Mr. Speaker, it is a pleasure to rise this afternoon to speak to the motion of the Minister of Human Resources Development.
In his social security reform package, the minister proposes to deal with social problems and unemployment, at the expense of the unemployed and the poorest people in this country. The government is asking the unemployed to pay more for a solution to their problems and asks the poor to be even poorer, if they would enjoy the benefits of this reform which, as I said before, will take more money from the unemployed and the poor.
Instead of looking at the underlying cause of unemployment, instead of looking at the causes of social problems, the minister and his experts are telling the unemployed they will have to pay the bill. As if the unemployed and the poor were responsible for unemployment rates and the large percentage of people living on welfare, especially in Quebec.
That is why this afternoon, I would prefer to discuss what causes unemployment and the reasons for welfare. The federal Liberals have not been very helpful in this respect. After working for about ten years here in the House of Commons and seeing how the government runs its affairs, I could give you a few examples to prove that the federal government causes unemployment, not the unemployed.
My first example concerns interest rates. In 1990, the Governor of the Bank of Canada decided to raise interest rates, saying that there were inflationary tendencies in Canada and that we absolutely had to raise interest rates to reduce economic growth, although he knew perfectly well that these inflationary tendencies were restricted to a few specific locations in Canada and that their causes were well-known.
Inflation tended to be concentrated in the Toronto area. Why? Because the federal government had invested too much money in federal-provincial shared-cost programs. In 1981, 1982 and 1983, the Liberal government had set up special programs to fight the recession. At the time, inflation was really high and you may remember that the government had raised interest rates up to 21 per cent. It also had to set up programs, precisely to ensure that people on unemployment or welfare rolls would not suffer unduly from the situation.
However, the Conservative Party, which was in office then and of which I was a member, did not have the courage to reduce the budgets of those programs and continued to spend more or less the same amounts in joint cost-shared federal-provincial programs. There was a 50-50 split.
The result of this was that Quebec, which had less money than some other provinces and which was spending less on its joint programs, received less money. This is why the inflation rate in Quebec was somewhat more reasonable or acceptable. The situation was just the opposite in Toronto, which was going full speed ahead with the federal programs. Indeed, through these 50-50 programs, the federal government was spending a lot of money, with the result that the economy of that region overheated, thus generating more inflation.
It was obvious that the inflation was the direct result of this overheating generated by the federal government. The government of the time never wanted to use the means at its disposal to lower inflation. Instead, it left the Governor of the Bank of Canada on his own. And the governor had no choice but to increase interest rates. Vancouver is the other place where inflation was high. A lot of money was being invested by people from Hong Kong and Far East Pacific Rim countries. The inflation there was also very much a local phenomenon.
And what did the federal government do? Nothing. It let interest rates go up, with the result that Quebec's small and medium-sized businesses, which had worked tremendously hard to survive, went bankrupt one after the other. Unemployment went up, since workers were being laid off. All this because the federal government did not take its responsibility. I personally told the Governor of the Bank of Canada then that he was creating a recession we would have great difficulty pulling out of.
We have been in a recession for four years, yet did not manage to bring it under control. That is terrible. So, when I hear that the unemployed should be the ones to pay for the problems, I find it absolutely ridiculous. That is all the Minister of Human Resources Development talks about in his plan.
The other event that took place was the signing, in 1989, of the Free Trade Agreement with the United States. Quebec investors in particular, and I am still one of them, were told: "Invest in your business because this is a golden opportunity to gain access to a unique market, the US market". We were told: "Invest in your businesses and life will be great. In the years to come, you will make good money, do good business and create jobs. It is going to be just great".
A short time afterwards, interest rates went up, curbing growth and killing the very businesses that had just been put in a vulnerable position by investing in infrastructure and equipment. They were crushed with higher interests rates, reduced growth and reduced production capacity, at a time when they are very vulnerable. Many had to shut down. That is outrageous! And that is what is going on right now.
That is why, Mr. Speaker, I suggest that, if we want to address the UI and social welfare issue, instead of making a big fuss, publishing nice green books and talking about UI and social reform, we should start by creating favourable conditions for our businesses. Jobs do not appear suddenly, out of thin air; they are created by businesses and our businesses need favourable conditions to do so. They must not be required to do what they are currently doing on behalf of governments, namely handling enormous amounts of money collected left and right. Let me name a few of the tasks imposed upon our businesses.
First, they have to pay CSST premiums, UI premiums, federal and provincial sales taxes as well as federal and provincial income tax. They must deal with two sets of taxes: Quebec's and Ottawa's. I could give other examples.
Each time that a business is unable, or fails, to satisfy all these requests, which come in daily, there are additional penalties to pay.
Our small and medium-sized businesses in Quebec have to live in this negative environment. We think that it is terrible, unacceptable and discouraging for those who want to go into business, to succeed, to create, to invent and to export to have to look after all this administration for the two levels of government.
When I say that support to businesses must be more flexible, I am not talking about money, but rather, at the very least, an environment that would facilitate their growth.
The government's insistence on centralizing, on trying to control everything from here, on creating terrible confrontations between the two levels of government, leaves our businesses vulnerable in this sort of environment.
This is just another example. I think that the Minister of Human Resources Development hit on it himself when he said that there are many difficulties and problems associated with unemployment insurance and other social programs. There are many problems to resolve. But having read the document, I can tell you that there are not many solutions, because he did not really understand the cause of the problem.
We have here proof, once again, that federalism does not work. When a government can no longer meet the basic needs of its citizens, it is clear that federalism is not working. The debt is now $550 billion.
Our deficit will again be close to $40 billion. What more proof do we need that federalism does not work?
So what is the answer? As the Premier of Quebec told the Chamber of Commerce last Tuesday, although the federal government siphons off our money and, as a result, our resources are diminished, Quebecers manage to do a better job than the federal government as far as economic development and job creation are concerned. My view is that as far as we are concerned, this reform is redundant. The federal government should simply transfer full responsibility to Quebec, since it has given us ample proof it cannot make a go of it. I can assure you that Quebecers with their dynamic outlook will do a much better job. I am positive about that.
That is why I look forward to the challenge of a sovereign Quebec, where Quebecers will be able to develop their potential and get a really good start by investing all their resources and skills and productivity. They will be able to create jobs, reduce unemployment and reduce the number of welfare recipients so that this nation can live with honour and enthusiasm.