Debates of Feb. 1st, 1994

Presence In Gallery

[Some hon. members]

Hear, hear.

[Some hon. members]

What about Marc?

[The Speaker]

There is no reason to introduce our friend, a former member of the House, who is in the gallery.

The House resumed consideration of the motion.

Pre-Budget Consultations

[The Speaker]

Order, I believe the hon. member for Joliette still had 15 minutes left.

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, when I interrupted my speech just before Question Period, I was listing some examples of wasteful spending and poor management of public funds. I mentioned National Revenue, Investment Canada, ministers' travel expenses, the Department of Fisheries and Oceans, and I was getting to the matter of student loans.

In 1990, 1992, and 1993, the Auditor General stated that annual ceilings for student loans had been exceeded. In 1993, the annual ceiling had been exceeded by $170 million. According to the Auditor General, action was urgently needed to correct the situation and ensure compliance with the provisions of the Canada Student Loans Act.

We are not against lending money to students. We are aware of the financial needs of students, but the decision to exceed approved ceilings is up to Parliament, not departmental officials.

Another example concerns the Canadian Aboriginal Economic Development Strategy. This strategy would invest $1 billion over a period of five years. Three departments were responsible for implementation of the strategy: Indian Affairs and Northern Development, Industry, Science and Technology and Employment and Immigration. The purpose of this strategy was to address disparities between aboriginal peoples and other Canadians, and its objective was to help aboriginal peoples achieve economic self-reliance.

Between 1989 and 1993, $900 million was spent under the strategy. The Auditor General deplored the lack of harmonization between the departments, which were supposed to co-ordinate their activities and put in place an evaluation framework. Because of this lack of leadership, the framework was not put in place until 1993, four years after the strategy came into effect.

There are also very few ways to evaluate the effectiveness of this strategy. In fact, $900 million is being spent without any assurance that these expenditures are justified.

In 1992, for instance, the Department of Indian Affairs and Northern Development spent $20 million on 73 economic development organizations in communities considered to be fully developed. On the other hand, it spent $33 million on 296 organizations in less developed communities. No wonder the Auditor General has asked for measures to monitor and evaluate these programs.

It is most unpleasant when one is speaking to the Chair and members on the other side of the House are talking. I think we deserve some respect when we speak on behalf of our fellow citizens.

[The Acting Speaker (Mr. Kilger)]

The hon. member for Joliette has raised a point, and I must say I agree. I would ask hon. members to continue their discussions outside, behind the curtains, so that we can hear what is being said and the hon. member for Joliette can continue his speech undisturbed.

[René Laurin, Bloc, Joliette, QC]

I will go on, then, Mr. Speaker. To sum up, I do not know what real benefits have resulted from the activities outlined in the strategy. Were the resources maximized? We do not know whether the funds were spent on native priorities or whether there is a more cost-effective way to obtain the same results. A review of the Canadian Aboriginal Economic Development Strategy is therefore essential and programs must be assessed at that level.

Another example is the Old Age Security and Canada Pension Plan. Pension benefit overpayments are in the range of $120 to $220 million each year, thus increasing administrative and implementation costs by 50 per cent to $260 million. These overpayments represent 0.5 per cent of total payments.

The detection, recording and recovery of overpayments is not being managed in a cost-effective manner. Overpayments could be related to deficiencies in two key program activities: Canada Pension Plan disability reassessment and Guaranteed Income Supplement renewal. The systems and procedures in place for the recording, control and collection of overpayments fell far short of meeting minimum standards for such accounts.

Past efforts to prevent and detect overpayments have been minimal and ineffective. The department responsible does not even maintain information on the extent of overpayments. That is why the Auditor General had to come up with an estimate himself.

Here I would like to quote from the Auditor General's report: "In short, the Department does not have proper control of the overpayment situation. Benefits are paid to those not entitled to receive them. Existing systems do not allow managers to quantify the amounts involved or to manage their collection efficiently. Moreover, the Department is not organized for enforcement activities such as the recovery of overpayment".

There is another example: the Canadian International Development Agency, better known as CIDA. This organization continues to invest in development projects unlikely to be sustained beyond donor countries' financial assistance.

This government agency did not maximize its use of resources and its projects have not led sufficiently to self-reliant development of the countries receiving financial assistance.

It is important to resolve conflicts among multiple goals such as alleviating poverty while pursuing commercial and political objectives.

CIDA must channel its efforts. On the one hand, pursuing multiple objectives to meet the demands of various Canadian interest groups raises costs and diverts us from the intended objective. Commercial and political goals have caused CIDA to scatter its human and financial resources.

On the other hand, new objectives have been added to those of the 60s and 70s such as economic and social policy reform of third world countries; human resources development; the promotion of human rights; sustainable development and environmental protection; finally, delivery channels, program proliferation and CIDA personnel rotation between countries every two to three years.

This situation has increased the administrative burden and made the assessment of project results much more difficult.

Corrective action is needed and the Canadian International Development Agency must act: one, to streamline its operations to be more efficient and effective; two, to review its project management strategy; three, to spell out its accountability to Parliament and the Canadian public; four, to be more open and transparent with regard to its strategic objectives. Finally, information on the results obtained should be made public.

Just think, all these examples are taken only from this year's report, nothing else. The Investment Canada case is a good example of waste by a public servant. In management courses, we learn that officials and other managers often want to increase their sphere of influence by hiring too many employees or asking for operating budgets which are too high. All this leads to irrational spending. Civil servants do not always have the interest or the desire to challenge the government apparatus head on.

That is why we want the committee that will analyze government spending to be made up, not of public servants, but of parliamentarians answerable to the people.

We believe that it is the people's representatives who should ensure that the various programs achieve their objectives and that the public service and the government manage the allocation of public funds fairly, efficiently and economically.

I again quote the Auditor General, who wrote in his report: "Most of the time, Parliament is not provided with adequate information on the results that departments and Crown corporations have achieved with billions of dollars of taxpayers' money". Since parliamentarians do not have sufficient information on the government's financial situation, we think that the cases of waste and mismanagement reported by the Auditor General are just the tip of the iceberg.

A parliamentary committee to analyze public spending could provide Parliament and thus the public with more information on the government's financial situation. On this point, we agree with the Auditor General's proposal to ask departments to provide clear and comprehensive reports in which they would give Parliament an exact accounting of their stewardship by providing results-oriented data on major spending items.

Duplication of programs and overlapping jurisdiction are another waste of public funds. Not many studies deal with this issue, but among those that do, we have one done by the Treasury Board of Canada in 1991. It concluded that for at least half the provinces, provincial and federal programs apparently overlap in about 60 per cent of cases. The unclear division of power, federal interference in provincial jurisdiction and the federal spending power are the main reasons for this duplication and overlap.

The Bélanger-Campeau Commission estimated that a sovereign Quebec would save $233 million on transportation and communication costs and $289 million on the collection of duties and taxes, by eliminating this duplication. The problem is therefore potentially very important. However, no recent studies to estimate the cost of duplication in all provincial and federal programs exist. Some sources estimate the total cost at nearly $3 billion; others put it higher than that.

That is why we ask this House to give the Auditor General a mandate, free of partisanship, to make a serious, complete study of duplication and overlap in all spending programs of the provincial and federal governments.

In conclusion, the Bloc Quebecois thinks that the Canadian government must show that it is doing its part to reduce the deficit by eliminating waste, unnecessary programs and mismanagement of public funds. For this, we ask the Liberal government to stop hesitating and to set up a parliamentary committee to study government spending, item by item.

This is part of a series of measures proposed by the Bloc Quebecois to put the government's finances back on a sound footing, without making the most disadvantaged or the provinces bear the burden of the necessary reduction in the federal deficit.

We also ask the Liberal government to act quickly and energetically to eliminate the cases of waste and mismanagement identified by the Auditor General, which I mentioned in my speech.

[Philippe Paré, Bloc, Louis-Hébert, QC]

Mr. Speaker, I have a brief comment. The hon. member for Joliette gave a good many very convincing examples of inept government administration. I have another one for you.

With respect to occupational training, the federal and Quebec governments spend roughly $1 billion annually in Quebec alone. Despite this fact, the occupational training needs of Quebecers are still not being properly addressed.

We have seen that in this particular area, overlapping jurisdictions swallow 60 per cent of the total amount allocated, that is 60 per cent of $1 billion, or $600 million. This money is used to deal with administrative problems, which leaves a mere 40 per cent for real occupational training. This is completely outrageous.

In spite of the promises in the white paper, we are now being told to wait two years for a review of these problems. This is unacceptable.

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, I totally agree with my colleague's remarks. More examples could have been given. Mention was made of the inept management of the public service. We could also have mentioned public service renewal, a process that is two years behind schedule. In his report, the Auditor General noted that the public service is absolutely indispensable to the operation of government. He also said, however, that the public service does not have the necessary tools to ensure effective management or the necessary controls to fulfil its obligations to the public.

We could have given you many more examples, but since time is limited, we have to be content with underscoring the principal areas highlighted by the Auditor General. Follow-up action must be taken as soon as possible and the necessary changes must be carried out in order to ensure the sound operation of the House of Commons.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, on the occasion of my first speech to the House of Commons in the 35th Parliament of Canada let me first express my sincere gratitude to the residents of my riding of Mississauga South. I am honoured to represent their interests in Ottawa and to serve their needs.

I also wish to thank my wife Linda, and my children Aaron, Reagan and Whitney. All members of Parliament know the great personal sacrifice that our families have made so that we can pursue our goals. In this, the International Year of the Family, we say to you: "We miss you, we love you and we thank you".

We also thank the Prime Minister for his vote of confidence and the historic decision to allow all members to speak freely and openly on important issues such as this pre-budget debate.

Canadians are well aware of the complex and troubling problems we face today such as chronic deficits, high unemployment, poor economic performance and the lack of credibility of government.

In 20 years of corporate life and as a chartered accountant I learned quickly that for every complex problem there is a simple solution, and it is wrong. To focus solely on deficit reduction is too simplistic. We need a balanced approach to fiscal and monetary policy to promote economic growth and job creation. This, coupled with expenditure rationalization, will lead to deficit reduction.

Financial performance can be improved in two ways: increasing revenues or decreasing expenses. On the revenue side, tax increases are not an option in this budget. Canadians are already over-taxed. Alternatively, we need to broaden the tax base by expanding the economy.

On the expense side, cutting and slashing to lower the deficit would be destructive. Moreover it does not take into account the value of an integrated expenditure plan which can create synergies and opportunities in support of economic growth.

Government must redefine its philosophy on expenditures, viewing them not as spending but rather as investing in people, programs and assets. We are investment managers of the taxpayers' funds, and when we invest, not only must we set returns and performance requirements but we must also become accountable to the people of Canada. When these returns and performance requirements are not being achieved government has a duty to take corrective action.

Annually the Auditor General has reported on countless examples of waste and mismanagement. We must respond to these reports and demonstrate that we have learned from our mistakes.

Our social programs were initially designed to provide a social safety net for those in most need. Although the system served Canada well in the past, we must overhaul and renew these programs to fit the realities of the 1990s and into the 21st century.

We must simplify our tax system and restore equity and fairness both in the personal and the corporate sectors. We must streamline government operations at all levels to improve productivity and efficiency. We must provide incentives for new investments, particularly in small and medium sized businesses to create lasting jobs for Canadians.

For every one dollar investment in Canada the multiplier effect is five times in terms of the contribution to our economy. This creates new jobs and a broader tax base which is essential to the meaningful reduction of the deficit.

At this point I would like to make a few specific suggestions for budget consideration. We must aggressively deal with the underground economy to ensure that more are paying their share so that all are paying less. With an estimated 20 per cent of our economy underground the government has a duty to conduct more network audits and to introduce more comprehensive

forensic auditing techniques to address this most serious problem.

In regard to RRSPs, contribution limits should be set at levels that will allow all Canadians who are not members of pension plans to adequately provide for their retirement income. These levels should be comparable to those afforded to members of registered pension plans.

With regard to the $100,000 lifetime capital gains exemption, it has not met its objectives of stimulating investment in Canada. The exemption should be discontinued and the savings be reinvested in job creation initiatives.

Old age security for our seniors should not be affected by this budget. The present tax law already claws back a portion of the benefit where the taxpayer has other income. The Prime Minister told seniors during the election campaign that old age security was a dividend, recognizing their lifetime of contribution as taxpayers and we should honour that position.

The rising level of foreign-owned debt is draining capital out of Canada. As such, consideration should be given to incentives for Canadians to invest in our country, such as tax exempt bonds.

On unemployment insurance, benefits should be paid only to those Canadians who are unemployed and looking for work.

The current practice of paying benefits where there is only a disruption of earnings should be reviewed and a threshold of earnings should be considered as a basis for increasing the rate of clawback on these social benefits.

On immigration, the federal government must enforce its immigration sponsorship agreements where the sponsor is able to meet their obligation. In 1993 the region of Peel alone had some 11,000 welfare claims from immigrants who were already covered by a sponsorship agreement. Thirty-eight per cent of those agreements broke down in the first year, rising to 62 per cent before the end of the second year of the 10-year sponsorship. In addition, 59 per cent of those sponsors were children sponsoring their families. In a large number of cases they did not have the financial ability to do so.

The rise in defaults has been dramatic and the burden is falling squarely on the shoulders of the Canadian taxpayer. Fiscal responsibility requires that we must address this situation.

On health care, the federal government contributes 24 per cent of the cost through transfer payments to the provinces and, as such, should ensure that the funds are being appropriately spent. However, Ontario has over two million unauthorized health cards in circulation, costing that province as much as $900 million per year in fraudulent claims.

Although this is under provincial jurisdiction, there is only one taxpayer and this type of savings opportunity cannot be ignored.

With regard to economic growth, new partnerships must be built with the business sector which will be responsible for the creation of 85 per cent of all new jobs. That means that the government must provide meaningful incentives, such as job creation tax credits, training subsidies, UIC premium exemptions and wage subsidies as its partnership contribution.

We must also provide a supportive environment by streamlining government services and creating one stop shopping for those services, especially as it relates to small and medium sized businesses and to export opportunities.

In conclusion, the pursuit of economic growth coupled with sound financial management and wise investing will allow us to deal effectively with the challenges before us. To quote from the government red book, a strong economy is the essence of a strong society and therefore jobs and economic growth must be our top objectives.

Political credibility requires fiscal responsibility. The people of Canada have given this government the mandate to make the tough decisions necessary to restore our economic strength and to create opportunity, hope and jobs for all.

Canadians also understand that all who are able will be called upon to contribute their fair share. We need a tough but fair budget. We need it now for the long term benefit of all Canadians.

[Audrey McLaughlin, NDP, Yukon, YT]

Mr. Speaker, I would like to congratulate the member for Mississauga South on his first speech in this House. He made some extremely good points.

However, I would like to ask him a few questions on tax policy. He mentioned at the beginning of his remarks that he felt that there should be no new taxes. I certainly concur that the middle class and individuals are just totally overburdened on taxes. He concluded his speech by talking about fairness.

I would like to ask the member for Mississauga South if his comments at the beginning of his remarks would include the fact that there should be no consideration in this budget of taxing those profitable corporations that now pay no tax. Last year the Auditor General told us that there are millions of dollars in uncollected taxes because of the provision for profits to be put offshore and therefore not taxed in Canada. We know that the family trusts, where the rich can shelter their money, are not taxed.

I would like to ask the member, when he talks about no taxes, is he talking about allowing these tax loopholes for the rich and for profitable corporations to continue or does he really want to see a fair tax system so that the individual taxpayer gets less burden when everyone is paying their fair share?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I want to thank the hon. member for Yukon for her kind words of congratulations.

I do not think I can do justice to her question in the brief moments that we have here but let me comment with regard to at least the concept of no new taxes vis-à-vis corporations, offshore companies and family trusts.

The concepts of fairness and equity would say that government has to revisit all of the provisions. There are no more sacred cows. To the extent that businesses are indeed draining capital or sheltering business income through offshore instruments, this government, if it is to be true to its value system of fairness and equity in our tax system, must investigate, analyse and work toward reasonable solutions to ensure that the income derived from Canadian soil is invested to the greatest amount in Canadian opportunities.

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, my question is for the hon. member for Mississauga South, whom I want to congratulate on his maiden speech. I noted that he talked about the elimination of the $100,000 lifetime capital gains exemption.

Does the hon. member not think that by doing away with this exemption, to which every taxpayer is entitled during his or her lifetime, the government is in effect taxing the inflation that it has itself generated because of negligence, because of a bad interest rate policy in some cases and because of excessive taxation?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the $100,000 lifetime capital gain exemption was introduced two Parliaments ago by the previous government. It was sold to Canadians on the basis that it was going to stimulate investment and job creation in Canada. I think that Canadians embraced those principles as being honourable.

However, the government in its implementation made two fundamental errors in that exemption. First of all, it did not establish a V-day value for investments and so allowed investments which were already made and had holding capital gains on them which were eligible for that exemption. It forewent the opportunity to direct this exemption to new investment.

Second, the government did not specify or restrict the nature of investments that could be made under this program. As such, investments even such as Florida vacation properties became eligible for that exemption. Under the circumstances I think the hon. member would agree that this particular exemption, although honourable in its roots, was very poorly implemented. The optics are very bad to the Canadian taxpayers and the dollars that the government is foregoing by permitting that exemption would be much better spent by investing in job creation initiatives.

[Bernie Collins, Liberal, Souris—Moose Mountain, SK]

Mr. Speaker, it is my honour and privilege on behalf of the electors of Souris-Moose Mountain to rise on this very memorable occasion to make my first presentation to the members of this House on a topic so crucial and that is the budget.

We are honoured to have the hon. minister, Mr. Paul Martin, as the minister in charge of this department. I am sure that the members from across the House have recognized his capabilities and are prepared to work with him along with each of us.

For me, having come from a riding that has been notable for people who have served in this capacity, it is a humbling experience. I do know that I have the support of my wife, Delphine, and my family. If I were to name all the members of my family we would be here for some time.

Let me just say that from the oldest member Michael to the youngest member Carrie-Lynn, I do know that they are prepared to make a commitment, along with me, of total responsibility and trust to those who have placed me here.

I look forward to the opportunity to work with all members of this House as we go forward to address the challenges of this, the 35th Parliament.

Because my riding is so vast, almost 300 miles across, I have had the opportunity to travel 30,000 miles and meet constituents during the campaign. Our riding encompasses the entire southeast corner of Saskatchewan. From the Manitoba border one can travel 300 miles to Minton in the area of the Big Muddy. From the United States border our constituency reaches 180 miles north to the Qu'Appelle Valley.

I found that everywhere I went young people were seeking hope. They desire a chance, a way to make themselves known in this great country of ours. They do look to us to light the fire in their eyes and to renew the hope in their hearts so that they along with us can be the beneficiaries of this fantastic country.

My riding includes seven First Nation reserves, the Sakimay, White Bear, Ocean Man Band, Ochapowace, Cowesses, Kahkewistahaw, and Pheasant Rump. I know their hopes and aspirations are for recognition as a First Nation and for self-government. They too search for hope for their families.

I am happy now to put forward some ideas that may be incorporated into, as it is being prepared by the people of Canada, this budget for 1994.

I have travelled through southeast Saskatchewan and have had a very clear, concise concern put forward to me by different groups of people.

In the agricultural community never did I find a farmer who said he wanted a handout. What they did ask for was a fair price for the product they produced.

Certainly that is all too true when I look at the unemployed. They wish to have training to improve their skills so that they can become part of that hope and dream.

I remember a meeting in Estevan some three or four years ago when the then Minister of Finance, Michael Wilson, brought forth the goods and services proposal. The business people of that area spoke loudly and clearly and said they could stand a 3 per cent or 4 per cent flat tax or basic tax but that would be the ceiling.

What has happened since that time? I am sure the House remembers the reports in the newspapers that the goods and services tax was creating such a great amount of wealth that the government was not sure what it would do with it.

We still find that the truth of the matter is that the goods and services tax did not produce the expected wealth. What it did produce was an army of people out collecting the tax, creating for small and large businesses alike a horrendous amount of paperwork.

I look to this government to get rid of these levels of paperwork that take hours and hours for business people. They are in the business of making money, not just spending time filling out government reports.

In the history of Canada there is no tax that I know of that is as hated as the goods and services tax and I want to assure all those people in Souris-Moose Mountain that in one clear voice they have spoken. They do not want any more taxes and they do not want an unfair tax system.

What I do mean is a fairness in taxes. I believe, as the report of the Auditor General has indicated, that the Government of Canada must close loopholes so that investors cannot borrow money, invest it in foreign countries and then have a tax shelter of these investments.

I also believe that the Auditor General when he does make his report should frequently bring those recommendations to this House so that we can fix those areas which are inappropriate or wrong. Corrective steps to overcome the problems must be taken.

What about accountability and proper management? I read that between $120 million and $220 million is lost annually because of pension plan and old age security benefits paid to ineligible people. I know a case in which an individual was able to approve for himself educational funding. Where is the accountability?

These are the things that have gone on in the past which my constituents have made clear to me they will not tolerate any longer.

I want to switch gears into the area of student loans. The student loan program is costing the government a tremendous amount of money. The tax on student loans should be equitable and should be fair. There should be a six month buffer for students to pay.

Let us be thoughtful when we are spending our money and how it is accounted for. My constituents are not pleased about spending $1.6 million on a painting when there are 1.6 million unemployed.

I have a few quick observations from consultations with my constituents. Several have suggested to me that a tax on lottery winnings especially over a certain level would be acceptable.

An opportunity should be given for communities to invest in themselves. This could be handled through an infrastructure program, but there are tax implications. A suggestion has been made that citizens could make a one-time contribution to a community fund and receive a tax benefit.

Given that a significant amount of our debt is held by foreign countries a concerted effort should be made to buy back that portion of the debt that is held outside this country.

I am confident, as is everyone in this House I am sure, that we have a talented, thoughtful and visionary man at the helm of this overwhelming economic situation. Remember that Paul Martin, Sr. was a man of vision, a man of action and a statesman. He was a man Canadians trusted and respected. He was a true Canadian. Our present finance minister will surely be deserving of the same accolades as he prepares and presents, with our help and the help of all Canadians, the budget for 1994.

A famous writer of Negro heritage, Langston Hughes, depicted the life of his family and indicated that one could go through life laughing or crying. His solution was: Go through life laughing. Enjoy it. Part of the challenge is to provide an opportunity for the people of this country to go through life enjoying it. We will enjoy our part if we know that we have contributed to improving the standard of living and the hopes and expectations of all Canadians.

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

Mr. Speaker, I listened closely to what the hon. member for Souris-Moose Mountain had to say, as I did to everything that has been said in this place so far today. I think that, if we were to sum it all up very concisely, there would be at least two main ideas emerging. First, a good many people in this country have lost confidence in their politicians and second, we have a government mired in a situation that can be attributed to government mismanagement.

Every member who has participated in this debate has pointed out several instances of mismanagement, like this business with health insurance cards, although this involved the Ontario provincial government to some extent, and other telling examples of mismanagement on the part of our governments.

What strikes me about this debate is that we seem to be rehashing the same old things we have been hearing for ten years. I am sure there are people in my riding who are thinking just that: "All that stuff, we have been hearing about for ten years".

This morning, the Minister of Finance mentioned relying on meetings he had had with 30 or 40 top economists in Canada. But we have been relying on Canada's 30 or 40 best economists for 10 or 12 years already and, instead of improving, things are getting worse.

I want to put this question to the hon. member for Souris-Moose Mountain regarding Quebec. As you know, it is most likely that we will be holding a referendum in Quebec within a few months. Here is how the people of Quebec view the overall situation at this time. In 1980, when the Liberals took office, the cumulative debt in Canada was about $80 billion. Incidentally, our present Prime Minister was Minister of Finance in that Parliament. At the end of their mandate, they passed on a debt of $200 billion or so. Under the next government, a Conservative government, it rose to $500 billion. We know that upon separating from Canada, we will take on 25 per cent of the Canadian debt. Had we voted "yes" in the 1980 referendum, we would have had to pay $20 billion out of this debt, but if we vote "yes" now, it will cost us $125 billion. This means that over a 13-year period, Quebec's share of the debt has increased by over $100,000 million. As the holder of 25 per cent of the voting shares in this company called Canada which has increased our debt by $100,000 million in 13 years, in what way is this partnership profitable to Quebec?

[Bernie Collins, Liberal, Souris—Moose Mountain, SK]

Mr. Speaker, I appreciate the question the hon. member has put forward.

Let me say that he is being more than optimistic in his thought that all of us in this House, with the exception of the Bloc, are going to stand by while he departs from this country, because it will not happen. We are in this for the long haul. In this, the 35th Parliament, each and every one of us has a commitment to the debt and to the improvement of the welfare of this great country of ours.

I can assure hon. members that the people of Souris-Moose Mountain will make their commitment to continuing to come up with a budget that considers Quebec, that considers Yukon, that considers all of Canada.

I am pleased that the hon. member for Yukon is here because she is going to be part of this process so that jointly we come up with a decision. We are not going to do it as individuals but together collectively we will come up with a solution.

It is easy to turn to the past and say that it was the fault of someone else. I suggest that we have to come up to today's standard and ask: What are we going to do now? We have a new group of people. They are optimistic. I am optimistic and I can see nothing but good for this country under the leadership of our great Prime Minister and our Minister of Finance.

Along with us, the hon. member from Quebec will be surprised how happy he will be when the budget for 1994 comes forward.

[John Solomon, NDP, Regina—Lumsden, SK]

Mr. Speaker, I wish to offer my congratulations to the hon. member for his election to Parliament and also congratulate him on his remarks today.

The hon. member has asked the members of this assembly for advice with respect to the budget. I have many things I wish to offer in terms of revenue saving items. I do not have the time right now but will get them on the record later.

I have one question I would like to raise at this moment. On the budget considerations by the Minister of Finance, the minister of defence is considering closing certain military installations across the country.

CFB Moose Jaw which is now called 15 Wing has been in existence for many years. It has been there for very practical reasons, for example, the cloud-free skies, adjacent flat topography and a low population density to the south. These have contributed to the positive training and safety conditions of the base.

Would the hon. member join with me in making representations to the minister of defence to ensure that this facility remains intact for the benefit not only of our country but also for the province of Saskatchewan and for the military and residents in and near Moose Jaw?

[Bernie Collins, Liberal, Souris—Moose Mountain, SK]

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

On many occasions he and I have shared the opportunity of coming together on certain topics. The kind of thing that has to happen in this House is that we have to come up with a collective approach to dealing with problems.

I assure the hon. member not only will I be part of that but I want to work very hard to convince all members from Saskatchewan that we collectively ensure the base at Moose Jaw continues to stay open.

[Ray Speaker, Reform, Lethbridge]

Mr. Speaker, I would like to say that this is a great day to be in the House of Commons.

When I decided to take on the challenge of being a member of Parliament representing not only the Lethbridge constituency but the people of the province of Alberta, I faced in my home in Edmonton a number of young people, young men and young women who were concerned about their futures. These young people who had visited my home from the University of Alberta were quality students, young people who had the potential to make a great contribution to Canada. But their main concern was job opportunity: How do I get a job after I have studied so hard and taken on a major loan portfolio as well? That was their main concern.

At that time I said I thought I would like to take on the challenge of federal politics and be in the House of Commons, leaving the Legislative Assembly of Alberta where I had served my people for some twenty-eight and a half years. So today I feel it is a great day that I am able to stand and take part in this pre-budget debate and make a contribution that I feel should assist those young people.

We in Canada, specifically the people of my constituency as in other areas, have other concerns as well, with the deficit and the debt and with the type of leadership we will have this 35th Parliament. Will we achieve what we have established and set out to do? I would like to talk about that for a few minutes today.

During the past two weeks as I sat here in this assembly I listened very carefully to what the Prime Minister had to say and what the Minister of Finance had to say regarding their objectives and the hints they were going to give. I know as well as all other members do that they may not have been able to lay out a full plan with all of the details. That is because it would have been the traditional way where the government lays out the plan and then goes into a defensive mode and we in the opposition go into an offensive mode and we become adversaries over the plan as set out.

As I understand it the plan is still loose and is building and is open to suggestion. That is why we have this opportunity today to fulfil our commitment to Parliament, to the people and to the Minister of Finance, to fulfil that plan.

As I looked at some of the remarks of the Minister of Finance during the past week I believe he gave us some hints. He said on page 387 of the January 26 Hansard : We are going to hit our target through a combination of growth, cutting unnecessary spending and building more equity into the tax system''. He went on to say on another day in Question Period:We are going to broaden the tax base and fill in the tax loopholes and this will simply remove inequities in the tax system and make it a great deal fairer''.

Those are noble objectives. What I hope we are able to impress upon the Minister of Finance is that in his budget he will have to implement the details that are satisfactory to the Canadian people.

I want to go a little further in Hansard as of January 26 and issue a bit of a concern in this listening process. One of our Reform Party members raised the matter of the Reform zero and three plan, or our proposal to reduce the deficit. The Minister of Finance in his comments of Hansard of that day said that our proposal was a kind of savagery.

I only say to the Minister of Finance that he should rethink that. And I ask this question: In this listening process has he taken the time to listen to all of the details, the tabling that our leader made today? Is he prepared to read through the plan to see if there are suggestions and ideas which can be used before he writes off in a partisan way suggestions that have been truly tested by hundreds of thousands of Canadians and supported by them because that is why there are many Reform members sitting in this assembly today.

After reading some of the comments of the finance minister and after what I heard today in Question Period, I get the feeling we could be on the verge of more taxes or new taxes or increased taxes. Certainly there will be a shift somewhere within the cross section of Canadians. Someone will pay more and maybe someone will pay less or pay the same. In that equity formula there will be an imposition of a greater amount of taxation. In this context I say to the Minister of Finance that there are very few people who support the concept of more taxes, especially new taxes.

An article in the Financial Post of January 30, 1994 referred to American growth relative to the Canadian growth, and I think the minister should take it into consideration. It stated:

Fast-paced economic growth in the U.S. is likely to drag Canada along eventually, economists say, but lack of consumer demand and government cutbacks will make it a struggle.

Despite booming exports to its neighbour, Canada will be hard-pressed to keep up with the U.S. economy this year.

These are the reasons given in the articles:

Fragile consumer confidence and rising taxes have left it several steps behind in the recovery process.

I suggest the minister should make note of the article. Another thing about taxation and the approach to it is that more taxation is not the way to cut the deficit.

I refer to a government document entitled "Canada's Economic Challenges" and dated January 1994. Page 48 of the document talks about Canada's tax burden. It states: "Canada's tax burden has been steadily increasing. Since the early 1980s total government taxes as a share of GDP has risen significantly". If we look at the graph over the last 10-year period it is about 6 per cent.

Page 39 talks about the public debt. It states: "The public debt burden continues to rise. Relative to GDP, Canada's combined federal and provincial debt has increased two and a half times since 1981-82".

The point I want to make to the finance minister is that even though taxes have increased significantly relative to GDP, our debt continues to rise. Just increasing taxes is certainly not the solution to the problem we face.

I listened very carefully last evening to the remarks of the Prime Minister in Toronto, along with my good colleague from the Bloc Quebecois. The Prime Minister indicated to Canadians and to the people in Toronto that he would like to cut the deficit to 3 per cent of gross domestic product by the third year of the government's mandate. He said that there would be cuts but that the best way was through growth.

The Prime Minister did not talk about the kinds of cuts or the kinds of objectives. Again today the Prime Minister hedged on how we were to deal with the question of social programs. There is a challenge for the government. A soft Liberal approach will not work.

The Investment Dealers' Association made a submission to the Minister of Finance in January 1994. I have just received a copy in the last couple of days. Referring to the approach of the government, the association indicated that the government must do more than what the Prime Minister has said, that it must deal with the expenditure pattern of governments. The association indicated:

The deficit for the current year is now projected at $45 billion, about 5 per cent of GDP. The government's stated policy is to reduce the deficit to 3 per cent GDP within three years-requiring a $20 billion or 45 per cent reduction in the deficit.

We have to recognize that we are left with $25 billion as a deficit. The association went on to say:

This deficit target is a worthy fiscal objective. However, the government cannot rely on strengthening economic growth to close the deficit gap within the forecast period. The scale of expenditure reduction to achieve the 1996-97 deficit target suggests massive reform of federal and provincial spending will be required.

I certainly want to echo and support that. I believe it is the way the government must handle it.

What do I suggest Canadians are also saying? They are saying that the government must priorize its spending. I believe it should work toward deficit reduction and balancing the budget within a term of the 35th Parliament. I expect that in the budget there will be targets, priorities and a concrete time line for deficit elimination.

That is the challenge of the Minister of Finance. I am at the end of my time. I would like to thank you, Mr. Speaker, the government, the Prime Minister and the Minister of Finance for the opportunity to make these remarks on the pre-budget debate.

[Sarkis Assadourian, Liberal, Don Valley North, ON]

Mr. Speaker, I congratulate the member on his election and on his first speech on the pre-budget debate.

Before I put my question, I mention to him that we promised in the red book that we would bring down the deficit to 3 per cent of GDP. In his plan, as was mentioned during the campaign and as he mentioned again today, he is to eliminate the deficit in three years. This means that on average it must be reduced by $15 billion every year for the next three years to meet the target of a zero deficit.

Would the member explain to us how he would do that? From where would he cut $15 billion every year on average for the next three years?

[Ray Speaker, Reform, Lethbridge]

I certainly appreciate the question. It is a very leading question. It gives me an opportunity to espouse our position very clearly.

Some ingredients have changed since we set forward our zero in three plan in early 1993 in terms of revenue possibilities. The actual deficit is much greater than the one we projected. I believe we were looking at around $35 billion. We are now into a projection of $44 billion to $46 billion. There certainly are other areas of government that we must look at in terms of bringing about those kinds of expenditure reductions.

Basically the Reform Party looked at three areas. In the broad area of government efficiency we recommended that some areas have 15 per cent cuts. That is in the document we presented today.

The second area we looked at was grants that are now made available to businesses and special interest groups. In that area we felt we could reduce the expenditures of government by about $4.3 billion.

The third area we looked at were transfers to individuals. We have said clearly that health care was not one of them. We were to maintain the expenditure pattern as set out in the 1992-93 budget. It is to be kept at that level until we could maybe add to it, but there would not be a reduction in health care spending or in advanced education. We also had a hold on retraining and criminal justice programs.

Other areas we were looking at were unemployment insurance and old age assistance. For example, we wanted to look at an income threshold of $54,000. In examining that we could reduce the direct expenditure in that area by about $3.5 billion, by putting in that family threshold of $54,000. Those are some of the kinds of things we were looking at.

We have tested those with many Canadians and have had very positive responses. We intend to continue to do that. There may be others we will have to put on the table. Now that we have a major contingent elected to the House, it would be our plan to develop, refine and certainly be more specific in terms of further expenditure reduction patterns.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I would like to congratulate my hon. colleague for Lethbridge on his excellent speech and I am happy to hear a member from the Reform Party say they would maintain the resources allocated to health care and social security systems. I feel that this shows progress in the analysis made by Reform Party members, and I think the Bloc Quebecois and the Reform Party will eventually reach common ground on this. Besides I had yesterday the opportunity to discuss at length with the member for Lethbridge before commenting on the speech by the Prime Minister.

I would like to ask my colleague if it would not be appropriate for the Reform Party to support the request the Bloc Quebecois made many times to the Minister of Finance that a special parliamentary committee be struck, with responsibility for looking at the tax and budget expenditures as a whole, so that drastic cuts are not made across the board, and so that, after an item-by-item review, cuts and increases could be determined. We feel, for instance, that expenditures on social housing should rise. Through you, Mr. Speaker, I ask my colleague if it would be possible for his party to support mine on that point?

[Ray Speaker, Reform, Lethbridge]

As a Reform caucus we certainly considered the presentation of the Bloc Quebecois in its amendment to the main motion.

In terms of the concept of having a parliamentary committee to review the budget and the priorities and to look at areas where we could reduce and cut in a responsible way, I think it had a lot of merit. What made it very difficult for Reform members to support the concept were some of the other items listed in the major paragraph called the amendment. Because of that we felt it was not the right thing to do. The original idea, the concept of more study by a broader group, did have some merit.