Debates of Feb. 9th, 1994

Federal-Provincial Fiscal Arrangements And Federal Post-Secondary Education And Health Contributions Act

[Nelson Riis, NDP, Kamloops, BC]

Part of the reason is the good government. We constantly hear that international investors and so on are very concerned about the government of the day, particularly about its fiscal responsibility and so on. We can ask the question rhetorically. Which provincial government has been best able to control the deficits of their province?

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

Ontario.

[An hon. member]

Saskatchewan and B.C.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Alberta.

[Nelson Riis, NDP, Kamloops, BC]

The answer is British Columbia. There is no question. My friend says "Alberta". I have watched Mr. Klein at work and how he is approaching this along with how wonderful he is doing.

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

Slash and burn. Tell us about Bobby Rae.

[Nelson Riis, NDP, Kamloops, BC]

My cheek is bulging. I said that with my tongue in my cheek. What Mr. Klein is doing is a typical Conservative or perhaps Reform approach to the world. We will see how that works out in the next few months.

We tried a different approach in British Columbia. We tried what I would call the real New Democrat approach of can we bring that deficit under control without emasculating the social programs. Yes, we have. As a matter of fact I do not think there is an economist in Canada who can say that is not taking place. Anybody who understands the financial markets would say it is not taking place.

To be fair, it is not only because of Mike Harcourt and the New Democrats. There are other reasons but I just wanted to make the point because hardly anybody ever makes it these days so I felt some obligation to raise it in the House.

[John Harvard, Liberal, Winnipeg—St. James, MB]

Get on the subject, Nelson.

[Nelson Riis, NDP, Kamloops, BC]

We have to see Bill C-3 in a number of contexts. What other programs has the federal government involved itself in of a similar nature?

My colleague earlier referred to the EPF, the established programs financing, where for health care and post-secondary education the federal government contributes about $11 billion. The Canadian assistance plan or CAP as it is referred to has $7 billion where the federal government shares in the development of a variety of social programs.

The whole area of tax points has to be included as well as a whole host of shared cost programs. Almost $12 billion last year was involved with a sharing program between the federal and provincial governments. In our province, the program that comes to mind is the forestry agreement, FRDA. It is a very helpful investment program where both provincial and federal governments work in co-operation with the private sector in British Columbia and invest in the future of the forest resource and ensure sustained development in the years ahead.

The federal government in its wisdom decided it would not do that any more. It would pull out of this program. Recognizing that forestry is our number one export in Canada, the federal government abandoned the ministry of forests and is moving out of its contributions to the FRDA program. It is a very regressive step.

One has to raise this issue. Recently when the government introduced the infrastructure program, it said that every province would have a certain allocation. The allocation in British

Columbia was $220 million. This was done on a population basis essentially plus or minus 5 per cent depending on the state of unemployment in a province. In other words here was an effort at some equalization. Often this takes place in federal programs.

The question I would raise is that if we have a whole program for equalization in which we try to create a relatively level playing field in terms of the ability of provincial governments to provide services and having relatively similar revenue systems in place as well, is it necessary when we take that step on such a massive scale as we are doing with this legislation to also have a whole set of other equalization programs in place? Is not one good one enough?

We have to look at this within that context and say we are dealing with equalization with Bill C-3, but what about all the other areas in which equalization is also attempted? To see the value of this legislation, whether it should continue, whether it should be expanded, whether it should be reduced or maintained as is, I think we have to see it in that context and we do not have enough information here. Perhaps in committee we could ask for that and then have a more serious discussion there.

I guess this is my complaint section during my presentation. I hear other provinces complaining that they do not get enough, that they have this size of population and so on. Over the years I have never been able to identify a single federal program in which the province of British Columbia gets its fair share. There might be one some place. I have yet to find a single one that is based on our population within Canada.

[An hon. member]

Good weather.

[Nelson Riis, NDP, Kamloops, BC]

My friend says "good weather". Yes, perhaps we get good weather and we are happy for that. However, I am thinking of things more to do with the federal government at this point. I know it lays claim to all sorts of things but the weather of Canada would not be one.

Is there a single federal program in which the government participates with the Government of British Columbia in which the people of British Columbia get their fair share? I could present a long list with the figures of where we do not. I do not believe that is necessary. I simply want to make the point.

Even within that climate, even recognizing that I do not think there is a single federal program in which British Columbia receives its fair share, at least based on population, we still do not begrudge the fact that we are going to be participating in this equalization program.

In all my years as a member of Parliament and in all the discussions I have had with my constituents and others, I have never heard anybody complain about the willingness to share. I hear a lot about getting the short end of the stick, or getting skewered or all sorts of other fancy names we could put to that in terms of our fair share regarding the federal government. However I will let that stand for the moment. There will be other opportunities to raise this.

I simply want to say in closing that I appreciate having the chance to participate in this debate. However I do not want to get into the Reform Party schtick of saying: "Mary Bloggs from this town asked me to raise this question". I have been asked to at least raise the question on behalf of the city of Vancouver in terms of what it perceives to be an unfairness. It certainly is not unique to the city of Vancouver or unique to any particular city. It is regarding immigration policy.

The federal government establishes its immigration policy. The minister of immigration indicated the other day a new set of quotas or limits on the numbers, acknowledging that a major share of those immigrants end up in the greater Vancouver area. Then it is left to the school boards and the taxpayers of Vancouver to the pick up the necessary language training and and so on, at least to a certain extent.

The government is asking for some consideration. With the reality of immigration in certain selected parts of Canada, should there not be more attention given by the federal government to acknowledge that and to assist and co-operate in terms of providing the appropriate services for new Canadians?

To be fair, I acknowledge that there are programs that work toward that end but when it comes to English language training or teaching English as a second language, particularly in our school system, the costs are becoming over burdening.

I simply want to conclude by saying that I have been pleased to participate in this debate. I look forward, particularly at committee, to see a more thorough examination of the some the points raised by my hon. friends and I look forward to third reading debate some time the future.

[Stephen Harper, Reform, Calgary West, AB]

Madam Speaker, I certainly enjoyed the presentation by the hon. member for Kamloops. I noticed that he touched upon a few Reform themes like the issue of double equalization that occurs in some federal programs. He touched upon issues like western alienation, the effect of these programs upon his province and the effect on the inter-relationship of this with the equalization program. I acknowledge these. I do not want to say that he is a good Reformer but I certainly acknowledge these as rays of wisdom breaking through like the sun on the British Columbia flats.

Having said that, I would like to ask him about one particular comment that he made on the relationship between fiscal policy and the present economic growth situation. He was anxious to credit the current government in British Columbia with this, but it is fair to say that we have had a period in Canada over the past generation in which governments, federally and provincially, have grossly mismanaged their finances. One of the areas in which relatively good fiscal performance occurred was in the province of British Columbia. Corresponding to that we have seen rather healthy economic growth in British Columbia at a

time when other provinces are struggling with their deficits and debts at much more significant levels.

I wonder if the hon. member would acknowledge that there is this long-term relationship between deficit, debt and low economic performance and whether he would give credit to British Columbia governments over the years for having avoided to a fair degree that kind of trap.

Specifically in the case of this bill, would he recommend that perhaps in re-examining equalization in the future we look at whether the fiscal performance of these governments should be a factor in the kinds of equalization transfers that go to them?

[Nelson Riis, NDP, Kamloops, BC]

Madam Speaker, I appreciate the question from my hon. friend.

I want to clarify one point that he made, or perhaps add clarification. I do not think he was saying that the Social Credit government actually managed the state of the province well. That is not my view.

We will all recall that when the New Democrat government took over office in British Columbia it brought in one of the more internationally recognized accounting firms to evaluate the books and it found the whole place a complete financial disaster. We will start from that and then go on, much the same as this government is finding the Conservative situation regarding the whole country.

I will acknowledge the point that we have seen a general understanding that it is important to get the debt and the deficit under control in British Columbia for some time.

There is probably no province in which that has been demonstrated more clearly than the province of Saskatchewan, if my memory serves me. There seems to have been a pattern. This is an interesting pattern, although I do not want to take up a lot of the time of the House by talking about it. It just seems natural that people change governments. They elect another government, either a Liberal or a Tory government and it turns the whole place into a financial disaster. Then it gets tossed out and in comes the CCF or the NDP again. It gets everything in order over a period of time. This just plays itself out.

That is a reality and just the way things go in that province.

[John Harvard, Liberal, Winnipeg—St. James, MB]

You would not make a very good historian.

[An hon. member]

That is the history of Saskatchewan and B.C.

[John Harvard, Liberal, Winnipeg—St. James, MB]

What about Ontario?

[Nelson Riis, NDP, Kamloops, BC]

Part of getting the fiscal house in management in the province of Saskatchewan and in the province of British Columbia has been the recognition that we have to get the debt and deficit under control as well. No question about that.

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

Ask Bob Rae.

[Nelson Riis, NDP, Kamloops, BC]

Let us ask Clyde Wells. I am just using this as a good case study. We want to look around the world and ask where governments seem to work. They seemed to work under CCF and NDP governments in Saskatchewan and under the NDP government in British Columbia.

[An. hon. member]

What about Yukon?

[Nelson Riis, NDP, Kamloops, BC]

"What about Yukon", somebody asks. Yukon is the same.

I am not saying that New Democratic governments always work super well everywhere, just like I do not think anybody here would say the Tories or Liberals-Reform has a short record so far-essentially work everywhere. I am saying that we have to look around for models of excellence in which people actually have done the job well. I am saying that British Columbia is doing it well, just like the New Democratic and CCF governments in Saskatchewan have done well over the years.

I want to acknowledge the point made by my hon. friend. To do this properly one must manage debt and deficit.

How do you do that? Ralph Klein is trying one approach. It does not seem to be working. The Tories before him I guess tried that. He is trying some more cut, cut, hack, hack, seeing if that works. So far it has not worked.

I was here for the nine years that the Progressive Conservatives were in office and they said they tried that approach. The situation has never been worse in this country. We have over a half trillion dollar debt. Obviously the people of Canada want to try something totally different.

The province of British Columbia is doing it a bit differently. It has cut back on all sorts of unnecessary government spending. It also acknowledges that there is something called government investment. It is investing in a variety of areas such as the development of high tech firms, training highly skilled technicians, putting money into scientific research and development through to production. In other words, it is recognizing that there is government money to put into investment and government money to put into simply spending and that has to be cut. It has done that.

As a result I am pleased to say that probably within another two years there will be a balanced budget in that province, the only province in Canada. I say that the proof of the pudding is in the eating. I am not saying that everything that it has ever done has been perfect. We would not say that about any government. However, when it comes to managing the economy it seems to be working better than any place else in Canada.

I say to my hon. friend that I think his question was good. It was not really a question, I guess. It was simply would I agree. Largely I would agree.

To tie equalization in in terms of the fiscal management of provincial governments, I think that was the question, is worth some merit. Perhaps it is the kind of thing I would like to see discussed more in committee to see what the implications of that would be, particularly for some of the very poor parts of Canada. I do not want to name those provinces, but I think there would be some provinces that would have a very difficult time without substantial equalization in a whole variety of programs. It probably is sufficient for my hon. friend to say that they are doing a good job.

[René Canuel, Bloc, Matapédia—Matane, QC]

Madam Speaker, since the beginning of this debate on Bill C-3, several experts have tried to prove with figures that equalization was not necessarily fair, and I am sure it is not.

Coming from a remote area, from one of the poorest ridings, I see farmers forced to sell their land, I see our trees sold without any processing, in short I see serious problems. I am not prepared to say that equity from sea to sea applies to my riding.

However I wish to focus on education. Therefore I will deal more specifically with transfers to education. In a country like Canada and in a future nation like Quebec, it is essential that we devote every effort to manpower training. I spent my life in education and I know that without proper training it is unrealistic today to expect a decent standard of living.

Education and training are the keys to economic, social and cultural development. They are also the keys to our success, nationally and internationally. Our labour force must be upgraded on a continuing basis if we want to meet the challenges of today and especially those of the future.

The federal government started to grant money directly to universities in 1951, although education was officially a provincial matter. At that time, and justifiably, Quebec strongly opposed that move.

In 1961 the federal government transferred to Quebec 1 per cent of corporate income tax in order to allow the province to give its educational institutions equivalent grants.

The cost sharing arrangements for post-secondary education were revised in 1967. The federal government agreed then to transfer to the provinces 50 per cent of the operating costs of post-secondary education institutions. These agreements then took the form of tax point transfers and cash payments to all the provinces. In 1977, these agreements were merged into one program called Established Programs Financing.

Previously advanced education was accessible only to a privileged few. Education was reserved for a minority. At that time, the only university for all of the Gaspé Peninsula, the North Shore and the Lower St. Lawrence was Laval in Quebec city. The ordinary people of our regions, whom we called the poor, did not have access to that institution. It meant that only some people, part of the elite, could go to college and the others had to stay home because they could not afford it. What did they do? They became welfare or unemployment insurance recipients.

Be that as it may, after World War II, there was a mass communication explosion; our planet was about to become a global village. It was no longer possible to deny the people their right to a better education and better training. All young people wanted to study and our system quickly overflowed, to such an extent that in 1967 we had to create the CEGEPs, general and vocational colleges.

At that time, Quebec's Department of Education said it could not meet the demand. That year, only ten CEGEPs were created, but others followed. Progress was not to stop there. We had to build or expand universities to meet the demand and governments invested considerable amounts in that area. Another major factor at that time was the fact that people wanted to get good training in vocational sectors.

What triggered the whole process was the coming home of soldiers after World War II. We had to find jobs for them. We had to put them back in the labour market. But before anything else, if they were to have a real opportunity to succeed, they had to be trained. We created a country-wide network of technical schools which were merged with the CEGEPs during the 1960s and 1970s. Only a few schools still remain independent.

Furthermore, the adults who were already working wanted advancement so they also wanted access to higher learning. The demand for education increased unbelievably. All this led to the development of a sound education system across the country, thus raising the general level of education. In some specific areas, it increased very rapidly.

Another very important aspect of this revolution that swept North America, is the fact that women were admitted in colleges. Before that, only men had access to higher education. Thanks to the efforts made by Quebec in the area of education, there are now more women than men enroled in higher education establishments. And so it should be.

In spite of its many successes, our education system still needs to be improved, and for that, the help of the federal government is essential, especially as regards post-secondary education. In my riding, we only have one CEGEP and no university. The slightest tuition fee increase closes the door to post-secondary education for some of our young people, depriving them of the necessary training to face the challenges of the next century.

Each dollar we do not invest brings our young people, and our adults too, closer to having to depend on unemployment insurance and welfare. Every year, in my riding, the rates go up. Is it what this government wants? Is it what we want, unemployment and people on welfare? It is not possible to go back in 1994. By investing less in post-secondary education, do we think that we can continue to develop this country and get out of the economic problems it is going through?

Certainly our education system is not perfect, but it is highly defensible, especially in Quebec. Like any system, it must continue to be improved. We cannot improve it by cutting its funding.

We have let parents and teachers have their say in our education system. Now it is up to us in the government to follow through on the right to speak which we have given them. Parents are speaking up and so are students aged 16 to 20. They are afraid of unemployment. Today, I speak on their behalf.

Can we again go back on this point?

We must bring the debate back to the real issue. Do we want a better future for our fellow citizens? Do we want to give our desperate young people a real chance? Do we want Canada and Quebec to continue to enjoy a good standing among developed nations? If that is what the government wants, it cannot cut transfers to the provinces, especially for post-secondary education. Our future depends on it. Furthermore, post-secondary education is in provincial jurisdiction. In Quebec, we need all the available resources.

I want to speak out here against the principle of a ceiling on equalization. For Quebec, it means a loss of hundreds of millions of dollars over the next five years.

I am speaking against Bill C-3 because it extends the ceiling on equalization payments. On the contrary, we need a complete reform of all transfer payments to the provinces.

The cuts made by the federal government in established programs financing reduced the federal share of funding of health and post-secondary education programs in Quebec from 45 per cent in 1984 to 32 per cent in 1993. Government spending on research and development is much lower in Quebec, whatever the criterion used.

It is unacceptable to let this government darken our future by depriving us of money that we send in taxes which should be used to educate our youth and adults. It is too important for the survival of Quebec and the riding of Matapédia. As long as we pay taxes, we must get this return. It is too important for the young people and adults in my riding. Madam Speaker, you can be assured that I will demand it.

[Stephen Harper, Reform, Calgary West, AB]

Madam Speaker, I listened closely to the speech by the hon. member for Matapédia-Matane. If I understood correctly, he was speaking not only about the treatment of Quebec in Canada, but also about the way his region is treated by the province of Quebec. We find that to be a very interesting point.

Does he believe that in the case of federal programs such as the equalization provisions in this bill, if the federal government were to change the formula, the Quebec provincial government would be encouraged to spend some of the equalization funds it receives in the poorer regions of the provinces. I think that is the aim of programs such as this. Does the hon. member believe it is important that the provincial government spend equalization funds in his region, and not only in the large urban centres such as Montreal or Quebec?

[René Canuel, Bloc, Matapédia—Matane, QC]

Madam Speaker, I want to thank my hon. colleague who appears to be highly sensitive to the plight of the regions. It is true that very often when we think of Canada, we think of large cities. Large urban centres are often represented by several members, and sometimes by several ministers. That is why I say that federalism has proven to be a failure for regions such as mine, and most likely for regions such as his.

Basically, federalism has proven to be an even greater failure in the regions. It has failed throughout Quebec, but especially in the regions. True, equalization and transfer payments are supposed to help the poorer regions. However, I have only one voice and compared to that of Toronto, Vancouver or Montreal, the voice of regional members is not heard because they represent a much smaller number of people.

When I decided to run in my riding, it was for a very special reason, namely to heighten the awareness of city dwellers of the poverty in our regions. We have a great deal of talent. We have tremendous human capital, but as we all know, when people leave to attend large universities, they do not return. On this point, I agree completely with my hon. colleague. We need to focus more on the regions and give them as much as possible.

Because, when towns cease to exists, cities decline and eventually disappear.

I want to thank my hon. colleague and let him know that I am very sensitive to his concerns. I agree that more has to be done for our regions.

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

Madam Speaker, I would like to congratulate my colleague from Matapédia-Matane for an excellent speech, and especially for talking about Quebec and Canada's rural communities.

I had the privilege and the opportunity to be associated with a great event held in February, 1990, in Quebec, which was called the États généraux du monde rural. What came out of this general assembly for rural communities, which lasted for over three days, but took more than a year to prepare, is that we do not do enough for rural areas in Quebec and in Canada. We always tend to consider government programs, taxation and even the Constitution in terms of the needs of the cities rather than the needs of rural areas.

I would like to congratulate him for that, and to build on his arguments about federalism versus rural communities. Nowadays, we hear about a concept called subsidiarity, which goes a bit like this: if you expect good results from government policies, you would not be needing extremely centralized measures undertaken by a cumbersome bureaucracy, or a paralysed government, but rather massive decentralization. During the debate on Quebec sovereignty, and where Quebec attains its sovereignty, we might also have to talk about subsidiarity, to draw the people, especially the rural population, closer to power.