Debates of March 10th, 1994

The Budget

[Anne McLellan, Liberal, Minister of Natural Resources]

Mr. Speaker, I am pleased to rise today in support of the first budget of this government announced on February 22 by my colleague, the hon. Minister of Finance.

This budget deserves the support of this House because it provides a solid framework which will both stimulate economic growth and set the course for long term fiscal restraint and responsibility. As the member for Edmonton Northwest, I am very encouraged by this budget. It addresses those issues that the residents of my riding raised with me during the election, issues of job creation, deficit reduction and meaningful reforms to Canada's social programs.

In addition, there are several announcements concerning the activities of my department, Natural Resources Canada, that I wish to highlight.

First I wish to discuss aspects of the budget which affect my constituents in the riding of Edmonton Northwest. The unemployment rate in Edmonton Northwest is high. However, with this budget the government will help restore hope and prosperity not only to the residents of Edmonton but to all Canadians.

A key component in restoring this hope and prosperity will be the creation of jobs by the private sector. In my riding as in many others these jobs will be created primarily by small businesses.

For example, mine is a riding of small businesses. There are over 5,000 such businesses creating employment in my riding.

This budget recognizes the importance of small business, supports its further growth and encourages its natural creativity and initiative. For example we have cut back on premiums for unemployment insurance. That will save businesses $300 million a year which they can now reinvest in new jobs. The government will consult with banks for the first time to develop a code of conduct for small business lending.

The budget also creates Canada business service centres in every province to facilitate contact with our government. It establishes the Canada investment fund to streamline badly needed access to venture capital for small enterprises.

In addition this budget addresses the badly needed reform of our social programs. Our social security system was designed for a different era and no longer meets Canadians' needs. We have hundreds of thousands of Canadians who are unemployed, underemployed or stuck on social assistance, who see unfairness and disincentives in the system and who live in poverty.

We will undertake this reform of Canada's social programs through a wide ranging process of consultation involving other levels of government, the private sector, members of Parliament and their constituents. There will be numerous opportunities over the next few months for constituents in Edmonton and elsewhere to participate in this process and I encourage them to do so.

Now I would like to turn to another key component of the budget, deficit reduction.

As stated by my colleague, the Minister of Finance, the budget reduces the deficit from $45.7 billion in 1993-94 to $39.7 billion in 1994-95 and $32.7 billion in 1995-96. In terms of spending cuts this is the most significant budget we have seen in this country in 10 years.

One of the key components of the deficit reduction program is major cuts in defence spending, some $1.9 billion over the next three years. The budget contained the announcement that 21 defence facilities across Canada would be closed or restructured. While these decisions were not easy they are an example of the tough choices this government has promised to make to get our spending under control.

In Alberta alone the net saving which will be achieved through cuts in defence spending is approximately $44 million annually. We in Edmonton with a proud and long military tradition know that we must do our part to ensure an efficient and effective yet streamlined military force.

At CFB Edmonton several operations will be transferred out, including the search and rescue squadron to Yellowknife and the air transport squadron to Trenton and Winnipeg. These and other operational changes will result in a net saving of approximately $36 million annually.

At the same time the Lord Strathcona Horse Brigade will be transferred from CFB Calgary to CFB Edmonton. By reducing the transit time to the main training area for these troops at Camp Wainwright and by closing the Harvery barracks, this move represents a saving of $6 million annually to taxpayers. In addition, the closure of CFB Penhold will achieve another $2 million in annual savings.

The government believes that our defence infrastructure has far exceeded for many years any probable and reasonable defence needs. The announcements of reductions reflect the realities of the nineties that with the end of the cold war Canada's military presence must be rethought and reconfigured.

The budget also focuses on achieving greater equality in social conditions for all Canadians. In this budget we see investments made in women's health care issues, the well-being of children, young Canadians and aboriginal peoples. These issues are very important to me as they are to many in my riding.

I am very pleased to note several announcements which follow from our promises to Canadians in the red book. The budget provides funding for a centre of excellence for women's health, a prenatal program for low income pregnant women, an aboriginal head start program, a new youth service corps and youth internship and apprenticeship programs.

I believe these programs are long overdue in terms of responding to the needs of these groups and individuals. The introduction of these initiatives demonstrates that this government is committed to the equality of all Canadians.

Further, these programs represent a key step toward meeting the challenge which the Minister of Finance identified in his budget speech, the challenge to construct responsible social programs which are affordable.

Several aspects of the Minister of Finance's announcements will have a direct effect on the women of this country. For example, I would like to note that the package of reforms to the unemployment insurance program will help the women of Canada. As the Minister of Finance said, it is often women who bear the brunt of social stress and economic dislocation.

He said that during our budget consultations a number of issues were raised regarding disparities in the tax and income support systems.

Specifically, while the unemployment insurance benefit rate will be reduced to 55 per cent, the rate will be 60 per cent for individuals with modest incomes who support children or older parents. Many of those people are single mothers. There will be amendments to the provisions governing workers who quit their jobs voluntarily or are fired for misconduct. This acknowledges the concerns of the many women who voice their opposition to

the introduction of these provisions by the previous government.

Furthermore, I am very pleased to note that the Minister of Finance announced that he will act on the recommendations of the federal-provincial family law committee which has been studying the issue of tax treatment of child support payments and the related issues of their levels and enforcement.

While these measures respond to the specific needs of Canadian women, they also respond to the pressing need to reform Canada's outdated social security system to ensure that system builds bridges to work and that system encourages independence, not dependence.

The Minister of Finance also discusses in the budget a number of measures which will create economic renewal and revitalization, including the infrastructure program. In Alberta total investment in infrastructure development and enhancement and job creation will be $518 million. The creation of both short and long term employment, particularly in centres with high unemployment such as Edmonton, comes as welcome news.

Moreover, the infrastructure program will improve national, provincial and local competitiveness and help promote improved environmental quality.

For example, I know that the Edmonton city council is considering a number of projects, including the construction of a major roadway interchange along a truck route, improvements to the Gold Bar Wastewater Treatment Plant and the extension of its river valley park system.

Such programs will help to ensure that Edmonton not only remains a good place to conduct business, but also that its citizens continue to enjoy a high quality of life.

I have addressed some aspects of the budget which directly affect my constituents in Edmonton Northwest. Now I would like to turn to issues which deal with my responsibilities as Minister of Natural Resources.

Let me emphasize the fact that Canada's natural resource sectors are industrial cornerstones of Canada's economy. Through our general economic policies and the work of my department this government is committed to ensuring that the energy, mining and forestry sectors continue to provide jobs for Canadians, stimulating the economies of hundreds of communities in all regions of this nation and continuing to contribute to Canada's positive balance of trade.

Before I discuss specific budget announcements affecting these industrial sectors I would like to address two key concerns identified by Albertans in discussions leading up to this budget. First, the federal government's acting unilaterally to impose a carbon tax was of great concern to some Albertans prior to the budget speech. The Minister of Finance did not impose a carbon tax.

In addition, the Minister of Finance did not reduce tax rebates for privately owned utilities.

One of the things this new government will accentuate is a partnership approach with all key stakeholders such as other levels of government, industry, labour, et cetera. Gone are the days when governments could impose solutions without consulting with those who will be most affected.

The goal of the Public Utilities Income Tax Transfer Act, also known inelegantly as PUITTA, is to reduce interprovincial tax disparities and provide a balanced playing field for crown and investor owned utilities and their customers wherever they are located in Canada.

The principal beneficiaries of PUITTA are those provinces with investor owned utilities of which Alberta, Nova Scotia and Prince Edward Island are the main examples. Under the PUITTA legislation the federal government rebates 85.5 per cent of the federal income taxes paid by investor owned utility companies back to the provinces.

The government is not abolishing PUITTA but merely extending the current restraint on its growth. Albertans are not being targeted. Their utilities receive better treatment from the federal government than from their own provincial government.

In 1990 the Alberta government abolished its own equivalent of the federal PUITTA program.

I would like to turn now to the changes affecting class 34, capital cost allowances. First, I should explain that class 34 allowed the right-off of certain equipment used in co-generation, the recovery of waste heat and renewable energy, including active solar heating, small hydro, energy from wood and municipal wastes and wind energy.

In this budget class 34 has been eliminated and we have created a new and expanded class. Class 34 was created in 1976 and was designed to encourage business and industry to reduce energy waste and use renewable energy sources.

On the energy efficiency side many of the standards used under class 34 were based on the technology of the seventies. Since the purpose of the tax write-off mechanism is to encourage the use of leading edge technology the standards needed to be revised, and accordingly the new class does just that.

On the renewable energy side we have created a new class that now has expanded to include three new renewable energy sources. Photovoltaic energy, geothermal energy for electricity

production and methane from landfill sites and sewage treatment facilities are now included in the new class.

The initiatives under this new class will contribute to the government's greenhouse gas emission objectives. In addition, the government is examining a variety of measures under the national air issues co-ordination mechanism. This examination includes several measures to increase the use of renewable energy in Canada.

There has been criticism about the fact that this budget does not do anything to improve the prospects for mineral exploration in Canada. First of all, the Liberal Party of Canada was the only federal party to have a platform on mining during the election campaign.

Let me also point out that this budget was one of the first in years to address the concerns of the mining and mineral industry in this country. The tax changes concerning mine reclamation, which I will discuss in a few moments, prove that this government is committed to the future of this industry in Canada.

The mining policy mapped out by my party notes the serious economic implications of Canada's declining ore reserves due to inadequate grass roots exploration. The Minister of Finance has listened carefully to my concerns regarding the ore reserve and mineral exploration issues.

He has also carefully considered concerns registered by organizations such as Save Our North, the Prospectors and Developers Association of Canada and various regional prospectors and developers associations. However, the government's immediate agenda for taking action to stimulate mineral exploration and other desirable economic activity must take into account constraints imposed by the country's current fiscal situation.

I should also point out that this issue is being examined through a consultative process called the Whitehorse mining initiative. This initiative, as I know members are aware, is driven by industry and includes federal, provincial and territorial governments, native peoples, environmental groups and other related stakeholders.

Mining has been a significant factor in this country's economic growth since before its very inception. As I mentioned earlier, the mining industry has demonstrated its commitment to Canada through the development of the Whitehorse mining initiative. Late last September the industry launched an impressive public information campaign called "Keep Mining in Canada" which my department enthusiastically supports.

In this campaign's ten point plan the industry called on government to change the tax laws on mine reclamation funding to encourage investment in new mines. Briefly, mine reclamation is the process of decommissioning and rehabilitating mine sites following closure and the termination of production. It involves restoring the site to the same or better state than existed prior to the development of the mine. As I am sure members can appreciate, this often costly process supports our commitment to sustainable development.

By bringing in changes to the mine reclamation tax fund regulations, the Minister of Finance has created greater equity in the tax system. The government has taken a position that is fair to both small and large companies. Smaller single mine companies are put on a level playing field with large mining corporations.

With the new measure such small companies will be able to take the deduction up front to the extent that they are required by provincial governments to make payments into mine reclamation funds.

In short, the measure the Minister of Finance has taken is good for environmental protection. It has brought greater equality into the income tax system and has increased the cash flow of large and small mining companies.

This measure also represents an annual investment of about $15 million by the Government of Canada in our mining industry. I believe this measure addresses some of the concerns raised by the Keep Mining in Canada campaign. It also supports the improvement of the investment climate without doing something which could prove to be fiscally imprudent.

I should add the perception that this new measure creates a system of double taxation for mining companies is false. While fund earnings are taken into taxable income twice, there is a corresponding deduction for the amount of reclamation expenses. Therefore in reality tax is paid only once on the fund earnings.

Finally I should emphasize several measures announced by the Minister of Finance which have positive benefits for client sectors of Natural Resources Canada.

As I mentioned earlier the reduction of UI premiums is estimated to provide businesses with some $300 million to put people back to work. I believe this will spur job creation in small businesses engaged in energy, mining and forestry activities throughout this country.

The establishment of the youth corps is also expected to provide young Canadians with the opportunity to gain valuable on the job experience in our forestry sector. The apprenticeship program will enable other young Canadians to get valuable experience in all three sectors supported by my department.

The technology network represents a first step toward improving the linkage between federal government research and development institutes, universities and the private sector. That linkage will be extremely important as every country in the world seeks to set up electronic highways to improve its competitive edge.

Besides the potential increase in demand for forestry products the residential rehabilitation assistance program may also increase demand for energy efficient products that have been

developed by industry in co-operation with my department's research and technology arm, CANMET.

The redefinition of Canada's involvement in space will boost our commitment to the continued development of Canada's expertise in remote sensing. As members know the Canada Centre for Remote Sensing which is a division of the surveys, mapping and remote sensing sector of my department was almost single-handedly responsible for the push in the early 1970s to develop our expertise in the field of space.

Mr. Speaker, I see that my time is almost up.

[The Acting Speaker (Mr. Kilger)]

I was just going to ask the hon. minister if she could give me some assistance and possibly indicate as to how much longer she might be.

[Anne McLellan, Liberal, Edmonton Northwest, AB]

Two minutes.

[The Acting Speaker (Mr. Kilger)]

Is there unanimous consent for the minister to conclude her remarks?

[Some hon. members]

Agreed.

[Anne McLellan, Liberal, Edmonton Northwest, AB]

Mr. Speaker, these last two points I have raised only begin to scratch the surface of my department in terms of its importance in the development of Canada's science and technology expertise.

I can assure members of this House that Natural Resources Canada is committed to greater efficiency in its operations in order to maximize its contribution to Canada's science and technology capabilities which are key to our future prospects for economic growth and job creation.

In closing, as the member for Edmonton Northwest and Minister of Natural Resources, I urge this House to fully support the announcements my colleague the hon. Minister of Finance has made concerning this government's first budget.

Canada faces serious challenges as we move together toward the next century. I believe these measures provide an extremely positive and useful series of first steps to get this country on the road to a more competitive standing in global markets and to get Canadians back to work.

Much has been said about this government's commitment to the concept of sustainable development. It is clear we must move carefully to achieve a balance in decision making between environmental and economic objectives.

At this time our movement toward sustainable development must progress carefully. We know very well that the wrong signals to the marketplace will have a drastic effect on our ability to encourage environmental sensitivity. All Canadians must work to balance environmental and economic objectives. It is that simple.

In conclusion this budget will rekindle that confidence. It is the kind of confidence this country needs to get hundreds of thousands of Canadians back to work and to fulfil their desire to make a positive contribution to the future of this great nation.

[Nic Leblanc, Bloc, Longueuil, QC]

Mr. Speaker, I do not think the Secretary of State for Human Resources really understands what the budget does. At least not the way I understand it. I do not see how she, as the Secretary of State for Human Resources, could let the Minister of Finance increase unemployment insurance premiums by $800 million. And since she is supposed to help Canadians who need assistance, I wonder why she let the Minister of Finance raise the minimum entrance requirement and reduce the number of weeks during which claimants can collect benefits. It seems to me that the minister does not have a great deal of influence with the Minister of Finance.

She also talked about research and development. I may remind her that at this very moment, $1 billion more is being spent annually on research and development in Ontario than in Quebec. I hope that from now on she will monitor the situation closely and ensure that funding is distributed more equitably.

She also mentioned infrastructures and the many jobs this will create. I say it will not happen, because increasing unemployment insurance premiums by $800 million means that consumers will have that amount less to spend. The government reduces our purchasing power by $800 million but allocates $1 billion for infrastructures, which means zilch for job creation.

It is clear this budget is not about job creation but job reduction.

Furthermore, corporate taxes will be increased by $1.7 billion and individual income tax by $1.8 million, over the next three years.

If the government thinks this is going to create jobs, I think the reverse will happen. That is why I completely disagree with the secretary of state. And now for my main question, which concerns her directly. Considering her responsibilities in this area, how could she let the Minister of Finance raise unemployment insurance premiums for the current year and reduce unemployment insurance benefits? In other words, how can she let the Minister of Finance do the exact opposite of what she should be doing in her own department, which is to improve the well-being of Canadians?

[Anne McLellan, Liberal, Edmonton Northwest, AB]

Mr. Speaker, perhaps my hon. colleague is under some misapprehension as to who I am and what I do. I am not the secretary of state for human resources. I am the Ministerof Natural Resources. There is a difference, although I take the

point that perhaps our greatest natural resource in this country is our people. Having said that I will respond to a couple of the comments made by my learned colleague.

In relation to his concern about unemployment insurance as my comments indicated the reforms of this system are ongoing. There will be a far reaching consultative process with Canadians. In the interim however we have targeted those people most in need to ensure that their benefits are increased. Those most in need with modest incomes, with dependents be they children, elderly parents or disabled family members, are going to see their benefits increase to 60 per cent.

In relation to the hon. member's concern about jobs and job creation this government believes the single greatest engine of job creation in this country will be small business.

I reiterate those steps the Minister of Finance and this government have taken to encourage small business to create more jobs. The Minister of Finance offered small business a challenge in his budget. I have no reason to believe that the small businesses will not take that challenge and create tens of thousands of new jobs across this country.

[John Williams, Reform, St. Albert, AB]

Mr. Speaker, in her concluding remarks in answer to the previous question the minister said she had every reason to believe business is going to take up this challenge and create hundreds of thousands of new jobs. Why then do we actually need an infrastructure program which is going to cost the taxpayers another $6 billion?

The minister asked us to endorse the budget that was brought down by the Minister of Finance. In her speech she talked about creating jobs through small business. Why do we need a $6 billion infrastructure program that loads more taxes and more debt on the taxpayer? We have argued for a long time to start reducing taxes and allow business to do its job and that is how we will start creating employment.

In her remarks on unemployment insurance she was taking great credit for the fact that government is reducing UI premiums. Remember however that on January 1 the government increased the UI and now is taking it back. The net result is absolutely zero. For the government to take credit for reducing the UI premiums I think is false on its part.

The hon. minister talks about the budget, taking great credit for reducing the deficit to $32 billion. By the minister's own admission it will drop on its own to $41 billion this coming year.

Why is the minister asking for our support when the Minister of Finance brought down a dismal budget? It has not been accepted by Canadians and Canadians recognize that government has not even started to address the deficit problem, adding another $100 billion in debt.

Will the minister please explain why we should support the budget as brought down by the minister because I do not think we should.

[Anne McLellan, Liberal, Edmonton Northwest, AB]

Mr. Speaker, in relation to the infrastructure program and small businesses, small businesses will create jobs. What do small businesses need to create those jobs-renovated and rebuilt infrastructure. They need good public transportation, good roads, good sewer systems, cleaner air. That is what they need to compete with their competitors around the world.

It is interesting that our major global competitors, Germany, Japan and the United States, are contributing billions and billions of dollars over the next 10 years to renovate their public infrastructure. Why? They know it is a public responsibility to provide the foundation, the bricks and the mortar, so businesses can then do the job they do best which is to create wealth and put people back to work.

That is why this government, with its commitment to long term thinking, is making this short term commitment to the renovation of this country's infrastructure.

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Mr. Speaker, I am pleased to rise in this House today to speak on behalf on the citizens of Mégantic-Compton-Stanstead about the budget tabled recently by the Minister of Finance. Let me assure you that my constituents, like Quebecers and Canadians everywhere, have become acquainted with the measures contained in the budget and, like the Official Opposition, are extremely concerned about the budget's implications on their day-to-day lives.

In the past few days, as I was thinking about what I would say on the subject, the front page of the Saturday, March 5 edition of La Tribune caught my attention. In fact, two headlines caught my attention. I would just like to mention that La Tribune is owned by the Power Corporation. It has no ties to the Bloc Quebecois and is in no way sympathetic to the Bloc's position. I would invite my colleagues on both sides of the House to subscribe to this daily which, I might add, focusses on the Eastern Townships. On reading the editorial page, they will see that this newspaper has nothing in common with the usual stands taken by the Bloc Quebecois.

As I said, this daily newspaper is sold in the Eastern Townships and outside this region. So, naturally it also reports on the

goings-on in the riding of Mégantic-Compton-Stanstead which I am honoured to represent in this House.

As I was saying, two headlines in the newspaper caught my attention. The first one, which I would like to show to my colleagues, proclaimed the following: "Record Number of Social Welfare Recipients".

Last January, 21,539 people in my region received unemployment insurance benefits, according to statistics supplied by the Department of Human Resources Development. How in all conscience can we speak of human resources development in the face of such a high level of unemployment? In addition, 17,600 people received social welfare benefits during the same period. These figures do not include dependants of unemployment insurance and welfare recipients. In reality, what all of this means is that 28.6 per cent of the region's labour force is unemployed.

The 1994-95 budget launches an assault on the least fortunate, the very group that the Liberal government and its Minister of Finance profess to staunchly defend.

The second headline in this newspaper was a statement made by the Prime Minister of Canada which earned-the statement that is, not the headline-the applause of 700 people attending a luncheon given by the Saskatoon Chamber of Commerce. I assume that very few unemployed people must have attended that luncheon. The Prime Minister is quoted in this article as saying: "Stop complaining. The time has come to stop whining, to forget about the Constitution and think about creating jobs". He goes on to say: "Stop whining-you know what I am talking about-and you will make progress".

The Prime Minister's comments show unacceptable scorn towards the thousands of people who find themselves unemployed, not because of their own iniquity but mostly because of mismanagement by all federal governments of the last 20 years, in particular that of Pierre Elliott Trudeau in which, as Minister of Finance, the current Prime Minister was one of those who started the monstrous deficit spiral that has led to a debt of over $500 billion.

However, we understand why the Prime Minister drew applause from the richest members of our society, since this government has not touched the outrageous family trust system.

I want to point out another perverse effect of this budget on unemployment insurance. I refer to the study done by three economists from Quebec University in Montreal, Pierre Fortin, Pierre-Yves Crémieux and Marc Van Audenrode. What are the conclusions drawn by these economists?

They point out that the new unemployment insurance measures are generally more stringent than the 1990 Tory reform that caused an outcry among members of the current Liberal government then in opposition, and make the unemployed bear the burden of the unemployment insurance reform now under way, which represents 60 per cent of the new budget cuts announced by this government.

According to these three economists from Quebec, the new cuts are in the order of $4.1 billion, $2.4 billion of which comes from savings made possible by the changes to the unemployment insurance program.

In the face of such measures, how can we assume that the government is acting in good faith when it claims it wants to improve income security programs through an extensive reform process and when, even before knowing the first thing about this reform, we already know that this government intends to make cuts of between $5 billion and $6 billion in unemployment insurance and who knows how much in the Canada Assistance Plan? Only yesterday, the Minister of Human Resources Development and the Prime Minister announced outside this House that they would make cuts not only in unemployment insurance and social assistance but also in old age security pensions.

In conclusion, I urge the Minister of Finance to intercede with the Prime Minister to make him show more compassion towards the disadvantaged and more common sense in the administration of federal affairs. If the government really wants to save $280 million at Quebec's expense, it only has to put Quebec in charge of managing job training programs, as all Quebec stakeholders are asking; it will thus save $250 million a year while ensuring that job-seekers receive better services.

[Ronald J. Duhamel, Liberal, Parliamentary Secretary to Minister of Public Works and Government Services]

Mr. Speaker, I would like to ask the following question: Does he believe that the victims, whom he mentioned in his speech, are the result of policies of the former Conservative government or are they victims of the policies of the new Liberal government, which has been in office for a little over four months? Of whose policies are they the victims? That is my first question. I would like to have a very honest answer to a very specific question.

The second question I would like to ask is as follows. He mentioned that the Prime Minister of Canada, the Right Hon. Jean Chrétien, made a speech where he said that we need to have a positive attitude and stop whining and so on.

Does he really believe that this Prime Minister was targeting people who are unemployed or on welfare? Frankly, that is what I understood, and if that is the message he was sending, I am very, very disappointed, because no member and no party in this

House, be it the Prime Minister or anyone else, would wish such a misfortune on anyone. If I am wrong, let him correct me; if I am right, I would like him to withdraw that comment.

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Mr. Speaker, I will first answer my colleague's first question, in which he refers to his government's responsibility for the state of the Canadian economy. I come back to what I just said in the last ten minutes, something that is mentioned very eloquently in the study done by economists at the Université du Québec. I remember the figures given in this study by the economists, which incidentally was published in the newspaper La Presse last Monday:

The federal budget provides for a net deficit reduction of $8 billion in 1995-96. However, slightly less than half of this had already been proposed by the previous Conservative budget.

The new Liberal cuts are thus about $4.1 billion. Of this amount, $2.4 billion is from savings made through changes to the unemployment insurance program.

So the responsibility belongs both to the previous government and to the present government, because in fact just the label has changed from Conservative to Liberal but the measures are the same.

So, yes, the present government bears some responsibility for the drastic economic situation in which we find ourselves. As I said, the present Prime Minister, when he was Minister of Finance some 15 years ago and more, was one of those who started this deficit tragedy which means that today we have a debt of over $500 billion.

On the second point, I will answer my colleague that I believe that people in all parties are sincere when they feel sorry for the unemployed and welfare recipients throughout Canada, except that a government is judged by its deeds and its actions.

In this budget, dear colleague, the cuts being made are aimed at the unemployed. Again, I take the example of family trusts, on which nothing is being done, although they could immediately have obtained large amounts from them.

If the Prime Minister or members of the government are not talking about the unemployed when they say to stop complaining, I would like them to tell me whom they are talking about. The unemployed people whom I met in my riding last week feel these remarks were meant for them.

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, this is the fourth day of debate on the 1994-95 budget. According to this budget, expenditures will reach $160.7 billion, which is $39.7 billion more than the anticipated revenue.

While the expected deficit should be 0.2 per cent lower than in 1993-94, it still remains an enormous burden for Canadians, and particularly for the middle-class and the poor.

Indeed, this budget asks the unemployed to tighten their belts even more. It asks the middle class to forget about salary increases, even though this has been the case for the last four years. It asks the elderly to accept smaller pensions. It asks small businesses to still wait for an economic recovery which will come of course when the recession ends. It asks municipalities which, in many cases, cannot afford it, to get even more into debts to improve their infrastructure and create a few thousand temporary jobs.

However, this budget reassures the well-to-do by maintaining most of the benefits which will enable them to increase their wealth as well as the gap between them and their less fortunate fellow Canadians. The rich will continue to get richer by taking advantage of tax shelters. Wealthy families will continue to avoid paying taxes, thanks to the maintenance of family trusts. Similarly, major corporations will continue to cash in millions in non-taxable profits, thanks to tax havens. The 90,000 companies which, in 1987, realized profits of $27 billion without paying any taxes, according to professor Léopold Lauzon, will carry on their operations without having anything to fear from the tax man. The underground economy will be able to continue to prosper.

Yet, according to the Association of Canadian Distillers, liquor smuggling alone results in an annual loss of $1.2 billion for the various governments in Canada. Last November, Gallup conducted a survey to ask Quebecers and Canadians if they had contributed to the underground economy in the 12 previous months. Thirty-three per cent of Canadians and 42 per cent of Quebecers candidly admitted to having paid cash for purchases, so as to avoid paying applicable taxes.

In fact, it looks as though it is perfectly acceptable to promote the emergence of two classes of citizens: the poor who have trouble meeting their basic needs, and the rich who live the life of Riley. The noble definition of just society advocated by the federal Liberals since the days of Mr. Trudeau has very little to do with the reality experienced by Canadians as well as with their perception of that notion.

The deficit is a chronic problem for which the federal government is the primary responsible, since close to 80 per cent of the total public debt in Canada is attributable to it. Yet, the Auditor General tells us that, for several years now, the federal government has been doing a rather good job of monitoring its budgetary expenditures. This was also the case at the end of the Conservative administration. So where is the problem?

To understand the root of the problem, you have to realize that this federal debt results from the accumulation of deficits over time. If we look at the evolution of the deficit in relation to the GDP, we can see that the debt really grew primarily under Liberal governments.

Indeed, from 1970 to 1985, the debt-over-GDP ratio went from a surplus of 0.3 per cent to a deficit of 8.5 per cent, an all-time record.

Usually, increases in budgetary revenues tend to follow a rise in GDP. However, during the 1992-93 fiscal year, the federal government's budgetary revenues fell by 0.41 per cent, despite an increase of 2.6 per cent in GDP during the same period.

The trend has continued. According to the forecasts of the Department of Finance, budgetary revenues will decline by 3.74 per cent or $4.592 billion during the 1993-94 fiscal year. This was abundantly confirmed by the results for the first eight months of the current fiscal year, since federal budgetary revenues were down 5.2 per cent, from the same period in the previous fiscal year.

During the second and third quarters of 1993, GDP increased 3.6 per cent and 3.7 per cent, respectively, on an annual basis. The decline in revenue is largely attributable to a decline in personal income tax payable, another indication Canadians' fiscal threshold had been reached.

Despite the extent of the deficit and the national debt, Canadian taxpayers may be willing to make additional sacrifices, provided all members of society and all economic partners do their fair share. And also provided that those sacrifices will be used solely to improve their individual and collective economic situation. As a guarantee to Canadians that this will indeed be the case and that the objective will be achieved, the government should immediately put in place mechanisms that will inform Canadians quickly and accurately on the state of the economy.

Since so many complex factors are involved, it is not easy for the average person to get a clear picture of the country's financial situation. Since the experts often disagree on the best way to deal with the economic situation, I realize it must be hard for the average citizen to weigh his own immediate interests against the broader, long-term interests of the country.

However, we must not underestimate the ability of average Canadians to make up their own minds if they are given clear and precise information or a number of simple indicators. As was pointed out by the Auditor General in Chapter 5 of his report to the House of Commons, it is important the government provide Canadians and their elective representatives with the appropriate tools they need to grasp the essence of the problem.

Simple tools and periodic information must be made available to Canadians so that they can evaluate the government's forecasts and its achievements. Any discrepancies between the two should be explained to them.

Canadians must be told with delay about the impact their future choices will have. For example, if it had been properly explained to them that the revisions to the 1992 economic plan made in the 1993 budget would mean an $8 billion increase in the projected deficit for 1993, if they had been told clearly that this would translate into an increase of $65 billion in the total debt six years down the road, then they would have understood that the government's objectives sometimes have considerable future cost implications.

The more Canadians know about the state of the government's finances, the less chance they have of being taken in by questionable interests. Better still, they will understand when the time comes to make difficult decisions.

In conclusion, let me just say that if this government honestly believes that it can achieve the economic and financial goals set out in this budget, then it should have the courage of its convictions and immediately provide the public with adequate evaluation mechanisms so that all Canadians can judge for themselves well before the next election whether they made the right choice when they democratically elected this government.

[Dennis Mills, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, I would like to say to the member opposite that I was quite surprised when he was delivering his budget remarks that he did not mention the two initiatives he talked about in his prebudget speech. He asked the government to make sure these were included in the budget speech.

I refer to the speech the member gave on the budget day consultation when he talked passionately and convincingly about the necessity to maintain the homebuyers permanent plan, allowing first time homeowners to buy homes out of their RRSP funds.

I remember saying to the member that he made a compelling argument.

We listened to the member and as he knows that is in the budget and I thought it very strange that the member did not acknowledge that we on this side of the House had listened to him for that idea he put forward.

That was a good idea and is part of the comprehensive package that this budget is putting forward in trying to put people back to work. As the member knows, with low interest rates right now this is a period in which young people with families could have a chance to get into first time homes. That will create jobs for people in trades.

That is the thrust we are putting all of our energy into, putting people back to work. The member had a very good idea. We listened to it and I am surprised he did not acknowledge that the Minister of Finance had listened to him.

To simply focus on some of the problems with the budget in terms of the unemployed, just to talk about that, is a bit unreasonable. All of us in the House realize this has been a tough budget, particularly for those who are unemployed, but we are trying to get them back to work.

It is very important also that the member should have acknowledged some of the things we are doing in this budget for small business, particularly the study in the industry committee, the study on access to capital for small business. Many of the Bloc members are participating constructively.

My point is that although there may be room for some constructive criticism on this budget, it is also important that the opposition recognize some of the good things in this budget.

Our responsibility in this House is to deal in hope for the people who are trying to get this economy going. I am wondering if the member could maybe acknowledge that.

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, I would not want the hon. member to be too disappointed at not hearing my thanks. I am pleased to thank him today because the Liberal Party decided to accept one of the many measures which we proposed.

Since not many of our suggestions were accepted by the Liberals, you will agree that I cannot spend ten minutes thanking them. I would rather let the hon. member remind me that he congratulated me, and I really appreciated that.

As for the other measures, particularly as regards unemployment, I want to point out, as I said in my speech, that the poor might once again be willing to make an additional and ultimate effort. People in our ridings discuss this issue when we meet them. If ordinary Canadians could be guaranteed that this ultimate effort would eventually help improve their financial situation and reduce the deficit, I think that they would be willing to make that extra effort, but only on the condition that they would not be the only ones to pay. But the government still has not given us that guarantee.

Indeed, the poor and the middle class are affected, but the wealthy have kept their most important privileges. They are only affected in a symbolic way. This is what the poor find unacceptable. They say: If we are an integral part of this society, are we an integral part only when the fiscal burden must be shouldered? Are we there only ones to pay? Should we not also get some benefits?

The humble privilege which should be granted to the poor is the right to collect UI benefits when they become unemployed, usually involuntarily. Instead, the government decided to impose stricter conditions for them to be eligible to UI benefits.

I do not think this is the just society which the Liberals were so adamant about, and I will be very pleased, in a future speech, to thank the hon. member and the government opposite if they are willing to accept our numerous other requests.

[The Acting Speaker (Mr. Kilger)]

I would like to join all members from both sides of the House today to thank you also for your co-operation.

I recognize the hon. member for Rosedale.

[Bill Graham, Liberal, Rosedale, ON]

Mr. Speaker, it is with great pride that I rise today to give the first speech in this House in which I have the opportunity to speak to the members of this House, my colleagues, to some extent about the nature of my riding in introducing my observations about the budget.

I am very proud to stand here as a representative of the people of Rosedale riding and to take the place of a great Liberal who was the last Liberal to represent that riding, the Hon. Donald Macdonald. I do not say that I will be able to fill his shoes. As I am sure you, Mr. Speaker, and his other friends in this House will remember, that would be a difficult task both physically and mentally.

I would like to introduce my remarks by saying to my colleagues in the House that the name Rosedale does not entirely describe the diversity of the riding. I would like to tell members about the diverse areas that we have in our riding. It stretches from Davisville to the waterfront and includes such interesting areas as Moore Park, Rosedale itself, Cabbagetown, Regent Park, Moss Park, Crombie Park and St. Lawrence.

In this area are located six major hospitals, two universities, part of the University of Toronto and a new university, Ryerson University, and other institutions of higher learning.

Toronto's financial district, the notorious if I may say that, King and Bay area is located there and includes the headquarters of five major banks and many other financial institutions. Osgoode Hall, the seat of the justice system of the province of Ontario, is also located there as are many theatres of local and national reputation including the Théâtre Français of Toronto and some 18 co-operatives. In addition, I am sure it will be of interest to members of this House to know that we also have the Riverdale Farm located in the riding. It is perhaps not of enough size to give me credibility among my colleagues in the rural caucus but is at least a presence and a reminder to the people of this urban riding that we too must always be conscious of rural issues.

In human terms, we have here a complex urban mixture, a microcosm, as other members of this House have said, of the society in which we live and, if I may say, not only a microcosm of Canadian society but in fact of the integrated world which we are now living in and adjusting to. It is an exciting dynamic community which represents, if I may say, the best of what Canada has to offer.

The area of Rosedale proper of which I spoke contrasts in some ways with St. James Town, Regent Park and Moss Park where we have many people living in assisted housing, many seniors and single mothers, and others who are working hard to keep ahead. All are united in their desire to have good government, a government with a sense of balance, a government that puts their interests first. Our government I believe achieved that in this budget.

We have in our riding a large component of new Canadians. Some have come to us as immigrants, some have come as refugees. All are decent hard working people, bringing their skills to contribute to this country in the tradition of our forefathers.

The riding also contains the largest gay and lesbian population in Canada who bring a sense of diversity to our community and who enrich many areas of our community life, including the artistic and cultural life of the city. These people look to this government to fulfil long unkept promises of many previous governments to ensure that discrimination in their lives and in their employment will cease so that they may play their full role in our society. It is their right to live in a world with a level playing field and we owe that to them.

You will also find in my riding a French community which may not be large, but is important to us. This community is proud, different, and fully contributes to our culture and our economy. Our French Canadian community considers the presence of Quebec within our federation as an asset and a source of inspiration for its own linguistic and cultural future. And our French community hopes that our friends in Quebec are aware of it.

This diversity raises challenges and opportunities. I would suggest that many of those challenges and opportunities are reflected in the budget which we are discussing here today. The merit of this budget in my view is its balance between the various financial imperatives which influenced it, the directions that it sets for the future and the way in which it relates to real people's lives. It puts people first. It does not sacrifice them on the altar of fiscal dogma or orthodoxy.

The people in my riding have responded well to this budget. The people in Rosedale proper who are self-employed were pleased to see that they will be able to contribute to their RRSPs and guarantee their financial future so they will not become a burden on future taxpayers of this country.

The small and medium sized businessmen in the riding were pleased to see their initiatives adhered to and their concerns referred to in a way which will enable them to compete more effectively in this complex world in which they have to operate.

The new Canadians of whom I spoke seek to employ their skills to advantage and are looking for ways to use their languages and their cultural skills in a way in which they can take them out and invest them into medium and small sized businesses and the export markets. This budget points the way in that direction. These skills are a resource of this country which we owe to ourselves to mobilize for the good of all of us because it is the future of the world and the future of Canada which is at stake in the way in which this particular community brings its cultures and skills to play. This budget specifically focuses on that.

People in my riding living in assisted housing see the human resource development initiatives in this budget as an excellent beginning on the way to ending their dependency and giving them back control of their lives so they may live productively without having to rely on the government handouts which they despise.

I had the opportunity last week during the break to assist in a very proud moment in my riding. I went to a meeting at George Brown College where, because of a grant of the Government of Canada, Goodwill Industries was able to reach out and train people who hitherto had been unable to get training. Some of the people had disabilities, some had had drug problems, they all had problems which had inhibited them from being able to take advantage of their lives. They were given a program, thanks to a government grant, which enabled them to complete this program and 70 per cent of them had jobs as of the night they graduated.

When I heard the leader of the Reform Party speaking yesterday about the need for budget cuts and Draconian measures I could not help but think of the smiles on their faces and the smiles on their families' faces, showing the pride with which they graduated from this program. Those programs are the type of programs that this government is creating for people to enable them to get back to work. This is a resource that we cannot afford to lose in our society. This is the budget that is going to enable us to do it.

That is why I am proud on behalf of the people who live in my riding to speak for them, whatever class of society they come from.

It is that element of the budget which makes me proud. I think it maintains an essential, constructive, necessary Liberal role of government and the people of my riding, all parts of it, support it.

Even in the university community there are many problems of finance. I was speaking to the president of the University of Toronto the other day. He told me that the cuts in unemployment insurance premiums, which have had to be paid by the university, are a significant contribution. Universities are very big employers. This will make a contribution to their financial stability.

The infrastructure program has been ridiculed on the other side of the House as being nothing but a bricks and mortar operation. The president of the University of Toronto tells me it is creating a tremendous opportunity for his institution of higher learning to do a better job of training young Canadians who are going to take us forth into the 21st century.

Why do we do negative things like this, just for partisan political purposes? I heard the minister speak, just before I got up to speak, eloquently about the need to deal with our infrastructure. We all have to realize that this infrastructure program has an intellectual component to it which is just as valid as bricks and mortar and I am proud to be part of a government which has seen that, seen the need to renew and seen the need to look forward to the future.

Let me conclude my remarks where I began. I am proud to stand here in this House and make my first speech, recognizing the people of Rosedale who elected me and who put me here. I will do my best for them. I will do my best for my country. I will do my best for this government which I think in this budget has set the framework for a productive and human future for this country.

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

Mr. Speaker, I am very reluctant to interrupt the question or comment period that is about to start on my learned colleague's speech, but I wonder if I might seek unanimous consent of the House to revert to presenting reports by standing and special committees. I have a committee report which I think will be of interest to members that I would like to table at this time.

[The Acting Speaker (Mr. Kilger)]

Does the hon. parliamentary secretary have the agreement of the House?

[Some hon. members]

Agreed.

Committees Of The House

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, I have the honour to present the 10th report of the Standing Committee on Procedure and House Affairs concerning the items of Private Members' Business which have been selected as votable.

Pursuant to Standing Order 92(2), this report is deemed adopted once laid upon the table.

Normally this report would not be tabled until tomorrow. There was agreement that if it were tabled this afternoon to get the information before members so they know which items have been selected Private Members' Hour would not start tomorrow but would start on Monday.

Accordingly I move, I believe with unanimous consent:

That consideration of Private Members' Business commence on Monday, March 14, 1994 at eleven o'clock a.m.

Motion agreed to

The House resumed consideration of the motion.

The Budget

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Mr. Speaker, I am pleased to make a brief comment on my colleague from Rosedale, with whom I had an opportunity to travel to Vancouver a few weeks ago. I got to know him better and I believe that he is someone who can be called a gentleman, as the term was understood in the Middle Ages, that is, a man who is sincerely open-minded towards all his colleagues in the House. I do not at all doubt his sincerity when he speaks or when he expresses the wish that Quebecers feel at home in the Canadian federation.

I also want to tell him that should Quebecers in the near future choose to take charge of their own affairs and thus make Quebec a sovereign country, Quebecers will still be happy and interested to maintain ties with neighbours who show this open-mindedness, like the hon. member for Rosedale.

I commend him for what he said and I hope that we can indeed maintain such a relationship, whatever the future holds for us.

[Bill Graham, Liberal, Rosedale, ON]

Mr. Speaker, I thank the hon. member for his very nice comments about me but he also reserved something for the end that may give us the opportunity to voice more opposition than today.

I would like to put some emphasis on what I said about Rosedale. I suggest to him that it is not only a matter of Quebecers being welcome in other parts of Canada. I assure you that Quebec's attitude and the fact that Quebec and Quebecers have succeeded in keeping alive their culture and their language is an inspiration to francophones outside Quebec, including those in my riding.

I urge you not to endanger, through your actions and what you will do in the future, this fragile flower that must be tended by you, by us and by all members of this House so that the francophone culture can flourish in the rest of Canada like it did in Quebec.