Debates of March 9th, 1994

The Budget

[Gilbert Fillion, Bloc, Chicoutimi, QC]

Mr. Speaker, I will answer by saying that right now Quebec does not receive the same percentage of taxes that it pays to the federal government. Indeed, we account for 25 per cent of the Canadian population, but barely 21 per cent of the taxes we pay is returned to us. Right there you have an injustice which would be eliminated with a sovereign Quebec.

[Maurice Godin, Bloc, Châteauguay, QC]

Mr. Speaker, this budget is the failure of a newly-elected government, a government with a list of promises as long as your arm.

Sadly, we are faced with a double failure. First, this government has failed to start off its mandate by taking the drastic actions required to put our public finances in order. Second, it also failed to find ways to promote economic recovery. It has managed to take yet more from the have-nots of our society, while sparing the wealthy. It has even managed to cause controversy with unfortunate decisions like the closure of the Collège militaire royal de Saint-Jean.

However much the Minister of Finance tried to prove, with all kinds of figures and calculations, that efforts had been made to cut expenditures, few people believed him-not the media, and certainly not ordinary people-because the figures are there, implacable and merciless.

Those figures tell us that the budget will again show a deficit of disposable revenue over uncontrolled expenditures. This government will keep feeding an accumulated deficit by nearly $40 billion, an amount that the government is spending on top of what the people are able to pay. So, it should not boast about cuts and efforts to that effect. Its failure is visible, undeniable, because total spending continues to increase.

The level of indebtedness of this country is getting ridiculous. While this government will be adding some $40 billion to the accumulated debt, it will spend about as much just to service the debt. In other words, we are getting dangerously close to the point where our annual deficit will be equal to the cost of

servicing the public debt. Will we soon be forced to cut government spending just to cover debt charges? The Minister of Finance himself admitted that he will not be able to pay off Canada's public debt. What about the annual deficit? Could he pay it off? Not likely! If only the government could invest as much in job creation as it is paying just for debt maintenance.

Furthermore, the government could not resist picking up the bad habit of hitting on low-income people. We thought we had seen everything with the actions the former minister responsible for the Unemployment Insurance Program had recently announced. He had even tried to fool people by renaming his department, using the euphemism of Human Resources Development. Can you imagine? But people were not fooled; we know what they did with this kind of human resources development. In the last election, the Canadian people as a whole fired all those who did not understand the difference between tackling unemployment and attacking the unemployed.

The new government, far from distinguishing itself from the old Tory government, followed in their footsteps. Ordinary people have trouble understanding how the proposed changes to the unemployment insurance program are likely to improve the employment picture. I, too, have trouble understanding the increase in the number of weeks of work needed to qualify, when jobs are increasingly precarious and job security seems to have become an obsolete concept.

The cumulative deficit of some $6 billion in the unemployment insurance account at the end of 1993 is not a result of the system as such but of the failure of governments to support employment and the economy. It is not the unemployment insurance program that creates unemployment. The Liberals are confusing the disease with the cure. This remedy is not curative but palliative. The Liberals are on the same wrong path as the Conservatives; they have the same policies, the same lobbyists, the same kind of election fund, the same friends, the same protectors.

Observers quickly noted how fast the government acted to introduce in its current budget measures hitting the middle class. Yet, despite all the proposed measures regarding capital gains and tax loopholes, the Minister of Finance merely announced public consultations and hearings. Not only is there no equity in this budget but there is no appearance of equity.

While cutting transfer payments to the provinces by $2 billion over two years, it does not have the courage to close the real tax loopholes available to the rich. We in the Bloc Quebecois are always identifying tax trusts or invoking the Auditor General's recommendations, for example. If cuts to operating expenditures for 1994-95 only amount to $413 million, it is because the government did not take immediate action to eliminate waste and duplication.

It refuses to cut in the right places but does it in the wrong places. In his speech, the Minister of Finance called for renewal and accountability in social programs. To move in that direction, the government could have restored the non-profit housing program, for instance. That program provided needy households with housing of reasonable size and quality at affordable prices. It helped eligible sponsoring organizations to build, acquire, renovate and run subsidized rental housing projects. But the government did not restore the program, and thus missed a good opportunity to show its know-how.

Short of a similar program, it seems that the Canada Mortgage and Housing Corporation, which was responsible for such applications under the National Housing Act, is now essentially a mortgage insurer and has given up its role of partner in social programs.

The office of the president and chief executive officer of the Société d'habitation du Québec told us that, in 1993, 782 new low-cost housing units had been built across the province, thanks to the financial involvement of the federal government. Thirty-five of these units are located at 41 Saint-Hubert Street, in Châteauguay, thanks to the initiative and efforts of all those involved within the community. Do you know how many new units are expected to be added in 1994, after this budget? None, Mr. Speaker. None at all! Maybe this is the government's message! Maybe this is the solution found by the government to free itself from its obligations towards the poor.

I say to the government that better management is not synonymous with reneging on commitments. The necessary streamlining of expenditures and operations did not take place. It is more than urgent that the government use common sense. The Liberals had their red book, but their budget does not show that they have the know-how. This is why the Bloc Quebecois has every reason to be here in this House. It must make representations on behalf of all those who are forgotten and neglected by the government, and it must inform this same government of the opportunities which exist but that it refuses to recognize.

As the Official Opposition critic for Veterans Affairs, I was surprised to read that the secretary of state was satisfied because no programs were affected by any cuts, and that he was confident that no service would be adversely affected. These comments were reported in the February 24, 1994, issue of the Charlottetown Guardian . How can the minister make such claims when cuts affecting the department are somewhere around $3.2 million? How can these cuts, which will impact on the 1994-95 department's operating expenditures, have no effect whatsoever? Is the department so badly managed that cuts of that magnitude will not be felt at all? I certainly intend to ensure that the statement made by the secretary of state is not merely exaggerated optimism.

This budget clearly illustrates the failure of the Canadian federal regime. The wheel of the regime is turning with such inertia and is under the influence of such external force that it does not seem controllable. The result is that the Liberals have drafted a budget identical to the one which the Conservatives might have tabled, had they been re-elected. It is the exact same thing! If the elected government does not seem able to control the federal regime, how can Canadians have the impression that they can make a difference and change things in that regime?

We believe that the real solution lies in a major redefinition of the controls of public authority. Quebec's sovereignty is not an end in itself. It does not automatically mean the end of Canada or the will to come to that. Rather, Quebec's sovereignty represents the beginning of a new relationship in which solutions simply not possible in the present constitutional structure could be used to resolve common problems. Canada's structural crisis can only be solved if Quebec becomes a sovereign nation. This is the option I favour for the benefit of our future generations.

[Nic Leblanc, Bloc, Longueuil, QC]

Mr. Speaker, I want to thank the hon. member for Châteauguay for his excellent speech and for his great interest in Quebecers. When he speaks of Quebec sovereignty, he speaks of the greater welfare of Quebec, and indeed of the greater welfare of the rest of Canada.

In his budget speech, the Minister of Finance spoke of one-stop shopping for government services. I assume he meant federal government services. He forgets that for years now, Quebec has been demanding to have similar service centres which would also provide Quebec government services.

I am interested in what the hon. member for Châteauguay has to say about the fact that once again, the Minister of Finance has forgotten that this kind of duplication is extremely costly. According to the Bélanger-Campeau Commission, duplication between Quebec and Ottawa costs between $2 and $3 billion per year. If the Minister of Finance had seriously wanted to cut spending, he should have realized that it is not a government services centre that is required, but a kind of one-stop centre that would also include services offered by the government of Quebec. I would like to get the hon. member's comments on this issue. I feel certain that he has some excellent suggestions to make.

[Maurice Godin, Bloc, Châteauguay, QC]

Mr. Speaker, I agree with my hon. colleague from Longueuil. As far as I am concerned, a country's revenues and production capability are not merely a function of its size or the extent of its borders, but rather a function of the way in which that country is run.

I think that is the problem with Canada today. We have a government machine that could in all likelihood adequately serve 260 million people, the population of the United States, whereas we have a population of barely 26 or 27 million. And that is the crux of the problem. There is considerable duplication at the federal, provincial and municipal levels. If we cannot change or amend this system, then the only option for Quebec, the only way for it to achieve a healthy system of government, is to become sovereign.

[The Deputy Speaker]

Hon. members, I made a mistake. As a rule, after a speech, the Chair must recognize a member from another party first.

I should have recognized first the member for Edmonton Southwest. Please be brief, the time is just about up.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Mr. Speaker, I have a great respect for the hon. member for Chateauguay but I wish to draw a contradiction that I see in his presentation to the attention of the House and perhaps get his response.

His first words were that the closing of the military college at Saint-Jean is a desperate problem for the province of Quebec. Would the member not agree that if Quebec were to separate and be an independent country, Canada would no longer have any facilities in Quebec? Does not the closing of that one military college, which he takes great umbrage at, foreshadow the closing of many more federal installations in Quebec to the tremendous detriment of Quebec and Canada?

[Maurice Godin, Bloc, Châteauguay, QC]

Mr. Speaker, I wish to thank my hon. colleague for his question. No, I do not believe that additional closures of federal installations in Quebec would be detrimental to Quebec. One has to understand that any federal investment in Quebec is tied to taxation. Whether we take our tax dollars and send them to Ottawa only to have them reinvested in the province, or whether we spend them ourselves, it is really all one and the same thing.

However, I would point out to him that there is quite a difference between receiving one million for research and development, and receiving one million for unemployment insurance. If we were the masters of our own destiny, we could take the one million and invest it in research and development, rather than spend it on unemployment insurance. Then, we would be able to put everyone to work.

[The Deputy Speaker]

The Chair is reminded that the time has expired. Next time I will be sure to recognize someone from another party.

[Brian Tobin, Liberal, Minister of Fisheries and Oceans]

Mr. Speaker, I am pleased to rise in my place and participate in this debate. May I at the earliest opportunity on my feet with you in the chair express my congratulations to you on taking up these most important responsibilities.

In beginning my remarks I cannot help but say to my colleague opposite who in giving his remarks on this budget debate said "if we were masters of our own destinies" that we are as Canadians in a free and democratic society masters of our own destiny. Quebecers are masters of their own destiny. Every time Quebecers have been asked to chart a course, to fasten a sail and to be captains of their own ship they have decided that their fate and their course lies in parallel with Canada, not as a separate entity and not as a separate ship.

I am confident that Quebecers, if they are again given the opportunity to cast a judgment, will again choose to contribute to this great experiment on the northern half of the North American continent called Canada.

Canadians on October 25 gave a very clear mandate to a new government to attempt to come to grips with age old problems. I submit that never in modern times has a party laid so clearly before the people of Canada, fully a month in advance of an election, a detailed blueprint for the government's policy and plan of action. I am referring now to the Liberal red book.

Each of the major initiatives outlined in the red book were outlined weeks in advance of the election, something which heretofore has been considered to be a politically silly thing to do; to actually tell the people in detail, not days, not hours, not weeks but a month before an election, to lay it out and say: "Here is what we will do if charged with the responsibility to govern". That is something we did.

I am proud to say that I belong to a party that not only laid out its program but has scrupulously, item by item by item, sought to fulfil the contract, which is what it is, that we made with the people of Canada when they signed on the bottom line, marked their x and gave Liberal members of Parliament a majority and the opportunity and responsibility to govern.

In Atlantic Canada Canadians by an overwhelming majority expressed confidence in the platform of the Liberal Party. Atlantic Canadians did not express that confidence because they had some kind of simple belief that just by voting Liberal all of the social challenges that confront us would suddenly disappear or held some simple belief that just by voting for change that unemployment would disappear. No.

The people of Atlantic Canada marked an x for a party and for a program fully aware that the structural problems of Atlantic Canada could not be dismissed with the introduction of one budget, could not be eliminated just by an expression of good will of a new government, but that our chronic levels of unemployment and our structural problems required real change, not slogans but substantive change.

One of the areas we committed ourselves to change and one of the areas where Atlantic Canadians lock arms with us in marching forward to accomplish that change is in the area of the fishery.

We said that we would make two substantive changes in fisheries policy, two sea changes in fisheries policy. On the one hand we said we would not walk away and turn our backs on those in crisis, those dislocated and those out of a job because of the closure of fisheries and because of the moratorium on Atlantic groundfish stocks. There are now a total of 14 moratoriums in place. There are 14 groundfish stocks in which there is no fishery for the first time in 500 years.

We now have a situation for those people who live in rural Newfoundland on the tip of the great northern peninsula in a small rural isolated community where the average income is among the lowest in the country and where the capacity to take some wild game or jig a few cod is an important component of the food basket where I, as Minister of Fisheries and as a native Newfoundlander, have had to take away the right even to jig with a hook and line, the most basic biblical kind of tool, to go out and draw a few fish from the sea. I have had to take away that right in the name of conservation.

Incredibly, for the first time in 500 years that right was removed. There is not a protest. There is not a revolution. There certainly is not a celebration. However, there is acceptance. There is a bearing down, a gritting of teeth, a desire to pay the price that is required to rebuild those cod stocks even if that price is to take the fish and the protein out of the sea, right out of the cupboards, the freezers and off the tables of the very people who have relied on it for 500 years.

We said to the people of Atlantic Canada and to the people of my province of Newfoundland and Labrador that we will take the tough decisions. We have begun the process of taking them. We put in place in the budget $1.9 billion to ensure that people can retrain where appropriate, that people can be sustained in the core fishery where appropriate as the rebuilding process goes on.

We have publicly identified the need to reduce capacity on the harvesting and processing side of the fishery by as much as 50 per cent. Imagine, standing up in a public place, in a land where people for generations have eked out a living on the edge of the north Atlantic, drawing the resource from the sea, and publicly saying: "Half of you cannot be sustained. Half of you cannot

carry on. Half of you must move on to other industries and other jobs".

If a decade ago someone had even whispered that thought there would have been riots. A decade ago if someone had stood in a public place and suggested that people would be separated from not just the means of making a living but the way of life that generations of forefathers had carved out, he would have been run out of town. However, today there is a steely determination to bear whatever cost has to be borne, to bear whatever pain has to be experienced, to rebuild these cod stocks.

I want to take this opportunity to say that all of those who sit in steel and glass and ivory towers, in the editorial boards of the nation from their vantage point 25 or 30 floors above the concrete below, to those who say that Atlantic Canada is finished, that the back of the economy has been broken, that the spirit of the people has been crushed or broken, those who say the solution is simple resettlement, should be moved to Toronto, Montreal or Calgary or Vancouver or to somewhere else where there is a job. I want to say to those who in their own mind when faced with such a challenge as that being faced by the people of Atlantic Canada who would fall down and give up that that is not the mood, that is not the spirit, that is not the disposition and that is not the character of Atlantic Canada.

The people of Atlantic Canada and of Newfoundland and Labrador do not feel desperation or hopelessness but are reaching down and uncovering a wellspring of courage and conviction to carry on. We are going to rebuild the industry. We are going to restore a new conservation ethic. We are going to stand up and ensure that the last fish out there is maintained to rebuild that important historical sector.

We will pay any price in the name of conservation. We will impose 14 groundfish moratoriums. We will impose a moratorium on the food fishery. We will take 35,000 people and have them park their boats and close their plants.

We as a nation will pay the price to maintain, sustain and retrain them. We will demand no less of foreign nations that fish on the nose and tail of the Grand Banks. We will demand no less. We say to France, Portugal, Spain, Japan and Russia, with our palms outstretched in the realm of generosity, with our hands stretched out seeking understanding, that we can do no more than we have already done in the name of conservation and that they can do no less than to join us in respecting these important cod moratoriums.

We have said that we will not catch a pound of fish this year on the nose and tail of the Grand Banks, the breeding grounds of what once was the world's greatest protein resource. Not a pound. At a time when we have an agreement in Brussels through NAFO, when Canadians have agreed not to fish and when our NAFO partners have agreed not to fish, we will not allow pirate vessels flying flags of convenience to come in and make a mockery out of the sacrifice that Canadians and indeed others around the world are prepared to undertake this year to rebuild those cod stocks.

Monday next I will be in New York. On behalf of Canada I will speak to the UN conference on high seas fishing. I will make it clear that we want to resolve this matter by agreement. I will equally make it clear that we will resolve it by unilateral action if necessary.

Two years ago when the government of the day came before Parliament seeking authority for an assistance program for Atlantic fishermen, the then minister stood in his place and pointed out that a northern cod stock had collapsed.

The minister said against a backdrop of a $30 billion national deficit that he needed assistance for 17,000 displaced people. He said that assistance would be required for two years. I am back two years later. The deficit is not $30 billion, it is $46 billion. The number of people requiring assistance is not 17,000, it is now 35,000. The timeframe is not two years, it is now five years. The scope of the crisis has broadened dramatically.

As I said, we want to do all we can to rebuild the fishery by restructuring at home, by enforcing reasonable conservation measures inside and outside the 200-mile limit. We also know that we must rebuild the economy. We have to diversity the economy of Atlantic Canada.

Let me speak of my own province, Newfoundland and Labrador. I know it is not enough to ask my fellow Canadians to stand with us, to stay with us during this downturn in the fishery. I know we have to demonstrate that Newfoundlanders and Labradorians are prepared to go out and to compete, to develop their skills and to win in a global economy.

That is also a direction we are moving in. I want to share with some of my colleagues elsewhere in the country what is happening in Newfoundland, where the new opportunities lie and where the new leadership is coming from.

I submit to members that one of the areas in which we can be competitive, where 90 miles of water is not a disadvantage, is in the area of the new information and knowledge based industries, in high tech, in research and development. That is where the future lies and that is where the future is being carved out.

In the province today we are seeing the development of new companies in the engineering services field. Last year, RDS Engineering of Newfoundland won out over national and international competition for a $6 million contract on Hibernia. A new company, Instrumar, has developed a clean wind detection system now being used all across the country, technology to develop the presence and thickness of ice, snow and other substances on aircraft wings. This company recently formed a

strategic alliance with Allied Aerospace Canada to commercialize both nationally and internationally this new system.

Ultima East Data Communications Ltd. has developed a range of hardware and software products for communications applications, including access to current satellite technology. Together with a sister company, Sea Link Ltd., Ultima East has been marketing automatic high frequency radio systems world-wide. Eighty per cent of the product of this company is being marketed not in Canada but internationally and the vast majority of its export product is going into Asia. All of the software development has occurred in Newfoundland and Labrador. That is the kind of future we have to carve out for ourselves.

Compusult Limited, a St. John's company, recently completed a $1 million contract to develop a system for Environment Canada to receive and to store ice data. It is now in the process of commercializing that technology. EJE Trans-Lite, a Newfoundland company, was established in 1988 to design and market specialized safety lighting products for the marine and aviation industries. One of its products, a personal rescue light, has sold already in a short period of time more than 200,000 units and over 80 per cent of that product is being exported around the world.

Another company, Nautical Data International, recently formed a joint venture between two high technology companies, one based in Newfoundland and the other in Vancouver. Both these companies have put their resources together and are digitalizing the data from the department of hydrography in my department. It is a unique development. We have privatized the information available. We have digitalized that information and both the Vancouver and Newfoundland based firms working in tandem are marketing that product around the world and around North America. It is another new high tech development.

I mention these companies because I am not naive. I have been here 14 years. I understand that for many Canadians who have not had the opportunity to visit Newfoundland and Labrador and certain parts of Atlantic Canada, there is a perception that the economy is built entirely on the fishery, as some Canadians falsely perceive that the economy of Alberta is entirely built on red beef. Of course nothing could be further from the truth.

It is a modern, thriving economy showing great leadership in the high tech field, the petrochemical field, the engineering field, and so on. A new economy is evolving in Newfoundland. Some of it is spinning out from around the offshore oil and gas sector.

We understand on this side of the House that we have to create the environment to allow that new technology, that new leadership, that spirit of entrepreneurship to flourish. We have to give people the circumstances and the conditions under which they can, as a people and as a province dependent too long upon a single resource, sprout their entrepreneurial wings and fly, successfully compete in a global economy. That initiative is under way today in Newfoundland and Labrador.

In the meantime we must never forget, Atlantic Canada must never forget, that Newfoundland and Labrador has a historical attachment to the ocean, a historical attachment to the sea and to the resources of the sea.

We must begin to understand that the desecration, the destruction of cod resources, northern cod all throughout the Atlantic, the destruction of offshore resources is the environmental equivalent of the destruction of the rain forest. When we take away that resource we take away not an opportunity for an income or a livelihood from people in the particular region but a resource that is part of the world's food basket, a rich source of protein for the planet.

We have to begin to understand that the crisis on the east coast is not a Newfoundland crisis. It is not an Atlantic crisis. It is not a regional issue. It is a question of sovereignty for a nation.

If we as a country cannot commit ourselves to rebuilding the great Atlantic resource, if we are not prepared to commit ourselves to take action to rebuild that resource, to flex our will, not only at home but beyond 200 miles, then we have to call into question how mature this nation is and how willing and how ready we are to stand up and call ourselves a mature and modern nation in 1994.

[Chuck Strahl, Reform, Fraser Valley East, BC]

Mr. Speaker, I wish to thank the minister for his speech which was very emphatic and informative.

I did notice a couple of things as you were progressing through your list of accomplishments in the ongoing change in Newfoundland. You specified how the economy is diversifying, the number of jobs being created, and so on.

Almost conspicuous by absence is the fact that the infrastructure programs that past governments have initiated, if I can call them that, the Hibernia project, and so on, are not playing a huge part in the rebuilding of Newfoundland.

It seems to me there is a lesson to be learned there, possibly that the businesses mentioned are small and medium sized businesses using the high tech future to grab hold of things and sprout wings, as the hon. minister mentioned, to grab hold of the new possibilities.

Hibernia is not really playing the big part that people hoped. I wonder if the minister would comment on future job creation projects. I realize the minister is supportive of his own infrastructure programs but it seems that billions of dollars have been

wasted in large part on Hibernia. There is going to be another billion dollars thrown at the P.E.I. bridge.

Would the minister comment on whether that is the best use of taxpayers' money. Would it be better to lower taxes, thereby helping these small and medium sized businesses?

[The Deputy Speaker]

Before recognizing the minister, I wonder if members could say "the minister" or the "member" rather than "you".

[Brian Tobin, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Speaker, I did not talk about the Hibernia project because I wanted to focus on what I think is an exciting new dimension. There are a bunch of young men and women, some in their twenties and thirties who are developing software, not importing technology or software, adding some value and sending it off. The resource is their own imagination.

Limitations are those they impose on themselves. They are taking tools of modern technology and using those tools to create new knowledge based industries and exporting them around the world.

I find it fascinating this kind of activity happens on an island province where traditionally we do not expect that kind of development.

I want to acknowledge that today. This kind of development is every bit as exciting when one young firm with a handful of young engineers and a couple of people prepared to write and develop new software develops a brand new industry based on knowledge and the extent of its own imagination.

I find it every bit as awesome to contemplate as Hibernia, which is in itself an incredible feat of engineering. It has contributed significantly to the economy of the province of Alberta.

I do not want to belittle Hibernia. It is an important project. Another government in another day committed the funds to that project. It can lead to a series of new offshore developments. Mr. Speaker, knowing your former interest and expertise in matters having to do with energy development in Canada, I do not want to diminish from the project at all.

I simply want to take this opportunity to acknowledge what is being done by young incubator companies. They are not waiting for your permission or mine or even our acknowledgement. They are out there competing and winning in the world market. I think that is exciting and ought to be acknowledged and encouraged.

[Nic Leblanc, Bloc, Longueuil, QC]

Mr. Speaker, I am always impressed by the eloquence and verve of the Minister of Fisheries and Oceans and of people from Newfoundland generally.

The minister referred to the Liberal Party's red book, and I must say there have been an impressive number of references to this document.

I wish he would use the same eloquence and the same verve to explain why, in the red book, he did not tell Canadians that unemployment insurance premiums would be taxed by more than $800 million. Why did he not say that companies would be paying $1.7 billion in taxes over the next few years? Why did he not say that individuals would be paying $1.8 billion in taxes over the next three years? Why did the red book not say there would be a deficit of $40 billion for the current year? And that in 1996, the cumulative debt would be nearly $600 billion? Why did he not say this?

I wish the minister would use the same eloquence and the same verve to explain that to Canadians. Why were Canadians totally misled by what was said in the red book, if we look at what the government is doing now?

[Brian Tobin, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Speaker, we have a saying in Newfoundland. When someone is awfully bold we say they have more nerve than a toothache and a vicious one at that.

Here is the member asking me why we did not tell Canadians about the fiscal situation of Canada. The hon. member's leader made a notable contribution to the leaders' debate during the last election and the leader of the Reform Party will remember this. He kept asking the then Prime Minister what the deficit was and what the deficit would be. Up to that point we were all told the deficit this year would be about $33 billion. It turned out after we came to office that the deficit was $46 billion, $13 billion higher than the government had admitted.

Having the member ask me why we did not know this is amusing, given that the member who just asked the question spent his first four or five years in this place sitting on the government benches, the Tory party benches.

Why the member would now ask me what he was doing jumping up and down voting yes every time the government he supported proposed a motion, I do not know. I do not know what he was doing and I do not know what questions he asked in his caucus.

What I do know is that he was a loyal follower, notable for his capacity to get up and bow yes whenever Mr. Mulroney asked his permission to spend more money. It takes a special kind of nerve, like an open, raw wound, for this member to stand here now and complain. This member ought to be put on the bow of a boat out at 200 miles because he bellows so loud and makes so little sense that he would scare away all foreign fishing vessels.

[Jack Ramsay, Reform, Crowfoot, AB]

Mr. Speaker, I have a similar question. I have asked this question to two of the member's colleagues in the past and did not get an answer. I have often watched the hon. minister on television during the last four or

five years and I am always impressed by his intelligence and his wit. Therefore, I would like him to concentrate that wit on this question and I hope to get an answer.

How will the addition of $100 billion to the federal debt over the next three years affect the plan to rebuild the fishing industry on the east coast as well as a new tech industry that he speaks about emerging now in that area?

[Brian Tobin, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Speaker, the member wants an answer and I am going to give him one.

What the member is suggesting, to reverse the situation, is that rather than add $100 billion to the debt, he is now referring to approximately $30 billion of deficit on average over the three years, a little more for $100 billion after three years. The member is really suggesting that we should cut out an additional $100 billion of expenditure. Is that not true? I see everybody but the leader of the Reform Party nodding yes. He is a bit more cautious.

By cutting out $100 billion we would start, according to the hon. member-

[Jack Ramsay, Reform, Crowfoot, AB]

Answer the question.

[Brian Tobin, Liberal, Humber—St. Barbe—Baie Verte, NL]

I am answering the question. The member does not like the answer. We start by cutting the $2 billion for fishermen and plant workers. That is what the member wants. Then we would cut all unemployment insurance payments in total so there would be no more unemployment insurance plan. Then we would begin to cut medicare and do away with medicare as a universally accessible plan and ensure that people would pay their own way. The member is nodding his head yes. When done with that we would then cut out all regional development funding so that those who lived in areas of highest unemployment would be left to their own resources. At the end of the day we would simply take the keys to Parliament and the notion of parliamentary responsible government and we would turn them over to Walmart.

The Parliament of Canada is not McDonald's. It is not Walmart. It is up to government to use the tools and the resources of the nation to give direction and shape to the country. We do not give shape to the country by abandoning public policy to public accountants. We will not do it.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, I rise to address the budgetary policy of the government as presented by the Minister of Finance on February 22. My principal reason for rising is to register a profound sense of disappointment and apprehension concerning the fiscal and the human aspects of the 1994 budget.

The blunt truth concerning the fiscal aspect of the budget is that it does not bring federal overspending, the federal deficit or the federal debt under control. Nor does it lay the foundations for doing so in the future. Projected spending for 1994-95 is $164 billion or $3 billion more than was spent in 1993-94. The federal deficit for 1994-95 is $40 billion or 5.4 per cent of GDP. The government spending plans add another $100 billion to the federal debt over the next three years, a debt which already stands at $511 billion.

After all is said and done, the only improvements in the government's financial position are mere projected improvements for future years, projections which are no more believable than those of the previous government.

It is the implications of the budget for Canadians in human terms which turn my disappointment into apprehension and even alarm. Because the budget fails to come to grips with overspending it offers no hope whatsoever to millions of hard-pressed taxpayers for tax relief. In fact it assures them of nothing but future tax increases.

Because the budget adds another $100 billion to the federal debt over three years it diverts another $3 billion to $6 billion of revenue per year into interest payments on that debt. Federal financial support for health care, education and pensions will thus continue to deteriorate. This is bad news for the recipients of those services.

Because the budget fails to come to grips with the deficit and the excessive taxation of Canadians, it sends a strong negative signal to private sector job creators. The net effect of the budget is to discourage private sector job creation. This is bad news for the 2.5 million unemployed and underemployed in the country.

In summary, the federal budget stripped of its rhetoric and politically inspired optimism is a failure of the first order, a failure whose heaviest impact will fall on taxpayers, recipients of social services, the unemployed and the underemployed.

Based on this assessment it is appropriate for us as members of Parliament to consider the following question. If the Government of Canada were a great publicly held company with 27 million shareholders and we were its directors; if we had just received a financial statement showing our 21st annual loss in a row, this time for $40 billion; if our balance sheet showed we were carrying half a trillion dollars worth of debt; and if this Chamber were the great board room of that company and we met here today, many of us as new directors, with a legal responsibility to our shareholders to face up to fiscal realities, I ask how would we likely respond.

We know that some members would choose simply to deny the reality. They would say a $40 billion deficit is not that bad; we

can always borrow more; the lenders will never cut us off; it might happen to New Zealand but it will not happen to us. Others might try to escape the fiscal reality by flights of fancy. They would say: "Let us focus on next year; next year things will be better". Still others would be looking for someone to blame and be saying: "It is not our fault; it was the previous director's fault". Yet again some of us might simply look for an exit strategy: "Let's make sure we don't get hurt. Let's make sure our golden parachutes are in order. Let's take some subsidiary of the mother corporation, separate it out and go off on our own".

There is another response that is possible under these circumstances. That response is to face up to the fiscal reality that the budget downplays and to develop a contingency plan for the day when its shortcomings become evident to all. Instead of going into denial or flights of fancy or blaming someone for trying to get out, we should say one to another: "Let us develop a contingency plan that really comes to grips with the overspending, the deficit and the debt, a contingency plan that protects the taxpayer, the workers, the unemployed and the users of social services from the injuries the budget will ultimately cause. Let me briefly outline the key elements of a contingency plan for Canadians to cope with the failures of the 1994-1995 budget".

First is a contingency plan for real deficit reduction. The budget presented by the minister last month proposes spending cuts for 1994-95 amounting to only $2.2 billion or about 1.3 per cent of total spending, achieved mainly by cuts to defence spending and unemployment insurance. Those of us who believe federal spending must be reduced more quickly and in greater amounts must complete a more detailed and extensive list of spending cuts and keep it current as a contingency plan for real deficit reduction.

The Reform Party has a list of about $20 billion in proposed spending cuts which could be updated and made part of this contingency plan. This list was tabled in the House during the prebudget debate.

To his credit the Minister of Finance has said that he and his officials would be willing to sit down with us to review the feasibility of this expanded list of spending cuts. We look forward to that opportunity.

Various provincial governments, in particular Alberta and New Brunswick, are further along the road to controlling overspending than the federal government. Their deficit reducing activities should be scrutinized for elements which could be incorporated into a federal contingency plan.

In any event a contingency plan for real deficit reduction must be developed and kept current for the day the government and the House realize the federal deficit is much more serious than the 1994 budget acknowledges.

Second is a contingency plan for taxpayers. The budget presented by the minister last month provided for the federal government to extract $9 billion more out of the pockets of taxpayers than in 1993-94 and $600 million of that from tax adjustments contained in the budget itself.

The government was wise to heed the wishes of Canadians and back off proposals for reducing RRSP contribution levels and for instituting new taxes like a carbon tax. The fact remains that too many Canadians are responding to excessive taxation by going into the underground economy or taking their capital out of the country. Those of us who recognize the seriousness of this problem need to provide taxpayers with some other options. We need a contingency plan for taxpayers and here are four suggestions.

(1) We can make sure that every major taxpayer group in the country becomes aware that further tax increase are inevitable unless the government gets far more serious about cost cutting.

(2) We can invite taxpayers to communicate their concerns to the government, perhaps by sending a tough letter of protest with every tax return so that even the most obtuse member of the government will realize that further tax increases are not a politically viable option for solving the government's fiscal problem.

(3) We can solicit from taxpayers their proposals for government cost reduction and their ideas on what form tax relief must take in order to stimulate private sector job creation.

(4) We can show taxpayers a tax relief light at the end of the cost cutting tunnel. If Parliament would pledge itself to reducing the deficit to zero by the end of its term then and only then does genuine tax relief become a real possibility.

Third is a contingency plan for workers. In its election campaign and in its red book the government said that job creation was its highest priority. Yet the real job implications of the budget are bleak indeed. The most real and immediate job impact of the budget is the elimination of 16,000 jobs by the defence department; a reduction, not an increase in employment.

The finance minister predicts a reduction of only one-tenth of one per cent in the unemployment rate in 1994 as a result of his budgetary measures.

The Minister of Industry and the Minister of Human Resources Development however are more optimistic. The Minister of Industry in his response to the budget spoke well and extensively on the new information based, export oriented economy emerging in the country. He assured us the government

had the knowledge and the policies to enable workers and businesses to find a place in that new economy. The Minister of Human Resources Development in his response to the budget said rightly that there was a job crisis in the country and that the Chamber must seriously consider how jobs are created.

How is a self-sustaining job to be created in the 1990s? The government seems to feel that government is the primary engine of job creation, whereas Reformers believe that the best job creation process is as follows.

First there has to be a customer or a consumer somewhere with a demand for a good or a service and money to activate that demand. Then there must be an entrepreneur or a business that sees that demand and decides to fill it. The role of that business is to assemble the resources, the capital and the labour required to satisfy consumer demand. When that is successfully done employment opportunities, jobs, are created for workers qualified to fill them.

The essential role of the government in all this is not to initiate job creation but to support it. The employment aspects of a government's budget, therefore, should not be measured primarily by how many jobs government spending and programs create but by the signals that budget sends to private sector job creators, by how many more dollars it leaves in the pockets of consumers and investors, and by the support programs it provides to workers.

Measured by those standards the budget presented in the House is a failure. By not coming to grips with the deficit the only signal it sends to business and investors is a negative one: more tax increases ahead. This signal kills rather than stimulates private sector job creation.

A contingency plan is required for the unemployed and the underemployed whom this budget fails. A part of that plan will be the real deficit reduction measures discussed earlier, but the second part of that plan must include measures to assist workers to find and fill jobs in the new economy referred to by the Minister of Industry.

In this regard I suggest we submit the government's employment enhancing measures to a simple test. The minister of defence says that he is going to cut 16,000 jobs in the defence department. The Minister of Industry says that he knows there are new jobs waiting in the new economy, and the Minister of Human Resources Development says that he has the programs to equip people to find and fill those jobs.

Therefore let the minister of defence submit to the House the names of the 16,000 people whom he is laying off. Six months from now we will contact them to see how many are on UI, how many are on welfare, how many are in dead end jobs in the old economy and how many in fact are on their way to jobs in the new economy. If even 75 per cent of those 16,000 are on their way to jobs in the new economy, we will be the first to congratulate the government and to encourage it to further refine and develop its employment initiatives. If more than 25 per cent of those 16,000 are on UI or social assistance or stuck in dead end jobs in the old economy, it will be clear to us and the whole country that the government does not have an answer to the job problem and never did.

In other words, if a government cannot guide 16,000 from the defence department to jobs in the new economy, who would believe that it has the policies and the programs to guide 1.6 million unemployed to that destination?

Finally the House must address the question of where the guidance and leadership will come from to correct the failures of the 1994 federal budget and to produce a contingency plan for Canadians. I am genuinely sad to say it is apparent this guidance and leadership will not be coming from our chief executive officer, the Prime Minister of Canada. This is regrettable because experience in this country and others has shown that major efforts at government cost cutting are almost never successful unless they are fully and vigorously backed by the leader of that government.

Unfortunately the present Prime Minister made it clear on his visit to Alberta last week that he could not be counted upon to provide that kind of leadership. He is quoted as telling an Edmonton radio audience there will not be a new round of tough spending cuts. There may be some changes in reference to the reform of social programs but there will be no spending cuts in the next three years other than those announced in last week's budget.

Second, it is equally apparent that guidance and leadership in correcting the failures of the 1994 federal budget will not be coming from the Official Opposition. If you analyse the speeches made by the Bloc members in response to the budget you find they are totally negative with virtually no constructive alternatives to offer.

It is not enough simply to point out the weaknesses and deficiencies of the budget. Anyone can do that. What desperately needs to be done is to provide constructive alternatives, contingency plans to remedy those weaknesses and deficiencies, something the Official Opposition has failed to provide.

We also notice that underlying most of the budget speeches of the opposition is the assumption that you could balance the federal budget by simply cutting administrative fat. If Bloc members would spend even five minutes studying table 17 on page 56 of the budget plan, they would see that federal transfers in support of social programs in 1994-95 will amount to $67 billion or 55 per cent of all program spending whereas the total spending on government operations is $20 billion or 16 per cent of government spending.

In other words you can cut the fat, the tissue, the muscle and the bone out of government operations and you will still only reduce the deficit by half or, put another way, there is absolutely

no way the federal deficit and debt can be brought under control without reforming social spending.

The responses of members of Parliament to the federal budgetary problems are totally negative or utterly unrealistic and cannot be counted on to develop viable contingency plans for this or for any other ship of state.

If we cannot count on the Prime Minister or the Official Opposition to remedy the failures of the 1994 budget or to produce contingency plans for coping with its negative impacts, whom can we count upon?

Reformers say that in this instance as in all others affecting affairs of state we can count first and foremost on the people themselves, the taxpayers, the workers, the unemployed, the underemployed, the recipients of social services, the people whose interests are most seriously injured by the failures of the 1994 budget and the absence of realistic contingency plans.

It is the intention of Reform members to register our disappointment and apprehension concerning the 1994 budget in debate and in committee, but it is our intention to do more. It is our intention to call for the development of a contingency plan for Canadians and we invite other MPs and concerned Canadians to contribute.

We envision a contingency plan that really comes to grips with the federal debt, deficit, and overspending by proposing the needed additional spending reductions that are missing from the budget. We envision a contingency plan that calls upon taxpayers to register their opposition to overtaxation and their desire to secure tax relief.

We envision a contingency plan that puts our social programs on a more secure financial footing and that directs public social spending to those that are most in need.

We envision a contingency plan that responds to the needs of the unemployed and underemployed by the stimulation of private sector job creation and by supporting workers in their journey from the old economy to the new.

We envision using our positions, offices, and resources as MPs to combine our ideas with those of the public into a contingency plan for Canadians to control federal spending, secure tax relief, stabilized social services and stimulate private sector job creation.

This is the Reform response to the 1994 federal budget and when the day comes six months, one year, or two years down the road and Canadians realize how badly the 1994 budget missed the mark there will be a constructive alternative to which they can turn.

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development -Quebec]

Mr. Speaker, first of all I am delighted to welcome the leader of the Reform Party to the debate. As the Prime Minister, myself and other ministers went across the country we missed his presence in the debate over the last couple of weeks and we are delighted to see him back.

Let me simply make a couple of points because I know the time is very short. The leader of the Reform Party talks about the necessity for jobs and in the same breath he talks about the requirements for tremendous cuts. I am sure he would recognize that even the Alberta treasurer said that as a result of his cuts the growth in Alberta was going to be cut by almost a full percentage point. I am sure he would not recommend to us as a country that wants to create jobs that we begin on the kinds of cuts that are simply going to bring the economy to its knees which is indeed the result of the kinds of recommendations that he has made.

What we have done is follow what the OECD has done, which is a far more balanced approach, one which will lead to deficit reduction at the same time as job creation.

The member opposite talks about eliminating the deficit. He talks about doing it by the end of this mandate, which is indeed his party's program, but the fact is that the deficit is now $13 billion higher than when he originally prepared that program. I would ask where would he make those cuts or what kind of growth would he get.

In his own projections he talked about growth of $16.5 billion in revenues over three years. That is based on assumptions which are simply Alice in Wonderland. I look forward to sitting down to understand how this country which was not able to grow faster than 2.4 per cent last year is going to triple its growth over the course of the years to come.

I go on. He talks about cuts in OAS. He says he would do it at a level of $54,000. An objective assessment of what the member opposite has said would in fact talk about having made those levels of cuts to people who are making lower than $20,000 to $25,000. He would cut subsidies to business by $800 million. That is $200 million more than in fact is given to business through the regional agencies and basic subsidies. His arithmetic is fundamentally wrong or his understanding of the public accounts is wrong.

He called for a 25 per cent reduction is subsidies to crown corporations. I simply ask him: What would he cut? VIA? Would he cut the CBC, eliminate it? Tell us. Do not simply give us these numbers in the air.

I go on. He says taxes. He says we should not have done on the tax side what we did. Does that mean he would keep the $100,000 capital gains tax exemption of which the previous government, according to its own studies, said there was no proper evaluation? It was not able to make one iota, one scintilla of relationship between that capital gains tax exemption and job

creation or benefit to the country. Would he keep that? We eliminated it and we are very proud that we did.

He talks about a carbon tax. He was the first person to raise the carbon tax. It is part of an ongoing study set up by the previous government which we are continuing, but he is the person who raised the carbon tax.

I must say to talk about a tax revolt in the House, a revolution against the tax of his own imagination, is somewhat specious to say the least.

Mr. Speaker, I know the time is precious, but let me simply summarize it by this. The essence of the position of the Reform Party is that what we should do at the present time is have a full review of the defence policy before any cuts are made, but that we should immediately embark upon a savage cut of all those government support programs which go to single mothers, single parents, senior citizens, widows, and children.

I simply do not understand. I do not understand a political party which says that the cold war is not over and therefore we should continue defence spending, going ahead as we have in the past, but on the other hand that we have won the war on poverty. That is simply unrealistic.

[The Deputy Speaker]

The leader of the Reform Party will have as long as the Minister of Finance just took, which is about four minutes.

[Preston Manning, Reform, Calgary Southwest, AB]

We are going to exhaust the question period.

The words in the minister's remarks that I think are the ones I can agree with are when he said: "I do not understand".

What we have had in this exchange is perhaps one of the problems of debate in this Chamber. The minister made a number of statements about the Reform Party's approach to deficit reduction in which either he misunderstands our position or we have not communicated it clearly.

Even our growth projection figures, which are based on about 3.5 per cent and which we now acknowledge are a little bit high, are not that much higher than what the minister is using. We can defend our spending reductions. We would be prepared to do this. I think the more proper forum for this-and I think the minister has invited us to do this-would be on one of these nights, away from the media, away from where we are scoring political points, for the minister to bring his officials who can roll up their sleeves, we will bring ours, and we will hash over these numbers.

I have enough faith that I think the government is seriously enough concerned about this that if we can score points in that debate and say: "Look, here is an area where something more could be done", it will listen. If we are wrong on some of these projections, we will back off on those in our public presentation. I think that is the place where we are going to make a contribution or not.

There is a second point I would like to make. I think this is where there is a philosophical difference between ourselves and the government. It is a question of how jobs are created and what is the role of the government in that versus the private sector.

I have looked at the minister's budget. I notice that when the government talks about reducing unemployment insurance premiums by $725 million to $2 billion over three years, it says the effect of that will be to create about 40,000 jobs. In other words, by leaving money in the hands of businesses and taxpayers it is going to create about 20,000 jobs per billion dollars. Then the government comes along and says: "But we are going to have an infrastructure program and we are going to tax $6 billion between the three levels of government out of those taxpayers, and we are going to reinvest that and we are going to create 65,000 jobs, in other words about 10,000 jobs per $1 billion spent".

There is an inherent contradiction in those numbers. If you can create 20,000 jobs by leaving a billion dollars in the hands of taxpayers, why would you not leave the $6 billion in the hands of those taxpayers and create that many more jobs? This is the philosophical difference between our approaches. I look forward to hashing it out.

What we are interested in, and I am sure other members are, is getting answers. We are not interested in just scoring political points on this. We want to get to what is the best way to create self-sustaining employment. If our way is better we hope you would acknowledge it; if your way is better we would be pleased to acknowledge that.

[Nic Leblanc, Bloc, Longueuil, QC]

Mr. Speaker, in 1984, when I ran for the Conservatives, we talked about three things: decentralization of government, spending cuts and national reconciliation. I would like to say to the leader of the Reform Party that, as of June 1990, none of that had happened.

National reconciliation had just fallen through. There were no cuts; they were spending more. As for the decentralization of power and of government management, they continued to centralize more in Ottawa, as the Liberals had done. I think that is the main reason for the deficit and the national debt and that is why I resigned.

I would like to know the position of the leader of the Reform Party on this. Does he think that a big decentralization, giving much more power to the provinces, would lead to better manage-

ment and more efficiency, so that expenditures would be lower and the economy would grow more?

[Preston Manning, Reform, Calgary Southwest, AB]

I thank the member for his question.

I do not think there is a simple answer to the question of whether centralization or decentralization is better. We have got into a pattern where one generation of politicians seems to think that the answer is to centralize all the power in Ottawa-I think we had a lot of that under the Trudeau administration-and the next generation says "No, the answer is to flow all the power out to the provinces". I do not think the answer really is either of those extremes.

It seems that what you have to do in a federation like ours is go through the entire set of power. In some cases you want to strengthen the federal power or the central power, in other cases you want to decentralize.

Our program, for example, calls for strengthening the federal commerce powers, the ability of the federal government to strike down interprovincial barriers to trade. That is a strengthening of the federal power.

On the other hand, we would like to leave the jurisdiction over linguistic and cultural distinctiveness more in the hands of the provinces and the non-governmental sectors. Therefore we decentralize certain aspects of power and centralize others. I think that is the balance we are seeking and not just a knee-jerk reaction one way or the other.

[The Deputy Speaker]

There are five other hon. members standing who wish to make comments or ask questions. Since the time has expired is there unanimous consent of the House to proceed for another 10 minutes?