Debates of Nov. 28th, 1994

Budgetary Policy

[Susan Whelan, Liberal, Essex—Windsor, ON]

Mr. Speaker, I feel that first I must reply to the comments made by the hon. member with regard to my constituents.

As I stated several times in my speech today, my constituents came to a prebudget consultation meeting and hundreds of constituents wrote to me. I felt it was my duty to present their views today. Those are the views of my constituents, not my views, with regard to the majority of the speech I made today. I think it is only proper and fair that the constituents of Essex-Windsor have the same rights as constituents in other provinces. They wanted those rights and that is what I put forward today.

With regard to the problem of the deficit and trying to put the blame on the Liberal government of the 1970s, I would like to remind the hon. member that in the late 1970s and the early 1980s we had a recession in Canada. Everyone knows that you can expect to have a higher deficit during recessionary times. However, the 1980s, during the previous Tory government, should have been a time to curtail spending and bring down the deficit. It was not. It increased spending.

To try and blame the Liberals of the 1970s I think is a very poor effort on behalf of the hon. member, when everyone knows that during economic growth, which we are experiencing now, it is the time to cut spending and get our finances under control. That is not what happened during the 1980s when the Tory government had the opportunity.

I do not believe we should blame past governments. We should be giving credit to this government and to the Minister of Finance for undertaking this effort to allow Canadians to express their opinions and to allow for this debate today and in the future. It allows us an opportunity to put forward views and ideas and allows all Canadians to have input. That is what is happening. That is what this government started and it is unprecedented.

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I would like to thank the member for her speech. I wonder if she could clarify something that caught my interest in the previous question. We talked about who is responsible for deficits.

The province of Quebec has the highest provincial deficit of all provincial governments. It represents $9,400 for every man, woman and child in that province. Of this debt, 40 per cent is owed outside the province of Quebec and outside Canada. It is owed to foreigners.

Interestingly enough, I went back and discovered that over the last seven years of the PQ administration it raised deficits in that province by 285 per cent at a time when transfer payments from the federal government actually increased to the province of Quebec. After the PQ government, I think in 1985, the deficit continued to increase but less than half the increase occurred while the current premier of Quebec was the minister of finance.

I wonder if the member could possibly give some comments on the previous speaker's dissertation about how all the debts have been created by the federal government.

[Susan Whelan, Liberal, Essex—Windsor, ON]

Mr. Speaker, I thank the hon. member for his intervention. I would like to expand on that.

We all know that every government, whether it be provincial or federal, has a responsibility. We know that the debt, as I stated today, of $700 billion is both a federal and provincial number. There are a number of provinces that need to get their financial houses in order. If the finance ministers of all provinces were to follow the example of the federal Minister of Finance, we would have a more open process across the nation. That would be wonderful.

As I stated earlier, one problem today with our debt is the fact that over 44 per cent of it is foreign owned. With the problems developing in other provinces, as my hon. colleague pointed out, we have to get control of it both federally and provincially. The consultation process, openness in asking Canadians for their input and listening to their ideas is the way to do it.

[The Acting Speaker (Mr. Kilger)]

I wonder if I may seek some assistance from the House. If members are splitting their time would they please indicate it to the Chair.

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

Mr. Speaker, I advise the House that I am splitting the time with my colleague. I will take 10 minutes.

I am pleased to rise today to take part in this important debate on budgetary policy. I think it was Will Rogers in talking about the weather many years ago who said: "Everyone talks about it but nobody does anything about it".

We are doing a lot of talking about it today. I heard some very sensible things being said in the House and some not so sensible. I wonder what the fallout from all that will be. Will someone actually do something about it? Is the Minister of Finance listening to the words being said in the House, or does he have some staff available to sift through it all and separate the wheat from the chaff? I hope something is being done because some words of value are being spoken here today.

Government policy in this whole area, as restated last Thursday in the House by the Secretary of State for International Financial Institutions, is to bring the deficit down to 3 per cent of the GDP. This is not an acceptable policy. Many financial experts have stated it. The C. D. Howe Institute is urging the government to move faster in the area of deficit reduction. There are some signs the Minister of Finance is getting the message, but I do not know if he has it all yet.

The policy of simply taking 3 per cent of the GDP as the target is unacceptable. It would leave us with an $25 billion deficit annually in a couple of years. It is unacceptable for another reason. In response to a question from one of my colleagues on Thursday, the same secretary of state stated that while their fiscal policy was to reduce the deficit to 3 per cent of GDP it was only an interim target. That can be good news and bad news. What will the final target be?

How does the government expect to inspire economic confidence when its fiscal policy is geared only toward an interim target? This is not acceptable to the financial markets. This is not acceptable to Canadian taxpayers. Both expect more from the government than a vague financial policy based solely on an interim target.

I am beginning to think that not only is it an interim target; it is a moving target. The statement of the Reform Party on targets indicates that we have to target our spending. I heard statements in the House today that social spending should be preserved for those in need. I totally agree. We should target our spending to those who need it, not those who do not need it.

Last week Reform finance critics released a paper detailing about $10 billion worth of cuts. It was quite a worthwhile paper. I will not go over it all but I remind the House that last week the Reform proposed that people at the top of government must be the first to make visible and significant sacrifices such as reforming the pension plan of MPs.

Last week in the House a private member's bill was proposed to reform the plan and the government and other members voted against it. They did not want reform if it was going to cost them money.

[John Cannis, Liberal, Scarborough Centre, ON]

Read the red book.

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

That is unacceptable. I have read the red ink book.

The Secretary of State for International Financial Institutions described the paper brought in by the Reform as containing positive suggestions. It is refreshing the hon. minister recognizes the value of some of the ideas being batted around in the House.

I remind everyone of the precarious situation of our country. We have a debt at the federal level of $530 billion or $540 billion. We are increasing that debt. As of this year our deficit spending looks like another $40 billion, which works out to a rate of $110 million each and every day we go deeper into debt. It is a serious problem. The public at large in Canada is finally starting to haul it aboard. Certainly the financial institutions have hauled it aboard. It is time the government did so.

I will touch on one small area today and perhaps two if I have time to show what we can do to wrestle with reducing spending. I am the critic for official languages. I would like to suggest that we can save in the area of $310 million annually. This is not a big deal relative to the amount of deficit spending we are going through, but if each area can pick up $310 million in a year and spread it across the board we can get this thing under control.

Because I am talking about savings in the area of official languages I know they are waiting across the way to jump all over me and tell me how terrible our policies are. Let me reiterate with regard to bilingualism and official languages that the Reform Party is pro-bilingualism, not anti-bilingualism. The more people have French and English the better off we are. The more multilingual people in the country the better off we are in trade with the Pacific rim, with Europe and around the world. We are not anti-bilingualism; we are anti-waste. A lot of waste spending is incurred under the aegis of the Official Languages Act. We have to cut that out.

Another policy would be to give language and culture to the provinces and say they are theirs to take care of; if they want to spend money on them they can go ahead and decide to do so. We would leave it to the provinces. From the $310 million I am talking about we could trim about 30 per cent or $80 million from funding for official languages education. We could leave that to the provinces, keep the federal government out of it and save $80 million. Education, after all, is a provincial responsibility and should be left to the provinces like culture and language.

It should also be noted that most of the money is used to fund immersion programs. Immersion, especially French immersion of youngsters, has been touted by powerful special interest groups like Canadian Parents for French as the best means to create bilingual children. This is simply untrue. Several studies indicate that French immersion, especially at the younger ages, has been a failure.

Dr. Hector Hammerly of the linguistics department of Simon Fraser University has done extensive research in the area and has concluded that French immersion is based on a series of incorrect assumptions. Rather than producing graduates fluent in both languages, it turns out people who he says speak frenglish. They speak and write French poorly and they have difficulty in English. Dr Hammerly has discovered that core French is as effective in producing bilingual graduates as French immersion and costs less to operate.

Therefore, if we are spending money on something that does not work, surely we can afford to cut that spending.

I am always available to discuss any problem involving bilingualism or French immersion with anyone.

Second, we can save $41 million by eliminating grants-

[The Acting Speaker (Mr. Kilger)]

Order. I regret the member's time has lapsed. Possibly he will have the opportunity to conclude his remarks within the context of a question or comment from a colleague.

[Ronald J. Duhamel, Liberal, Parliamentary Secretary to Minister of Public Works and Government Services]

Mr. Speaker, I was very interested in the quote from my colleague with respect to French immersion. I have worked for a number of years in the field of education and have known the best experts not only in Canada but throughout the world.

It was my understanding there was a consensus that the immersion model was the best one in terms of learning a second language. I am really quite surprised with his assertion. However I recognize it is always possible to find someone who will disagree with any body of knowledge.

Is it true that those educated through the immersion mode supposedly do not speak it very well? The studies I have seen show that they do as well as their peers do. In fact they very often do better even when we throw in factors such as socioeconomic status and intelligence.

Why is it that people such as I who have French as a first language and others who have Greek, Italian or another language are able to learn English? They are able to learn their own languages and not speak frenglish. I think my English is reasonably good.

Could the hon. member somehow try to explain to me what appears to be a contradiction? Most French speaking people I know whose first language is French and most other Canadians who have another language as a first language end up speaking the English language very well. If that is the case, why should English speaking students who have English as a first language and learn French not be able to do the same? It does not make a whole lot of sense to me. I would certainly like some clarification.

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

Mr. Speaker, English speaking people are able to learn French. There is no difference in brains as I understand it. I am trying to tell the hon. member for St. Boniface and anyone else who wants to listen that there are problems with French immersion training among youngsters. This problem has been brought out in a most recent issue of Saturday Night magazine. I would be very happy to pass a copy of it to the member. I would also be happy to give him a copy of Professor Hammerly's book. This evidence of the failure of immersion training of youngsters is being swept under the carpet because this group of parents for the French language receive a grant of $900,000 a year from the federal government. They parlay that apparently into more. They are not at all interested in doing anything but continue touting immersion training, whatever its deficits.

[Jean H. Leroux, Bloc, Shefford, QC]

Mr. Speaker, I listened very attentively to the comments made by my colleague from the Reform Party and I think he is right on the issue of early language training. However, that is not what I want to talk about. What bothers me a little is his proposal to transfer language and culture to the provinces.

We know full well that if Canada implemented the hon. member's proposal at this time-since I have always thought that Canada was an artificial country kept together from coast to coast to coast by the policy of the two official languages-, we would have a problem because we in Quebec have a long tradition.

As you know, Quebec anglophones have their own elementary and secondary schools as well as their own school boards, hospitals and universities in and outside Montreal. So this is not a problem for Quebec but I think that francophones in the rest of Canada would lose all their services, which would be very dangerous. I do not know if the hon. member has thought about it, but I think that there would be no problem in Quebec but that francophones in the rest of Canada would simply lose their services. Could he comment on this?

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

First of all, we must realize that Quebec already has a problem with Bill 101. I believe in Quebecers' generosity so there should not be a problem in the future because the people themselves will decide what to do and for whom and how much to spend. I assure you that the same applies elsewhere in Canada. Canadians are quite generous by nature; they care about their fellow citizens whatever their origin and will do what is needed to protect languages or anything else.

[Jean H. Leroux, Bloc, Shefford, QC]

That is not the reality.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, it is truly an honour to be able to speak on such an important subject. I would like briefly to go back to my involvement and interest in the subject of debt and deficit and why I became involved really in politics.

In 1984 all of us realized that this country had a major problem and that we had to deal with it. At that point we were $190 billion in debt and we had someone who promised to help us get out of that. Of course by 1988 we realized that those promises were not going to be kept and that even though we were promised with some more time something could be done, an awful lot of us said no way, and so the birth of the Reform Party.

Basically there were a number of test cases that came for where the Canadian public was at. We had the elite and the media saying that Charlottetown was the answer to a lot of our problems and the Canadian people sent their first message.

In 1993 we had another very sound second message sent which stated: "You had better deal with that debt and deficit or you know what is going to happen". The PCs suffered from that. To the Liberal's credit they have realized that is exactly where people are coming from. We must deal with this and we must do it right now.

However, when we look back to February 22 of this year that probably was the darkest day in this House when we found that nothing had changed and that nothing had happened. Now we are

into the fall and winter of 1994 and we now hear that come hell or high water we are going to deal with this debt and deficit. I hope that these are not just more words because if so the third message will come from the Canadian electorate and that will be borne out on the Liberal Party.

Three per cent of GDP by 1996 or 1997 is just not good enough. That is so minor in terms of what has to be done. People will not accept that. We have to do things to change. We have to show lower taxes so people will have the incentive to spend more money and leave their money at home. We need to downsize government dramatically. We need to help people help themselves. Certainly taxing RRSPs is not the answer to that.

We need to get government out of business. We need to stop duplication between the provinces and the federal government. We need to solve the Quebec problem, the native land claims problem. We need to show leadership in areas like the WTO and the OAS to name just a few. We need to reform the whole government starting with pensions, as we have heard so many times. We need to look at many other areas of government to reform, not the least being the Senate.

Many speakers have dealt with our zero in three plan which we have had in place for a number of years and which we have now fine tuned. Each of us as critics in our areas has been asked to specifically go after the things that affect us most.

As the foreign affairs critic I will deal just with that area and the sort of deficit reduction that we would see there. As an earlier member said, we do not have the specifics, I would like to let him know that we have a lot of specifics, certainly more than we have heard from the other side.

In talking about foreign affairs and how we would do our share as part of government to reduce, I would go back to our foreign affairs review on which we spent the last seven or eight months listening to hundreds of witnesses across the country. The strange part was that so often we spent our time dealing in an academic exercise, not dealing with any real policy and never did we talk about the kind of cost cutting that we would recommend to the minister when the time came for his call to say here are the cuts that we can make.

Instead of asking key questions like what can we afford, what should be the priorities in foreign affairs, we conducted major discussions as to whether human rights abuses should be considered as being grave, severe or serious before Canada should respond with positive measures to help.

I point out that all of the above words are synonyms and have no quantitative or qualitative differences. It was like arguing whether the movie "The Omen" was frightening, scary or horrifying. We spent our time discussing words that really were in the area of academia interesting, but in the actual area of making a difference not very.

As a result while the final report was precisely worded it did not deal with some of the key things like how we are going to cut our debt, how we are going to reduce our spending and yet still try to get the job done.

As a result we did put forward a dissenting report on the foreign affairs review. Our number one issue that we talked about was fiscal responsibility. We pointed out that the report had asked for numerous spending increases and had asked for no cuts. Not one place did we suggest a cut.

Since we found this unacceptable we went ahead with our zero in three proposal and said how can we make cuts. Out of that we came up with $1.3 billion worth of cuts that we feel are essential if we are going to balance that budget.

In this proposal we looked at a number of areas. The first one was operating expenses of government. In the area of foreign affairs and CIDA we have a number of administrative costs. There have been cuts in the past.

If you talk to the bureaucrats, they will tell you that you cannot cut any further. In the tough times we are in we have to cut further. We do not have a choice. In the unreal world, in the utopia that we often hear described around this place, we would not have to make those cuts. That utopia does not exist and those cuts are necessary. We cannot go on any longer without making those cuts.

We have to cut government to government aid programs. As many members are aware, at our recent convention held here in Ottawa we passed a resolution which asked for a tough analysis of this whole area of aid. The big thing we cannot avoid is this whole aid question as being one of a slush fund for the minister or the Prime Minister whenever they travel.

I have press releases here that I got today showing again $2 million here, $80 million there. It is like a slush fund, like when we go to a cocktail party we simply hand out a cheque just to show what good guys we are. The Canadian people are not going to accept that anymore. They want NGOs to handle the aid program. They want NGOs who are responsible and who are prepared to raise equal funds on a one to one basis. They are not prepared for 100 per cent funding any longer. They are asking for transparency and an evaluation of the programs they get involved with. That would be the way the Reform Party would approach that area.

I am not saying we would cut foreign aid. I am saying we would target it. We would look at it and try to get the best bang for the buck. We cannot be all things to all people.

The third area we might look at is the whole area of international grants. We give a lot of grants and in many cases there is no accountability for those. I could go on if I had more time to talk about those. Again, the Canadian people are asking us to evaluate those international programs and to be sure that the money is being spent in the best possible way. We are cutting money to our students but we should be looking at what we are getting for some of these international grants.

As well, we have to take a look at some of the institutions we belong to. The policy of the Canadian government has been that we have to belong to everything that is international. We belong to more organizations where we do not know what they do. When the Auditor General took a look at this three years ago he could not even find out what the aims of some of these organizations we belong to are, who their boards of directors are and what they hope to accomplish.

What I am saying is that in all areas of government, it does not matter what department, we are going to have to make some cuts. There is no question about that. We must recognize that and we must expect the ministers in each of those departments to come up with those kinds of cuts. That is our goal. That is what must be our goal. It is what we in this House must all agree on.

[Jean H. Leroux, Bloc, Shefford, QC]

Mr. Speaker, I really enjoyed the hon. member's speech. I think that it is very sensible. He is an opposition member and the opposition's role is to ask questions. The role of the government is to find solutions and solve problems. I think that the Liberal government facing us was not in opposition long enough to really prepare for governing, but you know that Canadians, outside Quebec and the west, decided that it would be the government so it should govern.

I would like to discuss something about my colleague's speech, his reference to the Quebec problem. Quebec does not have a problem; I think that the rest of Canada has a problem, because Quebecers will decide freely in a referendum.

He talked to us about Charlottetown. That accord was a historic event which shows us beyond any doubt that Canadians and Quebecers voted no, but for entirely opposite reasons. So Charlottetown clearly shows the differences between Quebec and the rest of Canada.

My question for the hon. member, who made a very good speech, is this: Is it not time now to see what Quebec wants and let Quebec develop fully?

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, I certainly did make reference to the Quebec problem. Maybe problem is the wrong word. I should have said concern.

Members know where we come from on that sort of issue is that basically we believe the day of two founding nations was the case back in history. Now we have 10 equal provinces. We have 12 million people in this country whose original language is not English or French. Therefore let us get on with it is the point. Let us get on and make this country Canadian.

We are Canadians. We are proud of it. We want Quebec to be part of that. We believe that grassroots Quebecers also want to be part of it but they are tired of the old line way of dealing with things. They want to deal with things now in 1994 style. That is let us deal with the problems, the jobs, the debt, the deficit, the criminal justice system. Those are the areas they want to hear about.

They do not want to hear us talking about this constitutional garble. Let us get on with it. Have the referendum. Tell the people the facts and then let us get on with it.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, I would like the member for Red Deer to clarify something for me. During his presentation he indicated that taxing RRSPs was not the answer. Earlier today one of the members from the Reform Party indicated that RRSPs should be taxed. I am a little bit confused. Maybe he could clarify.

[Jack Ramsay, Reform, Crowfoot, AB]

Who?

[John Cannis, Liberal, Scarborough Centre, ON]

Maybe it came from a different fax machine, I do not know. The other question I have is this.

He indicated chopping, chopping, chopping and this government is not coming forth with any proposals. Often the Minister of Finance is asked these questions. As custom has it in this House at the appropriate time the minister will come forth with those answers. Right now, as we all know, we are going through the consultation process to hear what the people are saying so that we can collect this information and come forth with the proposals. I would like clarification on the RRSPs.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, the less government we can have and the more we can let people be responsible for themselves, an RRSP is the way to do it. To tax something like that, one is saying: "Hey, we are not even going to let you take care of yourself". Had we stayed out of CPP back in 1965, we would have been better off if it was not going to be run like an insurance program because look what government did to it.

What we are saying is this. Encourage people to take care of themselves. The RRSPs are doing that, do not touch them. Do not raise taxes. I would be really surprised if anyone over here agreed with that.

As far as the studies in 1984 we knew we had a problem, $190 billion in debt and we said: "Fix it". Mulroney said: "I will" and then he chickened out. In 1988 he said: "Hey, I need a little more time. I just did not have enough". By then we said: "You're lying". We had an election but people believed him. In 1993 they did not believe him any more and members saw what

happened. That is what will happen to anybody else here who does not deal with that number one problem.

That is why we are losing our jobs. That is why it is not working.

[Ronald J. Duhamel, Liberal, Parliamentary Secretary to Minister of Public Works and Government Services]

Mr. Speaker, I listened with great interest to the vast majority of speeches made today. I really appreciated them and I would like to briefly summarize the key arguments of each party.

When Bloc members take the floor, we hear about the deficit. We are told that the debt is huge and even more than huge. But then, they tell us not to change anything because if we do we will create problems-I think we understand that-the big problem of course being Canada. This is the essence of the Bloc's message.

The notion that Quebec could be a problem was rejected by these people, but they were quick to say that Canada is the major problem. I do not think it is the case and people should be honest about this issue. The fact is that, for years, we spent a lot of money; now, we all have a big problem on our hands and we all have a responsibility to try to find solutions together.

I appreciate listening to speeches made by Reform Party members.

The main thrust is cut. It is easy. It is so simple to bring in a balanced budget. It is not difficult. I did it as a former deputy minister. You have to realize, and I think my colleagues do but they will not admit it, that whenever you cut something there are victims at the other end.

For example, when we talk about cutting aid to other countries we forget that there are potential victims there. We would like to make Canadians believe we do that out of the goodness of our hearts. Let us be honest. We get a lot in return. We also add to our own security when we do that. Let us be fair when we talk about whatever it is that we are going to do, to cut or to add or to subtract. Let us be fair. Let us share the impact.

I was really shocked, Mr. Speaker, and I think you noticed it when the colleague previous to the last, and perhaps he did not see it that way, attacked Canadian Parents For French, which is a very honourable organization. The suggestion was that because they get some assistance from government that they go on promoting immersion as opposed to believing that immersion is the appropriate model.

You will remember, Mr. Speaker, that I said that there are roughly seven million French speaking Canadians whose first language is French and there are probably 12 million others whose first language is other than French. We all learned English in an immersion setting. In fact we have learned it so well that some of us speak English better than we do our own native tongue.

I reject completely the whole hypothesis that immersion is not effective. I reject it totally. I have already made a call to look at the most recent research. If I am wrong I will come back and I will tell the member.

It is easy to come in here and make those kinds of accusations. Take one Saturday Night magazine article and that is it. That is not good enough. It is absolutely and totally unfair to attack a group of responsible Canadians who have been working for years to give their children the best of all possible educations and then just slough it off on one reference, one supposed expert.

Well, I better change gears because, frankly, it upsets me when I think about the exaggerated and insensitive comments which were made.

I want to say a word on the consultation process. As you know, before undertaking that process, about a month ago, the minister and his department had the good sense of providing us with a number of documents on economic development in Canada, in times of deficit, debt, et cetera, so that we would have a background, based on facts, to better understand the problem. As you well know, the finance committee started to travel throughout Canada to consult the people, to find out what Canadians think of this pre-budget consultation process and what they think about the cuts, the taxes, et cetera.

The Minister of Finance himself has gone to a great number of Canadian cities to attend all kinds of meetings where he listened to people who expressed their concerns and then he told all members of Parliament, not only members from his party, but all the members, to feel free to share with him their views on the budget.

I think this is an initiative that deserves to be supported. When I heard someone say that these were phoney consultations, I found that allegation insensitive and unfair. I think it is really very ill-considered to claim that the Minister of Finance has undertaken pro forma consultations.

Frankly, people who make such statements are going too far. I am only a private member, but I have had the opportunity to talk with some of my colleagues, with businessmen and women, as well as a number of constituents not only in my riding of St. Boniface, but throughout Canada, and here is what I found out.

After having talked not only with my own constituents and having had a number of meetings with them, but having chatted with Canadians across the country, here are some of the things that I have found, noted and shared with the Minister of Finance.

Surprise, surprise, surprise, virtually everyone I talked to said they were taxed too much. I suppose I would probably agree with that. Interestingly enough, they wanted to see how our taxation rate compared to that of other countries and particularly those countries that are major trading partners such as the U.S., Japan and a number of other countries. They also felt that if one was a wealthy person one had the means to avoid paying one's fair share of taxes. These are impressions, opinions and views they shared with me.

They also believed, rather passionately I might add, that rich Canadians should not be allowed to pay no or few taxes. Whether or not this is totally true is not the issue. The issue is that these people believed it. They also believed the same thing of what they call rich corporations.

There was a bit of a problem when they were asked to define rich. They could not agree too quickly as to what the definition might be. However, they were really annoyed that banks supposedly, according to their perception, do not pay a sufficient amount of taxes. I think banks would probably disagree with that. In fact I have met some bankers who have, but that was the perception by Canadians.

I have more. They wanted loopholes blocked. These are Canadians from different walks of life who do not have loophole opportunities. They really feel that many of those loopholes are not there in order to assist Canada and Canadians generally but that they are there in order to assist those who have more. They felt that probably in most instances those should be closed.

There was also unanimous feeling that people earning profits on their investments in Canada can avoid paying Canadian taxes. I have been looking into that. Apparently people can make money on their investments in Canada. If they shuffle the money out they pay less tax if their money is in another country. They said: "If that is so is it really fair that they come and make their money in Canada and then take it elsewhere in order to avoid paying some of their taxes?" That is what they believed.

There were a number of cases on student loans concerning people who are supposedly very wealthy or relatively wealthy today who still owe student loans. They have not paid those loans. The people are angry because many of them had student loans. Many of them today have families with children who have student loans. They have paid off their loans and will help their children go through college or university.

They also had a lot of good, common sense. They said: "Clearly, if somebody cannot pay off a student loan why give them a hassle? Why go after them? Why not set it aside for the time being until they can get their lives financially together and then later on, if it straightens out, they can collect?" There was a strong feeling that anyone who today is relatively well off and still owes the government money on student loans should pay off that student loan and the sooner the better.

There has been a lot of discussion today about family trusts. These people with whom of I spoke also mentioned it. Whether the perception is correct or not, there is a belief that there is a lot of money put away in family trusts that is not being taxed at the same rate as my own, your own or their own earnings. They felt that was wrong.

They also asked a number of interesting questions. Is it time for this country, supposedly one of the few that does not have an inheritance tax, to look and see whether or not that would be a useful measure?

They also had the equally strong feeling that the black market economy needs to be addressed. Some of them were rather sympathetic and said it was the way the poor man and the lower middle class got around taxes. They think that wealthier Canadians have a number of mechanisms to assist them in doing that if they choose. Then perhaps it is not so bad after all. The general feeling was that once the richer paid their fair share that much of the black market economy would disappear.

Of course it would not surprise you, Mr. Speaker, that the whole question of MP pensions came up. They are pleased to know the government will be addressing that issue shortly. If for no other reasons than symbolic ones, they are aware that features of that pension plan are significantly different from what most Canadians enjoy. They want that matter addressed.

They want not just MP pensions looked at. The general feeling was that all Canadians should be able to retire with a pension that permits them to live their remaining years with some dignity. They felt that all pensions should be looked at so that we could strengthen pensions generally and where they are too generous perhaps tailor them. They really felt Canadians should be able to retire with a pension that would permit them to live in dignity. I was extremely pleased.

A final point that came out of these discussions is that the Auditor General has a great deal of credibility. They felt that those issues the Auditor General raised pointing out serious problems in terms of money not being used as appropriately as it should be need to be addressed. They would like them addressed in the budget each year.

After a number of weeks of talking with constituents and Canadians across the land those are the points that have been made to me. I might add those are the points I have shared with

the Minister of Finance hoping that he might be able to address some or all of them when he comes forth with his next budget.

I think the Minister of Finance is looking for that kind of input, that kind of precision, that kind of assistance. When he does come forward with the budget it will address our government's goals to reach 3 per cent of GDP in terms of the deficit by the third year of government.

I have shared with you and my colleagues some of the concerns expressed by a number of my constituents and Canadians concerning the budget to be tabled in this House in February 1995. What the Minister of Finance is looking for, I think, is the same kind of information from other members of Parliament, so that he can take their viewpoints into consideration.

These are the comments I wanted to share with you and my colleagues in the House of Commons.

[Jean H. Leroux, Bloc, Shefford, QC]

Mr. Speaker, I listened carefully, although with a little bit of difficulty, to the remarks made by my colleague opposite. He talked about the consultations that the Minister of Finance has been holding for a month now.

We could easily accept his arguments if the Minister of Finance were the only one holding consultations. Unfortunately, we have a government that is continually consulting. The 25 committees consult and so do the departments. And while all these consultations are taking place, no decision is made. I think the government is trying to muddle the issues by making Canadians believe that it is taking their opinion into consideration. After all these consultations, decisions will eventually be made, but they are constantly being delayed.

Instead of talking about what divides us, I would like to ask my colleague from St. Boniface a question about what unites us.

The redistribution of wealth has united this country for more than 25 years. We have, in Canada and in Quebec, a unique social system and I think we should be careful not to lose it. My concern and the concern of all members of the Bloc is that the government may destroy this system, reduce it, make it less effective.

And our greatest fear is that middle and low-income Canadians will end up paying the price. My question is this: Can the member for St. Boniface assure this House that it is not only middle and low-income Canadians that will end up paying for these changes?

[Ronald J. Duhamel, Liberal, St. Boniface, MB]

Mr. Speaker, I thank my colleague for his comments and questions. Yes, absolutely, the Prime Minister said in the House that social programs needed to be changed because they were created many years ago for conditions which are no longer the same.

He also said a few days ago that saving money was not a priority. If we can make savings at the same time, fine. I also said in my speech-and this is why I was surprised to hear my colleague say that he listened carefully to my speech, but had some difficulty with it-, that we should not take money from the most disadvantaged.

I said it many times. I even gave several examples. So why did he have so much difficulty? The other thing that I am really afraid of is that he accused the government of consulting. Does that mean that if his party ever formed the government, it would not consult? Aha! That is what is being suggested. If it were the government, the Bloc Quebecois would not consult.

Of course we are consulting. We do not need to present a budget until February 1995. What should we be doing? Make decisions without consulting? That is what the Bloc would do. I find that most disturbing.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, I appreciate much of what the member said.

Certainly consulting with constituents is what we have all been attempting to do for quite some time. Whether it is at a farmers' market or a town hall meeting all of us have heard the message. A lot of what he said is the same message we are hearing.

One thing really interests me when he talked about the underground economy. There is a sort of dream that if they thought it was fair they would all just rush in and start paying tax. I question whether that is true. I think the underground economy is huge and is much greater than what we have imagined.

I wonder what the member thinks about the single tax proposal or the flat tax proposal. The reason I ask that is does he not think that if we totally reformed the tax system and everybody felt they were being treated fairly that is how we would get back to people being willing to pay their taxes? It is not just by the cosmetic changes we are talking about.

[Ronald J. Duhamel, Liberal, St. Boniface, MB]

Mr. Speaker, I appreciate my colleague's question. It is a fair one and he makes a number of good points.

If in my remarks I suggested that I thought Canadians all of a sudden would want to pay taxes as a result of some changes in the system that was not my intent. My constituents told me with respect to the black market economy that they felt there were loopholes for some individuals, perhaps wealthier Canadians and perhaps government ought to consider whether or not certain aspects of the black market economy were loopholes for poor or lower middle class or middle class Canadians.

The question was raised. I do not know the answer to the question but I certainly do not want to give the impression that people thought that would correct the problem. The problem is much more complex. It is very difficult to quantify as my colleague has mentioned, and as the Minister of Finance or the

Minister of National Revenue indicated today. I want to make sure we are on the same wavelength and I think we are.

With respect to the flat tax, I must confess that I have done quite a lot of reading on it. One of my colleagues has taken a great deal of interest in it. I do not know enough about taxes generally to be able to say that is the way to go. Not only have I read the material but I have read critiques of it both in favour and not in favour.

It would bother me if the flat tax was not sensitive to those in the lower income brackets. I think it could be. We are talking about Canadians who earn $7,000 to $12,000 a year. Those people really should not pay any taxes. Therefore I could not support it from that perspective.

Let me say as a final comment that I am quite willing to support any type of taxation that is sensitive to the various economic realities in the country. I want it to be fair but I also want it to be perceived to be fair by Canadians because if they do not have that perception it does not matter whether it is flat or what have you it just will not work. It simply will not work.

What we have to be aware of is if we were to change the taxation system completely, and for the moment let us say it was a flat tax, there could be many potential ramifications that we had not anticipated. We have to anticipate the potential negative impacts on Canadians. I would want to make sure those were understood before going forward with the change.