Debates of Feb. 1st, 1994

Pre-Budget Consultations

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, I give my sincere thanks to the government for permitting this precedent setting debate.

During this pre-budget debate I rise to offer an analysis of the government's infrastructure program that will add $2 billion to federal government spending. During the election campaign and in the throne speech the Liberal rationale for the infrastructure program was twofold. First, this jointly funded program would create jobs. Second, it would encourage public investment in our roads, sewers and public buildings, all of which would increase the nation's productivity and therefore our competitiveness.

Together these measures are supposed to jump start our economy. I would argue however that this rationale is deeply flawed. I would argue that this program is not only premised on faulty assumptions. I would also argue that its design is coercive, inefficient and unfair in nature.

Let us look at the assumption that this program will create 50,000 to 60,000 new jobs. As the government has already admitted it has not taken into account how many jobs will be lost by raising taxes to pay for this $6 billion program.

This program betrays the government's belief that it will use that $6 billion more efficiently than taxpayers, than investors would use it, despite the mountains of evidence indicating that it just is not so.

I can guarantee the House that the owner of a small business would not charter a jet to fly to Boston and New Orleans for $172,000 if he could get a commercial flight for $5,000. The Minister of Consumer and Corporate Affairs has demonstrated in an exaggerated fashion what happens on a smaller scale a thousand times a day in government.

Instead of taking that $6 billion out of the hides of taxpayers, I urge the government to leave that money where it is. The small business owners, taxpayers and investors will spend that money a lot more efficiently and effectively than government ever would.

Another assumption the government makes is that we are somehow lax in funding infrastructure in the country. This is despite the fact that public infrastructure spending increased 40 per cent between 1986 and 1993 to $17.5 billion.

Meanwhile private infrastructure investment last year was in the tens of billions of dollars. This was an investment that businesses were counting on to pay some immediate dividends, or else they would not have spent the money at that time.

However the same cannot be said of the infrastructure works program. It will only fund new projects that until now municipal governments were not planning, presumably because they were not the best use of taxpayers' money, or in the case of repairs and upgrading because the roads or sewers still had a few more years in them. Perhaps it was because new taxes would have to be raised to fund them which would enrage taxpayers who are already overtaxed.

We should have deferred to the good judgment of the municipalities. Instead the government's infrastructure works program coerces the provinces and municipalities into joining the program and requesting funds for projects that may or may not need doing. After all, if a municipality does not participate then the federal tax dollars that come out of that jurisdiction would just fund the next municipality over. Thus local municipalities are pressured into participating.

When the federal government tells the other levels of government that the only way for them to get a dollar is to spend a dollar, we have a taxpayer's worst nightmare. Sadly this is not the only design flaw with this program. Although this program is supposed to create 50,000 to 60,000 jobs the government does not, to my knowledge, have any way of monitoring how many jobs will be created or whether these jobs will teach new skills or will lead to permanent employment.

As the government knows, the Auditor General has been very critical of past government programs that spend millions and millions of dollars but never check to see if those programs are actually accomplishing their objectives. I hope some day the government can enunciate its plan for monitoring the progress and income of its infrastructure works program.

I am also concerned that this project will perpetuate the problem of dependency on government, a problem that has become the hallmark of Canada's social programs. On one hand, the government is saying that it wants unemployed Canadians to get their skills upgraded so that their long term job prospects will be improved. On the other hand, it is enticing them to go to work for two years on a dead end job creation project, a project that in all likelihood will leave them unemployed in two years with no new skills to show for it.

I am also concerned that the control over this program is so loose that we see projects like the Quebec City Convention Centre getting the go-ahead before any criteria are even established. Again it causes me to question the government's implicit contention that the minister for infrastructure knows better than taxpayers how their money should be spent.

The government's infrastructure works program will kill more jobs than it creates. It coerces other levels of government into participating and encourages unnecessary infrastructure investment. It lacks clear measurable objectives. It is susceptible to political pork barrelling. It provides a disincentive for unemployed Canadians to seek training and long term employment. It drives up taxes and impedes our ability to tackle the root cause of unemployment and slow economic growth. I refer of course to the deficit and the debt.

I quote now from the Investment Dealers' Association 1994 pre-budget submission:

The Keynesian agenda is no longer a viable option. Indeed, even if one abstracts from the deficit and debt problem, it is difficult to reconcile increased government spending with a rebound in economic growth. Government expenditures have already reached unprecedented levels, with spending accounting for about 40 percent GDP, and yet economic activity remains in the doldrums. In this regard the proposed $6 billion infrastructure program, while boosting overall productivity, would have a minimal effect on stimulating growth.

Government expenditures must be viewed within the context of government finances which have run amok. The stimulative Keynesian impact of higher spending is overwhelmed by commensurately higher taxes to blunt a deterioration in finances, or higher interest rates in response to larger budget deficits. Never before has fiscal policy turned completely on its head to the extent that policy initiatives must be considered in terms of their impact on government finances to the exclusion of everything else.

The other day the finance minister offered to give the leader of the Reform Party a lesson in economics. On behalf of our leader I will gratefully decline. Instead we will take our guidance from a small business owner who attended the finance minister's pre-budget consultation conference in Calgary on Saturday. Vicki Dutton told the minister and the conference you cannot tax a country back to health.

I would argue that simple truth is worth all of the finance minister's elaborate theories ten times over.

We should abandon the infrastucture works program immediately and begin the overdue process of cutting government spending.

[Werner Schmidt, Reform, Okanagan Centre, BC]

Mr. Speaker, let me compliment the Prime Minister and the Minister of Finance for initiating what I hope will be a new approach to putting Canada's financial house in order.

The budget is the most influential of all government documents because it affects the lives of all Canadians more deeply than anything else. It contains the vision and the direction of government and provides the means of implementation of those programs. Therefore it is particularly important that we recognize the Auditor General's admonition in this regard when he said a compelling need is required to reconcile the convention of budget secrecy with open consultation and debate.

The taxpayers' interests must be protected and who is in a better position to do so than the taxpayers themselves?

In the pursuit to open up the consultation process and improve economic health we have turned toward big, small and medium sized businesses for answers. In this regard I wish to direct the attention of the House toward the management of government grants and contribution programs.

At this crucial time it is necessary that we ask ourselves whether this traditional means of supporting the economy continues to be the most efficient. Are the billions of dollars spent to support these programs used in the most efficient manner? Are Canadians getting the best value for their tax dollar? I submit, no.

As an example, let us go back to October, 1986. The government of the day through the Federal Business Development Bank, signed a share subscription agreement that provided $79 million of equity to a publicly held company as part of a multi-million dollar plant modernization project. A similar investment of $55 million was made by the province of British Columbia, representing $134 million in government funding for the first stage.

In total, $161 million was spent on stage one with only $27 million subscribed by the company.

In December 1992 the company advised the government that it would not be able to meet its obligations by the December 31, 1992 deadline. To date the government, through the Federal Business Development Bank, has not received any dividend payments or redemption of any of its shares. The investment before the company declared it could not meet its deadline was written down to zero in March 1992.

Did we receive the best value for our money? No. Did the contribution of funds generate revenue? No. Were the interests of the taxpayers protected? Certainly not.

Quite clearly, the government and taxpayers took most of the risk and saw no return.

Whether one agrees or not with the various government programs, the process is not effective if it allows the government to undertake the major risks with little or no risk on the part of the companies involved. Canadians cannot afford these kinds of losses. They only add to the already large deficit. It is time that the government allows big business to grow up. It is time that we recognize big business will take its own risks if government provides the right climate. Big business can get in step with the new information based economy without subsidies provided by the taxpayers' money.

Where can Canadians get the most value for their money, and how can they use that money to create employment?

Small and medium sized businesses are the backbone of employment in this country, providing well over 80 per cent of all the jobs for Canadians. It is not done easily.

When I talk to business people about the difficulties of operating their businesses, they tell me there are two major problems. First, tax burdens make it increasingly difficult to operate, to expand and to employ people. Second, they lack the knowledge about programs and assistance available to them. Given that small and medium sized businesses employ most of Canada's work force, create new jobs and help to build strong communities, it is unthinkable that this sector must suffer from an inordinate level of taxation which inhibits growth and thus employment.

We must recognize that small and medium sized businesses will be the primary sources for employment of those Canadians who have lost their jobs because of downsizing. Small and medium sized businesses will put Canadians to work in new occupations. Success in these new jobs will require that both employer and employee work together to develop the skills necessary to accomplish that transition.

The major factor for success of this re-employment strategy will be a reduction of the tax burden to the small and medium sized business. A reduced tax burden will do much more to stimulate the economy and reduce the deficit than broadening the tax base.

The second major problem for small and medium sized businesses and the one which relates directly to my discussion here this evening is the lack of knowledge among these business people about government programs and assistance.

Allow me to run through some of the current government programs designed to assist Canadian business people.

Among them are the Small Businesses Loans Act, Community Futures including business development centres, self-employment assistance and the Community Initiatives Fund, the Small Business Financing Program and the Regional Assistance Program including western economic diversification, the Atlantic Canada Opportunity Agency, the Federal Office of Regional Development (Quebec), and the Federal Economic Initiative for Northern Ontario.

Under research and development we have the Industrial Research Assistance Program, the Scientific Research and Experimental Tax Credit Program, and the Technology Inflow Program.

Under export assistance we have the program for export market development, the Industrial Co-operation Program and the Export Development Corporation.

Under programs for aboriginal Canadians we have the Canadian Aboriginal Economic Strategy, Aboriginal Business Development, the Aboriginal Capital Corporation and the Joint Venture Program.

That is but a sample of the programs available. I have here in my other hand 13 pages and each page has approximately 10 different kinds of program descriptions from one department. In some cases, as many as three departments operate and administer a single program.

Mr. Speaker, if you were a business person which way would you turn, which program would be best suited to your business? Is it not possible that more than one of these could provide assistance?

A preliminary conclusion would suggest that there is an overlap of function and that the potential for bureaucratic competition exists. Can a business benefit from only one program or can the same business benefit from a variety of programs simultaneously? Is it any wonder that there is confusion? Can we be assured that this system in making efficient use of taxpayers' money will exist in this budget?

Whether a business is big or small the fact is that the old way of creating a climate for business success is not the most efficient. Grants and contribution programs must be re-evaluated in terms of need, purpose and administration.

It will be the first step in opening up the budget process as we have seen it here today for consultation and debate and making the necessary improvements that will ensure that we use our resources more efficiently so that taxpayers' interests are protected. Canadians have found ways to cut costs and put their respective financial houses in order. The government must do the same.

It needs an ambitious budget that demonstrates it is master of its financial house. Then big, small and medium sized business will triumph in their pursuits of economic success and Canada can move forward into the new knowledge and information based economy with confidence. That is our challenge. Let us do it.

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

Mr. Speaker, I want to make a novel suggestion to the finance minister and it is one that has proved its worth in the past and I am sure it will work today.

I remember when I was going to elementary school during World War II and they had what was called war saving certificates. You brought 25 cents to school whenever you could afford it and they put a 25 cent stamp in your book. When you had $4 worth of stamps you tucked them away and in a certain period of time you got $5 back. A lot of the kids right across this country bought war saving certificates throughout World War II and they felt they were helping Canada.

I am going to suggest to the finance minister today that we use the same system for young people across the country, elementary and high school age, and for older people as well if they wish to buy back Canada certificates.

When I say buy back Canada certificates I am thinking of the debt that we have with foreign countries. In order to cut down the debt that we owe abroad, these buy back Canada certificates can be applied to the national debt to pay off foreign countries. Grandmothers and grandfathers can buy a $20, $50 or $100 buy back Canada certificate and give it to a youngster for his or her birthday or whatever. Any Canadian can invest in them.

In other words, it will go the year round. It is not just a certain period when you buy savings bonds. It will go the whole year. Let them buy these and it will instil in every young Canadian, every child, an attitude of Canadianism. "I am a Canadian citizen. I am contributing to this country. I am buying back Canada. I am buying back Canada's debt from foreign countries." They are looking to their future. They are building their financial future.

I think it would catch on and it would make every Canadian a part of a Canadian solution. It would help every Canadian contribute toward the national debt, bring down the deficit and feel that they are part of the action. In this way we will be helping senior citizens who are in need because their pensions can still come through.

I had a lady phone me this morning from Deep River who was very concerned about her pension because she knew this discussion was going on in the House today. I told her I would bring up that item on her behalf. She is the type of senior citizen who did not have a chance to have a contributory pension during her lifetime and worked hard. Those are the people we have to be thinking about at this time.

Medicine in this country is for everybody, not just the sick. We should be looking after ourselves through preventive medicine. I went on for years not looking after myself. I worked 15 and 16 hours a day, travelled all weekend, seven days of the week on this job. I never paid any attention to the fact that my father and his brother had heart problems and that some uncles on my mother's side of the family had heart problems. When I left the farm I kept on eating in the same manner I had been when I was working actively every day at physical work.

As a result I ran into problems. The good medical care of this country helped put me back on my feet after a triple bypass operation, after a triple vessel cleaning. The doctors and nurses were wonderful. We have outstanding medical care in this country and we have to support these people.

How can we support medicare? By looking after our own health, by looking after our own diet. It is not only after we have had an operation that we should look after our diet. It is up to every Canadian from the youngest to the oldest. By looking after our own health and putting some discipline into our every day life can be preventive medicine. Every one of us should be paying attention to that.

At a Heart and Stroke Foundation dinner on the weekend I paid tribute to Dr. Wilbert Keon who is the head of the University of Ottawa Heart Institute and Director General at the Civic Hospital in Ottawa. This man was born in a small community just across the Ottawa River and up a bit from Petawawa where I live. He spent years in medicine. He dedicated his training to becoming a heart specialist and he did.

However, after Dr. Keon received his training at Ottawa University, he received help from Canadians so he could become a great heart specialist. He did not take off to the United States where he could demand the biggest buck going. He did not head off for Britain or some other country to make big money. He stayed right here in the Ottawa Valley and contributed to Canada. He is probably the top heart surgeon in this nation right now. He has trained many others. A top heart surgeon at a hospital in Edmonton trained under Dr. Keon here in Ottawa.

This is the kind of loyalty that Canada needs from professionals today, people who are going to stay here and put their life and soul into their work the way Dr. Keon did. To me that is the mark of a great Canadian. We need more like him. The staff around him is so oriented to thinking of the family.

People think the National Defence Medical Centre in Ottawa is only there for national defence personnel. Canadians who are in the trade business, Canadians who are diplomats, every Canadian soldier has the right to go there for their operations and they do. However, the operations for the Heart Institute take place at the University of Ottawa Heart Institute at the Civic Hospital. They do the work and send the patients back for post-operative care. Those people are wonderful.

We sometimes get very down. We cut this program or that program. There are other ways of cutting programs. I mentioned one tonight, preventive medicine, when talking about looking after ourselves better than we do. Diets are not just for people who have had problems. They are for people who are still healthy, to keep them healthy and to keep them out of the medical system.

People think that research and development is something that is very expensive. They cannot see any immediate returns from it so they get upset and say it is a waste of money.

I wish to say a few words about Crown corporations. Atomic Energy of Canada Limited is one of my favourites and I talk about it often in this House.

The Canadian public has invested $4.7 billion in Atomic Energy of Canada Limited since 1952. But do you know what the return is on its research? A recent Ernst & Young report stated that the return to the Canadian taxpayers was over $23 billion. That is a good investment. If you could get that return on every investment you made it would be great.

I was part of the legislative committee that steered Bill C-13 through this House and through the committee system. It dealt with the sale of Nordion International. Nordion provides radioisotopes to hundreds of hospitals across this country. We had 90 per cent of the world's market captured. Today what has happened? The previous government in 1989 sold Nordion International to a private concern. Now it is in a big dispute over the contract because AECL says it cannot provide the radioisotopes for the price the contract provided and the other company wants AECL to live up to the contract. Today we are in a position where hospitals in this country may end up with a shortage of radioisotopes.

I am going to leave it there because it is a subject I could speak on for the next hour. However, I wanted to highlight that radioisotopes today are becoming a very serious issue. Research and development on the medical side is becoming a serious issue and we have to invest if we want that four and fivefold return on R and D in this country. It has to happen.

[Joe Fontana, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, let me begin by congratulating you on your appointment. I also want to take this opportunity to congratulate my colleagues who were returned and the new Liberal team. I believe they won the trust and confidence of the people and that is why we are on this side of the House, hopefully to do something about the problems we have been talking about tonight.

I want to take this opportunity to first thank my family and the volunteers on my campaign. More important, I want to thank the people of London East who saw fit to return me to this House for another term. I am truly appreciative.

Being on the opposition side the past four or five years was a very frustrating exercise and one that sometimes was not as joyful as one would want. I would like to think that this debate tonight is our change in direction. I want to take this opportunity to thank the Minister of Finance and our Prime Minister who have demonstrated two things in these past weeks, that we do really want to consult because we have a common mission here. We were all elected to this House by people who believed that we have the answers to the problems. Regardless of what side we are on and of what political stripe, we are all here to do the nation's business.

The government has demonstrated that it really wants to work with everyone to accomplish the great task before it. We have had an open debate on peacekeeping in Bosnia, the cruise missile and the social nets. Today we are talking about the budget before the fact. I have never experienced that before in five years. We could only react to what the former government had done and therefore it was very frustrating.

I was rather surprised by some of the remarks I heard tonight. Coming from an opposition that wants to play a constructive role they tended to be rather negative. Had I been given the opportunity of telling former Prime Minister Mulroney and his gang-

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Michael Wilson.

[Joe Fontana, Liberal, London East, ON]

Michael Wilson. Some input before the budget, boy I would have jumped at the opportunity.

Yet tonight I hear nothing but more of the same old thing from a party that said it was going to come here to change things. I will not get too partisan. Perhaps some of them are listening.

The ship of state is in trouble. Canadians want change. On October 25 they threw out a government that was not responding to their needs. They want men and women who are determined to change things from the way they were.

We are still in the midst of an economic disaster in this country where we have 1.6 million people unemployed. We have 455,000 permanent full-time jobs that have been lost. Part-time jobs have increased to 840,000. We have two million Canadians visiting over 300 food banks each and every day. Youth unemployment is over 18 per cent. Among female lone parent families 62 per cent have incomes below the poverty line.

We have a mission. That is to think about each and every one of those 29 million Canadians who look to us to try to solve these problems. I could blame it on the former government that moved the debt from $120 billion to $500 billion. I could blame it for leaving us with $46 billion deficit.

However what do we accomplish if we look back at yesterday? Our mission is to look forward to tomorrow. I believe that collectively we can. Collectively we can put our minds together and work in the new spirit of parliamentary reform now that the committees are struck, now that we have this debate and now that we have heard from people in our ridings as to what the proper medicine for this country is.

Last week my colleagues and I had our pre-budget consultation in London, Ontario. We invited people to come forward with their views as to how the government should run its affairs, how it should put its house in order and what their priorities were. They told us.

Hon. members have probably heard the same thing. I know that the finance minister heard the same thing at his consultations. Canadians in London, Ontario are not any different from those out west, in Quebec or in Atlantic Canada. They want good government. They want honest government. They want a government that will solve the problem of the deficit.

We know we have a crushing debt and deficit. Yes, we have to cut programs that are useless. We have to streamline the process so that each and every dollar we spend counts, so that it helps people and does not enslave them.

Yes, we have to make changes to our social programs, our net. The safety net must not only catch people but it needs to be a trampoline that pushes people back up to take advantage of the opportunities that are there.

That safety net is important. One only has to look at our society and compare it to that of the United States. In our country 85 per cent of people who need help get help from their government. In the United States 25 per cent of people who need help get help from their government. Look at its crime statistics. Look at the problems it has in health care. Look at the problems it has with its infrastructure and in its cities. Look at the social problems that country has.

I believe we have succeeded in creating a great country by working together. In 125 years we have managed to become one of the economic powers of the world with one of the highest standards of living in the world. That did not come easy. That came from the dedication and hard work of a lot of people working together to create this great country.

That is what we have to do starting today along with the other members of this House. We need to create jobs. People on October 25 told us that jobs were their number one concern. People need to work in order to look after their families.

That is why we are committed as a government to creating jobs through infrastructure programs, through the residential rehabilitation program, to investing in small businesses to give them opportunities. We must invest in their minds and talents because we know that small businesses will create 85 per cent of the jobs in this country. However we need to get the capital for them, the affordable long-term capital and the support of the banking institutions for them to allow them to grow and prosper. If they do, people will work. Young people will have hope and opportunities. Women who want to get into the work force will also have opportunities. But we have to support small business and this government is committed to doing that.

We also must look at ways of living within our means, of looking at the expenditures and renewing our pledge to social programs. There is nothing wrong with saying that we believe in supporting people, because our job here is to protect people, especially those who are not in a position to look after themselves as much as they would like. We have a social responsibility to every Canadian.

The budget is a blueprint not only for our economic views but also for the kind of society we want to build. Yes, we know the horror stories and we hear of wasteful spending, but there are ways of saving money and we are committed to doing that.

I will say that in my riding the people said yes to no more taxes. They all agreed they were already over-taxed. The middle income group is now paying for the top and the bottom and they cannot afford to do so. They want us to streamline it and make sure every dollar counts. They want us to create jobs. They want us to invest in people, in training and retraining programs. They want us to invest in small business. They want us to invest in research and development and work in true partnership with the universities, the private sector, labour and government, all working together to forge a new society.

I believe that is what Canadians expect of each and every one of us. This government is committed to doing that, to putting our financial house in order, but more important to investing in people because if we have people working, deficits go down, not up.

That is the Liberal message and we hope that the opposition and all parties in this House will work with us to help build a better country.

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Mr. Speaker, since this is my first speech in the House of Commons, let me first of all thank the women and men of Mégantic-Compton-Stanstead for their support in the election on October 25, 1993. On the American border in southeastern Quebec, Mégantic-Compton-Stanstead is a rural riding with great economic, industrial, agricultural and tourist potential.

In the Mégantic-Compton-Stanstead riding there is an important English speaking community, not living outside the French community but side by side fully respecting who they are.

Mégantic-Compton-Stanstead is much more than a mere electoral district established by law. Its people are proud and hard-working and, like many others in Quebec and Canada, they are likely to be affected by the economic policies and decisions that will soon be made in the first budget tabled by the Liberal government. My constituents recently told me that they are skeptical and concerned about the sorry state of the government's finances. I must admit that I share these fears and these doubts. Indeed, many signs suggest that the budget which will soon be presented will just be more of the same. That is very disturbing, because we need change. We must react to a deficit which has reached gigantic proportions. This year's deficit is more than 6 per cent of the gross domestic product.

What is even more worrisome is that a steadily growing share of our debt is financed by foreign funds. This reduces the government's room to manoeuvre and mortgages the future of generations to come. In fact, the federal government has quite simply lost control of its debt and large amounts are being used to pay interest on borrowed capital. This money is not invested in economic recovery. I will come back to this point.

In the past, the federal government tried to control its deficit by reducing spending through cuts in social programs and in transfer payments to the provinces. A cut in transfer payments would, in an indirect way, reduce the federal contribution to the social programs provided by the provinces.

Also, the government has increased its tax revenues by taxing more heavily the middle class. These measures are inequitable and should no longer be resorted to.

We recognize that the deficit is a major problem which has to be addressed urgently. Nevertheless, the government cannot cut social programs when unemployment is at 11.2 per cent, and even 12.8 per cent in Quebec, and when the number of welfare cases is growing as lay-offs continue.

Although experts say that the recession is technically over, the recovery is painfully slow. The people of this country would like to see tangible signs of economic recovery. In fact, they are losing hope and faith in their government, if they have not already done so.

The various Canadian governments promised year after year to sort out overlapping jurisdictions, to solve unemployment problems and put an end to the erosion of our standard of living, but they never delivered. This is irrefutable proof that the federal system cannot be changed. In this regard, the Bélanger-Campeau Commission stated in the conclusion of its report: "The relationship between Quebec and the rest of Canada, within the present political system and constitutional framework, has reached an impasse." This was confirmed by the referendum on the Charlottetown Accord. For the future, the present government is offering very few worthwhile alternatives.

But what is even worse is that the last 30 years of centralizing federalism have created a debt of over $500 billion due to the government's lack of initiative and financial mismanagement.

The logic of successive federal governments was to make this federation that was envied all over the world work at any cost. What they forgot to tell people who believed that the country was prosperous and stable is that this wealth and national unity only existed in the books of those who wanted to artificially preserve the federation without taking into account the price that future generations would have to pay.

The effects of this mismanagement of public funds by the federal government are huge and negative, both for Quebec's economy and the economy of the rest of Canada, because the country's debt has also reduced Quebec's financial leeway. So, Quebec has been long contributing and is still contributing considerably to Canada's debt financing. The cost of this federal debt is astronomical for Quebec and the whole of Canada. This phenomenon is all the more frustrating that the decisions which caused these federal deficits were all taken by federal governments and, more often than not, they infringed upon provincial jurisdictions with the stated objective of putting Quebec in its place.

But let us see how much this federal debt can cost Quebec's Treasury. The calculation is very simple: the total interests paid on the debt are roughly equal to Canada's annual deficit, which is over $40 billion. During a Canadian Broadcasting Corporation's special program on the debt, someone said that interest paid to foreign lenders was $28 billion. And using that as an example, I will simply say that the $28 billion given to foreigners in interest payments on the debt means a share of about $6 billion for Quebec and that is approximately the amount we pay in unemployment insurance benefits.

All that money leaving the country helps to create jobs and support social programs outside Quebec. In fact, it is money the federal government sends outside Canada in our name while Quebec, more often than not, is in minority at the Canadian table where all great decisions are made.

Quebecers have clearly showed during the last federal election that they had enough of their representatives defending the interests of their Canada-wide parties instead of defending those of Quebec. They decided they should send to Ottawa representatives who promised to speak loud and clear when the government makes decisions contrary to the best interests of Quebec.

And I admit it must be disturbing for the federal establishment so used to Quebec members abiding by Canadian policies. The era of subservience is over for Quebec. The time for shady deals behind caucus doors is gone. We have a country to build and we will take whatever measures are necessary for Quebec to become a sovereign and prosperous state, with full control of its economic levers and full respect for its partners.

But before Quebec rises to full sovereignty, the federal government will have to act quickly if it wants to save our social programs.

To conclude, I would like to say a couple of words regarding income security program redesign. This is an example of overlapping which, if avoided, could save a lot of money. This week, the minister of Human Resources announced, in his speech on social programs, a far reaching reform of social security, including of course, unemployment insurance and old age security. Whether you want it or not, when you embark upon negotiations regarding social security, you have to talk about the Constitution since it is an area of exclusive provincial jurisdiction.

Mr. Speaker, I will end by saying that we must indeed tackle the deficit which is endangering our future, but that we must do it while preserving our social safety net which provides those in need with the basic minimum.

[Suzanne Tremblay, Bloc, Rimouski—Témiscouata, QC]

Mr. Speaker, the arts and culture industry plays an important role in the Canadian and Quebec economy. According to a UNESCO study, a $1 billion investment in this sector generates several billions of dollars in economic activity over two years.

The vitality of this sector depends on its craftsmen and women. Through their work, their imagination, their passion, these people enable producers and cultural industries to provide us with a range of cultural products: books, sound recordings, radio, television, films, videos, paintings, plays, dance and other forms of expression that nourish and define us.

The film and television association is right in reminding us: "With the exception of the United States, no western country has succeeded since World War II in developing strong national cultural industries without active, growing and multiform state support. Despite the efforts made, maintaining strong national cultures and identities has become more difficult than ever with the globalization of markets increasingly dominated by the big transnational conglomerates".

The association goes on to say: "Unless they react with vigour and imagination, national states may be powerless to stop the gradual disintegration of their cultures and identities to be replaced by a single transnational culture and be forced to witness the slow disappearance of what made human cultures so precious: their diversity. It is therefore essential that the government pay particular attention to this sector in preparing its next budget".

Let us look at some figures on the arts and culture industry to realize how much they contribute to the Canadian and Quebec economy. In 1990-91, this industry injected into the economy a total of $22 billion or 3.7 per cent of the GDP. The Canada Council made the following statement: "Recent comparisons with other industries show that arts and culture contribute more to the GDP than agriculture, mining and forestry".

The arts and culture industry helps to create 500,000 direct and indirect jobs. Employment in this sector has gone up by a phenomenal 122 per cent since 1971, while the average growth rate in other sectors of the economy over the same period was 58 per cent. This means that in 20 years employment in the arts and culture industry rose from 1.8 to 2.5 per cent of the Canadian workforce. The federal Treasury alone collects some $650 million in annual taxes from cultural industries.

Finally, creating one job in the cultural sector costs about $20,000 compared with $100,000 for light industry and $200,000 for heavy industry.

However, this information can hide the fact that most of the artists, creators and craftsmen active in the arts and culture industry live in poverty. In 1986-87, Jean-Guy Lacroix surveyed 6,170 artists and creators in the field of music, theatre, dance and writing and found that the vast majority were experiencing considerable economic hardship. Their average income was $8,170. Seventy-eight per cent of them earned less than $10,000, 15.3 per cent lived above the poverty line, and only 2.8 per cent had incomes above $50,000.

Moreover, the employment status of artists and creators is precarious as they mostly work on a part-time or contractual basis, which means that they constantly face an uncertain future, since their self-employed status makes them ineligible for unemployment insurance.

Cultural and artistic industries have two main characteristics. They are risk sectors and are vulnerable to imports, especially imports from the United States.

Since these industries are chronically underfunded, if projects are to get off the ground, regardless of the field, the producer needs to put together the necessary funding. Succeeding in this endeavour is quite a feat and as everyone knows, many worthwhile projects never see the light of day for lack of funding.

This vulnerability to artistic and cultural imports is confirmed by the $4.4 billion trade deficit recorded in 1991. It should be noted that this is a trend. In fact, the trade deficit recorded by artistic and cultural industries is growing every year. Since 1988, it has increased by 12 per cent.

Yet, consumers are asking for more. In 1991, the people of Canada and Quebec spent $35 billion on cultural products. The Canada Council reports that, since 1982, while overall consumer spending has increased by 7 per cent, the increase in the area of arts and culture has been 9 per cent. This means that more and more Canadian and Quebec products must be supplied to meet consumer demand and eliminate the deficit in the trade balance for that area. I must remind the hon. members that it costs less to create employment in that sector than in any other economic sector, hence the importance of investing in cultural industries.

The previous government made cuts in the cultural and communications industry without thinking about the long-term effects of its action. They are even suspected by some of having tried to challenge the principle of government support to the cultural industry.

Between 1984 and 1992, while overall government expenditures increased by 41.9 per cent, the GDP rose by 52.7 per cent and inflation climbed 36.6 per cent, the portion of the federal budget allocated to culture increased by only 3.7 per cent. This apparent increase actually translated into a 24.2 per cent decrease in constant dollars. By the way, most of the cuts affected the CBC.

Finally, further cuts are planned, based on the 1993 budget, at the rate of 10, 10, 15, 20 and 20 per cent for the five years remaining.

This is clearly the work of a short-sighted government, especially when we know that the government recovers almost every penny invested in that industry.

Granted, the government has very little financial flexibility. Where then can we find the necessary funding for the cultural industry in Quebec and Canada?

For its part, Quebec has long demanded respect for its exclusive jurisdiction over culture. In the field of culture, Quebec can no longer afford having two departments, two councils for the arts and literature, three film development agencies that provide grants and whose officials do the same work and even contradict one another at times.

What the federal government is now doing is outside any sub-agreement between Canada and Quebec. The agreement on cultural facilities expired in March 1991. Without consulting the Government of Quebec, Ottawa is giving grants left and right for cultural facilities projects, while leaving it to Quebec to pay their operating expenses.

However, the Harpin Report submitted to Quebec's Minister of Cultural Affairs is clear on this point. It said: "We can conclude that the two levels of government clearly overlap in the area of program structures, clients served and even legislative and fiscal measures. We can even say that duplication leads to one-upmanship".

So one of the first ways to free up funds is to end the overlap and duplication, to give Quebec back its jurisdiction over culture and to include the funding that goes with it.

In the meantime, we want the government to cancel its decision to reduce funding for the Canada Council and Telefilm Canada by 10 per cent and also to cancel the $250 million in cuts planned for the Canadian Broadcasting Corporation.

Finally, if through some misfortune, the measures implemented by the previous government were to be maintained, the Official Opposition would ask for the development of a program especially geared to members of cultural industries. These people who, so far, have been living mainly off their passion, must not be the victims of the clear-cutting measures taken by the government; the latter must provide them with the means to overcome the crisis which it will impose upon them.

Performers make us dream; they make us cry; they make us laugh. Creators constantly surprise us and stimulate our imagination. I ask the government to not let them down. Nobody can afford that.

For all these reasons, the Minister of Canadian Heritage must not be content with maintaining the status quo. He must take the initiative and explain to his colleague the Minister of Finance that artistic and cultural industries need active, growing and multifaceted support from the government, because the decisions made today will shape tomorrow's society and will determine, to a large extent, our collective future.

[John Williams, Reform, St. Albert, AB]

Mr. Speaker, first let me express my appreciation to the government and the Minister of Finance for this historic debate.

Let this moment not pass without my saying that this debate is hopefully the first step on a road leading to real contributions with parliamentarians in the financial and budget planning for this nation. Therefore, while I doubt that we will solve all the problems today I do hope that the Minister of Finance will repeat and expand this exercise in the years to come.

This country has been blessed with a great abundance of natural resources. We have forests that provide lumber and wood products around the world, we have vast prairies that feed millions beyond our shores and we have renewable and non renewable energy resources that are the envy of the world.

We have natural resources far in excess of any other country in the world but unfortunately we also have something else far in excess of what we deserve and that can be described in three words: debilitating deficits and debt. Not only have we squandered the resources that have been ours but we have squandered the resources that rightfully belong to the generations that will come after us. To say it bluntly we are up to our neck in debt. As of today there is no plan or consensus on how we are going to overcome this national disgrace.

The federal debt is now 70 per cent of the gross domestic product and the annual deficit of the federal government as the minister said today is 6.2 per cent of the gross domestic product, not to mention the provincial deficits on top of that. The interest on the federal debt now consumes 31 per cent of total federal government revenues and I quoted the Auditor General's report in my reply to the speech from the throne when he said that hard choices lie ahead.

Recognizing these hard choices I issued a challenge to the Minister of Finance to balance the budget by the end of this Parliament. We have a crisis on our hands and the Minister of Finance has a choice in this budget. He can dare to be great or he can play it safe down the middle with more taxes and a little less spending which is a timid, anaemic approach to the problem.

The Minister of Finance has a hard choice to make. I think it is a simple choice. He can choose mediocrity or he can choose to rise above mediocrity to reach beyond himself and lead this nation out of a dark tunnel of deficits and debt into the sunshine of renewed prosperity.

History has always given the accolades to the leaders who rise to the challenge and buries the rest in footnotes beside the ignominy of their failure.

There is a parallel that some may refute but which is worth considering today. At the end of World War II the federal government had an accumulated debt equal to 108 per cent of its GDP. Soldiers were returning from the war without jobs. Unemployment was high. Industry was going through a rapid transformation as defence industries scaled back dramatically and in may cases closed down completely.

While it turned out to be the dawn of an era of unprecedented growth and prosperity, who would have known that in 1945?

The government basically had one thing going for it and that was the savings of the cost of the war effort which today we would call the peace dividend.

At that time also Europe had to be rebuilt and was rebuilt under the genius of the Marshall Plan.

The financial future must have looked bleak to the federal government of 1945 but it used the peace dividend to generate lasting jobs and wealth throughout the country. That prosperity seemed to be assured and never ending. When we look at the statistics we find it came to an end in the early 1970s when Mr. Trudeau and his Liberal government were running this country.

Mr. Trudeau had a vision of what he called the just society that would eliminate poverty and inequality in this land. The cost of eliminating poverty is equal to the price of success in the long run.

Mr. Trudeau and his Liberal government introduced generous welfare programs, social programs, and benefit entitlement programs that discouraged many from working. He paid for them all with borrowed money.

The point is that he paid for them all with borrowed money. In so doing he created a debt society and not a just society. I do not think the taxpayers would have been nearly as accommodating had they been given the bill at that time. The seeds of our present dilemma were sown when program spending blossomed to 125 per cent of all government revenues and when you add interest costs on top of that total expenditures rose to 155 per cent of all government revenues.

I referred to my parallel of today's problems with those facing the government at the end of World War II. Federal debt was intolerably high, unemployment was a major problem, industry had to restructure but at the end of the war there was a peace dividend.

Today we need the money that can be saved from the restructuring of our social programs to set this country on a course leading to renewed prosperity. In other words, we need a deficit elimination dividend.

Using information from the Auditor General's report in the 29 years from 1946 to 1975 the GDP of this country increased 12.5 times from $12 billion to $152 billion and during that same period the federal government debt only doubled from $13 billion to $27 billion.

I believe that if the Minister of Finance makes serious cuts in government spending and makes a serious commitment to balancing the budget by the end of this Parliament then the private sector will pick up where the public sector leaves off and will create thousands of long term wealth producing, tax paying jobs in a similar vein to the 1950s and 1960s.

This time around at the end of the cold war it is the economies of eastern Europe that have to be rebuilt. China and the Pacific Rim countries can absorb all our exports that are competitively priced. Mexico, which is now part of NAFTA, should be considered a consumer of our products as its standard of living rises rather than our competitor.

Our technological advantage can be the driving force of that economic growth and renewed prosperity.

If we put our trust in the entrepreneurial spirit of Canadians there is more opportunity for job creation in this country than there are Canadians to fill the resulting jobs.

Remember that the Auditor General said that hard choices lie ahead. I also think of Shakespeare and his advice to the minister of finance. He said there is a tide in the affairs of men which, taken at the flood, leads on to fortune.

Will the Minister of Finance rise to the challenge and commit this Liberal government to amending the errors of the previous governments and commit to balancing the budget by the end of this Parliament or will the minister dwell in the land of mediocrity and give us a few more taxes and a little less spending while we watch his vision cause this country to slide down into the realm of third world economies?

In the last election the Reform party laid out a clear and simple plan to balance the budget in three years. Now that we have been told that the deficit is significantly worse than we had imagined last fall I have given the Minister of Finance room to manoeuvre. While the choice is his, the bad news is that he will only have one chance to make that hard decision, which is that when he introduces his budget later this month I hope he can rise to the occasion and earn his place in history as the Minister of Finance who brought this country through the dark tunnel to the sunshine of renewed prosperity.

I can be done. It has been done before. Therefore, I do look forward to his budget later this month.

[Simon de Jong, NDP, Regina—Qu'Appelle, SK]

Mr. Speaker, I appreciate the opportunity to participate in the debate. There is much to say and little time in which to say it, so I will immediately get to my points.

First, as a New Democrat I abhor the fact that every year some $40 billion in public revenues goes to interest payments. I have called it a transfer of wealth to the wealthy of momentous proportions. Who gets the $40 billion every year? A certain percentage goes to average Canadians. The vast majority goes to banks, financial institutions and the very wealthy and increasingly to offshore financial institutions.

If it just went to ordinary Canadians I would have no problem. However, the fact is that it is a transfer of wealth to the very wealthy.

The CCF party that originated the NDP had this to say in its Regina manifesto, a statement made in 1933, and I quote from this: "All public debt has enormously increased and the fixed interest charges paid thereon now amount to the largest single item of so-called uncontrollable public expenditures. The CCF proposes that in future no public financing shall be permitted which facilitates the perpetuation of the parasitic interest receiving class".

No wonder NDP or CCF governments have always balanced their budgets, particularly when you look at the history of both CCF and NDP governments in Saskatchewan under Tommy Douglas, Woodrow Lloyd, Allan Blakeney and now Roy Romanow. It is a recognition that interest payments are a transfer of

wealth to the wealthy and inhibit the government from fulfilling its proper duties.

How did we get ourselves into this mess? What I am missing in this debate is a proper analysis of how we got over $500 billion in debt. In 1991 Stats Canada issued a study. Stats Canada claims that 50 per cent of that $400 billion debt at that time was due to interest payments, 44 per cent of it to decreases in revenues and only six per cent to increases in government expenditures of which social programs were only two per cent.

In other words, the increase in social spending is only 2 per cent of the national debt. The former speaker from the Reform party claims that we are living beyond our means and our social programs are too rich and that is why we are in debt, I beg to differ. Compared to other OECD countries Canada is the second lowest on what we spend of our gross domestic product on social programs, less than Holland, Italy, Ireland, Germany, Spain or Greece. We spend less as a percentage of our gross domestic product on social programs. The interest payments are 50 per cent of it. The high interest rate policies were started by a former Liberal government and continued under the former Conservative government. They escalated into momentous proportions. There was a 44 per cent loss of revenue.

There were two reasons for that as a Statistics Canada study shows. One was that the tax breaks the Liberals gave to the very rich in the 1970s were continued under the Tories. That accounted for a big hunk of the revenue loss. Then along came the free trade agreement with the United States which cost us over 400,000 jobs so we now have 400,000 people not paying income tax. The combination of high unemployment and tax loopholes to the very rich created the loss of revenue.

I underline again that it is not increases in government expenditures, particularly in social programs, that have created the debt. It is the neo-conservative agenda of the Ronald Reagans, the Margaret Thatchers, the Brian Mulroneys and the Grant Devines. No wonder under the neo-conservative governments we see increases in debt.

Mr. David Stockwell of the United States, who was the budget director of Ronald Reagan, openly admits that they deliberately increased the deficit so that it would justify later cuts in social program funding. That is the agenda of the neo-conservatives. It is working because governments now being strangled by this growing debt and deficit have to cut back. Where do they cut back? They cut back on the poor, on the sick, on the children and on the social programs. The cutbacks are going to occur on the backs of the victims. They did not create the deficit or the debt but I am afraid they will be paying the price.

What are some of the alternatives? I do not believe the proposal of the Reform Party of zero in three years makes any sense. It never tested the proposal through an independent firm or put it through an economic model like Informetrica. In fact it predicted that over 300,000 jobs would be lost if zero in three was put into effect.

The Reform platform never talked about the loss of that revenue and how it would have further added to the deficit. There was a bit of mischief in the figures that were floated around when it comes to zero in three. The economic impact of taking $40 billion out of the economy in a three-year period was never factored in.

The truth of the matter is that there is no simple, easy solution. There is no magic wand that in three years time it is going to be prosperity and happy days will be here again. It is not going to be that simple. To believe so is to be naive or to lie.

When we go back to the origins of why the deficit is there the answer to the solution lies in the Statistics Canada study. We must keep our interest rates down. Our long term interest rates are still too high. When we look at historical parallels every time the world has experienced high interest rates we have ended up in huge recessions and depressions.

Statistics Canada showed that we must also address the revenue side by getting fairness in the tax system, not by doing what some would suggest. Instead of adding further tax loads to the middle class and to the poor, how about the very, very rich. Over $140 billion in profits have gone untaxed in the last nine years, $140 billion in profits that have not yielded one cent of tax. Why are they not totally outraged in the House at the unfairness of it? This is creating the deficit that is resulting in cutbacks to the social programs and educational opportunities. That is the outrage.

Surely another area has to be employment. When Canadians are out of work Canada does not work. Things like the free trade agreement with Mexico and increasing the tax on employment, which the increase in the UI payments surely were, are counterproductive. They do not create jobs.

I am not opposed to free trade agreements. The European model makes certain there was a level playing field in terms of social programs, environmental programs and labour costs. That makes sense, but we are now being reduced to the lowest common denominator. Common sense will tell us that at least in the short term we will lose more jobs in a period of time when we cannot afford it.

Perhaps somewhere in the future we will benefit from the free trade agreements. Certainly in the immediate sense I believe every economist agrees that we will be losing jobs. That is at a period in time when we cannot afford to lose any more jobs.

Another suggestion I heard that made a lot of sense was the one of the member for Renfrew-Nipissing-Pembroke. The debt and the deficit in the country are killing our social programs and our public sector. That is a threat as serious to our way of life as was the last war. It is that serious. It will affect the health, welfare and future of generations of Canadians to come. There is absolutely no doubt about it.

Why not call upon Canadians of goodwill as we did in the last war when we issued victory bonds? We could have boy scouts, girl guides and every public spirited interest group trying to sell and promote these bonds so that we can buy back the debt. At least the debt would be here, not offshore.

I heard somebody earlier in the debate say that we will be spending from $40 billion to some $50 billion on interest payments this year. That is money out of the pockets of Canadian taxpayers. Some $28 billion of it will go offshore. That is a total drain on and waste of the energies and the lifeblood of Canadians. We cannot continue this way. It is destroying us. Let us buy back our foreign debt so that it will be paid to Canadians and benefit Canada to some degree.

In conclusion I wish to say that for myself the issue of the debt and deficit is not a right wing one. It is an issue that should concern anybody and everybody who favours the public sector playing an important role in the social well-being of our society. As Mr. David Stockwell, former budget director of Ronald Reagan, is now saying, I believe the neo-conservative deliberately created the debt to kill the public sector.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, our health care system is one of the best things provided by our great country and Canadians attach a great importance to it. Without health, enjoyment of life can be greatly diminished. The protection of our health is dependent upon two major elements: the responsibility that each one of us has to adopt healthy habits, and our national health care program. The government cannot do much about the first element, but it can do something about the second one.

As a physician and a consumer I believe the Canadian system of health care is indeed the best in the world. It is one of which other countries are envious and one in which any Canadian in the country can get the best of medical care free of charge.

At the foundation of the system lies the Canada Health Act which is based on five tenets: universality of care for all Canadians, comprehensive coverage of all essential services, reasonable access by both providers and users, portability of benefits from one province to another, and the administration of health care on a non-profit basis.

The provinces and the federal government both share the management of payments. The care however, and the management of the whole system falls under the provincial jurisdiction. The federal government now provides approximately 25 per cent of the necessary funds so long as the provinces administer their health care plans in accordance with the Canada Health Act.

Over the last decade we have seen the emergence of a mounting fiscal crisis. If unchecked it will ultimately lead to the collapse of publicly funded health care in Canada.

The largest crisis which many of my colleagues have mentioned today is the mounting debt and deficit. In this country federally we have gone from $125 billion in 1980 to over $500 billion this year.

The amount of revenues that are required to service this obscene debt load has increased. Roughly in 1984 we were paying about 28 cents out of every dollar for interest payments. Now it is running around 33 cents. If our spending goes on as it is going on at current levels, in the year 2000, 40 cents out of every dollar will be used merely to service this debt. This means we have less and less money to spend on social programs such as health care.

Another interesting fact that people may not be aware of is that the amount of money the federal government spends as a percentage of total program spending has actually declined since 1970 from 10.9 per cent to 7.6 per cent. This means that the federal government itself is spending less and less money on health care regardless of anything else.

I am not taking into consideration the provincial fiscal crisis which is also going to impinge on the ability of governments to fund health care.

At the same time that the governments have been reducing their spending on health care, there is the other side of this equation. That is that the costs of medical care in this country are escalating dramatically. In fact they are going up over four times the rate of economic growth. This situation will only worsen in the future. There are many reasons for this such as an ever increasing aging population that consumes over 70 per cent of the health care dollar; technologies of intervention and equipment which are getting more and more expensive all the time; and new diseases such as AIDS which are very expensive to treat are raising their ugly heads. For all of these reasons and many more it is clear that health care in Canada is living not just on borrowed time but on borrowed money.

The health care crisis is a result again of dwindling funds and escalating costs. The problem is clear. The federal government continues to hamstring the provinces and is preventing them from getting their health care under control by using its fiscal contribution to the provinces as a wedge that will prevent them from enabling us to continue with publicly funded health care.

This as one can see is an unsustainable system. We must do something about it because it will ultimately contribute to the demise of health care in this country and to the suffering of Canadians. Is this a lost cause? No, it is not. There are a number of things we can do.

We must freeze federal spending for health care at 1993 levels. We need to modify the Canada Health Act to stop penalizing the provinces when they try to get their health care under control.

This suggestion is in a provincial jurisdiction but I am saying it for the record so that we can address it. We need to strike a committee to define what essential health care services are that will be covered across the country from coast to coast and we should delist other ones. Delisting services would be those services that would not be considered essential health care for Canadians.

We can make consumers more accountable. The current system encourages waste and will lead to unnecessary cost. Some suggestions have been bantered around and it is up to the provinces to decide on modest user fees and the use of deductibles. Remember, if we can save publicly funded medical care in this country, no one will go without essential health care services.

As a physician, one of the reasons I got into this was to preserve the system that we have in Canada. We do not want to get into a system like we see in the United States which I personally think is reprehensible.

We also need to inform the public of the cost of medical services. Perhaps we can do this with a statement of accounts at the time of consumption or perhaps annually or bi-annually. We also need to put a greater emphasis on health care education, particularly at the early grade school years. This will pay off in spades later on. I can guarantee that.

We also need to address health care professionals and we must educate them more, myself included, as to the cost of technologies and intervention. By and large we have not done a good enough job of that.

I would also allow the provinces to enable health care professionals to run privately funded services. This would serve two purposes. It would decrease the horrible waiting lists that we now have and ultimately it would be a win-win situation for all people those who would go private and those who would go public. People under that circumstance would get their health care services a lot quicker than before which would mean less pain and suffering. People would go back to work sooner and it would be far more beneficial for the economy, not to mention the insurance companies whose premiums would go down.

The current hodge-podge two-tiered system of rationing that we have is the last futile attempt to correct a system that is broken and will soon sink under its myopic tenets and fiscal mismanagement.

The second topic I would like to speak about briefly in view of the Auditor General's report is how we administer foreign aid. We can look at the CIDA disaster in conjunction with this.

Some fundamental changes have been considered and I would like to suggest a few of them today.

First, no government to government aid as much of this money lands in the Swiss bank accounts of despotic third world rulers. As a result of that the heads of many of these states are some of the richest people in the world.

Second, dispense aid directly to projects on the ground administered by foreign aid workers in conjunction with local peoples.

Third, focus on helping people to help themselves.

Fourth, concentrate on small projects that incorporate and are sensitive to local customs and practices. Expensive mega projects are usually expensive mega failures.

Fifth, focus on projects that involve family planning and birth control. Perhaps the greatest threat to the welfare of all peoples on this planet is the population explosion. We are rapidly outstripping our ability to provide for ourselves and are straining our resources to their maximum and laying waste to the environment.

I would not encourage foreign aid as a lever in developing nations as it only affects those most in need.

Make no mistake that what happens in other parts of the world will one day land on our doorstep one way or another. That is inevitable.

[The Acting Speaker (Mr. Kilger)]

It being 10.10 o'clock p.m. pursuant to order made earlier this day, this House stands adjourned until tomorrow at two o'clock p.m. pursuant to Standing Order 24(1).

(The House adjourned at 10.10 p.m.)