Mr. Speaker, the sudden flare-up of interest rates could kill the economy which was slowly starting to recover.
To help it recover, to really put it back on its feet again, the government should have given it a helping hand, but instead it gave it a punch in the face.
We were waiting anxiously, but full of hope, for a recovery of the job market. But it is more unemployment that we will have because of rising interest rates. Has the Bank of Canada gone crazy? No, it is only trying to cope, as well as can be expected, with 10 years of mismanagement of this country. I will not pass judgment on its present policy.
In the United States, France and Canada, we are now hearing the old economic debates are coming to the fore once again. How can we revitalize a sick economy, particularly with monetary policy? Galbraith, Sorman and others have, I am told, opinions on this subject which are as clear-cut as they are divergent. People also talk about neo-Keynesianism. I will not venture into this subject because whatever I said would surely contradict one of these prominent economists.
You know what the argument of the Bank of Canada is, Mr. Speaker. For Canada to stay competitive on the loan market, Canadian rates must be higher than American rates. That is the result of our enormous debt. However, American rates have been increasing this past month to quell the risk of inflation there. Consequently, we are told, Canadian rates must also go up. Q.E.D., what perfect logic.
The problem, as you know, is that the American economy is expanding rapidly. We are told that it will not be hurt by this dampening measure. The American economy has a little fever? Put an ice pack on its head. This therapy is quite defensible.
The problem for us is that our central bank thinks it has to apply automatically the same medicine to our economy, which is anemic and needs a tonic. If we cannot raise our rates higher than the American rates, how will we find investors for the debt
securities that we have to issue because of our enormous debt? Is that the financial independence advocated and promised in the famous red book which will meet the same fate as Mao's little red book and be thrown in the garbage with its promises of a brilliant future?
Do you know what it says in the Canadian red book under the promising title of "independence"? I will tell you right now that the red book does not talk about the independence of Quebec, but about the independence of Canada from other countries. And I quote: "A Liberal government will end the Conservatives' junior-partner relationship with the United States and reassert our proud tradition of independent foreign policy". It is mind-boggling! In terms of financial independence, Mr. Dubuc, an editorial writer at La Presse , pointed out earlier last week our complete dependence upon our creditors. The way things are going with this government, our policy will be dictated to us by the International Monetary Fund tomorrow, and the pill will not be easy to swallow. Will Canada, which is ironically the most indebted and potentially the wealthiest country on earth, become part of the Third World?
This is the result of a decade of unacceptably frivolous public management in this unfortunate country. We have accumulated the heaviest per capita external debt in the western world. The time has come to pay the piper. And we do not want to hear this government claim that it has inherited this situation and that it has no choice but to face the music. When did our external debt begin to rise really? The 1970s. Who was in office at that time? The same party as today. And back then, where was our present Prime Minister who takes such pleasure reminding our leader that he was once a member of the Conservative cabinet?
He was the President of the Treasury Board in 1974 and Minister of Finance in 1977, 1978 and 1979.
I shall now come to the heart of the problem, the icing on the cake. The increase in interest rates will jeopardize the recovery and who is going to pay the price? The unemployed. However, who or what is being targetted by the pitiful attempts of this government budget to at least slow down the growth of our debt? The wealthy? Those who benefit from tax shelters? The federal civil servants who are responsible for duplication and overlapping? Ministers' air travel? Not at all! It is always the unemployed who must foot most of the bill we now have to pay in order stop the deadly increase in the public debt.
If we are to go by what Pierre Fortin and his colleagues from the Faculty of Economic Sciences of the Université de Montréal say, the Canadian unemployed workers will have to pay for half the predicted new drop in the federal deficit, even if we take into account the budget for social reintegration.
As mentioned in the same study, since the unemployed end up depending on social security, we are once again witnessing a transfer of the deficit on the provinces. We are talking of at least one billion dollars. The provinces, in turn, will pass a part of it on to the municipalities, which will have no other choice than pass it on to whom? To Canadian taxpayers. We are back to square one. I know what I am talking about because I was a mayor for sixteen years.
It is far from being decent, Mr. Speaker, it is most cynical and unbearable. Only the legendary patience of our two peoples can explain why no angry outburst has yet occurred among unemployed workers and welfare recipients as it would surely have been the case in other countries.
Social peace and the most elementary sense of fairness both call for a fair distribution of the sacrifices imposed by the situation. Since Bill C-17 completely fails to meet those conditions, I will not support it.