Debates of Nov. 10th, 1995

The Economy

[Some hon. members]

Oh, oh.

[The Speaker]

I would ask the hon. member to withdraw the word disloyal.

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, I will withdraw the word disloyal. It has been a heck of a week. We have had members of the official opposition acting like spoiled brats in not recognizing the results of the referendum which they lost. Now we have the government members who do not know why they won striking up the divine nine committee. We have a Prime Minister who wants Copps out of the House.

[Some hon. members]

Oh, oh.

[Jim Silye, Reform, Calgary Centre, AB]

In the meantime, this week we have been busy meeting with the governor of the Bank of Canada and with 10 of this country's leading economists which prompts my first question.

I believe that the size of our federal debt is $567,902,132,500.57. Would the finance minister please confirm to this House what the size of our federal debt is?

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

Mr. Speaker, I am sure the member's estimate of our national debt is within a couple of pennies.

The problem is not only the size of the national debt, but that as a nation over the course of the last decade we did not face up to the fundamental problems of job creation, the preservation of our social programs and the preservation of the social fabric of this country. What is crucial is that we continue the course that has been set by this government. We must deal with the fundamental problems so that a subsequent government does not have to stand up and admit to the kind of heritage the member just described.

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, the problem is the debt. That is this country's major problem. The soft targets this finance minister has set are not solving the problem. He should get serious and set some targets that really mean something, such as a zero deficit within the time frame of his mandate.

I know the finance minister has heard what many of the economists said yesterday when they were looking at forecasts into the future. If the minister were to listen to the advice of these leading economists he would recognize that the track he is taking this country down is not good enough. There is a demand by taxpayers to solve our problem quicker. It is better to err on the side of quickness than to err on the side of slowness.

Why does this finance minister not commit his department and his government to a clearly defined program of when we will get to see a zero deficit?

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

Mr. Speaker, there has never been a better expression of the difference that exists between the Reform Party and the government than the one just expressed by the member.

He in fact said that the end of government was to reduce the deficit, that the purpose of government was to make itself smaller. That is not true. The purpose of government is to make itself smarter. The purpose in reducing the deficit is to help in job creation. The fundamental role of the country is to give its citizens a better future.

Yes, we have done a great deal to reduce the deficit. We will continue to reduce the deficit and we will balance the budget, but that is not the end of this society. The purpose of society is to give citizens a better standard of living, to give children a better chance and to make sure we take children out of poverty. That is what we will do.

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, the finance minister talks about making things better for Canada. He talks about how he will improve things for Canada. From when he came into power until when he leaves power overall spending will be the same, if not higher. He is not solving the problem. He is adding to the problem.

The problem is the debt. The solution is to get to a zero deficit so that we do not add to it. Whether it is over three years, two years or whatever, that is the objective.

[The Speaker]

I know the member will ask his question right now.

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, for the good of the country and for the good of the financial community, will the finance minister quit playing politics with the deficit, come clean with Canadians and present a balanced budget before he goes to the electorate in the next election?

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

Mr. Speaker, as set out in the last budget, program spending by the government by 1996-97 will be at its lowest level as a percentage of our gross domestic product since 1951. We will be the only government of the G-7 that will have put into place an absolute reduction in its expenditures.

The minister of agriculture has just listed what we have done in terms of job creation which is fundamental. If our only objective is to reduce the deficit, the fastest way to do it is to put Canadians back to work. The minister of agriculture has just set out what we have done.

We will reduce the deficit. Let there be no doubt about that. However we will do it in a balanced way, one that does not harm the Canadian economy, one that gives our children a chance.

If we want anything different, we can take a look at the budget set out by members of the Reform Party this year: scorch and burn, demolish the country. They are so ashamed of it that ever since it came out they have refused to bring it forth and talk about it because they know it was a dud.

Purchase Of Helicopters

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Mr. Speaker, my question is for the defence minister. Yesterday, the minister quoted, in support of his decision to buy new search and rescue helicopters, an analysis published in Le Devoir . Had he read

it through, he would have learned that Quebec was the biggest loser in the cancellation of the EH-101 contract.

Given that the Canadian aerospace industry is mainly based in the Montreal area, that Quebec is far from getting its fair share of defence spending and that the minister did not hesitate to award without tender to Ontario a $2 billion contract for armoured personnel carriers, how can he explain the fact that there is no Canadian content requirement in the new contract? How can he justify that?

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

Mr. Speaker, the hon. member forgets that, a few years ago, the previous government awarded a contract worth more than $1 billion to Bell Helicopter, in Mirabel, to build helicopters for the Canadian army. This was a major contract for 100 helicopters. But that is something he failed to mention in the House.

Quebec has a large part of the aerospace industry. Bell Helicopter has received the world product mandate for the construction of certain types of helicopters it is now delivering to the Canadian army. It was because of the government's decision-perhaps this is one of the few things the previous government did correctly-that Bell Helicopter company was able to get the world product mandate and bring jobs to Canada, to Quebec, for the making of these helicopters to serve Bell's worldwide market.

The hon. member conveniently forgets that, when he criticizes the announcement I made on Wednesday.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Mr. Speaker, the minister is like a propeller, we never know which way he will turn. Does he not realize that, by refusing to include a Canadian content requirement in this contract, he is not only compromising our businesses' chances of securing the contract but also completely ignoring the policy on managing major crown projects, namely projects in excess of $100 million, which clearly requires him to give top priority to industrial and regional development?

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

Mr. Speaker, we have stated as government policy that we will get the best deal for Canadian taxpayers. Where possible, we will buy off the shelf, and we have done that.

As I said the other day, the hon. member and his party do not have much confidence in Quebec companies, many of them world class, that will easily be able to compete and offer their services to provide components for these helicopters. He does not have faith in their own industries in Quebec. That is shameful.

Finance

[John Williams, Reform, St. Albert, AB]

Mr. Speaker, the Minister of Finance basically released his annual financial report. On page 2 of that report the minister acknowledged that he massaged the personal income tax collection figures for the previous year to take $3 billion out of revenue in 1994.

Using the real figures, will the Minister of Finance acknowledge that the 1994 deficit was only $39 billion and that the 1995 deficit is exactly $38.7 billion, which means that the deficit has not come down hardly at all?

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

Mr. Speaker, the accounting principles we followed in reporting the state of the government's finances have been consistent and are ones determined by the auditor general.

If the hon. member is accusing the auditor general of massaging the numbers, I would suspect he should do so in another forum. Even if one accepts the premise of the member's question, which is obviously false, one would have to ask him to apply the same principles from one year to the next and he would find that his question does not stand up.

[John Williams, Reform, St. Albert, AB]

Mr. Speaker, I was quoting from the report of the Minister of Finance that there were some changes and some fixing of the numbers in 1994.

While we listen to the daily drivel of the government of how it cuts costs and is trying to create jobs, using his actual numbers tax collections were up $7.3 billion and the deficit has only come down by $4.5 billion.

Therefore would he acknowledge that he is reducing the deficit on the backs of taxpayers, not by cutting spending, and that increased taxation kills jobs? It does not create jobs as he talked about earlier today.

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

Mr. Speaker, the member did not quote my words. He quoted his own words. He would have been better off to have quoted mine.

First, we follow the accounting principles established by the auditor general. Second, the member will understand the basic problem of the country is compound interest. While our spending may well go down in terms of programs, our interest costs continue to rise. That is the basic nut we have to deal with.

Over the course of the last two years we have engaged in more deficit reduction than any government, certainly over the course of the last decade. We have hit our targets and we will continue to hit our targets.

It may reflect Reform Party policy but he should not say that paying attention to job creation and job creation policies are drivel, because that is what Canadians want their government to do.

Agusta

[Maud Debien, Bloc, Laval East, QC]

Mr. Speaker, yesterday, the government announced that it had reached a settlement to compensate the Italian company Agusta, following the cancellation of the contract for the EH-101 helicopters. No details will be made public until several months, but we know that this settlement will cost several hundred million dollars. Agusta, it must be remembered, is currently facing bribe and corruption charges in Europe.

My question is for the Minister of National Defence. While the terms of the settlement reached between the government and Agusta are not yet known, and given that the inquiry called for by the Liberals when they formed the opposition never took place, how can the government explain that Agusta is still being considered for the new helicopter contract?

[David Dingwall, Liberal, Minister of Public Works and Government Services and Minister for the Atlantic Canada Opportunities Agency]

Mr. Speaker, the hon. member was quite right in saying that an agreement in principle had been reached between the Government of Canada and the company to which she referred. Unfortunately the hon. member went on to make an assumption which has yet to be realized. In point of fact the Minister of National Defence has yet to give to the Department of Public Works and Government Services a request for a proposal.

We do not know who in the world might be submitting bids for various procurement initiatives of the Government of Canada. How the hon. member could stretch an agreement on termination costs with a particular company into saying that it will now be somehow successful in some subsequent bid is beyond the realm of reality.

[Maud Debien, Bloc, Laval East, QC]

Mr. Speaker, that answer has nothing to do with the question. My question was on the second contract, but the minister keeps referring to the first one. Will we have to make a video for the minister to understand the question?

Let me put it again. Since Agusta is at the centre of a huge scandal in Belgium, how can the minister justify that, without any inquiry on the circumstances surrounding the signing of the EH-101 contract, he will pay Agusta hundreds of millions in compensation, without telling us whether he intends to exclude that company as a bidder for the new helicopter contract? That is my question to the minister.

[David Dingwall, Liberal, Minister of Public Works and Government Services and Minister for the Atlantic Canada Opportunities Agency]

Mr. Speaker, I would be happy to receive the video at any time. Perhaps she might want to have Canada Post deliver it.

The Government of Canada, as I am sure any reasonable individual would understand, had a binding contract with the company in question. We made a decision upon coming to office about the termination of the contract. There are termination costs the Government of Canada will have to provide in accordance with the contract. We will live up to the contract obligations and we hope to be able to provide that information in due course.

However the hon. member cannot jump from that resolution into thinking that automatically the company to which she refers may have some upper hand with regard to possible procurements of the Government of Canada.

Canada Post

[Randy White, Reform, Fraser Valley West, BC]

Mr. Speaker, I agree with the Minister of Finance that job creation and putting Canadians back to work are not drivel. The brother-in-law of the head of Canada Post is about to be awarded an untendered $300 million contract and get an extension on another to the year 2002, and the minister responsible does nothing about it.

If the Minister of Public Works again alleges there is nothing wrong here, would he assure the House that the contract will be investigated as part of the much anticipated review of Canada Post?