Debates of Feb. 23rd, 1994

Motions For Papers

[Some hon. members]

Agreed.

The House resumed from February 22 consideration of the motion that this House approve in general the budgetary policy of the government.

The Budget

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

Madam Speaker, we seldom have an opportunity to do so but before resuming our comments on the budget of the Minister of Finance, I would like to start by congratulating the interpreters who do an excellent job, both in French and in English. This is not always easy, especially when members speak quickly and use technical terms.

Yesterday's budget speech by the Minister of Finance is a direct contradiction of any expectations we might have of a new government in this House. This government promised us jobs that would restore the dignity-as the present Prime Minister said and kept repeating, especially during the election campaign-of a million and a half unemployed Canadians and nearly half a million unemployed workers in Quebec. That did not happen in this budget.

This budget merely refers to the infrastructure program which already been announced on many occasions and will create only 45,000 temporary jobs, or barely 3 per cent of the needs of the unemployed. Three per cent, that is what the government and its Minister of Finance are giving us after repeating for I do not know how many months, while waving their little red book, that what was needed was jobs, jobs, jobs. And all we get is 45,000 jobs, 3 per cent of what the Canadian labour market needs.

The government was also committed to putting its financial house in order. However, the deficit for 1994-95 will remain very high, at nearly $40 billion the highest deficit estimate ever in federal history.

And since yesterday, this government has felt very proud. The minister says he is proud of this budget, and he brings us the highest deficit in Canadian history. How can anyone be proud of a budget as disastrous as this one?

The government failed to make much-needed cuts in government spending. It failed miserably. It did not have the guts to attack departmental operating expenditures and cut the fat in the federal bureaucracy. The fat is still there. Every year the Auditor General keeps repeating the fat should be trimmed from program administration and public spending in general. But where is the political will to do what the Auditor General asked the government to do not so long ago? Nowhere.

This government, and the Minister of Finance in particular, does not have the courage either to end overlap and duplication which at the very least cost Quebec alone between $2 and $3 billion. This is unacceptable for a first budget from a federal government which promised to get its fiscal house in order. If my memory serves me correctly, yesterday's budget reduces federal government operating expenditures by only $400 million, out of a total operating budget of nearly $20 billion. How can it be proud of this achievement?

Instead of cutting expenses, the Minister of Finance and his government have foolishly chosen to increase the fiscal burden of taxpayers, specifically the burden of the middle class, thereby falling into the same ruts as the previous government.

Overall, the government will collect no less than $575 million in 1994-1995 from a variety of new taxes, and more than $1.3 billion in 1995-1996. Not so long ago, every member of this government, and in particular the current Prime Minister and the Minister of Finance, was saying that when they came to power, there would be no tax increases and no income tax increases. They are doing exactly the opposite of what they have been saying for months. They are also doing exactly the opposite, Madam Speaker, of what they said they would do in their red book, this rag that they have been waving in our faces every day.

[Some hon. members]

Hear, hear.

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

In so doing, Madam Speaker, they are also directly contradicting themselves and their claims to want to increase economic growth opportunities, because by increasing the fiscal burden of taxpayers, the government is reducing their purchasing power and jeopardizing the already anemic economic recovery.

Finally, the Minister of Finance, the stand-up comic of Canadian economic policy, is soaking middle-income earners for more than half a billion in tax revenues over three years by taxing-and this is just one example-life insurance premiums paid by employers, by taxing middle-income earners.

Moreover, we now know the true meaning of the words "modernization" and "rationalization" when spoken by the Liberal government and the apparatchik.

The Minister of Finance, the real boss when it comes to running public affairs in Canada, is making, on the backs of the very people who have to rely on assistance from the entire community, a shameful $7.5 billion cut in social programs.

[An hon. member]

Unacceptable.

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

And inadmissible. It is inadmissible that a government which, not so long ago, was complaining to the previous government that it was outrageous to attack the universality of social programs and to start cutting back such programs.

Members opposite have the gall to talk about-and I have been hearing the same thing over and over for a very long time-social justice and a fair contribution in looking for ways to better control public finances. The government claims to be concerned with poverty and unemployment and then turns around and attacks the victims of these two social evils to solve its own problems.

I cannot figure out what kind of social conscience these people have, but as soon as they have the reins of government in hand, they forget who they owe this to, and that is inadmissible.

These are not the only tax bites suffered by the taxpayers. Reneging on its election promises, the government has cut transfer payments to the provinces, payments which are used to support education and social assistance programs. It is taking away, stealing from the pockets of the provinces nearly $2 billion for fiscal years 1995-96 and 1996-97. That is what has come to be known as shifting one's deficit onto the shoulders of the provinces while sparing oneself the unpleasant task of confronting the voters with additional tax increases.

[Some hon. members]

There. That is it.

[An hon. member]

The cat is out of the bag.

[An hon. member]

Put that in your pipe and smoke it.

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

Who is going to pay for all this? Who will pay? Again, as always, the taxpayers. The same people pay for it all. We do not have different groups of taxpayers for federal income tax, provincial income tax or municipal property tax. The same people pay at all three levels. Whether we increase taxes directly at the federal level or pass the buck to the provinces, in the end, the taxpayers are paying and the middle-income taxpayers in particular have been overburdened with taxes since 1984. Yet, they have just been struck another blow and are seeing their tax burden become even heavier.

From this perspective, the Official Opposition can only condemn the fiscal stance of the Minister of Finance, which does not solve the huge problem of the federal deficit, quite the contrary!

There is no action in the budget for job creation and no hope for the 1.5 million unemployed in Canada. The infrastructure program is supposed to create 45,000 jobs, only 3 per cent of the needs of the Canadian labour market.

The finance minister expects the most spectacular deficit in Canada's history, the highest ever calculated. We know by tradition, especially the treaty of tradition, that the deficit will go over $40 billion. It will probably go over the $45 billion mark this year.

The Minister of Finance does not have to be proud of it.

There are no reductions in federal spending, but taxes will increase for middle income earners. There is nothing in the fiscal loopholes under family trusts but promises to study them in the finance committee. There is nothing concerning the recommendation of the Auditor General on the possibility of saving more than $5 billion a year by removing inefficiencies in public services. There is no provision for social housing in the budget. Instead, the minister decided to cut social welfare by $7.5 billion for the next three years including a cut of $2 billion in provincial transfer payments.

Madam Speaker, there is really no need to remind this House that the inability of the government to control the deficit is merely the continuation of the fiscal laxness of Liberal governments in the seventies and the early eighties, and I did say Liberal, not Conservative. As you know, the current Prime Minister was even the Minister of Finance for a while during those years. This laxness on the part of all those Liberal governments is directly responsible for the huge increase in the public debt, which is now over $507 billion.

From 1970 to 1985, during 15 years of almost uninterrupted Liberal regime, the ratio between the budget and the GDP went from a surplus of 0.3 per cent to a deficit of 8.5 per cent, a high which remains unequalled. This disastrous state of our public finances is the legacy of successive Liberal governments.

If the past is any indication of what the future holds, and I believe it is, we are in for quite a ride with the budget tabled yesterday by the Minister of Finance, especially because it maintains social injustice, fiscal laxness and tax unfairness. Rich people and major corporations will not pay any more taxes, while the poor and the middle class will continue to pay for the Liberal government's attitude. This is unacceptable!

The Minister of Finance has no reason to be proud to announce a deficit of some $40 billion for the fiscal year 1994-95. Especially since he knowingly-and I do mean knowingly-and wilfully increased the amount of the deficit for the last fiscal year, so as to look more efficient with the cuts announced in his budget of yesterday.

According to several economists, some of whom he consulted during the pre-budget exercise which took place recently, the actual national deficit for the current year is not $45 billion but somewhere around $42 billion. In fact, the Conference Board, which can certainly not be accused of promoting sovereignty, wrote this in its note on the Canadian economy for the winter of 1994: A large part of the $3 billion cost overruns for 1993-94 results from changing the implementation date of certain measures announced in policies and, as such, is due to one-time discretionary accounting decisions. What that means is that, based on the deficit forecasts from the Department of Finance and on the budget tabled yesterday, the Minister of Finance moved only $2 billion towards his expense-cutting objective. The minister speaks of cutting the deficit by $7 or $8 billion, but it is a fraud, a sham. I will not say that they are lying, because that is unparliamentary, but I will say that they are not telling the truth.

Since the deficit for 1994-95 will be reduced by only $2 billion, where is the effort to restore fiscal sanity to government? They must be joking, they are not credible! Do you think, do we all think, that the Minister of Finance and this government are waiting for a third warning from the International Monetary Fund before doing something? Are they also waiting for a further deterioration of Canada's fiscal situation as a result of a lower credit rating from the major rating agencies? Madam Speaker, this government and especially the Minister of Finance are grossly irresponsible.

I believe that compared to other industrialized countries, the economic situation in Canada called for aggressive budgetary measures. If you allow me, Madam Speaker, I will give a few examples of Canada's bad performance to show that we needed more than budgetary cosmetics from the Minister of Finance.

The facts that I will now present are known, and I hope they are known to the Minister of Finance. I hope he knows his ABC's. First of all, the relative size of the Canadian deficit is greater than in the other G-7 countries. In 1993, according to the Organization for Economic Co-operation and Development and according to the definition given in the national accounts, Canada's deficit-GDP ratio was 63 per cent higher than the G-7 average. It is spectacular in the bad sense of the word.

The second fact that the Minister of Finance should know, that his government should know and that all ministers should know but instead pretend not to know in order to hide the fact that our present system is a national catastrophe, is that our debt is growing much more rapidly than in that of the G-7 countries as a whole. From 1985 to 1993, the debt-GDP ratio of OECD countries grew by only 21 per cent, whereas Canada's debt-GDP ratio grew by 82 per cent. That is 82 per cent versus 21 per cent.

In less technical terms, this means that Canada's debt is growing much more rapidly than the revenue that could be used to reduce it some day. When a country gets to the point where it cannot generate enough revenue to be able some day to pay the interest and part of the principal on its debt, it means that things are bad, really bad.

As if that was not enough, between 1983 and 1992, the proportion of the federal debt held by non-residents more than doubled. This is unacceptable. It makes us lose control over the Canadian economy, so that future generations, our youth, are crippled more than other taxpayers. They are the ones who will have to pay off the debt, including our enormous foreign debt.

I can tell you that the present government, as did the previous ones, is leaving quite a legacy to our youth, seing that the unemployment rate is at 17.5 per cent in the under 25 age group. Such are the figures for the last quarter of 1993. It is quite a legacy, which does not allow them much hope.

Again, according to the OECD data, due to structural factors the Canadian public sector's spending is increasing faster than that of most countries of the OECD, and faster than in all G-7 countries. Simply put, it means the system is no longer working.

This system is rotten to the core, as we say in Quebec. The system does not work and things only get worse because of the fact that tax revenues do not flow in the federal coffers as they should, given the economic growth. Why? Because of overtaxation, and to put it bluntly, because Quebecers and Canadians are fed up. A new underground economy has emerged and is becoming larger and larger.

I believe the Minister of Finance, with the budget he tabled yesterday, is contributing to the growth of the underground economy both in Quebec and in Canada. That is unforgivable. He is contributing to the collapse of our country and of our system which he pretends to be protecting.

According to the technical data from OECD, government expenditures are now out of control and changes are needed, not only some patching here and there, but major changes the Minister of Finance does not have the guts to make. Tabling a budget like the one the Minister of Finance put forward yesterday is an act of cowardice.

Even if the members opposite laughed at us before their first budget was tabled, we did not take any pleasure in constantly urging the government to set up without any delay a special parliamentary committee not only to consider, but to analyse carefully and in detail all of the expenditure items of the Canadian government, not only the budgetary expenditures but also tax expenditures. We wanted to make major changes that would help us to control somewhat the degradation of public finances in Canada, since we cannot totally control the situation, with the system on the brink of collapse.

Of course, we will not go over the history of the past three months, but already, even without the committee, even without the government's response to the establishment of a special parliamentary committee, the Minister of Finance yesterday, if he had the courage of his convictions which he showed when he was in the Official Opposition, could have applied the Auditor General's recommendations of the past three years and thus taken a considerable amount, not just $40 million, from the government's spending on operations. According to many tax experts, he would get at least $5 billion a year in wasted public spending and inefficiency and bureaucracy of all kinds, but the Minister of Finance and his government did not have the courage to take that medicine.

As for revenue, when we look at the forecasts-and these forecasts are absolutely ridiculous; they have no credibility in economic and financial circles-we must admit that the Minister of Finance is making exactly the same mistakes as his predecessor in this House. He still thinks he is in the period from the mid-1970s to the mid-1980s, when tax revenue rose in step with economic growth, as measured by the gross domestic product, that is growth in the nation's wealth.

The Minister of Finance wrongly predicts that any 1 per cent increase in national wealth as measured by the gross domestic product will result in an increase of over 1 per cent in tax revenue. Since the mid-1980s, that is no longer the case, as a Conference Board study done in January confirms. When the nation's wealth as measured by the gross domestic product grows 1 per cent, tax revenue grows by only 0.4 per cent. Why? For a very simple reason, as I just said: the emergence and growth of a large underground economy in Quebec and Canada, because taxpayers are fed up with taxes and have had enough of being overtaxed, while seeing that the present government, like the previous one, does not have the courage to act to eliminate waste and inefficiency.

I would remind you, Madam Speaker, that revenue forecasts are unrealistic, even in comparison with the estimates done in the last three years. For example, the February 1991 budget overestimated revenues for the 1991-92 fiscal year by $6.5 billion. The following year, the budget again overestimated revenues for the 1992-93 fiscal year not by $6.5 billion but by $10.6 billion. Finally, according to the Department of Finance's estimates, the April 1993 budget overestimated revenues by nearly $10 billion. So how much credibility can one expect with such revenue estimates in the finance minister's budget when, on one hand, the assumptions underlying economic growth-re-

lated tax revenues are false and, on the other hand, the team responsible for the previous government's economic and financial forecasts is still giving the finance minister the same kind of estimates?

According to the analysts I heard yesterday, the finance minister's estimates are totally unrealistic and he will not meet his target to reduce the deficit to 3 per cent of GDP in the next few years. It is technically impossible.

Not only does the finance minister lack finesse and credibility in this respect but, like his predecessors, he also shows a lack of vision because he goes even beyond using data that is not credible. He said in his speech yesterday that government revenues would not only follow economic trends but grow faster that the economy. Imagine, he goes even further than the previous government by using totally unrealistic assumptions. He says that tax revenues will increase faster than the collective wealth.

I do not know how this bill of goods was sold to the finance minister. I do not know whether he believed in it from the start but I can assure you that it is impossible. It is impossible and if it ever happened, the government's friends or the Chamber of Commerce representatives would be deeply concerned about this kind of forecast.

I do not know if the finance minister remembers how indignant he acted and how he condemned the Conservative government's surrealistic forecasts when he was on this side of the House. Like his predecessor, is he wearing rose-coloured glasses which encourage finance ministers to overestimate government revenues or is he trying to live up to its reputation as a stand-up comic, as the prestigious Toronto daily The Globe and Mail recently called him.

With regard to revenues, the government and the Minister of Finance are broadening the tax base as they promised to do, but they do it again on the back of the middle-class which is already overtaxed.

Madam Speaker, let me give you a few examples to flesh out my argumentation. In the next three years, the Minister of Finance will unduly burden middle-income workers with taxes, first by taxing the employer contribution to various group insurance plans. In the next three years, the Minister of Finance will hit middle-income workers for at least another $520 million, that is half a billion dollars.

Furthermore, last week, while looking at ways to eliminate abuses and loopholes for the rich, maybe the Minister of Finance had a stroke of genius, who knows. However, in seeking to end abuses and close loopholes, he has thrown the baby out with the bath water by reducing the tax credit for meal and entertainment expenses. While it may be true that some of the people who benefit from this deduction fall into the high-income category, it is also true that nearly 80 per cent of those claiming these kinds of deductions fall into the middle- or lower-income categories. This provision will primarily affect self-employed workers. They are not the ones with hefty incomes who shelter their money safely away in family trusts. They are the people who work tirelessly to create their own jobs because they must contend with a government that is incapable of supporting their job creation efforts.

Obviously, the minister, even though he continues to wave his red book and to chant "jobs, jobs, jobs", did not give a moment's thought to the impact, largely negative, that this measure would have. He did not give any thought either to the effects of this measure on jobs in the restaurant industry. He did not think about this. He did not think about how this provision would discourage self-employed individuals who, day after day, work doggedly and struggle against the tax burden and the federal bureaucracy to earn a living.

My feeling-and we have an illustrious representative of the former administration-is that the Liberal government, and its Minister of Finance, is simply following without question the advice of federal apparatchiks. We see before us a pale reflection of these mandarins. To spend $170,000 to deliver a speech in New-York City, great! He travelled in a Challenger at public expense, at the expense of the very same people on whom the Minister of Finance is now imposing a tax hike, an irresponsible tax increase, as irresponsible as a $170,000 expenditure to travel in a Challenger to go and deliver a speech.

By eliminating the age credit for seniors, the Minister of Finance is widening the tax base at the expense of 800,000 older people. That is social justice! That is how we reward seniors who worked hard all their lives to start a family and build this country that this government claims to stand for.

They will actually be squeezing out of seniors another half billion or so over the next three years. How can the minister think seriously that a senior with an annual income of $25,000 is affluent and use that as an excuse to cut the age credit for seniors? How can he justify such an action when, at the same time, very profitable large corporations are allowed to pay not a cent in taxes? That is inadmissible.

I gather from this that, like his Conservative predecessors-because this is basically a Conservative budget tabled by Liberals-the Minister of Finance is relentlessly targeting the middle-class. Must the minister and his government be reminded that, from 1971 to 1991, the actual tax rate for families with an average annual income of about $46,000 increased by

32.3 per cent on average, as compared to only 26.7 per cent for families with an average annual income over $110,000?

This blatant injustice, when it was uncovered not too long ago, prompted the editorial page editor of Le Devoir , Mr. Jean-Robert Sansfaçon, to point out to his readers the unfair situation the middle-class was being put in. This is what he said: Since 1980, middle-class Canadians have had to hand all their additional income over to their governments''. They had to give all their extra income since 1980, everything they have earned since 1980, to the government. It goes on to say:The tax burden climbed faster than the combined inflation and growth rates. Last January, the Liberals, newly arrived in the federal capital, raised unemployment insurance premiums by 7 per cent, a direct tax on job creation''.

The finance minister behaved in an odious fashion, worse in some respects than the Conservatives, whom he criticized for taxing middle-income Canadians. It is a rather silly situation when part of the budget denounces the payroll tax to finance unemployment insurance, which was increased from $3 to $3.07 in January, and accuses it of slowing down job creation. But it is the Liberals who, last January, increased employers' and employees' premiums, thus taking some $800 million from workers' and entrepreneurs' pockets and compromising their promise of creating long-term jobs in Quebec and Canada.

I do not understand, Madam Speaker. I get the impression that the Liberals are laughing at Quebec and Canadian taxpayers, as no other government has dared to do in the political history of Canada.

They recognize that this increase has slowed down job creation, but they still agree to keep it at $3.07 throughout 1994 and say they will create jobs this way. They agree it is an obstacle but they still want to keep it. How ridiculous, Madam Speaker! Jobs, jobs, jobs, cut, cut, cut. How utterly ridiculous!

Does the Minister of Finance know that taxpayers from all income groups pay proportionally seven times more taxes than businesses in Canada? This is another aspect of the budget which I would like to discuss.

The federal tax base is split like this: roughly 73 per cent of the money is paid by individual taxpayers, compared to 27 per cent by Quebec and Canadian businesses. Maybe it is time to create a better balance, because contributions made to the federal tax base by businesses are getting smaller year after year.

I would like to mention some figures, again from the OECD, to those who, like the minister, his colleagues, and the friends of and contributors to the Liberal Party of Canada-and I will get back to this later, Madam Speaker-believe that businesses, and particularly very big money-making corporations, are doing their share.

The Canadian corporate tax burden represents approximately 6.6 per cent of our gross domestic production, whereas for all the G-7 members, that is for the seven most industrialized countries, this proportion is 9.9 per cent. I think there is still some margin for manoeuvre without jeopardizing the competitiveness of major money-making corporations, and I think we could tax those big companies which have made $27 billion in profits in 1987-88 and still did not pay any taxes. It seems to me that we should look at this possibility.

Some say "it is not industrialized countries we have to look at but our main trading partner". Indeed, Madam Speaker, if you look at the corporate tax burden in the United States, you will see that it represents 7.2 per cent of their GDP, compared to 6.6 per cent here in Canada.

So considering this difference between Canada and the United States, there is room for an entirely legitimate tax grab from large corporations that take advantage of tax loopholes.

I think this is clear proof that we need a minimum corporate tax. There is no minimum tax for large companies that are very successful and manage to transfer their profits elsewhere and patriate losses from other countries to deduct them in this country. This proves that a minimum tax would be most welcome. I think it is high time to get rid of the inequities and unfairness in our tax system.

In the same vein, we have repeatedly asked the federal Minister of Finance to put a stop to the outrageous family trust scheme which was actually introduced by a Liberal government.

[Louis Plamondon, Bloc, Richelieu, QC]

Again.

[An hon. member]

Friends of the party.

[Louis Plamondon, Bloc, Richelieu, QC]

Them again.

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

Exactly! The system allows wealthy families to defer indefinitely, in other words, until the death of the last heir-this could go on forever!-all taxes, not only on the capital deposited in these trusts, but also on the interest generated by the trusts which themselves are not subject to tax.

A number of analysts estimate, unlike what the Minister of Finance claimed this afternoon, that the government could obtain at least $350 million annually in new federal revenue from this source-

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

Who said that?

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

-and even as much as one billion dollars in new revenue, according to the estimates.

I hear some comments from our friends opposite. They did not have the guts, and if they think these trusts are so funny, why did

they not get rid of them right away, to see how that would affect the government's tax revenue?

Why did they not do away with the family trust system right away, instead of raising direct and indirect taxes on middle incomes? They had no hesitation in doing that. They did not ask the Finance Committee for a study. They did not ask for an impact assessment of these tax increases.

[Louis Plamondon, Bloc, Richelieu, QC]

Hold a forum? Certainly not.

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

They increased taxes, so why did they not do anything about family trusts?

The minister was saying this morning that, since the Finance critic of the Official Opposition had requested that family trusts be reviewed, he had referred the problem to the Committee on Finance. The minister knows full well that what I asked him to do is to abolish those trusts. It is true that I asked him to instruct the Auditor General, with the consent of the House, to review all the tax loopholes used by rich individuals and large companies, as this could be part of the attributions of the Auditor General, but I specifically asked that family trusts be abolished immediately.

The minister knows full well that the government, for political and politicking reasons, has already given the Committee mandate to find alternatives to the GST and that, consequently, the review of family trusts could not possibly be undertaken before next year.

If that is not helping the friends of the party, I wonder what it is. If this is not not telling the whole truth, what is it?

[An hon. member]

Protecting your buddies.

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

Instead of going after middle- and low-income earners, why did the government not go after those tax shelters of the wealthy? Why did it not tackle the real problems, the problems that Quebecers and Canadians are faced with, which are unemployment, the curse of our time, and underemployment? The government is always talking about jobs, jobs, jobs, but it did not even give an absolute priority on this desirable objective. We would have supported them on that, but there is nothing in this budget, but another repetition of the creation of 45,000 temporary jobs as a result of the urban infrastructures program.

Regarding job creation, we can only condemn the absence of genuine job creation strategies in the budget. Need we remind the Minister of Finance that the anemic economic recovery has had virtually no effect in terms of creating new jobs. For example, Quebec has recovered only 25 per cent of the jobs it lost during the recession, while the recovery rate in the rest of Canada is slightly higher at 40 per cent. As I said, the recovery is anemic everywhere. In Quebec and in Canada, unemployed workers and families struggling to make ends meet will suffer even more as a result of the Finance Minister's budget.

Moreover, I would add that the Minister of Finance was not being completely truthful yesterday in so far as Canadian economic policy is concerned when he stated with a straight face and without encountering any opposition that his government, the Canadian government, was very proud of the fact that since October 26, it had followed through on its election platform as set out in the red book. In referring to monetary policy, he said that his government had set monetary policy right so that it would never again jeopardize economic recovery. The minister is making fun of Quebec and Canadian taxpayers. What a joke!

Last December, I attended a press conference at which the Minister of Finance was accompanied by the new Governor of the Bank of Canada, Mr. Thiessen, who was the principal adviser to and right-hand man of the former governor, John Crow. Mr. Thiessen took this opportunity to unveil his monetary policy. And what was his monetary policy? They have exactly the same monetary policy as the previous administration, with their relentless and dogmatic fight against inflation without paying any attention to this goal they claim to have, namely job creation. Stop kidding the people and stop telling them that, once recovery really gets under way-if and when that happens and if this government does not jeopardize it-the Governor of the Bank of Canada will take, as he did during the first quarter of 1990, drastic measures to bring inflationary pressures under control.

I did not understand the point the minister was making yesterday when he said that this policy was changed to reflect a quantitative target to achieve balance between long-term price stability and short-term job creation requirements.

[An hon. member]

The red book has turned blue.

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

Exactly! I was also surprised to notice that there was nothing in this budget to help the business community, and the small and medium-sized businesses of Quebec and Canada in particular, face the challenge of globalization. Again, the red book is disregarded, because the red book said this was a priority, that support would be provided to the small and medium-sized businesses to help them recover from the recession and face market globalization. What do we find in this budget? As expected, the Minister of Finance was true to himself and the budget is pure posturing. It reflects a taste for consultation, consultation and more consultation, without ever making decisions or taking positive steps.

The Minister of Finance is suffering from acute consultation fever. When he said: "Working in partnership with the private sector and the financial community, the government will seek the best possible way to provide long-term funding to businesses". The government is not making any decision, only a commitment with regard to consultation. I am still new to some things, but I get the distinct impression that I have been hearing about nothing but consultation, whether in the form of constitu-

tional talks or citizens' forums like the Spicer Commission on the future of Canada, the future of something which is technically flawed.

That is something! I quote another passage from the budget speech, where it says: "The government will undertake a thorough review of federal spending on science and technology, in order to implement a more effective policy to assist research and development".

Once again, for about five years, Canada has had a chronic R and D deficit; it is lagging in technological development, the key to meeting the challenges of globalization, and we are told that a thorough review will be done. What credibility can the Minister of Finance and this government have in presenting such things to us?

Still quoting the Minister of Finance: "The Minister of Industry, with funds available in 1994-95, will establish a program of technological partnerships to strengthen co-operation between public and private institutions, so that the results of research lead to new products and employment". For ten years we have been discussing these things, for ten years we have had no decision and the minister is continuing this governmental inaction.

I think that the time has come to act, to stop discussing, to stop sitting around a table and trying to develop new partnerships. The partners are there. They are waiting for this government to get out of its laissez-faire attitude, to make concrete decisions and not to compromise the economic recovery by its actions, by increasing taxes or in various ways. That is what people want. Presenting things like that is not serious.

Another very important point in the budget, which I found particularly disturbing, yesterday we discovered-I hear laughter from the other side, that is not serious, but so is the budget-who the real Minister of Human Resources Development was and we saw that it was the Minister of Finance, the member for LaSalle-Émard, who was dictating to the Minister of Human Resources Development that he would have to do without $7.5 billion for social programs over the next three years.

I was shaken because there always is some trust between individuals and I believed the members opposite were serious in some regards. When the Liberals were the Official Opposition, they said that social programs should not be tampered with and they warned the Conservatives against meddling with the Canada Assistance Plan and the federal contribution to post-secondary education.

The current finance minister and the Prime Minister rent their clothes every time the Conservatives talked about changing social programs one iota. In this regard, yesterday the minister made everyone proud and happy by presenting us with a $7.5 billion budget reduction plan over the next three years.

What kind of social conscience do these people have? Is this how they intend to restore tax equity and fairness in Quebec and in Canada? Is this what they had in mind? Is attacking the underemployed and the poor what they were thinking of? It is outrageous.

The Leader of the Bloc Quebecois and Leader of the Official Opposition was right. When the members opposite talk about reforming social programs or about reforming the health-care system, like the hon. member for Hull-Aylmer did, they are talking about cuts. They are not talking about improving the systems but about cuts, pure and simple. We had undeniable proof of that yesterday.

It is the same thing with social housing. As you know, Madam Speaker, maybe better than I do, 1.2 million Canadians, mostly women and young children, are waiting for social housing. Why is that? It is because these people spend between 30 and 50 per cent of their income on rent. This means that they have roughly half of their income left for clothes, hydro, telephone, medication and unforeseen expenses.

Not that long ago, some poor people from Quebec and every part of the country took part in a demonstration here in Ottawa. This is actually a good opportunity to make a point. Five MPs were there to meet these people, and all five were Bloc Quebecois members. Neither the Liberal Party nor the NDP were represented.

These people asked us to be their spokespersons and tell this House as well as other Quebecers and Canadians about their plight and their daily hardships. The hon. members for Laurentides and Ahuntsic, a couple of others colleagues and myself have had the opportunity to work with these people and help them make a budget. Once they had paid for rent, food, clothes-and I mean the bare essentials-and medication for their children, some of these people, particularly single-parent families, had a deficit in their monthly budget. In the case of one person whom I had the privilege of helping with her budget, that deficit was $27.

Again, the Liberals were in opposition last year and they were outraged when the Conservatives announced a $600 million cut in social housing programs. But what are they doing now with this budget? That is the problem: they do nothing to give some hope to the poorest families.

I remind the Minister of Finance and member for LaSalle-Émard that the level of poverty in Montreal has constantly been on the rise in the last ten years. In that city-and the minister should know that since he is one of its prominent representa-

tives-close to 64,000 families, that is one family out of five, spend more than half of their income on rent. This makes Montreal the Canadian city with the largest number of renting households spending more than 50 per cent of their income on accommodation.

There is more, and I want the minister of Finance and member for LaSalle-Émard to listen to this. He is not here? Surely he must be listening to me. Excuse me, Madam Speaker, I apologize. I made a blunder. I wish the Minister of Finance would realize that in Montreal, as I said earlier, 64,000 families-one household out of three-pay more than 50 per cent of their income on housing, and 20,000 people are homeless. Are the Minister of Finance and his government going to close their eyes much longer to this human suffering?

It is time to stop the pretty speeches and take action. The government should stop saying it will do anything at all to help people, when it agrees to maintain a decision to cut $600 million from the budget for social housing.

I have a few comments on national defence, since the Minister of Finance and the Minister of National Defence referred to the Bloc's position on the subject this afternoon. The measures in this budget are not what the Bloc Quebecois asked for. I will explain, perhaps for the last time in this House, what the Bloc's position was on the budget for National Defence. The Bloc Quebecois was in favour of a 25 per cent cut in the defence budget. It favoured using part of the resulting savings on reconversion of defence industries to civilian use, something which is entirely absent from the budget plan of the government and its Minister of Finance. It is not the same perspective. They can use as much political rhetoric as they like, as the Minister of National Defence did this afternoon, but they cannot deny that this was requested by the Bloc Quebecois.

Second, we asked, and we defended the principle during the election campaign, that a fair share of Canada's national defence budget be spent in Quebec. We asked that fairness be restored to the system before proceeding with drastic cuts just about anywhere.

Today, and the Official Opposition defence critic will correct me if I am wrong, about 19 per cent of Canada's national defence budget, let us say between 17 and 19 per cent, is attributed to Quebec, although Quebec represents 25 per cent of the population, and now they say: of course you will agree with the closing of the only francophone military college in North America. I think that is outrageous. We will never agree with that decision, and I can assure you that in the case of the Collège militaire royal in Saint-Jean, the Bloc Quebecois and its supporters, and I think we have quite a few in Quebec today, will stand and fight, and I mean this quite seriously, against the closing of the only francophone military college in North America.

[Some hon. members]

Hear, hear.

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

Time is flying, but I was told I had unlimited time. I find that fantastic, although I would not want to exaggerate.

I would like to say a few words on international assistance. We did not talk much about that, and I think we should start. The budget contains a 2 per cent cut in international assistance. That is a $400 million reduction in the budget over the next three years.

The Bloc Quebecois, short of increasing the budget for this item, would have asked the government to keep the level of Canadian development assistance, because we are still quite far from the objective of 0.7 per cent of our GNP for international aid programs. As I could see during my years of employment with a farmers union, poverty in Latin America as well as Africa is not only still there, but it is increasing. The government could have corrected some of the administrative problems in international development that the Auditor General pointed out in his last report. We should, at least, have had the decency of maintaining the level of our international assistance, our commitment to helping the neediest on this planet. It seems to me that it is not much to ask of a country like Canada.

We should not forget that every time we teach people in the developing world to do something, they become wealthier and therefore, they acquire goods and services in Canada. Such a cut is therefore postponing possible growth in the demand for Canadian goods and services. From an economic point of view, the only one that the government ever takes into consideration, this fact should have been remembered. We deplore the $400 million reduction in international development assistance over the next three years, while children in Africa and Latin America continue to die every day.

In conclusion, I would just like to say that this budget is devoid of the measures that the government should have taken. Moreover, its spending reduction targets are ridiculous because as I said at the outset, in nominal terms, expenses will not be reduced over the next three years. In fact, spending levels will remain relatively stable.

This budget does not contain any serious measures which would allow the government to get its finances in order. As many observers have pointed out since yesterday, it is not a visionary budget. It does not contain any job creation incentives to give some hope back to the 1.5 million Canadians and 460,000 Quebecers who are unemployed. The middle class is being taxed to death, while the poor and the disadvantaged will feel the effects of cuts to social programs.

If I may digress for a moment, last week I was rereading René Lévesque's memoirs and a thought came to mind. As you know, in Quebec, Mr. Lévesque left us with a legacy whereby political parties can only accept contributions from individuals. I notice that the federal Liberal Party and the Reform Party have no such system in place. This seems to be the case just about everywhere in Canada. I wonder if the fact that the Liberals do not have such a system explains in part why they did not move in this budget to close the various tax loopholes which benefit large corporations or to do away with family trusts which benefit the wealthiest members of society.

I went and got a copy of the report the Federal Liberal Agency of Canada submitted last year to the Chief Electoral Officer of Canada, only to discover that among the contributors whose names I will not mention -the report is public domain, anybody can refer to it- there are Canadian manufacturing industries which have contributed up to $68,000 to the election fund of the Liberal Party of Canada. Probably the same ones dodging tax in tax havens like Barbados and the likes. I also noticed that the Liberal Party of Canada received from banks and trusts companies amounts ranging from $12,000 and $45,000. They are the ones responsible for administering family trusts.

I wondered if that did not explain in part why the government across the way, the Liberals, did not eliminate this kind of preferential tax treatment for contributing friend of the Liberal Party of Canada. When you accept contributions like that, you have to expect to have your hands tied once you are in office. You must also expect that you will not really be free to make the right, timeliest and fairest decision. I wondered if that was not the reason. If indeed it is, I am outraged. If not, prove it to me. Let our friends opposite put in place a system based on René Lévesque's great legacy, a system similar to the one we, the Bloc Quebecois, have adopted.

Our hands are not tied. We can speak on behalf of middle-income taxpayers and those suffering the most hardship in our society, without the diktat of large corporations and the wealthiest families of Quebec and Canada being imposed upon us.

To conclude, I would ask the Minister of Finance to take off the work boots the Prime Minister has offered him, because I believe he is not worthy of wearing them.

I therefore move:

That the motion be amended by deleting all the words after the word "That" and substanding the following:

"this House denounce the reversal of the Government's position on the budget which:

(a) tackles the problem of the deficit on the back of a middle class already bled white by the tax increases of recent years:

(b) gives up trying to control spiralling deficit-related expenditures by basing its fiscal analysis on unrealistic revenue projections;

(c) refuses to eliminate tax loopholes for the wealthy and for big business;

(d) abandons the poor to their fate by its readiness to slash funding for social programs; and

(e) continues the destructive policies of preceding governments by demonstrating a flagrant lack of long-term vision and by giving no hope to the jobless."