Debates of Feb. 15th, 1995

Questions On The Order Paper

[The Acting Speaker (Mrs. Maheu)]

Shall the remaining questions be allowed to stand?

[Some hon. members]

Agreed.

Motions For Papers

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Madam Speaker, I ask that the notice of motion for the production of papers be allowed to stand.

[The Acting Speaker (Mrs. Maheu)]

Shall the notice of motion stand?

[Some hon. members]

Agreed.

[The Acting Speaker (Mrs. Maheu)]

I wish to inform the House that pursuant to Standing Order 33(2), because of the ministerial statement, Government Orders will be extended by six minutes.

Supply

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

moved:

That this House call upon the government in its next budget to avoid any tax increases targeting low and middle-income taxpayers and to consider instead trimming the fat from the government, eliminating tax expenditures which primarily benefit large corporations and wealthy Canadians and collecting on unpaid tax debts owed to the federal government.

Madam Speaker, I am pleased to debate this motion in the House because it is consistent with what the official opposition has been defending, since the last election, as a means of putting our finances in order, as short term or medium term corrective measures, since most experts agree, as we do, that, without fundamentally changing the system, it will be difficult to get control over public finances again.

The Bloc Quebecois is of the opinion that the government must, in its upcoming budget, substantially reduce its expenditures and refrain from increasing income taxes for the middle class or low income taxpayers. The Bloc Quebecois asks that the federal government undertake a complete review of the tax system in order to eliminate unfair tax expenditures and ensure that companies currently not paying taxes pay their fair share.

The federal government should, in particular, eliminate tax shelters benefiting high income taxpayers and big business. Not the measures which favour middle or low income individuals, but the real tax loopholes benefiting very wealthy Canadians and big business who have not been paying their fair share in the federal system for at least 12 years.

The government has tried to justify a possible tax increase, stating that the rise in interest rates is forcing them to do so, forcing the Liberals, when in fact this rise is in large measure attributable to their inaction in fighting the deficit in the last year. I would like to remind you that just days after the Minister of Finance tabled his first budget last February 22, Canada's credit rating was lowered significantly for the first time in five years and the interest rates demanded by domestic and foreign investors on Canadian securities increased considerably, which in turn caused mortgage rates in particular to rise.

Middle class taxpayers are past their tolerance level. Any increase in their tax burden is unacceptable, and the Prime Minister should be reminded that he made promises and commitments regarding the issue on the Téléjournal newscast, on October 1, 1993. He said then that he would not raise taxes during his first two years in office. This is year two.

Last December, the Liberal representatives on the finance committee paid no heed to the Prime Minister's commitment and recommended an across the board surtax on income. This proposal, in the official opposition's opinion, is utterly unacceptable, and I would like to remind you, Madam Speaker, that according to the OECD, individual Canadian taxpayers pay 33 per cent more taxes than the average taxpayer in the United States. We are neighbours, we have a free trade agreement in common and it is inadmissible to have such a disparity between levels of taxation.

The official opposition also warns the government not to make any attempt to use devious means to increase the tax burden of the middle class and others by hitting RRSPs. The Bloc Quebecois is also firmly opposed to the option considered by the federal government to impose a one per cent capital tax on RRSPs. I would say to you that this hidden tax, which could net up to 5 billion dollars annually, would be an insidious blow to taxpayers who are trying to plan for a comfortable retirement, at a time when public funds are inadequate and Canadians' savings are at their lowest in thirty years. This would be an ill-considered and irresponsible measure.

Neither should the federal government abdicate its responsibilities by shifting its deficit onto the backs of the provinces. This approach is irresponsible and has been resorted to time and again in the past, by this government. As an example, since 1982, in the health and education sectors alone, the federal government has deprived the provinces of 48 billion dollars-no small amount-by cutting transfers to the provinces, a loss of 12 billion dollars just for Quebec. Members will recall that, in his February 1994 budget, the present finance minister again made additional cuts of over 2 billion dollars in transfers to the provinces.

Since meeting with his provincial counterparts, the Minister of Finance has left open the possibility that the federal government might make new cuts in transfer payments to provinces. This dumping of the deficit and this scheme to force the provinces to shoulder the burden of the cuts to social programs are unacceptable and irresponsible.

The official opposition feels that the federal government must withdraw from provincial fields of jurisdiction and provide full financial compensation. After all, and in spite of what we are often led to believe, transfer payments to provinces are not gifts from the federal government. The money being transferred comes from taxpayers, including Quebec taxpayers.

Between 1982 and 1992, taxes paid to the federal government by Quebecers increased by 121 per cent. Over that same ten year period, financial transfers from the federal government to Quebec only rose by 50 per cent.

If the federal government makes cuts in transfer payments to the provinces, it should also transfer to provinces tax revenues or tax points equivalent to those cuts, so that the provinces can assume their new responsibility.

The issue of duplication and overlap must be a priority in the government's upcoming budget. Any attempt to eliminate these problems will fail if it is not supported by a withdrawal of the federal government from provincial fields of jurisdiction, as well as full financial compensation. Our friends opposite know that it would be irresponsible for the federal government, after creating duplication by meddling in areas of provincial jurisdiction, to cause a sudden and serious imbalance by withdrawing from social programs while keeping Quebecers' savings and taxes in Ottawa.

I wish to raise a last point. The Liberals have forgotten that the fight against the deficit involves creating jobs. We will create jobs not by cutting post-secondary education funds, as proposed by the Axworthy reform, or by raising taxes, but above all by assuming our responsibilities.

A consensus was reached long ago, in particular in Quebec, on the generalized decentralization of everything having to do with manpower training, job training, the re-entry of unemployed workers into the labour force and even income security. The time has come for the federal government to open its ears and eyes and do what is needed to stimulate employment. It is not by quoting the red book to us every day and telling us that their infrastructure project has created thousands of jobs, when they only created 45,000 casual jobs, that they will convince us that they are concerned about employment. This government must learn the difference between wasteful spending and investing in human capital. That is something it has forgotten in the last year and that is unfortunate.

Finally, last October and last December, when the Liberal majority on the finance committee tabled its report concerning the prebudget consultations, the official opposition made some suggestions to put our finances back in order in the short or medium run, but mostly on the short term. We made these suggestions to allow the Minister of Finance to boast and to reduce the deficit to $25 billion, or 3 per cent of the GDP, by 1996-1997.

We came up with measures to find the money where it is. Cutting social programs will not help us to straighten out our finances. Let me briefly recall the recommendations we put forward.

The first thing the official opposition suggested was for the federal government to withdraw from the provincial areas of jurisdiction upon which it has encroached since the second world war and from all the areas it has invaded, oftentimes by ignoring the provincial governments' prerogatives. We suggest that it withdraw completely from areas that belong to the provinces, with financial compensation.

This withdrawal must not be drastic, it must not steal away like a thief, but in areas of provincial jurisdiction, it should give

the provinces all the tools they need, especially fiscal, with full tax points so that they can meet their new obligations. The provinces are not asking for a handout. They just want the federal government to have the honesty to say: We are pulling out of certain areas, we are eliminating the costs of duplication and overlap, and we are going to let the provinces, who are in the best position to do so anyway, manage their own affairs, as provided in the Canadian constitution, in the fields of health, post-secondary education and social assistance, to name a few.

This proposal has a dual objective. First, it sets out to eliminate contradictory policies and to allow the provinces to adopt an integrated policy on job training, education, job creation and health, in short truly comprehensive social policies. Second, this proposal allows the provincial and federal governments to reduce their operating expenses by eliminating costly overlap and duplication in programs and services. In Quebec alone, the cost of duplication and overlap is in excess of $3 billion. I think it would be worthwhile for the minister to consider this proposal.

The second recommendation from the official opposition contained in the minority report submitted to the finance committee in December, as part of the finance minister's pre-budget consultations, is to stop providing subsidies to business immediately, as these subsidies total more than $3.3 billion and are more a source of patronage than a source of assistance for businesses facing modern day challenges, mostly in terms of productivity and international competitiveness.

The president of the Conseil du patronat du Québec himself made the same suggestion in his testimony. He said something like this: these subsidies only foster competition between those businesses which are subsidized and those which are not, and this is unhealthy in terms of management and business growth. I think that it is fair to say that, however much wisdom Mr. Dufour may have displayed in the past, on several occasions, he really outdid himself this time.

We are suggesting that the Minister of Finance immediately cut business subsidies, in other words to forget about his corporate chums for once and make sure that expenditure restraint targets are met, this year as well as next year.

Third recommendation: these are times of reduced international tensions. Experts we consulted before the last election when the Bloc Quebecois became the official opposition say that it is possible, practical and, in fact, desirable that the defence budget be cut by 25 per cent. That is what they said a year ago. National Defence's budget has since been reduced by some 13 per cent, which leaves 12 per cent more cuts to be made, for savings of $1.6 billion. It is definitely worth it in times of constraint, when the Minister of Finance is actively seeking to save. I think there is a good potential for savings there.

We also recommended and continue to recommend that the federal government withdraw from a huge money pit project in which the government has already sunk over $3 billion in direct transfers or loan guarantees. I am referring to Hibernia. According to all the studies conducted, except government studies justifying its continued involvement in this harebrained project, oil prices are unlikely to rise in the next 20 years and may even fall in relation to today's prices. If Hibernia is not profitable with today's prices, how can it be profitable in 20 years with lower prices?

If the government really believes in sound financial management, it should start there. I think it is an interesting idea.

Our fifth recommendation was that the government, the Minister of Finance, undertake a full review of the taxation system in preparing his next budget. We are no longer the only ones asking, although we were the first in the last two years to push for the establishment of a special committee, made up of elected parliamentarians, to review the whole tax system, item by item.

The Canadian tax system is very complex and has not undergone a thorough review in 25 years. Some tax experts mired in administration will, of course, tell us that changes have been made, but these changes are nothing more than patchwork and cannot be compared to a thorough review.

They added some provisions and removed others, and made more additions and deletions. For example, they allowed big businesses to hire renowned tax experts familiar with Canadian tax loopholes. And there are many of them. We have discovered new tax loopholes every day since becoming the official opposition.

The time has come to undertake a thorough review of the tax system. I do not understand why finance department officials, the finance minister himself, the revenue minister and the members of our third party are all opposed to this idea. I do not understand why they are against reviewing the Canadian tax system when many experts, if not the vast majority of them, see this as a necessity at this time.

Our tax system-and particularly our corporate tax system-is the most complicated one in the world. And I am not just expressing my own opinion.

There are people in the United States, including tax experts and economists, who simply cannot figure out our system. I should point out that, towards the end of the Reagan administration, the United States undertook such a process. The Americans reviewed their whole tax system. They did not only look at the corporate tax system, but also at the personal income tax program. They streamlined their whole system to the greatest possible extent. The Americans did not do that just to simplify matters, but also to facilitate detection of tax evaders, including those who take advantage of their financial means or corporate income to hire experts who help them avoid the tax man. It is

now more difficult in the United States to avoid paying one's due to the government.

Why not do the same here? Why is the government so reluctant to follow up on our suggestions to target two sectors on a priority basis? The first one is the tax conventions signed with 16 countries considered to be tax havens. Investment management companies will tell you that they can easily find loopholes. It is easy to establish subsidiaries in some of those 16 countries and take advantage of tax loopholes which will allow you to save hundreds of thousands of dollars, if not millions, or even billions, in federal taxes.

Why does the government refuse to review these 16 tax conventions? Is it because of possible conflicts of interest? Is it because some friends of the party might be taking advantage of these tax havens by creating bogus companies in these countries? They also declare phoney operating losses in these tax havens, so they can deduct them from their profits in Canada and avoid paying taxes.

It is time something was done about this. When the government talks about cutting back, when Quebecers and Canadians are asked to tighten their belts and make incredible sacrifices, maybe it is time the Minister of Finance acted responsibly and stopped protecting his friends and the friends of the Liberal Party of Canada, whose incomes are not necessarily those of the average Canadian.

Tax treaties should be a priority in the next budget. The minister should overhaul some of these treaties which are riddled with tax loopholes.

Family trusts are another case in point. In November, and even in his last budget, the minister tried to make a good impression when he said he would create a sub-committee of the finance committee to analyse the impact of family trusts on federal tax revenues.

The subcommittee was set up, but despite assurances that the process would be completely open, first of all we never got the co-operation of senior officials from the Department of Finance who just laughed at us in committee; second, whenever we asked for additional information and studies, the real stuff, we were turned down; and third, before Christmas, when the official opposition presented a motion in the finance committee to review the policy on family trusts for wealthy taxpayers who never have to pay a cent of capital gains tax, the committee's Liberal majority and the Reform Party voted the motion down. They even voted against a study of family trusts. I think that is unconscionable.

In concluding, I have another recommendation. In his report, the auditor general referred to federal accounts receivable still outstanding. He mentioned the $6.6 billion, owed by taxpayers, especially wealthy taxpayers, to the federal government. They did not deny the fact that they owed the money, but because of this government's spineless attitude, no attempt is being made to recover the $6.6 billion. According to the auditor general, we could recover 80 per cent of this amount.

If the minister needs a few more billion, we suggest that he can get around $14 billion without even touching social programs. It is high time government members woke up to this fact, because people have had enough.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, I listened attentively to the member's statements. As he well knows, when leading up to a budget there is always speculation and rumour. Indeed, what we have heard today from the member is a lot of speculation and a lot of rumour.

The member started off by talking substantially about somehow shifting the tax burden to low and middle income Canadians. The member knows that when the Minister of Finance addressed the finance committee on October 17 and 18 the very clear message was that the minister was not looking at increasing taxes as a primary vehicle for deficit reduction and meeting his target of 3 per cent of GDP.

As the debate and the work of the committee have gone on, there has been no question that the committee, of which the hon. member is a member, has concentrated on many items the member has raised. These include the elimination of overlap and duplication among different levels of government; the reduction of subsidies to businesses; and dealing with loopholes that are not illegal but were brought in to handle certain situations at a certain time which may no longer serve their purpose.

The member also spent quite a bit of time referring to the rich and making the rich pay. I thought it might be helpful to pass on to the member for his information some facts that were published by StatsCanada.

The top 10 per cent of taxpayers in Canada in 1992 started at some $50,000 a year. Those top 10 per cent of taxpayers paid 34 per cent of all taxes. In addition to that, that top 10 per cent of taxpayers also contributed 42 per cent of all charitable donations.

When we are talking about who is paying for what, it is clear we have to take into account the full dynamics of the financial affairs of those people who are successful. I think the member would agree that we want Canadians to aspire to do as well as they possibly can. If we have successful leaders in businesses and industry, we will also have successful people working within those businesses and industry.

I have a question I want the member to deal with. He talked about tax reform. I think most members will agree that tax reform is an important process of this House. He talked about it in the sense of reducing the complexity of our taxes and simplifying them.

The member then went on to talk about corporate taxation. He abandoned the arguments about complexity on a personal level and went on to tax havens and other exotic tax matters that do not have anything to do with the ordinary Canadian. Would the member care to comment on tax reform from the perspective of making it simpler or less complicated?

Would he not agree that changing the way in which income tax is calculated is not going to improve government revenues in itself? Would he not agree that in fact we need fundamental tax reform, not in the way we are doing things now but in the fundamental way in which we actually assess taxation on ordinary Canadians?

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

Madam Speaker, I do not know where to start with this question. It is huge, and it is more of a commentary than a question as such. My statement contained neither speculation nor rumour, it was based on fact. The facts are as follows: since it came to power, the Liberal government has done exactly the opposite, or just about, of what it said it was going to do in the red book, except for infrastructure projects.

It said it would protect society's most disadvantaged; it said it would not tax middle income Canadians. The first thing it did in its first budget, on February 22, was cut unemployment insurance by $7.5 billion. If these are not the most disadvantaged-I think these are people who are somewhat desperate. They are looking for work and have little to do as well, because, with the tightening up of unemployment insurance measures, whole families have been thrown on welfare. This is what happened in my riding and in the ridings of my colleagues as well. I hope my Liberal colleagues are still checking on the people in their ridings.

Secondly, as for the taxation measures, in 1993 the Prime Minister said: "No problem, we will not tax, we will not increase taxes or income tax". Since we have been here, since we started questioning the government, led off by the Prime Minister, has not ruled out the possibility of an increase in taxes and income taxes. So, they are looking at increasing taxes and income tax for taxpayers, but they are not prepared to clean up the tax system. Where is the logic? There is no way the tax return can be simplified with the present tax legislation.

This is not what I was saying earlier. I was not talking about simplifying tax returns. In any case, we have decided not even to raise this issue any more. Each time we called for a simplified tax return, senior government officials would complicate tax returns even more. So we have stopped raising the issue. People are beginning to get used to the present forms. What I am talking about is an in depth reform of the tax system. I do not know whether you have read the tax legislation for the past 40 years-it is awful.

I have tried to do my best. I have often taken those books out of the library and have gone to consult them there as well. It is a monumental mess. Only the experts can find their way around. Secondly, you will admit that without this reform, we have a serious taxation problem. Forty-five years ago, corporate taxes accounted for 50 per cent of federal revenues, while the remaining 50 per cent was drawn from individual taxpayers.

Now nearly 83 per cent of federal tax dollars are collected from individual taxpayers. The remaining 17 per cent is collected from businesses. This is an imbalance, an unhealthy one, I would say, and people are increasingly aware of that. It is no wonder that, just about everywhere, and I am not referring to the revolt stirred up by Reformers, people are outraged to see this, they see what is happening and see us walking away from our responsibilities, they see that the government will not even go so far as to review the tax system.

Even if it takes two or three years, it has to be done, such a review must be done. This should have been the first step, the first measure taken by the Liberal government. They talked about it before the election campaign, during the campaign, and even before bringing down the first budget and the Minister of Finance has turned a deaf ear to it all. So has the Prime Minister. Reformers are doing the same because it is a direct attack on their friends, and even on a number of the people they represent who have considerable personal assets.

This review must be carried out, I feel, and so must tax expenditures be reviewed. There was talk earlier of tax treaties; they really must be reviewed individually because, in this area too, people are becoming aware that some large, very profitable companies benefit by establishing phoney companies abroad, in countries considered as tax havens, and thereby avoid paying taxes. Ordinary people cannot do that. They cannot set up such companies and, when they owe a dollar in taxes, be assured that they are hunted down for it.

[Patrick Gagnon, Liberal, Parliamentary Secretary to Solicitor General]

Madam Speaker, a motion introduced by the Reform Party regarding the government's next budget was debated in the House yesterday. Now the Bloc Quebecois is taking a crack at it. Both parties' motions clearly demonstrate that neither has what it takes to accomplish this imposing task or to run a country like Canada, let alone an independent Quebec.

In both cases, political grandstanding takes precedence over real and credible action. The two motions also prove that the two opposition parties do not dare acknowledge the budgetary principles the Minister of Finance applied in last year's budget.

I know that the historic budget he will soon table will be based on these principles. The minister repeated several times that the emphasis of this budget will be on spending cuts and not on tax

increases. And he stressed that if tax measures must be taken, their purpose will be to make the tax system fairer, not to increase the tax burden of low income taxpayers, as the opposition claimed today.

We have also clearly indicated that we believe that the first steps that must be taken to pare down the government machine are to downsize it and cut fluff and waste. This is what the opposition has been telling us. We have already taken real action on the issue.

Last week, the Minister responsible for Public Service Renewal tabled a bill to dissolve or reorganize 22 organizations. Taxpayers would save almost one and a half million dollars. I understand that this is very little, really just a drop in the bucket, but I know that this budget will be the result of the most extensive review of government programs and operations ever undertaken in recent history in this country.

I am also convinced that the budget will demonstrate to all Canadians that we have the courage to do what we say we will do and to keep our promises. We need to take action to reduce the cost and size of government because it is vital to the deficit reduction goals we set last year. And it is precisely this question of the deficit, in the debates yesterday and today, which brings out clearly the fundamental shortcomings of the two opposition parties.

As for members of the Reform Party, eliminating the deficit but without tax action seems to be their only concern. They seem to think that deficit action alone will ensure Canada's economic success and renewal. They refuse to recognize that there is a role for government in promoting economic development and in protecting Canadians in real need.

It is also interesting to note that where Reform sees only the deficit, the Bloc seems to have completely forgotten it exists at all. The result is a motion on the budget that ignores Canada's real fiscal problems.

After all, the Bloc's separatist cousins in Quebec City include a finance minister who feels that Quebec's obligations with respect to the national debt need be honoured only when it is convenient to do so. But our government refuses to slough off its responsibilities. We are aware of the burden of decades of debt and galloping deficits, which have given rise to an increase in taxes and interest rates, and a certain mistrust on the part of investors; all are factors detrimental to growth and job creation.

You know, the latest statements by the Quebec finance minister did not help the province's ratings, and it is the middle class that will pay the price.

However, our government is determined to do what is necessary to maintain growth and create jobs in all regions of the country, including Quebec. And in order to reach these objectives, it is essential, and Canadians themselves are demanding it, that we put in place an effective financial reform strategy.

Our government believes that winning the debt challenge starts with laying a clear, concrete and credible foundation. That means keeping to the deficit track we set out on to bring the deficit down to 3 per cent of GDP in three years.

That is exactly what we will do, as the minister said, "come hell or high water". The federal deficit now near 6 per cent of GDP has not been as low as 3 per cent since 1974-75, 20 long years ago.

In addition, setting specific deficit reduction goals is a significant change from past practices. That is why our government used a different approach. We set realistic goals and we will take all necessary steps to achieve concrete results. Our success in this regard will make our long-term objective of totally eliminating the deficit more credible.

We believe it is best to set out short term targets, concrete milestones, and achieve them. With short term targets there is no excuse for delay, no acceptable grounds for not taking tough action to address the problem. When we set unrealistic long term goals, we can always find a reason to avoid tough action today, tomorrow and the tomorrow after that.

Let us remember that we have done more than just set out a goal. Last year's budget took dramatic bottom line action. It set out measures to deliver $20 billion in deficit reduction over three years. For every $1 of revenue action there were $5 of spending cuts. No budget in a decade moved so strongly to cut spending.

We also know that even stronger action might be necessary. The problem is interest rates. They are much higher than we or the private sector expected.

There is no mystery about the pressures at work. To begin with, there is action by the U.S. central bank to control American inflation. There is also the lingering concern about the Quebec situation and the worry over Canada's debt and deficit burden.

The problem is our accumulated $500 billion debt. It is so big that an increase in rates has been a frightening wallop. Let us remember that last year the interest charges on the debt consumed almost $40 billion of taxpayers' money, the single largest expense of government. Every time the rates go up one per-

centage point our carrying costs jump by $1.7 billion, and that is just in the first year. By the third year it is a $3 billion penalty.

It is this punishing dynamic of compound interest that makes tough budget action the right action. The fact is that we have always recognized the need for continued fiscal action. The 1995 budget process started the minute we introduced the 1994 plan. That is why we combined immediate action with a sweeping series of program reviews on government operations, defence and social security reform. These have set concrete foundations for this year's budget and the tough decisions needed.

In this regard let me remind both opposition parties, given their calls for eliminating government waste and inefficiency, of the six questions that have framed our program review of government operations.

(1) Do the program areas continue to serve the public interest?

(2) Is there a legitimate and necessary role for the government in this area?

(3) Is the current role of the federal government appropriate, or can the program be realigned with the provinces?

(4) What programs should or could be transferred to the private or voluntary sector?

(5) If the program continues, how can its efficiency be improved?

(6) Is the resulting package of programs affordable?

Before concluding my remarks I should also reiterate a point made yesterday on the issue of tax increases. Only a foolhardy politician would ignore the real "tax fatigue" felt by Canadians. It is felt on this side as well. That is why cuts in government spending must and will be our priority in reducing the deficit. We proved that last year when we cut spending by $5 for every $1 in revenue measures.

However, most Canadians know that in order to cut taxes in the future and, in the short term, to ease the pressure on interest rates and the dollar, we must bring the debt under control. And this will only be possible after we achieve our deficit reduction goals.

Given the magnitude of this challenge, I understand why the Minister of Finance will not promise a budget without measures to increase revenue. But, if such measures are included, I am confident that they will be aimed at improving the tax system and closing loopholes. To those who are opposed to tax measures, I ask this: Do you really feel that the existing system is totally effective, that there are no loopholes or unjustified advantages? Given our financial situation, Canadians do not want or need such stupid political games.

I could say much more but I think that the budget will be more eloquent. Yes, we have a long road ahead of us, but I think that we are off to a good start. I am confident that the budget to be tabled in late February or early March will show all Canadians and world markets that our government meets its financial commitments.

By doing this, we will reinforce the conviction of the vast majority of Canadians, including my fellow citizens from Quebec, that this country, Canada, will fulfil its destiny of greatness and unity it deserves.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Madam Speaker, I listened to the hon. member for Bonaventure-Îles-de-la-Madeleine. I wish I was as confident about anything as the hon. member opposite seems to be about everything, especially since it was the party opposite that was the father, the parents and the grandparents of the present dilemma our country faces today.

The member opposite is very quick to criticize opposition parties. However it does not seem to sink into members opposite that there is a good deal of distrust in the nation of the Liberal government, the parents of the dilemma that our country is in today, the very people who got us into this mess. A lot of people perhaps mistrust the fact that the Liberals present themselves as the people who have seen the error of their ways and are now going to be the ones who will lead us out of this dilemma and into the promised land. A lot of people in Canada have a healthy degree of scepticism about the ability of the Liberals to come through and do what they acknowledge must be done.

I have a question for the hon. member for Bonaventure-Îles-de-la-Madeleine whom I know to be earnest and hardworking. I honestly believe he speaks with conviction. What in his opinion is the single most important ingredient in getting our nation's finances back on track? What is the single ingredient on which everything else hinges?

[Patrick Gagnon, Liberal, Bonaventure—Îles-De-La-Madeleine, QC]

Madam Speaker, I think I will include some of the very favourable remarks of the hon. member opposite in my next householder.

Yes, being a Liberal I am somewhat confident. There is confidence out there in the general population that the Liberals can deliver. The minister said it very clearly when he said that he would bring the deficit from a high of 6 per cent down to approximately 3 per cent of GNP within the next three years. This is something we are striving to do.

Of course it will not be done without any pain. We might be talking about short term pain for long term gain. We are not going to cut indiscriminately in every area. We still have social

conscience on this side of the House. I believe it still exists among certain members on the benches opposite.

After hearing what the member told me earlier I am convinced a number of the members will recognize the efforts made by the government to decrease the deficit and to make sure that we eliminate the deficit by some time at the beginning of the turn of the century.

It will be a long term process. This is what we have to prove to outside investors and Canadian investors. Canadians are expecting us to make sure that we come out with a reasonable budget, given the situation we are faced with, so that we can look at the future with hope and encouragement, thanks to the first steps taken by the Minister of Finance. In the next few weeks the course will be set.

[Gérard Asselin, Bloc, Charlevoix, QC]

Madam Speaker, first of all, further to the remarks made by the hon. member for Bonaventure-Îles-de la-Madeleine, of course Canadians as well as Quebecers are aware of the fact that the national debt has grown to $600 billion, with debt charges totalling about $115 million per day.

We all know that, just to pay the interest on this debt, the Canadian government now has to borrow money. We are also aware of the need to paid off this debt someday, or at least to reduce the deficit. The last budget the Minister of Finance tabled in this House was passed with a deficit of approximately $52 billion, this being the biggest deficit ever approved by this House.

Naturally, this budget was passed by the Liberal majority who had approved in this House the biggest deficit ever in Canadian history. Today, it is suggested to create a deficit to solve the deficit problem.

The people are prepared to tighten their belts and make sacrifices. What they will not accept is the shameless government overspending. They have a problem with expenditures like the $475,000 spent just recently on the installation of the Governor General. They find it difficult to accept that members of Parliament be entitled to a pension for life after serving for just six years.

And this causes concern and social insecurity from coast to coast. The concern caused by such things as the Minister of Finance contemplating tax hikes, contemplating replacing the GST with a tax hidden in product prices so as to be able to tax everything that is presently tax-free, such as food, prescription drugs and health care, is not making seniors feel any safer, because there is even talk of taxing RRSPs.

Meanwhile, the Minister of Human Resources Development is considering making cuts in education programs, loans and scholarships for students, who represent our future. The minister is considering making cuts in the UI program, which should not be used for government administration purposes since it is an insurance for those who lose their jobs. The minister is also considering making cuts in the government support to seniors and to low income families. When I think of low income families, I am reminded of all the cuts made by the previous Conservative government, including the subsidies to provinces for social housing.

The minister is also considering making cuts in the subsidies to women's organizations which promote employment and equal pay. Then, there is the Minister of Finance who is also considering cuts in airport and airline services, or even privatizing these services. If the equipment is transferred to the provinces, it is like shifting the burden onto their shoulders.

So, I ask the hon. member: Is it possible that, this year, the government will manage to reduce its deficit without targeting the poor and, if so, how will it do that?

[Patrick Gagnon, Liberal, Bonaventure—Îles-De-La-Madeleine, QC]

Madam Speaker, I can assure you it was never the intention of the Liberals to introduce budget cuts at the expense of the most vulnerable in our society, and I said as much in my speech.

As the member for Bonaventure-Îles-de-la-Madeleine, and like the hon. member from the North Shore, I represent a riding that has to live with financial, economic and social problems.

However, in his comments he referred to the fact that people needed security, and I also heard him say that people thought we spent too much money on the installation of the new Governor General of Canada and all the activities that were organized around this event. I would like to remind the hon. member opposite that the Premier of Quebec is going to spend, not two million, as he promised, but more than five million on the commissions going around Quebec that want to discuss only one topic: Quebec's independence. There is nothing that makes my constituents feel more insecure, and I hear people say this. I hear this from people in Quebec's remote areas, when they see a provincial government that is intent on only one thing: the break-up and, in fact, the end of the best country in the world.

The only way we can survive is by introducing a new fiscal policy, making certain cuts and reallocating our spending priorities. Reallocation is necessary to ensure that we can become leaders in important fields.

However, we must stay together, because dividing Quebec and dividing Canada and making all kinds of statements, as the opposition sometimes does, is not the answer. I am not necessarily referring to members opposite, but it was the Quebec finance minister who said recently that he felt Quebec was not necessarily obliged to meet Canada's international commitments in terms of paying off loans and servicing the debt.

In concluding, we want Quebecers to feel secure, and I think we are going about it the right way. This is a caring government, and I think the Chrétien government has proved repeatedly during the past one and half years that we are in touch with the grass roots, that we are fully aware of our financial obligations in terms of the national debt and that we also realize that the federal government has an obligation to take care of the neediest in our society.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Madam Speaker, for the benefit of those watching on television I would like to read the Bloc motion once again. It is non-votable and it reads as follows:

That this House call upon the government in its next budget to avoid any tax increases targeting low and middle income taxpayers and to consider instead trimming the fat from the government, eliminating tax expenditures which primarily benefit large corporations and wealthy Canadians and collecting on unpaid tax debts owed to the federal government.

How do we go about disagreeing with that? We cannot. It is like motherhood and apple pie. Furthermore, it makes sense. Why should we not be doing the things that the Bloc suggests? As a matter of fact, we are doing most of them now.

Our party agrees 100 per cent with the notion that we should avoid any tax increases targeting low and middle income taxpayers. We are very adamant in saying that we should not have any new taxes on anybody for any reason, period; not on people, not on businesses, not on anyone for any reason, not direct and not indirect. The reason for this is we have to establish the political will to do what has to be done.

Earlier in questions and comments I asked the hon. member for Bonaventure-Îles-de-la-Madeleine to tell me what in his opinion was the most important single thing that needed to be done, what was the factor above all other factors that would ensure success in eliminating the deficit and getting our country's finances in order. For those watching and for those in the House it is no surprise that we did not get an answer to that question. I asked the question specifically because I wanted to know whether the member opposite really had a sense of what had to be done. We did not get an answer to the question. I assumed that the member opposite did not know what that ingredient was.

I am going to give him the answer. I am going to let him and other members opposite know what the single ingredient is which must be there. Without that ingredient there will not be success. It cannot happen. That single ingredient is political will. Members opposite control the purse strings. They have their feet on the pedals and their hands on the wheel that steers our nation. We in opposition can influence but we do not make the final decision. It is the government opposite that makes the final decision. Unless the government opposite has the political will to do what has to be done it simply will not be achieved.

How does it go about getting this political will? What does it take? That is why it is so important that the government not look for tax fairness at this time. Tax fairness is not the issue. Spending is the issue.

If we allow ourselves as a Parliament to wriggle off the hook instead of saying to ourselves our problem is that spending is out of control, instead of being absolutely committed and convinced of this and start burrowing around looking for little ways that we can pick up a few bucks here and a few bucks there, we will very quickly lose the political will to do what has to be done, reduce spending.

Programs have to go. If we do not do it we absolutely will not achieve the goal that has to be achieved. Our nation is quickly getting behind the power curve financially.

For those present who do not understand what the power curve means, getting behind the power curve is an aviation term. What that means is that if a person is flying along and there is a mountain ahead and that person pulls the nose of the aircraft up, they will have to increase power so that they can climb up over that mountain. If there is not enough power in that aircraft to keep the nose up and to keep flying, they will very quickly lose speed, lose control, spin, crash and burn.

Our nation is in an aircraft and there is a mountain of debt ahead of us. That mountain of debt is growing rapidly through the magic of compound interest which is people's greatest enemy when they owe money and their greatest friend when they do not owe money.

Here we are hurdling along in the sky. This mountain of debt is in front of us and we have to keep pulling our nose up. As we pull our nose up, which is increased taxes, we are losing power.

There is the point when our economy has lost so much power because we have to keep increasing the taxes so that we can get over the mountain we simply will not be able to do it. That is why the political will to get our spending under control is of critical importance.

That is not to say that there are not elements of our taxation policy which should not be corrected. That is not to say that my colleague and friend from St. Hyacinth-Bagot is not absolutely correct in saying that in our tax life you have to be a Philadelphia lawyer to fill in your tax form.

Have members ever tried to make money in this country? People pay taxes on making money. People pay taxes on spending money. Every time we turn around there is a disincentive to be productive in our economy. There is an incentive to be non-productive.

We have to get those changed. We have to simplify our tax regime in this country. As a matter of fact our hon. colleague from Broadview-Greenwood has been working diligently for years to introduce the single tax in Canada.

Our party is 100 per cent supportive of that but we have to set priorities. Right now our nation and all Canadians are in a lifeboat. We have already hit the iceberg. The Titanic is going down and we are in this lifeboat. There are holes in the lifeboat and what are we doing? We are talking about who should be the captain and what colour we should paint it.

We better get some priorities together. We better be plugging the holes in the lifeboat and bailing because if we do not, we are going down, and we are going down together.

It does not matter if one is bankrupt in French or English. One is bankrupt. It does not matter if one is bankrupt and cannot afford to buy a gun. Does it matter if one has to register it? Does it matter if one is gay or straight? One is bankrupt.

Our priority is to get our nation's finances in order. That is what we have to do. Once we have done that, this Parliament should rightly put its interests in all the other thousands of things that drag us away from where we should have our noses focused, one of which is on government spending.

We need as a Parliament to get our noses on the ground, to get our butts in the air and work on priority number one, that which is most important above all other things, to get the political will so that we can make the tough decisions. We can look our fellow Canadians in the eyes and say we have made the first sacrifice ourselves. We have done away with this outrageous pension plan that acts like a magnet for all the ire of everybody in the country.

When they look at that and say: "How can these people who are elected to lead us write laws that protect them from the very mismanagement they have put on to our country in the first place? How is it that people can spend 20 years here and get a pension that allows them to live so they do not ever have to worry about the consequences of their mismanagement of our economy?"

We have to restore the bonds of trust between the elected and the electors. We have to put the rights of victims ahead of the rights of criminals. Above all, we must get our nation's finances in order and we must have the political will to make the very tough decisions necessary.

[Mac Harb, Liberal, Parliamentary Secretary to Minister for International Trade]

Madam Speaker, I am not able to associate with this picture by my colleagues in the Reform Party. Day in and day out they try to paint this as a sinking country that one cannot live in and that has so many things wrong with it.

For the third time in a row the United Nations has clearly stated that Canada is the best country in the world in which to live and raise a family. Twenty years ago when I came to this country I knew Canada was the finest and best country in the world. I say that over and over again.

I do not understand what is wrong with my colleague. Perhaps we should establish a fund for our colleagues in the Reform Party to send them abroad to look at the world. When they come back to Canada, maybe then they will start talking about the positive things that exist here. Then they could truly appreciate all of the good things we have and will come to the conclusion that we have to work collectively in order to make it even better.

This negativity day in and day out, the doom and gloom is not serving anybody. It is not serving the interests of Canada. Business people have told us over and over again: "Give us the tools and we will make it happen". Government has to provide a proper environment in order for business to create jobs and we are doing that.

Economic indicators by all agencies, whether from Canada or abroad, whoever we talk to, all of the economists agree that Canada and this government is going in the proper, right direction. We are leading the other industrialized countries in terms of growth. According to the Minister of Finance and the Prime Minister we are way over what we have forecast in terms of economic growth.

What is wrong? In terms of what the government is spending annually versus what we are getting in terms of revenue, we are in a surplus position. However, we have a debt and interest to pay on it.

For my colleague to turn around and attack the government for its track record is unfair. He should stand up and congratulate this government, the Prime Minister, the Minister of Finance, every member of the cabinet and government for a job very well done. That is what he should do. Stop the doom and gloom. Talk about the positive. Smell the roses. Have some coffee. Maybe he would wake up.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Madam Speaker, it is such a delight to respond to the hon. member opposite as he whips his rose coloured glasses from his nose.

You do not have to be a brain surgeon to figure that if you have been running up debts, you can live like a king if you are doing it on someone else's money. The problem is the bank is about to cut off our Visa card. Our Visa card, American Express, Mastercard and our bank line are as high as they will go. We opened up a home equity line of credit which we are using and still we cannot pay our bills. We are going further into the hole every day. That, sir, is the problem.

Step number one in solving a problem is that you must deal with things as they are, not as you would wish them to be. This Pollyanna wishing and saying that the United Nations says we are number three in the world, why are we not number two or number one in the world? We are borrowing it. We are going down the hole. Our grandchildren and our children will be paying off debts that our generation and the generation that preceded us ran up. And these people are saying: "Everything is fine in the world". It is insane.

Let me read from The Wall Street Journal about this number one nation in the world. I am quoting Mr. Alan Reynolds in The Wall Street Journal of Friday, October 14:

The drop in the Canadian dollar, 20 per cent since 1991, is largely caused by the uncompetitive tax climate for both labour and capital. World investors do not like to invest in countries with rising tax rates.

The article goes on:

The weak currency means Canadians, and the Canadian government, have less buying power in the world. When the Canadian dollar falls, the government needs more Canadian dollars to make the interest payments on its large foreign debt. The increased tax rates after 1989 have thus increased the spending side of the government's budget by sinking the currency and raising interest rates, as well as shrinking real revenues.

Now this is not the party opposite. This is a world renowned, respected economist from the Hudson Institute.

These are the kinds of comments, the kinds of articles that affect our interest rate on the 30 per cent of the foreign debt owned by other countries. Every time we make an interest payment on that foreign debt we are putting German, Japanese, and American people to work.

Why do you think our interest rates are five points higher than the American interest rates? Is it because we are such great money managers? Why do you think our unemployment rate is 3 or 4 per cent higher than the American unemployment rate, yet our economies have matched each other for 40 years? Is it because such masterful people have been running our economy, the Liberals, the Conservatives, and again the Liberals?

In 1984 the Conservatives were elected with a mandate to get our country's finances under control. They did not. They blew it. There are two Conservatives in this House today. Count them. The Liberals have the same opportunity today to address the number one problem. If they do not do it there will be two of them left after the next election, maybe. Canadians are sick and tired of this Pollyanna attitude to what is really hurting our country.

[Jean-Paul Marchand, Bloc, Québec-Est, QC]

Madam Speaker, the Reform Party member is right when he says that Canada is heading for national bankruptcy. The hon. member is also pretty much on target when he says that the government lacks the will to put some order in its finances.

This lack of political will, as well as the fact that we are obviously heading for bankruptcy, has been quite noticeable since the Liberals took office. Foreign investors are extremely concerned about the state of the federal government's finances. The fact that Canada's economic situation is truly out of control may not be the main reason why Quebec wants to become a sovereign state, but it is certainly one of the reasons. As the Reform member pointed out, this government lacks the will to act.

We can accept the fact that Liberal members rise in this House to say that Canada is the best country in the world. However, with impending bankruptcy looming on the horizon, Canada may not hold that honour for much longer. This reminds me of the captain of the Titanic who, in 1912, said that his ship was the most beautiful in the world and referred to it as ``the unsinkable Titanic ''.

The Titanic sank, but that does not justify the fact that Canada is experiencing very serious problems. The whole world is aware of that, and particularly investors. Yet, this government does not have the political will to correct the situation. This is serious, especially since the government and the minister could take a whole slew of realistic measures to help the economy. However, they simply will not do that. On the contrary, the government is bent on eliminating the debt at the expense of the poor. And that makes this federal regime even more unfair.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Madam Speaker, I think my hon. colleague from the Bloc hit upon quite a salient point. We are facing yet again this question of how we are going to survive as a nation united with Quebec as a part of Canada.

The Bloc brings forward the notion that what is it about the federation of Canada financially, is this country so well managed that we could not manage on our own just as well? I guess it does that because of the mess we are in and that argument has some weight. In my opinion, and I think in the opinion of most Canadians, we would all be much worse off, Canada and Quebec, in the event of a separation. That very question is hurting us today in interest rates.

[The Acting Speaker (Mrs. Maheu)]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Saint John-Trans-Canada Highway; the hon. member for Mercier-Manpower training.

[Grant Hill, Reform, Macleod, AB]

Madam Speaker, I would like to add my words on the issue of Canada's financial circumstances.

The other day I heard it described as a prize fight in Canada. It was a prize fight between the fiscal disciplinarians, and I would characterize the fiscal disciplinarian as our Minister of Finance, and the social capital advocates. I would describe the minister of HRD as the social capital advocate. This prize fight had been won by the fiscal disciplinarians. The commentary was that this was a tragedy for Canada because our social programs were going to be eaten away by fiscal disciplinarians, those who had understood and realized the depth and severity of our debt problems.

My difficulty with that discussion and argument is that surely there is a connection between our social programs and financial responsibility. Surely there is a connection that will not allow that to be broken.

I would like to go over a few individual statistics. I hear over and over again that the way out of our debt problems is simply to close loopholes and make our taxation system fairer.

Taxes now account for a much bigger proportion of the average family budget than shelter, food and clothing combined. It is a complete reverse of what is normally present in the country. In 1961 the reverse was true.

There are those who say that the rich in our society should take a heavier hit from taxes. Last year the top 30 per cent of families, those earning $61,660 or more, paid 62.4 per cent of the taxes. "Let's hit them harder", say some. To those who say that we are not taxed too highly compared to our major trading partner, Canadians pay $50 billion more tax per year than Americans after adjusting for the size of our economy. We are taxed to the eyeballs. We are taxed until we are drowning. We are taxed so much that anyone who says we can pay more taxes is dreaming.

I liken this to two individuals. One is a prize fighter who is lean, mean, quick and knows all the tricks. The other prize fighter looks like a Sumo wrestler. The Sumo wrestler waddles into the ring and says: "I'm going to take you on" and does take on the quick, alert prize fighter by lying on him and squashing him. There is no talent in that at all.

The overweight, bloated debt in our country is a Sumo wrestler and it is going to kill completely the prize fighter who has the ability to move quickly, to adjust to circumstances and to be competitive.

I tried to look for an international comparison to see if Canada could look at some other location. I looked at New Zealand. I took an opportunity to review what happened in New Zealand in 1984. New Zealand has a House much like ours and these same conversations were going on in 1984. The government of the day said: "Everything is fine. We are in third place in the world. We are the third best country in the world. Everything is fine". We heard that.

One day after the debt wall-the member opposite said not to be so violent-I was going to say smack into the debt wall but instead I will say gently nudge up to the debt wall and hip check the debt wall. New Zealand did a hip check of the debt wall. They did not smash into the wall. In one day New Zealand went from the third highest in the world to twenty-second.

My field is health care so I looked at what happened to health care in New Zealand in that one day. The same scenario faces Canada. In one day they ended up with advertising on the ambulances to pay for the fuel. To go to sick patients they had to advertise chocolates and booze, in order to get the sick patients to the hospital. In one day they went from a system very similar to ours where everything was free to a system where there were user fees for everything.

One of my friends who practised medicine in New Zealand said: "The tragedy for those individuals who came to the hospital with a coronary was that they lay sweating in bed worrying about how much it would cost". This was from a society that said: "Everything is fine. All is well". One day later, their health care system was gone. Can members sitting on the other side tell me that is not a problem?

What do I see in our health care system that caused me to come to Parliament, to leave a medical practice that obviously is better than doing this? What caused me to come here? These are the things that caused me to come here.

First, the waiting lists for my patients were getting longer. I am told there are no problems in Manitoba today. Hip replacement is a 60-week wait. The standard for Canada should be 12.7 weeks. No problems in Canada.

I watched technology in our country slipping behind other countries. We have in Canada 1.1 MRI machines per million people. The U.S. has lots of them. They are techno freaks so I will not talk about the U.S. Germany, a country very close to us, has 3.6 MRI machines per million people. Where do we go if we need an MRI in our country? We go to the U.S. We cross the border. We put our Canadian dollars on the table in the U.S.

The technology that we need, that we deserve, that we must have, is being denied by a rigid set of rules that say we cannot provide more funds to the health care system. That might privatize something.

If an individual here needs health care should we wait for New Zealand? I suppose that is the answer. Monumental waiting lists will be the legacy of a government that will not pay attention to our debt.

I had a young student face me not so long ago and say to me: "You are so hard-hearted. All you care about are finances". All I care about is a health care system that will survive. If we go New Zealand's route and I say to my grandchild that everything is fine, my grandchild will say to me, "You are not a good grandad".

Health care will not survive with a government that does not pay attention to its debt. I will not allow that to happen.

[The Acting Speaker (Mrs. Maheu)]

Because the last speaker's time ran over by five minutes on questions and comments I will allow one comment and one question in response.

[Jean-Paul Marchand, Bloc, Québec-Est, QC]

Madam Speaker, I was somewhat surprised by the comments of the Reform member, especially when he talked about health care. Obviously the Reform Party wants to privatize health care. It is a party that has not defended social programs. We are the only party that has defended social programs in this House, in spite of the attacks and reductions by the Liberal government.

The Reform Party has not spoken in defence of social programs. It is obviously opening the door to privatization of health care. Our health care system is one of the standards of Canada, one of the hallmarks of Canada, one of the achievements of Canada. This party is talking about privatizing health care and giving us the model, obviously, of the American system where if a person gets sick he or she risks going bankrupt very quickly.

Under the cover of comments of New Zealand's problems and success story, among all the other comments that have been made, which unfortunately Americanize things that have been good for Canada, he is again opening the door to a system that has proven to be costly and wasteful and even dangerous, where people go bankrupt if they become ill.

That is not an avenue which is very constructive. It is probably even worse than what the federal government is now doing. The federal government has not been doing very much in terms of helping people, in terms of the social programs, in terms of health care. The government in trying to reduce its deficit has attacked unemployed people and senior citizens. It has tried to put more debt on students. It is now even increasing the rent of the poorest people in our society. That is what the government is doing now, which is probably the worst thing that I can imagine, and the hon. member is suggesting something which is even worse.

I ask the member how privatizing the health care system in Canada would improve the debt problem?

[Grant Hill, Reform, Macleod, AB]

Madam Speaker, I will have to be brief. That was quite a discourse.

The response of the health minister in Quebec to the new proposals from the federal health minister is quite interesting to me. The health minister in Quebec said simply: "Health is a provincial responsibility. The federal government should keep its nose out of health". That is a proposal I strongly support.

Alberta, my province, says that Quebec has it right. We may disagree on whether or not there is any place in health care for a safety valve. We may disagree but surely we do not disagree that health is an important program. Surely this is not a partisan issue.

[René Laurin, Bloc, Joliette, QC]

Madam Speaker, I am happy today to speak to the motion presented by my colleague, the member for Saint-Hyacinthe. I think it is important for the official opposition to raise once again this pressing matter which the government should address, but about which it keeps on procrastinating.

The government is supposed to present its budget very soon; it was said to be in early February; but it would appear that it will not be until late February or even early March. The social reform was announced for the fall; it had been postponed until winter and now it is postponed indefinitely. In the meantime, the situation is deteriorating, the deficit and the debt are increasing.

Why is the government dragging its heels? It is dragging its heels because it knows it must take steps which are going to hurt. It is afraid to do anything which will make it the enemy of the people or which will cause the vast majority of Canadians to hate it.

In the past, we have made many suggestions on how to solve the deficit problem. We have offered numerous options to the government in order to solve this problem without raising taxes, but it refuses to listen. The solutions it favours, the only ones it is considering are those aimed at the majority of people, namely the under-privileged members of our society.

What we are proposing instead is that the government target the minority of Canadians who are more fortunate, the people and corporations which are in a position to contribute more through their taxes. However, because these corporations, these executives, these wealthy people are friends of the government, it is reluctant to tackle a job which is most urgent. It refuses to assume its responsibilities for fear of alienating those Quebecers who are about to vote, in the referendum, in favour of a flexible Canada, a flexible constitution.

The present government is playing hide and seek, when we require openness. In my speech, I would like to emphasize the collection of unpaid taxes owed to the federal government.

My colleagues already talked about other aspects of the motion. They talked about trimming the fat from the government. True, we could save millions by doing that, but when we talk about trimming the fat, we do not mean simply cutting jobs in the civil service. It is not true to say that all depends on the number of civil servants. If there are too many, fine, by all means cut, but I hope the cuts are going to be fairly spread among the various provinces, not made in the way recently announced by the Minister of Intergovernmental Affairs and Minister responsible for Public Service Renewal. If a 25 per cent reduction in spending is anticipated, I hope we will not see a 33 per cent cut in Quebec, as is expected.

That is not the only way to trim the fat from the government. To trim the fat, we could have only one bus service to take members of Parliament from their offices to the House of Commons. The same bus service could be used by members of both houses to reduce the cost. We never talked about that. Each House wants its own staff, its own accommodations, its own transportation system, its own allowances. We have two sets of everything; yet we still wonder what purpose the other place serves. However, no expense is spared.

I will not dwell on this issue any longer, because I want to come back to what I said earlier about recovering delinquent taxes. The auditor general made several comments on that topic. Most taxpayers pay their taxes when they file their income tax return or when they get a notice of assessment. But sometimes, measures have to be taken to recover, for example, unpaid balances or tax deductions at source. Also, an employer can forget to remit on time to the government the tax deductions at source. Or some taxpayers can deliberately neglect to pay their taxes.

Let me describe briefly the situation we have. Right now, there is about $6.6 billion in delinquent taxes, that is unpaid taxes that should have been paid. These $6.6 billion are owed by some 1.6 million taxpayers. These are the numbers we had as of December 31, 1993. Of these $6.6 billion, $3.6 billion were owed by individuals, self-employed workers, corporations, and include source deductions by employers.

Of that amount, $900 million had been owed for less than 90 days. This was the case in 1993 for 21 per cent of taxpayers in arrears. And $250 million had been owed for more than 90 days on small amounts. But $5.35 million had been owed for more than 90 days on larger amounts. This was the case for 25 per cent of delinquent taxpayers.

Thus, of the 1.6 million delinquent taxpayers or corporations, 25 per cent, or some 400,000, representing the smallest group, owe more than $5 billion in taxes. That is to say that each of these 400,000 taxpayers owes a lot of tax money to the government. These are not humble and poor people. They are not people who are always in need.

On the Public Accounts Committee, we were told that we sometimes go easy on the people who have some difficulty in paying, because we do not want them to go bankrupt. We say: "We have to be understanding. Sometimes, you know, floods or fires occur. So companies are given more time to pay their taxes".

But for individuals whose income tax is deducted from their pay cheques, not even a flood will stop their employer from taking off their share of income tax and sending it directly to the government. Even if a fire destroys their home, these individuals will not be able to use the money that their employer has already deducted from their pay cheques for tax purposes. For salaried employees, the income tax is collected immediately. And for those who have different means of paying their income tax, the state is always willing to show some understanding, which gives these people an opportunity not only to take advantage of the system, but in many cases to abuse the system.

I think that the government must take action to give the Department of Revenue more control over individuals and corporations that owe taxes to the government. There has to be greater control if the just society that we have heard so much about in this country is to be reflected in the way Canadians pay their taxes. If we want a just society, everybody must pay their fair share of taxes. We must not have half of the population paying taxes for the other half.

I know that my time has expired. I still have a lot to say and I hope that the questions and comments period will give me an opportunity to complete my remarks.