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.