Debates of Dec. 6th, 1995

Unemployment Insurance

[Michel Gauthier, Bloc, Roberval, QC]

Mr. Speaker, I do not know whether the Prime Minister realizes what he just said. He just explained that the government's deficit for this year will actually be $5 million more, because the Minister of Finance took the surplus in the Unemployment Insurance Fund, subtracted it from that column, put unemployment insurance revenues into revenue, and then told us: "Here, this is will be my deficit".

Does he realize that with this answer he just confirmed, as the leader of this government, that the deficit of the Minister of Finance will be $5 million more?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, as I said before very clearly, we consider that the funds in question are made up of money that we borrowed. Instead of borrowing from the private sector, we are borrowing from ourselves. However, on the books, as good accountants, we said it was not our money, it was money held in reserve.

Instead of borrowing the money on the market and competing with the private sector, we are using this money, which we know we will have to pay back some day.

However, it is quite probable that in the years to come, since the government is working very hard to create jobs, instead of a deficit the UI Fund will again show a surplus next year.

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

Mr. Speaker, my question is also for the Prime Minister.

The data available in the financial review of the Minister of Finance reveal that 82 per cent of program expenditure reductions proposed by the federal government were in the unemployment insurance program alone.

In this context, how can the Prime Minister refuse to admit that his government's only strategy in fighting the deficit was to cut the benefits to the unemployed?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, when the Parti Quebecois government says we cut transfers to the provinces, it is contradicting the member, who has just said that all we cut were the benefits of the unemployed, and not transfers.

But we cut all over, except that we reduced transfers such as those for health and the other programs. We did, however, increase equalization payments. In fact, since we have been in government, transfers to the province of Quebec have remained at exactly the

same level. They are even slightly higher than they were when we came to office.

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

Mr. Speaker, the Prime Minister is avoiding the question. We are saying that, of all the government's program cuts in connection with transfers to the provinces, 82 per cent of the cuts were made to the UI fund. This is what we are saying today. And this is what he is trying to get round.

I would ask him the following question. Does the Prime Minister realize that his approach to reducing the deficit through the unemployment insurance surplus is unconscionable and testifies to his inability to improve the state of public finances other than by imposing a job tax? What his employment insurance amounts to then is a job tax.

[Lloyd Axworthy, Liberal, Minister of Human Resources Development and Minister of Western Economic Diversification]

Mr. Speaker, once again the hon. member is engaging in an attempt to misinform Canadians.

Let us go back to last Friday and bring forward two basic facts. It is very important to try to clear the fog the Bloc Quebecois constantly tries to disseminate.

First, $800 million of the proposed savings in the system are being recycled into direct employment benefits to get people back to work. Therefore it represents a substantial shift from income benefits to employment benefits and is designed to meet our very different work situation. It allows us to give people a quick, effective way back into the employment market.

The figures the hon. member refers to have absolutely no relevance to the fact that we have said directly the money is being recycled.

Second, we are beginning to reduce the premiums under the system. There will be a $1.3 billion reduction for businesses and employees so that we can put more money in their pockets and they can create more jobs.

[Some hon. members]

Oh, oh.

[Lloyd Axworthy, Liberal, Winnipeg South Centre, MB]

Mr. Speaker, my argument is so powerful that it even affects the electrical system of the House. The problem is that when the Bloc stands to speak, the lights go off totally and everybody is in the dark.

The Economy

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, the Prime Minister says he wants to put his makeshift unity policy behind him and get on with jobs and the economy. So let us do that.

At present the greatest single impediment to job creation and economic growth in the country is the dead weight of the federal debt of $570 billion, a debt the government is adding to at the staggering rate of almost $100 million per day.

The IMF and Canadian business groups have repeatedly called upon the finance minister to get real and revise his weak deficit reduction targets.

Has the Prime Minister specifically instructed the finance minister to come up with a new deficit reduction target, the only one that means anything to the Canadian taxpayer, namely a zero deficit by 1997-98?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, we are on target with what we said to the Canadian public we would achieve.

We said that we started at 6.2 per cent of GDP and that we would be at 3 per cent after three years. We will be there. We set some realistic goals in a way that we have not stifled growth in Canada. At the same time as we were going through a reduction in the deficit, we saw a reduction in unemployment. The policies are working very well.

Most of the time members of the third party are not asking questions on the economy. Yesterday, for example, they spent the day talking about the coat of arms. Is it extremely important?

On January 15, 1994 the leader of the Reform Party criticized previous opposition parties. He said that anyone could make a jackass of themselves in question period. Yesterday the Reform Party proved that quite well.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, the former head of the Economic Council of Canada, John Deutsch, used to have trouble getting Mr. Trudeau to take the debt and deficit seriously. I wonder if Mr. Trudeau passed the virus on to the current Prime Minister.

The only way Mr. Deutsch could get Trudeau to take public finance seriously was to somehow link it to the Quebec or unity issue. Perhaps we can awaken the Prime Minister's interest in the issue by pointing to a recent CROP poll which said that 80 per cent of Quebecers believed the government should come to grips with real deficit reduction. This is something Quebecers have in common with other Canadians.

If the Prime Minister is groping for actions to unite the country, why does he not personally commit his government to balancing the federal budget before the end of his mandate? I ask him not to give us a 3 per cent answer.

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, when we ran in the last campaign we were very careful to put in

writing what we would do. We are meeting our goals. We are respecting the commitments we made and we are on target.

When we introduced the budget last February it was extremely well received by all commentators; we had done the right thing. We are moving in a rational way in the reduction of the deficit. At the same time we are not doing it in a way that is causing social problems in the country.

That is why we are a party of the centre. We are not doctrinaire. We will not eliminate medicare just to have a balanced budget. We will make sure we have policies that respect the individual and at the same time offer solid administration.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, the Prime Minister likes to dwell on the past. I am wondering whether he remembers a time in 1978 when Mr. Trudeau went to an economic summit in West Germany and was somehow briefly converted to deficit reduction. He came back and went on TV. Does the Prime Minister remember this? He announced $2 billion in spending cuts without even telling his finance minister, who is now the Prime Minister.

Could the Prime Minister take a short trip, perhaps to Queen's Park; take a few lessons on budget balancing from Mr. Harris; get on TV and commit himself to spending cuts that will balance the federal budget?

Eight of eleven senior governments in Canada are now committed to deficit elimination. Will the Prime Minister make the Government of Canada the ninth, by committing to balance the federal budget by 1997-98?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, the leader of the Reform Party is making too many trips to Queen's Park. He will lose the only Ontario member he has in this House very quickly if he does not change his travelling plans.

We have a good plan for reduction of the deficit. At the same time we are making sure the economy is working well. We will have managed to take the deficit from 6.2 per cent to 3 per cent in three years, as we said we would. It will be reduced gradually and eventually we will have a balanced budget.

However, we are not like their friend in the United States by the name of Gingrich who is talking about balancing the books in 2002. We do not talk like that; in Canada we do it.

Unemployment Insurance Reform

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, my question is for the Prime Minister.

A little more than a month after the Quebec referendum, the unemployment insurance reform tabled by the government calls for both the maintenance of national standards and the implementation of five new manpower programs as demanded by Quebec.

In light of the maintenance of national standards and the introduction of new programs, will the Prime Minister admit that the proposed reform does not in any way reflect the distinct and unique character of the people of Quebec?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, the reform has been well received all over the country. I have figures in front of me showing that 66 per cent of people in Quebec at this time feel it is a well balanced reform which respects the regions.

But an unemployed person is an unemployed person. What does he or she need from government? Good programs. Language does not enter into it. The unemployment insurance system takes money from those parts of Canada where people have the advantage of having jobs and distributes it to places where others do not enjoy that privilege. It has nothing to do with language and culture; it has everything to do with respect of the individual, and all citizens of Canada are treated equally.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, it has been made very clear that this reform targets Quebec and the maritimes, despite the Prime Minister's words.

How can the Prime Minister claim that his motion on the distinct character of Quebec holds any meaning when, the first chance he gets, he makes a total mockery of a unanimous request from the Quebec National Assembly by treating Quebec like all of the other provinces, in that it will be subject to the same national standards when it comes to manpower?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, we have done what we said we would, namely withdraw from manpower training and make funds available to truly serve those individuals who are our clients, the unemployed. We want to ensure that the money they paid in while working gets back to them and not to others.

As for the question of a distinct society, I note once again-for the third time-that the members of the Parti Quebecois and of the Bloc Quebecois will again vote, in their great hypocrisy-

[Some hon. members]

Oh, oh.

[Jean Chrétien, Liberal, Saint-Maurice, QC]

Yes, Mr. Speaker, they will again vote against the distinct society, because they criticize us and when the time comes to vote in the House, they vote against-

[Some hon. members]

Oh, oh.

[The Speaker]

Dear colleagues, I would ask you all to be a little more careful in your choice of words during question period. As we know, words that stir up one side are usually replied to in kind.

I ask all hon. members to please be very careful in their choice of words. Naturally we would not allow some terms to be used against individual members but when they are used in a general way they have been acceptable in the House.

Underground Economy

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, last week the Minister of National Revenue and taxation bragged about raising $1.1 billion out of the underground economy.

If he were truly serious about attacking the underground economy why were Revenue Canada auditors instructed not to audit visible minorities?

[David Anderson, Liberal, Minister of National Revenue]

Mr. Speaker, the basis of the hon. member's question is false.

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, if that is truly his answer, if he really believes it is false, then this gentleman is not doing his work.

A report was done by Ernst Young on the underground economy. A lot of field auditors were interviewed, reviewed and visited. They were asked what was going on. Six, seven or eight case reports were done. The study and some off the record remarks by auditors confirmed they were instructed not to audit certain visible minorities "due to potentially explosive political repercussions".

Further, the minister should know that 90 per cent of liquor smuggling in Ontario comes across one certain spot near Cornwall.

I again ask the minister what steps he is taking to ensure his auditors apply the rules of the Income Tax Act to everyone equally regardless of race.