Mr. Speaker, I would like to start with a comment on the presentation made by the hon. member for Drummond who is to be commended for her excellent speech.
First of all, I entirely approve of her proposal that the provinces should themselves raise, and be allowed to keep, the amounts they need to operate the health care system. However, as we know, under the present system this is unthinkable. So we must ensure that transfer payments to the provinces are not affected, so that the provinces can continue to be responsible for and provide health care services to their residents. I may remind hon. members opposite that during the election campaign, the Prime Minister promised that he would not tamper with transfer payments to the provinces.
The hon. member also made a very careful analysis of the two perverse consequences of a possible reduction in transfer payments for health care. First of all, there would be a reduction in services. And, as she so astutely pointed out, the neediest members of our society would suffer most because they are unable to pay the user-fee or health tax that might be introduced by the province if transfer payments were cut. They would either postpone medical appointments or not go at all.
Furthermore, as I pointed out myself, this might increase the tax burden, because if the federal government reduces transfer payments to the provinces, that does not necessarily mean it will lower its tax rates. Consequently, the provinces will have to pick up the slack, either by increasing their own tax revenues or by asking residents for a bigger contribution to the health care system. And this illustrates the other perverse effect I was mentioning previously. It is a kind of vicious circle: increased burden for the taxpayer on the one hand, and reduced services on the other. I believe, therefore, that the perverse consequences are too important to even consider a reduction of transfer payments to the provinces.
Besides, I would like to point out, Mr. Speaker, that the Prime Minister promised not to cut transfer payments to provinces. However, we will have to watch carefully to make sure that those payments are not frozen at their present level, since that would amount, in the long run, to a reduction equivalent to inflation. The government will have to keep the promise it made during the campaign and index transfer payments to provinces to the consumer price index.