House of Commons Hansard #30 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.


Borrowing Authority Act, 1994-95Government Orders

10 a.m.

York West Ontario


Sergio Marchi Liberalfor the Minister of Finance

moved that Bill C-14, an act to provide borrowing authority for the fiscal year beginning on April 1, 1994, be read the second time and referred to a committee.

Borrowing Authority Act, 1994-95Government Orders

10 a.m.

The Speaker

The hon. Parliamentary Secretary to the Minister of Finance and a brand new father, I might add.

Borrowing Authority Act, 1994-95Government Orders

10 a.m.

Winnipeg North Centre Manitoba


David Walker LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, because of the birth of my second child, I have not had an opportunity to speak in the House at length, so I would like to congratulate you on your election as Speaker. I am probably the last member of the House to do this formally, sir, but I would like to congratulate you on your new position. I also congratulate your colleague, who has now taken the chair, and thank you for making things go so smoothly in the first weeks of this House. Thank you again.

I welcome the opportunity to speak at second reading of Bill C-14, the borrowing authority bill. I urge the House to proceed with this legislation as quickly as possible so that new borrowing authority will be in place at the beginning of the new fiscal year.

Before speaking directly to the measures in the bill, I would like to put this legislation in its proper context. The amount of borrowing authority requested in the bill is directly connected to the financial requirements set out in the budget presented earlier this week by the Minister of Finance. The information required to deal with the financial aspects of the bill is set out in the budget.

It is extremely important that this bill be passed as quickly as possible. Without borrowing authority early in the new fiscal year, there will be severe constraints placed on the government's financing program. Essentially the government would be limited to using section 47 of the Financial Administration Act which restricts funding to short-term funds.

No bond issuance will be permitted except to funding maturing issues of which there are very few in the first quarter of 1994 and 1995. Any delay in the passage of this important bill beyond the end of the current fiscal year therefore could prove costly to the government and Canadian taxpayers, and would expose the government to the additional interest rate risk implied by higher short-term funding.

With the large financing program, delaying bond financing will also be potentially disruptive of the capital market which could result in higher debt servicing charges. It is critical that borrowing authority be secured as soon as possible after the budget.

In granting the borrowing authority requested in this bill, hon. members should keep in mind that the budget takes strong action to bring government finances under control. The measures announced in the budget are an essential part of this government's action plan to revitalize Canada's economy.

We do not put forward this request to borrow money lightly. We know there are real costs involved in adding to the country's debt burden. That is why we have taken real action by proposing the most substantial spending reductions by a government in the last 10 years.

As well, in charting Canada's fiscal course in this budget we have relied on cautious, prudent projections of economic growth for this year and next. Consequently the deficit projections are much higher than those given to the House last April.

The economic projections presented in the budget are based on a consensus of private sector forecasts and are in stark contrast to the overly optimistic, some might say unrealistic, expectations of growth presented in some previous budgets, expectations that have resulted in deficit forecasts that were wrong by tens of millions of dollars.

For our part we have served notice that we are committed to changing the way government does business. One aspect of this is the use of prudent projections of economic growth to generate budget numbers that Canadians can trust.

The 1994 budget actions, coupled with the moderate economic growth we are projecting, will reduce the deficit from $45.7

billion in 1993-94 to $39.7 billion in the coming fiscal year. A further drop to $32.7 billion is expected in 1995-96. As a percentage of Canada's economy, the deficit will fall from 6.4 per cent of gross domestic product for this year to 4.2 per cent of gross domestic product in 1995-96. Looking further ahead, the budget sets the deficit on a path to meeting the government's interim deficit target for 1996-97: 3 per cent of GDP or some $25 billion.

In setting this course of responsible deficit control, the government has put the emphasis on actions that will support economic renewal and confidence. Most important, we have emphasized reductions in government spending. Net expenditure cuts will total $17 billion over the next three years and while we have proposed some measures to increase revenues there are $5 in spending cuts for every $1 in new revenues.

The 1994 budget sets in motion the most comprehensive fundamental change in decades. However, change is not always comfortable. It is not always easy and is tempting to attack. This change is vitally needed because it focuses on three essential goals that directly answer the priorities expressed by Canadians during our first ever series of public budget consultation conferences.

Canadians said they wanted action to restore our country's economic vitality and to create the jobs so many people desperately need. This budget addresses those needs.

We are accelerating regulatory reform and GST reform because Canadians told us they want government to get off their backs and relieve them of the dead weight of over-regulation and red tape. Canadians also told us they want a government committed to lowering taxes that stand in the way of hiring and growth. Therefore, we will roll back UI premium rates in 1995 to their 1993 levels. This will save industry almost $300 million a year. Due to this action there should be some 40,000 more jobs in the economy than could otherwise be expected if premiums were allowed to rise.

The budget also funds new strategies to promote small business and technological innovation, key engines of a successful economy in today's global arena.

We are acting to get the banks working better to provide finances for small businesses. We are also reforming the way government approaches science and technology. We are taking steps to give small business access to technology and to allow it to afford dedicated engineering support. We will be developing a strategy for the information highway and we will be issuing a policy paper on science and technology so that we can work with Canadians to develop a clear statement of government priorities in this crucial sector.

During our consultations, Canadians also said they want reform of our social security system to ensure it is fair, compassionate and affordable, a reform that delivers incentives for work and creates jobs and opportunities.

That reform has been launched by the Minister of Human Resources Development. The budget takes important steps to begin meeting this challenge. The link between the length of time a person works and UI benefits is being strengthened. Assistance is being enhanced for those with dependents. These and other actions will reduce the costs of the program by $2.4 billion next year. This will allow us to bring UI premiums down.

The consultations also delivered a third blunt message. People told us to get government finances under control and make government more effective, cost conscious, and less of a burden that undercuts job creation and entrepreneurship.

The government understands that these are obligations we must accept, not options. The budget reduces the deficit with this in mind. Using prudent economic assumptions, the actions in the budget set the deficit on a clear path to bring it down to the target we set out in the red book of 3 per cent of Canada's economy in three years.

The budget also includes freezing both public service and parliamentary salaries for a further two years. I must say as a personal aside that this is the first announcement I have given to my family, including my wife who is in the hospital and watching this, that in fact my salary has been frozen for another two years. I hope she takes it in good spirit.

Defence spending will be cut by nearly $2 billion more. That is in addition to the $1.7 billion saved by cancelling the EH-101 helicopters over the next three years. Subsidies for businesses and grants and contributions to interest groups will also be reduced.

The government will reduce the operating budget of the government departments by $400 million in the next fiscal year with savings rising to $620 million annually in 1995-96 and beyond. Total savings and cuts in government operations will rise from $468 million in 1994 to $1.6 billion in 1996-1055 97.

Grants and contributions paid by the government, including international assistance and grants to small businesses, will also be reduced to achieve $253 million savings during the fiscal year starting next April. These savings will reach $409 million the following year.

The government also undertook a vast restructuring of our social security system in order to improve it and make it better suited to the needs of the time, while making sure it remains affordable.

Within this framework, we have major objectives in two areas: unemployment insurance reform and social security transfers to the provinces.

The new rules will strengthen the link between work history and the ability to collect benefits, and will enhance benefits to those with lower incomes and those who are supporting dependents.

Federal transfers to provinces currently total some $40 billion annually with some $14 billion of that related to social security programs. The budget calls for a two-year period of predictability and modest growth in these transfers.

During this period the federal government will co-operate with the provinces in setting reforms and testing new approaches with extensive public consultations and input along the way.

However, the budget makes it clear that social security transfers will be no higher in 1996-97 after reform than they are this year. This will save the federal government at least $1.5 billion in 1996-97.

The challenge of the deficit is not only one of spending, it is also one of revenues. The government knows that Canadians believe taxes are already too high and we agree with them. Our priority as a government is to stimulate the economy to create growth which will help curb the deficit and allow us to reduce taxes in the years ahead.

The tax and deficit relationship is a two-way street. A higher deficit will lead to higher taxes, while a lower deficit will lead to lower taxes. To reduce the deficit now some revenue increases are necessary. The government has decided that the fairest way to raise revenue is to broaden the tax base and to bring greater equity and fairness to the tax system.

The $100,000 lifetime capital gains exemption will no longer be available for gains realized after budget night. For individuals, the full value of employer paid life insurance premiums will be taxable. The income tax credit provided to persons over the age of 65 will be income tested. I should note that only one senior in four will be affected by this change.

A number of changes are also being proposed to the corporate tax system to make it fairer and to better target the tax assistance made available to certain businesses. They include: a reduction in the GST tax credit and the business income tax deduction for meals and entertainment expenses; the elimination of certain tax preferences aimed at small business that are enjoyed by some large private corporations; a change in the tax treatment of certain security transactions by financial institutions; and the elimination or reduction of certain regionally based investment tax credits that have not been cost effective in attracting new investment. The proposed changes will add $575 million to federal coffers in 1994 and almost $1.4 billion the following year.

In bringing down this budget the government is pursuing a balanced approach, weighing a number of concerns and targeting a number of goals: to create jobs; to stimulate economic growth; to reduce the deficit; and to encourage the long-term financial viability of the social programs that define this country.

There are some voices that might call for a different balance, some views which are focused on one issue or another instead of the complete picture. This government asks them to think again.

As the Minister of Finance put it during his address; for those who would have us spend more, Canadians deserve to know where the money would come from. And for those who demand we cut more, Canadians deserve to be told the extent to which that would hurt growth, hurt jobs, hurt the less fortunate. It is with this in mind that we have asked the House for authority to borrow the funds we require in Bill C-14.

I would now like to go into some detail as to the elements of this bill. Like borrowing bills in recent years, this bill contains three basic elements: authority to cover financial requirements for 1994-95; exchange fund account profits; and a contingency reserve. In total, the government is requesting authority to borrow $34.3 billion for the 1994-95 fiscal year.

In addition, there is a provision for an additional borrowing authority of $3 billion to provide for borrowings conducted in this fiscal year under section 47 of the Financial Administration Act.

I would now like to touch briefly on the main provisions of this bill. First, there is the provision for $30.2 billion of authority to cover our anticipated requirements for borrowing to meet the net financial requirements set out in the budget.

Second, there is provision in the bill to cover $1.1 billion of exchange fund account earnings which give rise to additional Canadian dollar borrowing requirements. This is because these earnings, although reported as budgetary revenues, are retained in the exchange fund account. They are not available to finance ongoing operations of the government.

Third, there is a $3 billion reserve, the same amount requested in borrowing authority bills in the last six years. This reserve provides for unforeseen contingencies such as foreign exchange transactions, seasonal swings in borrowing requirements and delays in passing the future year Borrowing Authority Act.

There is also a provision to cover the funding of bills issued in 1993-94 under section 47 of the Financial Administration Act, up to a cap of $3 billion. Without this clause these refundings

would be charged against regular 1994-95 borrowing authority, even though the money was raised in 1993-94 fiscal year.

Members should note that the provision cannot be used to generate additional borrowing authority for 1994-95. Next year's borrowing authority is only increased by the amount of section 47 borrowings actually transacted in 1993 up to a maximum of $3 billion.

There are some minor technical provisions in the bill that more clearly link fiscal year borrowing authority with fiscal year borrowing requirements. One provision provides that 1994-95 borrowing authority may only be used after the 1994-95 fiscal year begins. Another provision stipulates that the borrowing authority covers the full fiscal year beginning April 1, thereby ensuring refunding authority for the securities maturing in fiscal year 1994-95.

Until this bill is passed we may continue to use any amount of the non-lapsing reserve provided for in the Borrowing Authority Act, 1993-94. This bill when passed will cancel all borrowing authority remaining from fiscal year 1993-94. Also, it will deduct from the basic amount of borrowing authority sought any borrowing authority for 1993-94 that is used in 1994-95. This prevents any use of the 1993-94 non-lapsing reserve effectively adding to borrowing authority in 1994-95.

As background information I would like to review the government's debt operation in the current fiscal year up to the end of January. At this point in the domestic debt program about $25 billion in new net market debt has been issued. Of this total, $21 billion was in the form of marketable bonds, $5.5 billion in treasury bills, and $925 million in real return bonds.

The real return bond program was first announced in October 1991 and is a modest and cost effective diversification of a debt program. The bonds offer investors a real rate plus an inflation compensation component.

I would like to report to the House on last fall's Canada savings bond campaign. That campaign with bonds bearing an interest of 4.25 per cent had total sales of $5.4 billion. After taking into account the Canada savings bonds that matured or were redeemed in that period, net purchases of new bonds amounted to $842 million.

Regarding foreign currency debt, outstanding Canadian bills increased by U.S. $2.7 billion to $4.7 billion at the end of January. These are short-term U.S. dollars denomination bills which are issued from time to time in the U.S. market to fund Canada's foreign exchange reserves. In addition, a yen 80 billion bond issued in 1986 matured in July 1993.

In January the government launched a U.S. $2 billion five-year floating rate note. This issue will be used to pay down outstanding Canada bills thereby diversifying the source of U.S. dollar funding of Canada's exchange reserve. It will not increase the level of reserves or Canada's overall indebtedness.

In summary, the bill is straightforward and contains no unusual provisions. All the information needed to deal with it is before the House in the budget, the main estimates, and related documents.

I therefore urge the House to proceed with this legislation as quickly as possible so that new borrowing authority will be in place at the beginning of the new fiscal year and the government's regular borrowing program can proceed as the fiscal year begins.

Borrowing authority is a normal part of the operations of the government. I urge all members to support this bill.

Borrowing Authority Act, 1994-95Government Orders

10:20 a.m.


Pierre Brien Bloc Témiscamingue, QC

Mr. Speaker, I suppose I should welcome this opportunity to speak to the Budget but I cannot say I approach this task with a lot of enthusiasm, because there is little to be satisfied with, especially when we have a situation whereby the end of the next fiscal year, we will have a deficit of at least $40 billion. I said at least, and I will get back to this later on.

We now have a bill before the House to provide borrowing authority. I would like to take a few moments to discuss this, because a substantial part of the debt or the interest on the debt is paid abroad. That is the most problematic aspect of the debt, and it is something that is not always clearly understood. Interest paid to Canadians is fed into the economy, so this is a lesser evil. Not so in the case of interest paid abroad.

Take, for instance, someone who borrows $1,000. Mr. Speaker, suppose you were to lend me $1,000. You can see my credit is good, and I pay back the loan as agreed, so you are satisfied. If I want to borrow another $1,000 next year, there will be no problem. However, if you notice I have trouble meeting my payments so that you are not sure you will be paid back, you will start having second thoughts about the matter.

If later on, I want to borrow money again, you will say: Fine, but I want a better return on my investment. Interest increases according to the risk involved, according to a basic financial principle.

That is what we are seeing today in the case of Canada, and that is why although interest rates on short-term loans are low, rates on long-term loans are not going down.

We must borrow to service the debt. The financial markets want a certain yield, and that is why our long-term interest rates are not going down as much as we would wish, which prevents us from investing in a vigorous economic recovery.

For all these reasons, the government will have to put its financial house in order, which is not the case in this budget. This year again, the government failed to act.

I remember how I reacted to last year's budget. It was a disaster. The government postponed many important decisions for another year. Under the circumstances, it was decided to let the future leader of the Progressive Conservative Party and the government make these decisions. This year, with a new government, a newly-elected government with wonderful objectives and nice campaign speeches, we expected a more vigorous approach. It did not happen, and I will give some more details later on.

I heard an analyst give a very good explanation of the situation this week on the Radio-Canada program Le Point . She said that the government must put its financial house in order as soon as it comes to power. During its first or second year. The government failed to do it the first year, and we can only hope it will not let us down next year. This is a serious matter.

The longer a government is in power, the harder it gets to make budget cuts. I remember talking to someone who had been a member of the Quebec cabinet, and he told me: Pierre, when you are elected, you have about six months to do some real house cleaning, because after that it becomes extremely difficult. I found that illuminating.

I hoped that in its first budget, the government would have done more. Spending cuts are not as significant as they would have us believe. The famous five-for-one rule, which says for each dollar of additional revenue, we cut five dollars in spending, should be changed to read: "We will cut five dollars in our spending estimates". This is not the same, because as we can see in the budget votes, expenditures are not going down. We are now at around $122 billion, and it will be like that for the next three years. Granted, in real terms-these figures are nominal values-there will be some reduction in real value.

I will also mention a few positive aspects of the budget. I looked around and found one I want to mention particularly, which is the decision to introduce a permanent program that will allow first-time homebuyers to use RRSP funds to purchase a home. It is a positive measure that was supported by our party and the Reform Party and by Liberal members as well. In fact many people wanted to see this become a permanent measure, and that is now the case. Bravo! That was a good decision.

Another good decision was to roll back unemployment insurance premium rates to $3, but not until 1995. It is a good decision for next year.

That was the good news.

I admire my Liberal colleagues who must spend 20 minutes discussing the positive aspects of the Budget. I admire them because personally, I could do it for only two or three minutes. That is quite an achievement, Mr. Speaker.

Now, on to the deficit. I looked up a number of figures, not to give you a personal history, but to give you a history of the state of our public finances since the year of my birth. In fiscal year 1971, the government recorded a deficit of $379 million.

Let me quickly give you some figures. In 1972, the deficit stood at $614 million; 1973 was a positive year; in 1974, the deficit stood at $672 million and this is when things started to snowball. In 1975, the deficit increased to $1 billion. By 1978, it had surpassed the $10 billion mark. The situation improved slightly in 1979 and 1980, when the deficit fell from $16.2 billion to $11.5 billion. One could have thought that we were on the right track, but no, the deficit continued to spiral upward.

The deficit in 1982 was $14.9 billion. By 1983, it had increased to $29 billion, with no relief in sight. The situation improved slightly during the mid 1980s, but the upward spiral continued in 1992 and 1993. The extremely high deficit, which stood at $34 billion for the 1992 fiscal year, increased to $40 billion for the 1993 fiscal year. This year, it will stand at $45 billion, while projections for next year put the deficit at $40 billion.

It should be noted that the projected deficit for this year was not $45 billion, but rather $32 billion. Talk about a forecasting error! If a person in the private sector were to make this kind of mistake, he would certainly be out of a job. Of course, you will say that the government was indeed defeated and turfed out of office. However, I sincerely hope that my Liberal friends will deliver on their promises.

I want to talk a little about this year's $45.7 billion deficit. After the elections, the Minister of Finance lost no time announcing to us that the deficit would be worse than anticipated. You may recall that during the election campaign, our leader, Mr. Bouchard, spoke of a $40 billion deficit for this year during a very lively debate on the CBC. His comments created quite a stir during the campaign.

Once in office, the Minister of Finance announced that the deficit was larger still, around the $46 billion mark, somewhere between $44 billion and $46 billion. One has to understand that of these $46 billion, close to $4 billion are non-recurring expenditures, that is expenditures which the government will not have to incur next year. Therefore, we are really talking about a deficit of $41.7 billion or $42 billion.

In addition, I have not taken into account the fact that the government will be making more prepayments this year, which will allow it to post more expenditures to this year's budget. Since they are blaming the deficit on the Conservative government, they might as well make it as large as possible, while they are at it. Then they can say next year: "See, we reduced the deficit from $45 or $46 billion to $39 billion". Reality and the facts prove that this is not quite the case. This budget takes the deficit, which is hovering at about $42 billion tops, and reduces it to a projected $40 billion. And what are the real facts? Well, it is highly likely that the real deficit will not be much lower than last year. Given that the economy is expected to grow this year, this is cause for some concern.

When I look 10, 15 or 20 years down the road, I try to imagine what the country's financial state will be and the outlook looks very gloomy. How much interest will we be paying on the debt? Will 50 cents of every tax dollar be going to pay the interest on the debt?

It should come as no surprise to you that young people are very cynical about the political process and about the future. How can they be confident? Their future is being mortgaged big time! They wonder how we are going to get out of this mess and puts things right. It should come as no surprise to you either that a growing number of Quebecers have expressed doubts about the federal system which has created this unresolvable debt crisis.

This year, in its budget, the government has shied away from making the hard choices, preferring to postpone matters for another year. It amazes me that budgets always seem to paint a rosier picture of the future.

With the Tories, forecasts were always for five years and invariably, the graphs showed the deficit miraculously dropping, by the fourth or fifth year, to very reasonable levels. I do not know how they managed to do that, but they did.

Now, the Liberals and their Minister of Finance are telling us that, for the sake of transparency, forecasts will be on a three-year basis. But again, things start to look up only in the second or the third year, never the first one.

This budget should be telling us what is going to happen during the first year. We will see. So much is unpredictable or very hard to predict. How can the Minister of Finance make reliable forecasts over three years when major consultations are ongoing in areas such as human resources and the GST for instance? If financial guidelines are not in place, how can he predict with any accuracy what is going to happen in terms of the economy? One can wonder.

Somehow I get the uneasy feeling that this alternative to or improvement on the GST could be used to generate additional revenues to even things up. As for consultations on human resources, financial criteria seem to have been clearly established already. What is the use of consulting then, if the goals of the reform have already been set? Take unemployment insurance for example. This budget provides criteria and guidelines in that area. Is all the work done by this committee, all its distinguished members and all the people who will be consulted be for nothing? I am afraid that they might work hard for nothing, that decisions have been made already.

About this year's deficit, I would like to add this: it is a record. Never in the history of this country has a higher deficit been forecasted, never. The past cannot vouch for the future and I certainly hope that it will be the case here because it would be catastrophic.

In the past, the Department of Finance has had some difficulty forecasting economic performance, and that is putting it mildly. Now, the Minister of Finance is telling us: "We are going to use much more realistic forecasts for a change". Let me say a few words on these forecasts.

In his financial forecast, he has announced more realistic growth rates and interest rates. One area where his forecast is questionable however is inflation. In that regard, he has failed to listen to all the economists who have provided him with forecasts. They were all around 2 per cent, but the Minister of Finance chose to use a rate of 0.8 because that was just what he needed. A 2 per cent rate is much more realistic, especially if slight economic growth is expected. Whether we like it or not, growth always causes some inflationary pressure, and 2 per cent inflation is not too terrible. But no, he chose to use 0.8 per cent. That particular figure is questionable.

But there is one which is even more questionable. You know, when you make forecasts, you use a long mathematical equation, one perhaps as complex as for equalization. You put numbers in, then say: "Let us change the figures to get more realistic results". But there is a major mistake, a major flaw in this equation. The government expects a 1 per cent growth in the economy or economic activity to generate a 1.2 per cent increase in public revenue during the first year. I find that hard to believe.

In the seventies, at a time when revenue did grow slightly, a 1 per cent growth in the economy could make public revenue increase by as much as 1.5 per cent. Things changed drastically in the eighties. Now, when the economy grows by 1 per cent, public revenue increases by a mere 0.5 per cent. Last year, it actually decreased. Why would there be an increase this year, as the minister is announcing? I am having a very hard time figuring how and why the Minister of Finance, who is so concerned with transparency, can keep such a parameter in his mathematical model.

He may have changed some figures, the figures for growth rates and interest rates and used more realistic figures in the model, but he did not change the basic figure.

That is why I can tell you right away that, if the Minister of Finance does not review this question, he will never achieve his objective of bringing the deficit down to 3 per cent of GDP within three years, because he overestimates revenue growth. We can see it in his approach, in the fact that there will be no major deficit reduction this year; he is banking on economic growth to do his job for him but it will not happen.

A very simple explanation is to look at the size of the underground economy. We do not need to go very far. We only have to walk around in our ridings and look around us to realize the extent of people's involvement in the underground economy and how much this economy represents. According to the most conservative estimates, it is at least 8 to 10 per cent. But it is probably a lot closer to 15 to 20 per cent. If we put it at between 8 and 20 per cent, Mr. Speaker, it is already enormous. The government loses billions of dollars to the underground economy every year.

The minister includes these billions of dollars in his revenue growth forecasts as though this phenomenon did not exist. The underground economy is very difficult to estimate and very complex. One must work with aggregates such as the money supply and that is very difficult.

It seems that the Department of Finance has done a study on the underground economy but it refuses to publish it. Why? Because it might have to include it in its forecasts, which would make this exercise much more difficult.

I heard the Minister of Finance say that if things did not go the way he wanted, he would make every effort next year to bring the deficit down to the level he wants. I told the people around me to get ready for a budget statement sometime this year, because the minister will have to take this phenomenon into account and he will then have to redo his calculations and make new choices.

The minister does not talk about it much but he did something that was rather wise. He kept much bigger reserves than his predecessors, about $2.5 billion, and that was wise. Last year, his predecessor kept reserves of only $300 million and he would have needed much more. The Minister of Finance is to be congratulated on that score, but even this reserve will not be enough to offset losses due to the underground economy, that he continues to include in his revenue growth forecasts.

When they say they will cut spending, they go all out, Mr. Speaker. They were saying two for one at the beginning. The Minister of Finance told us before the holidays that, for every additional tax dollar collected, he would cut $2. He was told that it was not enough, that it would not make a big enough impact in the budget. Now he says that, for every additional tax dollar, they will cut $5. How come next year's expenditures will be slighter higher at around $122 billion, when at least hundreds of millions of dollars in extra taxes will be collected?

I cannot figure out how they arrived at that figure. We should have been closer to $118 billion or $119 billion in expenditures. They did not make real cuts; they simply lowered the forecasts made by their predecessors. That is a rather complex but fascinating exercise. If we compare budgetary votes, which are the most significant measurement, with operating expenditures in nominal terms-even including inflation, which is hard to take out-, we can see that there are no major cuts.

I was reading an article by Claude Picher of La Presse , who wrote on budget day, ``Tonight, when Mr. Martin will tell you that it is impossible to put government finances on a healthier footing without increasing taxes, you can quote some government expenditures,'' and he gave the following examples: National Capital Commission, $90 million; Canadian Intergovernmental Conference Secretariat, $7 million; Human Rights Commission, $18 million; Offices of the Information and Privacy Commissioners of Canada, $6 million; International Development Research Centre, $117 million, and so on. There is a whole bunch of them.

This government never agreed with our proposal to systematically review all government spending, let alone the whole tax system.

I feel like saying this to the Minister of Finance: It is funny, in the budget he said that he would refer the issue of family trusts to the Standing Committee on Finance, which is already overloaded, for consideration, at the suggestion of my colleague, the Official Opposition's finance critic. How come that is the only one of my colleague's suggestions that he took, and that he is trying to embarrass him by saying that it is his own suggestion?

My colleague suggested much more; he suggested setting up a committee to examine all public spending, item by item, and to deal quickly with the matter of family trusts. He said so many times. But no, instead they choose one small element, family trusts, to refer to a committee for study. That is not what we wanted; we wanted to look into the whole tax system, the government's tax expenditures and its uncollected tax revenue.

The minister had fun telling us that there was already a minimum corporate tax. I am eager to talk to him about it again so that he can explain to me how it works. I am not sure that his officials agree with him that it really exists, far from it. And then he listened to a suggestion from a fellow member. My colleague made several suggestions to him, and all have fallen into oblivion. He is trying to distort what he said by telling us that it is what the opposition wanted. We wanted much more than that, we wanted a lower deficit.

We wanted and expected-and that is my next point-the government to do much more for the economic recovery-much more. We expected more from a Liberal government which talked constantly about jobs, jobs, jobs during the election campaign. The Prime Minister repeated that everywhere he went.

Let us look at the predicted unemployment rate. Even with the infrastructure program next year, it will go down only 0.1 per cent. How come? This infrastructure program will generate many temporary jobs, Mr. Speaker. We must not think that the municipalities will be able to continue doing the work at the same rate forever after. And there is a maintenance cost associated with it. But it will not be enough. Those people will not stay on the labour market. We must take additional action so that after a year or two or three, we have a sounder economic support structure.

It is true that the government alone cannot create employment, but it must still at least create a more favorable climate and send a signal. Cutting its spending further would have been a clear signal and made people say, "The government is doing its part, so we can give it a little more credibility. We will do more too". But that is not the case, it is the status quo.

They talked to us a lot about small and medium-sized businesses and the Bank Act during the election campaign, and where is it in the Budget? A series of words: the government will consider, a parliamentary committee will review, the banks are considering, means will be developed, etc., etc. We will study, analyze, recommend, we will see, we will analyze and probably nothing will be done. Nothing will be done.

How is it that for unemployment insurance, they were able to put a reform on the table quickly and in other fields, they will have to analyze and consider? Clearly, the main point in the finance minister's budget is to get money from people on UI. It is very clear; that is the main point in his budget. He was not able to examine other spending more thoroughly, for lack of time and imagination. That is why many people have trouble distinguishing this government from its predecessor when it comes to their budgets. Except for the colour of the documents and of the book behind it, not much is different. It is very disappointing.

I will come back to another cut that could almost be called savage which they made. I will quote a sentence from the red book: "We will reduce public spending by abolishing unnecessary programs, tightening procedures and eliminating duplication, all in co-operation with the provincial governments". "Co-operation with the provincial governments": that is something we can read in many places in the speech from the throne and the budget and the red book and many other statements.

Where is the elimination of administrative overlap in this budget? We could even include inter-departmental overlap within the same level of government.

When I say overlapping, I am referring to two different types: interdepartmental and intergovernmental. Nothing was done about this. Studies presented to the Bélanger-Campeau Commission in Quebec estimated that these overlappings cost $2 to $3 billion annually. Over a ten-year period, they amount to somewhere between $20 and $30 billion. Yet nothing was done. The government cuts $400 million in the operating expenditures of the federal administration. This is a very minor cut. It is like doing surgery for terminal cancer. This is very disappointing.

Yet, this is what the red book said. Indeed, there is no mention of a timetable. But I doubt very much that the government will succeed. It should send a signal. Let us not forget that this government will probably soon have to deal with a referendum in Quebec. It will have to show that they can reduce this overlapping. They have not even started doing so. How very disappointing!

As regards jobs, aside from the infrastructure program, the other major initiative announced to promote job creation is simply unbelievable and beyond logic. Indeed, the government says that the $3.07 rate for UI premiums is bad for the economy and will therefore lower that rate to $3.00 at the beginning of 1995. But let us not forget one thing: who set the rate at $3.07 in the first place? The same government, last December, when it decided to take out $800 million to finance its infrastructure program. Now it is telling us that this rate is bad. The government is telling us that it will lower that rate and create 40,000 jobs in the process. But using the same logic, it means that 40,000 jobs were lost this year because of the government's initial decision. The infrastructure program may create 60,000 to 65,000 jobs, but there will only be a net gain of 20,000 to 25,000 jobs, and not 100,000 as seems to be implied in various government documents.

There is inflation. You do not hear much about it regarding the economy, but there is a lot of verbal inflation when it comes to quoting figures and numbers. So, this is the other major government initiative: next year it will correct this year's mistake. But the government will not admit its mistake. Rather, it says that the rate was bad for the economy, without ever taking the blame or even apologizing to Quebecers and Canadians by saying: Look, we made a major error in judgment when we decided to set that rate.

In terms of helping small and medium-size businesses and promoting research and development, Quebec is not getting its fair share, while in Canada as a whole, we do much less than our major competitors to promote R and D. I thought the government would send a clear message that, from now on, this would be one of its priorities; that it would start investing a lot this year in these programs and that it would do even more in the future. But this sector is not even defined as a priority. If it is not considered as such in theory, how can it possibly be perceived as a priority in reality? I heard someone say in this House that people should phone their bank managers and ask them to be

more co-operative with small and medium-size businesses. I am not sure that this approach will bring about very good results.

The government had said that it would amend the Bank Act to help those who have funds invested in small and medium-size businesses. But it did not do it. Instead, the joint committee on industry and finance will examine the issue. I do not feel lost here because I was studying before coming here and I feel I am still at school because we are always told that this or that issue will be looked at. In school, I sometimes felt that the work was useful, but I am not always convinced it is the case here. I feel that decisions are made before studies or reviews are undertaken.

I want to point out another important issue. In their red book, the Liberals talked about tax fairness. In their budget, they say that all classes will be affected: the rich, the poor as well as the middle class. Everyone will have to make sacrifices. But it would be an understatement to say that I am outraged by the measure affecting senior people. I find it very hard to accept that a senior is considered a rich person if his or her annual income is $26,000 or more.

Between $26,000 and $49,000, they gradually lose their age credit. These people are being told to contribute $490 million over the next three years, while during that time, according to a conservative estimate, we could get at least $350 million annually by taxing family trusts. That is one billion over three years, and twice the amount we will get from senior citizens.

As you know, and as you will see in the weeks to come, they are very sensitive about this. Senior citizens who depend on their pension cheque for their income have so little that they want to keep the age credit. They spent all their lives working hard, and now they are under the gun. Did this generation of senior citizens put us in the financial situation we are in now? I doubt it. Pitting one generation against the other is certainly not my intention, but the odds are it was probably the generation between theirs and mine that put us in the financial mess we are in today.

However, the generation that holds the reins of power, the so-called baby boomers, has decided to cut spending on senior citizens. I can only hope they will be just as eager to take these cuts when it is their turn. Quite frankly, I do not like this.

This reminds me of another measure in the budget, which is about abolishing the capital gains exemption on the first $100,000. Many Canadians have taken advantage of this exemption. At one time it was $500,000. Today, people in my generation are being given a signal that they will not have this tax incentive to become part of the upper middle-class or the wealthy class.

We are prepared to do our fair share to pay off the debt, in addition to whatever we will be asked to do in the future. However, it is just not true that today's wealthy Canadians are being affected by this measure. Many Canadians have already used the exemption, and in fact, capital gains that have accrued since 1985-86, for instance, will not be taxed. So this measure applies starting today or rather the day before yesterday. It will not produce a lot of revenue, and certainly not as much as the Minister of Finance indicated in his forecast, and we are going to monitor that very closely.

People already expected this to be retroactive and were doing their transactions before the budget, because of all the advanced publicity. These types of mesures do not always identify the groups that are affected. About the fiscal fairness that will be needed to fight the underground economy, I think there is a false perception among members opposite that we can deal with the underground economy by modifying the GST. They keep harping on the GST, but the GST was merely the last straw and not what created the underground economy in the first place. There is a whole set of measures that make people feel they are not getting their money's worth, and that is what drives people into the underground economy. They have the impression they are getting a fair deal this way.

The government keeps saying it will change the GST, and this may make matters even worse, depending on how they do it. We will watch this very closely, but they will have to take a much broader approach to this problem, an approach on tax reform that will cover the range of measures that provide the government with tax revenue.

There is nothing in this budget to restore fiscal fairness. The government will not meet the objective of the Minister of Finance to bring the deficit down to 3 per cent of GDP, because it is not sending a clear signal that the issue is fiscal fairness. I find that very disappointing.

In concluding, I want to evaluate the three objectives mentioned in the budget of the Minister of Finance. First: to build a framework for economic renewal to help business succeed and to turn innovation into a more effective engine of Canadian economic growth. That sounds wonderful, but I could find no indication of this in the budget. In the budget the government says it will evaluate, analyse, recommend, study, and so forth. That is it, Mr. Speaker. I am still looking. We may find it in future budgets. So that was the first objective in this year's budget.

The second objective. To put in place a responsible social security system that is fair, affordable and dapted to the needs of Canadians. I thought this was more or less the mandate of the Human Resources Committee, but we can see that the budget

defines the financial parameters. It says we must meet these objectives while working within current financial constraints. Here again we can wonder to what extent the objectives will be reached, given the cuts in unemployment insurance.

The third point, and this is a major one, is: improve public finances to allow the government to concentrate all its energies on helping Canadians adapt to a demanding and changing world. If improving public finances means ending the next fiscal year with a deficit of more than $40 billion, this is a failure. This point by itself deserves a zero mark.

To conclude, the government is boasting that it is bringing to life the commitments of the red book. it says that this budget is the red book. Now, people say that there is nothing in this budget, and that makes us realize that the content of the red book was in effect zilch, nothing and no hope.

I thank you for your patience, Mr. Speaker, and I will conclude by saying that I am deeply disappointed by this budget.

Borrowing Authority Act, 1994-95Government Orders

11 a.m.

The Speaker

It being 11 o'clock a.m., pursuant to Standing Order 30(5), the House will now proceed to statements by members, pursuant to Standing Order 31. The Chair recognizes the hon. member for St. Catharines.

Brock UniversityStatements By Members

11 a.m.


Walt Lastewka Liberal St. Catharines, ON

Mr. Speaker, I rise in the House today to congratulate Brock University on its 30th anniversary. The university is central to the Niagara Peninsula and is an excellent centre of higher learning.

The theme for Brock University's 30th anniversary is: "Big enough to matter and small enough to care". The university certainly lives up to this theme. The business, the arts and teacher education programs have excellent national reputations. The new school of entrepreneurship is a unique, progressive, small business initiative. The university remains small enough to provide personal time and attention to students throughout their important education years.

I welcome all members of the House and all Canadians to visit Brock University for its open house on Sunday, March 6. Special mini workshops, demonstrations and other events will take place at the university that day.

Again I congratulate Brock University on its 30th anniversary.

Francophones In The Armed ForcesStatements By Members

11 a.m.


Philippe Paré Bloc Louis-Hébert, QC

Mr. Speaker, yesterday the Prime Minister informed this House that the matter of the closure of the Collège militaire royal de Saint-Jean was not raised in the Liberal caucus. This college is the only francophone military college in North America. If in fact the matter was not raised in caucus, then I condemn all Liberal members from Quebec for not defending the interests of the province and for not defending the French fact in the armed forces.

The closure of the only French-language military college in Canada will mark the end of a 50-year-long struggle for francophone equality in the Canadian armed forces.

The BudgetStatements By Members

11 a.m.


Jake Hoeppner Reform Lisgar—Marquette, MB

Mr. Speaker, I rise in the House today to share the concerns of my constituent, Betty Maxwell, of Neepawa, Manitoba, who comments: "The government has given us a middle of the road budget and with the economic traffic we have that is a very dangerous place to be. We have a budget that is long on rhetoric and short on substance".

Instead of attacking government spending with serious cuts it is actually increasing spending. If this increased spending only brings unemployment down one-tenth of 1 per cent in the first year, it confirms that previous governments by overspending $500 billion have put us at this rate of unemployment.

This budget is very reminiscent of those of previous governments with rosy predictions and miscalculations that Canadians have never been able to rely on. With optimistic forecasts for growth and lack of deficit reduction, it is back to the old philosophy of counting the chicks before they are hatched.

Winter Olympic GamesStatements By Members

11 a.m.


Shaughnessy Cohen Liberal Windsor—St. Clair, ON

Mr. Speaker, I take this opportunity to draw the attention of the House to the outstanding achievements of a constituent of the riding of Windsor-St. Clair.

Chris Lori is captain of both the two and four man Canadian bobsled teams and is representing Canada this weekend in Lillehammer in the four-man bobsled events. Chris has been a member of the national team since 1985 and was overall World Cup four-man champion in 1990. In the 1992 games in Albertville, France, he came within .04 seconds of a bronze medal in the four-man event.

The dedication of both Chris and his team mates, Sheridon Batiste, Chris Farstad, and rookie Glenroy Gilbert, will stand them in good stead this weekend as they face off against the best in the world.

On behalf of the people of Windsor-St. Clair I wish Chris, his team and all Canadian Olympians who will be competing in the final two days of the Olympics the best of luck. I congratulate them in advance for their outstanding achievements.

Rail Line AbandonmentStatements By Members

11:05 a.m.


Murray Calder Liberal Wellington—Grey—Dufferin—Simcoe, ON

Mr. Speaker, the Canadian National Railway has applied for abandonment of a rail line in my riding known as the Meaford subdivision, 33 miles of track between Collingwood and Barrie.

There are two private companies willing to purchase the line but will not because of an Ontario NDP labour law known as bill 40. The future of this rail line and the jobs that depend on it are being jeopardized by this regressive Ontario labour law.

When the tracks are torn up they are rarely put back down, and some more of Canada's heritage dies.

Crime StoppersStatements By Members

11:05 a.m.


Glen McKinnon Liberal Brandon—Souris, MB

Mr. Speaker, on January 22 I was arrested and released on bail by the Brandon Crime Stoppers Association. My charge was allegedly making the Progressive Conservative Party of Canada look like a luxurious outhouse known as a two-seater.

I am currently released, providing sufficient bail is raised. Money is raised by such fund raising events to rally the public, the police and the media in a collective campaign against crime. Anonymous tips lead to arrests of suspects and these cash payouts for valuable information are funded by volunteer contributions and fund raisers.

Crime Stoppers is an extremely cost effective organization. Since 1985 in Manitoba over $1 million in contraband has been recovered and $3.5 million in personal property.

I commend the volunteers associated with Crime Stoppers and encourage all members of the House to support, promote and contribute to their local Crime Stoppers program.

FrancophonesStatements By Members

February 25th, 1994 / 11:05 a.m.


Madeleine Dalphond-Guiral Bloc Laval Centre, QC

Mr. Speaker, in addition to making disparaging remarks about the small region of Lac-Saint-Jean, the Prime Minister reminded us yesterday of how his education tour of Canada made him discover what Canada was really about.

What country is he talking about? Does the Prime Minister not realize that francophone communities outside Quebec are facing assimilation? These communities still have to fight to preserve their language and culture while often not even having access to post-secondary education in French.

The people of Quebec have no problem with going outside the province when they want to learn to speak English, but they know full well that true French education is only possible in a francophone environment.

What the Prime Minister is proposing for the students of the Collège militaire royal de Saint-Jean is a sprinkling of classes in French in a completely anglophone environment. That is the picture of Canada the Prime Minister is painting for francophones.

BilingualismStatements By Members

11:05 a.m.


Chuck Strahl Reform Fraser Valley East, BC

Mr. Speaker, the Reform Party has come under criticism for presenting petitions on behalf of constituents calling upon Parliament to hold a referendum on bilingualism.

I inform the House that a total of six Liberal members have also presented these petitions. They are the members for Dauphin-Swan River, Simcoe North, Winnipeg St. James, Leeds-Grenville, St. Catharines, and Moncton from whom two petitions were received.

I remind the House whether or not members agree with the petitions' subject matter, members of all parties are duty bound to present the petitions of their constituents. To use the tabling of these petitions to suggest that Reform is in any way anti-Quebec or anti-French is entirely incorrect. The practice leads to needless antagonism and public misunderstanding.

It is an unfortunate demonstration of traditional politics, the kind of politics that divides the House and the nation, the kind of politics that the Reform Party wants to change.

Guns And AmmunitionStatements By Members

11:05 a.m.


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

Mr. Speaker, last week the Minister of Justice gave us excellent

briefings on the new gun control administration and in particular on the requirements for the safe storage of weapons and ammunition.

We were told that it is just as important to secure the storage of ammunition as it is to secure firearms. On the other hand, we also learned that approximately 3,000 firearms were stolen or lost in the last reported year.

In these circumstances I urge the minister to amend the law to require a firearms acquisition certificate for the purchase of ammunition. This would make it more difficult for those with stolen or illegally acquired weapons to use those weapons.

Experience shows us that the more we restrict the availability of guns and ammunition, the fewer crimes are committed with guns and ammunition.

Right now it is easier to buy a box of bullets than it is to buy a case of beer.

EuthanasiaStatements By Members

11:10 a.m.


Harold Culbert Liberal Carleton—Charlotte, NB

Mr. Speaker, the House is a place for discussion and debate of issues affecting all Canadians.

The government has agreed to allow a debate on euthanasia. Although there are various opposing views, I believe it is important for all members of the House to respect the current legislation governing euthanasia.

The House must set the standard of respect for law and order for our youth and for all citizens of our beloved Canada. I ask all members of the House to remember and to honour the current legislation respecting this issue.

Foreign AffairsStatements By Members

11:10 a.m.


Patrick Gagnon Liberal Bonaventure—Îles-De-La-Madeleine, QC

Mr. Speaker, I found out that our Minister of Foreign Affairs is going to Washington to meet with his counterpart in the Clinton administration and that the Leader of the Opposition is also travelling to that city. I realized why when I read an article in the November 29, 1993 issue of Maclean's magazine. The Leader of the Opposition is quoted in this article as saying:

"I think Americans are very independent". He goes on to say:

In economic terms, Americans believe in individualism, every man for himself. What I love about Americans is their sense of liberty.

When the Leader of the Opposition is in Washington will he be talking about sovereignty or the annexation of Quebec into the United States?

Myriam BédardStatements By Members

11:10 a.m.


Maud Debien Bloc Laval East, QC

Mr. Speaker, it is now the Prime Minister's turn to take credit for Myriam Bédard's wins, and in a political debate no less. He says that the Canadian Forces made a positive contribution. Mr. Speaker, some contribution!

The large number of Canadian military personnel in Biathlon Canada were ready to do anything to control her, even if it meant destroying her, according to a journalist from the Gazette daily newspaper. These are the same people who draft her contracts in English only. That is the Prime Minister's brand of bilingualism!

These are the same people who put roadblocks in the path of this athlete from Quebec and damaged her skis in Albertville. Does the Prime Minister know about this?

Does the Prime Minister want other examples of this positive contribution? Why does he not consult with his minister before saying such things?

Child MolestersStatements By Members

11:10 a.m.


Randy White Reform Fraser Valley West, BC

Mr. Speaker, a terrible injustice in my riding of Fraser Valley West has been brought to my attention by one of my constituents, Sandra Wingrove. Ms. Wingrove is publicizing her name so that others might avoid the pain she and her eight-year old daughter recently suffered.

A young offender who lives in the same federally subsidized housing complex has sexually assaulted Ms. Wingrove's daughter. This child molester has been convicted twice of sexual offences and yet is still allowed to live in the complex with his mother. One must have children to qualify to live in the complex and now it seems one must be willing to expose them to this continuing danger.

Convicted child molesters must not be allowed to access our children. Again we see another case in which the criminal justice system has let us down. Yet the government does nothing.

ParalympicsStatements By Members

11:10 a.m.


Andy Mitchell Liberal Parry Sound—Muskoka, ON

Mr. Speaker, I rise in the House today on behalf of the constituents of Parry Sound-Muskoka to offer best wishes to 21-year old Sandra Lynes of Utterson.

Sandra, the daughter of Pat and Kelly Lynes, was one of two Ontario athletes chosen to represent Canada in alpine skiing at the Paralympics in Lillehammer, Norway, March 10 to March 19.

The 18-member Canadian team has been training hard in Alberta and British Columbia while preparing for the Lillehammer event. Sandra will be competing in the downhill, super giant slalom, giant slalom and slalom.

If Sandra's two silver medals at the 1992 Paralympics in Albertville, France are any indication, her international competitors are in serious trouble. Congratulations and best wishes, Sandra. We are proud of you.

Day CareStatements By Members

11:15 a.m.


Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, the economic reality in Canada today is such that in many cases both spouses of a family must work.

However, when a spouse decides to enter the workforce where day care service is necessary, the net earnings of that spouse are materially depleted due to the cost of day care. In fact, the net income generated is often not reflective of the value of the work done. As such, many working spouses would not require much incentive to leave their jobs to work in the home.

Today we need to address the acute shortage of affordable day care. We need to make it easier for a parent to personally care for young children. We need to create job opportunities. We need to provide opportunities for all Canadians to accumulate retirement income. We need to promote economic independence for all and we need to recognize the economic value of a spouse working in a home.

Accordingly, I will be introducing a private member's bill which will permit a working spouse to pay a salary to the other spouse for managing the family home and caring for dependent children. This would allow that spouse to pay into CPP and buy RRSPs. We need to recognize the value of the woman in the home.

The BudgetStatements By Members

11:15 a.m.

Progressive Conservative

Elsie Wayne Progressive Conservative Saint John, NB

Mr. Speaker, where in the government's budget is there any hope for the people of Atlantic Canada, especially the unemployed? Where in the red book does it say seniors will have to pay more taxes?

The Liberals promised jobs, jobs, jobs. They promised to consult the communities that were possible targets for defence cuts. They promised to replace base jobs. What happened to the promises? They were not kept in my part of the country.

The Prime Minister is taking a tour of Atlantic Canada but he is leaving out New Brunswick. Is that because he is afraid to come to New Brunswick, Paul? I have to say to you, Paul, these were not the promises that you made to the people of New Brunswick.

This budget hurts those who can least afford it. The Minister of Finance got a new pair of boots I understand from the Prime Minister. I am awfully sorry that he has used them to kick the people of New Brunswick.

The BudgetStatements By Members

11:15 a.m.

The Speaker

I know that the hon. member sort of slipped in the first name of one of our members here and of course I know that will not be done too often.

Francophones In The Armed ForcesOral Questions

11:15 a.m.


Michel Gauthier Bloc Roberval, QC

Mr. Speaker, "the cream of the crop of francophone officers in the armed forces will be assimilated if young francophones opt for RMC in Kingston". These words were spoken, not by a nasty Quebec separatist, but by Mr. Terry Liston, the former Commander of CFB Valcartier and the current Vice-President of MIL Davie.

How can the Minister of National Defence, who says he is sick of Quebecers, claim to be the great defender of the French fact within the Canadian armed forces when according to those in the know, those who have been there, his plan to shut down the Collège militaire de Saint-Jean will unquestionably lead to the outright assimilation of francophones?

Francophones In The Armed ForcesOral Questions

11:15 a.m.

Don Valley East Ontario


David Collenette LiberalMinister of National Defence and Minister of Veterans Affairs

Mr. Speaker, in the interview I gave to a Canadian Press reporter two days ago, I did not say that I was sick of Quebecers. What I said was that I was sick and tired of Quebecers like the Bloc Quebecois members sowing the seeds of dissension among Canadians during question period here in the House of Commons.

Mr. Speaker, in light of the cuts to our defence budget, we can either choose to keep all three colleges, even though we do not need this many institutions to train officers, or we can choose to centralize operations in one institution and Kingston's Royal Military College has the best facilities for this purpose.

I have been watching with some great alarm the remarks of people in Quebec, prodded by the members on the other side on this particular issue. They are not doing the people of Quebec and Canadians a great service by inflaming what is becoming an argument that is emotional and is not based in reality.

French is now taught at Kingston. Forty per cent of the students at Saint-Jean are in engineering. They have to finish their education in English and French at Kingston because it is too expensive to have two or three courses in engineering.

We already have in reality a bilingual college at Kingston. The facilities are much better. If the facilities had been better at CMR de Saint-Jean, we would have centralized everything there.

Francophones In The Armed ForcesOral Questions

11:20 a.m.


Michel Gauthier Bloc Roberval, QC

Mr. Speaker, I would like to inform the minister that if he is sick and tired now of Bloc Quebecois members, he is in for a rough ride. We have four years ahead of us to put questions to him and we will continue to do so until we get some answers from him. I am sorry, but we do not intend to stop.

How can the minister seriously think that we will believe him when he says the French fact will be protected in Kingston, when according to Mr. Liston, who has firsthand knowledge of these matters, people have been saying for ten, maybe even twenty years now, that RMC in Kingston will become a bilingual institution. This is impossible, given that Kingston is located in the heart of traditional loyalist country. Does the minister really expect us to believe him?