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.