Debates of Nov. 18th, 1994

Questions On The Order Paper

[Gilbert Fillion, Bloc, Chicoutimi, QC]

Is the Department of Fisheries and Oceans planning to rebuild the wharf in L'Anse Saint-Jean in the riding of Chicoutimi, to re-evaluate this project in fiscal year 1995-96 and to begin negotiations with the municipality of L'Anse Saint-Jean?

[Brian Tobin, Liberal, Minister of Fisheries and Oceans]

The Government of Canada has been aware of the municipality's interest in rebuilding the wharf at L'Anse St-Jean since the fire of August 22, 1992. Since that time, the Department of Fisheries and Oceans (DFO) has been discussing the situation with the municipality.

In 1993/94 and 1994/95, DFO approved expenditures totalling $300K for the pre-engineering studies, and for the plans and specifications for the reconstruction of the wharf. This was done to facilitate the wharf's reconstruction, should funds become available. At that time the government could not make a commitment to proceed with the work.

Public Works and Government Services Canada's recent technical assessment and planning documents indicate that the demolition of the outer end of the wharf and its reconstruction and the renovations to the remaining portion of the wharf will cost an estimated $2 million.

In light of the current climate of fiscal restraint, competing demands for funds to carry out repair and reconstruction projects at federally owned harbours across Canada cannot all be accommodated within the limited budget for the small craft harbours program. Under the current program review, government is seriously questioning whether we can continue to spend diminishing funds or operate improved or reconstructed recreational harbours at the expense of doing essential repairs at commercial fishing harbours. DFO has assigned a higher priority to repair projects at commercial fishing harbours than to recreational harbours and this leaves no funds for large recreational projects. As a consequence, DFO is unable to make a commitment to rebuilding the wharf at L'Anse St-Jean at this time, and it is unlikely that this situation will change in 1995/96.

DFO is prepared to co-operate should other interests provide the funds necessary to reconstruct the wharf.

Question No. 90-

[Gilbert Fillion, Bloc, Chicoutimi, QC]

Will the post offices in the riding of Chicoutimi be reorganized and if so, how and what effect will this have on employment and the quality of customer service?

[David Dingwall, Liberal, Minister of Public Works and Government Services and Minister for Atlantic Canada Opportunities Agency]

Starting on February 13, 1995, Canada Post will improve collection and delivery in the riding of Chicoutimi by introducing motorized mail courier service to the area. Also, letter carrier operations currently located at the Chicoutimi Racine and Chicoutimi Nord facilities as well as mail processing operations currently located at the Chicoutimi CTC will be consolidated into a new facility at 1939 Des Sapins Street in Chicoutimi. Retail customers will not be inconvenienced, as CPC products and services will continue to be availabe in the Chicoutimi Nord and Chicoutimi Racine establishments.

Though CPC employees will be transferred to the new facility, there will be no job loss associated with this rationalization.

The project will result in better postal service for the region, as Canada Post introduces a modern collection and delivery system well adapted to the future needs of its customers.

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

I would ask that all remaining questions be allowed to stand.

[The Deputy Speaker]

Shall the remaining questions stand?

[Some hon. members]

Agreed.

[The Deputy Speaker]

I am told that the hon. member for Verchères has asked to present a petition. Does the House agree to return to Presenting Petitions?

[Some hon. members]

Agreed.

Petitions

[Stéphane Bergeron, Bloc, Verchères, QC]

Mr. Speaker, I thank my colleagues.

Pursuant to Standing Order 36, I am pleased to table in this House today a petition signed by 156 residents of the riding of Verchères, more particularly, the municipality of Varennes.

Referring to the abolition of universality for the age credit for income tax, the signers of this petition believe that the present government is unduly attacking the income of retired people.

The signers also consider these measures to be very discriminatory in fiscal terms since they attack people who have already made a major contribution to the Canadian economy; these measures would deprive these people of hope for an improved standard of living in the coming years.

Accordingly, the 156 signers of this petition ask Parliament to vote against any measure that would lower the income of retired people. Needless to say, I share the analysis of the situation presented in this petition and I strongly support my fellow citizens' request.

The House resumed consideration of the motion.

Social Security Program

[Beryl Gaffney, Liberal, Nepean, ON]

Mr. Speaker, I am very pleased to speak in the House today on social security reform. I will direct my comments specifically to the unemployment insurance aspect of it and how the proposed changes will affect women and families.

This debate takes place at a critical time in the history of Canada's social programs. The Minister of Human Resources Development launched the social security reform debate in the House last January. At that time he challenged Canadians to define what effective social programs would look like in a world shaped by the economic and social trends we see around us today.

During the following months the Minister of Human Resources Development and the Standing Committee on Human Resources Development have both heard the same things from a large number of Canadians. Quite simply our social programs are losing the confidence of the people who pay taxes. They see the inconsistencies and the gaps.

Like every member of the House I have received numerous letters and phone calls on the topic. The polls say it. Our mail says it. Canadians are not satisfied with the status quo. They know that a more effective and a more cost effective social safety net is not just possible; it is necessary. That is why the government released the discussion paper on social security reform on October 5.

We want a debate for all Canadians. One element of the debate is fairness. Canadians clearly reject the idea that we should have a slash and burn approach to social programs. They just want them to work better. They want the money and services to meet the greatest needs with the greatest impact.

Certainly unemployment insurance was not meant to create the cycle of dependency that has developed in too many communities for too many workers. A large and growing share of people who get UI are frequent claimants. Thirty-eight per cent have made three claims in five years. With the best of intentions we have allowed the system to develop into one that encourages low skilled, seasonal and temporary work in high unemployment regions. It does little to encourage people to improve their skills and their options.

A place where that is certainly the case is in the unemployment insurance area. To hear some of the comments in the House on the topic one could conclude that UI is about to be destroyed in some fiendish plot driven by the titans of high finance. One could conclude that the government is bound and determined to roll back the gains that women have made in the labour force over the past generation. One could conclude that we are determined to make poor families suffer. Nothing could be further from the truth.

I want to concentrate my remarks today on how the green paper proposals on UI relate to the needs and the realities of women and families in Canada. UI has been serving Canadian workers for over 50 years. For most employees it works as it was intended to. It is insurance to tide them over the time between jobs.

The labour market has changed greatly since 1942 when the first claim was filed. Now people do not just lose one job and move on to another. Structural change in our economy means that people may not just move between jobs; they may move between industries or communities. UI was not designed to deal with that type of situation.

In contrast, as hon. members will recall, is the second option of a system of employment insurance. Within it there could be basic insurance that would work in the way UI does now. People who make a UI claim only infrequently would see no real change. People who need the help with the special benefits such as maternity, parental, adoption, or sickness benefits would still be able to get that help.

At a time when we are asking how we can invest funds to make people employable across all social programs we have to ask the same questions about UI. The discussion paper lays out two different approaches we could take to address the fact that some people need far more help than UI can give them through income support alone.

The first is simply tightening the status quo. Higher eligibility rules, shorter duration of benefits and lower weekly benefits are all options. The only problem is that it does little to address the needs for more active labour force programs. It nibbles at the edges of the program without really challenging the big questions surrounding UI.

People who make relatively frequent use of UI would move into the adjustment insurance category. For these people there would be a greater emphasis on help to find the skills to get and keep better longer term work. The government recognizes that some industries are seasonal and that some communities have little work in parts of the year. That is why we are open to ways to make this approach work well.

Some critics have raised the idea that people who might be eligible for adjustment insurance could have their benefits set on the basis of family income. This has been opposed by some people as a giant step back for women. Before any more interest groups howl about this let us again look at the facts.

First, very few women would be affected by this proposal if it actually came to pass. Women account for only about one-third of all frequent claimants. The program is good for about seven out of ten women. Adjustment insurance would not matter. Their needs would be met by the basic insurance program.

Second, women would still have good access to the special benefits under the system. A study states that women account for 59 per cent of all sickness claims. We know they account for the maternity claims. We can guess that they probably account for the majority of claims raised for adoptions and parental benefits. There would be no change for the vast majority of women who call on UI for help. It will still be there to help them.

Where the debate exists is over a proposal that would base adjustment insurance benefits in part on family earnings. Third, low income people would get the full benefit. A sliding scale would lower the benefits for people with higher incomes. Immediately some protested this might undermine the self-esteem of a woman or it might undermine her financial independence. I disagree with that statement.

In 1991, 18 per cent of frequent claimants had annual incomes of over $50,000. A further 28 per cent had family incomes of between $30,000 and $50,000. Frankly the image one gets is that UI for these people is a regular top-up to family income and not a protection against hardship. Canadians have the right to ask if this is the best way to spend their dollars. I suspect that Canadians will agree that it is not. They will agree that these people claim the money because of a feeling of entitlement, not need. UI is not a publicly subsidized savings account.

The prospect is that by focusing attention on people most in need whose work patterns are the most marginal we can help them break out of a cycle of dependence. The premiers of the Atlantic provinces agree. Economic analyses agree. Canadians agree. The old pattern of 10:42 simply does not work. The answer is not to cut people off and say sink or swim. The answer is to get programs and services in place to help.

Women will benefit from this approach. The idea is to put more emphasis on employment development services of all kinds: counselling, job search skills and work experience training. The idea is to move money from less important places to more important places.

Among the proposals in the green paper was one that raised the question of improving UI coverage for part time and seasonal workers. Most of the people who would benefit from it are women. Twenty-eight per cent of women workers are in part time jobs whereas only ten per cent of men are. The ideas we have suggested could directly address the needs of those women better than the status quo.

Many women need the kinds of programs social security reform will make available. Let us take the example of single mothers. Almost 60 per cent of lone parent families with children under 18 live on low incomes and 95.9 per cent of single parent mother led families live below the poverty line. They often lack support services such as child care that would help them get back to work. Those on social assistance often find that the value of support services like dental care are much greater than what they can earn with the limited skills they may have.

The government has embarked on a series of experiments with the provinces to explore better ways of helping these mothers get back into the workforce. We now have a pilot project in Manitoba that will provide 4,000 lone parents on welfare with employment skills and support. The program is called "Taking Charge". It is specifically to help those people do just that, to take charge of their lives.

We will continue to solicit the ideas and views of Canadians. I am glad to see that the Standing Committee on Human Resources Development has attracted not only many submissions but substantial attention in the media. The issue is very important. It deserves a full debate. That is why the government has provided financial resources to 19 women's organizations to enable them to participate in the consultative process.

Many times we in the House hear different people ask why we are providing financial resources to organizations so that they can attack the government. This is a case where we are providing financial resources to women's organizations not to attack the

government but to give us the ideas we need to provide help for women.

Our current set of programs were designed at a time when most people needed relatively few skills to get and keep a job. What they picked up in school and on the job was usually enough to build a lifetime of earnings. People needed financial help between jobs. Others needed support if they could not work at all due to disability or family commitments. The old system was based on a stable world with stable skills and stable jobs for the vast majority of working people.

I would like to refer to my own case. My husband and I raised five children who have all been in the workforce for a few years. They were all able to complete university and get jobs. They are now contributing citizens. Not one of them has ever collected a day's UI in their lives. That is not the way it is today. Times have changed. Students coming out of university are having a very difficult time and we have to address that problem.

Our support for programs like New Brunswick Works in New Brunswick and Job Link in Ontario and the Northwest Territories is investing in people and is helping us find better ways to help the most disadvantaged, to help their children break the welfare cycle and to have self-esteem at work. Social security reform can help women and their families far better than any of the patchwork programs we now have in place.

In the end the value to women of social security reform is much the same as it is for men. At the centre of any social security network lies a guiding principle. In a time of constant change that principle must be employability. Real security for Canadians comes from the ability to get and keep a job. Our programs must reflect the fact that this is more complex now than it was in the past. That is true for both men and women.

We cannot stop changes; we can help people provide the skills and supports to meet the realities of change. From letters I have seen and the people to whom I have spoken, that is all most people are asking for. Social security reform addresses important questions that affect women and all Canadians. It points to a new approach to working, to learning and to security. Everyone can benefit from that.

My speech today has been narrow in its focus because I have specifically dealt with women and UI and how the changes we are talking about in our social security reform will affect them. The whole package of social security reform is broad and will affect all Canadians. I felt this particular aspect was so important that I wanted to focus and narrow in on specifically UI and women's issues and I was pleased to do so.

[René Canuel, Bloc, Matapédia—Matane, QC]

Mr. Speaker, the hon. member said earlier that her children never had to rely on UI benefits. This is great, but it is not the case for us. Our mothers and fathers have a lot of heart. Still, many children claim UI benefits not because they want to, but because they have to.

The government will create two classes of unemployed. One for those who occasionally claim UI benefits, like once every five years, and the other for those who do so almost annually.

Where I come from, around November, workers have to claim UI benefits again, because they are out of work. They are jobless.

I worked for the agency and for other organizations to generate work. Back home, a great number of people do their utmost to create jobs, not only through programs but in the field. People in my region are extremely disappointed by the minister's reform. They know that they have no choice but to rely on UI benefits every year. Yet, the new reform provides for cuts in those benefits as well as for more work weeks, something which is impossible in the Gaspe Peninsula.

We asked, among other things, that the Eastern Quebec Development Plan for forestry workers be extended. We made representations. This morning I made a statement pursuant to Standing Order 31. This is cumbersome. The government does not understand. It does not understand that, in the Gaspe Peninsula, the Lower St. Lawrence region and the riding of Matapédia-Matane, the issues are not necessarily the same as in Toronto or Calgary.

The hon. member told us that her children never had to rely on UI benefits. I congratulate her and her children, but I also tell her that the situation is not the same for everyone. I hope she will realize that.

I want to make another point. If tuition fees go up, a very large number of students from the Gaspe, Matapédia-Matane and Lower St. Lawrence regions will not be able to attend university. In my region, the university is located in Rimouski and not every subject is taught there. Consequently, some students have to go to Laval university, in Quebec City, or to Montreal, thus incurring extra costs. If they go home once a month, they have to pay for their transportation costs and also spend extra money on food and lodging. If, on top of that, tuition fees are increased, as many as half the student population in my region may not be able to go on. Even today, the total number of those who can afford to attend university is lower than elsewhere. Therefore, my region is adversely affected by this measure.

If the hon. member cares about those who live in rural and remote areas and who will not be able to go to university because of that reform, what would she tell the unemployed in my region who want to work but cannot find jobs? I would appreciate an answer on these two issues.

[The Deputy Speaker]

The hon. member for Nepean will have as much time as her colleague had to give her answer.

[Beryl Gaffney, Liberal, Nepean, ON]

Mr. Speaker, I thank the hon. member for Matapédia-Matane for his question.

I hope in mentioning my children that I did not create a wrong impression with the member for Matapédia-Matane because that was not the intent of my mentioning them.

I was making a comparison of young people coming out of university, high school or college a few years ago and obtaining a job and today. If they had a certificate or diploma from a university it was almost a guarantee that they could get a job. It was much easier. That is gone. It is no longer in effect. Young people graduating today who might have a masters or PhD still have to spend two years looking for a job. The situation has changed.

My children were raised in a very fortunate time in the history of Canada, They were able to access a job immediately. They were fortunate they did not have to go into the UI system and that money was able to stay there for those who needed it. It was not necessary for them to participate in a government program that was there to benefit those who could not find work.

I have a great deal of sympathy for the people who live in an environment or in a territory of Canada, such as the member lives, where their work is seasonal and it is very difficult for them to find work for 12 months of the year.

These are the types of reforms we are talking about in the human resources development program. They are specifically to deal with the people who live in the member's region, and in the Atlantic region or in the northern part of Canada where work is seasonal.

This is part of the consultation process. They will be consulting with the people in Quebec and asking how this program suits its needs. That is a major portion of the consultation program and is what is so important. We are not just saying that what is suitable for my riding of Nepean, Ontario is suitable for the member's riding in the province of Quebec. Every riding is different and that is what is very unique about Canada. We are very unique not only in each province but as we move from region to region. This is what the program of reforms is trying to address, again through the consultation process.

Some students will not be able to afford to go to university if the tuition rates are raised. As Mr. Axworthy said on the steps of Parliament Hill the other day, he is not putting less money into education, he is putting more money into education. He is trying to ensure that students who do not have a university in their town-as my children did, as students in the member's area who have to travel to Rimouski to go to university-that funds are in place so they can go. The students of wealthy families should have a responsibility to support those in less wealthy families who are from less wealthy regions.

I firmly believe we are headed in the right direction. Obviously the consultation process is going to prove us wrong if we are wrong or prove us right if we are right. We are there and we are very much prepared to listen.

I thank you very much, deputy, for your two very good questions.

[The Acting Speaker (Mr. Kilger)]

I would ask hon. members to please not refer to each other by name. Members of the House are to be referred to either by the member for x or the minister for y .

[Bob Ringma, Reform, Nanaimo—Cowichan, BC]

Mr. Speaker, I very much enjoyed the comments of the member for Nepean. She got into a narrow realm, as she explained, of unemployment and women.

I enjoyed as much the question from the member for Matapédia-Matane because he expresses, as a representative of a totally different part of the country, the particular concerns of that area. That is the value of the House of Commons. We must listen to one another. I hope the process will go forward with the review committee as they tour Canada and pick up all of these comments, all of which are valid. If we are to tackle the enormous problem of the debt and the deficit year by year, we badly need a review of the social spending that we are undertaking.

A leaked government memo indicates a need to reduce social spending by $7.5 billion. This demonstrates that even the Liberals realize the necessity of cutting in this area.

A quick look at where the government spends its money will show why we need to cut in the area of social spending. But unlike the member for Nepean who took a narrow view I, as the first Reform Party speaker on this subject today, would like to take an overview of the whole situation to set the scene.

We have a debt of roughly $540 billion at the federal level. Our deficit spending at this time is running at about $40 billion per year. This means we are getting ever deeper and deeper into debt. At the same time government spending annually is roughly $160 billion. One-quarter of that annual spending, roughly $40 billion, $39.4 billion goes to interest payments. This amount cannot be altered or reduced until we balance the budget. Think of it again, and I address this to the public in Canada, $40 billion a year alone in interest payments on our debt.

Another quarter of our annual spending, just over $40 billion, goes for government services. This includes the armed forces, foreign affairs, the RCM police, subsidies to business, multiculturalism, bilingualism, Parliament, the civil service among others. These areas must be drastically cut before we touch social programs. However, even if we cut this roughly 25 per cent of our spending to the bone, we can only save $8 billion to

$10 billion a year. The mathematics is there. It is just not enough to balance the budget.

The remainder of government spending, $79 billion, consists of transfers to the provinces and social programs. This spending has to be reduced by $12 billion to $17 billion if we hope to balance the budget in a number of years. That is an awfully big reduction.

Let us now look to see what the government is going to do to help address the whole problem. The finance minister brought down a lacklustre budget earlier this year. Not only were there few cuts but spending actually increased. Each day, as we are all aware, the government is spending $110 million more than it is taking in from revenues. We cannot go on doing that.

Despite these facts, however, the finance minister defended this weak fiscal plan and stated the government will have no problem in meeting its debt reduction target of 3 per cent of the gross domestic product as promised in the red ink book. The finance minister now admits his projections may be off and earlier this month informed the finance committee that cuts totalling more than $9 billion would have to be made over the next two years.

It is encouraging to see that the finance minister is finally beginning to realize the gravity of the situation. I suspect he is being pummelled by this country's financial institutions saying: "Minister, look at the reality". We have yet to see the finance minister's actions come close to matching his words.

Similarly, we must look at what action the minister of human resources has taken to tackle his share of the problem. His is a big share of the problem, no question.

For more than a year now we have waited for his social policy review paper. Instead of the action promised in the red ink book, all we have had until last month has been foot dragging. Given his reluctance to release the paper before the Quebec provincial election on September 12 it is surprising the minister even released the paper in advance of the promised Quebec referendum, but he did. This type of blatant politicking only serves to exacerbate the problem because it delays the move toward a badly needed solution.

Be that as it may we finally have the review paper. Looking at it however, what do we really have? So far that paper is nothing more than an eclectic grab-bag of reworked Liberal programs from the 1960s and 1970s along with a continuation of some Tory proposals.

The minister also denies that this process has anything to do with budget cuts. Well it surely has and it must. I do not think Canadians are fooled by this attempt to sugarcoat the truth. In fact, some Canadians might find the minister's sales pitch somewhat insulting.

We all know what the problem is. The real question is: How do we solve it? We solve it collectively in an open and honest way while ensuring that those really in need do not suffer. We must protect the people who need our help.

We have to eliminate the deficit by carefully reviewing all of the government spending including sacred cows like official languages and multiculturalism. Every time we mention that in this House we get bombarded that they cannot be touched. Well the time has come when we have to touch them and examine them in detail. We must ask ourselves if we are getting value for every dollar we spend and whether we can live without the program.

The process has to be done objectively and fairly treating all provinces alike and all individuals with compassion. Once we eliminate deficit spending we can begin to chip away at the debt. Only through this method can we ensure the continued viability of Canada's valued social programs. In the meantime it is obvious some cuts are needed in social spending but the big question of the day is where to cut.

We have heard a dissertation on unemployment insurance. Last year the program cost Canadians $20 billion. The minister's review paper talks about making this a two tier system, or simply making it harder to be eligible for benefits. I suggest that both of these proposals are nothing more than a continuation of Tory policies.

The unemployment insurance system must be returned to a true insurance plan. It must eliminate regional differences in qualifying periods, benefits and non-insurance components. This area alone could save roughly $5 billion.

The Canada assistance plan helps the provinces fund welfare programs at an annual cost of $8 billion. The government suggests this program be made more flexible to allow provinces to experiment. This may help the provinces. It may help to prevent some of the abuses of the welfare system but we are still going to be spending the same amount.

It may be better to cut much of this spending in favour of a new child tax credit which could be targeted at low income households. As I said earlier this whole process has to target those who absolutely need the help. We cannot afford to continue with the past approach of universality. In any event the new child tax credit would not only ensure the money gets to those who need it most, but it could also produce savings in the area of three to five billion dollars.

In the area of education the government is proposing a system in which RRSPs could be used to pay for tuition. Many years ago there was a registered education savings plan. This was eliminated when it was found to be ineffective. Therefore why does the government continue to believe that a failed program from the past can work today?

Instead of giving money directly to students and not through increased loans as the review paper suggests, how about doing it through a voucher system? That has been discussed in this House. It has merit and really should be looked at.

It would ensure that money is spent on education rather than just going into provincial general revenue funds. It would make post-secondary institutions more accountable and receptive to the changing needs of students and the job market. The savings would not be great but a more efficient use of current resources would be ensured. Education is an area we have to protect to the maximum degree possible.

The review paper does not talk about reforming health care. Health care costs Canadians over $70 billion each year of which the federal government pays about $15 billion one way or another. The health system is increasingly overburdened.

Reform stated during the 1993 election campaign that it would maintain transfer payments for health care at current levels. The medicare system in Canada is something I think every Canadian says we must have. It is of highest priority for protection. What do we have to do then? We have to experiment with ways to get more bang for our buck out of the health system.

This would mean allowing provinces more freedom to design their own health initiatives based on their own needs. The provinces are close to it. They are the ones who have to deliver the services. Let them make more decisions. While it is important in the health system for national standards to apply, those standards should not be so rigid as to disallow provincial experimentation, such as private clinics.

The Liberals decry this type of thinking claiming it will create a two tiered system, which is already a fact in Canada. Why do the Liberals think that is so terrible in the area of health yet they proclaim it as a possible saviour for unemployment insurance? This is an example of the type of double talk the government is becoming famous for.

I have only begun to touch on the many programs in Canada's social safety net and we have already identified about $9 billion in potential annual savings. I have also attempted to ensure that those who are truly in need of help are not adversely affected.

It is possible to save money in this area by carefully targeting where the money goes and rethinking the way we deliver these services. I hope the government has listened and continues to listen when my Reform colleagues add their valuable input over the remaining hours of this debate.

[Morris Bodnar, Liberal, Saskatoon—Dundurn, SK]

Mr. Speaker, I appreciate the opportunity to speak in the House today.

Six weeks ago the Minister of Human Resources Development released a discussion paper on social security in Canada in order to engender a lively debate across this country about what kind of social security system we want in the future. A debate should be based on facts not rumours and scare stories so let us make sure we all understand those facts.

We have created an excellent and highly accessible post-secondary education system in Canada but it is increasingly under pressure. Resources for everything are tight and there is a growing need for more access to the system. Our challenge is to ensure that we maintain and improve the system and broaden access.

First, why broaden access? Because there are three million people already in the workforce who want to improve and upgrade their skills in order to keep jobs. More and more people should be getting a post-secondary education. Of the new jobs created during the last three years 17 per cent went to people with university education. There were 19 per cent fewer jobs for those with less than high school.

Governments do not have any more money to pay for education. In fact most governments have less money to spend. The federal government is not proposing that we cut $2.6 billion out of the system as some people would suggest. Our proposal will put more in the system as I will explain.

Let us look at how education is paid for. Students pay about one-fifth of the costs of their college or university education through tuition fees. More than half of the students graduate without borrowing money or by borrowing very small amounts. Taxpayers pay about four-fifths or 80 per cent of the cost of post-secondary education, whether or not they personally benefit. That is a lot more than in most countries where students pay a larger share of tuition costs in recognition of the fact that they earn higher salaries and wages during their working lifetime.

Provincial governments are responsible for education, but the federal government pays half the costs for colleges and universities, about $8 billion a year. This currently includes $3.5 billion in tax points that allow the provinces to collect taxes for colleges and universities and $2.6 billion in transfers to provinces in cash. There is an additional $2 billion, mostly in support to university research and the cost of student loans through the Canada student loans program.

The $3.5 billion in tax points will always be there and it will keep growing. The tax points contribution will grow by an estimated $2 billion over the next decade, replacing the cash portion that will run out over the next 10 years.

Under the present system the cash will run out in about 10 years. Without extra government money it is likely that tuition fees will keep rising. That is why the government is considering an alternative, taking some of that cash before it disappears and using it to set up a permanent expanded student aid program. This would provide as much as $2 billion extra in student loans each year.

Under such a scheme the total amount of federal contributions to post-secondary education would increase by more than $10 billion over the next 10 years. Instead of leaving the system as it is now, which would put the federal government contribution at a total of about $60 billion over 10 years, it would be about $70 billion.

A new kind of student loans program would make it easier to finance education, not just for traditional students but for older Canadians who want to go back to school but do not qualify for student loans now. More people would be able to go to college or university. College and university fees could rise but it seems like a reasonable investment given the fact that university graduates' lifetime earnings will be 40 per cent higher than if they had not made that investment. That is about one-quarter million dollars more.

In addition if we were to make the replacement of student loans contingent on earnings after graduation, students would have a guarantee that their investment in learning will not burden them with impossible loan payments.

These are the ideas we have put forward for discussion. Canadians will have an opportunity to respond. They can fill out the work book which we have available for all Canadians to have their say on the reform of social programs. The booklet is available in postal outlets, Canada Employment Centres, YM-YWCAs and many grocery stores or by calling the toll free 1-800 number.

Social security reform affects all Canadians. The government encourages open debate to find the best solutions to take us into the next century.

[Roger Pomerleau, Bloc, Anjou—Rivière-Des-Prairies, QC]

Mr. Speaker, first of all, I am pleased to rise today and speak on the social reform issue, which I believe will be of great significance during the coming months for a number of reasons.

I would like to take a moment to demonstrate that the Liberal government is facing an unsurmountable problem, trying desperately as it has been for the past year to defend the Constitution. I am referring of course to the federal system as we know it, this system that the Prime Minister described as profitable federalism over a decade ago.

In fact, this profitable federalism that we keep hearing about without ever seeing any results, this much-vaunted profitable federalism has no room left to move because it is throwing everything in reverse as we will see later. And there are only two ways out the deadlock for the federal system: to tax the middle-class to excess or cut social services.

This is the context in which I think the social reform proposals before us must be seen. While the previous government, a Conservative government, became famous mainly for increasing the tax load of middle-income earners, the present Liberal government seems to want to make a name for itself with social service cuts affecting first and foremost the less affluent.

All of this boils down to what was described as the vicious circle in which the Canadian economy is trapped. You start by overtaxing middle-income earners, thereby reducing their buying power which in turn forces them to change their consumer habits and definitely buy less. This results in fewer jobs and higher unemployment. The low-income population is growing at the expense of the middle-income one. The decline in employment causes the government's tax revenues to drop as well.

Similarly, since unemployment and social assistance costs are going up, the government must spend more. The deficit is growing every day, while the government's manoeuvring room is getting narrower.

Faced with this situation, the well-off often transfer their assets to other countries before it melts away here. Again, this eliminates jobs, raises the unemployment rate, cuts government revenue and increases public spending, which in turn narrows the government's room to manoeuvre.

To address the problem, the government has decided to reduce its services. In this regard, this government is not so different from the former Conservative government, since its proposed social reform reflects the philosophy behind the various UI reform initiatives put forward by the Tories when they were in power. To be convinced of this, one only has to look at the main elements of this reform. First of all, the government has created two classes of unemployed: the occasional UI claimants and the frequent claimants. We may well ask ourselves if the workers now benefiting from the infrastructure program put in place by the government last year will become frequent or occasional claimants when they lose their short-term jobs.

Since it creates these two classes of unemployed people, the government also creates two classes of benefits: basic insurance and adjustment insurance, as it is called. Basic insurance is for occasional claimants. It is pretty much the same as the present system which the government finds inadequate. In the second case, adjustment insurance, the government perpetuates the vicious circle of the Canadian economy which I mentioned earlier.

In fact, the reform of social programs which the government has presented to us provides no real policy to stimulate employment. So one may well ask what claimants of adjustment insurance can adjust to.

To deal with this situation, the government intends to require frequent claimants to do community work or take training courses in order to qualify for benefits. We see how ridiculous the situation is, because these are bandaid solutions. Once these unemployed people have completed their community work to which the Department of Human Resources Development will assign them, they will all return to unemployment as even more frequently unemployed, since in the mean time the government will have provided nothing to stimulate employment.

So we go from one vicious circle to another, making the unemployed pay for this government's lack of initiative when it comes to job creation. However, this little game is just fine in the context of the vicious circle prevailing in Canada. First, the government no longer has any margin. Consequently, it forces the unemployed to participate in new employment expansion and development programs. So as to lower their production costs, companies use these programs to hire workers whose salaries are lower, and therefore competitive with those already being paid.

Consequently, in the medium term, well-paying jobs become more and more rare, thus reducing even more the purchasing power of the middle class. Since employment income tends to diminish, it results in lower tax revenue for the government, which then has even less of a margin. The result is that the government must make new cuts in services to meet its budget goals. And the vicious circle starts all over again for the Canadian economy.

The introduction of this social program reform by the Liberals only confirms what the majority of Quebec voters figured out last year: To vote for the Liberals or the Conservatives was just the same. The Conservatives overtaxed the middle class, while the Liberals will cut aid to the poor. At least one Liberal MP, the hon. member for York South-Weston, recognized this when he said that, during the ten years that the Liberals formed the Official Opposition, they accused the Conservatives of reducing the deficit on the back of the poor, but that they were now doing the same thing.

It is useless to vote for a party that supports a constitutional framework that is dragging us down into bankruptcy. The problem is that all this is being done at the expense of the vulnerable in our society. The rich are never affected by these reforms. To illustrate my point, I may refer to a letter sent recently by a Liberal member, the hon. member for Gander-Grand Falls, to the Minister of Finance. In this letter, which was published in the media either yesterday or today, the hon. member said, and this was to the Minister of Finance, that he was particularly upset about the shocking and immoral deductions allowed as entertainment expenses, for instance, the purchase of $200 bottles of wine, cruises, escort services, and so forth. What is the hon. member for Gander-Grand Falls actually saying?

Every year, one of my neighbours in my riding, Mr. Tremblay, has one or two corn roasts for his friends. He buys corn, of course, some wine and some cake, and he entertains his guests. Of course, Mr. Tremblay does this at his own expense. Meanwhile, large corporations entertain their guests, serving cocktails, petits fours and champagne, and that is tax deductible. Who is paying? Mr. Tremblay, through his taxes. So Mr. Tremblay is paying for everyone. That is why corn is expensive, and that is why it is so expensive to be poor.

In his letter, the hon. member for Gander-Grand Falls estimated that amounts spent on wine, petits fours and champagne were costing the government $200 million.

The hon. member, who did some research at Revenue Canada, also pointed out that forward averaging of taxes by companies now amounted to nearly $40 billion. Forward averaging refers to amounts that are payable but may be spread over subsequent returns. Nearly 1,200 companies recorded profits of at least $1 million without paying a cent of income tax, according to the hon. member. In concluding, he said more or less the following: As the minister can see, the $9 billion he is looking for could be found by collecting the taxes that should have been paid by companies on their profits.

I agree with the hon. member of the Reform Party. I think that before cutting social services, we should first get the money that is out there so that we have some degree of social justice. Where are we heading, politically speaking? I am sorry to put it this way, but I really think we are starting to look like a banana republic. A banana republic is not a republic where people pick bananas. It is a republic where the people who pick the bananas do not grow them. This means a republic with only two classes: the poor and the rich. The rich always get richer and the poor get poorer. If this proposal is passed, as it will be within the next few months, we will witness the undeniable signs of "bananization". Obviously, we cannot support this reform package.

[John Bryden, Liberal, Hamilton—Wentworth, ON]

Mr. Speaker, I listened to my colleague's remarks with great attention, particularly his comments about social services reform in the context of federalism.

We are all agreed, in the House and in the country at large, that the previous government, because it concentrated so much on constitutional issues, left our house in a state of great disorder not only in the accumulation of debt but also in failing to address these very crucial problems of social security reform.

I would like to suggest to the member opposite that we now have exactly the same situation. We have another leader in Canada pushing a constitutional agenda which will take us away from the focus on necessary reforms involving social services and reducing the debt. I suggest to the member that person is Mr. Jacques Parizeau. I wonder how he can explain that Mr. Parizeau is not directing us away from where we should really be looking, that is looking after Canadians, finding jobs and increasing the benefits in the economy.

[Roger Pomerleau, Bloc, Anjou—Rivière-Des-Prairies, QC]

Mr. Speaker, I think that we will indeed have to pay increasing attention to the Constitution in the months to come. Sadly, this problem could have been resolved a while back, if only the Charlottetown agreements had been passed. We know what happened to these agreements that put at end to the negotiations between Quebec and Canada.

Quebec said no to the agreements, and so did Canada. This means that very soon the people of Quebec will have to choose between taking Canada such as it is and building a new country in Quebec. We have been expressing this need of ours for greater self-reliance to the rest of Canada for 125 years, and no effort was spared during these 125 years. But apparently, no one can find a solution to this problem.

The only solution that seems fair to us consists in building a country in Quebec and letting Canada develop as it pleases, according to its own interests. Basically, Canadians would decide what they want to do and how they want to do it, while we would do the exact same thing in Quebec.

As for employment development, let me tell my hon. colleague that it is not by making massive cuts on the backs of welfare recipients that you boost job creation. I think that, with or without Quebec, a comprehensive tax reform is required-and I firmly believe this-in Canada. Unfortunately, if this is not done, Canada, with or without Quebec, will face huge difficulties in the years to come, because the low and middle-income class will get poorer and poorer. The Prime Minister himself once said that $1 million knows no language barriers and moves quickly. Some people will move their assets out of Canada and we will go through very hard times.

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

Mr. Speaker, I think the terminology I heard was bananas, and that is absolutely right. Bananas, I repeat it.

I read a little quote: "A strong economy is the essence of a strong society. My government will focus on a jobs and growth agenda. We will work with all our partners, provincial governments, business, labour, voluntary groups and individual Canadians". That is a quote from the Prime Minister of Canada.

I could carry it on a little further by referring to the opening of the green paper: "My commitment is to listen and to work with all Canadians, different governments, groups, organizations, so that we can develop in partnership a framework that makes sense, is effective and is founded on basic Canadian values of compassion and justice. And I invite you to join in the discussion and debate".

The point is that the green paper tabled by the minister is a consultation paper. The minister has pleaded with with the party across the way in the opposition to participate. There certainly are some alternatives laid forth in the green paper. At the same time the minister has been very open time and time again: if there is a better suggestion, a better idea, a better alternative, come forward with it. He is open to discussion; he is open to points of view on this subject matter.

As a matter of fact he has gone out of his way to invite all Canadians to participate. It is important to people from the province of Quebec. It is important to people from the province of New Brunswick. Indeed it is important for all Canadians. This is your opportunity, members of the opposition party, to focus on citizens in the province of Quebec and have them come forward.

Why is the approach not to get these points of view across to the minister? I know he is open to them.

[The Deputy Speaker]

Before recognizing the member, I would ask all members to put their remarks through the Chair. It is designed to keep the pressure down in here; it is not just because we have to have everything addressed to the people who occupy the chair.

[Roger Pomerleau, Bloc, Anjou—Rivière-Des-Prairies, QC]

Mr. Speaker, we have examined closely the famous green paper and we have made comments up to now. We believe essentially that the minister focuses mainly on social program reform. In doing so, he forces people to consider this reform. He starts by saying that the problem in Canada comes from small and medium-income people and that this is where savings can be made because the problems come from that group.

Besides, the Prime Minister himself did not hesitate to refer to these people as beer-drinking couch potatoes. What we say is

that there is indeed a problem in Canada and whether Quebec stays or not, Canada will have to go through a complete overhaul of its taxation system but the reform must start at the top. We must start with those who use these expenditures for their own benefit, those who pay no income tax. Billions of dollars are involved here.

I quoted earlier the Liberal member for Gander-Grand Falls who has studied the matter, as did many others. I believe we are open to discussion. As we have been saying since we came here, we should open the books to Canadians, not only the third chapter, not the first, all the books. We agree with that.

[John Finlay, Liberal, Oxford, ON]

Mr. Speaker, I listened with interest to the hon. member but I found an air of doom and gloom in his scenario. I would suggest that the nature of work in many respects has changed. A lot of people work successfully at home and on flex time. A lot of people volunteer and do a lot of work.

We have to face the fact that some people who work at lower salaries and pay their taxes are getting a little tired of waste and of those who abuse the system. However we are not going to solve the problems by attacking only those who abuse the system, because the system patently does not work well enough in this age.

What is wrong with someone asking for some community service work from frequent users of the UI program, which is supposed to be an insurance program and not a welfare program? What in the world is wrong with requesting people who receive something to do a little something in return, or at least to take responsibility within their community to assist in cleaning it up, in it being better run or perhaps assist seniors and children?

Would my friend care to explain how if we did that it would somehow, as he suggested, impact upon better paying work, upon more higher paying jobs? I do not see it.