Mr. Speaker, I rise today to speak on Bill C-17, the omnibus bill on the implementation of a number of measures in the recent budget. I am doing so on behalf of the hon. member for Lethbridge who is unable to be here. He has asked me to make a few comments on the general orientation of our caucus toward the bill and some of the measures in it. I will also take some time to comment further to that on some of our specific concerns with regard to the sections on transfer payments to the provinces, the area for which I am specifically responsible in the bill.
Before doing so I would like to take a moment to draw to the attention of the House that Ernest Manning High School in the south part of my constituency of Calgary West has been holding a model parliament this week where they are debating many of the same things. I had been scheduled to attend their model parliament today but due to this commitment and other commitments particularly with regard to Bill C-18 and the committee hearings we had last night, I was unable to depart Ottawa.
I have had the honour on many occasions in the past to attend model parliaments at Ernest Manning High School. If my experience is any example, I am sure the students would have much to recommend to the House in terms of not only the informed level of debate but also the democratic procedures that are in place in that particular parliament.
Having said that, let me move to Bill C-17. As I indicated in earlier remarks today when we were discussing a point of procedural order, our party would be opposed to this kind of measure, to an omnibus approach to government legislation. In my remarks today, specifically to start with, I will deal with the five general parts of the bill: part I which applies to public sector compensation considerations; part II, the cuts in the Canada Assistance Plan and PUITTA transfers; part III, the reductions in transportation subsidies of various kinds; part IV, the authorization of borrowing authority for the Canadian Broadcasting Corporation; and finally part V, the significant changes to unemployment insurance.
Our party has mixed views on these various items. It is unfortunate that the nature of the legislation itself would not allow us to independently support some of the more desirable aspects of the bill, at least at the voting phases.
In part I, public sector compensation, the effect of the measure as in the budget is to extend wage freezes that have been in place now to the end of 1997, saving the government up to $1.5 billion over the next three years. In the zero in three deficit reduction program Reformers ran on during the election, we supported general reductions to the costs of the federal bureaucracy, the civil service, and to some degree civil service compensation, although certainly we would prefer to see most of the savings in the public sector concentrated on non-wage overheads.
However it has been our experience that in the private sector-and, as members know, my area in particular is dominated by private sector activity-a general lack of raises in private sector wages has been the norm for several years now and downsizing in many organizations has been commonplace. In comparison, the public sector has been relatively lightly affected by the ongoing recessionary problems that we believe ultimately originate in the public sector through not only the expenditure practices of governments but also their taxation policies and taxation responses to deficit situations.
Public sector compensation has continued to remain generous during this period and downsizing relatively light compared to that experienced in many other areas of our society. It is only justified that the public sector would experience these kinds of wage freezes during the period in question.
I hope the committee will examine some of the specific measures and some of the broadness of the wage freezes which are actually very rigid across categories and do occasionally lead to some inequities or incongruities in application. There may be some specific things the committee could do to examine, while not violating the principle of freezing the overall wage bill, whether any more flexibility could be given.
We also would like to support the one-time adjustments involved in government policy for relocation and incentive payments to workers who are being displaced from the public sector, particularly in the military area. There may be disagreement with the specific programs proposed, but I think no one questions the principle that there is a need to provide interim relief to those affected by government cutbacks. In particular we compliment the government for beginning to encourage the use of these funds toward retraining and relocation rather than just
payments that encourage recipients to welfare when adjustment payments run out.
We strongly support the freezes we are applying to ourselves in line with this, freezes to senior people in government and to members of Parliament. We would also take this opportunity to urge the government once more to make substantial cuts in benefit related areas to members of Parliament that are out of line with standards the public expects.
I refer specifically to the MP pension plan. Even the contribution levels of members of Parliament to that plan exceed normal contribution to a plan. On top of that, the government is now matching our contributions on a six to one basis to preserve the soundness of the plan over the long haul.
This simply cannot be justified at this time. I call on the government once again to bring in serious measures to cut back the benefit of this plan. It should ensure that the tremendous liabilities which have built up are not simply the responsibility of the taxpayer and that some of the current recipients who quite unjustifiably and quite irresponsibly voted themselves this kind of defined benefit also share in the reduction of the costs of the plan over the long run.
In addition I raise the concern we have in this party about non-accountable expense allowances being used as supplementary pay. These allowances are substantial. I receive a cheque of $3,000 a month for my work here but then I receive an extra $1,775 for an expense allowance for which I do not have to account. I have absolutely no problem in saying that my expenses as a member of Parliament are high and I will account for them. However I know the total value of that particular money plus the additional expense accounts in our operating budgets exceeds the expenses I incur. I am certain they exceed the expenses incurred by members who live much closer to Ottawa. That is something the House should re-examine while it is looking at the compensation of ordinary public sector workers.
Part II of the bill concerns reductions in transfer payments to the provinces, specifically in the area of the Canada Assistance Plan and the public utilities income tax transfer arrangements. I will not comment on those at great length here because I want to do so when I am finished my more general remarks. Let me just say in summary that these measures in many ways are an extension of some existing policies of government.
Nevertheless we have concerns. We do support the fact-and we said during the campaign that the government was realizing it-that transfer payments to the provinces are substantial and will be affected by any kind of long term deficit reduction plan. We are seeing the government do that. Nevertheless it is doing it without a plan. We have some specific concerns with some of the proposals here and where exactly they are going. I will discuss that in a few minutes.
Part III of the bill concerns reduction in transportation subsidies extending and deepening some reductions in the area of subsidies both to Atlantic sectors and to western grain sectors of our economy. During the campaign our party had called for a general reduction in money spent in the area of subsidies to transportation.
We would prefer rolling together all grain transportation moneys for farmers along with other agricultural programs into a series of two or three programs. That would basically have the effect of giving individual farmers much more choice in how they utilize government assistance, particularly in the area of the type of transportation and the methods of transportation chosen to move their product. That is the direction in which we would like to go.
We emphasize, though, that we only support the continuation of these subsidies as long as there is not an equal playing field with regard to the farm situation internationally. We favour a multilateral approach through the GATT to reducing these international subsidies. In line with that we would see our subsidies drop as well.
I note that this question came up once before in the House of Commons. The government insisted that was everyone's position but of course it is not. There are people in this country and particularly in other countries who are opposed in principle to any kind of reduction in this area. We will not sacrifice our farm sector when other farm sectors are not experiencing similar reductions.
Part IV of the bill, as I indicated, is the part that perhaps gives us the greatest difficulty. The Canadian Broadcasting Corporation is being given its own borrowing authority for the first time in its history in the magnitude of $25 million. This is a thinly veiled attempt to give the CBC more money without increasing its direct grants. We have already seen the government restructure the downsizing, the subsidy reduction program to the CBC, and spread it over a number of years to allow it to be less costly to the broadcasting corporation and more costly to taxpayers.
What assurances do we have that in next year's request for moneys the CBC will not include the increased costs of paying back these loans as yet another financial need? In other words it could be a backdoor way for the CBC to get increased funding once again.
In our view there will have to be a thorough examination of whether we support a large or small reduction to the budget of the Canadian Broadcasting Corporation, a significant re-evaluation of its role and its mandate. Particularly as technology
advances and we see these tremendous changes in the world, we recognize that the CBC will have to be re-examined.
Whether or not the government likes it, shortly we will have the choice of hundreds of television stations for ordinary viewers. The CBC will be in a very different position than what it was when this kind of policy was first brought on to the stage. In recent years the CBC with this borrowing authority has been increasingly forced, like it or not, to compete, to go out into the market to raise revenues.
With the implied backing directly or indirectly of the Government of Canada, it is crowding out the efforts of private advertisers and private investors to fund their own activities, their own borrowing and expansion requirements, at a time where money is very tight in the markets. The complaint I hear constantly from people in the radio and television business, not only in Calgary but in other cities where I visit, is that the CBC is not on a level playing field.
It is a very tight and very competitive business right now. We know that a large percentage of private radio stations, for example, have gone out of business in the past several years. This is not the kind of competition they look upon favourably.
We need to decide whether CBC should be strictly a medium to promote and produce Canadian television or whether it is a market player just like other stations. If so, does it compete on a level basis or does it have an unfair advantage? Before we extend this kind of borrowing authority we should be asking what mechanisms are in place to ensure the investments made by borrowing this money are profitable. Ultimately the CBC is fully supported by the Government of Canada and may lack the necessary incentives to invest prudently.
Part V of the bill concerns the government's changes to unemployment insurance. As I have said in previous speeches on the budget, these are the most significant changes in the bill and we certainly support the general direction the government is taking.
In the second year of implementation of these changes, we will be saving the taxpayers in the order of $2.4 billion. This is a significant amount of money. It is certainly the most significant expenditure reduction in the budget. It is also a very significant reduction not just for the money saved but for the direction the government now appears to be mapping in this area which is very much along the lines of what Reformers have been advocating for a number of years.
These changes are an important signal to the marketplace. The government is hinging a great deal of faith on holding its budget through the first year to try to keep things on track, convincing the marketplace that this is the direction it is looking at and that it is looking at only less costly social programs in the future but much more responsibly structured ones.
It hopes the marketplace will buy this signal even though it is really the sole big dollar application in the budget and will be able to hold off any kind of precipitous developments in the financial markets toward the dollar and toward the Government of Canada in the next year.
As I said in my speech on the budget, that is the gamble the government has taken. I would note that except for this measure, the will is not in this budget. It is very unclear at the moment with the problems we have with interest rates and the dollar that the market is accepting this signal as the real direction of the government.
Let me mention the good things in this development with unemployment insurance. There are several. First, it shows the government is moving in a good direction by not only reducing expenditure but also reducing payroll taxes.
What is interesting is that the government claims reducing the payroll tax is one of the centrepieces of its job creation program. It is nice for us to see that the Liberals are acknowledging that decreases in these types of taxes are a real solution to the job creation problem and to the unemployment dilemma we have in the country. Certainly it is a more effective approach than things like the infrastructure program, an approach we hope they will expand in the future. We need to stimulate through tax relief sustainable private sector job creation. That really should be the focus of our economic strategy.
The second desirable point about this is that the change proposed by the government to unemployment insurance is making the program more of a true insurance program rather than simply a haven for seasonal workers to top up their income, in other words, an income support program.
The long run drift of the unemployment insurance program from insurance principles has been extremely costly in the number of dollars spent but also many economists would agree it has had a lot to do with the increase in structural unemployment and the distortion of the regional economies.
Through the changes the government is proposing in the bill and in the budget, it is taking us down the path of linking through contributory programs like UI, contributions to the program much closer to the benefits that one is eligible to receive. Of course that is really the justification on which such contributory programs should operate.
The third point in the government's proposed changes to unemployment insurance is that it is good to see the Liberals slowly crumbling their mantra of universality. I have already noted that while the government has attacked us on our proposed changes in these areas, for example changes to seniors' programs, the government itself has taken absolutely no steps to restore the clawback to old age security which it fought when it
was in opposition. In fact it has gone additionally in that area. It has now imposed means testing on some of the tax benefits to senior citizens. This is another example of getting away from universality. We could disagree with the specific mechanism but the drift is definitely there. In the case of unemployment insurance there has been an increase in benefits for lower income Canadians under some circumstances and a decrease for others.
The government is moving in all of these directions, and I repeat them: the reduction of payroll taxes, the return to a link between contribution and benefit in unemployment insurance, in other words, insurance principles and finally a move toward some targeting in this program and away from universality.
These are all positive aspects in our view. I also acknowledge they were difficult decisions. The changes will be significant for the people affected and this particular decision I am sure will not be an easy one for the government although it will have our support. I regret it is one of a very few difficult decisions contained in the budget.
I want to express one reservation. There is also a change which gives employees the benefit of the doubt when dismissed for misconduct. In our view it has the potential of encouraging employees to dispute all dismissals in the hope of collecting premiums. This could clog up the system and result in increased claims. We hope the government in committee will examine the direction it is going although I would acknowledge that some of the things the previous government did in that area were questionable.
Finally, we also acknowledge the need for the pilot projects that are part of the bill and we urge the government to keep the House current on the spending of this money and to report to the House evaluations of the success of these kinds of projects. Too often in the past we announce initiatives for the sake of lessening the impact of unpopular measures. These continue permanently, they are never properly evaluated and they end up being simply a way that we mitigate the effect of having tried to save money in the first place.
Having said those things, I regret we are unable to support the bill over all. There are many things we do support but do not support the bill over all because of its omnibus nature.
I would also like to comment very briefly on the position taken by the Bloc Quebecois regarding Bill C-17, an act to amend certain statutes to implement certain provisions of the budget tabled in Parliament on February 22, 1994.
I may add that most of the measures in this bill concern specific cuts in the government's budget, especially the government's proposed cuts in unemployment insurance.
Apparently, the Bloc is opposed to this bill, as it is opposed to any major changes proposed by the Reform Party which concern major government programs, and I find this disturbing, because I see a party that is in favour of the greatest change of all, the break-up of this country.
When we talk about federal programs, programs created under the federal system, our party is proposing major changes, while the Liberals are proposing changes that are as significant as ours, but when the government starts to discuss issues that are vital to the future of our country, we see that the Bloc is always opposed to these changes.
I find it hard to explain to my constituents why a party that cannot abide the Canadian federal system still supports federal programs and in fact supports the status quo.
The Bloc Quebecois is always prepared to recognize the benefits of federal programs and it does so clearly and incisively, but when it talks about what is wrong with the federal system and especially about the programs we are discussing here, they tend to lack that incisiveness. I must say that I find it hard to understand why they are opposed to the system, to the program in general, while they are not to specific cases.
I hope that we will get a better understanding of these positions as we debate these things in the future.
If I could for a few moments turn specifically to Part II which is the area of my particular expertise, the fiscal arrangements section of this bill, I note that it affects two areas, the Canada assistance plan and the Public Utilities Income Tax Transfer Act.
The Canada assistance plan changes are in clause 12 of the bill and the purpose is to limit future federal CAP contributions to each province to the amount they received in the year ending March 31, 1995 until superseded by social security program reform in fiscal 1996-97.
Our position generally has been to recognize the need for reduction in the area of federal transfers and specifically in the area of welfare. I guess what we ask is why we are imposing targets for reduction in the absence of any particular policy for change and even in the absence of any particular policy direction that would indicate what the changes would be.
In our view there have already been inequities created through this situation. The previous government brought in specific caps to the payments that went to the so-called have provinces:
Alberta, British Columbia and Ontario, caps that reduced quite significantly the expected revenue of these provinces from federal transfers for welfare payments. This has been a big problem in the case of Ontario.
This seems to be happening without an overall plan and now we are asked to implement additional projected cuts. Once again we do not know where this is going. In fact, we have various committees studying these things at the moment.
I am concerned about the lack of restructuring of the program, the lack of overall financial direction, just these arbitrary reductions. What is interesting is they are done really on the basis on which the Liberal Party often criticizes us, saying we are slash and burn, we have no plan and we just cut the dollars. In fact, this is precisely what this bill does. It lays out some areas for reduction to a significant social program and provides absolutely no rationalization why that would be done or plan to implement it.
Just to give some idea of the money involved, Canada assistance plan payments have been a rapidly growing area of government expenditure. In the last 10 years they have grown from $3.4 billion in 1984 to approximately $7.7 billion in fiscal 1993-94. They are projected to grow by another 5.4 per cent this year. Obviously we can agree with the fact that there does need to be some reduction.
The social assistance case load in this period has grown from about 750,000 in March 1980 up to 1.6 million today. I would point out once again to hon. members that the period of massive deficits, structural deficits, ongoing deficits and accumulation of debt has not been a period in which we have produced jobs in economic growth but one in which we have restricted and stifled it. I once again would ask the government to re-examine its view of the link between financial mismanagement at the federal level and job creation.
The ministers often assert that there is a positive link between deficits and job creation. I think the evidence is increasingly otherwise. There are projected savings from the reforms here of $466 million up to 1995-96. These are significant amounts of money. However, once again I suggest that we do not know the direction and we are concerned about further penalization of particular provinces as we had in the past as opposed to something that may treat all provinces much more fairly.
Clause 13 of the bill is the changes regarding the Public Utilities Income Tax Transfer Act. What this really does is preserve the current 10 per cent reduction of transfers under that act for an additional period of time.
Just to inform the House, the Public Utilities Income Tax Transfer Act exists because in some parts of the country, particularly Alberta but not exclusively, utility companies are private sector whereas generally speaking they are public sector utilities. As a consequence the operations of these corporations are subject to taxation whereas crown corporations are not taxed in the same manner. This has given rise to an inequity that is compensated for by the Public Utilities Income Tax Transfer Act which transfers back to the provinces some of the corporate income tax revenues that are taken out of certain provinces because they are private sector companies but not out of other provinces.
The purpose of this program has been to create a level playing field in other words. This is obviously undone when we begin to freeze or reduce these kinds of payments.
By the way this goes back to 1948. We recognized this inequity a long time ago. From 1966 on we refunded to the provinces virtually all, about 95 per cent, of the moneys that were collected from private utility companies back to the provincial governments. It was only in 1990 that we began to effectively freeze these payments. It had been done in the past but was reversed. However, in 1990 we started the pattern of freezing payments at fixed levels and of reducing the percentage that will be returned to provincial governments. In our view that is not fair.
It has a particularly unfair effect on the province of Alberta which is the major beneficiary. These tax revenues in other provinces are generally retained by the province, but in Alberta the province rebates these tax revenues to the utility companies with the stipulation that they must be passed on to their customers. In other words the purpose here is not to allow the operation of the Income Tax Act to lead to higher utility prices in the province of Alberta.
I suggest that the purpose of the act is fair. The government proposes to continue the present reductions in freezes that the Conservatives implemented. It is certainly no worse than we have at the current time but it is not an issue of equity.
I come back to that time and time again when I speak about transfer payments and how we change transfer payments to the provinces, whether it is through the equalization formula on which we have already had a bill or through cap changes here or through PUITTA changes.
In all cases what we see are programs that proceed without a plan. We either give money with minimal restriction in the case of equalization or cap it in the CAP or in the case of PUITTA. We have no particular rationalization for these things. The common theme seems to be that certain provinces, of which mine is one, seem to always come out at the short end of these non-systematic changes and revisions to policies that transfer money to provincial governments.
I remain unclear of what my view is of these measures. I can support the philosophy of the CAP transfers but I do not know where they are really headed or what the public policy purpose is. In the case of the PUITTA transfers I do not support the philosophy but I do recognize that the government has not introduced additional cuts. Of course we would fight that quite strongly. Those are measures we are going to have to examine in committee.
I see your signal, Mr. Speaker. I believe there will be other speakers on some of the other matters. I say once again there are things in this bill to recommend it. I just regret that we are proceeding with this omnibus approach to legislation which, because it lumps in things we support and things we do not support, unfortunately deprives us of the ability to support the government in votes where that would be appropriate.
I appreciate very much your patience, Mr. Speaker. I believe we will hear later in debate from the hon. member for Lethbridge, who was unable to be here today, as well as other members of our party.
