Debates of Nov. 17th, 1994

Social Security Programs

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, as you know, I am on the Standing Committee on Human Resources Development now holding consultations on social programs. The speech by the hon. member for Victoria-Haliburton made me shudder because it seems to overlook reality. It is based on the widely-held belief-too widely held in my opinion-that many unemployed workers lose their jobs on purpose. His talk of abuse almost implies that the unemployed are guilty of fraud. There may be abusers but I will start by asking him-I will have more questions later-if he can tell me what percentage of the unemployed are guilty of fraud?

His arguments sound funny when we look, for instance, at the miserly unemployment insurance fund. The human resources committee I am on heard a forecast from the minister but when we recently asked a senior official, he anticipated a surplus in the order of $2 billion in the UI fund for the year.

Now, why is there a surplus? Because UI was cut this year. The three series of cuts that he mentioned were implemented, and the hon. member seems to say that we should go even further. Let me refresh members' memories.

First, the amount of benefits was cut from 57 per cent to 55 per cent of salary; then, the benefit period was reduced to a maximum of 32 weeks.

I know that in the riding of Lévis, for example, the workers laid off by the shipyard are not unemployed voluntarily. After collecting benefits for 32 weeks, they will have no choice but to turn to their provincial government, even though the federal government picks up 50 per cent of social assistance costs, but it is still shifting responsibilities to the provincial government. The federal government is talking about making it even more difficult to collect unemployment insurance.

Yesterday, I met with students who, after completing their studies, may not be able to collect UI benefits because it would be even more difficult for someone who has not yet managed to join the labour force, as is now the case when after finally landing an insecure job a person is allowed to enrol in retraining programs.

I would ask the hon. member or another government member a little later to give us the exact percentage of voluntary unemployed who abuse the system.

[John O'Reilly, Liberal, Victoria—Haliburton, ON]

Mr. Speaker, I welcome the opportunity to respond to the hon. member. He and I share something in common. We are both concerned about the unemployment and retraining situation in Canada. That is the reason the hon. minister brought forward this paper for discussion. We welcome discussion and the exchange of ideas hopefully for the benefit of all people in Canada.

I am aware of ongoing retraining programs. I attended a retraining program in my riding of Victoria-Haliburton the other night. The Victoria County Training Council graduated 295 people and 75 per cent of 1,717 people it has retrained over the last four years are actively involved in the workplace. That is a record to be very proud of. That type of retraining program has set the example for others to follow.

The member says that maybe I do not understand unemployment insurance. My father was unemployed in the fifties so I am well aware of what it is like to have unemployment in one's family, to suffer because of it and not to have proper funding until another job is found.

Earlier today the member for Elk Island talked about some dream world wherein no one here knew about the programs. All the programs were brought in and he never had to partake of them. He had a great time getting along in some fairyland like Alice in Wonderland . I went through the fifties with an unemployed father. I know what it is like to have to go through programs when there is no work or nothing for the person who has trained all his or her life and is all of a sudden out on the street with nothing to do and a family to raise. I understand that part of being unemployed. That is why I am anxious to be involved in this program, add to the discussion and bring to the forefront the fact that people have to retrain.

I spoke to the graduates the other night and said: "You have come through a training program; don't stop training". We talked to the pages this afternoon about always spending time training and retraining. The days of walking into a place and being there until one retires with a pension are over. We must retrain. We must have a workforce that is effective in the nineties and beyond. Retraining, unemployment and financial assistance to people temporarily out of work are very important to me. I want to see the ideas of all members brought forward to make it a better program, an improved program for the people who most need it.

There are too many single parents suffering in poverty in Canada. They did not ask for that. They did not ask to be poor. They do not want to be poor. They do not want handouts. They want to be part of a productive society. That is what the government is committed to doing. It wants to make this a more productive society, a society that trains and retrains and looks after the job market that becomes available, a highly technical market in some cases.

However 2,400 jobs went out of my riding over the free trade agreement. Some of those people qualified within 15 or 20 weeks of not qualifying for certain programs of assistance. Some compassion has to be given to a person who does not qualify for POWA because there are not enough people working in the factory and people are laid off. That has to be looked at and refined so that it gives a benefit to everyone who needs it.

The member asked whether people cheated the system. I think it is a very small percentage. I know some parties work on that very small percentage for political gain, but I think most people are honest. Most people are on these programs because they need it, not because they want it. It is a program with refinements that can work to the benefit of Canadian taxpayers and retrain our workforce for the 1990s and into the year 2000.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, I have a specific question for the hon. member who just spoke. I would appreciate if I could get a direct answer to a specific question.

Does the hon. member believe that there should be unified qualifying rules across the country such as, for example, with regard to the period of work before qualifying for unemployment insurance? Or, would the hon. member prefer special treatment for certain parts of the country?

[John O'Reilly, Liberal, Victoria—Haliburton, ON]

Mr. Speaker, a specific answer would be that all economic regions of the country are not the same. Whether one is in Gaspé, Vegreville or Haliburton, there is a difference in the areas, a difference in the needs and a difference in the qualifications required. Some have to work in seasonal jobs in a seasonal market in a certain area. I can go into Haliburton in my area and find 30 per cent unemployment in the winter because it is a seasonal, tourist oriented job market. It is improving. Winter sports are coming on. There are some good ski hills. There are cross-country trails. Things happen there in the winter that are drawing more people in.

I do not think we can compare that with the city of Toronto, Vegreville, Elk Island, or any other area. The area has to be taken into consideration on its needs. The program has to suit the area, not the area suit the program. I hope that answers the hon. member's question.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I thought I was going to be able to further interrogate the member for Victoria-Haliburton, but I guess it is my turn now.

I would like to begin by declaring something we probably all know. Members on this side of the House certainly are aware of it. Members on the other side are becoming aware. We are very happy to notice that in recent days even the Minister of Finance has made public pronouncements admitting that our national debt and ongoing annual deficit are problems and something we must address.

As a matter of fact it is very important for us to remember in all this debate when we are talking about revamping our social programs the objective and one of the very large motivations for us being here is that we need to reconsider the financial picture of the country. We are in trouble. It is a matter of simple realism to recognize that if we do not do something about it external forces will take over and we will have it done for us. If we can do something about it while we still have control that is much to be desired and the highest of several different options.

In keeping with a well known couplet which probably everyone in the House knows, the borrower is a slave to the lender. Our debt with its required interest payments has made us slaves in the sense that we have now lost our freedom to do the things we want to do.

I really think it would be wonderful if we could just simply pick up everyone who does not have a job. I think it would be wonderful if everybody in the whole world could come to Canada to get medical procedures done because we have a wonderful free medicare system for everyone regardless of their ability to pay. I think it would be wonderful if we could offer free education to everyone, young and old alike. I think it would be great if we could say to people who are unemployed: "Don't worry. We will pick up your cost of living. We will pay for your tuition to get retrained. We will help you to get re-established in another workplace". Would that not be great? No one would ever suffer at all. That would be great.

However we do not have that option because of our fiscal situation. Right now for every $4 the government spends $1 is borrowed. We only have income of $3 for every expenditure of $4. A lot of that growth is not even in our control. Just adding the interest payment this year of $40 billion, if we do nothing, will add another $5 billion of interest payments next year because of the interest due on the interest we paid this year and had to borrow the money for. Unless we get a hold of it and get a hold of it fast, we are not going to have the option.

Members opposite love to make wonderful promises. I do too. I cannot help but use an analogy. I have a couple of sons. They are now thankfully grown up or close to it anyway. One of them is still at home because he needs my subsidy to go to school and that is fine. We love him and it is great having him there. I thought I would be considered the world's most wonderful dad if I could say to my boys: "Hey guys, I will buy you each a Corvette". They would just love it. Very frankly they would go around bragging. They would say: "I have the greatest dad in the world. He is going to buy us each a Corvette". It is an empty promise because I do not have financial backing. I do not have the money in the bank to buy two Corvettes to give to my boys. My promise is empty.

It is time the Canadian people woke up to the fact that despite the best promises that governments of the past have made and the present government is making, unless we maintain the fiscal backing that enables us to fulfil the promises, they become empty promises. That is why we must discuss all of our spending realistically, including social spending because it is such a large portion of our total budget.

In the body of my speech I would like to concentrate on the question of education. Since I graduated from university I have been an educator. All of us here have been educated to some degree or another and we have all benefited from receiving an education.

It would not be stretching it at all to recognize that our standard of living is based on education. Our democratic system is based on education. If we did not have a generally educated public we could forget about having votes and debates in public. We could not present things for people to read. If they were not educated and not literate we could only talk to them. We could not appeal to their ability to compute matters to see whether we are reasonable in our projections on the budget and government spending. Our very democracy depends on a generally educated public.

However, I would go beyond that. Without in any way minimizing or marginalizing those people who do get past high school, we also need to acknowledge that our standard of living is greatly dependent on what happens in educational institutions past high school.

I am not in any way minimizing or marginalizing those who for whatever reason do not go beyond high school. I know a number of people in that category and most of them do very well but our standard of living, as I am going to show now, is dependent on what happens afterward.

Think of the basis of much of our standard of living. Think of the things that we enjoy. I guess because of my particular field of study I would first of all thank the mathematicians, since mathematics is the foundation of almost all science, all research and all engineering. Without mathematics and a solid mathematic, analytic ability we really would not have any of the wonderful things that we enjoy in the western world. I extend that to studies in engineering, to research scientists, to medical practitioners, medical researchers. All of these people contribute to what we almost take for granted in our country as a standard of living.

We take it for granted that if we are ill we can go to the hospital for treatment. It goes beyond just having the hospital facility. Unless there are trained doctors and nurses, hospital and medical technicians, respiratory people and all the other specialities and all of the lab technicians, going to the hospital is as useful as going out to the wood shed when you are sick. We have to have qualified, trained people.

It is important for us to make sure that we have not only quality education but quantity education. We need to provide a high degree of quality control in our education right through the years so that when our students graduate whether they are doing surgery on us or are designing our aeroplanes, bridges, or buildings, they will provide a highly reliable, dependable service.

It also has a spin-off in our economic competition in the rest of the world. It is only when we do very well in those areas that we can maintain our standards. We are dependent on people who invent, who design, who plan, who build, who produce, who organize, who maintain and operate equipment, who build and maintain structures and systems. We need people who invent combinations of chemicals and materials to help our agriculture and forestry industries, to help us fight diseases with medicines. We need all of those different aspects, which are the result of education, if we are going to have our standard of living.

We need to have electrical engineers and others, who are capable of learning, developing and inventing new ways of communicating with each other via telecommunications systems, computers and things like that. We need to constantly be on the move forward.

So much for building the case for the need of education. Should we as people collectively, through our tax system fund education? I have said it in the House before. I say it again by way of emphasizing something that has been greatly misunderstood. Many times misinformation has gone out, especially from members opposite, regarding our party. They keep talking about us wanting to cut and slash and do away with everything.

We said during the campaign and we are as deeply committed now as ever to bringing our fiscal House into order so that we can maintain a universal Canada-wide health care system. It is in our policy. We have said it from the beginning. We have always said it, notwithstanding that others have tried to minimize our message.

Based on our very careful analysis of questionnaires of members in our party, which we think is a very good cross-section of the Canadian citizenry, those people have said that health is first and education is second. Here we have two programs. The review that the government has embarked on does not even talk about health care, old age security and some of the things that are so important to Canadians, but we have talked about it.

Those are the items which are of very high priority for Canadians. We are here to do what we can to make it more than an empty promise. I would like to say that investment in education is exactly that. I have already indicated that we benefit as a society and as individuals from the positive spin-offs of having an educated population. I would also like to add that it is a very positive fiscal investment. We can invest our money and actually get a monetary return.

I want to go way beyond what the minister has suggested. In fact it has already been done, as we know, in some previous parliamentary work the government has embarked on and that is to increase the loans to students. I do not think that is the way to go at all. We need to give some positive support to education so that education is within the means of students in their present level of earnings however they earn their money in the summer months when they are on vacation from their studies.

We need to look at it as an investment. Let me give some numbers. I happen to love mathematics. I did a few calculations. It is totally realistic to assume that a person with a university degree, a college degree or a technical institute diploma could earn in some cases $1,000 or more per month as a result of that education.

I am going to take a very modest number. I used to use the word conservative, but that word has now come into disrepute around the country, so I no longer say that. I am going to use a modest number of $400 per month. Let us say that graduate can earn $400 per month more as a result of receiving an education. Let us say that he graduates at age 22 and works to age 62, which is a good 40-year life span of work.

During that time the $400 per month gives him an additional $192,000 of earnings. We all know that in our tax system the marginal rate of taxation is around 50 per cent. Governments right now are clawing back 50 per cent of the result of that added earning. Over the 40-year period that is $96,000. Just educating a student gives back $96,000.

I want to be realistic. Let us think of this as an investment. What is the present value of that, using an 8 per cent interest rate, which is what I used to compute it. Amazingly the present value of every educated student in terms of returned increase income tax collected is $57,238. That is an amazing number. We are quibbling about whether or not we should lend these students $4,800 so that they can go to school and then graduate with a huge personal debt load as well as the collective government debt load we have laid on their shoulders. That is atrocious.

We ought to be looking at more creative ways of funding education. It is a tremendous investment not only for our standard of living but even from a straight fiscal point of view. In the matter of direct income tax collected, it is a tremendous benefit for us all in the economic activity in the country. The more people we have who are educated the greater the economic activity in our country and the greater our exports. We benefit myriads more than just the income tax collected. That is but a very small portion of that investment.

The question that comes next is how do we do this? How do we provide an education system for our students so that it is affordable and we can have all of our students going to school? I agree with the goal that students should not be prevented from going to school because of personal economic hindrances, just as I agree that people should not be prevented from going to a hospital for needed medical care because they do not have the money to pay for it.

It is a downright shame if young people from poor families cannot go to school because they cannot afford it. It is time that we wake up to the fact that we have a responsibility to make sure that education is affordable. That can only be done if we put our fiscal house into order and stop all of the wastage in those many other areas.

I have some suggestions. In the elementary and secondary schools we practise the idea that education should be free. Students generally do not pay tuition. There are some exceptions. Unfortunately in parts of our country some people who choose to send their children to private schools for various personal reasons end up paying extra. They pay tuition. Others, if they attend the public school system or, in some cases, there is a legitimate separate school system in the province, do not pay. That is paid for by the taxpayer.

I have a question. Why would we use that principle up to grade 12, or in Ontario grade 13, and then abandon it for education past that? The only thing I can think of as a legitimate reason would be that past grade 12 further education is a marked financial advantage to the student as well. Not only do we benefit as a society by being able to collect more income tax from them, but they are paying more income tax because they are making more money.

Therefore, it is fair to say that the students should pay for at least a portion of their post-high school education, as it has been for quite some time. However, I do not believe that we should put the whole load, the whole burden of that education on these students, particularly because we know that over the years they will end up paying it back into the system anyway.

Therefore I would like to propose that we give very serious consideration to a system whereby the students would look after their own housing. That is more or less acceptable unless they have to travel to a place away from home. The family should be able to provide for housing. In most instances they can live at home. Where they cannot of course we need to look at ways of

funding that at a reasonable rate, perhaps as part of the particular educational institution.

Second, there are books and supplies. These too I think for the most part could be funded by students through their summer earnings, particularly if we had a good strong economy which would demand that a lot of students be hired in the summer months when they are away from their studies.

My last and most important suggestion is that we would go to a system of vouchers for students which would essentially pay their tuition. I would like to see the student upon graduation from high school get a little certificate as part of his graduation package that says the certificate may be presented to any post-secondary institution in Canada of his choice and it will provide for a payment of 90 per cent of the tuition at that particular institution. I did think of putting in a fixed number. That is another option, but we do recognize that some institutions, some universities and some colleges have different costs because of the kinds of programs they offer.

We know for example that in some of the engineering and some of the physics programs the cost of the equipment is way greater than in some other areas where the costs are mostly in books and libraries. I think to recognize that different programs have a slightly differentiated tuition system that certificate could be used.

It would be a wonderful encouragement to our students to say: "We believe in you. We don't care whether you have rich parents. We are going to see that you have an opportunity for a good education and we are with you all the way. Here is a certificate from us, the taxpayers. We know that you will pay us back. But we put our faith and our trust in you. We want to see you be successful".

Mr. Speaker, my time has come to an end. I really would like to encourage the people on the government side to give serious consideration when they are looking at this aspect of a social program review to do it and, for the sake of our young people and our children, do it well.

[Harold Culbert, Liberal, Carleton—Charlotte, NB]

Mr. Speaker, I listened with great interest to the comments of the hon. member across the way. I must say that I am certainly pleased to hear a member speak from the point of view of consultation. That is what the green paper tabled by the minister is really all about.

During the most recent break I had the opportunity to have several public forums in my riding. I must admit there were several suggestions on this particular point regarding education and, from the federal perspective, how it might or should be funded in the future.

The point that the hon. member made was one of those comments about a voucher type of system. Another was the fact that instead of taking this fund that currently I believe is $2.6 billion, put it in a special fund for students only, earmark it that way and transfer it to the provinces, but with the specific outline that it is for post-secondary education only to ensure that is where it goes.

Having heard the hon. member and his comments regarding the voucher system, would he agree that there probably are several options available which could and possibly should be looked at in addition to the one that was in the green paper as one alternative.

I do appreciate the fact that finally the member and his party realize that this is a consultation paper, that nothing has been carved in stone, that we want this input not only from members of Parliament but from Canadians from coast to coast so that we can come up with a consensus that will be good for Canada, our students, our youth not only today but indeed as we work toward the 21st century and try to be a benefit to all post-secondary students and those coming on in the next number of years.

I would ask the hon. member to comment on that.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I thank the hon. member for his kind comments. Actually, I should be worried if I say things that please members on the other side. Maybe I have not done a good job.

With respect to the question of vouchers, I think it would be better for us to take the federal government money that is now allocated for post-secondary education, allocate it entirely through the voucher system and allow the universities to build a tuition system that reflects to a fair degree the cost of educating a student in the program.

The provinces would individually be required to provide the funding for the facilities and for any special developments there since it is a provincial requirement. This way the students would be the ones who would produce a level of good, healthy academic competition between various institutions. They would then have to attract students because of their good record and good quality control program. Their graduates would be able to get the top notch jobs. Through that natural competitiveness those institutions would I think develop a better level of research and a better level of teaching.

The provinces could go ahead and use their money as they are now in their component in the provinces. The voucher system would help to give students a great deal more flexibility in the choice of which institution they attend because of the fact that very often there are universities which specialize in their area.

For example today I was talking to a person who happens to be a member of the chiropractic profession. There are no programs for that particular discipline in all universities. But there are

those that could provide that service and that student would not have to face a great economic disadvantage because it may be out of province.

Those are just some of my comments on that.

[Jim Jordan, Liberal, Leeds—Grenville, ON]

Mr. Speaker, I have enjoyed the analysis by the member for Elk Island.

I have just a couple of things in relation to education in Canada and his idea that the economy is what should determine how we relate to costs of education in elementary where it is free, secondary where it is free and then in university where it suddenly costs money.

In Canada education is a bargain if you compare it with any country in the world. The one to which we are most likely to compare it of course would be our neighbours to the south where even the basic university courses cost roughly twice what they do in Canada. I am talking about the state universities that receive a government subsidy. I am not talking about private universities. They are beyond reach unless you are quite affluent. Private universities in the United States are very, very expensive.

What is wrong with a student borrowing some money? Just the exercise itself is a good one for a young person. He takes on the responsibility of borrowing some money and having it made available and taking that opportunity to advance himself, investing in himself. That is not a bad exercise for a young person to have. It would be better of course if you could graduate and say: "I do not owe anybody anything".

Really, carrying a little debt within reason is a pretty good exercise for later life. All of us I am sure have carried some debt. The idea is to take on some responsibility, address that responsibility seriously and repay that debt. I sometimes get very annoyed when people take the liberty of borrowing or taking advantage of money when it is available, but they do not follow up with the responsibility that accompanies that, to pay it back on time providing they are in a position to do that. I think provision is being made now to gear the repayment plan to the income you are getting. That seems to make sense to me. How else would you pay it back.

I wonder if the member would see some very worth while benefit to a student through those years accepting the responsibility of borrowing and of course the responsibility that follows the borrowing, to see that it is repaid. It is really taxpayers' money, my money, your money, and that of the rest of us. It is our money. We want it back because we loaned it to somebody. I think it is their responsibility to address that at the appropriate time when they can of course.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I appreciate the opportunity to address that question because that is actually one of the aspects of this proposal that bothers me the most.

I know it is good to learn when you are young that when you borrow something you repay it. I remember growing up as a youngster on a farm in Saskatchewan my dad taught me that whenever we borrowed something from a neighbour we always returned it in a condition as good as or better than we borrowed it. That is a good principle but I do not believe it is a good principle to set things up so that young people on graduation have a millstone of debt hanging around their necks.

For example, a young person who has gone through a dental program wants to open a dentist office. He now has to borrow money in order to put up his office, get his equipment. That is true for many different professions, even in my profession of teaching. We need to have computer equipment and things like that, depending on what area we are in.

Some of us on graduation get married. We set up a home. We need to borrow money for the home. We need to borrow money for the downpayment for the car and for the furniture. The first thing you know, you are up to your ears in debt just like this government is up to its ears in debt and you are totally debilitated by it.

I really think it would be much healthier for our whole society if our students could graduate debt free. That really is the very best. It is not that one is a nine and the other is an eight. I really think that one is a 10 and the other is a zero in this as far as my feeling is concerned.

I know that is idealistic but I think it can happen. In a healthy society where students can get a good summer job and are able to live frugally, I believe they should be able to save enough to pay their living expenses. If we as a society, as taxpayers, pay their tuition directly and have them pay it back through their taxes that would be a superior method.

I want to avoid handing them a millstone of debt with their graduation certificate from university.

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, I am pleased to have the opportunity to participate in such a historic debate in this House, one that I think is of great importance to all Canadians because we are talking not only about the social security network that supports us all in times of trouble but also about a very significant portion of the federal government's budget.

The green paper recently released by the Minister of Human Resources Development contains a number of interesting proposals that have already been the subject of considerable discussion and will continue to be the focus of that discussion in the weeks ahead.

The government's objective in regard to the improvement of Canada's social security programs was outlined very briefly by the Prime Minister in a speech he gave to the Canadian Chamber of Commerce in Quebec in September. I quote him: "Our objective at the end of the process is a reform system of social security that protects the most vulnerable while enabling all Canadians to obtain a fair and equal opportunity to exploit their

talents, lead fulfilling lives and experience the dignity of work".

Those are words that would reflect the views of a series of Prime Ministers of this country from Laurier to King, St. Laurent, Pearson, Turner, Trudeau, and of course the present Prime Minister who said the words.

They are words that come from the leader of a party that has introduced virtually every social program this country enjoys today. It is not a party that is in any way anxious to tear away the fabric of the social programs that we have built for Canadians. It is not our intent in producing this green paper to destroy in any way or rip apart the social safety net that we as a party at various times in government in Canada have worked to build.

On the other hand, there is a pressing need for social security reform. I can only look at the figures. I have quoted them in public meetings in my riding before and I do so again. The green paper concerns federal expenditure of $39 billion or about 24 per cent of total federal expenditures. It does not include pensions. It does not include expenditures in government departments related to transport, foreign affairs, corrections and national defence.

In other words, a huge range of federal government programs are excluded from the $39 billion figure that is the subject of discussion in the green paper on social security reform. It is the only other single government expenditure that is as large as the interest on the public debt which is at $40 billion. Some say: "You can reduce the debt figure and that will solve your problem". That is complete nonsense, utter hogwash.

The government does not control interest rates in the country. It can affect them. It can influence them. It cannot control them. In the end Canada's interest rate, the national rate charged by our central bank, will have to reflect world trends. It will have to reflect those for the very simple reason that the value of our dollar is tied to interest rates in the country. That is an unfortunate fact of life, but Canada cannot simply go about setting its own interest rate ignorant of world events, world trading patterns and currency movements. We recognize that we can influence the rate; we cannot control it.

Since the government has taken office it has influenced the rate. Whether it was done directly or not I cannot say; I do not know. The rate has gone down, the Canadian dollar has dropped and Canadian exports have increased since, leading to increased prosperity in the country. That may be one of the factors leading to prosperity. There are others but that is a principal one. The changes that have come about in our world economy have no doubt improved the economic situation of Canadians, but it has not improved to the extent that we can ignore the fiscal realities the Minister of Finance has been discussing.

We have a particularly competent Minister of Finance who has gone before the Standing Committee on Finance and made what I can only describe as a brilliant exposition, describing the state of the Canadian economy today and inviting Canadians to address that committee to express their concerns and views concerning tax changes in the country and how we can improve the tax system to make it fairer and better.

He has also asked Canadians to comment on what they would do if they were minister and were drafting a budget. Where would they cut? Where would they increase taxes? Where would they seek to increase revenue, and so on? Those questions are extremely important. We have engaged in a great national debate on this subject and we read about it daily in the media.

Unfortunately much of what we see are ideas that if we simply cut interest rates everything will turn up roses. I do not accept that for a moment. I do not believe it is true. I think the people that are saying it know it is false. They are simply putting the message out in order to distort the view of Canadians that things can be improved in this easy way without some painful changes in our systems.

What did the Minister of Finance say in his brilliant exposition before the Standing Committee On Finance? First, he indicated that the world economy has become far more integrated than it was 40 or 50 years ago when many of the social programs were put in place. It has become more integrated and global and trade barriers have disappeared. We have brought down trade barriers both through GATT and through the North American Free Trade Agreement. Those are being extended rapidly around the world.

Second, people from what we once called the third world are joining the global economy. They are producing goods for sale in this country that are inexpensive and that Canadians are buying. We will continue to buy them in increasing numbers because they are less expensive. They are also quite well made in many cases. We are getting better and better products that are made abroad.

Third, information technology is exploding. It is easily portable and we cannot stop it from changing across borders around the world. If we do not get on the bandwagon and produce goods and deliver services in a less expensive and more efficient way, we will be outpaced by others who can do it less expensively elsewhere. The technology that allows us to deliver the services more cheaply will move to the places where it is being delivered cheaper, reduce costs further and leave us high and dry. All this means is that competition is forcing companies, states and individuals to change their method of work, their method of dealing, and the way they interact one with the other.

I quote the Minister of Finance again:

For three entire decades after the second world war all we knew was high job growth, high productivity growth, high income growth and low unemployment. We ignored the fact that our unemployment rate was rising relentlessly with every recession and staying up.

As he pointed out, the unemployment rate 25 years ago was usually at 5 per cent. During this past decade it has been steadily at 10 per cent. Unemployment has become more serious for Canadians and the costs of it have risen enormously.

The Minister for Human Resources Development in his introductory address to the House when he produced the green paper and led off this debate pointed out that workers and employers finance unemployment insurance through their contributions. He said:

It is simply costing too much. In 1980 the program cost $4.4 billion. Last year it cost $19.7 billion. In other words, in about 13 years the costs quadrupled. We cannot allow this escalation in UI costs to continue.

The minister was right. For that reason we have to look at the unemployment system to see what can be done to improve it. It is very important that the green paper which has made some proposals be thoroughly discussed and I have aimed to do that.

The minister outlined two basic proposals for change in UI. He is willing to receive others. He has made that very clear. That is what the public debate is about. He said we could have a new unemployment insurance program or we could tighten the rules of the existing UI program further.

We have been tightening the rules ever since I got elected in 1988. We watched the Conservative government tighten the rules right, left and centre, causing pain and anxiety to a lot of Canadians. In the last budget there was further tightening of those rules. I do not think that continuing to tighten them is really helping the unemployed. It is not.

We need to find a new scheme that encourages people to work rather than encourage them to remain on unemployment insurance. The minister pointed out that because the program has been in place for so long and because it has some fairly generous rules here and there it is easily abused both by workers and by employers. They schedule work around UI instead of the other way around.

We are not taking out unemployment insurance against the day we are unemployed. We are taking it out and receiving it because we know there will be a period of unemployment. It is planned for in employment contracts today. That is not what the system was designed for. Canadians are paying a great deal of money for this system through the charges that are put on them, especially if they are ones who are in places where they are regularly employed and paying the new higher premiums.

The day after the tabling of the green paper I met with members of the construction industry in my community. They were very much concerned that unemployment insurance would be changed as we know it. They are not seasonal workers, but they are people employed in the construction industry who are unemployed from time to time, not at any particular time of year but whenever there is not work available for them. As they pointed out to me, many of them travel great distances to get work. They are quite prepared to travel to Windsor to work on a construction project there, or to New Brunswick to work on a construction project there if that is necessary. They will travel great distances to get work. However, if there is no work available, they depend on and need unemployment insurance.

The indication to me was that they would pay higher premiums if they could continue to receive unemployment insurance. They did not mean higher premiums in terms of the employer's share. They meant in terms of the employees' share. The employees would pay more if they could keep UI in something like its existing format.

I invited them to make a submission to the minister, send a letter to the minister or prepare some kind of brief through their union-and some union leaders were at the meeting-to let the minister know what they could do in their view to make the system work for them.

I have stressed to the minister in my discussions with him the importance of UI to people in that particular job category. In the green paper there are suggestions that perhaps UI will have to be tailored to fit the needs of different areas of our workforce. That would be worthwhile. It is a sensible idea. I hope that there are suggestions forthcoming from members of the construction industry in Kingston and the Islands.

Another thing the Minister of Finance said that I think is important is that we missed the signals with these rising unemployment rates. I quote him again:

And as we were missing those signals what did we do? We borrowed to paper over the problem, borrowing first from ourselves, then from foreigners and always from the future.

The hon. member for Elk Island in his remarks referred to the fiscal crisis facing Canada today. Most members of the House acknowledge that is a serious problem facing us. For the years from 1988 to 1993 I sat here and watched while Brian Mulroney and Michael Wilson fiddled. They did absolutely nothing to solve the deficit problem in Canada. Indeed it got worse and worse the longer they were in office. They were elected in 1983 with promises to fix this problem. They were going to bring the deficit under control within two or three years-I have forgotten the promise now-from 1984. We all know what Mr. Mulroney's promises were worth.

We sat on the other side of the House, some of my colleagues for the full nine painful years, but me for only five, and watched the government do absolutely nothing to make the situation better. I know members of the Reform Party who are here missed this, but we heard budgets presented that indicated that within three years the deficit would be down to, I think the low figure we heard was $16 billion. It never got anywhere near $16 billion. The projections were always wrong. They were revised in every budget and the promised pay off was always deferred another two or three years. It was really quite nauseating.

The minister kept insisting with every budget every year that this time his projections were going to stick, that he had made the right decision, that everything was going to be fine in another two or three years, and that we should just hold on to our seats and wait and see what happened. They did not hold on to their seats, thank goodness. We have the remnants of the party sitting over there, all two of them. It was a string of broken promises that really deflated and disappointed Canadians.

We have heard repeatedly from the Prime Minister and from the Minister of Finance the proposal he has put forward to reduce the deficit to 3 per cent of the gross national product by the end of the third year of our mandate. That gives us two years to reach that figure.

It is not going to be the annus mirabilis when we get there, but it does signify that at least the Government of Canada is willing to make a commitment and stick to it. The Prime Minister has indicated his commitment to that figure repeatedly in the House and elsewhere. I believe it is important that the government achieve this.

The critics of social reform, and I point specifically to the Bloc Quebecois, all sit and howl and scream and say: "You are eliminating this; you are going to hurt everybody". Yet they know perfectly well that the government is not seeking to reduce all its expenditures through this one package alone.

I have no doubt in the ability of the Minister of Finance and in his sense of fairness that when he seeks to achieve that goal of reducing the deficit to 3 per cent of GDP in another two years, he will achieve it by making reductions across a very wide range of government services and government programs. It will not all be done through reductions in social programs, which is what the Reform Party would like us to do.

On the one hand, the Bloc Quebecois wants everything to remain the same, unchanged, exactly as it is right now. Unfortunately, this is no longer an option. There is no way status quo can be allowed to continue. This is just impossible.

On the other hand, the Reform Party wants to cut all the social programs and let Canadians suffer on their own, abandoned by their government, abandoned by the social programs they have paid for with their taxes lo these many years.

[An hon. member]

All from rich provinces.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

And as my colleague says: "All from rich provinces".

I do not care where the money comes from. The fact is that Canadians expect there will be social programs in place. They may not be the same as they are today, but they want social programs and they want a voice in how those social programs will be shaped.

That brings me to the significant and important thing about this discussion. The Minister of Human Resources Development has produced a plan for discussion. He has invited Canadians to participate in this national debate to express to him and to one another what they think the social programs of the country should be like.

We are not going to have unanimity on the point. I know the hon. members of the Bloc do not agree with anything the government has put forward. They fulfil the traditional role of an opposition and that is, oppose, oppose, oppose. I can understand that. I am not surprised by that. On the other hand I would hope they would engage in a dialogue with the government and put forward their ideas on how the social programs of this country could be improved.

As for the Reform Party, it was refreshing to hear the hon. member for Elk Island. However I am sure that if his leader had heard all his remarks he would have been horrified by what he was saying. I know his leader would not have agreed with everything the hon. member for Elk Island said. I can only hope that the hon. member is here tomorrow. I am worried that he is going to be shut up and gagged.

What he said about the importance of this program spending on students was correct. I am sure that in an ideal world it would be wonderful if students could come out of university debt free. I do not think that is the case for many students today and I do not believe it will be the case tomorrow. I think the situation can only get worse, not better, at least for a while.

That is the fiscal reality we are going to have to face, notwithstanding the demonstration yesterday and notwithstanding the demagoguery of the hon. member for Roberval who was out there saying that students deserved free tuition and all that sort of nonsense. That was considered when I was a student in the sixties. It was not adopted by governments then and they had a lot more money to spend than governments have today. It is simply not a realistic approach to the tuition issue.

I did not want to get into that. I am prepared today to deal with unemployment insurance and I will stick with that.

The Reform Party must acknowledge that we cannot bring the deficit of the Government of Canada under control simply by eliminating social programs. If members of the Reform Party-

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

A point of order, Mr. Speaker. The parliamentary secretary just made some allegations about a member who is not even present in the House regarding another member in our caucus. He talked about being gagged. I would appreciate it if the hon. parliamentary secretary would withdraw those comments. They were out of order.

[The Acting Speaker (Mr. Kilger)]

I think the point raised by the hon. member for Kindersley-Lloydminster is more a matter of debate than a point of order. Like himself I have followed the debate attentively. In fact I do not believe I can attribute the inference to the parliamentary secretary. I think there is a debate going on between the parliamentary secretary and the previous spokesperson from the Reform Party as to whether that member would be here tomorrow or not and no one else who is here or not here at the present time in the Chamber.

I am prepared to return to debate. Unless the member for Kindersley-Lloydminster wishes to add something else, I will return the debate to the parliamentary secretary.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I hope that silly interruption will not be taken off my time. Even the hon. member for Kindersley-Lloydminster was huffing and puffing on that one.

Members of the Reform Party would do well to reconsider their ill advised stance with respect to Canada's social programs and get on board with the government to make the social programs better instead of just chopping and cutting the way they want to do.

I recall during the last election campaign I had many requests from electors as I went door to door asking what the Reform Party was really doing with its proposals to cut the deficit. Of course it had this great scheme for eliminating Canada's deficit by cutting $18 billion or $15 billion or something like that. We all know the deficit is $40 billion and so $18 billion was barely half of it. Yet that was the cut they were proposing during the election campaign. They were telling Canadians that was going to eliminate the deficit.

Most people could see that was hogwash. The people in Kingston and the Islands certainly saw that it was hogwash. I hope the Reform Party members who were elected running on that bowl of hogwash will be able to realize that it is time to change their tune, get into dialogue with the government in respect of what social programs could and should be and try to work with the government to make them better.

The hon. member for Elk Island in his very able speech spoke about one aspect of it. He did not tell us of any proposals from his party to improve the current proposals put forward by the government or suggest changes to the current system that would make the system one that we could afford or would be more workable or better for Canadians. That is the government's aim. That is what we would like to do.

I encourage hon. members opposite to engage in that dialogue. Work with the members on this side of the House in committee and in this House to come up with proposals that will better Canadians' lot in life and provide the income security for all that we so earnestly desire in this country.

[The Acting Speaker (Mr. Kilger)]

Questions or comments. I take note of the interest of a number of members who want to speak. I would ask that questions and replies be rather brief and I will get as many on the record as possible.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Mr. Speaker, of course there is always a great response from Reform MPs when they are being unfairly represented by members on the other side of the House.

The hon. member for Kingston and the Islands talked a bit about discussing with his constituents the Reform position on social programs and on reducing the deficit. It is true that Reform has consulted extensively with Canadians. In fact while the hon. member was part of a party that was involved in rat packing and some very unproductive activities, Reformers were consulting.

I might add our leader led the way in consulting with Canadians and hearing the views of everyone, not gagging anyone I might add, but being very considerate of all opinions expressed by Canadians. Reformers found a consensus that they took to the electorate last year. That consensus was that spending needed to be reduced to save social programs that were most needed by the Canadian public.

The hon. member for Kingston and the Islands and his party did not undertake that consultation. We did not see that proposal in the red book. They did not have a plan. They still do not have a plan. They cannot even put out an action plan. They have a discussion paper.

How does the hon. member have the audacity and the nerve to make these allegations in the House when in fact there is no political party in Canada that has consulted more with Canadians and knows more about the wishes of Canadians on the deficit and on the reform of social programs than the Reform Party of Canada?

[Peter Milliken, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I have no trouble answering that question. We just heard the answer from the hon. member for Elk Island. If the hon. member for Kindersley-Lloydminster had been in the House he would have heard it.

The hon. member for Elk Island said that yes, the leader of the Reform Party consulted with all the members of the Reform Party and that was a great cross-section of Canadians. What utter rubbish. If he thinks so, I wish he had gone to the meeting last night that the hon. leader of the Reform Party was at in Quebec. I understand all of 50 people showed up to hear him at Cowansville, Quebec, members of the Reform Party. That was a cross-section of Canadians? Be serious.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Mr. Speaker, as we all know in this House from time to time there are those who take liberties with exactitude of what might have been said, otherwise known as nose stretchers. I think we have just heard one.

As the hon. member for Kingston and the Islands knows full well, our presentation during the last election campaign was $18 billion in spending reductions and $20 billion in growth. At that time the Liberals opposite were going all around the country like Johnny Appleseed saying: "Do not worry, everything is just fine. Those terrible Reformers are going to have to cut spending but we are not. We have never done it in the past. We are not likely to do it in the future. Do not worry. Vote for us. Everything is going to be okay". However, we are all in this boat together. They are finding that they have to do the very things that would not be done or we are going to destroy the country. All of a sudden, they are faced with the fact that they have to do it.

Since the hon. member does not think the Reform Party has a plan, what is his plan for reducing the deficit to zero? That is not a low hurdle. We all know the member opposite is part of the Liberal olympic low hurdle team. If you make the hurdle low enough anybody can stumble over it. Before he hurts his shins getting over this 3 per cent hurdle let us hear how he is going to get to nothing.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I have not said, nor has the government said, that it is going to reduce the deficit to zero. What it did say is in the red book, and the hon. member says he did not see it. Of course I am sure he did not read the red book during the election campaign. He should have. He might have joined the Liberal Party instead and he would be much happier than he is today.

The red book made it very clear that the government was committed to reducing the deficit to 3 per cent of gross national product by year three of its mandate. That is the promise the government is going to keep. That is the promise I was discussing earlier in my speech. I believe it is a reasonable promise. We have two more years to do that. By the end of the two years the government will have plans for reducing the deficit further I have no doubt. I am optimistic that with the great policies the government is pursuing we will have phenomenal growth in this country throughout the period that will reduce it further.

I invite the hon. member to wait for the budget. See what is in it and rejoice when it comes out.

[Chuck Strahl, Reform, Fraser Valley East, BC]

Mr. Speaker, it is always an interesting discussion when the hon. member opposite begins to wax eloquent, especially if the wax is not fully hardened yet. I have particularly enjoyed some of his diatribe. It has been quite good.

I would like to add to what one of our hon. members just mentioned. This mutatis mutandis attitude the Liberal government has: Do not worry, be happy, everything will be okay. I wonder if those watching have heard enough yet from the Liberal side of the House that they will somehow, hopefully with about a 6 or 7 per cent growth rate, be able to balance the budget. I suppose sometime into their grandchildren's funeral party they will somehow be able to bring together a government plan that will bring the deficit down to zero.

Canadians are not fooled by the idea that if we set the boundary so low we can never be disappointed, if we just say that some illusive day we will be able to balance the budget. Canadians have had enough of this. That is why the green book, the red book, the mauve book, the pink book, the grey book, the flurry of studies this government has brought forward, not one of them has any idea that is ever going to solve this deficit problem. They are discussion papers. The latest one is another discussion paper. The Liberals put a nice title on it: "Jobs and Growth". It sounds good, but in the body of it there are no details, no goals, no dollar figures and no costing of the options.

The people watching are not fooled by this. Certainly on this side of the House we are not fooled by government proposals that continue to leave the dollar figures off the bottom line. The Canadian people are not fooled. It is time for action. The Liberals have wasted and squirrelled away a year. It has been the best year to take advantage of economic growth.

Why does this member and the government not move now while they have some political capital left to move and address this deficit problem? It is not going to get easier with the passing days. I encourage the member to grab the bull by the horns and come forward with some solid suggestions, not more discussion points.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

Mr. Speaker, the hon. member for Fraser Valley East has raised a number of points. I am delighted that he enjoyed my speech and feels that it provoked him to rise in the House and ask questions. I will try to make speeches more often to elucidate matters for him. I regret I cannot speak as often as I did when I was in opposition. I would have certainly enjoyed debates with him, although I suspect he would have been on the same side of the House just in one of the smaller parties.

The hon. member suggested that Canadians were being fooled by government proposals. They are not being fooled by any proposals by this government. He said that Canadians are fed up with the things they are getting from this government. Well the polls do not indicate that. Seventy-three per cent was the latest figure I read of satisfaction with the government, the highest ever. No government since polling began has done such a great job as this government has done in the eyes of the Canadian electorate who voted us in.

[Chuck Strahl, Reform, Fraser Valley East, BC]

You have not done anything.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

The hon. member says we have not done one thing. The other day I listened to a litany of complaints from one of his colleagues about things the government had done that he disagreed with. We have done all kinds of things and Canadians appreciate what we have done. It shows up in the polls when a government can get a 73 per cent satisfaction rating. It must make the hon. member and his colleagues green with envy.

I should also say that this party does not fool Canadians. We have not fooled Canadians in this debate. We have presented proposals. We have invited discussion. We have told Canadians what we are doing in an open and forthright manner. The only party that has fooled Canadians is the one headed by the hon. member for Calgary Southwest. I suspect he has fooled the members of his own party.

[Len Hopkins, Liberal, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, I want to compliment the hon. member for Kingston and the Islands for certainly raising so much attention to this great issue. I also want to thank him for reminding the Reform members that the Canadian people voted for the Liberal Party and its policies in the red book. They did not vote in favour of Reform Party policies.

I would ask the hon. member for Kingston and the Islands, what would be the impact today if the Reform Party policies were actually in place? How would they differ from the actual policies that are going into place by the Liberal Party right here in this House of Commons? We never promised what the Reform Party is talking about, so we do not have to deliver that. What we have to deliver is what we promised.

The hon. member for Kingston and the Islands has been very explicit in what he has said. He held up the books which contained the discussion papers. But the Reform Party is talking about figures. The hon. member for Kingston and the Islands knows very well that when you have a discussion paper you do not have bottom line figures. If you had bottom line figures to go on to begin with, why would you even have a discussion paper?

I want to ask the hon. member for Kingston and the Islands what is the purpose of the discussion paper? Would he explain that. I know, but I want him to explain to these people across the way who seem to think that the Canadian public voted them into office instead of the Liberal Party of Canada.