House of Commons Hansard #36 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.

Topics

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4:20 p.m.

Bloc

Jean H. Leroux Bloc Shefford, QC

Mr. Speaker, we have almost reached the end of the period provided under the Standing Orders for debate on the opposition motion presented by the hon. member for the Reform Party, concerning the Budget Plan for 1994.

I think the motion presented by the Reform Party is only a partial response to the expectations and policies I am about to explain, regarding the budget, job creation and cuts in public spending.

As you know, Canada's economy is the worst among G-7 countries. Recession, deficit and unemployment have become household words, unfortunately! Canada's monetary policy, although aimed at controlling inflation, merely exacerbates endemic unemployment in this country. Lacklustre job creation and the deterioration of Canada's public finances are largely responsible for the lack of vigour of our economy. It is not a pretty picture.

This lack of economic growth which has affected Canada for many years has led to some very serious consequences for Canada and Quebec. This lack of economic growth was followed by budgetary irresponsibility in federal public finances. At first, the Canadian government borrowed to finance existing and new programs. Subsequently, it had to borrow to pay the interest on previous loans, and now we are caught up in this debt cycle. Interest payments on the national debt have absorbed an increasingly larger proportion of government revenues. That is where we are now.

The debt's spiral has slowed somewhat, but this government's fiscal policy defies all logic.

The government is doing more to increase its tax revenue than to control its spending.

In pre-budget consultations, the Minister of Finance implied that he clearly understood the financial reality facing the federal government. It was an especially rude awakening when he announced a projected deficit of $39.7 billion. The saddest part is that the public servants whose salaries are frozen, the military people who are losing their jobs, like the other victims of the Minister of Finance, the elderly and the unemployed, are being sacrificed for almost nothing.

We are no further ahead in reducing the deficit. We might as well say that the effort to reduce the deficit is practically non-existent. In its 1994 budget, the government wants to finance its projected budget deficit for 1994-95 by a very clear increase in direct individual and corporate income taxes. I refer here to the revenue projections in the finance minister's budget plan, where direct taxes are the only revenue in the budget which could enable the government to achieve this deficit objective of $39.7 billion.

Does the government really think that it can tax the people of Quebec and Canada more? It is disturbing to see that one of the solutions adopted by the government is to increase the tax burden of middle-income seniors and of middle-class taxpayers in general.

Consumers have lost confidence in the economy. The financial markets are skeptical about promises to balance future budgets. In fact, the government has not made the cuts needed to reduce tax rates in the medium term and to revive the confidence of Quebecers and Canadians.

It is glaringly obvious: unemployment has not come down from its high rate. In February, Statistics Canada reported a rate of 11.1 per cent for all of Canada, while Quebec recorded an average rate of 12.5 per cent. Young people employed full time and men employed part time accounted for most of the lost jobs. Statistics Canada estimates that the labour force declined by 15,000, a sign that many Canadians have given up looking for work.

The Minister of Finance is continuing the Conservative policy of lower benefits for most of the people. The measure concerning low-income people with dependent children only hides its desire to save. It is a Tory policy with a compassionate face.

Young people will once again be the victims of reform. These measures will limit access and push some of these people towards social assistance. Eastern Canada, including Quebec, will be hit especially hard by the elimination of regional unemployment scales above 13 per cent and by the reduced number of weeks of benefits.

The unemployment problem in Canada and Quebec is that there are not enough jobs for everyone and that people must go from one short-term job to the next. It is not with 45,000 temporary jobs that we will give renewed hope to the 1,590,000 unemployed in Canada, of whom 500,000 are in Quebec.

Has the time not come to reconsider work sharing for those who want it, to put all those people back to work and return to a full-employment policy? Furthermore, it is urgent that the government turn the situation around to favour the development of small and medium-sized businesses throughout Quebec and Canada. Small and medium-sized businesses create jobs and generate wealth. The government missed this goal it should have emphasized more.

Today, too many urban centres look like disaster areas. Social inequalities are getting worse at school and in the labour market, and we are shocked by the brutal return of physical and moral poverty. Everyone can see the homeless on the streets but few of us know that food banks are stretched to the limit. There is no more space. It is always the weakest who must pay when economic growth slows to a standstill, as you and I know.

According to the 1991 census data, the Montreal metropolitan area holds the Canadian record for the highest poverty level: 22 per cent of the population. Behind this figure is a social reality that Canadian federalism cannot be proud of. It is still possible to give Canadians the social programs they need if we see them as a right and a necessity rather than a luxury.

Instead of proposing measures for a healthy distribution of wealth throughout the country, the government is going after the middle class and attacking the universality of social programs, even though this policy promotes social cohesion. In this regard, the Bloc Quebecois supports investments to consolidate the existing infrastructure, create jobs and lower the unemployment rate, provided that Quebec be the main authority responsible.

Point (a) of the pending opposition motion presented by the Reform Party goes against these objectives of economic development for the regions. The moratorium on all new spending programs announced in the budget is not compatible with our objective of regional development.

Mr. Speaker, I will now turn my attention more specifically to the public spending cuts announced in the latest budget.

The Minister of Finance recently announced that program spending would be reduced by restructuring the social security system, reforming the unemployment insurance system and reducing transfers to individuals, for example, family allowance payments. However, the minister also announced that total budgetary spending would increase by $2.8 billion until 1996. This increase includes debt servicing charges. In fact, despite the cuts announced by the government, overall program spending will continue to increase. In essence, all the government is doing is reallocating expenditures without actually reducing government program spending. It is not tackling head-on cases of waste and mismanagement within the system. Instead, it is targeting social programs.

The government has not addressed the root of the problem. Instead, like its Conservative predecessors, it hopes that the anemic economic recovery-a recovery that it has failed to stimulate-will get state revenues back on track. The government's economic growth and inflation hypotheses are realistic. What is not realistic, however, given the growth of the underground economy, is the government's belief, as reflected in the budget, that government revenues will increase at a faster rate than the Gross Domestic Product. In short, the government is counting on the weak recovery to bring down the current deficit.

How, under the circumstances, can the government justify increasing its level of spending, all the more so when we know that it is currently seeking the authority to borrow $34.3 billion for 1994-95 in order to meet its financial commitments?

Mr. Speaker, I find it unconscionable that the budget provides for an increase in public spending up until 1996. It is absolutely essential for the government to eliminate waste before it can put public finances in order. The government must give the example; it must restore public confidence as well as its own respectability. There are a lot more savings to be made by eliminating waste than by making cuts to social programs. Freezing public servants' salaries, restructuring public services and increasing the middle class tax burden are last resort solutions. There are other options still.

For the last three years, the Auditor General has identified waste or unnecessary expenditures totalling no less than $5 billion annually. This year, the Auditor General has discovered $700 million more in squandering than in the previous fiscal year.

Merely implementing the Auditor's recommendations would bring enormous relief, without any tax increase or social programs cuts. The equation is a simple one.

Taxpayers are fed up because they feel that the government is wasting public money and is after the middle class, which is overburdened with taxes. Five years ago, governments were making the same frivolous expenditures and wasting just as much, but nobody said anything. Today, because of the pressures resulting from the appalling state of public finances, such mismanagement is strongly denounced.

Fiscal consolidation is a must be carried out at the federal level to restore confidence among Quebecers and Canadians.

The chronic weakness of our economy is not due to a bad performance of our foreign trade but, rather, to the stagnation of domestic demand. The deficit must also be reduced because interest on Canada's foreign debt is the highest among G-7 countries.

Deficit reduction is conditional upon reducing public spending and waste, as well as eliminating tax unfairness. This streamlining exercise could result in savings of $10 billion. Of that amount, five billion dollars could be invested to stimulate employment, including by building a high-speed train line, whereas the other five billion could be used to reduce the deficit. Such an initiative would do a lot to restore taxpayers' confidence.

The government must give the example and restore public confidence. A true social contract must be based on a sound and balanced tax system. Unfortunately, it is a fact that over the last two decades governments have only contributed to create an imbalance between taxes paid and services provided by the state to taxpayers.

In order to eliminate waste, unnecessary spending and mismanagement within the government administration, the Bloc Quebecois proposed that the government set up a parliamentary committee to review each budget spending item, and it is asking that such a committee be created.

Setting up such a committee is justified because the latest Auditor General's report showed that Quebecers and Canadians who believed that some public funds were wasted were right.

That is the reason we want to create an analytical and revision committee of the governmental spending programs formed by elected representatives and not by civil servants. We believe elected representatives are entitled to supervise and ensure that the objectives of the different spending programs comply and that the allocated public funds are spent with efficiency, effectiveness and equity.

We believe that Parliament does not receive the appropriate information pertaining to the results of the different ministries and crown corporations wasting thousands of millions of dollars of taxpayers' money.

Guided by the report of the Auditor General of Canada we believe that the wasted public funds and the different cases of mismanagement are drops in the ocean.

A parliamentary committee responsible for reviewing government expenditures, item by item, could ensure that Parliament and thus the public be better informed of the government's financial situation. So, we encourage the Reform Party to support the establishment of the parliamentary committee on the item-by-item review of government expenditures to enable us to keep a closer eye on how public funds are managed, which will greatly help bring the deficit down.

I do support point (C) of the motion, regarding the production of quarterly reports on the progress made on deficit reduction. With regular status reports, I think we will be able to set realistic deadlines to achieve our goals.

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4:40 p.m.

Liberal

Peter Adams Liberal Peterborough, ON

Mr. Speaker, I thank the hon. member for his remarks.

I would like to ask his opinion about a particular part of the motion to which he was speaking. This, as he knows, is a Reform Party motion and it is an attack on various things, one of which is the government's attempts to help young people.

As has been suggested earlier, other parties in other countries which have had the Reform Party approach of cutting and burning have increased their deficits and debts. They have also produced very high levels of unemployment. That has happened in Canada.

One thing that has not happened yet in Canada is although we have high unemployment, particularly among young people, we do not yet have the chronic unemployment which exists in these other countries, for example Britain and the United States.

As bad and sad and tragic as high unemployment is, chronic unemployment for young people is worse. Chronic unemployment means that we have a generation which because during its formative years it has not worked is never really able to work. I believe that is a real tragedy.

In this motion the Reform Party is attacking our attempts to help young people now. I believe that it is already late to help our young people. They want to leave this to the forces of the economy. I believe that to avoid chronic unemployment among young people we must act now.

I would like to ask the member what he thinks of the Reform Party's attempts to cut down the efforts we are making to help the young people of Canada now.

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4:45 p.m.

Bloc

Jean H. Leroux Bloc Shefford, QC

Mr. Speaker, as you know, I worked in education for many years and I would like to congratulate my colleague opposite on what he said about Canada's youth.

I fully agree with the hon. member that our young people in Canada have unfortunately been sacrificed and that at this stage there does not seem to be a policy in the budget to put our young people to work-I will not say back to work. I think it is catastrophic for Canada to have young people who want to earn their living one day preparing and studying very hard without even a chance of starting to work or else having to accept work that is far less than what they could do. I agree with the hon. member.

What we said and what we are saying is that the budget will not spur economic recovery. The budget that we debated only plugs the holes and I think that it is a very conservative budget, and possibly a Conservative budget as well.

Now I think, as the Bloc proposed-it is an attractive idea-we should form a committee of the House, not a joint committee of the House and the Senate, but a committee of the people's elected representatives to look at the government's spending item by item, so that we, the people's elected representatives-because when we go back to our ridings and when people talk about politicians in Canada, they are talking about us here in this House, and I think that we have a responsibility-should be able to review the budgets item by item and be able to make cuts where required to get the money and help create jobs.

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4:45 p.m.

Lachine—Lac-Saint-Louis Québec

Liberal

Clifford Lincoln LiberalParliamentary Secretary to Deputy Prime Minister and Minister of the Environment

Mr. Speaker, it is with great eagerness that I take part in this debate today and welcome the opportunity to present the true picture of the government's plans to help Canadian young people help themselves to a more promising and prosperous future.

Let me begin by setting the record straight. Contrary to the assumption put forward by the hon. member from Lethbridge, the budget for the youth service corps does not represent new spending. The youth service corps will, in fact, be implemented using departmental resources and money from cost saving initiatives announced in the February 22, 1994 federal budget, pursuant to commitments made in the red book. The youth service corps will not put any additional pressures on our national debt. I can assure the House we will still see a drop in the deficit, down to 3 per cent of GNP, over the next few years, in line with our budget projections.

I believe, however, that my colleague from Lethbridge and other members of his party are being very short-sighted if they are prepared to short-change our young people.

Investing in young people is more than just a matter of dollars and cents.

Common sense and fairness dictate that the government must act to respond to the very difficult reality facing young Canadians. Perhaps the hon. member does not appreciate just how grave the current situation is.

Let me remind the House that, for adolescents and young adults, the recession started sooner and is lasting much longer.

The most recent labour force survey shows that, while the number of unemployed in Canada is down, the youth unemployment rate is rising. It reached 18.1 per cent last month, its highest level since last June. These are the official figures on young unemployed and do not take into account many more young people who do not show up on UI lists.

Let me put that into context. The hon. member represents Lethbridge which, according to the latest census, has a population of roughly 54,000. Compare that to the number of young people currently outside the job market-at last count 428,000. That is almost eight times the population of the city of Lethbridge. Young people are searching for relevant work experience that will give them saleable skills to get their foot in the job market door. Are these the people the hon. member from Lethbridge would penalize? Is he prepared to tell them we do not think they are worth the money?

At this time, I want to digress to pay tribute to a colleague of mine, Senator Jacques Hébert, for his achievements and his tremendous dedication to young Canadians. Through Katimavik, our young learned to help each other. They learned how to become more confident, more enlightened and more tolerant. They learned to make sacrifices throughout the world to help enhance the standard of living of many of our friends in Southern countries, for whom life is sometimes a matter of survival.

It is obvious that it is in our collective best interests to nurture and support the very people who will be tomorrow's workers and taxpayers. On economic grounds alone, the arguments are clear. Canada simply cannot afford a lost generation. Demographic trends clearly demonstrate that Canada will soon suffer a worker shortage. As baby boomers leave the workforce in large numbers, as they tend to do more and more, we will increasingly count on our young.

We will count on our young people to take over from us. They are our hope and tomorrow's leaders.

To compete globally in the next century we will need a highly educated, highly skilled workforce. One needs not be a futurist to know that our continued growth and prosperity depend on the workers of tomorrow, the unemployed youth of today.

There is evidence to suggest that young people who do not form an economic attachment to the labour force today will have much more difficulty in finding and keeping employment in the future.

To suggest that we should not place a spending priority on our most precious resource, our young people, leaves me questioning the commitment of the Reform Party to Canadian youth.

Even more convincing than the economic case is the moral imperative to provide our children with a sense of security, fairness and hope for their future well-being which is also our collective future.

It is heartbreaking to see young people brimming with ideas and ambition, very often far better educated than their elders, unable to apply their skills, their talents and their knowledge.

How can any of us in the elder generation be indifferent to their frustration, to their hopelessness, to their despair of today? It is completely unacceptable that so many young Canadians today have no place to put their energy to constructive use. I believe that every member of the House has a duty to ensure that Canadian youth do not feel rejected or ignored.

We must assure them that we appreciate not only their years of hard work acquiring an education but also their proven willingness to work and contribute to the commonweal. We must clearly demonstrate that we are committed to helping them achieve their enormous potential and that we will work with them to accomplish their goals.

The government intends to do exactly that. We will bring the Liberal vision for youth to life. We are determined to implement the strategies laid out in the red book which describe our action plan for young Canadians.

The Youth Service Corps is a key part of the Liberal promise to create jobs, to restore hope and build a stronger Canada. The youth service corps will provide productive ways to help young people through the transition from school to the workplace.

The youth service corps has four main objectives: community service, understanding Canada, environmental awareness and personal development.

I hope no one will question how valuable the young are in our society. It is important to give our young people the tools they need to prepare a better future for themselves by contributing to the building of our nation. Significant measures will have to be taken, and I think the youth service corps is one of them. So, I would ask the hon. member from Lethbridge: Who would see anything wrong with the youth service corps?

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4:55 p.m.

Reform

Philip Mayfield Reform Cariboo—Chilcotin, BC

Mr. Speaker, I would like to thank the hon. member for his comments. Many of them I can agree with. Some of them are points that I have difficulty accepting.

I am in full agreement with the statement that it is completely unacceptable that young people have no place to put their energies. However there is a moral imperative for the youth to have a meaningful place in our society. I agree with those statements wholeheartedly. I do have difficulty accepting a statement regarding short term views concerning the rights of youth and ascribing that to the Reform Party and to the position that we take.

We are watching from a view of history which we have watched through the 1970s when the Liberal Party was governing, through the 1980s when the Conservatives took charge. We are at a place now where we are economically unable to continue with those types of policies. To suggest that the Reform Party at this point comes with this resolution with no view of history does not make sense to me.

With the statements that the hon. member has made, how does he square those statements and his condemnation of the Reform Party with the history of the performance of the Liberals and the Conservative governments in the past? We are looking for a means to hold the economy together so there will be hope, there will be promise, there will be a meaningful future for our children.

As I see it, where the government intrudes, where the government takes control, where the government creates pigeon holes and expects people to fit into those pigeon holes, it has never worked. Therefore we are suggesting that it is time to put the initiative in the hands of grassroots men and women, to leave them with the financial resources to do the job that government has never been able to do and to have the government step back and leave private industry, individuals, the entrepreneurial spirit to do the work that has not been done before, to build the nation.

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5 p.m.

Liberal

Clifford Lincoln Liberal Lachine—Lac-Saint-Louis, QC

Mr. Speaker, this is the fundamental difference that separates us from the Reform Party and the member laid it out very clearly.

There was an election in October, as I remember, and our party ran on a platform that said certain budgets were going to be transferred to key job creation programs. One of the key job creation programs which was much more than a job creation program, it was also a social program of great importance, was to say that if we look at the situation of our youth today the great majority of whom are leaving school do not know where to go for work. There is a shortage of hope. There is complete despair.

I do not know if the member feels the same as I do. When in my riding I meet all kinds of young people. I could send him a a pile of CVs from young people, highly qualified, with masters and doctorates who cannot find work today.

The government has started to say: "We have to transfer money, especially from the defence fund at a time when the cold war is over, into a youth services corps for young Canadians". The great majority of Canadians obviously back this theory because they elected us in large numbers as a majority party. They did not elect the Reform Party with their view that the marketplace, the economy, dollars and cents will cure every problem. If it had been so in the past we would not have had trade unions. We would not have had reforms of the social safety net. We would not have medicare. We would have left it to the marketplace to sort it out.

In all places where the marketplace is paramount and exclusive the social fabric of the country is in disarray. We do not say that government intervention is the only way to move, but surely there is a mix there in establishing constructive, social policies that can have government take a sense of direction, and give leadership. It seems to us that if we want to give leadership the first place to put the accent is on our youth. I am very proud that we have this program in place.

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5 p.m.

Bloc

Yves Rocheleau Bloc Trois-Rivières, QC

Mr. Speaker, I have a question for my hon. colleague concerning the general position of the Liberal government and how it compares to the position taken during the election campaign. As the months go by, I find that this government is getting better and better at half-measures. This is clear from the red book, long on theory, by the way, where it is stated that last fall, there were 1.6 million unemployed in Canada. And what is the government doing to solve the unemployment problem? Well, it has set up an infrastructure program that will create 45,000 short-term jobs-15,000 in Quebec-in response to a situation where 1.6 million Canadians and 428,000 Quebecers are unemployed.

With respect more specifically to youth unemployment, the government has come up with another half-measure, namely a youth service corps. This program will not solve anything or create jobs. However, on the eve of a referendum, one component of the program will, judging from what the government member said earlier, enable young Canadians to travel and to learn more about Canada. We all know what the implications of this can be, what a man such as Jacques Hébert can accomplish. We all know what the implications can be. I would like my hon. colleague to explain to us how this youth services corps is not

fundamentally a very political move by this government on the eve of the referendum?

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5:05 p.m.

Liberal

Clifford Lincoln Liberal Lachine—Lac-Saint-Louis, QC

Mr. Speaker, last October, we presented to the Canadian public a very comprehensive program. It did not focus solely on young people. I used them as an example. Our program covered the entire social structure in Canada. It outlined our agenda in such areas as research and development where we pledged our support to the tune of 25 per cent for environmental research and development; it announced a comprehensive apprenticeship program for the next four years, a youth service corps and an infrastructure program. I would remind my colleague who speaks of 45,000 jobs that Statistics Canada reports that last month, 66,000 new jobs were created. Therefore, his figures are not correct. They should be 50 per cent higher.

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5:05 p.m.

Bloc

Louis Plamondon Bloc Richelieu, QC

Not with that budget.

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5:05 p.m.

Liberal

Clifford Lincoln Liberal Lachine—Lac-Saint-Louis, QC

What I mean is that-

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5:05 p.m.

The Deputy Speaker

Order! The parliamentary secretary's time has expired. Resuming debate, the Chair recognizes the hon. secretary to the Minister of Finance.

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5:05 p.m.

Winnipeg North Centre Manitoba

Liberal

David Walker LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, it is a pleasure to have an opportunity to speak with you today about the new Canadian Engineers and Scientists Program announced in the budget.

This government is committed to sharpening Canada's competitive edge and developing the kinds of technological capabilities that translate into new business and jobs. With as much as 85 per cent of new jobs being created by small and medium-sized businesses, we have placed a very high priority on support for these enterprises.

One of these measures is the creation of the Engineers and Scientists Program. As announced in the budget, $10 million a year have been earmarked to implement the program. To help Canadian businesses build up technological capabilities, when it begins early next year, the program will provide salary support to assist small and medium-sized manufacturing firms in meeting their needs for technical personnel.

One of these measures is the creation of the engineers and scientific program. When it begins the program will provide support all across the country. It is intended to help firms develop long term technological capabilities, not just short term project base needs.

It is designed to fill a gap in technological expertise that often hinders small enterprises from achieving their true potential whether in product development, productivity or both. Clearly a company that has no one with current technological skills or training has a difficult time introducing the level of innovation that can help the company to grow and create more jobs.

The federal government can facilitate growth through this type of national program. We can help set the stage for these firms to adjust to the significant development in manufacturing taking place around the world.

The program can provide an important focus for firms that have a potential to export. I think this is so important. We have to change the fact that over 90 per cent of Canadian firms do not export. Innovation and technological transfers are the keys to success to the kind of economy we need to have for the future. We have to look for new ways to solve old problems. We have to make sure Canadian manufacturers develop a high degree of technology based expertise. It is absolutely vital to any long term competitiveness and profitability in Canadian manufacturing.

While technology transfers are often difficult to define and measure we know that Canada has been weaker than most of its competitors. We need to work together to turn this around. We need to develop a program that is easy to use and is responsive to real need.

Statistics Canada just released a study entitled "Strategies for Success, a Profile of Growing Small and Medium Sized Enterprise in Canada". In this study it is confirmed that innovation is a key factor that separates successful small and medium sized businesses from the unsuccessful ones. To succeed firms need to be able to innovate.

However this is one of the problems we face in Canada. A recent survey of over 9,000 small and medium sized manufacturing firms in Quebec shows that slightly more than 10 per cent of the firms employ one or more engineers, with only 2,400 engineers in total being employed. This shows the need for investment in this area. We must invest so that our small and medium sized firms can prosper.

We all want to see Canadian companies establish a strong global competitive position. We want manufacturing jobs to stay in Canada. The federal government is committed to working with the provinces, business, labour and Canadian workers to help the process along.

The Canadian Engineers and Scientists Program will no doubt be a vital part of that success.

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5:10 p.m.

Reform

Ted White Reform North Vancouver, BC

Mr. Speaker, I am pleased to be speaking today to the motion which addresses some of the problems of the recently announced budget.

Last Monday when I spoke to Bill C-14, the authority to borrow up to $37 billion more on the backs of the young people of Canada, I said I wished that government members would vote against the bill in order to avoid mortgaging the futures of their children and grandchildren.

Unfortunately my pleas were not heard or they were not understood or they were not convincing enough. For whatever reason absolutely not one government member voted against adding another $1,450 in mortgaged future to every man, woman and child in the country. Government members refused to acknowledge or are incapable of understanding the seriousness of the problem and they voted for Bill C-14.

As one person put it, because of the budget the light at the end of the tunnel has been turned out until further notice. No light at the end of the tunnel usually means there is a wall at the end of the tunnel. We do not have to keep speeding into a dark tunnel on this train of out of control debt. There is a chance for government members to help stop the train.

What is needed, among other things, is for them to support the motion before us today, a motion that would foster co-operation, to place caps on spending and to develop a spending contingency plan that will stop piling debt on to our children and grandchildren.

Of course government members are always worried that our real plan is to overthrow the government so that we can have another election. I would just like to say to them that this is simply not true. We believe in stability in government and we will support any government at this critical time that is prepared to address seriously the issues of deficit and debt.

Government members should be placing partisan politics in second place and start admitting that Reform MPs are telling the truth about the seriousness of the problem. If they do not believe there is a problem they should think about what has happened in Ontario. They should ask themselves: If government spending was the answer to the problems, how come the premier of the province of Ontario has had to abandon his program of $13 billion deficits? If it did not work for Ontario, how can it work for Canada?

The fact is that government deficits kill the economy. Government deficits lead to high taxation and excessive regulation. Government deficits suck the wealth out of the private sector and destroy hopes for the future. Government deficits turn out the light at the end of the tunnel.

I find it hard to believe that at least some of the government members have not realized that the government, like ones before it, has a spending problem, not a revenue problem. I find it hard to believe that at least some of them have not realized that we have reached tax saturation point, that it is time to abandon these possibilities of widening the tax base. It is time to realize that increasing taxes will only lead to a bigger underground economy. Prior to the 1993 election Reform was the underdog. If this government does not wake up, it will find that after the 1993 election Reform is the watchdog and after the next election we will be the top dog.

The best way for government members to retain their seats in the next election and to prevent Reform from winning is to support the motion before us today. That is another bit of the free advice I give occasionally to government members to help them with their re-election.

I know that government members like to say the policies of Reform are slash and burn. This is ridiculous rhetoric. It really does not contribute anything to solving the problems. The people who watch the proceedings of the House of Commons on television are intelligent, thoughtful people who can see through that rhetoric. They understand it for what it is.

We on this side of the House try to offer constructive alternatives. We offer alternatives that are workable and reasonable. It would not hurt for a government member to occasionally vote with us on something that we propose.

The evidence that we speak the truth is all around us. The National Citizens Coalition, which the government would dearly like to silence, has widely distributed a taxpayers' score card. If any government member filled it in honestly, they would have to admit that the government had failed in its budget plans.

More evidence came right from the horse's mouth, so to speak, when the deputy finance minister admitted to the public accounts committee on March 9 that the tax burden on individual Canadians and corporations is higher than in any other major industrial power except France and has climbed to almost 40 per cent of the gross domestic product.

Peter Cook in the Globe and Mail on the same date wrote:

Mr. Martin may have convinced himself that economic growth and the spending cuts he announced will head off a debt crunch, and he has convinced his boss-

Do we know who that is, Mr. Speaker?

-who is rather easily convinced on this subject. But at the great bar of public opinion he is not doing so well. Not only has he failed to convince most Canadian economists and the Canadian media, but he is facing an international audience that is getting rather peppery and impertinent.

Reports in the financial circles of Germany and the U.K. criticized the failure to act on the spending and predicted that the Canadian dollar would continue to slide. The proof is out there for us all to see; another third of a cent drop in the dollar last Friday, almost four cents since the election. Is the government proud of this wonderful achievement?

Can government members not see that this will lead to higher interest rates, higher inflation and no possibility of getting control of this deficit? Anyone with a calculator can see that we are already off the targets that were set in that budget. Even the government's infrastructure program, which was supposed to

kickstart the economy, has become a scandalous wish list of pork barrel politics and make work projects.

In a news release on February 18 by British Columbia-Canada infrastructure works it was revealed that short and long term job creation are no longer essential criteria. They have been reduced to only important criteria. The item at the top of the list is now incrementality and/or acceleration of investment, whatever that means. Let's face it, it is a mess and it is not going to get better as a result of the budget.

Our Reform motion today tries to address some of the problems and it promises co-operation. If I were a betting man I would bet that the government members will do the usual thing and vote against it without having any good reason to do so.

The Globe and Mail editorial on the morning after the budget said:

The budget makes a mockery of Jean Chrétien's promise to return to the good old days. In the good old days the future was not mortgaged to the selfishness and cowardice of the current generation.

I am not a coward. I am prepared to tell it as it is, and I am not afraid to support decisive action.

I am also not selfish about it. I have taken a voluntary pay cut and refused to sign the form making me eligible for the gold-plated MPs' pension plan. I have proven that I am prepared to make sacrifices to avoid dumping more debt on to the next generation. I can sleep at night because I can say to the next generation that I tried to stop the debt train in that long dark tunnel while the government opened the throttle, hoping the light at the end of the tunnel would reappear only to discover there was a wall in front of it.

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5:20 p.m.

NDP

Audrey McLaughlin NDP Yukon, YT

Mr. Speaker, I listened with interest to the member's statement and comments. I would like to ask the member a specific question about this motion, in particular that a moratorium be put on the court challenges program.

The motion states a new program. This court challenges program is not new. It was cancelled by the previous government but the current government, as I understand it, has agreed to reinstate it. It is a program that is absolutely essential to provide a way for disadvantaged groups and equality-seeking and language rights groups to pursue the rights guaranteed to them under the charter and the Constitution.

I know the member will agree with me that the rights of Canadians are sacred to this nation, but rights without the ability to implement them and to seek equality in those rights are in fact meaningless.

I would say to the member that I know his party's position, very often stated, is: Why can't all Canadians just be treated the same. I would agree, why can't all Canadians just be treated the same. However, in reality and in the real world women, disadvantaged groups, persons with disabilities and visible minorities are not treated all the same.

The intent of the Charter of Rights and Freedoms is to enshrine in our country the importance that we treat each citizen with equality.

I would ask the member how he can justify this program, a relatively small expenditure, being wiped off the map by the Reform Party? Do they not support the equality of all citizens in this country?

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5:20 p.m.

Reform

Ted White Reform North Vancouver, BC

Mr. Speaker, I thank the hon. member for her question.

We in the Reform Party made it very clear that we support equality of all people regardless of their race, religion and province of origin. In fact I gave a speech to that effect this morning.

Specifically the member asked about the court challenges program and, as she quite correctly stated, it has been reintroduced. It was a very expensive program and had been used widely by special interest groups to press their own agenda on the backs of the taxpayers who frankly are fed up with this type of government redistribution of wealth.

We would favour getting rid of that program again and taking some load off the backs of the taxpayers.

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5:20 p.m.

Liberal

John O'Reilly Liberal Victoria—Haliburton, ON

Mr. Speaker, the motion deals with the infrastructure program. The member for North Vancouver has indicated nothing in constructive alternatives to that program.

I wonder what he wants me to tell the people in the town of Lindsay and the Lindsay police force which is planning to build a new building under this plan and the people in the town of Haliburton who I have met with who have plans to spend money under the infrastructure program. We have 30 per cent unemployment in the town of Haliburton. What does the member want me to tell those people who will not get a job because of that?

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5:20 p.m.

Reform

Ted White Reform North Vancouver, BC

Mr. Speaker, I thank the hon. member for the question.

Anywhere in this country the portion of funding that comes from the federal government will be borrowed because the federal government runs a deficit. The portion of the money used at the provincial level will be borrowed because all of the provinces are running a deficit. At the municipal level it will mean a taxation increase for homeowners to fund their portion.

Reform's answer to all of this is not to keep piling debt on to people and increasing taxation, but to get control of government debt so that we can reduce taxation which makes the economy prosper and everybody is better off.

The infrastructure program is not creating jobs. For the most part all it is doing is expanding a little bit the current functions of the municipalities without them employing a single additional person to their present staff.

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5:25 p.m.

Reform

Philip Mayfield Reform Cariboo—Chilcotin, BC

Mr. Speaker, if an analogy can be used to describe this year's federal budget, I would suggest the analogy of a rusted out pickup truck patched with Bondo and painted the same colour as the red ink book.

The budget is a patch-up job that seems to do very little to control the source of Canada's deficit problem. New programs have been introduced that require even more borrowed money. Each program represents an attempt to avoid the real problem, which is the government's lack of will to deal with a nation crippling deficit.

The infrastructure program is a large part of this problem avoidance. Jobs, jobs, jobs, we heard hon. members opposite cry on the campaign trail last fall. The promise of permanent jobs in this program is an illusion. The jobs created will last just as long as government money flows into this infrastructure program but not much longer.

By the same token, these jobs will not only cause the federal debt to rise, they will force the other two levels of government to increase their debts as well. The finance minister takes credit for not raising the tax rate. The visible tax rate may not have been raised but the various arms of government through which taxes are collected have been extended. The same taxpayer must now pay for more federally directed programs through the broader reach of government.

The additional debt to be incurred by all levels of government involved in the infrastructure program will result in about a $500 million annual increase in the deficits. This federal program is demanding that the provincial and municipal levels of government adopt its policy of increasing deficit spending.

Some provincial governments like Newfoundland may not fully participate in this program because they are already too heavily in debt. Other provinces have reluctantly conceded to the program only because of the pressure they receive from the municipalities.

Even the municipalities are reluctant to participate because of the enormous additional expense. These extra costs go far beyond what they can reasonably add to their budgeted expenses. However, because of the extra federal cash available politically both the provinces and their municipalities must enter this federally contrived competition for more transfer dollars.

The problem of paying for this program remains whether the money is accepted or not. Whether we take the cash or not we have to pay the taxman because the money will be spent. The money will be borrowed to spend and the burden of paying interest on that will be borne by the taxpayer.

Some of the largest cities may view this program from a completely different perspective. For them this may be a windfall. The federal government has taken on the role of Santa Claus, granting to them any project within reason that they can dream up. Some projects likely to receive funding can hardly be considered infrastructure types.

One project likely to gain approval is the Quebec City convention centre. Many would question this as infrastructure. While some communities are in desperate need of infrastructure upgrading, others will be using these tax dollars for projects that are ridiculous for financially broke governments to even consider.

Can we expect more projects as we saw from the previous government like the Museum of Humour in Montreal which is a joke of a project, approved and funded by all three levels of government?

Even if we could afford to undertake the Liberal infrastructure program, it is still flawed. Municipalities have been provided only two years to approve and implement projects which must be completed within just three years.

Any projects currently in place are not eligible and I fear the least infrastructure-like projects will get priority in the rush for approval. As well, the haste to completion will result in a lower quality end product with likely cost overruns to be fully borne by the municipalities.

I am concerned that this infrastructure program will end up yielding the same results as the Ataratiri Housing Project in central Toronto which was reported in the press. The description of this municipal housing project has similarities to the infrastructure program. On this Toronto housing project $265 million was spent and not a single residence was ever built.

I would like some assurance from the former Mayor of Toronto, now the hon. minister responsible for the infrastructure program, that the mistakes made in this Toronto project will not be repeated again on a $6 billion scale.

This infrastructure program serves as a reward to many municipalities that have neglected adequate maintenance. Rewarding negligence is found in another program adopted by the budget, the residential rehabilitation assistance program, or the

RRAP. This program is designed to assist individuals who own residences that do not meet adequate living standards.

The RRAP provides forgivable grants and loans. Forgivable grants are loans converted into grants after five years ownership has passed since the work was completed. The forgivable grant portion of the program cost the Canadian taxpayer $53.7 million in 1993. Additional fully repayable loans worth $10 million were also granted. However, in 1993 almost $1.5 million worth of previous loans were in default.

The residential rehabilitation assistance program as I understand it is intended to raise the standard of housing for those people with low incomes. This in itself is a worthy cause. As worthy as this may be the main problem with this program is the same problem we have with the infrastructure program. The RRAP will take another $100 million of borrowed money to finance it and this borrowed money will be added to the national debt and then we and our children can pay interest on that also.

However, there are some other reasons why I resist the RRAP. They are based upon some knowledge of some of the abuses that have taken place in the past. Homes have been renovated and upgraded with the result being an increased sale value which made selling the house an attractive option that was taken advantage of.

Another aspect I resist is the arrangement to provide loans which are simply not being repaid as agreed.

In the budget other costly programs were introduced. The cost of scientists and engineers program will be $10 million annually. It is designed to help businesses hire new technical staff with government subsidies. A similar program is the youth services corps which also acts as subsidies to businesses hiring youths.

As admirable as these programs seem they put businesses which are able to participate in the program at a competitive advantage over those that do not quality. Lowering the cost of research and production for a business which normally is not competitive or viable could force other self-sustaining and competitive business out of the market. Both these programs have admirable motives but have potentially dangerous consequences that could place Canada at a disadvantage in world markets.

It is always a disappointment for a person who has worked hard to see his or her business grow and then see a competitor come in and receive government money that instantaneously makes them 10 times larger than their years of work have accomplished and the business becomes unviable because of the artificial competition.

These programs will have little overall effect on employment but will force us to maintain current or higher levels of deficit spending and will not permit any overall lowering of business taxes which is the greatest stimulus to increased employment. These programs have the potential of working against the goal they were designed to achieve.

The court challenges program was reintroduced in last month's budget. Canadian Heritage estimates show a steady increase in the money to be provided to the court challenges program. The amount allocated for the next fiscal year, 1994-95, will be almost double what was provided in the last full fiscal year before its cancellation in 1992.

We must also take into consideration that the $35,000 available per case represents only a small portion of the entire cost that each case represents in the entire judicial system. As well, there are a growing number of people who resent taxpayers' money being spent to argue for the rights that satisfy agendas more personal than national.

The goal of the court challenges program was introduced to help minority groups challenge the sections of the Canadian Charter of Rights and Freedoms. It would be reasonable to expect that after 14 years of the existence of this charter the number of cases should be tapering off, not increasing.

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5:35 p.m.

Liberal

Julian Reed Liberal Halton—Peel, ON

Mr. Speaker, I would like to ask the hon. member how he would respond to the people in the municipalities of my riding who have said to me very enthusiastically that because of the infrastructure program the municipalities were able to update projects that had to be delayed in the past because of the recession and that the benefits will accrue over the next 10 to 15 years, well beyond the time that the mechanics of the infrastructure program are under way.

I wonder how he would respond to that in making the statement that this is strictly a temporary thing with an end and once it is over it is over and gone.

He alluded to that early in his speech.

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5:35 p.m.

Reform

Philip Mayfield Reform Cariboo—Chilcotin, BC

Mr. Speaker, the problem of money needed to rebuild and renovate infrastructure within the municipalities is not a new one. Municipalities have been short of money for this type of work for a long time.

However, the difficulty at this time with borrowing money for these projects is that this is money that will be added to the deficit and the debt and will increase the burden upon this generation and future generations to deal with the real problem of our economy, the number one economic problem of our nation, overtaxation. Every level of government suffers from that disease.

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5:35 p.m.

Liberal

Peter Adams Liberal Peterborough, ON

Mr. Speaker, the member spoke about the infrastructure program.

As the frost comes out of the ground across Canada, hundreds and thousands of infrastructure projects are going to start creating jobs, improving our infrastructure and stimulating local economies. He spoke about the residential rehab program. Thousands of Canadians are going to improve their basic investments in their homes.

He spoke about the science and engineering program. Does he know that whereas in Japan virtually every manufacturing company with 100 employees has an engineer, virtually none of our equivalent corporations does.

My question to the member is can he assure us that no municipality in his riding is going to take advantage of the infrastructure program?

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5:35 p.m.

The Deputy Speaker

Order. I ask all hon. members that when they are asked to be brief they do not go on indefinitely.

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5:35 p.m.

Reform

Philip Mayfield Reform Cariboo—Chilcotin, BC

Mr. Speaker, in a brief answer to the member's question concerning whether I will ask the municipalities to assure that they will not accept the money, of course I will not do that.

The reason for that is we are going to be taking part in paying for this project whether we use the money or not. Regardless of whether we are philosophically ready to approve this type of thing, which we are not, we must take advantage of it because we are going to be paying for it anyway. We are going to be there with our tax money like everybody else.

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5:35 p.m.

The Deputy Speaker

The time has expired. I would remind the hon. member for Cariboo-Chilcotin that he is not supposed to answer a question or put a question unless he is sitting in his seat.

I remind all hon. members of that.

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5:40 p.m.

Reform

Philip Mayfield Reform Cariboo—Chilcotin, BC

I am ware of that, Mr. Speaker. I will try to contain myself in future.