization.

From 1993 until this very day the Liberal team realizes that we have to use a balanced approach. We have to come to grips with what is going on in this country and tell people the truth, basically deal with it and say what the problem is and what we have to do. That is what we did in 1993.

Today we are discussing Bill C-67, the unanticipated surpluses act. Earlier on the gentleman from Abbotsford was a bit confused about the summary of the bill. I want to take this opportunity to read the summary of the bill so that members opposite understand:

The enactment authorizes the Minister of Finance to make, in respect of fiscal years 2005-2006 and 2006-2007, certain payments out of the annual surplus that is in excess of the sum of $3 billion and the amount paid in respect of that fiscal year under An Act to authorize the Minister of Finance to make certain payments, being chapter 36 of the Statutes of Canada, 2005. It also authorizes the Minister of Finance to make, in respect of fiscal years 2007-2008 to 2009-2010, certain payments out of the annual surplus that is in excess of $3 billion. The enactment allocates the amounts authorized to be paid as follows: one third to tax relief, one third to spending priorities and the remainder to reduce the accumulated deficit for the fiscal year.

The enactment also provides a mechanism for increases to the basic personal amounts under the Income Tax Act for taxation years 2007 to 2010 in addition to those implemented in the Budget Implementation Act, 2005, so long as the increases are considered to be fiscally sustainable.

For the benefit of my Conservative Party colleague from Abbotsford, that is what the bill is all about.

I came to participate in this debate with set comments with respect to the bill and other issues related around why the Minister of Finance in his wisdom and through consultation with his cabinet colleagues and us as a party is presenting this bill. However, as I sat in this honourable chamber listening to the debate, all of a sudden certain comments triggered me to say to my hon. colleague from Edmonton—Sherwood Park, thank God for immunity in this chamber because a couple of times he contradicted himself. He talked about the debt being over $500 billion and then about it being lower than $500 billion. In a minute I will point out exactly what the debt is.

Certain comments were made. The member for Cambridge talked about fiction. Let me tell him and his party about fiction. In the 2000 budget, as was mentioned earlier by one of my colleagues, a $100 billion tax relief program was rolled out over five years. If he thinks that is fiction, maybe he should look at his T-4 slips for the last five years. I know that each and every Canadian looks at his or her T-4 slip and those Canadians will answer whether it is fiction or not.

The member for Edmonton—Sherwood Park talked about pennies, and I am glad he used the words “ EI premium”. In the past members of his party would say it was a tax. I cannot thank him enough. As a former employer, that is really what it is. It is an employment insurance premium.

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October 27th, 2005 / 4:30 p.m.
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Ken Epp Conservative Edmonton—Sherwood Park, AB

It is 10¢ or whatever the premium rate is. I will not get into an argument with the parliamentary secretary over there, whoever he is.

I would like to point out once again that it is workers and employers who have been fighting the debt for the Liberals to the tune of around $45 billion. Around $45 billion has been taken out of EI in excess premiums by the Liberals. It has been $45 billion or more. I think $45 billion was the last number I heard and that may have been from last year. It has probably increased by now, and yet those members are saying they have done a great job.

Bill C-67, which is before us today, deals with unanticipated surpluses. I want to talk about the word “unanticipated” before I get down to some of the meat and nitty-gritty of this bill.

“Unanticipated” means that we cannot forecast properly, or if we can, we decide to hide the facts so that we leave ourselves a lot of room for playing with the taxpayers' money at the end for little things, such as an election where it might be nice to have some money in the kitty to roll out to try to buy people's votes.

We know that even in this House the Liberals have tried to do things that are quite unseemly with respect to taxpayers' money in terms of buying votes. That is not acceptable in our society. The rules of Elections Canada forbid it, yet it was done in this House on May 19, when the Liberals made a deal with the NDP, which cost around $250 million per vote on that particular occasion, just in order to stay in power a bit longer.

Let me point out that the cost of an election is approximately $250 million, so every vote on that particular occasion was worth the cost of a federal election. I do not know why the Liberals did not just spend one-twentieth of it or one-nineteenth and go to the people and ask them whether they had confidence in this government instead of buying the NDP. That is an atrocious misuse of taxpayers' money.

“Unanticipated” means very simply that the Liberals have not been properly using statistical measures and statistical forecasting methods in order to get a good estimate what the surplus will be. We know that this Liberal government is absolutely out of it when it comes to accurate forecasting. Year after year, this government has been way out to lunch.

It is obvious that in statistical measures we cannot be dead on over time. I concede that fact, but if we are being fair and honest most of the time we would be out by a small percentage. Occasionally we would be a little low and occasionally a little high. This government has always been very high in its estimate of government expenditures and very low in its estimate of government revenue. As a result, it has consistently posted excessive surpluses.

Those surpluses of course represent money that the government has taken from taxpayers. It has taken an excessive amount. The most recent case of course involved the government's prediction of $1.9 billion. We had a bit of fun with that, calling the finance minister the dyslexic finance minister because $1.9 billion should have been $9.1 billion, which is what it really turned out to be.

We on this side of the House of course applaud the fact that in our economy our people and our businesses are working hard and earning money despite the misuse of their dollars by this government. In spite of that, they are working.

It is also true that these surpluses are largely as a result of policies brought in by a previous government and which the present government opposed. We all remember the GST. In fact, I will never forget it. I believe it was the GST that actually won me the election in 1993 because of the great hatred people had for it.

The Liberals said that they would scrap the GST. I remember pictures on television of the then leader of the official opposition, Mr. Chrétien, saying, “If we are elected we will scrap it”. I will not attempt to mimic his accent or his voice but he did say that he would scrap it and that it would be gone. Did he do it? No, he did not. After his government came into power he thought it was nice money and decided to keep it and use it. Of course, it has been a huge tax.

We probably, at some point in time, will want to continue the debate on the merits of the GST that was brought in by the previous government. The Liberals promised to kill it but instead used it and now crows about how wonderful managers they are because of something they did, which they did not plan and which was brought to them on a silver platter. They were able to use the money to reduce the deficit and start reducing the debt. Good for the government but, on the other hand, they should not be crowing about it and saying that they are such great and wonderful managers. The Liberals never thought of it. The Liberals opposed it and yet it worked for them.

Second, I think of free trade. I remember the Liberals saying that free trade would be an absolute disaster. I heard phrases such as, “What's afta NAFTA? Disasta”. I heard those words from Liberal candidates and others. They did not want that free trade agreement. They were against it and spoke loudly in opposition to it.

We now know that our trade, especially with our American neighbours, despite the fact that the government has tried to do everything to diminish our good relationship with those neighbours, and with other countries around the world has gained us a huge benefit.

Once again the Liberals sort of got the deficit elimination and some debt reduction handed to it on a platter with a policy and with action that they not only did not think of or initiate, but they were against it. Now they are saying that they are great and wonderful. I would point out that if it were not for those things, the Liberals would probably be running deficits right now.

Furthermore, let us think about this. If the Liberals would have managed taxpayer dollars prudently and properly, instead of only using the words, one can only think of the amount of debt reduction that we could have had. I believe it has been the tradition over years in Canada that if there is an unanticipated surplus and if there is a debt, the surplus goes toward reducing the debt.

The present government could never bring itself to put into the budget an actual plan for debt reduction. Instead, it brought in this little thing called a contingency plan. I have no problem with that. I think it is prudent to have a contingency fund. However, in addition to that, it should have done accurate forecasting and built right into the budget a fixed amount that was designated for debt reduction.

Debt reduction is what people want. People want to see the amount of the debt reduced substantially so that we do not give future generations, our young people, our college students and graduates of today, this huge debt and the huge interest.

In several speeches today, including in the speech by the Minister of Finance, I heard Liberals say that some $3 billion a year is now available because of the reduced demand on the treasury to service the debt. I say that is wonderful. However it is too bad the government could not have been serious about debt reduction in the last five or six years with the huge surpluses, instead of going on their spending sprees because the debt could have been reduced even further. It could have been $4 billion or $5 billion that would have been available.

Instead, the government squandered the money and it has very little to show for it. It is the same as what we have to show for some of our teenage kids. They take the money and we wonder what they did with it. It is gone.

I also would like to point to a fallacy in the speech given by the Minister of Finance earlier today. He indicated that the Liberals had inherited a huge debt from the Conservative government that they replaced in 1993. I have said this before and I will repeat it over and over until somebody hears it and gets the point. If we look at the record over the nine years that the Conservatives were in power, they had a balanced budget on program spending. Members can check the record.

I expect the finance minister and the people over there to have accurate numbers when they are talking to Canadians. Members over there are crowing and yelling. They should listen to the facts. I do not have the numbers at my fingertips right now but I think it was in the--

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 4:25 p.m.
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Lloyd St. Amand Liberal Brant, ON

Bill C-67 simply builds on what the government has accomplished over the last several years: balanced budgets and unanticipated surpluses because of the prudent manner in which the nation's finances have been handled, not only by this finance minister but by previous finance ministers. Yes, I am confident that Canadians in fact will reap significant benefits as a result of Bill C-67.

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October 27th, 2005 / 4:20 p.m.
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Marc Godbout Liberal Ottawa—Orléans, ON

Mr. Speaker, I would like to congratulate the member of Parliament for Brant for a very comprehensive overview of Bill C-67. I have been getting positive initial reactions from my constituents on Bill C-67, specifically on the reduction of debt and what is proposed in the legislation. I wonder if the member for Brant could tell us what initial reaction he has had from his constituents, the business community, the community leaders and the residents of his riding of Brant.

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October 27th, 2005 / 4 p.m.
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Lloyd St. Amand Liberal Brant, ON

Mr. Speaker, I have the pleasure to speak to Bill C-67, an act respecting allocation of unanticipated surpluses and to amend the Income Tax Act.

I would like to take this opportunity to describe the key benefits of the legislation, how it strengthens the accountability, transparency and balance of the government's fiscal policies.

I will start by outlining the reasons for introducing a bill that specifies how to allocate unexpected surpluses over the next five years.

The story actually begins more than 10 years ago, when the Government of Canada realized its fiscal course of deficit financing and ballooning debt loads was simply unsustainable. Drastic action was required and drastic action was taken. The government and all Canadians took the often painful steps needed to put this nation's fiscal house in order.

A few years later, our current Prime Minister, then minister of finance, presented the first fruits of these labours, a balanced budget. That budget eight years ago was the start of a string of eight balanced budgets, a record never before achieved in the history of Canada. We have since benefited in countless ways.

For example, some $3 billion in interest savings has been freed up for investment in Canadian priorities like health care and education. In 2004 and 2005, the government spent just over 17¢ of every revenue dollar on interest on the public debt. This is down considerably from the peak of approximately 39¢ in 1990-91 and is the lowest this ratio has been since the late 1970s.

In addition, our debt load has fallen $63 billion since the government balanced the nations books and is now below $500 billion for the first time in over a decade. These balanced budgets have earned Canada international bragging rights as our net debt burden for the total government sector is now the lowest in the G-7. As recently as the mid-1990s, it was the second highest.

Finally, these balanced budgets have earned us the highest possible ratings by all credit agencies for federal debt, a spillover reward that benefits all Canadian borrowers and debt issuers in the process. This is in great part due to Canada reducing federal debt as a percentage of the economy from its peak of 68.4% in 1995-96 to its current level of less than 39% today.

These are impressive achievements, and it is a rare one since, unlike Canada, many countries today are in no position to contemplate what they should do with any surplus, expected or unexpected. Thanks to this long term, prudent fiscal planning, Canada is the only G-7 country to reduce its debt burden and record a surplus this year, and the only one expected to do so next year and the year after that.

At a time when most industrialized countries must prepare for the fiscal demands of an aging population, Canada is one of the very few currently reducing its debt load before those predicted extra costs become a reality.

We have now reached a point in Canadian history where Canadians expect nothing less than balanced budgets or better from their federal government. The result is that our commitment to achieving balanced budgets has, more often than not in recent years, resulted in surpluses being larger than anticipated in our budget forecasts. It is a problem most countries would surely envy, yet the consequences of our unwavering commitment to balanced budgets are often large budget surpluses with one destination: debt reduction.

Under current legislation, any unanticipated surplus must be applied exclusively to the debt. This prevents our government from using these unanticipated resources for any other purpose.

By no means am I implying that debt reduction is not a productive use of budget surplus; quite the contrary. We now benefit as a country from a debt load which is $63 billion lighter than it was when we first balanced our books. Debt reduction will continue to be essential to eliminating a financial burden that would otherwise weigh down future generations of Canadians and to ensuring that money will always be available to help cope with the unexpected.

However, amidst all of the rewards of higher than anticipated surpluses, we were still missing a key fiscal tool, choice. Regardless of the priorities of parliamentarians and Canadians following a budget surplus, we were severely limited in how we could use it.

It was in part this lack of options which led the government to ask Mr. Tim O'Neill, former chief economist and executive vice-president of the BMO Financial Group to review the Government of Canada's fiscal forecasting process. In the key recommendation of his June report, he concluded that if the government wished to retain its no deficit rule, it should adopt a more formal and structured process for dealing with fiscal surprises.

For the reasons I have already described, the government has no intention of abandoning a balanced budget commitment that has served Canadians so well. As the legislation in front of us today clearly indicates, we have listened to Mr. O'Neill's advice. We are responding with a sound approach to unanticipated surpluses that is very similar to what Canadians have told us time and time again are their priorities.

As the Minister of Finance stated on October 7, Canadians have consistently made it clear that they want us to pursue a balanced and fair approach to how we manage tax dollars by allocating resources among tax relief, social and economic spending and debt reduction. This legislation does exactly that. It extends that approach to future unanticipated surpluses starting with the current fiscal year 2005-06.

The bill would grant authority for the government to allocate any unanticipated increase in the surpluses over the $3 billion contingency reserve among tax relief, priority spending and debt reduction. The contingency fund of course would continue to be diverted toward debt reduction if not needed for emergencies during the fiscal year. The legislation also takes into account the spending priorities set out earlier this year in Bill C-48, an act to authorize the Minister of Finance to make certain payments.

Bill C-67's unanticipated surplus allocation would only be triggered once the surplus is higher than the $3 billion contingency reserve and once spending on Bill C-48 initiatives are included. The legislation would be effective for the next five fiscal years and the precise allocation could change in any given year depending on the size of funds available and government priorities.

On the tax side Bill C-67 specifies how one-third of higher than expected government revenues would translate automatically into a bottom line benefit for taxpayers starting with the 2006 tax year. Tax relief provided under the legislation would be delivered to taxpayers through a one time tax credit when Canadians receive their tax assessment. Under the new legislation the tax relief may not end there, but become an ongoing reduction for Canadian taxpayers.

Bill C-67 would allow the government to make the tax relief permanent subject to the Minister of Finance's assessment that the fiscal impact in following years would not affect the government's ability to prudently manage resources and continue to meet the country's spending priorities.

How would the tax relief provided under the legislation work? Allow me to demonstrate using the current fiscal year 2005-06 as an example. Any unanticipated surplus would be determined in September 2006 with the release of the final surplus figure in the annual financial report. At that time the tax relief set out in Bill C-67 would be announced.

This tax relief would be included on every Canadian taxpayer's notice of tax assessment, which in this case would be delivered early in 2007. Those who paid less federal income tax than the maximum benefit in the preceding year would receive a credit offsetting this previous amount. All other taxpayers would receive the maximum benefit under the bill on their notice of tax assessment.

The Minister of Finance would confirm if individual taxes would be permanently cut, starting in the 2007 tax year, by the same amount as the tax relief. This would be done by adjusting a taxpayer's basic personal amount; that is, the amount of income all Canadians can earn without paying federal income tax. Deductions would automatically be reduced on Canadians' pay cheques or government income payments in order to reflect the permanent increase in the basic personal amount and corresponding changes to the spouse or common-law partner amounts. This would represent tangible, ongoing tax relief benefiting all Canadians. It would build on the $100 billion tax cut plan of 2000, which continues to benefit all Canadians today.

Let me state emphatically that this bill does not by any means signal the end of the government's commitment to tax relief for Canadians. Rather, this legislation would be above and beyond any tax reduction plan the government may come forward with in the future. In fact, the legislation has the potential to accelerate previously announced tax reforms by accelerating the increase in the basic personal amount to $10,000 by 2009, which was announced in budget 2005. Increasing the basic personal amount to $10,000 would remove approximately 860,000 low income taxpayers from the tax rolls, including nearly 250,000 seniors. Thanks to Bill C-67, we could well reach that worthwhile objective much sooner.

On the spending side, Bill C-67 would specify how end-of-year spending, again starting with the current fiscal year, could go directly toward clearly defined priorities identified at the time of that year's budget and resulting budget legislation. The extent to which one-third of the unanticipated surplus is allocated to spending in every year would depend on the spending priorities identified by the government.

That would ensure appropriate parliamentary review, debate and approval, and would further strengthen transparency in how government spending priorities are determined. It would allow Canadians and this Parliament a vital opportunity to debate the allocation of unanticipated surplus revenue; in other words, to have a direct say in investments for the future health of this country based on the most up-to-date information on the financial resources then available.

All spending obligations would be taken into account before determining the surplus for a specific fiscal year in accordance with accounting standards. The amount available for additional spending initiatives would therefore be determined after taking into account year-end adjustments.

Let me also state that this legislation would in no way hinder us from dealing with the spending priorities set out in Bill C-48 earlier this year. The government is committed to funding the initiatives set out in Bill C-48. We will continue to move forward on these priorities, affordable housing, post-secondary education and foreign aid, to name just a few, wherever possible.

Finally, on the debt reduction side, both this legislation and the $3 billion contingency reserve would continue the government's disciplined approach to debt reduction.

Let me stress that the introduction of this new legislation is by no means a sign that the government is wavering in its determination to reduce the federal debt. In fact, the contingency reserve would continue to be set aside so that, in the absence of unexpected economic shocks, it would be there to reduce the debt burden of future generations.

Combined with a further debt reduction afforded by one-third of unexpected surpluses the ongoing erosion of the federal debt load should continue each and every year.

The Government of Canada continues to stand behind its stated principle of reaching a federal debt to GDP ratio of 25% by the year 2014-15. At the same time however the transparency and accountability of this legislation will give Canadians and we as parliamentarians a greater say in the best uses of unanticipated surpluses, an objective our recent fiscal review recommended and one that Canadians demand.

I have endeavoured to explain how the legislation works. Let me close by stressing what the legislation will mean to Canadians and their families.

Through its commitment to tax relief, Bill C-67 will mean more money for all Canadian taxpayers through an approach which benefits lower and middle income Canadians most of all. It will mean spending priorities that are set well in advance and will allow everyone the opportunity to participate in the debate and contribute to the decisions on how unexpected financial resources will best enrich the country.

It will undoubtedly mean new chapters in the government's debt reduction success story as we continue our world leading approach of ensuring that our current obligations will never stand in the way of our future goals. Greater transparency, accountability, fairness, balance, in the end that is what Bill C-67 is all about.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 3:35 p.m.
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Guy Côté Bloc Portneuf, QC

Mr. Speaker, we have heard the government's rhetoric during this debate on Bill C-67. We have heard the government present a series of half truths. It even tried to push its propaganda on us.

Now let's talk about the real things regarding Bill C-67. Since 1998, $130 billion of new federal initiatives were not included in the budget at the start. This represents close to $75 billion in surplus since 1998, $40 billion of which were unanticipated. That is the problem. It is quite simple. This government estimates have no credibility whatsoever.

I have talked about the government's half truths. Let us be clear. Bill C-67 does not deal with surpluses. It deals with the unanticipated surpluses in the various budgets. That is the problem.

In Bill C-67, the government is proposing a three part formula. Paying down part of the debt is very nice. But it should be considered as a budget item instead of having $3 billion set aside in an annual contingency reserve. If the government really wants to apply $3 billion to the reduction of the debt, it should provide for it in the budget.

That may seem like rhetoric, but it really is not. Since 1998 we have seen a series of last minute measures at the end of the year, more or less electorally motivated, to make the surplus as small as possible. The last financial year is a prime example, in which the projected surpluses changed from $1.9 billion to $9.1 billion and back to $3 billion. At some point, taxpayers have a hard time understanding what is going on, and I can certainly understand why.

The existence, year after year, not just of surpluses but unanticipated surpluses—according to them—is a perfect illustration of the fiscal imbalance. Why? Because the government taxes too much in comparison with its needs. Not only does it tax too much, it does not redistribute enough money to the provinces and Quebec for them to fulfil their responsibilities very well.

It is rather ironic that Bill C-67 is the perfect illustration of a phenomenon that the government totally denies, namely the fiscal imbalance. Bill C-67 should respond to the financial requests of Quebec and the provinces for the funds they need to provide services and fulfil the responsibilities they have under their jurisdictions.

The Prime Minister often talks about education, early childhood, health and the needs of municipalities. He should run for a provincial legislature or in Quebec. If these are the issues that concern him, he is in the wrong legislature.

The governments of Quebec and the provinces often have to meet the direct needs of citizens, but unfortunately Ottawa again ignores the demands of Quebec and the provinces. The federal government should, first, have increased the transfers, especially for post-secondary education and social programs. That would have been very important.

Since 1995, we have seen deep cuts—there has been a slight increase recently I must admit—to the transfers to the provinces. This is one of the ways in which the government financed the paying down of its debt. This was one of the methods, these deep cuts in the transfers to the provinces.

Therefore, rather than institutionalizing these unanticipated surpluses through Bill C-67, the government should reinvest massively in the transfers to Quebec and the provinces. That would be a first step toward trying to correct the fiscal imbalance, at least partially, so that Quebec and the provinces can fulfil their responsibilities.

For example, the second step would be real reform of equalization.

There are ten provinces and two territories in Canada. Equalization is calculated on the basis of five provinces. When there are ten and you want to work out the average, it seems to me that you base your calculations on ten and not on five. However, I understand that the government sometimes has a little difficulty with relatively simple mathematics.

I was saying earlier that the government has too much revenue for its responsibilities. We have what we feel is an excellent suggestion to relieve it of this burden, remove the temptation to spend left and right, and encourage it to regain control of its expenditures. This solution was actually tried already in 1964 and other times and it could still be done today. It involves transferring either tax points or tax fields—such as the GST—to Quebec and the provinces.

In our view, the government's current tax reduction measures are more an electoral gimmick intended to curry short-term favour with the taxpayers and make them forget the fiscal profligacy, poor management and all the scandals tainting this Liberal government.

We proposed to the government many solutions that are not only feasible, but also realistic. If only the government acted in good faith.

The Minister of Finance often says that he consults the best forecasters in the private sector. Why does the government not create a real independent forecasting office which could truly assume the critical responsibility of advising the Minister of Finance in the development of his budget policies, while also, to a certain degree, acting as a watchdog and perhaps telling the minister, from time to time, that he is off the mark in his forecasts?

I said a number of times in this House that, when it comes to budget forecasts, the government has no credibility at all. It always comes up with surprises. Year after year, since 1998, with a simple calculator and a few documents, the hon. member for Saint-Hyacinthe—Bagot arrives at figures that are very close to the actual numbers at the end of a fiscal year.

By contrast, the government, despite all the resources available at the Department of Finance, is off the mark by billions of dollars. Let us get serious. Unfortunately, as we know, thoroughness is not a trademark of this government.

Bill C-67 institutionalizes unanticipated surpluses. How? This bill proposes a new scheme of this government. If our surpluses exceed the $3 billion expected in the budget, which is a reserve for contingencies—$3 billion would already be used to reduce the debt—the government would apply, in equal proportions, one third to the reduction of the debt, another third—a second time—to the tax relief, while the last third would be applied to the funding of priority socio-economic expenditures.

It is important to keep a number of things in mind. This morning, the hon. member for Saint-Hyacinthe—Bagot made a very telling presentation on the tax relief. We are talking about an amount of $129 annually. I did the calculation and found out that this amounts to 35¢ per day. In other words, I could not even ask for the repayment of a pack of chewing gum, because I would need three days' worth of credits to be able to buy it.

But there is worse, and this is an old habit of this government. At the end of a fiscal year, the government might be tempted to present new budget measures to meet its priorities, as opposed to those of the provinces and citizens, and the government's priorities have to do with an election.

They refer to a period of a year. These are not recurring measures. For once, the government has been clear about this.

What is going to happen? Once again, the federal government is going to create a program, try to meet a need, one that may sometimes not be a priority for the provincial legislatures or for Quebec, and then after a year pull out its funding, leaving it up to the provinces and Quebec to fund these new initiatives. This is an eloquent and undeniable example of fiscal imbalance and of the federal government's all too frequent attempts to interfere in areas under provincial and Quebec jurisdiction. Unfortunately, when it pulls out, for all manner of reasons, MLAs and MNAs are stuck with trying to take over the burden, when they can. They are forced to take over the new program and administer it.

Given the financial capacity of Quebec and the provinces—with the exception of Alberta—at this time, and the visible nature of these services most of the time, the provinces are stuck having to explain to their population why the government has to terminate a program.

With Bill C-67, the federal government obviously prefers to invest its resources in direct spending programs it is in a position to control and thereby improve its image in the eyes of the public. That is understandable, and it needs any improvement it can get. It does this, however, even though this spending is not within areas under its jurisdiction. What is more, the proposed measures close the door to any sharing of the tax base with Quebec and the provinces.

This bill will not stop the federal government from once again cooking the books so that the budget surplus looks smaller than it is. There is nothing that can stop them from doing that. As well, there is nothing stopping them from stepping up their spending in order to avoid having to disclose a huge surplus.

Everyone in this House will clearly recall the national spectacle we were treated to last June when, over a 21-day period, the Prime Minister announced $21 billion worth of initiatives. That spending spree and flood of announcements was nothing short of scandalous.

As I said, there are about 15.5 million taxpayers in Canada. Assuming that the redistribution of the surplus going to tax cuts were based on the figure of a $9 billion surplus, $2 billion of which would go to pay down the debt, that would work out to about $129 per taxpayer, or 35¢ a day.

A little earlier, a colleague from the Bloc Québécois also said that these surpluses include those in the employment insurance fund. Of course, if you ask a member of the government party, he will assure you that there is no problem with this fund. He will tell you that its completely natural that more than half of the people who file claims cannot obtain benefits, and that only 38% of the youth, women and people filing a first claim qualify.

Now they have found one way, among others, to eliminate the surpluses in the employment insurance fund, which is to reduce the premium rate. The problem at present is not the premium rate, but the level of accessibility. Some people find themselves in black holes. They are forced to go on welfare because they cannot collect employment insurance at the hard times in their life.

But if we listen to our friends in the government, everything is just fine. No need for concern: they are taking care of it. We know they are taking care of our money. We see it every day in the House of Commons, and citizens feel it every day in their pocketbook.

The federal government has to address the source of the problem and stop generating indecent unexpected surpluses. The solution is to transfer tax points or the GST, so that the provinces and Quebec can obtain autonomous revenue that can be spent where and how it will best meet the needs of our fellow citizens.

Too often the government reduces this question to a very political dimension, and says: “You know very well, you in the Bloc Québécois.” The Conference Board has estimated these surpluses. I do not believe that the Conference Board of Canada is a sovereignist, separatist agency. If they are, they should call me, I’d like to know. The Conference Board estimates the recurring surpluses at over $10 billion for the current fiscal year, with more than $7 billion tucked away in the foundations established by the present Prime Minister.

You will not convince me that the federal government does not have the resources to correct the fiscal imbalance right now. As I was saying earlier, there will be no surplus; they will barely get to $3 billion in the contingency reserve.

The federal government had the means to do more with this bill to help Quebec and the provinces emerge from the budgetary impasse it has put them in by making deep cuts to transfers since 1995. The recurring surpluses, meagre transfers and increasingly inequitable equalization, far from resolving the fiscal imbalance, have aggravated it. This is a huge problem.

Instead of tackling real problems with Bill C-67, the government is introducing a cosmetic bill to try and improve its image with the population. This is very disappointing. We might have expected better from our elected officials. The past is an indication of what the future holds in store, and unfortunately, Bill C-67 is before us and we have to consider it today.

In the last decade, we have witnessed a constant growth in the Canadian and Quebec economies and a large operation to put public finances back in order in Quebec. In this province, difficult choices had to be made, with financing deadlocks leaving very little leeway because of all the severe cuts made since 1995. Quebec and other provinces did not have much choice.

Today, Quebec is forced to make negative choices and unfortunately to raise taxes, reduce services and add to its debt load. There is almost no flexibility in Quebec as in many other provinces. At the same time, the federal government is generating recurrent budgetary surpluses that are apparently unanticipated. They are really playing with the numbers. This government has become an expert at it. It increases its expenditures and its intrusions into areas of Quebec's and other provinces' jurisdiction. It is trying to impose its will and its political objectives on them.

The federal government's superior financial situation compared to Quebec and other provinces is the backdrop that we, in the Bloc Quebecois, have been trying to correct for a number of years. As I said a little earlier, the federal surplus has shrunk in 2004-2005 to a mere $1.6 billion. However, the Fiscal Monitor for February 2005, which came out in June, was still predicting a $9.7 billion surplus. I cannot understand that lack of reaction by the members of the government in the face of this kind of manipulation of figures that allowed last minute expenses to drastically reduce those unanticipated surpluses, only to invest them in pre-election projects and in this budgetary sham.

In conclusion, I would say once again that Bill C-67 is completely unacceptable because it imposes procedures that will prevent any correction of the fiscal imbalance. The enormous surpluses that the federal government has run over the last few years show that there is a fiscal imbalance. The government must agree, first and foremost, to correct this imbalance so that Quebec and the provinces have the necessary resources of their own to meet the needs of their people. How? By substantially increasing the transfer payments for post-secondary education and social programs, correcting equalization, and negotiating an agreement with Quebec and the provinces for a new division of the tax fields. This would enable them to have the increased revenues of their own that they need to fulfil their responsibilities in their own jurisdictions. Rather than engaging in budgetary smoke and mirrors, the government should deal with the real problems.

Business of the HouseOral Questions

October 27th, 2005 / 3:05 p.m.
See context

Hamilton East—Stoney Creek Ontario


Tony Valeri LiberalLeader of the Government in the House of Commons

Mr. Speaker, the hon. member, unfortunately, takes the opportunity every Thursday to ask the same question, knowing the answer will be exactly the same because it is factual.

The opposition days will begin the week of November 14, and I indicated that some weeks ago to the opposition House leaders. At that point, I thought the matter had been dealt with and that we would focus on the agenda, which is important to Canadians.

We will continue with the second reading of Bill C-67, which is the surpluses bill. Should this be completed, we would then return to the second reading debate of Bill C-66, the energy legislation. We do not sit on Friday. On Monday we will commence the second reading debate of Bill C-68, respecting the Pacific Gateway. We will give priority to these bills over the next week.

On Tuesday evening there will be a take note debate on cross-border Internet drugs.

If debates on the major bills that I have referred to are completed by late next week, we will then turn to report stage of Bill S-38, respecting the spirits trade, second reading of Bill C-47, the Air Canada bill, Bill C-50, respecting cruelty to animals, second reading of Bill C-44, the transport legislation, second reading of Bill C-61, the marine bill, reference before second reading of Bill C-46, the correctional services bill, report stage of Bill C-54, the first nations resources bill and other bills that will perhaps come back from committee that we would like to get into the House for further debate.

In order to bring about that take note debate on Tuesday, I move:

That a debate pursuant to Standing Order 53.1 take place on Tuesday, November 1 on the subject of cross-border Internet drugs.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 1:50 p.m.
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Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, the member somehow suggests that this is a forecasting problem. Is there another country in the world that has our problem of doing too well?

The corporate community in the fourth quarter has performed way beyond what was anticipated by any of the internal forecasters, any parliamentarians, any bank or any chief economic forecasters and the opposition is suggesting that somehow we are cooking the books.

As a consequence of these points that were raised, we consulted with Dr. Tim O'Neill. One of his recommendations was that if the government wanted to retain its no deficit rule, it should adopt a more formal and structured process to deal with fiscal surprises by setting out in advance contingent allocations among tax cuts, spending initiatives and reducing debt from any unanticipated surpluses. That is precisely what Bill C-67 would do.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 1:50 p.m.
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Guy Côté Bloc Portneuf, QC

Mr. Speaker, I find it extremely sad to listen to the member for Mississauga South. He believes what he is saying. This is very sad. He has talked a great deal about the fact that it is impossible to make accurate forecasts. I agree that, some years, revenue would be higher and expenditures lower. But, if it is impossible, how is it that they have been making the same mistake since 1998, oddly enough? This government no longer has any credibility with regard to its estimates. It has none whatsoever.

Bill C-67 formalizes this government's recurring practice of underestimating its surplus so that, at year-end, it can spend this money for electioneering purposes, in direct contradiction to the budget consultation process. This shows disrespect for the witnesses who appear before the Standing Committee on Finance, for the committee itself and even for the House of Commons. It is unbelievable.

Could the member tell me why our finance critic, the member for Saint-Hyacinthe—Bagot, always forecasts the government's end-of-year surplus almost exactly, while the government keeps getting it wrong? This government no longer has any credibility.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 1:50 p.m.
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Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, the member and I think other members in his party have said that the existence of a surplus means that Canadians are overtaxed. It is an interesting comment but he should also understand that under the system of accounting for the Government of Canada, the only way to pay down $1 of debt is to have $1 of surplus.

Paying down debt, in my CA terminology, is not a P and L item. It is a balance sheet item. Just for the member's edification, a surplus is necessary under the current rules to pay down debt. Under the rules, every dollar of surplus automatically must go to pay down debt. We cannot spend any amount of that after March 31.

The member suggested that if we see an anticipated surplus coming we will spend it all in advance. He argues that Bill C-67 must be a spending bill because they are spending it but Bill C-67 does not apply until after the fiscal year. The member is talking about before the fiscal year is over, so Bill C-67 would not apply. Clearly, he has not read the bill nor does he understand it.

I would suggest that we can debate as much as we want in this place about whether or not things are going well but the important indicator is whether Canadians think the country is in good shape.

I believe the international community clearly has recognized that Canada's economic performance has been a leader in the G-7.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 1:25 p.m.
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Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, it is my pleasure to celebrate Bill C-67. It is indeed a bill for which I have been waiting for a long time because it finally marks a point at which Canada has fully achieved the recovery that was necessary from the circumstances that it inherited back in 1993.

I had a written a speech to give on Bill C-67 to talk about the details of the bill, but the members very well understand the bill and they really want to talk about other aspects of the financial administration of the country.

It is fair to say that members who have spoken and the three finance critics who addressed the House after the minister this morning, all addressed Bill C-67 with the assumption that there will no longer be a federal budget in Canada, that Bill C-67 will replace the federal budgeting process.

They went on to argue that to take the surplus at the end of the year and allocate the excess of $3 billion to one-third to debt, one-third to tax relief and one-third to spending priorities is just a mathematical game, and that it is no way to govern a country.

First, the premise of that assertion is wrong. There is still a budgeting process. There are budget consultations with Canadians still going on. They are going on right now. We will have a budget before the commencement of the next fiscal year. To remind Canadians and all hon. members, the fiscal year of the government ends on March 31. The current year will end on March 31, 2006. There will be a budget which will be for the year starting April 1, 2006. The priorities within that budget and the assumptions that will be made for Canadians are being made now as we speak, as the consultations go on with Canadians and with experts.

We are now talking about Bill C-67, which is not establishing the priorities for spending and how we will deal with any surplus. We are dealing with a bill that finally brings to the House a process. It is proposing a process that we will use to deal with surpluses that exist after budget priorities have been taken care of and that is really important.

Let me reflect on the comments of the Conservative finance critic who said that productivity is where we should be, that we have to have improved productivity, that we have to have corporate tax cuts for the manufacturing sector and create those jobs, and that we have to have income tax cuts for middle income earners. I do not disagree, but not exclusively.

Let us reflect on what the Bloc finance critic had to say to the House. He dismissed the bill as being arithmetic. Then he said that we really should be worrying about the fiscal imbalance, that there is a fiscal imbalance in Quebec, that the federal government has more money and Quebec should get some of it, and that if we were to just transfer the money, that would solve all the problems because there is a fiscal imbalance.

Quebec has the same taxing authority that the federal government does. That province has responsibility for spending exclusively in certain areas and there are areas in which there are shared responsibilities such as health care, post-secondary education, and social assistance. There is federal participation.

However, Quebeckers are also entitled to tax cuts. They are also entitled to live in a secure financial situation. Debt servicing, debt repayment and the savings of interest are important also to Canadians who live in Quebec. This is just one part of it.

Let me reflect on the NDP finance critic. She came to the House and totally dismissed Bill C-67 in her first sentence. She then went on to say that we should be dealing with child poverty, affordable housing, foreign aid and a whole bunch of issues, many of which are included in Bill C-48 which was adopted by the House. It does authorize spending in those areas to the extent that it is fiscally sustainable and the House has approved that.

Having listened to the speeches by the finance critics, it is clear that their assumption is that Bill C-67 somehow replaces the budget, but it does not. They want Canadians and other members in the House to believe the budget and priority process we go through in planning a budget will somehow be replaced by a mathematical formula of one-third, one-third, one-third. That is not the case. This is a celebration.

Let us reflect on where we have been. Prior to 1997, Canada experienced deficits for 27 years. That was 27 years of spending more money than it brought in. Nobody could operate a household like that. How did governments do that? How did this happen? The national debt increased to $500 billion, a mortgage on our future. At the time, we had a debt to GDP ratio of 70%. Interest rates were up, social programs were in jeopardy and our economic sovereignty was questioned. We were described as a Third World economy.

Our debt was 68.4% of GDP. It is now down to 38.7%. Within the decade, it will be down to 25%. We have the best performance in the G-7. The foreign content of our debt has gone from 43% to 17%. That is very significant. Canadians said that too many foreigners were holding the debt. Now it is down to 17%. Debt interest was costing us 38¢ of every dollar collected from Canadians. Today it is down to 19¢, a very significant improvement. Canada is now back to a triple-A rating. Everyone should celebrate because we are now the envy of the G-7. That is important for Canadians to know and to understand.

We still have a budget. We are going through this process, a budget will be forthcoming and it will be before the commencement of the next fiscal year, which starts on April 1, 2006.

If Bill C-67 is not what the opposition is suggesting, what would it do? Bill C-67 is not a spending bill. As a consequence, it is not a confidence bill. Bill C-67 describes a process. On March 31, 2004, we had a surplus of $9.1 billion. After the plans for the year were executed, the books were closed on March 31. Six months later, after the audit by the Auditor General in September, she announced that the surplus was $9.1 billion. For the year ended March 31, 2005, she announced a surplus of $1.9 billion.

Under the rules set by the Auditor General and the rules of Parliament, all of the $9.1 billion had to go to pay down debt. No year end adjustments can change that. There are minor accruals, but no additional spending. Once March 31 was over, an audit was done and a $9.1 billion surplus was reported six months later by the Auditor General.

We always have built in a $3 billion cushion to make absolutely sure that we never again go into deficit. Canadians have said that they do not want more deficits, and that $3 billion is the cushion. To the extent that there is a surplus in any fiscal period which is in excess of that $3 billion, we need a process on how we will get the authority of Parliament to dispose of some of that without having it all go to debt. Bill C-67 provides that instrument.

It basically says that an appropriation can be put through which reserves the excess surplus over the $3 billion. That excess surplus, which was unanticipated and could not have been spent before March 31, now can be allocated. The bill proposes the process, which is one-third will go to debt, one-third to tax relief and one-third will be for additional program spending and supports.

Everyone understands the importance of continuing to pay down the debt, which also saves interest. Since we balanced the budget in 1997, $65 billion of national debt has been paid down. It has saved Canada over $3 billion annually of interest expense, which is available for health care, for housing and for the social needs of Canadian.

With regard to the one-third that would be for tax relief, it is established initially as a one-time credit. We do not know what will happen next year. The bill also provides a process that where we continue to have room to provide these credits, this one-time credit can be a permanent tax relief credit to Canadians.

Finally, with regard to the program spending, members somehow are suggesting that the finance minister can choose what he wants to do. It is clear in the bill, if the members would read it, that no spending of the one-third for program spending can be made except pursuant to a bill passed by Parliament. It is not at the discretion of the minister. It is at the discretion of Parliament.

I think members now understand that there still is a budget process which establishes our key priorities. Bill C-67 would not take away anything from the importance of having a fair, transparent and open consultation process with Canadians and with parliamentarians to determine our priorities. It provides us with the last necessary piece so if there ever again is a surplus which is far in excess of the $3 billion of contingency, we have an opportunity to use it in a way other than repayment of debt.

I want to comment very briefly on the $9.1 billion surplus of the fiscal year ending March 31, 2004. In the fourth quarter of that year, corporate revenues were way beyond the fiscal forecasts of any of the forecasters, so far beyond that there was absolutely no way even to detect it. By the time it was reported, the year end was already over. It was substantively a revenue opportunity which just occurred. The economy was booming. The corporate sector was doing its job. We could not have anticipated it 18 months earlier when the budget was set. In fact, this is a perfect example of an unanticipated surplus, all of which, in the absence of Bill C-67, had to go to pay down the national debt. None was available to deal with the other priorities of Canadians. If we had known, there would have been programs.

It is important to look at where we were. It is important to see what happened when we had large surpluses. We have to understand that last year there was not a surplus in excess of $3 billion and Bill C-67 would not have kicked in. There would not have been any one-third, one-third, one-third, simply because the surplus of last year was only $1.9 billion.

I hope this helps members and Canadians to understand that Bill C-67 does not establish priorities for Canadians. It establishes a process by which, in certain circumstances, Parliament has an opportunity to agree upon and pass legislation to authorize further spending in areas as a consequence of unanticipated surpluses.

It is extremely important to summarize again the themes and the importance of why we should consider Bill C-67 to be a bill of celebration.

First, the legislation would allow the government to allocate future unanticipated federal surpluses equally among cutting personal taxes, spending on social and economic priorities and reducing federal debt, a balanced approach. It would apply any of the surplus over the $3 billion contingency reserve before closing the federal books, starting in the fiscal year.

One-third of the surplus would go toward tax relief to all taxpayers in a one-time credit, which is non-refundable credit. This means each and every Canadian would equally share in the distribution of the tax relief.

One-third of the surplus in excess of the $3 billion contingency would go toward spending priorities, again, approved by Parliament, not dictated by the Minister of Finance as the previous speaker indicated.

This process would provide for greater transparency, accountability, fairness and balance. The bill is all about that.

Canadians have consistently told us that they do not want to go back into deficit. We do not have legislation that says we cannot go into deficit. We are managing the finances of the country by providing contingencies, by providing prudence in our estimates and by consulting widely with the forecasting community to make absolutely sure that we have the fundamentals right or at least as right as we can get them 18 months in advance of the year end.

Sometimes we cannot anticipate economic blips. Some years they will be good and in other years they will be bad. We have seen that over the last eight years. However, we have continued to balance the books eight consecutive balanced budgets. We fully anticipate that the next two budgets will also be balanced.

I remind members that under the current accounting rules guiding Parliament and the books of the Government of Canada, any surplus that is determined to exist at the end of the year automatically goes against the debt. The purpose of Bill C-67 is to provide a process so we can take part of that surplus in excess of the $3 billion and use it for something other than debt repayment, where there are priorities.

Also in the past, when some of the surplus was larger than anticipated, it was important to go after some areas, and I think that the House would agree. If not, maybe members would tell me which of these they did not agree with, in terms of unbudgeted spending.

How about the enormous amount of money that was put out for the mad cow crisis? How about the terrible tragedy of the SARS outbreak? How about the provincial health accord? How about the child care initiative? How about the B.C. pine beetle? How about the national security requirements, as a result of the tragedy of 9/11?

Sometimes very significant events occur in our world. A government has to be able to respond quickly. That is why we have put prudency factors. Sometimes that $3 billion may be required to meet emergency priorities, in the best interest of all Canadians. If the members feel that any of that spending, whether it be on mad cow, on SARS, on the health accord or on the national security issues related to 9/11, was not appropriate, please tell me what would be because I could not imagine anything else.

Today's legislation would give the government the authority to allocate this unexpected surplus. On the tax side, it would continue to build on the $100 billion tax cut program of the year 2000, which is now fully implemented. The indexation of the income tax system, as well as the other changes to the non-refundable tax credits that have been provided, have added a further $13 billion of tax savings for Canadians.

On the spending side, it specifies how year end spending, starting with the current fiscal year, could go directly toward clearly defined priorities, as approved by Parliament, not by the minister. On the debt side, the legislation would provide for the repayment of the debt of the $3 billion contingency, as well as one-third of the surplus over that amount.

Finally, many countries today are in no position to study approaches toward unanticipated surpluses because they do not exist. Canada remains to be in good financial shape. Canada continues to consult with Canadians on important priorities. We are in the area of keeping our books in good shape, meeting the health and social needs of our people, meeting the priorities of our children and seniors, meeting the priorities of our provinces and making sure we have the security and stability that makes Canada the envy of the world.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 1:25 p.m.
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Gérard Asselin Bloc Manicouagan, QC

Mr. Speaker, in connection with Bill C-67 in which the government concerns itself with the allocation of surpluses, it certainly does not want to make this a vote of confidence. The surpluses that we have now could easily have been foreseen by the Minister of Finance. If he knew about them, there is a problem. But if he did not know about them, there is an even bigger problem.

This morning during a question that I was asking, I referred to employment insurance. Every year the government pockets $4 to $5 billion of the surplus in the employment insurance fund, which it invests in its consolidated revenue fund but on the backs of working people and the unemployed. In the regions, this is of major importance.

In a second question, I referred to the lack of maintenance on federal infrastructure and facilities in the regions, including ports and airports. In the fishing industry in the Lower North Shore, the seaports belonging to Fisheries and Oceans or Transport Canada are very important.

Finally, I would like the member to tell me whether he thinks it is all right for the government to feel it has to pass a bill today on the equitable allocation of its surpluses when there are corrections officers at Port-Cartier penitentiary who have been without a collective agreement for four years and have had to take to the streets in order to assert their rights. They do a very dangerous job, but the government does not recognize its responsibilities in their regard. These public service employees have been without a contract for four years. This is immoral and not all right.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 12:45 p.m.
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Gerald Keddy Conservative South Shore—St. Margaret's, NS

Mr. Speaker, that was really something. I know that the hon. member is an experienced member in this place and certainly he has been an experienced member of government, but he is simply all over the map. I will be asking him a couple of questions.

How does the government have an unanticipated surplus? How does that happen? If a person has some business savvy, understands how the country is being run and has a good handle on the money coming in and the money going out, how does that person have an unanticipated surplus? We are talking about a major surplus, such that we are going to have to pass a bill through Parliament to bring in additional spending to somehow get rid of it, instead of simply putting it on the debt, which would give us an immediate return and give future generations an immediate return.

I am going to suggest to the member that perhaps Bill C-67, an act respecting the allocation of unanticipated surpluses and to amend the Income Tax Act, could be changed. I would suggest that it be changed to state that it is an act respecting the anticipated election--not the anticipated surplus but the anticipated election--and an unashamed, bald-faced attempt to buy the votes of Canadians.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 12:20 p.m.
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Brian Jean Conservative Athabasca, AB

Mr. Speaker, it is not often that I have an opportunity to stand in the House and actually agree with any policies or position of the NDP, but in this particular case I can say that I am prepared to do so because this bill is in large part a farce.

Some comments have been made about Alberta being in perfect shape and how wonderful Alberta is, yet we have a similar situation there. Our premier is planning to refund $400 to each and every taxpayer in a vote-buying scheme similar to what is anticipated to be taking place here. I would like her comments on that.

I live in an area in northern Alberta which has one of the most dangerous highways in Canada. We have been asking that it be twinned but it is not going to be twinned for some time. I do not think it is even planned on the books. We have a water treatment centre that has enough capacity for 50,000 people and yet 75,000 people depend on it. We have some water issues. Alberta has 15% growth per year, but no land has been issued for people to put houses on because the Alberta government controls that. I see what the Liberal government is trying here with Bill C-67 to be a similar situation.

The Conservative position is to lower taxes and to put more money back into the hands of Canadians, but to do so in a way that will not cost money. I know from a previous job I held that it would cost the college I sold to more than $100 to issue a cheque for whatever amount. This seems very similar. Instead of giving tax cuts and leaving the money with the people who know how to spend it best, the government takes the money and decides to roll it back in the form of vote buying. I would like to hear my NDP colleague's comments on that as well.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 11:55 a.m.
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Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, I apologize to the member who I missed. He must not have been in his seat when I was speaking because there was not a person to be seen on the Liberal benches.

This is a Liberal government bill. We are talking about a proposition put forward by the Minister of Finance and not a single Liberal is in the House to talk about it, to hear our concerns and to address the matter.

This is a very important issue for all Canadians. We resent the fact that the government once again thinks it can toy with Canadians, that it can play with them in terms of their concerns about the future. We resent the fact that it has put forward another gimmick to deal with the surplus as opposed to a meaningful constructive suggestion that gets money into the hands of Canadians who need it most.

Let us be clear. As I said when I began my remarks, we are talking about a gimmick on the eve of an election. Just as the leaves turn colour in the fall, we hear another Liberal surplus promises an imminent election. That we find absolutely abysmal and appalling.

Every time there is an election we hear from the Liberals about some miraculous cure to deal with the problems vis-à-vis their ability to be fiscal managers. They compensate for the fact that they cannot run the store. Every year they keep disappointing Canadians with their inability to forecast and budget properly and, by consequence, to ensure that the priorities of Canadians are met. They do this every year.

That is the essence of the debate today. It is about some newfangled structure or model that someone on the Liberal benches thought up as a way to appease the concerns of opposition members or Canadians in an attempt to redirect attention away from the fundamental issues. This is about a Liberal attempt to obfuscate and deny Canadians the right to have a say in this place about where budget dollars should be allocated.

For years we have been raising this issue. We have been calling upon the government to come clean with Canadians about the dollars it is sitting on, all of which end up going to the debt because there has been no open discussion in this place.

If we listen, we will have heard members from all sides of the House say clearly that we want a balanced approach to fiscal forecasting and budgeting. No Liberal can stand in this place, as they are, and ask what is so wrong with having a surplus, as if anyone ever said there is something wrong with having a surplus. We have heard this in committee and we have heard it in the House. It is a deliberate attempt to distort the debate and to minimize the concerns of the opposition and Canadians, whose concerns are very legitimate and must be addressed by the government.

Time and time again we have come to the House to ask the government to stop its practice of deliberately low-balling the surplus. We have asked it to come clean with the numbers, to be transparent and upfront in its fiscal approaches so this place can have a serious debate about the economic and fiscal priorities of the country and represent the views of Canadians as we were elected to do.

The government has denied us that opportunity for all these years through a practice of manipulating the numbers to suit its political agenda. The government has very carefully stashed away $85 billion over the last decade without allowing for parliamentary debate and input by Canadian in terms of the allocation of $85 billion. Through that deliberate approach of low-balling and manipulating the numbers, it has allowed itself to decide on its own, in the most undemocratic way possible, where that money should go.

In this case it has come in handy when the government has needed to deal with a few projects. Most important, it has allowed it to cave once again to the corporate agenda of putting all of our eggs in one basket without concern for the needs of Canadians and their responsibilities.

Of that $85 billion, close to $65 billion has automatically gone to the debt. Nobody on this side of the House in the NDP, and I am sure any other political party, objects to some money going against the debt and meeting our obligations on that front. We know it is important to present a balanced approach to Canadians and to ensure that we pay down the debt and at the same time invest in the needs of Canadians. That would in effect grow the economy and thereby bring down the debt.

Members will recall that statisticians and economists, those who the government and others use, have shown that if the government took the surplus money and invested it in Canadians, invested in the deplorable housing, in the inadequate education arrangements, in poverty, in the deplorable situation of aboriginals on reserves, in the environment and in health care, it would create jobs, the economy would grow and we would pay down the debt in the same period of time as if the government took this money and put it directly into the debt which has been its practice and its habit.

This debate is about priorities, balance and addressing the reality of Canadians.

We have a bill that would allow the government to take the surplus money and automatically set aside $3 billion supposedly for contingencies. There is no debate on what is an appropriate contingency and prudence fund. That is part of the Liberal scheme to deceive Canadians. Here is the rest of it. First, it sets aside $3 billion. Then the government takes the leftover surplus and divides one-third, one-third and one-third. One-third goes against the debt, one-third is for tax cuts and one-third is for spending.

That arrangement tilts the balance automatically. It means $3 billion in contingency that goes against the debt, plus another third of the surplus. If there were something like a $10 billion surplus, as is forecast to be the case for this coming fiscal year, we end up with about $5 billion or $6 billion that would go against the debt and the rest would divided between spending and taxation.

Is that balanced? Does that address the needs of Canadians? Does that deal with the imbalance in the system created by the Liberals ever since they took office in 1993? Does that deal with the fact that the government, rather than have a balanced approach, decided to cut the heck out of health, education and social programs in the country? This created the most devastating consequences for people everywhere in our community. Is this what the Liberals mean by balance, keeping the burden on Canadians, telling them to tighten their belts because all that matters is its priorities and not the priorities of Canadians?

Today the government comes to us and says that it will work on this commitment to Canadians for a balanced approach by heaping more misery on misery, by making it more difficult yet again for Canadians to make ends meet?

Goodness gracious, all we have to do is look around us today to see what this 10-year legacy of the Liberals has meant for Canadians, this 10 years of investing in strictly tax cuts for corporations and debt reduction without investing in those things that build a country. We would not have a Kashechewan today. We would not have this kind of absolutely deplorable situation that is worse than Third World country conditions in the wealthiest country in the world. We would not have people with sores all over their bodies, or rashes or poisoning by E. coli if the government had done what it was asked to do back in 1993 and 1994.

The government was asked to start investing in aboriginal communities, on reserves, to help them deal with fundamental issues. This is about access to decent drinking water, decent housing, food, clothing and education, the basics that so many Canadians at the upper end of the income scale take for granted.

We should not have this situation today in Manitoba. Using pre-tax low income cutoffs, Statistics Canada shows that in 2003, 22.1% of Manitoba children lived in low income families. It remains virtually unchanged from the 22.5% in 1989 when the House passed a motion by my colleague from Ottawa Centre to eradicate poverty by the year 2000.

How many times do we have to recap that for the sake of the Liberals? How many times do we have to remind them of their obligations and of their cooperation with that 1989 goal, that vision of trying to eliminate child poverty in a country as rich as Canada? How is it possible that we are still talking about this? We are not talking about the situation simply remaining static. We are actually seeing poverty increase. The situation is becoming worse.

I would like the government to talk about Bill C-67 and its little magical formula of making surpluses appear and disappear, and having these one-third, one-third, one-third divisions. I would like it to take that to the family of Kathleen Beardy in my constituency, the young 11-year-old girl who committed suicide just a few weeks ago.

I would like the Liberals to talk to Kathleen Beardy's parents who have six children and are struggling to make ends meet. They are trying to find work. They are trying to be good parents with so many odds stacked against them. They would desperately like to be able to share in a bit of that vision of Canada, to live in decent housing without mould growing around them, without the plumbing backing up, without having to put three kids in one little bedroom, without water coming through the ceiling and without the foundation crumbling around them.

I would like the Liberals just for one minute to put themselves in the moccasins of the family of Kathleen Beardy, not to judge them or make generalizations, but to simply understand the realities of that life and decide that it is important to start addressing the real people in this country, the people who built this country and the people who want to make a difference in this country. The government must start to address their priorities.

I would like the Liberals to talk to Brian MacKinnon in my constituency, a teacher at R.B. Russell school. He has been trying desperately to gather some funds, to grab the interest and attention of the government for a program as simple as helping teenagers in the inner city and the north end go to the downtown Y so that they can benefit from some sort of a recreation program. In fact under the Liberals' legacy of cutbacks, the Y in the north end is gone. All of the recreation opportunities have been basically cut back to nothing. There is no opportunity for young people to be themselves, to stay away from gangs, to be part of a loving environment and to feel that they are part of a community.

Ten years ago Winnipeg's north end community was struggling, but it had all kinds of hopes and ambitions. Community groups were working to turn things around. However, the Liberal government dealt our community a blow the likes of which we have yet been able to recover from. That blow set us back a good couple of decades.

The housing stock was already old but people wanted to renovate, to build, to construct, to clean it up. They wanted to have beautiful neighbourhoods, but the government came along and killed the national housing program. It took away any opportunity for people to get the much needed funds. It took away the opportunity to actually beautify neighbourhoods, to stop the erosion.

The government is complicit in allowing the degradation to continue, which people in communities like the inner city and north end of Winnipeg are still struggling to overcome, and they will do it. We will do it, but not with the help of the Liberals. It is too late for them, just like it is too late for the banks which have all left our community. We will do it on our own. We will fight for a better day. We will fight for a time when government takes the needs of ordinary people seriously. Our day will come.

The bill seems to be nothing more than a gimmick. I have outlined the reasons. It is not a genuine balanced approach. We have seen the past behaviour of the Liberals when it comes to the surplus. When it is convenient for them to pile up the surplus without reporting to Parliament, they do so and they let it go to the debt. When the political heat gets too much, then they say, “Oh, we had better do some quick spending, make sure that the surplus disappears”. They wave the magic wand, as they did just this past month, and suddenly the $8 billion surplus that was there and which was acknowledged by all independent forecasters, becomes $1.6 billion.

The Liberals were able to find some programs that had been sitting around for a while but suddenly this year they needed attention. Suddenly they decided that there were a number of five year funded projects that had to be collapsed into one year. Suddenly they found a way to take an $8 billion surplus and make it $1.6 billion. It is interesting that it is much lower than the $3 billion they feel is necessary to keep on a contingency basis.

Let us go back one more step to a previous attempt by the Liberals to address the surplus issue. Let us go back to the 1997 election campaign when the Liberals suggested that they would be operating on a fifty-fifty formula, not a one-third, one-third, one-third formula. Fifty per cent would go to program spending and 50% would go the debt and to tax cuts.

Did anyone here see that fifty-fifty formula take place? It did not happen by all accounts. Guess what? It was a 90:10 split. There was 10% for Canadians and meeting their needs, like the reserves, the Kashechewan First Nation and the aboriginal people in the north end of Winnipeg. There was 10% for all those folks and 90% for the government's corporate allies, for its buddies in the banking world and the corporate world to give them $100 billion in tax cuts over five years and to put the rest against the debt.

That is anything but a balanced approach. This proposal is not a balanced approach. We will look at the bill more carefully and study it. We look forward to the bill going to committee. I will not comment on our final disposition pertaining to the bill at this moment. I am anxious to see how much willingness the Minister of Finance and his parliamentary secretary have in terms of making this a proper, balanced fiscal framework for future surplus situations. I am anxious to hear how the government is prepared to address the real needs of Canadians to ensure that everyone in this country is able to live with decency, dignity and with some semblance of justice and fairness.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 11:45 a.m.
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Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, the member has been here a long time. I have come to know that he is a very skilled debater. It depends on whether or not we are talking about a piece of legislation on the revenue side or on the expense side, because if it has to do with an issue on spending, his is always the argument about a provincial jurisdiction staying a provincial jurisdiction. However, when there is money or revenue on the table, it is that the government has to do this and get the province the money, as the member laid out, for post-secondary education, for health care and for social assistance. In other speeches, I have heard him argue exactly the opposite about staying out of provincial jurisdiction. He cannot have it both ways.

It is an excellent argument, even on behalf of the Bloc itself, as to why the federal and provincial governments have to continue to cooperate to ensure that we deal with the priorities of Canadians.

The final comment I want to make before I pose my question is with regard the fact that a balanced approach to priorities is simply necessary. It is not going to be good enough to say that Canadians who live in Quebec should not have tax reductions. They are entitled to tax reductions. They are entitled to have debt being paid down so that we have the interest savings and so that there will be more money. They are also entitled to program spending, which also includes transfers to the provinces so that provinces can exercise their discretion with regard to the priorities for the people within their provinces.

My question really has to do with the importance of having a balanced approach, but first with how we must not assume that Bill C-67 replaces a budget. The bill only has to do with surpluses in excess of $3 billion at the end of the year. There is a budget, however, which will address a whole host of the important priorities that have been debated in Parliament and with Canadians in a consultation process, in which the hon. member participates, in the finance committee. In addition to that, there is the process under Bill C-67 which will give Parliament the tools to fine tune that and to do it in a balanced way.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 11:20 a.m.
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Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

That is not too bad for a government that claimed it was on a tight budget and could not meet the basic needs of its citizens in the areas of health, education and support to the disadvantaged. Not too bad for a government that claimed it had to tighten its belt because the public purse was in a bad state.

This year again—as my colleague from Medicine Hat has said—we in the opposition parties have retained the services of a group of independent experts so that there will not be the usual criticism that the Bloc Québécois, which has been within 3% in its estimates of the surplus at the beginning of the fiscal year ever since 1998, is exaggerating. In fact, the Standing Committee on Finance has hired independent experts who come and report to us every three months on the changes in public finances and provide us with their estimate of the surplus.

This year again, the Conference Board predicts a surplus of $10.2 billion, and Global Insight $12.4 billion. We ourselves estimate it to be between $10 billion and $11 billion, yet the government says it is in the $3 billion to $4 billion range.

That is utter nonsense. Since 1998, they have been hiding a margin of nearly $235 billion that could have been used for something other than enhancing the government's visibility. We will come back to that.

Not only has the government been hiding its considerable margin from us since 1998 and continues to do so, but it also continues to deny the fiscal imbalance and future structural surpluses, even though it acknowledges their existence through Bill C-67.

Despite this large margin, there have been some unbelievable inefficiencies in the machinery of government since it has been posting surpluses. When you are swimming in someone else's money and you have the authority to spend it, it is only human nature to waste it. I am referring to the numerous scandals. In fact, the sponsorship scandal is one of many. For example, we are still looking for the billion dollars that Human Resources Development Canada lost a few years ago, when the current Minister of Foreign Affairs was in charge. We are still looking for an explanation for the shameless waste of $1.5 billion in the gun registry, a program that was supposed to cost between $10 million and $20 million.

As you can see, the Bloc Québécois cares about sound fiscal management. Since the beginning, since 1993, we have been concerned about the sound management of the taxes paid by Quebeckers and Canadians, especially the $40 billion Quebeckers send to Ottawa. Nonetheless, we have noticed that since there have been surpluses, the federal government spending machine has been set in motion. In other words, it has taken the bit in its teeth.

Two years ago, the Bloc Québécois set up a committee that we christened the Léonard committee, after the former president of the treasury board of Quebec, Jacques Léonard. He wanted to get involved, as did my colleague, the hon. member for Joliette, my colleague from Drummond and myself. My colleague from Portneuf—Jacques-Cartier also joined the committee.

We conducted an in-depth examination of all bureaucratic spending by the federal government, and the results are disgraceful. From 1998 to 2003, when cumulative annual inflation was approximately 9.6%, federal government spending increased by 39%. We have verified these figures for the past two years. We discovered that during that period, while cumulative inflation hovered between 4.5% and 5%, federal spending increased by 20.4%. This is an outrage.

Yet, everyone was asked to tighten their belts before 1998, in order to eliminate the annual deficit. People have made sacrifices. However, the government has been hiding surpluses since 1998 and is therefore preventing the governments of the provinces and Quebec from fulfilling their fundamental mandates in health and education, and helping the most vulnerable members of our society.

Other people's money is being frittered away on operating budgets and bureaucratic spending in Ottawa. This is money that would normally go to the unemployed whose EI fund surplus is being stolen year after year. These surpluses correspond to employer and employee contributions; the federal government does not contribute one red cent. These are contributions from sick people who are waiting for treatment. There is not enough money for health care. The accord reached over a year and a half ago, thanks to which victory was declared and the federal government could appear to be a great saviour, was only enough to run the health care system in Quebec and the provinces for nine days. In the meantime, bureaucratic spending went unchecked.

The Léonard committee provided another important statistic. From 1998 to 2005, in other words from the time they started to generate surpluses using other people's money, on the backs of the unemployed, the sick and students drowning under student debt, payroll expenditures increased by 55.6%, an annual increase of 6.5%. This is more than double the inflation rate. This makes no sense whatsoever.

The government made major cuts to social programs, particular from 1995 on. They changed the criterion for social transfers for welfare, post-secondary education and health from needs-based to population-based. “They” means the present Prime Minister, and former finance minister, that man of great compassion. He is the one responsible for the drastic cuts since 1995. During that same time, the government's increasing revenues were being added to the savings achieved at the expense of our society's most vulnerable members.

Since 1995, federal revenues alone—not the savings in expenditures—have gone up by $76.6 billion. Over that same period, transfer payments to Quebec rose by $794 million, 1% of that figure. One per cent of the additional $74 billion has gone to increase transfer payments to Quebec since 1995. Disgraceful.

The Prime Minister, and former finance minister, achieved those budget cuts at the expense of the least advantaged members of society, including the unemployed excluded from EI because of tighter eligibility criteria. Otherwise, if the surplus had been reinvested in broadened accessibility, none of them would need to be on welfare now. The government is responsible for people having to move from EI to welfare, the latter being the responsibility of the Government of Quebec and the provinces.

At the same time as the provinces and the unemployed were being deprived of funds, the provinces' expenses were being increased, since they had to support people who had been literally thrown out on the street. This is the work of the Prime Minister, he who is so full of compassion for Canadians, whom he says he wants to help out of poverty. Come on, now, he is the one who has been putting them in it up to their necks since 1995.

If the transfer rate had been maintained for funding health and post-secondary education—that is to say colleges and universities—and to help the most disadvantaged, an additional $16.1 billion would have been transferred since 1995 to the governments of Quebec and the provinces for them to carry out their basic responsibilities.

This morning I heard the Minister of Finance talking about incredible tax cuts. In reality, Bill C-67 provides for the allocation of the “surprise” surpluses that the government might realize over the next few years. We call it a “surprise” even though we know about it a year in advance because we can figure it out with a little pocket calculator bought for $ 2.49 at the corner store. But for him, these are surprises. I do not know what they like about surprises; it is more fiddling with the figures.

Under this bill, if surpluses are anticipated at the end of each fiscal year, one third will be allocated to paying down the debt, one third will be allocated to tax cuts for taxpayers, and one third will be allocated to programs, but according to the government's priorities. These priorities could change along the way though, still according to Bill C-67, if the government so desires.

In reality, the government will continue doing over the next few years exactly what it has been since 1998. It will use its discretionary power to choose its own priorities, not those of Quebeckers and Canadians. That is what it has been doing since 1998. So what has changed?

In regard to these fantastic tax cuts, I would like to provide a small example of what they could be. Suppose that the surplus is $9 billion this year. Three billion would have to be set aside in a contingency fund. This has been automatically allocated to the debt since 1998. So we can forget this first $3 billion. There would be around $2 billion for new expenditures. These would not be the next expenditures but expenditures already included in Bill C-48 passed last June before the House adjourned for the summer. That is what would become the priority.

Therefore, $4 billion in surplus will remain after the reserve fund and the commitments under Bill C-48 have been satisfied. Let us suppose that if the surplus were just over $4 billion, $2 billion could be used for personal tax cuts. Do you know what that would mean for the 15.5 million taxpayers in Canada? That would represent $129 for one year. That is wonderful! We must applaud the government. A tax cut of $2 billion for 15.5 million taxpayers in Quebec and Canada would give them each $129. It is a joke to talk about whopping tax cuts; it is sheer visibility.

In reality, the federal government has sacrificed the economic and social development vision a government should have for visibility alone.

We have become accustomed to this government's finery: Canadian flags everywhere, cheques for fuel, etc. They are looking for visibility. You cannot run a society and make progress with visibility, you need a vision for development to do so.

We have just toured through several regions in Quebec. We have seen this government's lack of vision. Despite the billions of dollars in surplus it is been amassing since 1998, this lack of vision is killing entire communities, especially in the outlying regions. The remote regions have been totally abandoned.

All this visibility for a measly $129 cheque or a personal exemption for the same amount at the end of the day. This is a lot of talk for so little money.

We are talking about $2 billion for 15.5 million taxpayers. If the government was thinking about a vision instead of visibility, it would see that this money represents half the new investment the underfunded colleges, CEGEPs and universities have needed over the years. Last week's demonstration by students calling for $4 billion more did not come out of nowhere. It came from the fact that for the past 10 years, the Liberal government's savage cuts have not made it possible to give the colleges and universities the funding they should have received.

This too is the result of another of the Prime Minister’s promises which he has not kept and which has bit the dust. In the election campaign, when he was on the ropes, he was offering things to everybody. He promised students in the colleges and universities of Quebec and Canada to invest $4 billion in the education system, which is now suffering from underfunding. Fine words in an election campaign, aimed at saving his skin. They talk about the future of our children. They say the future of the Canadian economy depends on the education of our young people, on their knowledge, since ours is a knowledge-based economy. But when the time comes to act, there is no follow-up. They say that enough money has been invested in education. What lack of vision. So that every taxpayer can be offered an annual cheque for $129, we are in the process of sacrificing the education system of Quebec and Canada.

A sum of $2 billion, that is also what Quebec is lacking in equalization. If they corrected the formula and used real figures, a real method of calculating the pan-Canadian standard—that is, taking the ten provinces into account—and property tax, Quebec could obtain $2 billion with the equalization adjustment. That is the very amount we are scattering on needs of visibility and electioneering, that is, needs of very little importance which testify to this government’s lack of vision.

I listened to the Minister of Finance when he presented his bill. He said it was in line with what the opposition had asked for. What demagoguery. We made our request last spring, before the budget was tabled and before the revelation of the surplus figures for the last fiscal year. What we were asking for in the short term was to start correcting the fiscal imbalance by increasing transfers to the provinces for education, health and disadvantaged families, as priorities. We said that later, in the intermediate term, the government should sit down with Quebec and the provinces to work out a lasting solution for the fiscal imbalance.

We did not ask it to amass surpluses and plan a long-term distribution, but to correct the fiscal imbalance through a transfer of fields of taxation, such as the GST, and by correcting equalization. That would have ensured stability in Quebec and the provinces. But there is nothing in this bill that will correct the fiscal imbalance. They do not have the will, even though they recognize, by the very existence of Bill C-67, that there will be structural surpluses in the years ahead. This is testimony to the ongoing fiscal capacity of the federal government to generate surpluses, even though it does not need them to carry out its core mandates, and to the undercapacity of the governments of Quebec and the provinces to carry out their own mandates and provide direct services to the population, for lack of money, because that money is being siphoned off by Ottawa.

So we are going to oppose this bill. We will attempt to amend it so that there is a permanent and lasting solution to the fiscal imbalance. However, we cannot support the fact that, on account of the fiscal imbalance, it may be necessary to distribute in the coming years, at the rate of one third, one third, one third, the surpluses that the government will continue to outrageously accumulate.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 11:20 a.m.
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Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Mr. Speaker, it is a pleasure for me to rise and speak about Bill C-67, which at least gives us an opportunity—because this is the only benefit of the bill—to debate the question of whether or not there are structural surpluses in the federal coffers.

We have been estimating the surpluses since 1998 and we know that there is an imbalance between the financial capabilities of the federal government and those of Quebec and the provinces. On the other side of the House they have always denied the existence of the fiscal imbalance. Today, though, they confirm it for us through Bill C-67. It is a bill spread over the next five years. They anticipate, therefore, that there will be surpluses over this time, just as there always have been since 1998.

I would like to be very clear. The Bloc Québécois is totally opposed to this bill and will not support it. It is unacceptable in regard to both its arrangements and its substance concerning the existence of the fiscal imbalance. Nothing is corrected, and although the federal government recognizes the existence of the fiscal imbalance, it shows no desire to fix it.

So now the government says, “This is a bill for distributing the surpluses, but there will not be all that much in the future. There will not be any windfalls”. I am quite willing to think that there will not be any windfalls, but when we look at the tax cuts—and we will return to this in a minute—we see that the surpluses will generally be quite large.

Over the last few years, or at least since 1998 when the federal government has been taking in surpluses, about $75 billion in surpluses have been accumulated at year's end. But every year the government says: “There will not be a surplus or it will be minimal if there is one. We need to tighten our belts. We must be careful. Even if the post-secondary education system is collapsing and health care waiting lists are very long, the surplus will not be large enough for us to meet the demand”. And then every year, especially since 1997-98, the federal government's annual surpluses are a big surprise, like a rabbit they pull from a hat. We could not see it coming. It was unanticipated. What good government that gives us these surpluses at the end of the year thanks to its perfect management.

Perfect management it was not; it was a sham. Every year since 1998, some $75 billion of the surplus has been kept out of public debate. We could have been able to discuss allocation of those surplus funds, to focus even more on the matter of fiscal imbalance, and to find remedial measures precisely to enable the provinces and the Government of Quebec to fulfil their mandates duly set out in the Constitution, such as health, education and support to disadvantaged families.

But instead, they have concealed the surplus from us year after year. Not only had some $75 billion accumulated since 1998, but as well $160 billion had been allocated to new federal government initiatives. Not bad, that; it means that the government's margin of manoeuvrability, taking into account all that money since 1998, was in the order of $230 billion or $235 billion.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 11:15 a.m.
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Gérard Asselin Bloc Manicouagan, QC

Mr. Speaker, Bill C-67 concerns the allocation of surpluses. Why are there surpluses? It is because the Minister of Finance inaccurately forecasts his budget. He inaccurately forecasts the surplus. Each year, the Bloc Québécois proves that the Minister of Finance never fails to underestimate the anticipated surplus.

Why is there a surplus? First, $4 billion is taken each year from the EI fund. Now, we wonder how the surplus will be allocated. Given that fact, the minister should at the very least have improved EI and returned to seasonal workers the $48 billion he has taken from the fund over the past decade.

Today, the minister has had to introduce a bill setting out how the surpluses will be allocated, knowing full well that, every year, $4 billion is being taken from the unemployed, seasonal workers, women and the jobless. He is increasing the poverty level in the world and especially in Canada.

I want to ask the following question of the Conservative Party member who just spoke. Would it not be logical, in his opinion, for the government, which has taken $4 billion each year from the EI fund, to improve the EI program and give back to the workers the money—$48 billion according to figures provided by the Auditor General—that it has taken over the past decade?

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 11:10 a.m.
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Wascana Saskatchewan


Ralph Goodale LiberalMinister of Finance

Mr. Speaker, I was interested in the hon. gentleman's remarks. They were fascinating if not fanciful in both his analysis of the economic situation and his depiction of the relative position of the Conservative Party and others on economic affairs.

He was very critical of year end spending decisions by the government over the last number of years. However, I look at those spending decisions on things like: assistance to farmers to alleviate the burden for mad cow disease; special measures to deal with the SARS outbreak; money to the provinces for health care; a trust fund to launch the child care initiative; special money to British Columbia to help fight the mountain pine beetle; measures to deal with national security after 9/11; measures to deal with foreign aid and so forth. I wonder in all of this criticism which of those things the hon. member would have chosen not to do.

The hon. member also talked about the tax relief measures in Bill C-67. He implied that the tax relief in the bill is only in the nature of one time annual rebates. That is not true.

I would point out first and foremost that our government has already implemented $100 billion in tax reductions; two-thirds of that going to individuals. There was another $13 billion in tax reductions contained in budget 2005. About half of those have already been implemented and the other half are still in the process.

I would point out to him that it is the government's intent in future budgets, just as has been the case in every budget since we balanced the books, that there will be positive steps taken in the main body of the budget to reduce taxation, especially personal taxation. Bill C-67 provides not just for rebates on an annual basis but in fact for permanent ongoing tax reductions to improve the disposable incomes of Canadians.

The member said that taxpayers would have seen zero in benefit under this legislation last year. That is not true because there was $13 billion worth of tax reductions in the main body of the budget itself. That is what the hon. gentleman tends to ignore.

I quoted the hon. gentleman from the National Post of about a month ago where he was in fact supporting a mechanism like this. I would point out to him that at the finance committee in June in the debate on Bill C-48 the hon. member himself moved an amendment that was virtually identical to Bill C-67. He has just swallowed himself whole and I ask him, what will he do about his gross indigestion?

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 11 a.m.
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Monte Solberg Conservative Medicine Hat, AB

Mr. Speaker, when did it go to Canadian taxpayers, the people who earn that money and who need that money to look after their families? It has not gone to them.

My colleague across the way said that the government cut taxes. If that is true, why are Canadians not seeing it on their bottom line? Canadians need some tax relief so they can look after their families and their future. No one can look after their families better than they can themselves, certainly not the Minister of Finance and not a bunch of bureaucrats either. It is time for tax relief for Canadians. Why are we not seeing it?

My friend across the way said, “Say that outside,” when I said David Dingwall's name. He raised the issue so I will address it. I do not think one Canadian believes he or she can quit his or her job and get a king's ransom in a severance package from the employer. That is exactly what is going on today because the government has not changed its stripes.

The Liberals did not learn anything from the ad scam. They said that they would clean up government and quit rewarding their friends but the first chance they had to prove they would not be the same way, they blew it and defended David Dingwall. They defend their practices of featherbedding and looking after their friends.

All that tells me is that the Liberals have not learned a thing. And, guess what? No surplus is safe from Liberal friends, which is why we are opposed to Bill C-67. Liberal friends will always be rewarded first and it will always be taxpayers who get looked after last. In fact, if we were to use the formula last year, Canadian taxpayers would see zero for a rebate. That is one of the primary reasons that we oppose Bill C-67.

I want to point out that it was the Conservative Party that moved an amendment to the throne speech asking for independent forecasters to be hired by the finance committee so we could provide a different opinion of where government surpluses were going. I should say taxpayer surpluses because they are the ones who provide them. This was passed on, I think, December 1, 2004. The point of that exercise was this. All three opposition parties agreed that the government had been manipulating the surpluses and the books for its own ends. I mentioned a minute ago that the unanticipated surpluses, or the surpluses the government would not admit to, amounted to about $90 billion.

We moved our amendment back in 2004, which passed, and the government reluctantly went along with it. We now have a situation where these independent forecasters come to the finance committee every quarter and provide independent analysis of the size of the surpluses.

Last year the government said in the budget that the surplus this year would be $4 billion. The independent forecasters just came to the committee and said that was absolutely wrong, that the surplus would be well over $10 billion. This comes on the heels of a situation last year, which my friend from Wild Rose has already pointed to, where at the end of the last fiscal year the government said that the surplus would be $1.9 billion and it turned out to be $9.1 billion.

We cannot allow the government to continue manipulating the books to come up with numbers that suit its ends. One of the great flaws in Bill C-67 is that it does not commit the government to live within its budget. Therefore it can, at the end of the day, manipulate the size of the surplus and ensure there will be no surplus to divide up. I think the amendment was one of the great triumphs of the Conservative Party. I should acknowledge that it was the leader of the Conservative Party who brought this to Parliament, that we can at least hold the government to account to some small degree for this manipulation that goes on at the end of every fiscal year.

I urge all members around the House to oppose Bill C-67. It is clearly a bad move for Canada and it is simply a cynical attempt to buy votes as we get into an election campaign.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 10:55 a.m.
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Monte Solberg Conservative Medicine Hat, AB

The minister is urging me to do that so I will. I want to explain why the Conservative Party is very much opposed to Bill C-67.

Bill C-67 is indicative of a government that is out of gas and out of ideas. When the minister raised the fact that Canada is facing a productivity crisis, he brings in legislation that economist after economist has criticized as being absolutely antithetical to the idea of solving our productivity challenge. I want to explain what I mean by talking a little bit about the particulars of the legislation.

Bill C-67 would take unanticipated surpluses and divide them into three. One-third would go toward paying down the debt, one-third toward a tax rebate and one-third toward increased spending. Let me tell the House why that is unbelievably simplistic when we are facing this great productivity challenge. It is wrong for a number of reasons.

The government has used its ability to manage the size of the surplus a number of times to get around the normal parliamentary scrutiny that should be brought to government spending when we are talking about spending billions of dollars.

Since 1997, so-called unanticipated surpluses have amounted to about $90 billion. Independent forecasters knew these surpluses were coming. It is the finance department that claimed it did not know these surpluses were mounting. As a result Canadians have had no input on where the money should go.

What happens is that very often at the end of the year the government would go on a year-end spending spree. Sometimes the money would go to important things but a lot of times it would go to things of questionable value. I can think of one year, on the last day of the budget year, when the former prime minister bought two Challenger jets for his own travel at the same time that the Canadian military was looking for all kinds of equipment to move our troops around.

It is a dangerous when we have a government that manages the numbers so it can lowball expectations about surpluses and then use those surpluses at the end of the year for its own ends. We are concerned about that.

As members will know, at the end of last year Parliament's own independent forecasters projected a surplus of over $6 billion but the government engaged in a bunch of accounting tricks at the end of the year to reduce that surplus down to $1.6 billion.

When the government maintains the ability to manage the size of the surplus by introducing a bill to divide the surplus into equal parts, where Canadians think they will get a rebate at the end of the year, it is not going to happen because the government can eliminate the surplus if it suits its ends, which is what happened last year. We had a surplus at the end of the year of only $1.6 billion, which means there would be nothing to divide up. Canadians would see no tax relief, no debt repayment and no increased spending.

As long as the government maintains the ability to spend more than it said it would spend and manipulates the size of the surplus, having a bill that divides the surplus up is meaningless.

However it goes beyond that. We have other criticisms beyond that. One of the great criticisms that has been levelled against the government is the fact that it has not taken any steps to enhance our productivity. I touched on this a minute ago. The problem with Bill C-67 is that if one-third of the surplus were given back to Canadians in the form of a rebate, it would not do anything to enhance productivity.

One of the great arguments for tax relief is that lowering particular types of taxes provides an incentive for taxpayers to engage in certain types of behaviour. If taxes are lowered on investments, then people invest more, which, obviously, is something that enhances productivity. If personal income taxes are lowered, then people tend to produce more because they are not so heavily punished when they earn more money.

Economists have argued, and they are absolutely right, that instead of providing this one-third formula the government should just lower taxes for middle class Canadians. I know the government always pleads poverty but we have seen spending go up 52% since 1999. Money has gone to public service, Liberal friends and to David Dingwall. We have seen it go to the NDP.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 10:50 a.m.
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Monte Solberg Conservative Medicine Hat, AB

Mr. Speaker, it is my pleasure to address Bill C-67, the surplus allocation bill.

I know the minister would not want to mislead Canadians about the true facts regarding either the history of his own government's performance or even the history of other governments' performances, so I just want to start by addressing some of the issues that he raised in his speech and then I will say a little more about the bill in particular.

First of all, the minister said a number of times that his government balanced the budget, but that is not true. In fact the taxpayers balanced the budget and they paid a very heavy price to do it.

As the minister knows, first of all his government cut health care. It made the deepest cuts in Canadian history to balance the budget. It did not cut all the transfers to spending for grants and contributions. It did not cut them at all. In fact those stayed steady through that period, but the government certainly cut health care. In other words, Liberal friends were well looked after during that period but health care had the deepest cuts ever in Canadian history. It really was not the government that balanced the budget. It was health care workers, patients and Canadians.

During that time, we saw a number of tax increases, 67 tax increases, typically small, sneaky tax increases through that period. Who bore the brunt of that? It was the taxpayers. It was not the government that balanced the budget. It was the taxpayers who balanced the budget.

I also have to point out that GST revenues were very important in helping to keep that budget in balance, and that is the government that said it was going to get rid of the GST. Last time I checked it was still there. We are still paying that 7%. I see it every time I purchase something. The government certainly counted on the GST to balance the budget, even though the Liberals said they would get rid of it.

I noted another thing, and the minister partially touched on this. He talked about all the revenues coming in. I note that many of them are resource revenues and in fact revenues from companies that do business in the United States all the time. They are bringing in lots of revenue. The Liberals said they were going to get rid of the free trade agreement. They were going to rip up NAFTA but thankfully it is still there and it is providing a lot of these revenues.

Therefore, I just reject the premise of the minister's argument.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 10:45 a.m.
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Ralph Goodale Liberal Wascana, SK

Mr. Speaker, I first want to thank the hon. member for his words of congratulation to me on my common sense. I appreciate that.

With respect to the $9 billion in the surplus from the previous fiscal year, when that was announced was exactly the time when I indicated that Dr. Tim O'Neill would be invited to examine the fiscal forecasting process. He has made 14 recommendations. We are in the process of implementing those very recommendations.

The only one of his recommendations that we did not agree with was the one where he said it would be okay from time to time to run a deficit. We do not think that is consistent with the views of Canadians. We do not think it is consistent with the views of members of the House. We think the budget should be balanced or better every year.

Dr. O'Neill anticipated that we might not agree with his point that it would be okay every now and then to run a deficit, so he said that if we are going to stick to the no deficit rule, we have to have a mechanism to transparently deal with those extra surpluses. That is exactly what we are doing with Bill C-67.

On the aboriginal evacuation that is taking place in Ontario right now, I would point out that the responsibility for that evacuation is in fact under provincial jurisdiction. The Government of Canada's responsibility is to pay for it and in fact we are picking up the entire bill for that situation.

With respect to the issue about farmers, I am happy to tell the hon. member that during the time that I have been Minister of Finance, since December 2003, the Government of Canada over and above all of the normal safety net programming has invested an additional $2.8 billion to support agriculture in this country. We will stand by our farmers every step of the way.

On hepatitis C, the House discussed the process and the hon. gentleman, I am sure, is very aware of that process. It involves a court controlled fund that we are in the process of negotiating with the relevant parties. We are hopeful we can achieve the kind of solution that will in fact allow those revenues to flow.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 10:30 a.m.
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Ralph Goodale Liberal Wascana, SK

Mr. Speaker, I am very pleased to have the hon. gentleman's comment and his participation in this discussion. I hope, as the House procedure around the bill unfolds over the next period of time, we will have ample opportunity to get into the detail. It is important that the detail be well understood. It also is important that all parties ventilate fully their respective positions on this legislation.

Tax reductions for middle income Canadians may be one of those rare instances where he and I are in agreement with each other. I indicated very clearly in encounters that I had with Canadians in prebudget consultations this summer, in places like Halifax, Charlottetown, Montreal, Toronto, Chatham, Kent, Hamilton, Brantford, Winnipeg, Regina, Saskatoon, Edmonton and Vancouver, that I had addressed the importance of improving disposable incomes of Canadians and doing so by a variety of means, but significantly doing that by reducing the personal tax burden, which is very much a part of my thinking and planning as the economic agenda of the government goes forward.

On the specific comment of process, Bill C-67 is not regarded as a confidence bill. Any particular spending item that flows from the process in Bill C-67 will be subject to some future parliamentary vote, bill or appropriation. The legislation in itself does not trigger specific spending or specific appropriations. It provides the framework or the process within which that will be handled in the future. The specific decisions about what future appropriations would be would be subject to future debates and future parliamentary votes. This is a procedural bill. It is a process or framework bill and therefore it is not a matter of confidence.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 10:30 a.m.
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Monte Solberg Conservative Medicine Hat, AB

Mr. Speaker, I thank the minister for his speech. Obviously I do not agree with most of it, but the Conservative Party absolutely believes in lower taxes for middle class Canadians. We believe that is the right solution after a period of time when the government has ratcheted up spending by 52% since 1999 and has looked after bureaucrats, politicians and Liberal friends, and guess what, even the NDP that he criticized for driving up spending. He is the one who went along with the proposal to raise spending by $4.6 billion.

I will not take up a lot of time right now giving a speech because I will do that in a minute.

I want to ask the minister an important public policy question. He has spoken about the nature of the bill, but he really did not state whether he or the government regard Bill C-67 as confidence motion.

Unanticipated Surpluses ActGovernment Orders

October 27th, 2005 / 10:10 a.m.
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Wascana Saskatchewan


Ralph Goodale LiberalMinister of Finance

moved that Bill C-67, An Act respecting the allocation of unanticipated surpluses and to amend the Income Tax Act, be read the second time and referred to a committee.

Mr. Speaker, I am pleased today to launch second reading debate on an important new fiscal management tool for both the Government of Canada and the Parliament of Canada: Bill C-67.

This proposed legislation to provide the legal basis for fair, balanced and transparent allocations of any future unanticipated federal surpluses is perhaps the most significant governmental and parliamentary innovation in this field since that crucial time in the mid-1990s when our government fought and won the hard battle to eliminate annual federal deficits. Such deficits had become a chronic bad habit year after year, indeed, for 27 consecutive years prior to 1997.

To put things in context, the economy that we inherited from our Conservative predecessors exactly 12 years ago this week was very nearly a basket case. The fiscal condition of the country was appalling.

There was virtually no growth. Jobs were being shredded. The national unemployment rate was in double digits. The annual deficit was close to $40 billion. Federal debt was approaching 70% of GDP. Interest rates were high. Our precious social programs were in real jeopardy.

Some international observers were even speculating about Canada losing its economic sovereignty.

Things had to change and they did change, after 1993, and surprisingly quickly. We balanced the nation's books by 1997.

This is the first point to note about this new legislation. For Canadians to be able to have a spirited debate about how best to manage ongoing budgetary surpluses, anticipated or not, we first of all must have a surplus to argue about. Less than a decade ago, when we were mired deep in red ink, such a discussion about allocations would have been entirely hypothetical and wildly unrealistic.

This legislation and this debate are really a celebration of success, a celebration of the discipline and prudence which led to the elimination of annual federal deficits and the achievement of eight consecutive balanced budgets, with more yet to come on our planning horizon.

What is the evidence of that success?

From its peak at 68.4% of GDP, Canada's debt ratio today stands at just 38.7% and is on a steady downward track to reach 25% within this coming decade. Our debt load used to be the second worst in all the G-7 group of world leading economies. It is now the best.

The proportion of our debt in foreign hands has dropped from 43% to just 15%.

Debt servicing costs used to gobble up close to 38¢ out of every dollar the Government of Canada raised in revenue. Now it takes only 17¢ to service our debt obligations.

We have earned a triple-A credit rating for Canada, meaning major cost savings for all borrowers, new home and vehicle buyers, other consumers, businesses, the provinces and municipalities as well as the Government of Canada.

We are now saving more than $3 billion every year in federal debt charges that we no longer have to pay. That money is available for better things, like health care, child care, learning, innovation, and infrastructure.

Since balancing the federal budget and keeping it balanced, Canada has enjoyed the best job creation rate in the G-7, the highest ever participation rate in the Canadian job market, the lowest unemployment level in nearly 30 years, and the second fastest growth in living standards in all the G-7.

Fiscal success is about a whole lot more than just a bunch of statistical bragging rights. It makes a real-life difference in the lives of Canadians.

Among only a very few countries in the world, we have earned the freedom and the opportunity to debate our options about what to do with budgetary surpluses. Every other nation in the G-7, and most others around the world, envy that Canadian situation.

That is point number one.

Point number two, what we are talking about in Bill C-67 is only that small portion of government revenues described as unanticipated surpluses.

Contrary to some early and rather misinformed speculation, this legislation is not, and I repeat, not the government's primary instrument for making our major policy decisions about how much to devote each year to program spending or to ongoing debt reduction or to tax cuts.

The vehicle for making these fundamental decisions and for laying out the government's economic and fiscal plans is and of course remains each year's federal budget, and that will not change.

As we put together each budget, using the best external private sector analysis and econometric modelling, and using prudent assumptions and forecasting techniques, we will fashion the government's behaviour to invest appropriately in public programs and services and to cut the tax burden on Canadians, while balancing our books and running a planned or anticipated surplus of $3 billion.

As members of this House know very well, that amount is our annual contingency reserve. If it turns out not to be needed to keep Canada in the black in any given year, that $3 billion goes directly to reduce the federal debt.

But what happens to any larger than expected surplus, that is, any unplanned or unanticipated amount over and above the basic $3 billion? Due to the combined effects of the Financial Administration Act and generally accepted accounting principles, any and all such unanticipated surpluses go, just like the contingency reserve, exclusively and automatically to debt reduction.

There is no opportunity for debate, no flexibility and no choice. There is no judgment brought to bear by either the government or Parliament. It all goes to debt reduction, effectively by default.

There is no way of knowing exactly what that unanticipated amount, if any, might be until five or six months after the end of each fiscal year. That is when we get each year's annual audited financial report with the firm and final numbers.

Experience since we first achieved our positive balance in 1997 has shown that surplus amounts above the basic $3 billion can sometimes be significant, so last year we asked the former chief economist and executive vice-president of the BMO Financial Group, Dr. Tim O'Neill, the dean of private sector analysts, to review our federal fiscal forecasting process and to offer advice about how it could be made more precise. He drew upon not only the best information and opinion within Canada but also the best global advice from the International Monetary Fund.

Dr. O'Neill concluded that if the government is going to retain its strict rule against running deficits, and that is a rule that the vast majority of Canadians now insist upon, if that rule is to remain in place--and the government certainly agrees that it must--then surpluses beyond the basic $3 billion will be inevitable, and there should be a more formal and structured way of dealing with them, not passively by default, but through conscious decision making.

Bill C-67 is a reflection of Dr. O'Neill's recommendations. We did not pull this unanticipated surplus mechanism out of thin air. We took Tim O'Neill's advice. We also listened to parliamentarians. Spokespersons for every party in this House have at one time or another called for something along the lines of Bill C-67.

I could cite members in all three opposition parties, but let me just content myself with the hon. member for Medicine Hat. He is quoted in the September 30 edition of the National Post as saying:

We want to ensure that surpluses are put to some end--services that make a difference in people's lives, or a reduction in taxes that hurt productivity, or debt repayment.

The government agrees and that is exactly what Bill C-67 does.

Let me make this point. Our search for a fair, balanced and transparent process for dealing with unanticipated surpluses does not imply, and let me say that again, does not imply that ongoing debt reduction is not an ongoing priority. It most certainly is.

As a matter of intergenerational fairness, it is important to continue to bring down the mortgage from previous heavy spending that our current generation is passing along to our children and our grandchildren to pay. And as a matter of practicality, reducing past debt helps to build future flexibility to deal with the expensive requirements of the big baby boomer generation that is soon to retire.

That is why we remain solidly committed to a $3 billion annual contingency reserve for debt reduction, plus the fiscal anchor of a targeted debt to GDP ratio of 25% by 2015. I am happy to report that we are fully on track to reach that goal.

As and when the Canadian economy turns in a surprisingly robust performance, to the extent that the available surplus exceeds what was originally anticipated, then we believe the government and parliamentarians should at least have the opportunity to consider their options and to make appropriate choices within a commonsense policy framework. That is what Bill C-67 is all about.

As I said before, it is not our principal means of decision making. That will always come before the fact, before the end of any fiscal year, through the budget itself. Bill C-67 is the fallback mechanism to deal with any late-breaking good news that emerges after the end of any fiscal year but before the final audited annual financial report is available in August or September.

What is that commonsense policy framework in Bill C-67?

Based upon the sound advice that Canadians have offered over 12 years of detailed budget consultations, Bill C-67 provides for an unanticipated surplus to be divided transparently and equally, one-third, one-third and one-third, among: (a) further debt reduction, consistent with rock solid and ongoing fiscal responsibility; (b) further investments in Canadians' most crucial social and economic priorities, like health care, families, learning, innovation or infrastructure; and (c) further personal tax reductions, both immediately and for the long term.

The one-third that goes to debt reduction, in addition to the basic $3 billion in the contingency reserve, will help ensure that Canada continues to reap the huge benefits of being a world class fiscal performer. It will help to keep our credit rating high and our interest rates low. It will help maintain the foundations necessary for greater competitiveness and productivity.

The one-third that can be devoted to further investments in the social and economic well-being of Canadians will be subject to specific parliamentary approval every year. It is not possible, of course, to identify the needs and priorities in advance through an enabling bill like Bill C-67.

Bill C-67 would provide the standing authority to invest one-third of any unanticipated surplus, but exactly how that is to be done and for what purpose would be a yearly decision to be taken in a timely manner by members of Parliament.

Here is how it would work. In or around the time of each budget, the Minister of Finance will identify his proposals for investing one-third of any unanticipated surplus, should one later materialize. It would then be up to the House of Commons to approve those plans, or not, before the end of the fiscal year. It is a completely transparent and democratic process. It allows for intelligent decisions to be made that are appropriate to the changing circumstances of each passing year.

Finally, the one-third of any unanticipated surplus for tax relief may well be the key innovation in Bill C-67.

Over and above the permanent tax reductions that we have implemented already in every budget since we first balanced the books in 1997--more than $100 billion worth so far--and over and above the future tax reductions that we intend to provide in the main body of each federal budget going forward, Bill C-67 will help to ensure that Canada's sometimes surprising economic success will continue to be translated into improvements in disposable incomes and living standards, through personal tax cuts.

The fiscal year ends on March 31. The audited annual financial report of the Government of Canada, which would document any unanticipated surplus, comes out later, in August or September. That is the point in time when any one-third share available for personal tax reductions would be quantified.

To make the benefit available at the earliest possible moment, the government would provide each personal taxpayer with a tax credit against the income taxes they would otherwise have to pay for that very calendar year, that is, the actual year in which the unanticipated surplus is identified. For subsequent years, subject to the initial certification of the Minister of Finance that such a tax cut were indeed sustainable over the long term, the benefit would be reflected in a permanent increase in the basic personal amount that each Canadian taxpayer can earn and retain totally tax free. This would provide permanent tax relief for all Canadians across the board and it would help to take thousands of low income taxpayers off the tax roles altogether.

Bill C-67 is fair, balanced and transparent. It is rooted in democratic procedures. It responds to previous concerns by members of Parliament and is consistent with the advice of external experts. Most important, Bill C-67 is a reflection of the often repeated common sense of most Canadians, which is to say, if the country is fortunate enough to generate additional surplus dollars beyond those normally expected and planned for, then divide that good fortunate in three equal shares to contribute simultaneously to further debt reduction, accelerated investments in the priorities that matter the most to Canadians and lower taxes to boost disposable incomes.

Unlike our friends on the Conservative right wing, we do not subscribe to some monotone mantra that there is no problem in the world that a tax cut could not fix. Do tax cuts and nothing else, they say, “Abraca tax cut and poof, everything will be fixed”.

Unlike the Bloc, we do not believe that the Government of Canada should simply raise taxes only to transfer all the money to the premiers, plundering any surplus and leaving the Government of Canada weak and emasculated.

Unlike the NDP, we do not agree that we can forget about the tax burden, forget about debt reduction and just spend, spend, spend our way to paradise.

Instead we strive for balance, transparency and fairness. We want to give careful attention to debt reduction, program investments and personal tax reductions together. We want to achieve all that in an open and democratic manner, and that is what Bill C-67 does.

Business of the HouseOral Questions

October 20th, 2005 / 3 p.m.
See context

Hamilton East—Stoney Creek Ontario


Tony Valeri LiberalLeader of the Government in the House of Commons

Mr. Speaker, I find the last part of that question a little puzzling, given that the hon. member was at the meeting where I in fact outlined the opposition days. They will begin the week of November 14 and will go right to December 8. We are meeting our commitment and our obligation to provide seven opposition days during this supply period.

We will continue this afternoon with the second reading debate of Bill C-65, the street racing bill, followed by Bill C-64, the vehicle identification legislation, Bill S-37, respecting the Hague convention, Bill S-36, the rough diamonds bill, and reference to committee before second reading of Bill C-50, respecting cruelty to animals.

Tomorrow, we will start with any bills not completed today. As time permits, we will turn to second reading of Bill C-44, the transportation bill, and reference to committee before second reading of Bill C-46, the correctional services legislation. This will be followed by second reading of Bill C-52, respecting fisheries.

I expect that these bills will keep the House occupied into next week.

On Monday we will start with third reading of Bill C-37, the do not call legislation. I also hope to begin consideration of Bill C-66, the energy legislation, by midweek. We will follow this with Bill C-67, the surpluses bill.

Some time ago the House leaders agreed to hold a take note debate on the softwood lumber issue on the evening of Tuesday, October 25.

We also agreed on an urgent basis to have such a debate on the issue of the U.S. western hemisphere travel initiative on the evening of Monday, October 24.

Accordingly, pursuant to Standing Order 53.1(1), I move:

That debates pursuant to Standing Order 53.1 take place as follows:

(1) on Monday, October 24, 2005, on the impact on Canada of the United States western hemisphere travel initiative;

(2) on Tuesday, October 25, 2005, on softwood lumber.

Unanticipated Surpluses ActRoutine Proceedings

October 7th, 2005 / 12:05 p.m.
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Wascana Saskatchewan


Ralph Goodale LiberalMinister of Finance

moved for leave to introduce Bill C-67, An Act respecting the allocation of unanticipated surpluses and to amend the Income Tax Act.

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