Debates of May 26th, 1994

Budget Implementation Act

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Until what day?

[The Acting Speaker (Mrs. Maheu)]

Until Monday evening after the debate.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, what about Motion No. 4? Are we going to vote on it right away or wait until Monday evening?

[The Acting Speaker (Mrs. Maheu)]

It depends on the results of the vote on Motion No. 1.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

So if Motion No. 1 is rejected, does it mean that we will vote on Motion No. 4 Monday evening?

[The Acting Speaker (Mrs. Maheu)]

That is correct.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

moved:

Motion No. 12

That Bill C-17, in Clause 12, be amended by adding after line 36, on page 6, the following:

"(3) The operation of this section shall be reviewed on a permanent basis by such committee of the House, of the Senate or of both Houses of Parliament as may be designated or established for the purpose."

[English]

[Stephen Harper, Reform, Calgary West, AB]

moved:

Motions Nos. 13, 14 and 15

That Bill C-17 be amended by deleting Clause 12.

That Bill C-17 be amended by deleting Clause 13.

That Bill C-17 be amended by deleting Clause 14.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, I am pleased to speak on this part of Bill C-17 and the amendment proposed by the Bloc Quebecois, that is, to designate a parliamentary committee to review the operation of this section on a permanent basis.

This section deals with the federal-provincial tax agreements on the Canada Assistance Plan, in particular the freeze on federal contributions to the CAP.

The Canada Assistance Plan has often been the subject of harsh criticisms, which were quite justified in some respects, especially since the CAP is a shared-cost program where costs are split 50-50 between the federal government and the provinces.

The main criticism expressed in recent years is that this formula favours the richest provinces, which can invest in assistance programs and initiatives in the hope that the federal government will pick up half the costs.

I can tell you that the changes made by the previous government were rather fair in some respects and more socially equitable or democratic that those of the current government, which calls it a general freeze.

What the Conservatives did is freeze federal contributions to the CAP for Canada's three richest provinces, and with good reason. Contributions were frozen for Ontario, Alberta and British Columbia.

Then the Liberal government comes to office and decides to freeze contributions for all Canadian provinces, whether rich or poor.

So I would say to you that the Liberal government is less liberal than the previous Conservative government. I would say that it is like what we have been getting since the morning of October 26, under the cover of social democracy or even socialism, in some respects. Rules that are not quite social democratic are imposed on us. As was mentioned in the previous debate, we are forced to put up with an attitude that is not quite open and not quite fair when it comes to equity between the provinces, for example, or fiscal equity in general.

Madam Speaker, just capping CAP and funds for post-secondary education will cost the Canadian provinces at least some $2 billion in 1995-96 alone.

I was telling you about the federal government passing the buck to the provinces because of the inability of this government, like its predecessor, which was strongly denounced by members of the present government, to regain control of the public finances in a responsible manner, not by shifting financial problems to the provinces as they have been doing since the morning of October 26, and when it is not the provinces, sovereigntists are blamed for the poor economic situation or the bad state of Canada's finances; sovereigntists are accused of creating instability and causing high interest rates, although it is the present Minister of Finance who cannot properly manage Canada's finances without passing the buck to the provinces, who is responsible for the economic crisis and the way the government's finances are headed for disaster.

We deplore this attitude of the present government, just as we deplored the ceiling on equalization payments when we had to debate that issue. In both cases, behind these shameless, ill-considered decisions, we find the same incompetence of those who are running this government.

In this regard, let me remind you that, in the House, we are constantly hearing government members, as well as Reform members, claim to be great Canadians while disregarding-and the debate we had on equalization is still clear in my mind-, sneezing at or dismissing offhand one of the fundamentals of Canadian federalism which is fiscal federalism. They want to limit expenses such as equalization payments, which constitute the underpinning of fiscal federalism, and they congratulate themselves for capping or freezing payments, knowing very well that they are destroying one of the fundamentals of the system for which they stand as great Canadians. That explains why the system is in total disarray.

Anyway, I think that the members of the Bloc Quebecois have made the right decision, which is to leave that system behind.

According to our motion on this clause, which limits federal transfers made under the CAP, each time a freeze, cap or cut is introduced on such basic programs, the matter would have to be debated, and the government would have to justify its support for the hateful measure and put up with our telling it that its so-called system based on equalization payments or transfers under the Canada Assistance Plan is faulty. This system attacks the provinces with impunity and it shamelessly off-loads the federal government's fiscal problems onto the provinces.

I also recommend a follow-up on these bad decisions, this government's shameful decisions, a follow-up on the impacts, because there will indeed be repercussions. To freeze all contributions to every Canadian province, including the poorest ones which are experiencing the most serious problems in terms of welfare recipients and underemployment in general and which include Quebec and the Maritimes, can only have disastrous consequences from an economic and social point of view.

This decision by the government follows another one which we will have the opportunity to debate this afternoon and which concerns the Unemployment Insurance Program where, once again, the government is prepared to totally destabilize and demoralize entire communities, particularly in Quebec and in the Maritimes, which are in no position to support such hardship.

We too could have proposed the deletion of this part of Bill C-17. However, unlike Reform Party members, we are responsible people. We know that tax agreements were signed by the provincial and federal governments and this is why we did not deem appropriate, particularly with a majority government, to ask that these clauses be deleted.

However, we are proposing transparency, honesty and, more importantly, we want this government to be accountable to the House and to Canadians for the shameful decisions it has been making since it took office, decisions which are in total contradiction with the agenda and the vision-because the Liberals think of themselves as visionaries- which it keeps referring to. I submit this amendment and ask all members to support it.

[Stephen Harper, Reform, Calgary West, AB]

Madam Speaker, I am rising also to speak on these motions at report stage of Bill C-17, the Budget Implementation Act, particularly at this time motions dealing with sections 12 to 14, the fiscal transfers portion of the bill.

We are debating four motions, three of which I have moved, and I want to clarify my reasons once again for moving those motions. We have opposed the bill because of its omnibus nature. We insist upon having a debate on the floor of the House of Commons on each section of the omnibus bill because this should not be one bill.

I raised a lengthy point of order at second reading on this particular issue. I realize that the Chair ruled against it and I respect that decision which was based on precedent. I nevertheless reiterate that precedent is an unfortunate way to proceed here because we do have a new Parliament. We have a chance to right some of the wrongs and some of the questionable practices we have fallen into, in particular the practice in recent years of presenting omnibus legislation with respect to budgetary matters.

This particular section which I want to address in report stage today concerns fiscal transfers and specifically two areas: the CAP or Canada assistance plan and the PUITTA or Public Utilities Income Tax Transfer Act. We very reluctantly support these particular aspects of the bill, although my amendments are here to provide us with an opportunity for debate on this specific portion.

Let me first of all address section 12, that is the Canada assistance plan portion. The government is introducing through the budget a freeze to CAP transfer payments to the provinces at present levels for the immediate future.

Through this, the government projects savings of $466 million in the next fiscal year, 1995-96, and the budget has promised social security reform based on co-operative effort among federal and provincial governments.

This is an area where the government, although it is adopting some of the things we proposed, is really proceeding without a plan and causing friction with provincial governments. I would note that in spite of its promise of co-operation this is clearly not happening. The evidence for this was the refusal in April of some provinces to attend a scheduled briefing to inform them of the federal government's progress in the area of social security reform.

I caution the government against making the same mistake with welfare that it has already made with health care, that is getting into an area of provincial jurisdiction-welfare is clearly an area constitutionally of strict provincial jurisdiction-enforcing national standards through, in this case the Canada assistance plan and regulations, and then gradually decreasing funding levels; in other words cutting the provincial funding but not giving them the freedom to adjust to the changes to make their targets and policies appropriate to funding levels.

Obviously this is a formula for alienating the provinces. Along with cuts which decrease their spending power it will make it difficult for them to implement social policy now and could also impact their ability to implement proposed social policy reforms down the road.

We need national deficit reduction of course, but we need it in a plan. We need it with an agreement in these areas with the provinces rather than a dysfunctional partnership in which the federal government makes unilateral changes through transfer arrangements but leaves in place policies that were based on full funding.

Section 12 of the bill which freezes the current level into the future does, I would also note, perpetuate certain anomalies. It perpetuates the CAP discrimination that exists today with regard to the so-called have provinces, Ontario, Alberta and British Columbia, particularly Ontario and British Columbia where the unilateral and discriminatory reductions over the years in CAP funding have dramatically impacted upon those provinces.

I note, for example, that in Ontario the federal share of costs of CAP has decreased from 50 per cent to 29 per cent. This is one anomaly. Another is in the case of Quebec. This is an area that has been brought to my attention for not being clear in the bill.

In the area of CAP, Quebec operates under a bilateral tax abatement agreement with the federal government. I would call upon the government to clarify how exactly this freeze of transfers affects that agreement into the future.

Considering these problems, I want to congratulate the hon. member for Saint-Hyacinthe-Bagot for his amendment, Motion No. 12, which proposes the setting up of a parliamentary committee to review on a permanent basis the implementation of this policy. It is important, given the lack of a comprehensive strategy by the provincial and federal governments, to have such a committee, and I asked Reform Party members to support the motion tabled by the Bloc Quebecois.

I conclude with a comment on sections 13 and 14 that affect the Public Utilities Income Tax Transfer Act. These sections extend the freeze, basically a freeze of 10 per cent below the 1989-90 payment on these transfers to the provinces into the future.

I support this and our party supports this with even more reluctance than we support the CAP transfers. Of course the income tax transfers in this area to the provinces should be 100 per cent funded.

One should remember that the purpose of these tax transfers is to refund to provinces that have privately owned utilities the portions of tax revenue that are raised by the federal government. These are transferred back to the provinces where these private utility companies are located. In the case of Alberta, which receives a lion's share of these transfers, they are passed on to the customers of these utilities.

This is not a special payment. This simply ensures that there is not discriminatory taxation against provinces and against individual Canadians who happen to be customers of private rather than public utility companies.

While this should be fully funded, I understand the reason for the government's finding that at this time it cannot restore that but must continue the policy that was unfortunately established by the previous government.

We support that with some difficulty but we hope that will be reassessed some day when we do have a plan to get our fiscal House in order within a reasonable time period.

In conclusion, I would like to say on these amendments that we recognize the need for significant reform and some reduction of federal transfer payments to the provinces to balance the budget. These are not the best ways of proceeding. They are the ways the government has chosen. We are very concerned about the lack of an overall plan and strategy but are prepared to support them on an interim basis.

I would remind the House once again that I have moved certain amendments to allow this debate, but I would recommend to my caucus that we support the Bloc amendment to study particularly the operation of CAP transfer programs in the future.

[Francine Lalonde, Bloc, Mercier, QC]

Madam Speaker, I was interested to hear what the hon. member had to say. I will also speak on the amendment put forward by the Bloc Quebecois, which calls for the review by a committee of the administration and operation of this clause.

What we call CAP for short is in fact the Canada Assistance Plan. This plan, also funded by the taxes paid by all Quebec and Canadian citizens, was established during the major economic recession between 1957 and 1961, when we noticed a significant increase in the number of poor people, including unemployed workers.

In fact, in its first three years, the plan was called the Unemployment Assistance Program. This program, which was created in cooperation with the provinces, but still comes under a federal law, ensures that the federal government will finance 50 per cent of a number of expenditures. As the hon. member for Saint-Hyacinthe said earlier, to a certain extent, this program was of a greater help to the richer provinces, which could incur more expenditures, knowing that the federal government would cough up 50 per cent of the costs, as was the case, for example, for daycare and social housing programs.

As far as social assistance is concerned, the amount to be paid by the Canada Assistance Plan varied according to how generous the individual provinces were. On the one hand, you had people living below the poverty level, and on the other hand, you had individual provinces deciding upon the kind of programs they could afford.

This budget completely changes the terms and conditions of what could be called the moral contract between the provinces and Canada, because, from now on, the subsidies given to the provinces will not exceed what was granted as of March 31, 1995.

I must add, Madam Speaker, that the Canada Assistance Plan is subject to many more changes, since, for all practical purposes, the same budget also announced the end or the overhaul of the Plan. The consultations to be undertaken by the Minister of Human Resources Development, which, as we know, are also announced in the same budget, concern the social assistance reform. And yet, social assistance unequivocally falls within provincial jurisdiction.

When the federal government freezes the payment transfers for the Canada Assistance Plan, it changes naturally, first, the situation the provinces are in and, second, the rules governing the other programs which exists under this Plan. Moreover, and this is extremely important, we will speak a little later of the changes to the unemployment insurance. These changes to the unemployment insurance will mean a heavier burden for provinces as far as social assistance is concerned.

Thus, in two very important ways, the budget and this omnibus bill will make things worst for the provinces when it comes to dealing with poverty-and this is what it is all about-when it comes to helping people without any revenue whatsoever to survive. With what poor people are given in each of the provinces, they can barely live.

We are talking here of distributing the contribution of the richer provinces to the poorer to help people who have no revenue not to live but, as I said, to barely survive.

Under these circumstances, the amendment is very modest. We would very much like the Reform Party and the government to agree to incorporate it into the omnibus bill. It will allow us to look more closely at the operation of this act, to examine the means available to each province to fight poverty.

I must add that I have the feeling that, given the reform undertaken by the minister, these sums will be used for other purposes and that we will have heated debates in this House over the next few months if I am right about the changes that I think are forthcoming. But I will wait.

I would like to respond here and now to those who wonder why Quebec sovereigntists want to separate from the Canadian federation when Quebec benefits from equalization and from the Canada Assistance Plan. Yes, we want to separate because we are not only convinced but certain-because we have studied all these issues very carefully-that if Quebec had all the powers of a sovereign state to develop its economy and fight poverty, it would be in a better position to help those in need, to provide social housing and child care services to Quebecers. Quebec would do better as an independent state than if it continued to receive transfers that are constantly reduced and subject to more and more conditions. It would do better than if it continued to be deprived of the means with which to develop a strong economy, with workers who have all the job training they need. The fact of the matter is that the federal government does not give the province enough money, money it collects from Quebec taxpayers in the first place.

So, this is a modest amendment which will hopefully allow us to continue to demonstrate that the operation of this act makes no sense.

[Jim Silye, Reform, Calgary Centre, AB]

Madam Speaker, I would like to reiterate our party's philosophy on debating the bill today.

The purpose of our amendments is to make our support clear for some portions of the bill. At the same time we may not support our amendments when they come to a vote. We were forced to do this because the government wanted to lump a bunch of bills together and put it through without due and proper deliberation.

We feel it is important that everybody get a chance to debate each specific issue on its own merits and not have things lumped together. The advantage of this philosophy or political strategy is that it has forced debate on five separate areas. We can bring attention to each of the areas so there is a clear understanding of what areas we are for and what areas we are against, on all sides of the House.

What is wrong with an omnibus bill is that it groups unrelated pieces of legislation together. It is an admission of two things.

First, it is an admission that individual members, at least government members, have no real input into substantive legislation. There is so much put together and so much to consider that it is too hard for an individual to comprehend.

Second, it shows how ineffectual the committee system is. If input was really expected from committees a bill as broad as this would never go to just one committee. It has five different components and thus should not go to just one committee. Members of this House, especially government members, could then do a proper and better review.

In the accounting taught in most schools eventually everybody gets to hear about the kiss system: keep it simple, stupid.

It would be nice if this government would not ram big bills through on the opposition and on the Canadian public but instead applied a new approach, a more simple and more visible approach. It should start separating bills and discussing each

issue individually. I encourage the government to adopt that kind of a philosophy. It would be advantageous for everyone.

We favour the section on the fiscal arrangements with the provinces, partially because it adopts some of the policies and principles of the Reform Party zero in three plan. With that plan we would have a zero deficit in three years.

At first we had a lot of criticism of that zero in three plan. The Liberal government said our cuts were too draconian and that our suggestion of 6 per cent cuts on this year's budget alone was too draconian. I have now found out that when the finance minister appeared before the Business Council on National Issues, he indicated that in next year's budget he is actually looking for perhaps up to 12 per cent in cuts. If our 6 per cent is too draconian for the spending cap we set this year, what can be said about the government's proposed 12 per cent? We would work toward showing the government where those areas of cuts could be.

Our zero in three plan for cuts in this area would have been combined with some workfare and some constructive mechanisms and with hope for people to do just as much with less money, acknowledging the fact that we all have to start living within our means. We know the Canadian public is forced to live within its means. It is only this government that will not accept the fact that the problem is the deficit and the debt. It is not looking for ways to reduce spending.

I want to make the point that when we see the government does recognize that, and there is a significant saving here of up to $466 million through this freeze, then we support it. We compliment the government on that section and we encourage it to do more of the same.

[An hon. member]

We will.

[Jim Silye, Reform, Calgary Centre, AB]

I heard an hon. member opposite say: "We will". We will hold them to that promise.

I caution the government about making the same mistake with welfare as it is making with health care, which as members know, is another purpose of the Canada assistance plan and transfers to the provinces. The government has promised social security reform based on a co-operative effort among the federal and provincial governments. Clearly this is not happening. Evidence of this is in the refusal of some provinces to attend a scheduled briefing on health care.

The government makes the same mistake with this welfare program and decreased funding levels which it must and is doing. However it has to give the provincial governments the freedom to adjust to these changes and target funding appropriately.

The provinces cannot be punished by having to reduce their spending or having to figure out alternate ways of paying for these programs that are only partially subsidized by the federal government. Whereas they should have been subsidized to a higher degree, the federal government reduces the funding and the provinces have to look for ways and means to pay for the programs and then they are cut off. We know it is a problem but we just wish the government would be more aware of it.

Currently despite the fact that constitutionally welfare is strictly under the control of the provincial governments the federal government enforces national standards through the Canada assistance plan and regulations. We have a few concerns about this area. Alienating the provinces along with cuts which decrease the federal spending power may make it difficult when it comes to the social policy reforms being planned for in the fall by the minister of human resources.

Overall we recognize the need for significant reform and the reduction of federal transfer payments to provinces to balance the budget. We just have a concern about the overall plan or strategy.

[David Walker, Liberal, Winnipeg North Centre, MB]

Madam Speaker, in response to a question raised earlier, the amendments we are proposing do not affect tax points.

[André Caron, Bloc, Jonquière, QC]

Madam Speaker, this is a Bloc Quebecois amendment and I want to comment on it. It would amend Bill C-17 which proposes to freeze the federal contribution to the Canada Assistance Plan.

You know that the Canada Assistance Plan is financed by the federal and provincial governments.

According to Bill C-17, the federal contribution to CAP would be capped after March 1995.

CAP is a plan that was developed in the 1950s and 1960s for the sake of social justice for classes of people who, for some reason, cannot support themselves.

So, it is a plan that really addresses the basic needs of some of our fellow citizens. The government's proposal would impose a unilateral freeze on the federal contribution to CAP.

My party denounces this way of proceeding. This change would have major consequences that we parliamentarians can hardly assess at the present time but we in the opposition know that some parts of the population would be severely affected.

With this in mind, my party proposed an amendment calling for a standing committee to study the whole question so that the members of this House could know the real impact of the Liberal government's proposal on the most needy in our society. As parliamentarians, we must in all honesty seriously consider the consequences of our decisions.

I think it is not improper to really want to take into account the serious impact that could result from legislation we pass here. It is therefore important that people, through their representatives, be made aware of the situations that could result from a proposal such as the one the Liberal government is making.

I also want to denounce the practice followed at various levels of government, that is using a seemingly harmless measure to freeze transfer payments to other levels of government. That is what is called passing the buck, shifting one's problems, one's responsibilities onto someone else.

That is exactly what the federal government is doing now. And what will happen? Provincial governments will get less contributions. To maintain their present level of services, provincial governments will have to spend more and perhaps go deeper into debt or they will have to bear the responsibility of cuts in programs affecting the most disadvantaged members of our society.

But then the federal government will wash its hands of the matter, saying that it simply made cuts in transfer payments whereas provincial governments decided not to make supplementary expenditures in order to offset the cuts.

I think this is dishonest and hypocritical, because the government proposing this bill knows perfectly well what will happen, but it is going ahead with it nevertheless; when in 1995, 1996 or 1997, provinces have to either cut services to the most disadvantaged members of our society or borrow money to maintain services, they are the ones that will have to face criticism for their actions.

As parliamentarians, I think we have to be responsible for our actions. If we want to cut social programs, we should say so. We should not force others do that by putting them in a situation where they will have no other choice, but that is typical of this Liberal government.

We know that a reform is under way. Mr. Axworthy, the Minister of Human Resources Development, announced it. Committees are studying the matter. Experts were hired to determine the government's position. The Standing Committee on Human Resources Development is exploring different avenues. The government has no project, no overall plan. Things are done in a piecemeal way. We hear that cuts might be made in UI or in social assistance or that the student loans program might be redesigned. But since they are informed of all this in such a fragmented way, Canadians cannot assess the whole reform. And we parliamentarians cannot say to our constituents what our objectives are and what results we want to achieve in a few years.

So this proposal, which looks pretty insignificant but will have important consequences for many of our most disadvantaged fellow citizens, is a patent example of the hypocritical and often lying way in which our country is now ruled and its social policy for the poorest members of our society is designed.

I will certainly vote against the main proposal on freezing federal transfer payments, and I will vote for the amendment moved by my party to strike a standing committee for the purpose of reviewing all these proposals and gauging their impact. Parliamentarians will thus be accountable to Canadians on important measures and bills such as the one before us today.

[The Acting Speaker (Mrs. Maheu)]

Before resuming debate, I would remind the hon. member that ministers and hon. members should not be referred to by name.

Is the House ready for the question?

[Some hon. members]

Question!

[The Acting Speaker (Mrs. Maheu)]

Is it the pleasure of the House to adopt Motion No. 12?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mrs. Maheu)]

All those in favour will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Mrs. Maheu)]

All those opposed will please say nay.

[Some hon. members]

Nay.