Debates of Feb. 14th, 1995

Supply

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I congratulate the member for Calgary North who I thought gave a fine presentation. Seemingly she is concerned about finding somebody to blame for our past problems and our budgetary situation today.

I note that all western democracies, all OECD countries, increased their deficits during this period of time. Clearly we would not blame the Prime Minister or our party for the debts of the rest of the world.

I do not think it is fair realistically to go back and study history. What we want and what the people of Canada want are solutions. I am surprised by an opposition party that has no solutions. All I heard were complaints. All I heard were problems. There were no solutions.

There is one thing I would like to know as a bottom line from my hon. colleagues in the Reform Party. They want to basically allocate social spending to the provinces, give up tax points to the provinces. What is the end result of this philosophy? Ten balkanized countries within Canada? What about standards, health standards, labour standards? What is it that makes a country?

[Diane Ablonczy, Reform, Calgary North, AB]

Mr. Speaker, there were a lot of questions in that intervention. I would be happy to address them.

My hon. colleague says that Canada was not the only one that ran up a debt, that everyone else did too, so why pick on us. I do not know about you, Mr. Speaker, but your mother was probably like mine. She used to say to me: "If all your friends jump off a bridge, does that mean you are going to too?". We are not responsible for other countries. The leadership of our country is responsible for us. It has not done a very responsible job of looking after our interests in the long term.

Members opposite are always pleading for solutions from our party. We have worked hard to provide them with solutions. We will even be providing them with an alternative budget which is something no opposition party has ever done before.

I would suggest to the hon. member that perhaps he and his party need to work a little harder to provide some solutions. They should provide some glimmer of reform solutions to the people of Canada. I might add that solutions in the social policy area were promised loud and long and have never been delivered on.

Members opposite need to realize that if tax points were given to the provinces in order to allow them to have more control over the social programs in their provinces, the tax points grow as the tax base of the province grows. The tax base, the economies of our provinces and our country have been growing.

Once we give provinces tax points, their potential tax base actually expands, many over time. They actually have more hope of funding their programs long term and having a continuing source of revenue than if they were dependent on transfers from the federal government. As we have seen, transfers can be cut or are very uncertain. Provinces that have their own tax base to draw from are much more secure-and my economist colleague is nodding so I think I have this right-than if they are totally dependent on whatever largesse the federal government might decide to give them from time to time.

My colleague mentions fears that if there is not a centralist government, a tightly controlled federation from the centre which has always been the Liberal vision of this country, that somehow things will go to hell in a hand basket. I might point out to him that things are not too far from going to hell in a hand basket with the centralist vision having been very firmly in place for the last 25 years.

Surely we can do no worse than to trust those governments which are closest to us the people. We have the most impact on those and we can influence them more effectively than distant, federal central governments. If we could have more say and more influence over our own local governments, we would be a lot better off than we are today.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, it gives me great pleasure to speak to our supply motion which demands that the government respond to the demands of Canadians with spending cuts and not net tax increases.

Currently we are engaged in one of the greatest threats to our society and economy. It is not something that comes from without, but something that comes from within our own boundaries. It is not the deficit spending but the debt, that massive summation of overspending that has gone on for at least two decades that seeks to compromise every aspect of our society, every aspect of our economy and seeks to affect every individual in this country from coast to coast.

What is the magnitude of this debt? Many people talk about the federal debt being $550 billion. They do not include the provincial debt of $220 billion, the municipal debt of several billion, and unfunded liabilities such as CPP in the order of $500 billion. What does this do? The combination of all this amounts

to over $1.2 trillion. This debt is ever increasing and causes us to pay increasing amounts of interest from the public purse on this.

The government takes in about $120 billion every year and spends about $160 billion which means a deficit of about $40 billion. It is interesting because this amount is actually the amount of interest we borrow every year to pay on our debt. The government also spends out of this $40 billion on government services and about $80 billion on social programs.

As the debt increases we have larger interest payments to make which must come from one of two sources, either increased taxes or a boost in the economy. The increased taxes will either come from companies or from individuals.

If you are an individual it decreases your ability to spend money which has a downward effect on the economy. Similarly, if members speak to businesses in their communities they will find they cannot hire more people, they cannot do more research, they cannot do any more development, they cannot expand. Therefore it has a depressing and downward effect on the economy.

The citizens of Canada have sent a clear message to every member of Parliament: No new taxes; get the economic house in order; and make the necessary cuts in expenditures to do this because our taxes are already too high.

The government has said it will cut expenditures to 3 per cent of GDP, but I submit this is an element of intellectual dishonesty. This comes from the Maastricht negotiations where it was said that the combined amounts should be 3 per cent of the net debt, not the federal debt, but the accumulated debt which in this country is over $1 trillion.

If we adhere to what this government wishes to do, over a period of three years we will add at least $100 billion to the debt and further increase the amount of interest payments we have to make every year.

Even if we balance the budget, and we should look at the New Zealand experiment, there will be no change in interest payments over the short term and these expenditures will continue, but we do not have a choice in the matter. If we look at New Zealand now, some 10 years after its economic downturn, we see a country that is booming, a country that has one of the most aggressive and positive economies in the world. The reason it did this was because it was forced to the wall to get its economic house in order.

We do not necessarily want to go the way of New Zealand. We do not want a solution foisted upon us from outside the country by the international financial institutions. We would like to have a made in Canada solution, a solution which makes cuts that are sensitive and sensible without affecting the poorest of the poor in order to save the core of our social programs and to keep the economy we have come to know.

Our role in opposition is not to continually criticize, as the member from the other party mentioned just a few minutes ago. We have put forth a constructive and specific program to this government on how and where to make the necessary decreases in government expenditures. In other words, we have put forward constructive alternatives which very few opposition parties in the history of Parliament have ever done.

Initially, our financial group looked at government operations and removed $10 billion from that. Further, it decided to make cuts of $15 billion to $18 billion from social programs. The rest we would need in order to balance the budget would come from a 3 per cent growth in the economy.

Contrary to what has been put forward in the media, we are not a slash and burn party. Rather we are putting forth constructive and sensitive cuts in order to preserve the core of social programs in order to minimize the effect it will have on those who are most disadvantaged in our society.

Be aware that if we do not make these necessary changes now while we are in an economic upturn, we will have to do it in an economic downturn. That, my colleagues, will be one which is going to affect those who are least advantaged the most.

As I said before, our financial group has put forth a very constructive and specific plan in making these decreases to expenditures. The first priority is that we in this House must set an example. As a result of that we say: Let us make the cuts from the top first.

First we spoke about revamping MP pension plans and time and time again we have presented to this government specific ways in which to do that.

We have also advocated a 15 per cent cut to our budgets and eliminating excessive travel by members of Parliament. Just as an aside, each of us in this House can actually do this. In my office we found that by booking early and looking for deals we have decreased the amount of travel expenditures by 60 per cent from the average MP. If we all did this, it would be a considerable saving to the taxpayer.

We also say in this party that we must prioritize the funding to ensure that those aspects of government that are essential, that is, health care, education and law enforcement, are of the highest priority in terms of spending. We must also decrease duplication between the federal and provincial governments for savings of roughly $3.5 billion.

Some examples are eliminating the Official Languages Act which would save $310 million, to such things as eliminating official multiculturalism. Just as an aside I would like to say that this policy is one of the most divisive policies in the country.

Rather than concentrating on those things that bind us together as individuals it concentrates on our differences.

Speaking as an immigrant to this country, one who is very proud to have had the ability to come here and live here, this country offers so many things to all different peoples. One of the beauties of this country is that we are one of the few countries in the world which has been able to merge together over 160 different ethnic groups into a relatively heterogeneous group in peace. It is something as Canadians we ought to be proud of. Our new Governor General actually made a point of mentioning this in his installation speech which I was very grateful to hear.

Another aspect in our financial plan has been to stop subsidizing businesses and special interest groups to the tune of $3.7 billion a year. When we speak to businesses in the community they do not want handouts. They want a stable economy, a stable dollar, a skilled workforce and good information about where they can capitalize on export markets.

I encourage our fellow members who sit on the foreign affairs committee and the foreign affairs and international trade department to please listen and devise ways in which companies in our country can aggressively take advantage of export markets. They are out there and we can do it. We are more than happy to help.

The cuts we propose are over three years. Again we have emphasized no new taxes.

Some studies recently have come out to say that we in Canada are not taxed that heavily. I would argue again that this is an example of intellectual dishonesty. What it looked at was an example of taxation as a percentage of GDP which has no relation whatsoever as to how this affects each individual Canadian.

What is perhaps more revealing is to look at how it would affect the average person on the street. In 1961 the average Canadian family paid 22 per cent of its income in taxes and the free tax day was May 3. In 1994 the average Canadian family paid 46 per cent of its income in taxes and the tax free day jumped 44 days to June 16. We are being taxed more. Just in the eight years these taxes per family have gone up $3,500. This is due to increased spending by governments.

The government has recommended and made rumblings on increases in taxes on gas, lottery winnings, dental and medical benefits, surtaxes on individuals and businesses, RRSPs, inheritance taxes, and so on. The public and we in this party have said time and time again: Do not do this; we will not allow it to happen.

We would ask the finance minister to please look very carefully at the well thought out and specific plans our financial group has put forth. Please adopt as many of these plans as possible to do. We are more than happy to help you get our economic house in order. I put that to you as an offer.

[Nic Leblanc, Bloc, Longueuil, QC]

Mr. Speaker, I listened carefully to the member for Esquimalt-Juan de Fuca tell us a lot about federal expenditures. I must remind him that this has been going on for a long time and particularly since 1970, when the Liberal government of the time decided to centralize pretty well everything in Ottawa in an effort to boost the economy, so to speak. At that point in the 1970s, the government, by borrowing to create jobs and build up the economy, also caused the economy to overheat somewhat, which led to an appalling rate of inflation.

Do you remember the 1970s? Having created the inflation itself, the government was obliged to raise interest rates enough in the 1980s in order to reduce this appalling inflation, which had reached a rate of approximately 10 per cent per year. This means that the government created the inflation between 1970 and 1980. In 1980, it raised interest rates to reduce inflation and caused the recession. In 1984, the Conservatives continued to spend in the same way as the Liberals, who had set up certain projects to get through the recession between 1980 and 1984.

Between 1984 and 1990, the Conservative federal government continued to spend as the Liberals had between 1970 and 1980. They created more inflation, and, naturally, in 1990, they raised the interest rates and created another recession, which has lasted four or five years now.

It is easy enough to understand; this means that the federal government has caused all of Canada's problems. It is clear and precise. I will try to explain, in three minutes, that the real cause of the debt is the federal government itself which interfered in matters of no concern to it. It meddled in the economy, in all kinds of things.

I agree in principle with the Reform Party member who says that the federal government must stop some of its interference with the provinces if not most of it. And before him, the Reform Party member for Calgary-North said much the same. The government must disentangle itself and decentralize precisely to restore order in the country.

This is why I, for one, have taken the position that federalism has caused a tremendous amount of harm and has led Canada to bankruptcy and this is why I ask and we ask that Quebec become a sovereign nation in economic association with the rest of Canada, with Canada remaining as a type of committee or advisory board, a type of board responsible for managing areas the regions have in common. I would to hear the member's comments on this.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I thank my hon. colleague for the number of questions he poses.

We all know the history of the debt and deficit but rather than pointing fingers back in time we should look forward in the interests of all Canadians to put forward a constructive solution. I believe that is one of the things we have done.

Another issue that my hon. colleague mentions is the division between federal and provincial responsibilities. I will take but one example that is probably very close to his heart and that is the official languages policy. We in this party and people from coast to coast, including the people in Quebec, have said that the official languages policy has been a dismal failure.

We are saying we should give language responsibility to the provinces. If every province had that responsibility then they, the people inside the province, will determine what will be the language of choice in that area. It would reflect the regional bilingualism or unilingualism of an area. It would also save the taxpayer hundreds of millions of dollars per year.

To reiterate, the biggest threat we have to the social programs is continued overspending. What we are trying to do, what we are obligated to do in the interests of those who are most disadvantaged in our society is to ensure that we get spending under control to enable the government to have the money to spend on them.

[Marlene Catterall, Liberal, Ottawa West, ON]

Mr. Speaker, it is a pleasure for me to participate in this debate.

As I listen to the Reform Party and particularly the last speaker, I cannot help wondering if they believe in a country called Canada at all, believe in a sense of nationhood, in a society in which the public sector, the private sector all have a role to play. Do they believe in the kind of liberalism that has always defended the proper balance between those two roles but above all has stood for a sense of nationhood from coast to coast and not a patchwork quilt?

This debate provides us a good opportunity to bring Canadians and the Reform Party up to date on some of the very specific measures that the government has undertaken to control spending and to use their money prudently.

If the hon. members opposite would only take the time to look at the budget the Minister of Finance tabled last year and to add up all of the initiatives on public finances taken since, they would conclude that the motion is a little off the mark.

In that budget we made a start, but only a start, by reducing the deficit from $45.7 billion to $39.7 billion. This was done by cutting spending. There were $5 of cuts for every dollar of revenue action.

More important, we introduced a number of policies to stimulate job creation and the economy responded admirably. Since we came to office in November 1993, 413,000 new jobs have been created in Canada. I have to say on behalf of my own region that 13,400 of these were created in the national capital region in spite of expenditure reductions and government restraint. The Canadian economy is now out performing those of all G-7 countries and it is expected to do the same next year.

For clarity and conciseness, I will only comment on initiatives sponsored by the hon. Marcel Massé, Minister of Intergovernmental Affairs and Minister responsible for Public Service Renewal.

These initiatives, in general an integral part of the government's overall approach of fiscally sound management, will themselves contribute in a substantial way to the longer term economic management of the country.

When the government took office, we realized that as a nation, we are confronted with change the magnitude of which we have never seen before. The changes that are occurring here, in other countries and in most spheres of human endeavour are ushering in an altogether new era.

It was obvious to us that the old methods of approaching and resolving problems were longer adequate. It was also obvious that, to continue serving the population well in the next century, we would have to change the very role the government played.

As a government, our agenda is clear: creating the conditions to sustain economic growth, facilitate the creation of new business and get people back to work. As a government, our message is clear. Government spending is being and will continue to be brought under control.

As a nation we have reached a point of no return where we no longer have alternatives. Postponing the hard decisions that are needed this year would merely postpone the inevitable need for more dramatic and disruptive action in the future.

My hon. colleague, the minister and the government caucus understand that any serious attempt at deficit reduction now and especially in the long term requires a basic restructuring of what

government is and what government does. That is exactly what the minister has been doing this last year, looking at precisely how government can be restructured in such a way that it not only spends less but also concentrates on its core roles and responsibilities.

The full details, as we are all aware, will be announced in the forthcoming budget. However, the minister has looked at ways that government operations can be more focused, more client centred, more efficient and more cost effective. In a word, the kind of government Canadians want, at a price they can afford.

It is very obvious that Canadians have understood our intentions, that they agree with and support our approach. We need only look at the results of yesterday's byelections for confirmation of this. The voters in three riding enthusiastically endorsed the Liberal government's actions to create jobs and growth.

Mr. Speaker, you will recall that the Prime Minister asked Mr. Massé to lead a review of every department's programs, activities and expenditures. This initiative, known as a program review, covered approximately $47 billion in program spending.

The program review had three major objectives. The first was to strengthen the public administration of federal programs and services. Program review will lead to a smaller, more efficient federal government delivering high priority programs to Canadians.

The second objective was to make a contribution to the modernization of Canadian federalism. Program review will help ensure the federal government delivers only those programs and services it is best equipped to deliver.

The third objective was to help the government meet its fiscal objectives. Federal departments have recommended major reductions in program spending based on their priorities. In general, ministers proposed a range of program changes and consolidations which are to be implemented following the 1995 budget.

These changes are designed to ensure that departments discard non-core responsibilities. Similar programs and services are placed in a single department to achieve maximum efficiency. What has been done with pesticide control in recent days is a very good example of that.

Overlap and duplication among and between departments and jurisdictions is removed. New technologies are used to lower the cost of program delivery, while increasing service standards. Cost recovery and user fees are to be used to finance programs that provide economic benefits to clients and stakeholders.

Every sector of government activity-from transportation, farming and fisheries to energy, mines and forestry, as well as assistance to businesses, immigration, etc-was reviewed. Almost all federal departments will be called upon to restructure their programs and to concentrate their efforts on sectors of national or international importance, sectors which are in the general interest of the country. This was one of the program review's guiding principles.

Program review outcomes will provide clear and undeniable evidence that the federal government has confronted its fiscal pressures by getting its own fiscal house in order. The federal public service will be reduced significantly. Its size and functions will be brought into line with the federal government core roles arising from the program review.

This is and will continue to be a difficult period for public service employees right across the country and here in the national capital region. Local members of Parliament such as myself and the newly elected member for Ottawa-Vanier are all committed to ensuring that reductions in the public service workforce are managed in a fair, orderly way so as to reduce to an absolute minimum the stresses and disruptions to the lives of individuals affected.

As public service employees across this country hear horrendous stories about the magnitude of downsizing, I want it to be clear that we are not talking about huge numbers of public service employees losing their jobs. Financial compensation packages will be there. They will be fair and they will be adequate.

We will be flexible and imaginative in our approach. Every means at the disposal of government will be used to ease and facilitate the acquisition of new skills to make the transition to new careers as smooth and as complete as possible.

Let me illustrate how the program review will translate into specific actions by citing the Department of Transport as an example.

As the Minister of Transport said several times, the transportation system in Canada is too intrusive, subsidies are distorting trade and several parts of the system are in bad shape. Following the program review, Transport Canada will no longer own large parts of the system. It will no longer operate and finance them. Instead, it will focus on its fundamental responsibilities in terms of direction and regulation in order to ensure the safety of the transportation system.

Market discipline and business principles will be brought into the operation of transportation services. Costs will be reduced, overcapacity eliminated, regulations streamlined.

Another example is in the Department of Industry. The minister has announced that the era of providing subsidies to big business is ending. I am pleased to hear that the Reform Party supports that initiative of our government.

The private sector is the engine of economic growth and job creation. Nevertheless, the federal government will continue to have a significant role in creating the climate for business to be able to invest, innovate and compete for markets.

These are the types of sensible and meaningful improvements that will result right across government as a result of program review.

I would now like to draw the attention of members opposite to another similar initiative taken by the minister to make the federation more efficient by reducing overlap and duplication between the various levels of government.

Members will recall that at the first ministers meeting in December 1993 very shortly after our election, there was agreement to forge ahead on tackling specific issues and areas of shared responsibility or jurisdiction where overlap and duplication could be greatly reduced or eliminated altogether. Six months later, through a process of joint bilateral agreements, the two territories and eight of the provinces with one more coming on board signed action plans and set timeframes for concluding their work to get rid of overlap and duplication.

To really understand the type of improvements sought, let us consider the situation faced by the pulp and paper mills. They now have to deal with inspectors from the three levels of government, federal, provincial and municipal. We have agreed that, from now on, one inspector would be enough.

This is an example of the kind of sensible, meaningful activities which will result from the more than 50 action plans that have so far been signed between the federal government and the provinces. This work will continue. There will be more action plans in the months and years ahead as we continue to find ways to improve the efficiency of the federation.

It is important to underline that the reduction of overlap and duplication does not just result in savings. It also results in something as or more important and that is less government intervention on the individual and business and a more rational understandable environment in which to operate. That is not small change.

In addition to these two initiatives, the Minister responsible for Public Service Renewal has also looked at the role, function, size and cost of more than 400 federal agencies, boards, commissions and advisory bodies.

Ministers have been asked to review the various organizations under their jurisdiction, in order to simplify the machinery of government, by eliminating the organizations which have become useless or inactive and by streamlining the others.

In undertaking this review of boards and commissions, there were no set targets. Rather, it was intended to identify sensible and practical changes to make government work better. I might also say that has also been our approach to the public service: not to set numerical targets and not to take the slash and burn approach, but to say what makes sense to make this government work better.

To return to the boards and commissions, the first phase of this initiative is already before the House as Bill C-65, legislation which will enable the government to eliminate or significantly streamline 22 agencies and advisory bodies. By doing this, 150 governor in council positions will be eliminated. In very real terms these measures will save taxpayers about $1.5 million a year.

That is only one step in that process. The minister will be returning to the House with a second omnibus bill which will conclude the work. At that time hundreds of additional governor in council positions will be eliminated at what is anticipated to be a savings of approximately $10 million.

As the minister said in the House last week, the government wants to ensure that federal agencies continue to be relevant, that they are serving Canadians as effectively as possible and also that sensible and practical actions are taken to eliminate overlap and duplication and simplify government wherever possible.

I have just described three impressive components of the overall approach taken by the government towards fiscal responsibility. I think it is important for members opposite to understand these initiatives and agree that, as is the case with all the measures taken by this government, these are thoughtful, rational and well-considered decisions.

Proposals for mindless, indiscriminate axing in spending do not work in the modern context. Such proposals are simple minded and damaging not just to the economy but to the people of this country. Protecting the vulnerable is an essential function of government and to this we are deeply committed.

Yet we must be fair to taxpayers. Fairness to taxpayers means eliminating abuse, eliminating the careless use of public funds, eliminating non-productive activities, reducing the size of government where possible and providing government that is not only affordable but answers to the real needs of citizens and of the nation.

Mr. Speaker, I am sure you will concur with me that the range of initiatives undertaken by the government meets the objectives of fairness, eliminates wasteful spending and builds a more co-operative approach to a better future for Canadians.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, the member talked about the cuts proposed in governor in council appointments and mentioned a figure with regard to that. It is very interesting that Bill C-51, which was before the House before Christmas, adds governor in council appointments and Bill C-61, which just passed second reading yesterday, adds governor in council appointments.

I would like to know if this figure the hon. member presented was net of the new appointments that have been added or is this more Liberal doublespeak?

[Marlene Catterall, Liberal, Ottawa West, ON]

Mr. Speaker, I thank the hon. member for his question. It gives me an opportunity to say that the world does not stay frozen in time and neither does this government.

Perhaps the hon. member wants to suggest there are no new and emerging needs where this or any government needs the wise advice of Canadians who bring special knowledge, special skills, special expertise and wisdom to the operations and the programs of the federal government. Or, where it makes sense, to open up new ways in which we can be advised and counselled by Canadians who are capable of keeping us informed and aware of broader issues than those we may address in this House. We welcome their contribution to the future of this country. At the same time we do not want to continue carrying out functions and making appointments simply for the sake of making appointments.

As I have said, we have a multi-stage process for getting rid of appointments which are no longer serving a purpose and agencies which no longer make a valuable or important contribution to the essential work of this government.

[Jim Abbott, Reform, Kootenay East, BC]

Mr. Speaker, once again, this member has brought up the issue of protecting the vulnerable. I suggest that the Liberals are trying to protect the vulnerable with fairy tales.

The difference between the Liberal approach and the Reform approach is that the Reform pragmatic approach is to take the necessary steps to ensure that we can protect those who are most vulnerable in our society.

This Liberal government by design is going to borrow more money in its lifetime to pay the interest on the money we have already borrowed, more money in its lifetime factored for inflation than we borrowed to fund the entire second world war. How in the world are we going to have the money to protect the most vulnerable?

The Liberals are simply trying to protect them euphemistically or with fairy tales rather than practically and by doing the things that need to be done to protect the vulnerable in our society.

[Marlene Catterall, Liberal, Ottawa West, ON]

Mr. Speaker, the Reform Party often says that in generalities and yet proposes programs and program cuts that would make victims and casualties of women, children, the disabled, and seniors in this country. That is what its programs would accomplish.

For the first time in 20 years, this government is going to reverse that pattern which the member talked about of increasing interest payments, increasing debt and increasing the burden on the future. For the first time this country and this House are going to see action instead of promises.

This country is not prepared to sacrifice on the altar of short term economic need those who most need to have a stake in the future of this country, those who most need the opportunity to develop their skills and their talents and the ability to be fully part of the Canadian economy and Canadian society.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Mr. Speaker, I have had several opportunities on the finance committee and elsewhere to tell witnesses the truth about the welfare program budget cuts that our party is recommending. There is no truth whatsoever to the allegation that we would not protect the truly needy in our society.

The OECD is a highly respected international organization of which Canada is a full standing member and has to approve its reports. It has said that Canada is an outstanding example of excessive generosity in welfare programs.

We are not talking about hitting the poor in this world and it is an untruth being told and repeated again and again here. We are talking about retargeting all the excessive spending that is going on. That is the truth. The rest is slandering.

[Marlene Catterall, Liberal, Ottawa West, ON]

Mr. Speaker, when I hear members of the Reform Party speak I sometimes wonder if they know any people who are poor, if they know any people who are vulnerable, if they know the women in my riding living in subsidized housing, working for minimum wage, supporting their families on welfare sometimes, trying very hard to raise children decently on an income of less than $12,000 a year.

I know those people. I would be happy to take the hon. member out to visit my riding to find out just how hard those people are working and what they need to support their dreams for the future and the dreams of their children.

It is also important to point out to this member and others in the Reform Party the cost of poverty. Getting our debt and deficit down does depend on ending poverty in this country. Poverty is expensive. Poverty costs. One out of every five children in this country is poor. That child is four times as likely to end up seriously ill than the child who is not poor. That means that one child simply because of poverty will cost the health care system in this country more than the other four non-poor children. We cannot get our debt and deficit under control unless we get people out of poverty.

Poor children are four times more likely to drop out of school. At the age of 15 they are out on the streets and five years later they have never held a job, they are living in poverty, they are perpetuating the cycle of poverty. That costs us money. When children in poverty drop out of school we pay the price. We pay the price in wasted lives and wasted productivity.

We cannot tackle the problem of the debt and deficit unless we tackle the problem of poverty in this country which costs us all every day.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, I will be taking the full period of time.

I have to start by addressing the last speaker and speakers before this. Nowhere is there any fact saying that we are not going to take care of the poorest of poor. We are talking about a whole plan, having a plan. The economic management that the member talks about, economic management that is going to add $100 billion to the debt in the next three years, is not management, it is suicide. That is going to hurt those poor and that is what is going to lose these programs more than anything else we might do.

It is like the cab driver said last night when I was in the cab. He said: "I have heard it all before. It doesn't matter what happens in these elections. It doesn't matter because they are all the same. They get there and they are not going to change a thing. They don't have a plan. They are not dedicated. They don't mean it. They just go and do the same thing".

While we hear all this double talk and all this talk about the poor and the tears roll down the eyes, they do not have a plan. There is nothing there. There is nothing behind it. It is just all more talk and I agree with that cab driver.

I heard another speaker say that these were simplistic approaches. Voters want it simple once in a while. They want somebody with a plan they can understand, not a bunch of legal double talk, a bunch of on in the future some place we are going to handle this problem of our debt and deficit. They want it done now and they mean now, right now, and that is what we are here talking about.

I come back to why I even came to this job. There are times we all wonder why we are here. The reason is the government was not listening. It was a top down kind of process that we had here. There was spending and waste. All of us knew about it and all of us were disgusted by the waste that we talked and heard about.

It does not really matter, we thought, what party one elects and I am coming to believe that. It does not matter whether it has the PC tag or the Liberal tag. They are all so much the same.

We send good people from home and those good people all of a sudden come back and tell us what the party says is best for us, it is what the party wants us to do. We are so hung up on this undemocratic party process in this place.

Probably the worst day since I have been here was February 22 last year. I felt like wearing a black arm band. We had a finance minister who gave us a budget or whatever it was, but it did not address anything that the people had been saying since 1984. It did not say anything about the debt and deficit, about what our foreign creditors were telling us. It did not address anything.

The government members said it did not have time, that it had only been here for three months. It should have had that plan in place long before the election was ever called.

We each had that sunken feeling on the 22nd and we said we are not going to let that happen again. You are going to see our alternate budget. You are going to see it before you see the finance minister's budget. You are going to get a chance to compare.

I challenge-

[The Acting Speaker (Mr. Kilger)]

I want to remind colleagues in the House to make all their interventions through the Speaker. Basically if we are using the term "you" it is to the Speaker and I do not think that is the intent. I ask members to keep that in mind.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, what I challenge is that the government, our Prime Minister and our finance minister go

on national television with the leader of our party and our finance critic and talk about and compare the two budgets, the budget of the finance minister and the budget that we are going to put out as an alternate. I challenge them to compare those in front of the Canadian people. That is what has to be done.

Let us go back to some of the history behind our problem. I have heard a lot here today. I have not heard a lot of people who seem to really understand very much or certainly could not communicate it to the people who really matter, the taxpayers.

In 1945 we had it pretty good. Europe was in shambles. Asia was in shambles and we were able to grow. We had no competition and we learned the good life. By 1965 we were well into the social experiment programs that we now all feel are threatened and are threatened because of the serious problem we are in.

We allowed government to replace family. We allowed government to replace individual initiative and we said government will take care of each of us. We will lead this good life. We will never have any problems.

What also happened then was that the other parts of the world rebuilt and started to compete. As they started to compete we had a cash shortfall. We had developed a system that we could no longer afford and therefore we started to borrow.

We continued to borrow. Members know where that has taken us today. We have a crisis. In 1984 we said we must change this government. Right across this whole land everybody said we have to change it. Except for a few of those sure seats, the Liberals were literally annihilated.

The belief was that the $289 billion would be dealt with and it would be dealt with now. By 1988 it was up over $390 billion and we were told we did not have time, it was a worse mess than we thought it was, et cetera. However, we were no longer believers in that sort of analysis, and so the birth of our party.

In 1993 we had a $489 billion debt and we were told the Liberals will come up with a plan, and so they did. From October 25, 1993 when the debt was $489 until the budget comes out this month it is going to be $550 billion. We have added another $61 billion to our debt. That is totally unacceptable. The people of Canada will not accept that. They are demanding that action be taken.

It is not good enough to say we will just add another $100 billion and then we will plan to get it under control some time in the future. That is not good enough. We have precipitated a crisis which we are being told about. The dollar is a good indicator. It was about 80 cents U.S. a year or so ago. Look where it is today and where it is going. We know where the interest rates were and where they are going today. Those are simply symptoms and warnings that we had better take action and it had better be soon.

The biggest threat to our social programs is from this debt and that is why we must deal with it. We must passionately convince the government that it must deal with it.

The double talk we have heard today, I am glad it was not from the finance minister or people from the finance committee. Hopefully they understand things better.

We are going to lose pensions, UIC, social programs and education. All of those things are going to be threatened. Not because of any party or because some members take the slash and burn position. They learned that about a year ago and they have not stopped saying it. We are going to lose those programs because of the debt and those interest payments. Then what happens?

There is foreign control. I think we should talk about that. We should look at what just happened to Mexico. Mexico has lost its sovereignty for probably 50 years into the future. Does Canada want to lose its sovereignty? Does Canada want to give up its control of water? We have to look at all of those things. Our sovereignty is being threatened by that debt and deficit.

What do our good friends across the way propose? They have floated trial balloons. They talked about raising gas prices 1.5 cents per litre. That should hit just about everyone, including those poor families trying to earn a living. It is going to hit everybody. That comes from the finance committee.

Taxing RRSPs, that is pretty good. We are encouraging people to take care of themselves and all of a sudden we are going to tax something that goes against this. Dental and medical plans, surtaxes and surcharges on income. Changing the GST to a VAT. Are we going to change that? How high is it going to go? A lot of people predict it will go to 12 per cent. Maybe 15 per cent would be a better number. That is going to hit everybody, not just the rich we so often hear about.

What about a carbon tax? Give it any name you like, I do not think it is dead yet. If any kind of unity is to be promoted in this country it had better be put to rest once and for all.

What are the solutions? There has to be a light at the end of the tunnel. There has to be. That cab driver we talked about has to know there is a solution. He cannot simply say there is no hope, I hate politicians, I hate politics, I have no use for them all. In a couple of ridings only 30 per cent of people voted. That is a disgrace. That is the frustration of people who are saying it does not matter anymore, you are all the same, you are not dealing with the issue. That is not fiscal management. That is no management at all.

The money markets are telling us very clearly to get our act together. They are telling us by the dollar. They are telling us by interest rates. They are telling us to cut spending, do not raise taxes, do whatever to encourage the country but do something.

The public is telling us a lot also. Listen to the messages the public is getting. On February 11 in the Vancouver Sun , a quote from the revenue minister: Protest all you want, Canadians, but you are not going to change the final look of the coming federal budget''. They are saying that they will listen to what the people are saying, but here is someone saying:Protest all you want, Canadians. We are not going to change our minds. We are not going to listen to you''.

We might just ask the member from Transcona what message the people gave him in Winnipeg the other day as they drove him from the stage. What was the message yesterday? What was the message in Toronto? What was the message in Vancouver? What was the message in Halifax?

The message is for the government to get its act together and cut spending. We hear: "Yes, we are going to. Yes, we will". We have heard that before. We have heard that for years and years and it has not happened. The public is saying that the government should cut spending, stop listening to special interest groups and stop waste.

I knocked on doors in some of the poorer sections of Montreal, for the benefit of the member who was talking about that, and the universal thing everybody said was: "Get rid of the Senate. Get rid of that waste. It is an embarrassment". I should have said the other place. They asked us to get rid of it or change it because it is not working.

Another item was MPs' pensions. They asked us to have the courage to lead from the top. They want us to do something and not get stand around making promises. For 15 or 16 months we have been talking about doing something. We cannot go after the public of Canada without doing something here.

They are asking us to do something about the perks and the GST the Liberals promised they would change. How about the international travel that goes on in this place and the parliamentary associations that are going on junkets every other week, heading off all over the place and maybe taking their wives for cost? That touches a nerve ending. Nobody wants to talk about it because it is something we can get away with; it is one of the perks because we have such low pay.

We could try to tell the poor people about whom the minister was talking about the pay MPs receive. How about the eight or nine levels of management versus those levels in a company? Companies right sized long ago. Companies got down to two or three levels of management. I challenge anybody here to go to big corporations and ask them how much management they have. They have two or three levels while this place has eight or nine levels of management protecting themselves. They are not going to be cut. A few at the top will go but they will not be cut down to anything.

Let us look at the other waste that goes on here. All of us go downstairs in the Confederation Building. Has anyone ever wondered why we have a round of marble seven feet in the air in the new renovations over there? Does anyone know how much marble costs? Why is it there? It is there because the bureaucrats are not use to trying to save any money.

A lot of waste goes on in this place. Let us talk about it. Anything would be better than the kind of waste we have. That is what taxpayers are demanding. They want us to get waste under control. The public has lost confidence in the government and politicians. It is saying that we should cut spending and have no new taxes. That message is everywhere.

That message is not just in Canada. That message is in all democratic countries around the world. They are sending the same message. We can learn that lesson. There are lots of places from where we can take examples. People are demanding results. People have finally taken control of the situation.

What would happen if we had a government that would listen and bring about those massive spending cuts that are essential and eliminate the waste that is going on? We would have the confidence of the people, of businesses and of international investors. We would have jobs. We would have growth and the economy would boom. There would be extra income, more money coming in from taxation, and we would be able to start dealing with the real problem, namely our huge debt.

Above all, to get the trust of the general public of Canada back we must enact legislation, a taxpayer protection act that puts a cap on government spending so that this can never happen again. We can never let government do this to the Canadian people again. We have had 30 years of this and it has to stop.

Let us examine what might happen in this situation. There has been a lot of speculating on the other side so I will speculate for a minute. Look at the old line parties first. Let us start with the PCs. To examine the PCs there are three books that might help us. I would suggest that Beyond the Law might be a place to start. On the Take might be another interesting piece of reading. Underground Nation by Diane Francis might be good reading too for finding out what has happened because of extra taxes. That pretty well takes care of the PCs. I guess last night confirmed that.

What about the Liberals? The Liberals started this whole thing. Of course they still feel good and are happy. They are saying: "Maybe we can grow our way out of this problem. It should be fine. Hopefully we will be okay".

Then we have the NDP. Its socialist Utopia has not worked any place in the world so we can dispel that.

We know the Reform Party must be different. We have a situation wherein it is the people versus the elite. Who are the elite? We have talked about the elite a lot before. It is the national media. Certainly it is the old line political parties, the bureaucrats at the top and in many cases big business and banks. Those kinds of people are all part of the elite.

What are the people saying about all of this? They are saying: "We won't take it any more. If you keep spending you are going to pay". The message should be loud and clear. The people's power should be obvious to everyone here but it is not. The last message was in the referendum. The elite to the very last person said: "Vote yes. It will be good for you". However the people said: "No way". The people found out about it. They worked on it, got information and made their decision. They were not heard that well, though.

In 1993 there was another message. We know what that resulted in. What do we have to look at? The people are saying reduce and the government is saying increase. On pensions the people are saying eliminate and the government is saying modify. On the Senate the people are saying abolish and the government is saying ignore and promote. On RRSPs the people are saying raise and promote and the government is saying: "Maybe we will tax them". On jobs the people are saying: "More money should be in the hands of people" and the government is saying: "We will have infrastructure and more bureaucracy. The government can, after all, still take care of you".

In conclusion I quote from Terry Moore, a radio announcer in Calgary:

We have had it, and you have got to get a handle on this and attack the debt and deficit in Canada and quit playing political games with our future, our children's future, our grandchildren's future and our great-grandchildren's future-because if you don't pull it together, this country will go down the tube.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I listened with interest to the member's comments. It is fair to summarize by indicating that members of the Reform Party will continue to raise spectres, rumours, innuendo and tax revolts. They will continue to say they are going to do many good things.

However, the important point is that Reform Party members have been tinkering around the edges. They have ignored and failed to explain to Canadians how they are going to deal with their $15 billion cut in social programs. They have not articulated a specific initiative by which they would deal with social programs. They have not told Canadians the truth about what they really have planned for Canada.

We have a source for what Reform Party members plan. I want to give an example. It is articulated in their minority report included in the Standing Committee on Human Resources Development report that was tabled last Monday. I refer the House to their first three recommendations.

The first concerns the guaranteed income supplement in which 40 per cent of seniors participate. They are recommending increasing the age of eligibility. On old age security they are saying: "Eliminate old age security for seniors who have above average incomes". On the Canada pension plan they are recommending raising the retirement age, raising the age of eligibility.

It is fairly clear that the true agenda of members of the Reform Party is slash and burn. If they do not believe our seniors represent a significant portion of the poor in our country they have lost touch with Canadians.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, if I were the finance minister I would say to wait until next week, but I will try to answer the question.

The member can wait until next week but he will see that those in need have to be totally taken care of. People at the upper end who do not need it are quite willing to accept their share of the responsibility to get the country going. They are saying that as long as it is equal and fair they will take those cuts. However the people at the bottom will have to be taken care of. The most needy can never be out on the streets, as the member would like to portray. Next week he will see the exact details of what we are talking about.

[Jean Landry, Bloc, Lotbinière, QC]

Mr. Speaker, I listened with great interest to my friend's presentation. I agree with him, our financial situation is critical, but there are solutions nevertheless.

A while ago, I heard him speak of the Progressive Conservative Party which I believe is part of history. I think that when you are really optimistic, whether you are a government party, a person or a group, you look to the future. Therefore, we must widen our horizons and determine what aspects of our taxation system can be changed.

For example, since we are here to represent the population, I think it is important that we propose solutions whenever we criticize. I do believe that together we will succeed in addressing the problem of the enormous deficit of our country.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, I thank the hon. member for his question.

I agree with him 100 per cent that we should not be tinkering around the edges and that we should look at some major reforms, certainly a flat tax system, a new system of taxation that is much

fairer than the present tax system with all its exemptions and exceptions. This is something Canadians are asking for and the House should be entertaining as soon as possible. It should be a part of the exercise as we look to fix our finances.

[Roger Pomerleau, Bloc, Anjou—Rivière-Des-Prairies, QC]

Mr. Speaker, I also listened closely to the speech of the hon. member. Like all the members who took the floor today-I have been sitting here all day, although I never intervened-I agree that the Canadian situation is very difficult right now.

I also think that the government has a tendency to study, to set up committees, to ask for reports and, generally speaking, to postpone any decision. For 20 years we have heard the same speeches from the various ministers of finance. We could take any of them and reissue them, they are all the same.

There are two opposition parties in the House. The Bloc Quebecois proposes a very clear option: let us review completely the Canadian taxation policy. We sincerely believe that without a complete overhaul of taxation we are going nowhere fast.

The Reform Party's option is to cut deeply where it really matters, into social programs. Unlike my Liberal friends, I do not believe that our Reform colleagues are fundamentally evil. I think they have done a serious economic study of the situation.

If the Reform and the Bloc parties do not do anything, Canada is going to go bankrupt right away. We have to do something.

I would like to ask a question of my colleague on an economic matter. Most people know that we want to make Quebec sovereign and we seriously think that this will become true within a few months from now.

Most Canadians actually believe in two assumptions concerning Quebec. The first is we are a bunch of troublemakers, politically speaking, because we are never happy with what we get. Second, we receive much more money from Canada than what we put in. A lot of people believe these assumptions.

I would like to ask this question of my colleague. Does he not think that a sovereign Quebec would be part of the solution for Canada, depending of course that we take out of Canada our fair share of the debts and assets? That is exactly what we intend to do. Would this not be part of the solution for Canada?

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, certainly we agree with a lot of the things that were said.

More important, what I have learned from visiting Quebec a number of times is that the problems in Quebec are the same as the problems in Alberta or in any other part of Canada. We are all the same. We are concerned about the debt and deficit. We are concerned about crime. We are concerned about all of the same things. We are the same. That is the first myth that we have to dispel, that there is any difference between us because there is not.

The people in my part of the country do not hate the people of Quebec. The people in Quebec certainly do not hate the people of Alberta. We need to dispel these myths.

Economically, I believe firmly that as members of the G-7, in negotiating world trade as we are now actively doing, that the bigger the unit the better we are going to be economically.

I hope that the people of Quebec look at the big picture. We are going to be a trading unit of the Americas. I have said that in this House a lot of times. North and South America together are a trading unit. The smaller the unit the more difficult it will be balancing our budgets and taking care of our people.

We have to look at the big picture. The big picture says that the EU is going to get common currency and is going to come together more and more, that the seven tigers of the Orient are going to come together more and more and that the Americas are going to come together more and more. Rather than thinking of little units we should be thinking about bigger units. That is really the success of this country. This is the best country in the world and we need to save it with Quebec.

[Jane Stewart, Liberal, Brant, ON]

Mr. Speaker, I would like to say that it is a pleasure to participate in the debate on the motion tabled by the hon. member for Capilano-Howe Sound.

As a member of the Standing Committee on Finance the items that are included in the member's motion have been front and centre on my personal agenda for well over a year. There is a reason for that. The reason is that our government understands and takes very seriously the fiscal circumstances that face this nation. We are committed to working responsibly to manage the deficit and the debt and to responding to the needs and the interests of Canadians.

We are doing that in a very dynamic way. It is that process that I would like to refer to in my comments here this afternoon.

About a year ago the Minister of Finance came to us in the House and invited us all to participate in the first ever prebudget debate. He invited us as members to bring the concerns, the issues, the strategy, the direction of our constituents, Canadians, to this House of Commons and share them with him.

That process worked very well. That debate was very energized. It was informative. I know that the minister took a lot away from that day in the House and included it in his subsequent budget, our first budget as a government, that I would remind the House included a number of things. It included issues of tax fairness where we got rid of the $100,000 capital gains exemption. More important and more particular, for every dollar that we raised in revenues there were $5 saved in spending cuts, a five to one ratio.

The process has continued in a very dynamic way. In October 1994 the Minister of Finance came to the Standing Committee on Finance and presented a very articulate and clear understanding of his view of the economic forecast for our nation. At the same time, he talked about the fiscal circumstances that we faced then and face right now. He enjoined the members of the committee to take this information and share it in detail with Canadians and to begin the first ever prebudget consultations.

That consultation process started here in Ottawa with a panel of experts from the economy, from banking, from the social sector, from the NGOs. We sat around the table and talked about the economic assumptions in the minister's papers. We talked about the strategies of spending cuts versus revenue measures. We talked about the spending cuts that might be appropriate, those that would be inappropriate, the tax measures that might be appropriate and those that might be inappropriate.

From there and armed with a lot of information, the committee members fanned out across the nation. We talked to hundreds of Canadians. We went to communities like Lunenburg and Hamilton. In Hamilton I had the great fortune to chair the session.

We did something a little different. Rather than just hear individual witnesses, we encouraged Canadians as individuals to come to sit with us around the table. They took a very short time, two, three minutes, to position their particular areas of interest, their particular concerns. Some of these people came with presentations from groups. Some came merely as individuals interested in the process.

We sat together and we encouraged and invited them to talk with each other, to do their best to build consensus, to try to find and agree on the things that Canadians say we need to do to deal with the fiscal situation that we face.

As this process continued and coincident with it, members and colleagues of mine went back to their ridings and had town hall meetings with their own constituents, asking the same questions. Tell us about the assumptions. Tell us about spending cuts versus revenue measures. Members brought that data back to the minister who I know will read them and respond probably after the budget when he can not only comment on their suggestions but on his thinking around where he agreed and where he made some different choices.

I had one of these meetings. It is my second annual meeting and what I found in my riding was very interesting. Last year, I had 20 people out to my forum. It was a very interesting and informative night but only 20 people were there.

This year there were over 100 people. The message to me from my constituents was that they appreciated the process the government was taking. They believed that the government is listening to them, that it will take what they are saying and deal with it to build a consensus, a balanced strategy to help the country restore itself to fiscal stability.

The other thing that proved to me that this was so was that the whole thing was done without cost. The room was donated. The microphone system was donated. The coffee and donuts were donated. The community said: "This is important to us. This is significant for us. We believe in this process".

We did not have to charge Canadians $1 a shot to phone in on the 1-900 number. People were invited to come and share free of charge their concerns and their interests.

Over the course of the last five months we have been engaging Canadians in a very participatory and involved strategy. It makes a difference. Canadians want to be a part of this. They want to be heard.

What are the messages we have heard over the last while? Very clearly we found consensus that we must deal with the deficit and the debt. There is no question. Second, there is general agreement that it is far preferable to focus on the spending side and to reduce spending than it is to do a lot on the revenue measures side.

When I gave a speech in my riding last week I said to my constituents, "We are listening. We hear you. We understand the importance of spending cuts. But please understand what you are saying. You may think that your tax dollars are being burned in the fireplace and going up in smoke. Yes, there are places where we have to do a better job, where we have to cut back and where we have to be more efficient, but there are many programs that are helping Canadians". Those programs are helping groups in my community. They may be cut. As a result we have to be prepared to be compassionate.

With that in mind I would like to turn to some of the recommendations which were made by the standing committee. The first recommendation, which I strongly agree with, is that

we must deal with the issue of MPs' pensions. I look forward to the President of the Treasury Board presenting that legislation, sooner rather than later, because I believe that as we members have to show as these spending cuts come into effect-and they are going to be an impact-that we too are part of the process.

The other thing which we recommended as part of the committee report was that we must start with government operations. Government must take the responsibility to look at itself, improve its efficiencies, improve the quality of the programming that we are providing to Canadians and do it less expensively. We have to understand there are going to be cuts in the public service. People are going to be affected.

I have been involved in downsizing programs in the private sector. There are good ones and there are bad ones. The ones that work recognize that the people who are affected really have nothing to do with the growth in the business or in the government. They are not guilty; however, they are the ones who will have to make changes.

I know that the Canadian taxpayer as a good employer will want to provide to the people who are leaving packages which allow them to leave with respect and dignity. These packages will cost money. It would be totally inappropriate for me to say that there can be no new spending in this budget. We have to recognize that for longer term gains we have to have spending in the short term to recognize the good work that our public servants have done. Certainly in my riding I have been well supported by the correctional people, by my human resources development people and by Industry Canada, those in the regional office, and I thank them. We must deal with that with compassion.

As we talk about the strategy of spending cuts versus tax measures, I would like to point out that in the jurisdictions that we hold up as the best jurisdictions for spending control-and I am thinking of Alberta as one-there have been revenue measures. In Alberta the increase was in medical premiums of about 50 per cent. There were other increases in fees and in licences.

I know that the hon. member for Capilano-Howe Sound talked once in an intervention about loopholes. He said, "Those are taxes. They collect money. If it looks like a tax and it collects money like a tax, it is a tax". These fees and these revenue measures could be determined or viewed as taxes.

My point is that in jurisdictions where they are managing their deficit and debt there are revenue initiatives which go along with and are part and parcel with the spending cuts.

When we look at these messages we now consider what it is that the minister is going to do in terms of his next budget; the action that we will see as a response to this consultation and these messages. I do not know what he is going to have in his budget. He has been very good and done a good job as a minister in keeping those things close to his vest, as he should.

The thing I need to point out, which has been pointed out on a number of occasions in this House today, is that we have to, as I believe the minister will, deal with this very difficult agenda with compassion, generosity, fairness and balance.

Strangely enough those words are clearly absent from the member's motion. There is never a reference to how it would be done. Perhaps that in itself is the difference between the Liberal Party and the Reform Party. While Reform members protest that they will not hurt anyone, they never use words like fairness, balance and compassion. Those are real in our society and are things which I am committed to and which I believe in.

In closing I would like to say that experiencing the cross-country discussions, talking to Canadians, and hearing their perspectives was tremendously important for me to understand the differences that exist across this vast nation.

The last budget was brutal in Atlantic Canada. Communities that lost their defence installations were hit very hard. It is my expectation that in the next budget some of the rest of us may start to feel that pinch. It is going to be a challenge for us as a government to continue in a positive fashion to make sure Canadians do not go without, but that we do manage things more effectively and efficiently, that we recognize where government can play a role and where other partners in society can fill the void or maybe take over.

These are challenges that will make it very interesting for us over the course of the rest of our mandate. I very definitely believe and I would encourage the Minister of Finance to continue his dynamic and evolving process in this important area.

I have to make reference to one particular event that happened. Over the course of our discussions many Canadians said: "You know, these are tough times and I really do not want more taxes, but by golly, this country is important to me. We have to make sure it stays together. If there is a way of me providing funds that will go directly to maintaining our country, to reducing the deficit, I would be willing to participate".

Do not get me wrong. I would never suggest this is a strategy that will help us out of our problem. What made it important to me was the fact that I received a cheque from one of my constituents made out to the "save Canada and deficit reduction fund". Interestingly, I discovered there is an account this money could be sent to. I have sent it on and expect he will receive recognition for his contribution.

The message to me is that Canadians do feel passionately about this country. They do want things to be better. They do believe this government through balance, fairness and equity has a plan that will work.

I look forward to the minister's budget. I have every confidence that he is listening to the Canadian people and will respond to their needs and to the needs of others who have an influence on our domestic economy. With that I close and thank the member for providing us with the opportunity today to talk about this very important subject.

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, I would like to thank the member for her speech, although I basically disagree with her fundamental premise. I would like to make a comment and have her respond.

Having worked with her on the Standing Committee on Finance for a while, I know she is sincere in looking for solutions. As an individual who obviously by her considered remarks is very intelligent, I would like to offer a suggestion as to how to find that solution.

A lot of people know that if you define the right problem or if the problem is defined correctly, you now have at least 50 or 60 per cent of the solution because that is where you will focus your efforts.

I would present the case that this government has not identified the right problem. We have a problem in this country with the deficit, debt and the interest costs to service this debt. It is the debt that is causing the high interest costs and it is the high interest costs that is the number one problem in this country. Therefore the deficit is part of it because it contributes to the debt which increases the interest.

I will go very slowly. There are three parts to it: debt, interest and deficit. The government says it is the deficit that is the problem, that if we reduce the deficit, we will solve the problem. Wrong.

At the end of three or four years, this government's program will have added $90 to $100 billion to the debt which then would make the interest costs rise regardless of this 3 per cent of GDP. That is what everybody is saying in the world economy. That is why they are concerned about the toughness of the cuts necessary. It is adding to the problem.

What this government is doing is adding to the problem, thinking it is solving it by defining the wrong problem. That is why it is paramount that we get to a zero deficit so that we do not keep adding to the debt. It is the interest cost that is going to hurt those very people who the government is concerned about, the very people the government wants to help. The government will raise taxes to help and it will hurt the economy even more.

I am saying if we identify the interest costs to service the debt as the problem that then we will come up with different solutions and more of the solutions that the Reform Party is putting forth. I would like the member to make a comment on that, please.

[Jane Stewart, Liberal, Brant, ON]

Mr. Speaker, I have enjoyed working with the hon. member on the finance committee.

He points to a very important matter and I referenced it in some of my last comments. Not only do we have to understand and look at the things that Canadians need, but we have to unfortunately look outside our nation to the other people who have an influence on our current situation. What we find is that if the foreign markets are comfortable with us, if they are confident that what we say is what we mean and it is what we are going to do, then they back off and leave us alone a little.

We have worked very hard to indicate very clearly to the outside world that we are committed to price stability. Thank goodness we have been able to maintain inflation at very low and sometimes negative rates. That helps us in dealing with outside responsibility.

The other thing we have to do is be absolutely clear on what our strategy is. We have been. Our strategy has been to say that we will get the deficit to GDP ratio down to 3 per cent come-excuse my French but the minister said it-hell or high water.

If the minister can confirm that and make sure that is our strategy and that we do not waiver from it, the confidence it creates outside the nation is extremely helpful to us. That is because it has been difficult for us to have the best economic growth in the world, to have inflation managed efficiently, to have unemployment reduced significantly.

I expect after the implementation of our next budget it will again be clear to the markets that we are committed to this, that we mean what we say and that we will do what we say we are going to do.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Mr. Speaker, I appreciate the hon. member's speech. It was full of compassion. She also argued that she had a monopoly on compassion, that the Reform Party had no compassion whatever.

I have been in this business of arguing over social and economic policies for over 30 years. We agreed a long time ago that discussions over who is more compassionate will lead nowhere. I assert herewith that I am more compassionate than that member and every member of the Liberal Party.

The issue ought to be not who is more compassionate, but what is a rational solution to the problem so that we can give real expression to our compassion. That is the issue. This is rhetoric which leads nowhere. This country is going down the drain and we have to have practical solutions to the problems we face.

I also would like to make a brief comment on the member's description of the consultation process. I sat through more hours of this than I ever want to think about and travelled more miles than I would like to.

Most of the time I found that the witnesses said: "I do not know anything about the budget making process. That is your business, but let me take the next 20 minutes and tell you why the money I have been getting from the government is the best way the money could be spent and why you must never touch my program". Others had been coached by the intellectual and political left and had patent solutions that were obvious demagoguery from lowering the interest rate, to taxing the rich, taxing capital.

The Globe and Mail had an editorial saying that this process was dividing the country into hostile camps. I have not got the same impression, that this was a fruitful exercise in the way in which the opposite member was talking about.