House of Commons Hansard #43 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was debt.
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
And it goes on. But the Minister of Finance told us yesterday that he is doing the exact same thing as the Conservatives. He strongly reaffirmed the Bank of Canada's goal to fight inflation. What an about-face in four short months! One can wonder what to expect for the next four years, Mr. Speaker.
My question is for the Minister of Finance-and you will not get off lightly! After-
Job CreationOral Question Period
The Speaker
Order! I did not hear the question. Could the hon. member please repeat it?
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
I will start over, Mr. Speaker. I thought you were rising to indicate that my preamble was too long. That is why I sat down.
Let me put my question again to the minister. After tabling a Conservative-style budget, does the Minister of Finance not realize that he is reneging on his election commitment by pursuing the same obsessive fight against inflation and refusing to make lowering unemployment the priority of the Bank of Canada?
Paul Martin LiberalMinister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec
First of all, Mr. Speaker, I must say we were better off before the hon. member put his question. I want to congratulate him on the way he read the quote.
As far as the question is concerned, is the hon. member going back on what his own leader said? Is he telling us that maybe we should not preserve what has been achieved in the fight against inflation, at the price of so much effort, as we know? Is the hon. member actually saying that we should not have low interest rates in this country? Should we not take advantage of these lower rates to stimulate employment in Canada? Is he denying all he has learned as an economics student? Not likely. Maybe. He says he denies it. What is he denying, the denial or having studied economics?
Job CreationOral Question Period
The Speaker
Let us not forget that we have several questions to hear today, from both sides. So, let us hear from this side now. I recognize the hon. member for Saint-Hyacinthe-Bagot.
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Mr. Speaker, I have a supplementary question. It is strange all the same to see the Minister of Finance throw his short-term job creation creed out the window, just days after the G-7 Summit. So, I will ask him again.
Does the minister not agree that, by pursuing this obsessive inflation reduction policy, which his own party fingered as the main cause of the latest recession, he is knowingly stifling any hope of economic recovery and employment development in Quebec as well as in Canada?
Paul Martin LiberalMinister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec
Mr. Speaker, there is no doubt in our minds that job creation is our number one priority. That is why we were so happy to see that 66,000 new jobs had been created in Canada in February, as I just mentioned, 15,000 of which are in Quebec.
Let us assess the situation: consumer confidence has grown 13 per cent during the fourth quarter; retail sales increased by 1.2 per cent in January, following a 1.1 per cent increase in December; and car sales have increased significantly. Our economy is growing, and that is because of the confidence Canadians have in us.
Preston Manning Reform Calgary Southwest, AB
Mr. Speaker, my question is also for the Minister of Finance.
The minister's budget projects a bank rate of 4.5 per cent, a long term bond rate of 6.4 per cent and interest costs of $41 billion this year. It also predicts a 1 per cent rise in interest rates will add about $1.7 billion to the deficit.
Today the Bank of Canada rate is already half a per cent higher than projected and rising interest rates are mainly due to higher interest rates in the United States over which the government has no control.
Will the minister today acknowledge that his estimates for next year's budget deficit are simply too low? Just acknowledge it so that the House can get on with addressing the real problem that represents.
Paul Martin LiberalMinister of Finance and Minister responsible for the Federal Office of Regional Development -Quebec
Mr. Speaker, the member's statement in terms of the short term interest rates is a little out of date as of the present time, although the numbers he cited were good as of about ten o'clock this morning.
The member is nonetheless right in one area and that is on the long term rates. The long term rates are higher than those which we projected.
When one looks at the degree of conservatism which we built into all of the forecasts, that is to say in terms of growth, inflation and interest rates, we are very confident that the projections we have made in our budget will be attained.
Preston Manning Reform Calgary Southwest, AB
Mr. Speaker, it is the degree of conservatism that we are particularly worried about.
Just last week the minister's parliamentary secretary answered a question on rising interest rates by saying: "The outlines in the budget were done very conservatively. These types of considerations, that is higher interest rates, were taken into account".
Does the finance department actually have in place a contingency plan for dealing with the impact of higher interest rates on the budget as the minister's parliamentary secretary has implied?
Paul Martin LiberalMinister of Finance and Minister responsible for the Federal Office of Regional Development -Quebec
Mr. Speaker, we remain very confident in the objectives and our ability to attain the objectives that have been set out in the budget.
As I mentioned, the deficit projections that we made, the question of revenues and expenditures, are based on a series of projections. While the member is obviously right in terms of long term interest rates, the fact is that we are nonetheless easily within the safe side on the vast majority of our projections.
I would like to say one other thing. The member made reference to my use of the word conservatism and the use of the same word by my parliamentary secretary. I share that difficulty. I wish I could find another word, Mr. Speaker.
Preston Manning Reform Calgary Southwest, AB
Mr. Speaker, I have a further supplementary question.
There must have been somebody in the finance department who had anticipated interest rates higher than those projected in the budget and what to do about it. I ask the minister if the government will be forthright and publish its real interest rate projections and its real interest cost projections as distinct from those contained in the red ink book.
Paul Martin LiberalMinister of Finance and Minister responsible for the Federal Office of Regional Development -Quebec
Mr. Speaker, the interest rate projections are simply part of a series of projections within the budget. We remain confident that we are going to attain the objectives of the budget.
We are going to have the opportunity to sit down some time after Easter with members of the Reform Party, as has been described in discussions with Mr. Speaker and myself. We are quite prepared to go through all of the various scenarios and discuss a multitude of contingencies.
Let me say one thing to the member. We are confident that we are not going to need a contingency plan because we are going to hit our targets.
Gaston Péloquin Bloc Brome—Missisquoi, QC
Mr. Speaker, my question is for the Minister responsible for the Federal Office of Regional Development in Quebec.
Yesterday, the big three American automakers clearly indicated that they had no intention of taking over the Hyundai plant in Bromont. In answer to a question from the media, the Minister of Finance said that if the big three persist in ignoring the Bromont facility, the government might decide to look up companies from other sectors.
Is the minister confirming that the big three American automakers do not intend to participate in the recovery of the Bromont plant, and can he specify which type of businesses he was referring to yesterday?
Paul Martin LiberalMinister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec
Mr. Speaker, it is certainly a relief to see that they have stopped directing questions to the Minister of Finance.
As you know, the Quebec minister of Industry himself, Mr. Tremblay, said yesterday that he was still hoping to negotiate with the automakers and that he intended to contact them. In fact, I think he had already done so. Therefore, we should wait for the outcome of the discussions between Mr. Tremblay and those companies.
Gaston Péloquin Bloc Brome—Missisquoi, QC
Mr. Speaker, does the minister agree that the closure of the car assembly plant in Bromont will put Quebec at an even greater disadvantage, compared to Ontario, regarding subcontracting in the auto industry, and that a real strategy must be implemented to correct this situation?
Paul Martin LiberalMinister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec
Mr. Speaker, I already said that I was very disappointed by Hyundai's decision. I am very familiar with the situation-in fact, I live in the hon. member's constituency-and I know the region very well. I fully agree to co-operate with the Quebec government and the municipality of Bromont to truly find a solution to this situation.
The red book, to which the hon. member just referred, includes a plan to fight unemployment, which certainly applies to the Eastern Townships. I hope to report soon on the discussions with the Quebec government on job creation.
John Williams Reform St. Albert, AB
Mr. Speaker, my question is also for the Minister of Finance.
The minister has stated repeatedly that his budget is a two-part strategy and that severe cuts are coming next year. At the same time the Prime Minister maintains that all proposed cuts are already on the table.
There are no spending cuts in the budget for next year which could be described as severe, and on this basis can the Minister of Finance tell Canadians if severe cuts are coming, and if so why is the Prime Minister not aware of them?
Paul Martin LiberalMinister of Finance and Minister responsible for the Federal Office of Regional Development -Quebec
Mr. Speaker, what the Prime Minister said is exactly what I said in the House when the budget was presented, that the cuts and the actions taken in the February 22 budget in and of themselves will lead to a reduction of the deficit, bringing it to the point of 3 per cent of GDP in three years.
At the same time in the budget, and the Prime Minister repeated it, there were a series of measures regarding the re-examination of the way that government operates. Some are led by the Minister responsible for Public Service Renewal, a number of others are led by the Minister of Human Resources Development, and a series of other ministers, including the Minister of Transport, is going to continue to lead our efforts to clean up the nation's finances.
That is what the Prime Minister said, that is what I said, and that is our position.
John Williams Reform St. Albert, AB
Mr. Speaker, the financial markets recognize that there must be severe cuts in spending if Canada is to avoid a severe financial crisis. Rising interest rates indicate that they expect the government to renege on their second round of cuts.
The credibility of the Minister of Finance is at stake, and his audience extends well beyond the House. Will the minister assure us that the deep spending cuts are coming and will be imposed?
Paul Martin LiberalMinister of Finance and Minister responsible for the Federal Office of Regional Development -Quebec
Mr. Speaker, we said very clearly that the February 22 budget was the first stage of a two-stage process.
We had been in power for slightly over 100 days when we brought in our first budget and what we were doing was reviewing all government operations. That review is under way and its results will be manifest not only in the next budget but in announcements that will be made by ministers over the course of the next year and in periods following.
We were elected on two bases, one to create jobs and one to clean up the nation's finances. There is no doubt in my mind that at the end of our mandate, the Canadian people will find that we have been faithful to our word.
Francine Lalonde Bloc Mercier, QC
Mr. Speaker, my question is for the Minister of Human Resources Development.
After the parliamentary committee responsible for consulting Canadians on social programs had to hand in its report on Monday so that it could be tabled in this House on Friday, and after the parallel consultations held yesterday, Tuesday, in Montreal were denounced by most of the invited groups, today the Minister of Human Resources Development announced, with the Premier of New Brunswick, an income security program for people between 50 and 65 who live in that province.
Does the minister not agree that the first phase of consultations on social programs was a sham?
Lloyd Axworthy LiberalMinister of Human Resources Development and Minister of Western Economic Diversification
Mr. Speaker, contrary to being a sham, the program we announced was multi-faceted in its approach. It attempted to reach out to Canadians in a wide variety of fora. We certainly look forward to the report of the committee.
As the hon. member has said many times, we also have to try other ways and means of tapping into the opinions of Canadians. As a result, my department and various provinces across the country sponsored fora at which a large number of Canadians could come and express their views, be heard, have a dialogue and get into a serious debate.
I find it incredible that a democratically elected member of the House would object to Canadians having an honest debate about their future.
Francine Lalonde Bloc Mercier, QC
Mr. Speaker, for Canadians to have an honest debate on what is coming, the minister should put it on the table.
Does he not admit that he intends to use this new so-called regular income program as a first step to introduce a guaranteed minimum income program throughout Canada and then to force the hand of reluctant provinces?
Lloyd Axworthy LiberalMinister of Human Resources Development and Minister of Western Economic Diversification
Mr. Speaker, the hon. member may speculate all she wants but the fact is that we are being very serious and sincere about soliciting the views of a large number of Canadians.
One of the aspects we take very seriously is working with the provincial governments where we can develop a series of pilot projects, new models, and new techniques we can test out during this period of re-examination to determine what works well. In this day and age where there is such complexity in the job market, in the social service network, we should be trying out a variety of methods and a variety of models to see what works best.
As the hon. member knows, I am quite prepared to share all the information with members, to bring it together in an action plan we hope will be brought forward to the Canadian public within approximately six or eight weeks so we can then have the second stage of debate.
I find it incredible and really not very understandable why the hon. member would object to the government's reaching out to all parts of Canada, to all Canadians, to find out what works best.