House of Commons Hansard #29 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.


House Of Commons

10 a.m.

The Speaker

My colleagues, I have the honour to lay upon the table the expenditure plan in relation to the 1994-95 estimates for the House of Commons.

A message from His Excellency the Governor General transmitting estimates for the financial year ending March 31, 1995, was presented by the President of the Treasury Board and read by the Speaker to the House.

Main Estimates, 1994-95Routine Proceedings

10:05 a.m.

York Centre Ontario


Art Eggleton LiberalPresident of the Treasury Board and Minister responsible for Infrastructure

Mr. Speaker, I submit Part II of the estimates for laying on the table.

I would also like to table in support of the estimates Part I, the government expenditure plan. In addition I will table with the Clerk of the House on behalf of my colleagues Part III of the estimates consisting of 76 departmental expenditure plans.

These documents will be distributed to the members of the standing committees to assist in their consideration of the spending authorities sought in Part II of the estimates.

Government Response To PetitionsRoutine Proceedings

10:05 a.m.

Kingston and the Islands Ontario


Peter Milliken LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to several petitions.

Main Estimates, 1994-95Routine Proceedings

10:05 a.m.

York Centre Ontario


Art Eggleton LiberalPresident of the Treasury Board and Minister responsible for Infrastructure

Mr. Speaker, today I present the 1994-95 main estimates for the Government of Canada.

I have the honour to table the first Estimates of this 35th Parliament, which contain the government's expenditure plans, department by department, program by program, for the next fiscal year.

I take pride that these estimates reflect the commitments we made to Canadians in the election last fall. They reveal a balanced approach in which the government supports growth and creates jobs while taking steps to reduce the deficit.

The main estimates set out the details of $160.7 billion in planned expenditure in the next fiscal year. This includes the $112.1 billion in statutory expenditure that flows from legislation that Parliament has previously approved and $48.6 billion in expenditures for which we are seeking parliamentary authority at this time.

The main estimates are the first step in carrying out the expenditure plan amounting to $163.6 billion set out in the budget of two days ago delivered by my colleague, the Minister of Finance.

However, unlike the budget, the main estimates do not include reserves and they do not anticipate the impact of proposed legislation. In other words, if legislation has not yet been passed then the dollar figures would not be in the main estimates.

The main reason total spending is up is the increase in public debt charges. Program spending, which is our total spending less public debt charges, is virtually flat, increasing by only 0.7 per cent. Spending on most programs is down.

Old age security and aboriginal programs account for a large part of the increase in program spending. That is because of an increase in the population in those two categories which are drawing on the programs.

As the Minister of Finance made clear two days ago, this is a budget that sets in motion the most comprehensive reform of government spending policy in a decade. The budget tabled on

Tuesday and the main estimates that I table today provide a framework for the future delivered by a government for the future.

One of the clear policy planks of this government is that we are going to do what must be done and we are going to do it in a fiscally responsible way.

In the main estimates we have set a course of action for each component of the agenda in "Creating Opportunity", better known as the red book. Canadians have told us that job creation is a high priority and in the red book we have said that a national infrastructure program would be a key element in job creation.

Since we have come to office, I am proud to say that we have made this a reality by signing agreements in every province across this country. In the main estimates we are asking Parliament to appropriate more than $700 million in the coming fiscal year for the implementation of this program.

Also in the red book we said we would impose further cuts in operating budgets by some $400 million in 1994-95, increasing to $620 million in the following two years. The main estimates reflect the commitment. We hope that we can generate a lot of these savings through efficiency gains, but we realize that it may also require having to set priorities.

Of the $400 million just mentioned, the largest part will come from savings on professional services. These are services that we contract for. We will shortly be asking Parliament to look at this whole area of contracting out.

However, this was not enough. Solving our fiscal problem required taking more restraint measures in the operating budgets. We looked at different options available to us. We looked at what other governments and the private sector were doing. We consulted with our public service unions in this process. In the end we did what we believe is best for Canadians, best for public service employees and for the economy.

As the Minister of Finance stated in the budget, we extended the freeze on the federal public service for a further two years and we suspended annual increments for two years beginning in 1994-95. We also provided for the opportunity, working with our employees and working with their bargaining agents, to be able to shorten that period of time by finding other efficiencies in government spending so that we could in fact end that freeze at an earlier time.

We believe that under the circumstances this was the best course to follow. It allows us to better protect jobs while minimizing the impact of our ability to deliver quality services to Canadians at the lowest possible cost.

The reduction in the defence budget reflects reality. We had a defence structure that reflected the priorities of the past. The world order was changing and we had to adapt. The result will be an armed forces that will meet our future needs.

Reductions in our international assistance funding is a statement of our fiscal capacity rather than a reflection of what really is the need. We will nonetheless continue to spend $2.6 billion on international assistance as is shown in the main estimates.

Canadians told us that grants to business were not getting the best value for the tax dollar. We made it clear in the red book we would cut grants that were not of value in helping small and medium sized business and we have done that.

Canadians were vocal in expressing their desire to reform the unemployment insurance program because it was more than taxpayers could afford. The payroll tax required to pay the benefits was putting us in an uncompetitive position vis-à-vis our trading partners. We had to take action and we have.

In the main estimates 16 per cent of the total spending is in payments to other levels of government and 25 per cent is in payments to persons such as the old age security and unemployment insurance. The government will spend about $62 billion on social programs and $4.8 billion on natural resource based programs, $3.9 billion on industrial, regional and scientific programs, $2.8 billion on transportation programs, about $3 billion will go to cultural and heritage programs, $3.3 billion for justice and legal programs, and $6.4 billion for general government operations.

My colleague the Minister of Finance made it clear in his speech this is only the beginning of reform. He announced that over the next year we would make service delivery more efficient and effective and we will do that.

As a result of the course set out in the budget, program expenditures will decline in real terms between now and 1995-96. Even now, as I said earlier in my remarks, expenditures are virtually flat with last year.

Our annual deficit is on a downward curve, a very important downward curve, and we have set our sights on the fiscal objective of a deficit which amounts to no more than 3 per cent of all the goods and services we produce in Canada in a given year.

This is the true sign of a government that listens to the electorate, shows leadership, takes decisive action, consults its partners, and sets a clear vision for the future of each and every Canadian.

Main Estimates, 1994-95Routine Proceedings

10:15 a.m.


Richard Bélisle Bloc La Prairie, QC

Madam Speaker, what strikes me upon reading the 1994-95 Estimates tabled by the Minister responsible for Treasury Board is that, compared with the 1993-94 budget, there is a 0.5 per cent reduction in transfer

payments and a 3.2 per cent reduction in other program spending, while at the same time the cost of servicing the debt has gone up 3 per cent. This means that budget cuts are being made to accommodate an increase in the cost of servicing the debt.

The government's policy in the years to come will be to cut transfers to individuals and transfer payments to the provinces. However, as we postpone these cuts, the debt increases accordingly, as shown in the budget, which means even larger cuts will be necessary in the future, always to accommodate the cost of servicing a debt that will soon be out of control. We are fast approaching the breaking point.

As the debt increases and transfers to individuals are cut back, the gap between rich and poor widens. The gap between the various levels of our society has never been greater, and is getting wider. Ironically, the cumulative debt of the past 20 years was the result of a desire to redistribute wealth across the country.

When servicing the debt means transferring tens of billions of dollars from taxpayers to investors, this will create even greater gaps between the rich, the middle class and the neediest in our society. Is this the failure of the Canadian model of a just society, an echo from another era?

Total budget expenditures are forecast at $163.6 billion, an increase of 2.1 per cent. We are told that more than 75 per cent of this increase, or 1.6 per cent, is due to the cost of servicing the public debt. The impact of the debt on the estimates will get worse over time because the government's spending cuts are not enough, as was illustrated by the minister's speech this morning.

The cost of servicing the public debt is $41 billion, compared with $38.5 billion last year. Program spending is estimated at $122.6 billion, compared with $121.8 billion last year, a difference of only 0.7 per cent, while debt charges are 6.5 per cent higher than last year.

This year, cuts in operating costs-departmental budgets-amount to $413 million, out of a total $2.1 billion in cutbacks. My point is that departmental budget cuts represent only 19 per cent of the total reduction in operating costs. The $725 million cut in unemployment insurance, however, represents 33 per cent of total reductions. Reductions in business transfers add up to $117 million or 5.3 per cent of total cuts. I think it is clear where this government's priorities are. It uses the unemployed to get the cuts it cannot make in its own operations.

Cuts in the departments represent less than 2 per cent of the government's operating costs, of which a substantial 19 per cent is generated by defence. There was no disciplined item by item assessment by the government, as the Bloc Quebecois had requested.

However, there is still fat and waste in government operations. The Auditor General estimates that if the government stopped the waste, the potential savings would amount to several billion annually. A reduction of $400 million in operating costs, less than 2 per cent, is certainly not enough when the cost of debt servicing increases by $2.5 billion during the same period.

The government has failed to make the necessary reductions in spending. Only a reduction in expenditures achieved by eliminating waste and poor management procedures will in the long run reduce the tax burden on the middle class that has caused the underground economy to flourish, as we have seen repeatedly during the past few months.

Although so-called spending cuts were announced with a great deal of publicity, government program spending will increase again this year, by another $800 million. This amount corresponds to statutory programs such as equalization.

Instead of coming down hard on the unemployed and senior citizens, whose age credit has been cut, the government should have acted immediately to streamline government operations by getting rid of the duplication and overlap that costs the government between $2 and $3 billion annually. This is nearly eight times the cuts made in this government's budget plan.

Second, the government should make further reductions in defence spending. A 12 per cent cut is planned over five years, while the Bloc Quebec asked for a 25-per cent cut. The Collège militaire royal in Saint-Jean should not be closed until Quebec has received its share of national defence spending, on a per capita basis. This closing does not make sense, especially since the college had just been renovated at a cost of several million dollars.

In concluding, I would like to add that the government should have made further spending cuts and invested half of this spending room in job creation and the other half in reducing the debt. Most analysts agree that the infrastructure program does not do enough because it creates only 45,000 temporary jobs and is, in the final analysis, the employment recovery program the government announced with so much fanfare.

Main Estimates, 1994-95Routine Proceedings

10:20 a.m.

Lethbridge Alberta


Ray Speaker ReformLethbridge

Madam Speaker, I appreciate the opportunity to speak to the resolution before us and certainly in recognition of the tabling of the estimates. As we examine the presentation today and the budget which was given to us on February 22, we have some very major concerns. They are concerns that reflect the attitudes of Canadians.

The first concern is that the debt of the country is going to be our downfall and we must recognize that. The second concern is that along with the debt is the annual debt or the deficit which continues to hang over our heads, not only as taxpayers but members of Parliament. We have to deal with it. It is very basic.

We cannot afford in the next three years to accumulate $100 billion more of debt.

The estimates of 1994-95 start that process. They place before us $39.7 billion as the deficit. That is the best the government could do in its budgeting process. It could not do any better and it is not good enough. We have to sit here as parliamentarians and face that.

The government tried to tell us it has a plan to cut in the future. It is going to use studies to bring about the cuts. From my experience any time a group of legislators and private citizens work together, any recommendations that come back to the assembly usually demand more money.

I do not think any terms of reference went to those committees, particularly terms of reference with regard to social programs. The Minister of Human Resources Development said he would like to see the cost of social programs reduced but that those programs be targeted. I did not hear that in the terms of reference. Those should have been the initial terms of reference for those kinds of programs. That was not there.

The government is continuing a pattern of spending more. All of the deficit reduction in this budget, the amount of money applied to the deficit, comes from revenue growth. None of it comes from substantial, deliberate, priorized reductions of spending across government.

Nothing in these estimates presented to us today really deals with the fat of government, the overlap of government, the inefficiency of government, the bloating of government that occurred between 1975 and 1982. There is nothing in these estimates that represents significant changes from the trends of that period of time. The government is continuing the way it is.

I would like to say something with regard to the reductions. First, the government claims that it has made some major reductions and will make major reductions in expenditures over the next three years. The projections are $11 billion.

In the estimates before us the reduction is $3.7 billion. If one examines the budget book that was presented to us on February 22, 25 per cent of the reductions came from Tory policies, not from Liberal initiatives. That is the first item. Therefore how can the government take much credit for the reductions in the estimate expenditures?

Second, let us talk about the estimates for 1994-95. The reductions are $3.7 billion which is not much in a major budget of some $163 billion. New initiatives is $2.2 billion which leaves us $1.5 billion to apply to the deficit. That still leaves us with $39.7 billion. That is not much. Why did the government not look at the reductions and say it should apply all of the $3.7 billion to the deficit and do something with a little more significance?

Many of the funds were reallocated internally without consulting Parliament. We as parliamentarians should be able to ask the questions. For example, when certain programs are being cut, what is being cut out? After a program has been reallocated we should be able to ask the cost of the new priority, is it necessary, where will the money come from and can we do it for less. We really did not get a chance to do all of that in the process. We will possibly have that opportunity in the estimates.

I have a last point to the government in the time I have left. I hope that the government will really make a serious commitment, in the words spoken by the Minister of Finance yesterday, so committees will be able to review these matters, make recommendations and that the government will listen to those recommendations and implement them. I hope during this 35th Parliament that will be a major change. If government is that open and able to allow that, we will have a tremendous Parliament and one that is really democratic.

I recommend to the government not to become political and terminate that process through which a committee recommends decisions that are a little difficult to initiate. Committee reports and recommendations are number one to an effective process of dealing with the estimates.

Committees Of The HouseRoutine Proceedings

10:30 a.m.


Warren Allmand Liberal Notre-Dame-De-Grâce, QC

Madam Speaker, I have the honour to present, in both official languages, the first report of the Standing Committee on Justice and Legal Affairs. Pursuant to the order of reference on Friday, February 4, 1994, your committee has considered Bill C-4, an act to amend the Crown Liability and Proceedings Act, and has agreed to report it without amendment.

Committees Of The HouseRoutine Proceedings

10:30 a.m.


Jim Peterson Liberal Willowdale, ON

Madam Speaker, I have the honour of rising today to present the second report of the Standing Committee on Finance. This is in accordance with the order of reference of Wednesday, February 9, 1994. Your committee has considered Bill C-3, an act to amend the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, and has agreed to report it without amendment.

May I also take this opportunity to say this is the second report to the House from the Standing Committee on Finance. I just want to thank all members of that committee who have worked so hard in the spirit of constructive co-operation to

bring in a second report in addition to all of the other business the committee has had to do. I thank all members.

Main Estimates, 1994-95Routine Proceedings

10:30 a.m.

York Centre Ontario


Art Eggleton LiberalPresident of the Treasury Board and Minister responsible for Infrastructure

Madam Speaker, pursuant to Standing Orders 81(4) and 81(6), I move:

That the main estimates, 1994-95, tabled this day, be referred to the several standing committees of the House as follows:

Since the list is rather lengthy, I would ask that it be printed in Hansard at this point without being read.

Main Estimates, 1994-95Routine Proceedings

10:30 a.m.

The Acting Speaker (Mrs. Maheu)

Is that agreed?

Main Estimates, 1994-95Routine Proceedings

10:30 a.m.

Some hon. members


To the Standing Committee on Indian Affairs and Northern Development

Indian Affairs and Northern Development, Votes, 1, 5, 10, 15, L20, L25, 30, 35, 40, 45 and 50

To the Standing Committee on Agriculture and Agri-Food

Agriculture and Agri-Food, Votes 1, 5, 10, 15 and 20

To the Standing Committee on Canadian Heritage

Canadian Heritage, Votes 1, 5, 10, 15, L20, L25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75, 80, 85, 90, 95, 100, 105, 110, 115, 120, 125, 130, 135, 140 and 150

To the Standing Committee on Government Operations

Canadian Heritage, Vote 145

Finance, Vote 55

Governor General, Vote 1

Parliament, Vote 1

Privy Council, Votes 1, 5, 10 and 30

Public Works and Government Services, Votes 1, 5, 10, 15, 20, 25, 30, 35 and 40

Treasury Board, Votes 1, 5 and 10

To the Standing Committee on Natural Resources

Natural Resources, Votes 1, 5, 10, L15, 20, 25, 30, 35, 40, 45 and 50

To the Standing Committee on Environment and Sustainable Development

Environment, Votes 1, 5 and 10

To the Standing Committee on Foreign Affairs and International Trade

Foreign Affairs, Votes 1, 5, 10, 15, 20, 25, L30, L35, 40, 45 and 50

Public Works and Government Services, Vote 45

To the Standing Committee on Finance

Finance, Votes 1, L5, L10, L15, 20, L25, 35 and 50

National Revenue, Votes 1, 5, 10, 15 and 20

To the Standing Committee on Fisheries and Oceans

Fisheries and Oceans, Votes 1, 5 and 10

To the Standing Committee on Health

Health, Votes 1, 5, 10, 15, 20, 25 and 30

To the Standing Committee on Human Rights and the Status of Disabled Persons

Justice, Vote 15

To the Standing Committee on Industry

Atlantic Canada Opportunities Agency, Votes 1, 5 and 10

Finance, Votes 40 and 45

Industry, Votes 1, 5, 10, L15, L20, 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75, 80, 85, 90, 95, 100, 105 and 110

Western Economic Diversification, Votes 1 and 5

To the Standing Committee on Justice and Legal Affairs

Justice, Votes 1, 5, 10, 20, 25, 30, 35, 40 and 45

Privy Council, Vote 35

Solicitor General, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45 and 50

To the Standing Committee on Human Resources Development

Human Resources Development, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40 and 45

To the Standing Committee on Procedure and House Affairs

Parliament, Vote 5

Privy Council, Vote 20

To the Standing Committee on National Defence and Veterans Affairs

National Defence, Votes 1, 5, 10, 15 and 20

Veterans Affairs, Votes 1, 5, 10, 15 and 20

To the Standing Committee on Public Accounts

Finance, Vote 30

To the Standing Committee on Transport

Privy Council, Vote 15

Transport, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45, 50, 55 and 60

To the Standing Joint Committee on Official Languages

Privy Council, Vote 25

To the Standing Committee on Citizenship and Immigration

Citizenship and Immigration, Votes 1, 5, 10, 15 and 20

To the Standing Joint Committee on Library of Parliament

Parliament, Vote 10

(Motion agreed to.)

PetitionsRoutine Proceedings

10:35 a.m.


Grant Hill Reform Macleod, AB

Madam Speaker, it is a privilege to present a petition to this House from the members of my constituency in Glenwood, Alberta. This petition relates to the post office and it is an honour to present this petition on behalf of those constituents.

PetitionsRoutine Proceedings

10:35 a.m.


Chuck Strahl Reform Fraser Valley East, BC

Madam Speaker, it is my duty and honour to rise and present a petition duly certified by the Clerk of Petitions from over 400 concerned citizens in the beautiful Chilliwack River valley of my constituency of Fraser Valley East.

The petition states that incidents of flooding, related problems with roads, utility lines and residential homes and businesses are becoming more and more frequent since the disastrous floods of 1989 and 1990. Each such incident threatens public safety, devalues property and hinders the ability of residents to obtain mortgages and home insurance.

As a result the petitioners humbly pray and call upon Parliament to implement the Chilliwack River valley hazard management plan through the Government of Canada's infrastructure program.

PetitionsRoutine Proceedings

10:35 a.m.


Nelson Riis NDP Kamloops, BC

Madam Speaker, it is a privilege to present a petition on behalf of constituents from Kamloops, Chase, Savona, Pinatan, Knutsford, Little Fort, Barriere, Birch Island, Monte Creek, Pritchard, Monte Lake, Westwold, Blue River and Clearwater.

These constituents point out their concerns regarding the Young Offenders Act. They suggest that the act as currently enacted is inadequate for the needs of a modern society. They are asking Parliament to review the Young Offenders Act and take the necessary steps to ensure appropriate sentencing, better post-custody supervision and more effective rehabilitation programs.

Questions On The Order PaperRoutine Proceedings

10:35 a.m.

Kingston and the Islands Ontario


Peter Milliken LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Madam Speaker, I would ask that all questions be allowed to stand.

Questions On The Order PaperRoutine Proceedings

10:35 a.m.

The Acting Speaker (Mrs. Maheu)

Shall the questions be allowed to stand?

Questions On The Order PaperRoutine Proceedings

10:35 a.m.

Some hon. members


Questions On The Order PaperRoutine Proceedings

10:35 a.m.

The Acting Speaker (Mrs. Maheu)

I wish to inform the House that pursuant to Standing Order 33(2)(b), because of the ministerial statement, Government Orders will be extended by 24 minutes.

The House resumed from February 23 consideration of the motion that this House approves in general the budgetary policy of the government; the amendment; and the amendment to the amendment.

The BudgetGovernment Orders

10:35 a.m.


Jack Frazer Reform Saanich—Gulf Islands, BC

Madam Speaker, subsequent Reform Party speakers will be splitting their time, to 10 minutes and five minutes for questions and comments.

This morning I would like to address the budget from the point of view of the defence department and first of all to congratulate the government on some good measures it has taken. I have noted it is looking at reducing the rank structure in the Canadian forces and thinning out the level of middle management. Both these items are long overdue and will provide more people at the pointed end and fewer in the administrative support tail.

It is looking to amend its management practices, to delegate and lower the responsibility level to base commanders and other unit commanders, to do away with bureaucracy. This will make the process much more efficient and more cost effective.

It is looking at off the shelf purchases. For far too long Canadians have tended to put in special frills and things that required additional engineering which wound up costing more and taking much longer to implement. I think the off the shelf purchases are a very good idea.

We are looking at contracting out some of the things that Canadian forces personnel currently do. This as well is a step in the right direction.

I understand from the defence document that we are going to look at contracting out flight training at Moose Jaw. I know this has worked very well at Portage la Prairie in basic training and I must admit I have some personal misgivings about putting the training of our air crews into other than military hands. However, certainly it has worked at Portage la Prairie and we should definitely investigate it at Moose Jaw.

I also note that group headquarters has been combined for efficiency and moved air combat, which used to be fighter group headquarters, from North Bay to Trenton. The same will be done

with 10 tactical air group headquarters from St. Hubert to combine with air transport group at Trenton. Again, this is a refining and efficiency measure which will pay dividends.

The government also mentioned some infrastructure reductions, some $850 million over five years by the 1997-98 timeframe. By that time savings will be $350 million a year. I will be speaking to this from the other point of view in a few moments. However, I think all people who have looked at the defence department have been aware that there has been an overabundance of infrastructure in that force and it was time to reduce it.

However, I do think that defence has become an easy target. All parties in the last election, with the exception of the Reform Party, were aiming very strongly at large cuts in defence. I think this may be premature and that people do not appreciate the current state of the defence force.

Basically it has been underfunded since 1972 when Mr. Trudeau made dramatic cuts. He was reminded of the inter-relationship between defence and trade when he tried to make the cuts in NATO and very shortly found out that it would impact dramatically on Canadian trade. He reversed his decision on the cuts he was proposing.

The world situation has changed, without question. The relationship between the two superpowers has evaporated. However, rather than providing us with a more stable world, this has provided a much more volatile world, one which is must less predictable and, I would say, more dangerous.

Currently Canada has more troops deployed on operational missions than at any time since the Korean war. The current strength of the Canadian forces is 75,000 in round numbers. The government is suggesting that this should be reduced to 67,000 in round numbers by 1998. I question the wisdom of these cuts, particularly before we have completed a defence review to establish what we want the Canadian forces to accomplish.

I am not certain at the moment that 75,000 is a sufficient number to do the jobs Canadians will be asking their forces to do. I believe it really is premature to suggest that we should be cutting this number even further.

I am glad to see the reserve force staying constant at 30,000, although I believe there may be some need to expand its uses if we go to the total force concept and it is found to be workable.

Regarding budget cuts, over the period from 1989-97 the previous government had programmed in $14 billion in defence budget reductions. This government has now implemented an additional $7 billion deduction in the defence budget between 1994 and 1999. This is a total of $21 billion over 10 years, a substantial reduction in a budget of only $12 billion. This again has been done before we know what we are going to be asking the defence forces to do. I think this is premature.

These defence cuts have reduced the operations and maintenance budget so that operational and training activities have had to be reduced by 25 per cent. In plain words, this means that the navy has and will continue to sail less. The air force has and will continue to fly less and the army has and will continue to train less. This means less well trained and less capable sailors, soldiers and airmen, and that means a reduced operational capability. There is no question that the training required by the forces increases its ability to do the job we ask it to do. Reducing its training reduces its operational capability.

The government has said that one half of the $7 billion reduction over the five years in the defence budget will come from the cancellation of the EH-101 helicopter project. I remind hon. members that the EH-101 was a 13-year program extending to the year 2002 with the heaviest spending occurring in the years 1998 and 1999. The $5.8 billion to which the government is referring is based on 2002 dollars rather than the original cost for the EH-101 which in 1991-92 dollars was $4.3 billion. I suspect its number is not accurate, its $3.5 billion saving.

Also missing from the figures totally is the cost of the cancellation of the EH-101 program, payments to contractors who had already invested substantial sums in the program. This is estimated to be anywhere between $500 million but more likely close to $1 billion. This appears nowhere in the budget.

The Minister of National Defence said yesterday that this would not be coming from the defence budget, but if it is going to be paid it is paid out of our own budget. Since it is not identified that means it is in addition to the $39.7 billion the government has already estimated.

In addition, the minister points out on page 2 of the budget impact document:

The Department will still have to find the money for replacement helicopters should the requirement be confirmed in the defence policy review.

He said also, and I agree with him, that the likelihood was that the need for these helicopters would be confirmed in that defence review.

Depending on the helicopters that are chosen to be bought, we can spend as much or even exceed the cost of the original EH-101 program. The Canadian environment provides an atmosphere that is perhaps among the most challenging for flying operations the world knows.

Canada is a beautiful country. It is one I have chosen over a many other countries, having visited them. It has many advantages but we have long and rather severe winters. When we have winter weather we have icing conditions. When we have icing

conditions we have problems for flying machines, particularly helicopters.

Whatever airplane we buy it should have the ability to fly in icing conditions. I point out that when the Ocean Ranger went down off the coast of Newfoundland it took 36 human lives with it. Both the Sea King and Labrador helicopters were grounded in Halifax at that time. They were unable to fly because of a combination of icing conditions and fog.

The EH-101 helicopter could have operated in those conditions and may very well have saved those lives on the Ocean Ranger. Any helicopter we buy to operate in Canada whether it be from ships or in search and rescue should be able to have the range, the speed, the capacity and the ability to fly in icing conditions.

Let me move on to another cost saving measure, the reduction of infrastructure. The government has announced that it will close four bases: the base at Cornwallis, the base at Chatham, the base at Ottawa, and the base at Toronto. A total of $185 million is identified in the defence document as the cost of those closures. I do not think they are going to include termination training, allowances for civilians or transfer costs for military personnel.

The gift of the station at Downsview to the city of Toronto as a gift in perpetuity, a park, is a super thing. Is my time up, Madam Speaker?

The BudgetGovernment Orders

10:45 a.m.

The Acting Speaker (Mrs. Maheu)

The member's time has expired. Could he conclude please.

The BudgetGovernment Orders

10:45 a.m.


Jack Frazer Reform Saanich—Gulf Islands, BC

Basically there are some good things in the budget, but there are many things which are incomplete and have not been thought through. Budget day in 1994 was not only a disappointing day for Canada; it was not a good day for Canada's defence force.

The BudgetGovernment Orders

10:45 a.m.


John Richardson Liberal Perth—Wellington—Waterloo, ON

Madam Speaker, I listened with great interest to the hon. member for Saanich-Gulf Islands. He made some very good points in his speech.

I know from his experience the infrastructure was like an albatross around the neck of the forces in terms of budgets for the past 10 to 12 years. The move was seen by all professional officers as an excellent one, as a way to free up money for the needed things he mentioned in his speech. The government should be applauded for taking the stand to depoliticize the nature of bases. I certainly go along with that.

I agree with him that we should not be tailoring the future of the forces based on the budget. A lot of thought has to go into that matter. I hope the committee that is put together will come up with a forward thinking program and task the armed forces appropriately. I look forward to working with him on that future project.

There are other points I would like to make. The British announced today a very serious cut in defence expenditures. As the member just noted, they have gone to a ratio of total force. They call it a one army concept, a one navy and one air force concept. Here we call it total force. They are putting more resources into upgrading the quality of the reserves as a method of rapid expansion in case of need.

As the member appropriately indicated, we may probably have to look at it in the future as a way to bring the people of Canada into the armed forces by having the reserve component enlarged and increased in competence to take on the roles they do in the German air force, the American air force and the reserve programs, as well as in the army and navy components.

Overall he made some very good points. I want to make clear that the cut in infrastructure was applauded throughout the forces because it was a drain on both financial and human resources. It will release that hopefully for the future growth of the forces.

The BudgetGovernment Orders

10:50 a.m.


Jack Frazer Reform Saanich—Gulf Islands, BC

Madam Speaker, I would like to address the problem of infrastructure. I agree with the hon. member that obviously there was a military hand in the cuts that were made. These were not done for political reasons. I appreciate that. I think it is a step in the right direction.

I would question the wisdom of closing either of the two defence colleges, Collège militaire royal in Saint-Jean or Royal Roads Military College in Victoria. The total capacity of the production of the defence colleges has not been sufficient to provide the Canadian forces officer corps with sufficient graduates.

I can speak for Victoria. The University of Victoria does not have the capacity to absorb additional students. By taking this productivity from Royal Roads the number of qualified graduates that will be available has been cut. If these are supplanted by armed forces training prospects it will cut other people out of the program. It is my understanding the university training given at Royal Roads is very slightly more expensive than that given at any civilian university. I suggest the government was premature in shutting down these two universities.

The BudgetGovernment Orders

10:50 a.m.


Fernand Robichaud Liberal Beauséjour, NB

Madam Speaker, it has been agreed that hon. members on this side of the House, in other words, the Liberal members, will share their 20-minute speaking time, which means two periods of 10 minutes, with the exception of the ministers who will use the full 20 minutes.