Mr. Speaker, before I discuss Bill C-3, the bill to renew the equalization provisions of fiscal transfers for the next five years, I would like to thank the government for allowing us to have this debate tonight.
Originally the government had wanted to discuss this bill on Friday when I and the critic for the Bloc would be unable to attend. We were able to reach an agreement to debate this bill this evening. I say that in all sincerity in spite of the fact that I will oppose the bill. I will also express some concerns about the process not so much on this bill but the general process followed in reviewing such pieces of legislation.
As I have indicated my party opposes the bill. I want to take the time tonight to reiterate the nature of that opposition and also to review concerns about the process of discussion and debate used here in deciding some of these matters.
Our party does support some elements of this bill and it is important to indicate that. We support for example the concept a ceiling. It is important for anybody who is serious about fiscal responsibility and the nature of the problems we find ourselves in to not have a situation where the federal government finds itself liable for open-ended transfer payments. That certainly could be the case without some kind of a ceiling.
We also support the concept in this bill of some kind of compensation for excessive tax back of unique resource sources in the equalization formula.
While making these remarks, I would also like to say that the position of my party is not that of the Bloc Quebecois or that of the member from Mégantic-Compton-Stanstead. Despite his well-thought out remarks, our views are totally different.
I would like to take a few minutes to mention those differences in perspectives. As a party we support the concept of equalization. I would point out to all here that the concept of equalization is embedded as a principle in the Constitution Act, 1982, which our party recognizes and which we believe all provinces of Canada are part of. I understand that is a very different position from that of the Bloc Quebecois.
I also want to point out that in spite of whatever shortcomings this bill or other federal programs may have, this particular program is very generous to the province of Quebec. This has come up before. This year roughly $3.8 billion of the $8.4 billion spent under this program will be directed to the Government of Quebec, none to the Government of Alberta and none to the Government of British Columbia. While there may be shortcomings in the bill it is important to acknowledge that. All Canadians should acknowledge the importance of these transfers not only symbolically but in dollar terms.
I also point out, although we will get into this debate at a later date, that the Bloc Quebecois at some point is going to have to address more seriously than it has its support for independence and opposition to the Constitution Act on the one hand and its apparent love for some of these social programs and some of this spending on the other. In spite of the considered words of my friend there is a contradiction in not liking Canada and having such great love of the Canadian dollar. However we will discuss that at a later date.
The nature of our opposition is primarily the expenditure size involved and the fact we are making enormous commitments without proposals for comprehensive reform in this area. Our zero in three plan had called for reductions in the area of equalization as part of some fairly small reductions over all to the level of transfers to the provinces.
I note with this program even with the ceiling that the projected growth rates for equalization are about 5 per cent per year. That is very high in comparison with the expected rate of growth for spending on federal programs generally. It is certainly higher than most programs which involve federal transfer payments to the provinces. The cost of the equalization program will grow from $8.4 billion to about $10.4 billion over the five year period, fiscal years 1995 through 1999.
On top of that we are making these kinds of commitments in the absence of a comprehensive reform proposal. This bill was tabled and second reading debate occurred before the tabling of the budget, before the infamous red ink book.
We know the federal government in making this announcement reiterated its commitment to federal transfer programs. It implied as it had during the election that it would never consider cuts to social programs or to federal transfers. However the budget revealed that despite the renewal of this particular program, the renewal of the current dollar levels, there were going to be planned cuts in transfer payments in other areas, some of which we do not particularly support.
I note, for example, the budget talks about additional caps to the Canada assistance plan that would kick in the 1995-96 fiscal year. We would begin to limit spending in absolute dollar terms to the level of 1994-95 combined with established programs financing for post-secondary education. In 1996-97 the combined total of CAP and EPF post-secondary will not be allowed under the budget to exceed spending for those two programs combined in 1993-94.
This raises the spectre of something I think has been missed in much analysis of the budget, that is planned expenditure reduction by the government in the area of post-secondary education which is not a target that we deficit cutters have specified. We certainly have not found support in the country for making that a priority for reduction.
It is very funny that while we advocate some cuts in our plan the government is saying it is renewing this program. It is planning cuts to transfer payments to the provinces but there is no particular plan for any kind of comprehensive reform or rationale.
This is interesting considering that debate on the bill both at second reading and in committee has raised the fact that there needs to be such an examination in the case of equalization as well as in the case of other transfer programs. Generally speaking there is a lack of clarity on the objectives and the operations of the equalization program.
The hon. member for Lethbridge pointed out during second reading and in committee that if the formula created equity in federal programs, if we had equalization for that purpose, why would we then support in a number of ways special funding over and above this that recognized have not provinces in particular programs in other areas? I think, for example, of the infrastructure program, RRAP or the cap on CAP in the case of the have provinces. There is definitely a duplication of efforts and clear objectives.
As well there are problems that go back to the very beginning of equalization. Professor Tremblay of the University of Montreal pointed out to the finance committee in his presentation the original economic justifications for programs like equalization based on economic deficits and surpluses created by the system of tariff payments in the country. Those things are now obsolete, particularly with the implementation of free trade. That is not to say the program is unnecessary but the original economic justification of the program has been eclipsed.
Important questions were raised not only by Professor Tremblay but by other people in committee and at second reading: the impacts of equalization on regional dependency and on structural unemployment and whether it prevents natural adjustment to market forces and outward migration of population from areas with low income potential.
These are all very important questions. We are undergoing an examination in certain federal programs-unemployment insurance and welfare-of the effects of these programs on individuals and the restructuring of incentives. It certainly would be appropriate to undertake a similar study here on the effects of these programs on large governments both provincial as well as municipal.
The government in its defence of the bill has said that it now requires certainty in the area of federal transfer payments to the provinces, in particular certainty on the equalization formula. This is one reason it is anxious to support it and one reason government members gave for supporting it.
I would point out to the Chair that in the course of our committee hearing one government representative we did hear from, Mr. Neumann of the Intergovernmental Affairs Office of Manitoba, indicated considerable doubt about that as the previous speaker from the Bloc indicated. There is not unanimous provincial agreement with this particular approach. Governments are expressing some doubt about the issue of certainty. Mr. Neumann had indicated over and above his concerns about the ceiling, which I do not share, that some particulars in the calculations lend themselves to uncertainty about future receipts and that we should be examining those sorts of things. Of course we did not.
There are other specifics that are difficult with this. This bill leaves on an indefinite basis choices between two different kinds of equalization options for certain Atlantic provinces. We continue to have inequities in the equalization formula. They are well documented.
The treatment of natural resource revenues can be very different depending whether they are owned by crown corporations or private enterprise. The formula is extremely complex, difficult to understand and administer. On top of that, the formula does not use any kind of standard measures of fiscal capacity. It is a very unique formula developed only for this type of transfer and once again, there is no particularly clear rationale, at least to myself and to others I have talked to, between the particulars of the program and the objectives of the equalization program.
I have tried to lay out not only our general objection to the cost but also the fair range of issues that this bill really provoked both at second reading and in committee. I point this out because this is my first time as a new parliamentarian being a critic for a particular piece of legislation and being part of the system and seeing how it works.
We had the debate here. We went to committee with these bills. Points were made in the committee by members of the
opposition in both parties in opposition to the bill. Points were made, concerns were raised about the bill and about the philosophy of the bill by witnesses who appeared before the committee.
What was quite interesting to me was that the government members, generally speaking, who engaged in debate here and who talked in committee generally made no effort or only the most minimal effort to refute or to comment on any of the points raised.
I am not trying to be critical of any individual but the general defence of the bill offered by government members was certainty. The other was that equalization is about sharing and sharing is good, therefore let us pass the bill.
With that kind of orientation, we proceeded to pass the bill. We had two committee hearings and then proceeded to move to clause by clause, somewhere between 30 seconds and a minute, sums of money totalling $45 billion to $50 billion over the next few years.
I suppose an option available to myself or to members of the Bloc Quebec or other members of the Reform Party or perhaps any member would be to endlessly filibuster the bill, to bring speakers forward, to continue to raise these points in committee and in the House.
I follow our leader's example on this. There is no point saying that one is going to practise economy in government if one cannot practise economy in words. I am not interested in endlessly filibustering this bill but surely the point of the process is that we do an examination and even if we do not reach agreement that we at least sharpen our arguments so that we can better rationalize this bill.
Of course this does not happen because in our system with the pattern we have fallen into of government confidence on every motion and lack of free votes, the issue becomes not the substance of legislation but simply what party one belongs to.
Unlike in other legislatures, for example in the Congress of the United States, the one closest to us, it is unnecessary for us as individual members to defend or explain our position on pieces of legislation, even pieces of legislation that we are personally responsible for. All we have to know is that the government voted for it. If one is a government member, they had to support it.
That disappoints me. I am not suggesting that there are not members of the government who do not understand the equalization bill or who could not give good defences of this piece of legislation but this certainly did not transpire in the debates that I was involved in.
Why are we rushing this? This has all occurred very quickly. The bill was tabled before the budget. The government originally wanted it through committee around budget time. It certainly wants the bill through this House and has our limited co-operation to do so because as I say we are not interested in endless filibustering. It wants the bill through the House by March 31. Why? Because the program is slated to kick in on April 1 and is to go for so many years. In spite of the fact that we do not really have full provincial agreement this decision has been taken.
The bill had only been debated or on the order paper for a couple of weeks when I was contacted by Professor Boothe of the University of Alberta who has written extensively on federal transfer programs to the provinces. He would have liked to have said something on this but the committee hearings were done before he was aware we had a bill.
Why does this occur? This kind of rush occurs not because there is any real necessity or that there will be any collapse of the federal-provincial system if we do not pass this bill by March 31. It is because there is an attitude of the government, an attitude passed over from Parliaments in the past, that this process is a formality. This is a rubber stamp. It does not matter the sums of money that are involved, the objective is to pass it. In fact the decisions have been rendered in the executive. They were rendered in some other forum and there is no particular need to become knowledgeable only to get it through and maybe we will defend it at the next election.
These kinds of things concern me. I do not make these criticisms of the bill or of the process here as attacks on any particular government member or even on this government. This is the pattern of legislative process that we have fallen into in this country. It does not work. It is how we got ourselves into the kind of financial mess we have in this country.
I remind members once again that in many, many areas of public policy we spend more money than just about every country in the world, whether it is on education or health or unemployment insurance, transfer payments to lesser levels of government or whatever. We are spending as much or more than our competitors. The results are simply not comparable to what is required to compete in the international marketplace.
I think I have said my piece on that, Mr. Speaker. As I said, we anticipate the bill will pass. We oppose it on principle and will oppose it on division.