Debates of June 1st, 1994

Goods And Services Tax

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

Mr. Speaker, we learned this morning that the Liberal government is thinking not of eliminating the GST as it promised but of replacing it with another GST that would be even more complex than the first one, an odious, hidden tax that goes directly against the provinces' fiscal autonomy.

My question is for the Minister of Finance: Does he confirm his government's intention to implement a GST that would be even worse than the first one and that could apply to currently tax-free products such as food, health care and medicine, which amounts to a systematic attack against the sick and the poorest?

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

Mr. Speaker, the hon. member is on the finance committee which is drafting the report. We eagerly await this report, as I have always said.

I have no intention of commenting or anything until I have had a chance to read it.

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

Mr. Speaker, I refer to an article in this morning's newspaper and I ask the Minister of Finance whether he intends to promote a systematic attack against the provinces' fiscal autonomy, as well as a hidden tax that would be easier for his government to increase in a deceitful, odious and hypocritical way at consumers' expense.

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

Mr. Speaker, I have no intention of commenting on newspaper articles, but we will certainly comment after reading the official report of the finance committee. If the finance critic is the author or the source of the article in La Presse , he should be the one commenting.

The Economy

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, my question is for the Minister of Finance.

Earlier this week the Prime Minister acknowledged that increasing uncertainty caused by the debate over Quebec sovereignty was hurting the Canadian economy. At the same time the study released by the C. D. Howe Institute points to growing uncertainty about the government's ability to hit its deficit targets, which also hurts the economy.

The C. D. Howe study says the government would have to make further spending reductions of $7.2 billion just to restore confidence in its current deficit projections.

Does the minister accept the C. D. Howe study analysis and is he actively searching for an additional $7.2 billion in spending cuts?

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

Mr. Speaker, the study referred to by the leader of the Reform Party was one of four articles in a document that by and large was very good.

The objectives set out in the article by Mr. Richards are certainly objectives we share.

Unfortunately when Mr. Richards did his study he did not take into account the measures that we did in the February 22 budget and as a result his study is based on a set of numbers which are no longer valid.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, my supplementary question is for the Minister of Finance.

Two big sources of uncertainty are driving interest rates up, undermining confidence in the dollar and shaking investor confidence. One is uncertainty about excessive deficits. The other is uncertainty about Quebec.

The Prime Minister says that little can be done in the short term to control uncertainty over Quebec, but surely more can be done to control uncertainty over the deficit. It is the controllable factor.

Does the finance minister agree that the growing uncertainty over Quebec now gives him an added reason for coming to his colleagues and coming to the House and demanding stronger action on the deficit and the debt? Is he prepared to do so?

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

Mr. Speaker, I have made it very clear, as has the Prime Minister, that as a government we take our deficit targets very seriously. We are prepared to take whatever action is required in order to hit them. That is the commitment of the Prime Minister; it is the commitment of the government and it is a commitment on which the House can rely.

What adds to the uncertainty is the fact that over the last 10 years governments have not hit their targets. We think it is very important that a government hits its targets, and we are going to hit our target.

I certainly share the view of the leader of the Reform Party that the country's excessive indebtedness weighs heavily on it and is a cause of some uncertainty. I also share the view of the Prime Minister that the irresponsible statements made by certain members of the Bloc Quebecois and the leader of the Parti Quebecois are doing a great deal to damage our ability to create jobs.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, we do not disagree with the fact that one of the government's problems is created by the uncertainty generated by the sovereignist option. I suggest that one of the government's bigger problems-

[An hon. member]

The separatist option.

[Preston Manning, Reform, Calgary Southwest, AB]

One of the government's bigger problems, Mr. Speaker, is that it does not really have a strong mandate from the public to cut the deficit to the extent that it should be cut. The government did not seek that mandate in the 1993 election. It downplayed the seriousness of the deficit and now it is paying the price.

Do not the growing uncertainty and the need to address it more seriously give the minister an additional basis now to go out and rally public support for deficit fighting? In other words, is there not now an opportunity to go out and get the public support he did not get during the election to tackle the deficit in a new way?

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

Mr. Speaker, we certainly have a mandate to clean up the nation's finances. The Prime Minister made it very clear throughout the election campaign that our interim goal was a deficit target of 3 per cent of GDP within three years and that our ultimate goal was to eliminate it. That is what we said to the Canadian people and that is what we are going to do.

At the same time we also made it very clear, unlike the Reform Party, that we understood the economy is complex and there are many ways to approach the objectives. Cutting government expenditures is not the only way. Nor is it a way that will do it on its own.

What must be done if we are going to eliminate the deficit is to put Canadians back to work, and that is what we are going to do.

Indian Affairs

[Michel Gauthier, Bloc, Roberval, QC]

Mr. Speaker, regarding the situation in Kanesatake, the minister of Indian affairs indicated that he had no intention of paying the three million dollars asked by chief Jerry Peltier as a precondition to negotiating. It appears that, instead, the minister is about to acquire some land from the Oka municipality which he will then give to allow for the expansion of the cemetery.

Will the minister confirm that the government is about to acquire that land from the Oka municipality, and can he tell us how much it will cost?

[Ron Irwin, Liberal, Minister of Indian Affairs and Northern Development]

Mr. Speaker, my director general has been negotiating directly with the village. It is in the range of around $200,000.

I am glad the member asked me this question because I think this is part and parcel of the negotiations.

As of now, the Mohawk Council of Kanesatake has issued a press release saying the Mohawk cemetery expansion is suspended at Ottawa's request. I am very pleased that the Mohawks have suspended their clearing operation at the cemetery as an indication of their good will of negotiating.

Again, as I have said, we do not create a crisis. Our party is committed to recognizing a problem, going in, dividing it up into its components and solving those components. This is good news for me.

[Michel Gauthier, Bloc, Roberval, QC]

Mr. Speaker, my supplementary question is also for the minister of Indian affairs.

Could the minister tell us if he intends to give a favourable reply to the urgent request made by the Quebec government to participate in the negotiations, or will he conduct these negotiations alone and ignore the provincial government's wish?

[Ron Irwin, Liberal, Minister of Indian Affairs and Northern Development]

Mr. Speaker, it is imperative that the Quebec government be at the negotiating table with the Mohawks and the Government of Canada and with the very fine mediator and negotiator, both of whom are already working there.

The Economy

[Ray Speaker, Reform, Lethbridge]

Mr. Speaker, my question is for the Minister of Finance.

Yesterday we received conflicting economic signals: interest rates are up; GDP growth is up. Does the minister agree that higher interest rates due to Quebec uncertainty threaten to choke any economic recovery? How does the minister intend to respond to this circumstance?

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

Mr. Speaker, the very strong numbers that the member mentions for the month of March occurred during a period of rising interest rates. At the same time, as the member knows, the recovery began when interest rates were in fact higher than they are at this stage.

I think it is very clear that the recovery in Canada is sufficiently well anchored that in most areas of the economy, certainly those that are creating jobs like goods production, the high interest rates have not yet begun to stifle the recovery.

In terms of the uncertainty that has been created by statements made by certain people who are pursuing an unpalatable political option, there is no doubt in my mind that those statements are destroying jobs.

I think that one should appeal to all political leaders to desist from the kinds of things that are taking food out of the mouths of Canadians.

[Ray Speaker, Reform, Lethbridge]

Mr. Speaker, I certainly appreciate the minister's answer. It is very true there are statements that are affecting our economy and potential growth. This was supported by senior economists from Wood Gundy and Patty Croft as of yesterday's statement which was very clearly stated.

Higher interest rates are seen to be there because of the separatist discussion that is going on. It is threatening the government's 3 per cent deficit reduction targets. I believe that is happening.

Are the minister and the government prepared to bring about additional expenditure reductions for adjustments to the budget to meet their target and to assure us that they will?

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

Mr. Speaker, as I have said in the House, we are going to take whatever actions are required to hit those targets.

The credibility of the government's economic projections are very important if we are going to re-establish any kind of equilibrium in public markets. We are going to hit our targets and we will take the steps required to get there.

[The Speaker]

I remind my colleagues to always remember me in their statements and answers.

Kingston's Francophones

[Suzanne Tremblay, Bloc, Rimouski—Témiscouata, QC]

Mr. Speaker, teachers at the Collège militaire royal de Saint-Jean who may be transferred to Kingston are very concerned about the quality of French language education their children will receive in Kingston. Today, Le Devoir reported what was said by their spokesman, and I quote: ``It is like a third world country-the school's is housed in shacks without toilets or running water, and this has been going on for six years''.

My question is directed to the Minister of Canadian Heritage. How can the minister responsible for implementation of the Official Languages Act continue to tolerate the obstruction by Kingston's municipal council concerning the plans for building a real school for francophones in Kingston, when the minister has already approved the expenditure of over half a million dollars for the construction of a cultural centre attached to the school, right on the controversial Olan Mills site?

[Michel Dupuy, Liberal, Minister of Canadian Heritage]

Mr. Speaker, this decision reflects the Canadian government's determination to support Kingston's francophones. There will be a school.

[Suzanne Tremblay, Bloc, Rimouski—Témiscouata, QC]

Mr. Speaker, my supplementary question is directed to the Minister of National Defence. Does the minister still claim that Kingston is a showcase for bilingualism in Canada, and will he confirm that, so far, none of the teachers at the Collège militaire royal de Saint-Jean have agreed to sign a contract for their transfer to Kingston?

[David Collenette, Liberal, Minister of National Defence and Minister of Veterans Affairs]

Mr. Speaker, I do not know where the hon. member is getting her information. We have been having some very fruitful discussions with the commanding officer at CMR who, as I have announced, will be going to Kingston, Brigadier General Emond, Mr. Carriere, who has been the principal at Collège militaire royal, and the members of the faculty about their transfer to Kingston.

I do not get the same sense of disquiet from those officials of our department at the Collège militaire royal de Saint-Jean or the professors that the hon. member has.