Debates of Feb. 21st, 1995

Supply

[David Walker, Liberal, Winnipeg North Centre, MB]

Mr. Speaker, I rise on a point of order. I believe this is an important point because if the opposition party is basing this on a document which it is willing to produce to Canadians, it should have distributed it. I would point out that it is not available to the government at this side.

[The Acting Speaker (Mr. Kilger)]

I have already dealt with the matter. Certainly while the hon. member wanted to make a point, it is not a point of order. Again I would caution members on both sides of the House that props will not be accepted in this debate or in any other debate.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, copies are available at Room 200 West Block for anyone who would like one. This morning we released this budget, which charts a course that would eliminate the deficit in three years with no tax increases. No other opposition party in history has achieved this and we are very proud of our accomplishment. We have worked hard as critics and as members of this party to make that happen.

I am sure that the government's spin doctors and certain members of the media will see this as a great opportunity to cast our party in a negative light. They will read through our 60-page budget searching for that one sentence which they think will make us look bad.

It will not work because Canadians are smart enough to know how hard the Reform Party is working to provide an alternative vision for this country, smart enough to appreciate that we are being honest with them about the size of our economic problem and smart enough to ignore the mischief of political spin doctors who think they can manipulate people with the stroke of a pen.

The days of old line party manipulation are gone. The people of Canada are now in charge. They have shown it through the referendum, they have shown it through the last election.

The targets we have set in our taxpayers' budget are real and achievable. They are tough but they are fair. They are explicit and come with explanations as to why we are making the suggestions. I urge all Canadians to get a copy of the budget or the summary and read it for themselves. The Reform Party is willing to accept the judgment of the people of Canada, not the spin doctors.

We want our alternate budget compared with the Minister of Finance's budget next week. I believe that Canadians will agree that the government's target of 3 per cent of GNP is just not good enough. When Canadians read through our document they will notice there is a wide array of expenditure reductions. I would like to talk about the ones that affect my area, foreign affairs.

Over the past year the Standing Committee on Foreign Affairs has conducted a comprehensive review and made a number of suggestions for possible cuts. Although we were not successful in convincing the committee that there should be these cuts, I might summarize the three areas where we suggested them: in bilateral government to government aid; in international grants and non-mandatory contributions; dropping memberships in a number of non-essential international organizations.

We belong to hundreds of organizations. Some of them are not even functional any more. We want the minister and Prime Minister to stop using this aid package as a slush fund every time they take an international trip. We also believe that there should be a substantial cut to the operating expenditures for foreign affairs in CIDA. In total the Reform Party is proposing a cut of $1.3 billion to our international commitments over the next three years. We are proposing not only cuts but a much greater emphasis on accountability, transparency and efficiency in delivering the service.

While these cuts are steep, we believe they reflect the priorities of the grassroots of Canadians. We believe they could be implemented in a way that would preserve those programs to the greatest of their value.

In conclusion, the people of Canada are sending a clear message to cut the deficit to zero in three years and not to raise taxes. The government will either do its job and listen or it will travel the road the Tories took, the road to nowhere. This is the government's last chance. For Canada's sake I hope it will choose the right road.

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, I appreciate this opportunity to speak for a few minutes. I have heard all kinds of things since being elected to this House a little over a year ago and I have sincerely tried to understand our friends from the Reform Party. It sure is not easy. I sometimes get the feeling that they have rocks in the head. Something is wrong with them. Perhaps they have bats in their belfry. For whatever reason, they are not quite with us.

It is obvious that everybody wants to go to heaven but nobody wants to die. We all agree on that. When Reformers talk about cutting government spending, I agree with them that cuts have to be made. The point was made that extravagant expenditures were made in the past, on embassies, for example. It happens that certain things slip by the government unnoticed. The Reform Party estimates that the major part of government expenses responsible for the national debt approaching $600 billion are expenses the government made in an effort to help Canadians by developing social policies, in an effort to put Canada on the map with a number of social projects.

If drastic cuts were to be made in all this today, as suggested by the Reform Party, some 33 to 40 per cent of Canadians would just starve. This is unacceptable on the part of a political party, although I must admit it shows that Reformers have a lot of guts. I am impressed by their courage in tabling budget number one of the era of Reform. I am not as impressed, however, with the contents of the document. They are attacking multiculturalism, Canadian bilingualism, and Canadian subsidies. But do they know that $900 million is granted every year to Western producers, in their home region?

If this was cut overnight, what would happen to these people back home? Western farmers would simply be condemned to die slowly but surely of starvation. Now, this is not what politics is about. One has to know when and where to cut so that it is as painless as possible. It may be great fun to cut back the federal civil service by 30 per cent, but if you just drive civil servants out of A to force them onto B, B being welfare, and have no money to pay for welfare through federal-provincial transfers, I fear that Reform Party voters will have to tie their wallets to a chain, as some people have already started doing. This country will be subjected to widespread plunder.

Our social programs are also used to buy social peace. Take that away and the Reformers may well see prison populations swell, which is what they want, as a result of their fiscal policy. I do not know. I am just trying to understand.

This budget number one of the Reform Party does not strike me as a serious one. I would suggest that it goes back to the drawing board and come up with something practical, not prima facie grandstanding, something that makes sense.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, certainly there were a number of questions there.

I guess the first one is that the socialist utopia that we often hear mentioned by the other parties is just not reality any more. Therefore what we have done is attempted in our budget to empower senior citizens, students and our native people so that they can start taking care of themselves more and more.

Our program of an RPSP goes a long way in that area of taking care of people. What we have to do is target those people who need it most. That is the most important aspect.

We should mention as well that these cuts must be fair across the board. Most farmers in the west, as was mentioned by the member, are prepared to say: "Get government out of my face. Let me handle my own business. I am quite prepared to do that". He mentioned those cuts; we have been advocating them for years. They are nothing new. They are asking just to get government out of their lives.

Basically we want to put money in the hands of people. There will not be people lying on the streets who cannot take care of themselves; they will be taken care of. That is the whole nature of the program.

The member is welcome to review the document and discuss it at length with me or any member of our party. We would be glad to do that.

[David Walker, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I thank the third party for bringing the motion to the floor of the House, beginning with its press conference at nine o'clock this morning.

I will be very measured in my response. It is very rare that I can be so angered as a parliamentarian with the presentation of a case by the opposition parties. However when one cuts corners to the extent of deluding Canadians about the task that faces us, it is something that all parliamentarians should take seriously and look at closely.

This is an opportunity for Canada to turn the corner. I do not think any of us discount the anger felt by taxpayers and Canadians in general about the nature of the debt we now face. As a government we have undertaken with a great deal of pride and deliberation to ensure that our deficit is under control. We are the first government to set targets. We are the first government to meet its targets. We have approached the problem with a reasonable determination to succeed. We believe Canadians want success in deficit reduction more than anything else.

It comes as no surprise to anybody in the House that this debt is one that tragically encumbers our ability to be successful as a government. Speaking on behalf of the government, the Prime Minister and the Minister of Finance, we will succeed in these objectives.

In this context we have an opposition party that has sought to play with fire. Those of us who have been in Parliament for a while all know what happens when a parliamentarian plays with fire. Scenarios and perceptions are created perhaps deliberately or not deliberately that are simply false. People are given the

impression that a solution is just around the corner or that a solution is merely writing things off with the stroke of a pen.

I come from a very poor constituency. I have seen families in economic difficulty. The hardest thing is to say to them: "Things are not likely to be better for one or two years, but if you really stick to this poor paying job and your family gets an education things will be better". It is hope for a better future that makes us all work together as Canadians.

We cannot go to families encumbered by a lot of debt and say: "In two or three months things are going be fine". We cannot tell Canadians that in one or two years things are going to be fine because I do not think they will be all better within two years. Do I think it will be better in the near future? I actually think that. The government believes that and will work toward that objective.

Let me refer to some small items. The non-votable motion before us takes the government to task for its deficit reduction targets "within two years". The taxpayers' budget, the so-called document of the Reform Party, talks about three years. On the one hand we have set out a two-year program. We have been silent on the third year except to say, again in a very determined fashion, that we will meet the new targets we set. Those targets will get us closer and closer to a balanced budget.

By this sleight of hand the leader of the third party talks about his three-year plan and juxtaposes it with our two-year plan to get within 3 per cent of GNP. That is the unfair nature of the document.

I have another point. He opened his address this morning and very carefully chose not to be in Parliament where he could be criticized and subject to scrutiny such as the Minister of Finance will be next week or the week after or whenever the budget is presented. He very publicly said that we must not be subject to the $40 billion of debt that we borrow from foreigners each year.

We did not go to the debt market for $40 billion. The opposition critic and his assistants who he very nicely complimented during his speech know that under Bill C-14 our borrowing limit was far below $40 billion. We have not come back for an amendment. At no time this year did we say we would be borrowing $40 billion. In fact, if last month continues to be as suitable as the first 11 months of the fiscal year, it will probably be closer to $30 billion under Bill C-14. That is either poor research or a deliberate effort to tell Canadians something that is substantially not what it is.

The opposition party also plays footloose with the tragedy that happened to the Mexican economy and the difficult remarks made by Moody's last week. It takes glee in telling us: "I told you so. We are almost a basket case".

Does the party opposite realize the cost to Canadian homeowners? Does the House realize the cost to the housing market or the price we all pay because of these international factors? We should not take with pride that the Mexican economy collapses. We should not join the chorus of the Wall Street Journal and some editorial writer saying: ``We think Canada is just like Mexico''.

When the opposition party puts that into public record, some researcher in a Wall Street office or over in London looks it up and says: "Gee whiz, there are parliamentarians in Canada who think Canada is like Mexico". That is the finance critic. Then interest rates go up another half a per cent or another per cent. The housing market gets into difficulty. Families find it difficult. Credit card rates go up and we are charged greater prices. Then they can turn around in April, May or June and say: "See, I told you that you were getting into difficulty". That is essentially irresponsible.

The opposition party went through its taxpayers' budget and it went through $10 billion of cutbacks in government programs. I thank that party, as I did during the finance committee hearings, for the directness and willingness to work on the issue. The finance minister and the government in program review are looking for significant ways to cut federal expenditures. As I said in my opening remarks, we will not in any way, shape or form back off from the objectives we have set ourselves.

There is an honest way of doing it and there are other ways of doing it. Let me suggest one point. The top item all of us on this side agree with is to reform MPs' pension plan, eliminate excessive travel of federal officials and reduce the number of ministers of state and parliamentary secretaries for a savings of $10 million. Now $10 million is a lot of money. Everybody knows that the pension plan produces no savings in the next three years. There are roughly 20 parliamentary secretaries and we all get the grand sum of $10,000. That would save $200,000. The ministers of state get a bit more. Let us say the total savings would be $500,000.

That leaves us with $9.5 million for excessive federal travel. The $9.5 million at $1,000 a trip would amount to 9,500 trips every year. That is a lot of unnecessary trips. If we look at each week, it would be 190 trips a week out of the Ottawa International Airport. This is excessive federal travel. If a deputy minister or a minister thought that level of excessive travel was happening, we would find the responsible public servants and politicians reined in. I would argue that this type of oversimplification is what brings the wave of anger across the country on to the floor of Parliament and does not filter as a responsible parliamentarian would what is honestly wrong with the system and what is not.

As long as they play to the crowd that this is corrupt place, a place where people do not work and a place where people try to rip off the system, the country will not feel good about itself.

The major transformation we have to make, which the government has taken to its Prime Minister as the primary responsibility of governing, is to ensure Canadians have confidence in their government, confidence in the way their dollars are being spent and confidence that we have a plan for the future. Each of those objectives is being met by the government. We are not about to roll over and allow cheap criticisms in any way, shape or form to pull us down from this honourable sense of purpose.

Empowering individuals, families and communities: if we read each of these items carefully we see that the Reform is promising tax relief.

Let us go back. We want to balance the budget. One of the most difficult things to do at the federal level is to protect the integrity of the fiscal base of the central government. We are under a lot of pressure. We have an underground economy about which people argue as to its depth. We have many thousands of concerned Canadians voicing their opinions. I received petitions on behalf of newspapers and the Canadian Taxpayers Federation yesterday.

There are many hundreds of thousands of Canadians who are disturbed by their level of taxation. We would be wrong to ignore that in the context of making a budget.

Empowering seniors-long term tax relief or reform. Why do Reformers include that? They announced a $3 billion dollar cutback in payments to seniors within the next three years. I know the member for Kingston and the Islands would be interested to know that they are going to do it after consultation. That means this year is lost. They also do not recognize the fact that the senior population is increasing. If we do not do anything in this government, the actual current levels of expenditures go up because of an increasing population.

They are not taking out $3 billion but $5 billion. That is fair enough, but they should say $5 billion and not say $3 billion. They should do their research to understand how people are being helped and not being helped.

Empowering families: strengthen the capacity of families to care for themselves with tax relief.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

How much is that worth?

[David Walker, Liberal, Winnipeg North Centre, MB]

What is the price attached to that? It is not known.

Empowering the unemployed and job creators: tax relief or reform. Empowering citizens to meet education needs: this is after suggesting that we should get out of education.

What do they say? They refer to an annual federal-provincial conference to define national standards. Have they ever gone to a federal-provincial meeting where they did not contribute anything and did not have any authority? Who is inviting them? What are they doing at the table? Nobody cares if they are there if they are not contributing something. However they have said that is what we are supposed to be doing.

Empowering those who cannot help themselves: tax relief. Those who cannot help themselves get tax relief. If I were to tell the people on social assistance in Winnipeg North Centre that I was going to help them with tax relief, they would be very curious about what taxes I was relieving them of when they cannot afford anything and they get about $400 a month on social assistance.

Empowerment for aboriginals: many Canadians are frustrated with the administration and the development of self-government in Canada. It would be wrong to deny that. The Reform Party suggests a substantial savings on the aboriginal community. It is about $500 million; I do not have it in front of me.

What do we do when that population base increases about 6 per cent per year? The baby boom within the aboriginal community is the most pronounced generational problem in the country. If we did that we would not just be freezing money, but on a per capita basis when dealing with questions of housing, education and assistance to young people within the aboriginal community there would be phenomenal cutbacks.

The Reform Party has pronounced a huge cutback in the CBC, with a savings of $375 million. Those of us who look at the CBC carefully know there have been a lot of criticisms. I am sure the CBC understands this, but to cut $375 million would probably end CBC television.

This morning when the leader of the third party stood up in room 200, what did he arrange to have? Well, well, well, national broadcast by the CBC. What does he want to use? He wants to use national broadcasting to promote the end of the company doing that national promotion. Does he ever mention it in his speech? No, he just swerves right by it and remains silent on the whole issue. That is the nature of this presentation.

This goes on day after day. Those members talk about equalization. The first thing this government did, Bill C-3, was to stabilize equalization for the poor provinces across this country. This is a very important point because as we move toward other funding and as we begin to deal with the provinces and as we can tell from the report of the federal-provincial meeting last week, these are going to be difficult times for many of the provinces which have to be given credit for the fact that they have shown leadership and produced near balanced or balanced budgets.

Pretty well all the budgets in western Canada, for example in my own region, are getting close to being balanced. Different strategies are being applied, some gradual, some very abrupt strategies but nevertheless they have been stabilized. Equalization is an opportunity for the federal government to make sure

that the other provinces which have a more difficult time have some stability.

They suggest a $500 million cutback in stabilization. However, if we look at it, stabilization increases about $500 million a year. Therefore to freeze it at the level they are doing is a much more extensive cut than they have said. Sixty per cent of equalization payments in this country go to the province of Quebec. It is a very important contribution that the federal government makes.

I would suggest as we are moving into a very difficult year in fighting out the referendum. All parties should appreciate the extent to which the federal government supports the economy of Quebec and not undertake budget initiatives which destabilize that economy at a very important time in our history.

To not acknowledge in the paper whether or not they understand the relationship between equalization and the economy of Quebec, whether or not they just choose to ignore it is a moot question which I am sure they will be willing to address later on.

However, the federal government has a responsibility when it set out a program in March of one year to the next year to continue that program and to continue the stabilization.

They go on to talk about the reform of the social security structure. They have a new program to come out which is basically to disband the RRSP idea. One of the most expensive programs that we have in this country, the way the federal government helps families and individuals, is through pensions. It is through support of the RRSPs and through the support of the registered pension plans. We by most estimates allow $15 billion of contributions to go into those plans without taxes. That is one of the major tax expenditures that we have.

If one wants to have a balanced budget within three years, I would suggest that there are limits to ways that one can extend new programs. To put out the feeler or just a vague idea to Canadians that there is going to be tax relief, there is going to be tax reform, it is going to be made easier for them in the future is a subtle signal that it cannot be sustained by any logical argument.

The last part of what they talk about is a taxpayer protection plan. This has been tried in other countries. The fact is that the last government played with the idea also. We have a parliamentary system. In the parliamentary system it is very difficult to contain a government from doing what it wants to do. That goes back to Walter Bagehot and the English Constitution.

Whether one likes it or not a parliamentary system does have a lot of power. To argue that by law one can change the behaviour of a government is wrong. In reality one has to change it in the spirit of the government and by the moral commitment it makes to be reasonable with taxpayers' money.

That moral commitment, that fiscal commitment, is here in this government. To offer taxpayers protection act again puts out this phoney signal that there is a solution just around the corner: "If only the government would agree with our act".

Here is where silence is not golden. They talk about taxpayers. What do they not define? The taxpayer. Who is one of the most common taxpayers? Corporations and banks. Are they saying that tax base should never be changed, that there should never be another tax, that Canadians are happy with the corporate and bank tax structure in this country, that none of us have ever heard people ask what we are going to do about the tax on this and the tax on that? What about the foreign ownership of the Canadian economy? Are we going to remain silent on that, a taxpayer issue that we are going to put into the Constitution?

My time is limited and my comments are extensive. I have tried to contain my frustration with an opposition party which is misusing an opportunity immediately before a federal budget to give Canadians the false hope that there is an easy solution, that we can somehow magically eliminate all the problems and all the bad judgments made by governments over the last two decades. Yes, I include the government and my own party in that.

We have accumulated a lot of debt. To acknowledge the accumulation of debt is also to admit that we have a very difficult problem ahead of us. All of us will have constituents who will suffer. If any member in the House thinks that their own constituency is going to be exempt, that their own lifestyle is going to be exempt, that we will not feel the effects of this budget, they are kidding themselves. Our job is to maintain a consensus in this country, not to have a social struggle, not to have class bitterness, but to understand that we are all in this together.

I thank the House very much for the opportunity to participate in this debate and I look forward to comments from other members.

[Jim Abbott, Reform, Kootenay East, BC]

Mr. Speaker, I suppose on the other side of the coin I share the member's concern about having to keep one's feelings in a proper perspective in the spirit of debate in this House.

I found it particularly difficult when he was standing and very selectively making comments and extracts from where we were talking about Canadians being able to help themselves. Rather than going through the whole process of points one through five, he chose to stay on only one point. I find that really unfortunate and I do not think it really does anything for the level of debate in this House.

He has a complete lack of understanding of the rage that there is on the part of Canadians at this moment. The reason there is a

demand for a taxpayer protection act is that we currently have a government in Canada whose leader stood before the people of this country and said there would be no tax increases for two years. The election was in October 1993. That is less than two years and this government will bring in tax increases. Canadians want the ability to be able to make politicians accountable.

The Prime Minister, when he was on the stump, said there would be no tax increases except in the case of war. The last time I looked the only war was the war which this government is creating on social programs by its constant overspending.

The hon. member suggested that the Reform Party is doing a disservice, that investors somewhere or people doing research are going to take a look and say there is a member of Parliament who is actually speaking up and saying things that are said in this week's Maclean's magazine which reported:

Nevertheless, even Canada's best run governments and companies are now bracing for the sting of a credit downgrade. The federal government's credit rating is a ceiling that no other Canadian credit can vault. And if Ottawa's rating falls, Moody's has already served notice that it will also slash those of the provinces, including British Columbia, as well as eight triple-A rated municipalities across the country. One of those is London, Ontario, which currently has a debt of $83 million. "A downgrade would have a significant impact on our borrowing costs"-

It is also going to affect Sun Life Assurance, Imperial Oil and the rest.

I do not understand how this member or any of the other members can stand in this House and say that just because the Reform Party is saying it like it is that somehow it is wrong. This is supposed to be a House of truth.

The Financial Post last Friday, quoting from Moody's Investor Service, reported:

"We downgraded Italy in 1993 and it was very controversial", recalled Vincent Truglia, the senior analyst at Moody's Investor Service Inc. responsible for yesterday's review of Canada's debt ratings, which could result in downgrades.

In the case of Italy, Truglia concluded that though the country's economic picture was brightening, given the nature of Italian society it would be very difficult for the government to maintain fiscal austerity in the medium term.

"Everyone disagreed with us at the time and thought we were crazy", said Truglia, but Moody's analysis, "has in fact proven to be the case quite strongly".

These are warnings. I ask the parliamentary secretary to the finance minister why will the government not at least acknowledge these warnings? Even on the front page of the Vancouver Sun last Friday the finance minister said that he was surprised, he was shocked, he was outraged. These are warnings. Should we not be taking these as warnings rather than simply saying it is too bad the Reform Party is bringing up these terrible issues in the House?

[David Walker, Liberal, Winnipeg North Centre, MB]

Mr. Speaker, I see the member for Kootenay East is doing serious reading. He started out with Maclean's , went to the Financial Post and then the Vancouver Sun . I am glad he stopped his reading list right then and there.

I think there are more serious ways of looking at what rating companies do. There is no doubt that everybody is concerned about it. The Minister of Finance expressed his own concern in answering questions in the House of Commons last week.

I am not going to downplay the concerns that we have about how the world sees us and the volatility of the money markets over the last 12 months dealing with issues such as the referendum, dealing with the national debt and the provincial debt. All these questions weigh heavily on the government. To belittle them would be self-denial.

The question becomes how we approach the country. Do we approach it as a sad sack? Do we approach it as if this is about to be the end? Or do we say to ourselves this is a strong country, we have a tremendous economy? The OECD says we will continue to lead the industrial world for the next two years in economic growth, that we have the fastest growth rate, around 4.5 per cent. This is strength. These are companies and individuals going out and doing something.

We have rates of expansion in our export markets which are second to none in the world. We have strength. What we should be doing as parliamentarians is adding to that strength and not exercising the negative.

Yes, the report from Moody's was a very negative report. That does not necessarily mean it is correct. It does not mean that we should all sort of give in and say this is a terrible country, why do families stay here, why are we bothering doing anything here. As parliamentarians our job is to say that this is a pretty good country. What we should be doing is building upon this base and not trying to destroy it.

[Dennis Mills, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, I would like to build on the last sentence of the Parliamentary Secretary to the Minister of Finance, that we are here not to just talk about fiscal discipline but we are also here to talk about creating an environment for growth that will put people back to work.

As I review the taxpayers' budget put forward by the Reform Party today I felt that specifics related to job creation and putting people back to work were pretty thin.

I would like to get reassurance from the parliamentary secretary that we as a government have not wavered from our

commitment and our focus on putting Canadians back to work. Ultimately I believe that the two million plus people who do not have work are a heck of a lot more concerned about our commitment to that reality.

This whole debate on deficit and fiscal discipline which has pretty much crowded that part of the debate out also needs some discussion. I wonder if I could get some reassurance from the parliamentary secretary.

[David Walker, Liberal, Winnipeg North Centre, MB]

Mr. Speaker, this government was elected on the question of jobs. We have created over 400,000 jobs. More important, the economy has created 400,000 jobs.

We are very supportive of companies, particularly small businesses that are expanding. We will form a budget that supports the creation of jobs in small, medium and even large businesses in this economy. Our job here is to support others who create the jobs.

The parliamentary secretary to the minister responsible for industry is very interested in the tourism industry. He believes, as does the government, that we can really create jobs by supporting our tourism industry. I have no compunction about saying in the House that we will do everything we can to support tourism.

With respect to cutbacks, there is only one area the third party will not cut money from. It is not tourism. It is not regional development. What is the one area that it will not take a penny from? Jails. Members of that party can only be positive about jails. If we stop and think about it, we wonder what kind of perverted logic that is. We are looking at the way government spends money and the only thing they can be positive about is jails.

To their credit they are also supporting the Department of Justice on gun control by allowing money for that, and it is appreciated. However, we have to be concerned with more than just jails. We have to be concerned about job creation, about creating another 40,000 jobs, building enthusiasm and showing support for the entrepreneurs and companies in this country that are trying to rebuild our economy.

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, today we have a good example of the financial trouble we are in: a government which does not do anything, which does not realize the magnitude of the problem, and an extreme right wing opposition ready to impose a drastic remedy on all citizens.

Allow me to come back to the Reform Party's motion, although I do not feel it is worthwhile spending a great deal of time on it. Many of the things we do in this House are not always very helpful, and we are maintaining this tradition this morning.

If we have a quick look at government finances, we see that, first of all, this year's deficit will still hover around $38 billion. We will continue to get into debt for the 24th year in a row. Our debt will exceed $545 billion, while interest rates will add $85,000 a minute to our debt.

Our structural deficit is $28 billion, which means that even with phenomenal growth and a fully functioning economy, this deficit would persist. The Canadian economy is plagued by many structural problems. The Reform Party's discussion paper does not have much to say on this. Interest on the debt amounted to $38 billion last year and will reach $45 billion this year.

Our external debt represents 44 per cent of our total debt. When referring to our external debt, we must also take into account provincial governments, municipalities and businesses. Forty-four per cent of our economic activity is in foreign hands. The problem with foreign debt is that our savings rate is insufficient and our economy is far from operating at its full potential.

I will also touch on what our Reform friends are suggesting this morning. I find it hard to call them "friends" when I read their document. This paper is a all-out attack against Quebec. Let us see what policy sectors they are going after. As we know, because of history and a number of factors, Quebec receives equalization payments, social assistance and unemployment insurance from the federal government.

These are the only sectors where federalists can say that they send Quebec more money than they receive from it. There is no reason to boast about sending Quebec more money in these sectors, whether it is social assistance, unemployment insurance or equalization payments.

This is how they compensate for the fact that Quebec does not get its fair share of subsidies allowing it to better structure its economy, as in research and development and other such sectors. They compensate with transfers, a kind of social assistance for the provinces.

Today, Reformers are telling us: "We will put some order into this. Not only will we not touch those sectors where Quebec is at a disadvantage, but we will cut UI, social assistance and equalization payments". The figures speak for themselves.

The Reform vision would include cutting a total of $15 billion from our social security system. That includes $3 billion in equalization payments. As we all know, equalization is one area where Quebec receives a fairly substantial amount. It does not work out to much per capita, for instance, but since our population is larger, the total amount is still quite substantial.

They want to cut in this area. They also want to cut $2.5 billion in welfare payments and $3.4 billion in unemployment insurance. These are the three biggest items they want to cut, but they also want to cut $6.6 billion in cash transfers to the

provinces. This is incredible, and I am amazed that they failed to consider the regional impact of this so-called budget.

Perhaps the Reform Party should stop and think what the consequences and the impact of this budget would be on the Maritimes. They would also cut in other areas such as funding for official bilingualism and multiculturalism and the rest.

It is my impression that the Reform Party still acts like a regional party, a party whose vision does not go beyond the few regions it represents, a party that is incapable of looking at Canada as a whole, which is typical of the political situation in this country today. And it also says a lot about the future of a party that hopes to govern Canada someday. I would not wish this on any Canadian. In any case, we may not be around, but I would feel sorry for Canadians if they were ever governed by a party like the Reform Party. Besides, it would not be in the best interests of Quebecers for Canadians to suffer the impact of the lack of vision of these people on their social policies.

Just consider other cuts they would make. Three billion dollars cut from pension benefits. Three billion dollars, which works out to a 15 per cent cut in the income security system for senior citizens. Are they going to apply those cuts across the board? Fifteen per cent of everybody's pension cheques? Is that what they want to do? Hard to say. They do some simple arithmetic and come up with $3 billion, just like that.

They would make additional cuts totalling $3.4 billion in unemployment insurance, although they know perfectly well that this year, the Unemployment Insurance Fund will generate a very high surplus. They probably want to let the surplus accumulate or reduce premiums. It is not clear how they want to do that.

They would also make cuts of $200 million in funding for education. We know that they supported Minister Axworthy's plan that would raise tuition fees and let students pay a larger share of education costs. So it is not surprising that the Reform Party should suggest that. I am not sure what we should call this document, to do it justice. Perhaps we should call it an essay that would hardly get a passing mark.

There are another $10 billion in cuts that should be examined more closely, but basically, it is an all out attack against social programs and especially those that benefit Quebec.

What is the basis of the Reform Party's approach? It is generated by some kind of conservative ideology according to which the rich drive the economy and our social programs have burdened us with debt, and the only solution is to make drastic cuts in those programs in order to put public finances on a sound footing.

Their document does not talk about tax equity. Not at all. It does not talk much about fighting the underground economy. It does not mention the tax treatment of corporations or businesses because according to them, these are the people who generate economic activity and they should be praised for doing so. Their god is the "invisible hand" of Adam Smith at its best. Government has no place in the economy or the social sector, and if they could privatize social security completely, they would. But of course, they cannot go all out in that respect.

I heard them say in their introduction that they were proud of what they had done, proud of this document. If this document were actually in effect, however, I doubt they would be quite so proud about facing people in the street, sinking ever deeper into poverty.

Clearly they took their inspiration to some extent from the model provided by Alberta, which is going to fix up its public finances and will succeed in getting out of the deficit. However, one has to understand the Alberta model. Yesterday, there was a very good report on Le Point . If I am not mistaken, 30,000 welfare recipients have left Alberta. Where have they gone? Whose responsibility have they become? It is easy to do something in isolation, but others have to carry the cost of it. Where are they now? In British Columbia, Manitoba or Saskatchewan, and surely being provided for by another provincial government.

Some of them will no doubt re-enter the labour market, but still. So it is easy to do something in isolation when you can pass problems or costs on to others. It would be just about impossible to apply the Alberta solution to all of Canada. The additional revenues generated by the oil industry in Alberta this year could not be duplicated for Canada as a whole. The situation there is a highly specific one.

We should have a look as well at what all of this is doing to the health care system and to hospitals. I would like to quote a few passages from the Reform Party's document on decentralization, which echoes the Liberals in talk of new federalism, decentralized federalism, federalism on the move, developing federalism and everything else they would have us believe, but always with the same idea behind it all.

They suggest transferring financial problems to the provinces, which is what decentralization is all about, while maintaining national standards. Page 24 of their document provides that the federal government would use equalization to make these national standards attainable. However, further along in the figures, we see that they are going to cut equalization payments. They are therefore denying the means to those who need it to attain the national standards. Not only do we keep

national standards high, but we cut the money and then we force them to meet the standards. How are the provinces, the recipients of equalization payments, going to attain these standards? This would be the worst decentralization scenario, if it were handled this way. We would of course keep all the departments on overlap service.

Further on, the document states that, in terms of the health care system, essential services must be maintained so that they may be covered. What is an essential service? What does it mean? Under this kind of health care system, does it mean that essential services will be available to anyone, at any hospital, on any given day? Do they know what the impact of all this will be? It is said that prevention is one of the weak spots in our health care system and in our society in general. I would be curious to see the impact that only covering essential services will have on that.

People with health problems that they consider minor will not get out and get treatment. What kind of health problems will that lead to? Obviously, they do not talk about this. Their approach is overly simplistic. If I were a teacher in a CEGEP-I suppose that such projects could not be considered university level-and I had to mark this project, I would be hard put to give it a passing mark.

I would like to touch on what could be done. There are some things that we should do to improve government finances, because they have been suggested. There is a difference between making things even more difficult for people, which is what the Reform Party would do, and doing nothing, which is what the current government is doing-it did nothing to reduce the deficit in its first year, then decided to put changes off for a year and is too afraid to make a move before the referendum in Quebec.

We must not think that we can fix 24 consecutive years of overspending in 15 or 20 minutes of debate, as the Reformers would have us believe, or by jotting a few things down on paper; it is much more complex than that. We must take progressive steps, like the ones we need for our tax system.

I have been lucky enough, in these times, to travel throughout Quebec with the youth commission on the future of Quebec and to hear many visions for the future; how to build the desired society and the principles on which it should be built, be it Canada or Quebec. The values and principles mentioned most frequently are those of fairness and justice.

No one has any solutions to offer, apparently. We are told to emphasize certain things. There is little mention of collecting unpaid taxes, which would reportedly amount to some $6 or $7 billion. We can certainly not collect all of it, but we could at least collect part of it, even if it is only $2 or $3 billion per year over the next two years.

As for overlapping and waste by the federal government in particular, a great deal of money could be saved in this area, perhaps a few billion more. The only matter on which we agree with the Reformers is that of business subsidies. We can indeed eliminate subsidies which are in any case not effective and which distort the market. In the area of defence, more cuts can be made; $1.5 or $1.6 billion in additional cuts could easily be made.

We would also have to look closely at certain tax rules. We have talked about family trusts ever since we came to the House, so much so that I am getting fed up with the whole subject. Talk, talk, talk, but nothing happens. We must also reconsider the approach of investing in megaprojects. A restrictive tax policy would lead to a slightly more relaxed monetary policy, especially in regard to short term interest rates. The impact on our economy would not be negligible.

Certain measures would serve, over the next two years, to restore public finances to a level which would make foreign investors more confident, decrease pressure on interest rates and improve Canada's economy on the whole.

I shall conclude with the choices available. For a good number of Quebecers, 1995 is the year for making choices. For Canadians as a whole, it is also the year to make financial choices and, as the time draws nearer, a greater number of possibilities emerge, such as the Reform proposal, a proposal which has not been put forward in Quebec. Reformers need only look at the results of the byelections in Brome-Missisquoi and even in Saint-Henri-Westmount to see that their vision of society in the future, their vision is not catching on at all in Quebec and probably never will because it is out of touch with reality.

If this vision is becoming widespread in Canada, no wonder the union between Quebec and Canada is in trouble. So, if this is how Reformers see things, let us not be surprised if this vision has an impact on the choices Quebecers make, because they see things differently. So, I really wish they would stop wanting to cut in the financial assistance provided to Quebec on account of the fact that it receives more in terms of social assistance, unemployment insurance and transfer payments. I wish that Quebecers could levy their owns taxes and spend these amounts effectively so that they would not need to be on the receiving end of such programs, so that fewer people would be in need.

But for that to happen, half the economic lever must not be left in the hands of someone who could not care less anyway about economic development. In that respect, the Quebec government has come up with a solution, a solution it is putting forward with the support of the Bloc Quebecois and perhaps even another party, the Democratic Action Party, which is making it increasingly clear it wants Quebec to be fully sovereign.

So, there is growing support in Quebec for sorting out our problems on our own and letting others do the same, but I am still not convinced that this vision of the Reformers is shared by all Canadians. I certainly hope that is not the case, because this is no way of looking at the future, this is not something desirable.

To conclude, there is a whole range of possibilities between doing nothing, which is the Liberal approach, and laying off everybody and putting everyone on the street, as the Reform Party is suggesting. Good for them. Preparing this budget has kept them busy for a few days, but I do not think it will be very useful in the long run, in the greater scheme of things, to put the fiscal house in order.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, I have heard a lot of criticism of our budget from the hon. Bloc member, but I would like to ask him where the Bloc's numbers are. If you are going to criticize a solid plan like we presented here today, then you had better have something to offer in-

[The Acting Speaker (Mr. Kilger)]

Recognizing, like all debates, that this one will bring some strong views, by the same token I continue to remind members to direct their interventions through the Speaker so that we can continue this debate in the finest parliamentary tradition.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, I say again, if the hon. member is going to criticize, which is good, then he should offer a positive alternative as we have done with this budget. I ask the hon. member for some specifics on what the Bloc party and what he would offer as an alternative.

In particular, I am really surprised that the member from the Bloc pointed out a concern with what we have mentioned and with what we have presented in this budget in terms of transfer payments. In fact, we have proposed to give more control to the provinces. I thought this was something that Quebecers wanted.

I will read a little bit from our budget on the principle of decentralization that the member referred to. "As a general principle, government services shall be delivered by levels of government closest to the people. The federal government should respect in practice as well as in law, provincial jurisdiction over natural resources and the delivery of social programs".

The hon. member has criticized us for this. This actually means giving a lot more power to Quebec and all other provinces. I want to hear specifically why the member has a concern with this area. I ask for his suggestions, other than separation which appears to be an option that Quebecers are not going to accept.

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, I am pleased to go over the whole decentralization approach for the second time, an approach on which the Liberals and Reformers agree. It is how they see decentralization. They tell us that they will let the provinces manage social programs.

They mention natural resources. I would remind my colleague that, under the constitution, some if not most natural resources should come under provincial jurisdiction, just like health and education. How generous of them to tell us that they will let us manage these sectors in the future.

They tell us we should be happy that we will now be responsible for these sectors. We would also like to have the revenues to manage them. They cannot transfer expenditures without the revenues that go with them. While the federal government continues to collect taxes as in the past, it will transfer responsibilities but less money. They will tell us about their flexible federalism, which left them broke so that they will now return the favour by aggravating our difficulties.

In addition to giving us administrative responsibility, they will give us jurisdiction, and then impose national standards. They say that in their paper. They say "in co-operation". Talking about federal-provincial co-operation is all fine and well, but we know who always ends up setting national standards.

They also say in their paper that equalization payments will allow all provinces to meet these national standards. Their figures say the exact opposite: we cut your transfer payments and equalization but maintain the same standards. There is something wrong with their logic.

A little further, there is a statement about health care. It seems national standards would only apply to essential medical services. There is no explanation of what that means.

This is hardly decentralization. Real decentralization involves providing financial resources in amounts that are equivalent, sufficient and fair-take your pick.

There is another element missing from this document. In economics, it is very difficult to do an accurate assessment of the mathematical impact of a measure. Economic forecasts are a good example. People think economics is an exact science. Making an economic forecast is like predicting that, when I leave the House, I will either go straight ahead, to the centre or to the left, but since around noon I usually have lunch at the cafeteria in the West Block, it is far more likely I will turn right. On the basis of a number of set assumptions, one can say yes, he will turn right. However, anything can happen.

The document fails to consider some of the more predictable consequences of cuts in welfare payments and unemployment

insurance. This money is often recirculated into the economy. People who receive welfare payments do not keep the money. They spend it. So if we cut those payments, we get the so-called negative spiral effect on the economy, and the document fails to factor in the negative impact of these cuts.

We cannot cut $15 billion in our social programs without affecting government revenues. No way. These people buy things, and the store owner uses that money to buy what he needs. That is the positive impact of dollars that circulate. Dollars that no longer circulate, that are kept by the government to reduce the deficit, have a negative impact. This aspect of the issue seems to have been ignored.

I am not saying that we should continue going into debt. I am merely saying that the negative impact of the proposed cuts has not been evaluated. I am convinced that their proposal would not lead to a balanced budget.

As for the suggestions made by the Bloc, I am sure we were agreed on one of them, the one involving business subsidies. We talk of cutting the government's administrative expenditures where overlap exists, senseless expenditures-the Senate could be completely abolished, we would not be sorry to see that, but that will be debated after we are gone-collecting unpaid taxes, the defence department, and so forth.

We are ready to consider tax expenditures, but they do not believe in such things. They think that there are only budgetary expenditures. Some expenditures are tax expenditures. Is a box at a Toronto Maple Leafs or Montreal Canadiens game a revenue generating expenditure which should be a tax deduction? I have my doubts. The tax system could be tightened up.

But there is no mention of revising anything, of changing anything to do with taxes because they are afraid-these people are very fond of such measures which allow them to make taxes less progressive. Our progressive tax system is diminished by such taxation measures. At a certain level of income, it becomes difficult to maintain the progressive nature of the system because people use the tax system to circumvent it.

This cannot be changed, these are the same people who advocate a flat rate of taxation across the board. That is their idea, it is part of what they are demanding. This is all based on a peculiar vision of society which does not allow for any redistribution of wealth whatsoever, and that is its greatest fault.

I would like them to show me how they would redistribute the money, how they would narrow the gap between high income earners and low income earners which has grown steadily in the last fifteen years. Why is this not mentioned in their document? Redistribution is not one of the Reform Party's priorities, so it is not mentioned.

It is clear and quite plain that we will never get involved in a program like that. There are other ways of going about things. All it takes is a bit of imagination and to stop repeating the theories of right-wing economists.

[Jim Abbott, Reform, Kootenay East, BC]

Mr. Speaker, the member from the Bloc is right. He and his colleagues in the finance committee do talk endlessly about tax loopholes. In spite of having been given the opportunity on repeated occasions to be able to point out to the finance committee what these tax loopholes are and quantifying them, they have been unable to do that to this point.

However, so that he can come up to speed on the whole concept of tax points and how they affect things, the hon. member should look at our document, if he has a copy of it before him.

On page 57 he will see the impact on post-secondary education of decreasing the cash transfers from the federal government which we have proposed of $200 million. If we transfer the tax points and give the provinces of Quebec, British Columbia and Prince Edward Island the ability to tax in place of the federal government taxing, he will see from the graph that by the year 2014 there is a very substantial net increase in funding for post-secondary education.

I recognize that we released this document just this morning. Perhaps he and some of the Liberal members have not had time to come up to speed.

As another example, if the hon. member would look at page 52 where we are talking about a 15 per cent cut in the entitlement going to seniors, he would see it. The very first line says: "Focus OAS and GIS on those most in need".

In answer to the question in his speech about whether this means everybody will be cut, no, it does not. However, I am really interested in the concept that we are proposing to transfer the ability of the respective jurisdictions, be they provincial or municipal, to deliver the services at the point of need and also to have the tax room for funding.

Apart from the "vive le Québec libre" kind of thing they are getting into, is that not exactly what they are after? I do not understand why there is a conflict between his and our own point of view on this issue.

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, how very generous of them to say that, for $200 million, they will give us the equivalent tax points while at the same time they will cut something like $1 or $1.5 billion in equalization.

To my understanding, this is not about recovering equivalent tax points. So, their whole way of going about reallocating

transfer payments will have a negative impact on Quebec. A two minute analysis of the document makes this patently obvious. In any case, I have no intention of spending the whole day looking at it; I have more important things to do.

The hon. member corrected what was said about seniors by saying that not everyone would face a 15 per cent cut. It is true that that is not the case. They say the focus will be on those most in need, but, here again, it is not defined, just as they do not really define either who will be targeted by the UI cuts. They do not say who is going to be affected by those.

This is how it works. When they do not have enough information to provide more details, they stick to basic principles, which do not take into account the overall impact. It is easy to talk about cutting $1, $2 or $3 billion dollars. When we start looking at the workings or into the details, we see that a lot is missing. Fine principles are easily espoused, but hard to put into practice. The Reform Party cannot get around it. This document is not worth any more than the paper it is printed on.

[Bob Ringma, Reform, Nanaimo—Cowichan, BC]

Mr. Speaker, we will continue in Reform to split our time.

I am pleased to rise in the House today to address Reform's opposition day motion. I am also pleased to be here as a member of a team that has the gumption, the fortitude and the imagination to come forward with an alternative budget ahead of the government's own. It indicates to Canadians and to the House there are better ways of doing business and getting us out of the crisis we are fast approaching.

For the benefit of people who have just tuned in I would like to read the motion of the day: "That this House reject this government's totally inadequate target which reduces the deficit to 3 per cent of GDP within two years and will leave Canada at the end of this period with a federal deficit of about $25 billion, a federal debt of over $600 billion and $50 billion in annual interest payments and higher taxes".

The operative word is that we reject the government's target. Many in the House may ask what is the purpose of our motion. Is it simply partisan politics? I will admit there is a political overtone to our motion. However, its purpose is anything but partisan.

Its purpose, if adopted as a motion, would be to show to Canadians and to the international financial markets that the government is serious about getting its debt under control. This is a very important goal because Canadians must know that any sacrifices they may be asked to make as a result of the upcoming budget are designed to take a serious bite out of the staggering debt and deficit situation. It is also important to show international financial markets that the government understands the severity of the fiscal situation and is prepared to take concrete action to deal with it.

In November the prestigious C. D. Howe Institute issued a report urging the government to move faster in the area of deficit reduction. It said the target of 3 per cent of GDP was not acceptable to the money markets. We now see that this sentiment is shared by other influential members of the financial community. To the consternation of members across the way, last week Moody's bond rating agency announced that it is reviewing Canada's AAA credit rating. In fact it was probably to the consternation of all Canadians. News of this review caused the dollar to fall and interest rates to climb. We simply cannot afford this type of reaction to the government's relative inaction.

We must renounce the government's shortsighted and inadequate deficit reduction plan by adopting the motion that is before the House today.

Why do I say that we can no longer afford to follow the government's reduction plan? It is because the problem is of such a size that we can no longer afford to ignore it. We ignore it at our peril.

That problem is a projected annual deficit of approximately $40 billion, which incidentally is about the same size as the debt financing we are paying. Think what we could do with $40 billion to spend on programs. We have to bring the deficit under control. This deficit of $40 billion will get added to the national debt, which is now more than $550 billion. It is a debt which is growing by more than $1,400 every second of every day.

The government's idea of deficit reduction is to trim a $40 billion shortfall to $25 billion. It is not enough.

Currently each Canadian taxpayer is in debt over $39,000, while the debt of every man, woman and child in this country is more than $19,000. They need relief and they need it now. We cannot afford to wait longer for the government to get serious about deficit reduction, or should I say deficit elimination.

I hope that I have established the need for us to act. I would now like to offer the government some suggestions as to how to reduce the deficit. If it does not want to take the time to go into the taxpayers' budget, here are a few things from my particular area.

First, we must get hold of the deficit by spending reductions and not by tax increases. We have said that over and over again but I think we have to say it over and over again. Canadians are already taxed to the max and they cannot, nor should they, tolerate tax increases of any type. There are many places where the government can cut back on its spending. I would like to focus on an area for which I happen to be the spokesperson in our party, official languages.

My Liberal colleagues will no doubt shudder at the idea of trimming anything having to do with official languages. However, given our dire financial straits we can no longer afford to feed this sacred cow with the same unbridled abandon that we have for almost the past 26 years.

Just before I detail the cuts I propose, I would like to state very clearly again that Reform supports the use of two official languages in Canada. We believe Canadians have a right to receive services from key federal institutions where there is a justifiable demand. That is why later today I will be calling on the Standing Joint Committee on Official Languages to support my motion which would ensure people in minority language communities get the services they are entitled to from the federal government in the language of their choice.

People have a right to these services but, at the same time, all Canadians have a right to have their tax dollars spent wisely. This is why I believe we can reduce spending in this area without sacrificing minority language rights such as services to the public.

I have reviewed the more than $600 million in annual official, official languages spending. I say official because there appears to be more spending in this area which does not appear in the official documentation so I am just looking at the nominal book value of $600 million. I have been working on this for over a year so I know there is much more there that is out of view but I have not been able to put my finger on it yet.

My research shows that we can save roughly $300 million in a year by making the following changes to current government spending practices. This is only $300 million, but if we get $300 million here, $300 million somewhere else and $300 somewhere else we have $1 billion. If we keep doing that we can come up with the answers.

First, I propose a savings of $80 million by trimming the amount the government gives to the provinces for second language education. Education, as we all know, is a provincial jurisdiction and the federal government should stop meddling in this area. Much of this money is used for programs such as French immersion, which has in itself been called into question by several noted scholars, including Professor Hammerly of Simon Fraser University. Federal funding of immersion has also resulted in the creation of a two-tiered education system in many districts. This in itself is a good reason to discontinue this funding.

However, coupled with our desperate need to get our finances in order, it is an area of spending which must be eliminated. Under my proposal over three years we would save federal taxpayers more than $240 million.

Another area we can save in is the promotion of official languages. This program costs us more than $41 million in the current fiscal year. We can support official language groups in communities without spending copious amounts of money to do so.

I had better wind up by saying that the government's deficit reduction policy is inadequate. It is not enough to tackle our serious debt problem and it is not enough to inspire confidence among Canadians or the international money markets.

I urge the government to take this situation very seriously. We will try to help by offering suggestions such as I have just done as to the areas where we can cut.

I support the motion and I urge members and the government to do likewise.

[Andrew Telegdi, Liberal, Waterloo, ON]

Mr. Speaker, I had the opportunity to glance at the budget presented by the Reform Party. It was not readily available until later this morning.

One of the concerns I have is that Reformers identify the debt as being a major problem. Certainly the government recognizes that. My concern is what their actions might do in terms of causing pressure on interest rates. They have done well in that regard because they have exerted upward pressures on interest rates. I returned from Calgary on the weekend. I had an opportunity to pick up Friday's edition of the Calgary Herald and there was a front page story about that.

It is important to reflect on the cuts Reform members are talking about because they affect very real people. This story talked about how the social services department cut off of welfare a 60-year old mother who was caring for her disabled 29-year old daughter. Given her medical condition, the daughter suffers from continual seizures. As a matter of fact, it talks about her having had 210 since January 17.

If the decision to cut off of welfare that 60-year old mother who has worked all her life were allowed to stand, it would have resulted in the 29-year old daughter being put in care at a cost of $100,000 a year. It seems to make little sense to have policies in place that would allow that kind of tragedy to occur.

I bring that forward because you can be penny wise and pound foolish. I think the Reform Party is rather light on analysis and is rather light on the fact that there are real people involved.

Does the member believe it is better not to pay $600 in welfare to a 60-year old mother so she can look after her 29-year old disabled daughter? Or does he think money is better spent by forcing the 60-year old mother into retraining and having the state support the 29-year old daughter in an institution at a very excessive cost?

[Bob Ringma, Reform, Nanaimo—Cowichan, BC]

Mr. Speaker, I cannot believe that the question is a serious one.

First of all, I am not a spokesman for Premier Klein of Alberta. Second, the observation, while very interesting, has nothing whatsoever to do with the presentation I have just made in this House. It is totally irrelevant. It might be directed to some of the detail in the budget, but I cannot honestly take the question seriously.

[Morris Bodnar, Liberal, Saskatoon—Dundurn, SK]

Mr. Speaker, reference is made in the Reform Party budget to particular cuts in social security spending. In particular, reference is made to senior citizen benefits being reduced by 15 per cent. In a country where the number of seniors is increasing, there is no recommendation for stable funding in that area but rather a reduction of 15 per cent.

Could the hon. member perhaps elucidate in what manner these particular cuts are proposed to be made to senior citizens?

[Bob Ringma, Reform, Nanaimo—Cowichan, BC]

Mr. Speaker, once again, this is not directly relevant to the speech I have given, but I would be happy to answer it in any event since it seems to be a sincere question.

We would target seniors, such as myself, who do not need the old age pension. That is where we would do the cuts. We would target things properly. Those who need it either continue to get it, or in some cases perhaps they should get more. Those who do not need this sort of support should not get it. I think the majority of those would agree with this analysis and say to put it where it is needed, not where it is not needed.

[Diane Ablonczy, Reform, Calgary North, AB]

Mr. Speaker, I would like to speak today as one of our party's critics on human resources development and social policy and particularly to address our motion contending that the government's 3 per cent of GDP deficit targets are totally inadequate. I would like to address it from the perspective of the impact of this policy on social programs in this country.

It was the Trudeau Liberal government of which the present Prime Minister was once a senior member and finance minister, which first sold Canadians on the myth that big governments can solve most of our problems. Government then designed program after program to take over some of our personal responsibilities and provide for our basic needs.

Government help and handouts are now regarded as a right. In fact, today when someone claims a right for something, he is probably asking for goods or help from the government. The pervasiveness of this attitude was demonstrated to me this December when, as a member of the Standing Committee on Human Resources Development, I attended hearings on the social reform proposals of the Minister of Human Resources Development.

Although very few Canadians were given the opportunity to address the committee, 159 advocates for special interest groups were paid almost $4 million taxpayer dollars to come and plead their right to continued or even increased public funding. This is funding that will have to be extracted from current and future fellow Canadians, from you and me and our children, in the form of higher taxes or debt.

Sadly, the pipe dream of big government as a solution to our problems has not only brought us close to bankruptcy, it has led to an abdication of personal responsibilities and has set Canadians against Canadians. Hard working Canadians are becoming increasingly incensed to have the fruits of their labour confiscated to fund an ever growing number of non-essential programs. Needy Canadians are told that they are entitled to more help from their fellow citizens and that they can rightly resent anyone whose hard work, risk taking or good fortune has provided them with a measure of wealth.

The problems we are facing today are not just the result of a lack of money, but are directly related to the role we expect government to play in our lives. We are now beginning to realize that many government services are dysfunctional, unaffordable and have a negative effect on self-reliance, independence, responsibility, personal dignity and the social fabric of our society.

For a quarter of a century Canadians have been encouraged to increasingly rely on the government, and they have done just that. A vast amount of our national wealth goes to pay for security measures. Fully one-half of all federal government spending is on social programs. Two-thirds of all federal government spending, after it pays its interest payments, is on social programs. Spending on social programs by all levels of government is about $155 billion every year. That is over 20 per cent of our country's entire income of $750 billion.

On top of that, Canadians spend a significant amount of their own personal resources on security measures. These include additional health insurance, savings for old age, post-secondary education and training, insurance against a whole host of unforeseen adversities, and personal savings.

Even if we stopped funding any of this social spending with borrowed money, we still would spend more than adequate amounts of our national wealth to achieve the level of security we need. Yet welfare state programs are paid for not only by heavy taxation but by borrowing from future generations.

The disastrous consequences of these Liberal policies are now threatening the very programs that Canadians have been encouraged to rely on to meet their security needs. Let me explain why.

In order to borrow, someone has to lend us money. When someone lends the Government of Canada money there has to be

something in it for them. That something is interest. The interest has to be paid every year until the money is returned. Our government has not been returning any borrowed money. Far from it. Instead, for 25 plus years in a row it has borrowed more and more money every single year on which it must pay more and more interest. Not only does the interest burden increase, it compounds.

Just think about the logic of what we have done. We have borrowed money to keep expensive, welfare state, give everybody a cheque programs afloat. Every dollar in interest paid on that borrowed money is a dollar that we cannot now spend on needy people in our country.

This year the Canadian government paid out $42.7 billion in interest. Just think for a moment how much security that $42.7 billion could have provided to the people of this country. Next year we will have to pay about $47 billion in interest. So next year we will have $4 billion less to spend on social security, and less the year after that, and even less the year after that until almost all our national wealth is consumed to service the debt that our reckless and incompetent political managers, mostly Liberals with help from so-called Conservatives, have saddled us with.

The tragedy is that it is not just us today who must face the huge drain of interest dollars endangering our future security. Shamefully, our children and our children's children will have to carry the burden of our government's lack of self-control. Their futures have been heavily mortgaged because governments were not willing to pay their own way.

For 15 months this Liberal government has allowed this incredible fiscal disaster to continue. In these 15 months it has borrowed another $61 billion. That means that every single month this government, this team which claims to be so competent, has overspent by $4 billion. Every month this government has put $4 billion more on your credit card and mine, Mr. Speaker. That is $137.93 for every single Canadian every month. That debt is the inheritance our children have to look forward to. And now the finance minister even wants to tax that.

With this kind of fiscal insanity on the record one would think this Liberal government would now be telling Canadians it has cleaned up its act, will be living within its means and has stopped the interest drain on our economy. Instead, what the government is telling us is so incredible that it has citizens across the country rising in outrage.

The Prime Minister and the finance minister say they intend to confiscate even more of our income for their own spending purposes. They also tell us with pride in their voices that they intend to continue to put us in the hole a minimum of $25 billion for every year we leave them in charge of our affairs. They refer to this incompetent management as good, honest government.

Our children will have to cough up in the neighbourhood of $8 billion every single year to pay for the spending spree of this government not to mention the $40-odd billion every single year they get to pay on the spending sprees indulged in by previous Liberal and Conservative governments. I expect our children will have quite a different name for this kind of management.

It is not hard to figure out that a dollar spent on interest is a dollar that cannot be spent on social programs. A dollar spent on interest is a dollar that cannot be used to help the poor and disadvantaged. A dollar spent on interest is a dollar that cannot be used by business to expand, to improve products, to take advantage of trade opportunities and most of all, to create real long term jobs for Canadians.

Members of this government make a big production about their commitment to helping people. They constantly wax eloquent about the virtues of fairness, equity and compassion.

I am willing to bet that every single one of these kind and caring Liberals will vote to put us and our children over $100 billion in the hole during their term in office. Every one of these Liberals will stand by and see an additional $8 billion plus sucked out of our social programs, sucked out of our job sector, sucked out of our future security over their term in office.

How fair is that to Canadians struggling to support themselves and their families? How equitable is it for us to spend today and hand the bill to tomorrow's citizens? Where is the compassion in eroding the sustainability of social programs because the government cannot get a grip on its appetite for borrowed money?

For 15 months Reformers in Parliament have steadfastly pressed for a change in direction and have kept the issues of our borrowing and our debt and the interest drain on our economy on the national agenda. Reformers are telling the Liberal government it is time to change direction. Canadians deserve better than to end up where the Liberals are taking us.

We need to downsize government, re-evaluate and restrict its functions, and stop living on borrowed money. We need to find better ways to effectively help those in need, ways that are affordable and encourage people to take responsibility for themselves, their families and those around them through communities, churches, schools, charities and other social groups. Public assistance should be reserved for those who need it most.

My colleagues and I in the Reform Party are doing our utmost to get the message of fiscal responsibility to those who sit across the floor of the House. Unfortunately as opposition we cannot bring about real change, a fact that is as frustrating for many Canadians as it is for me. That will not stop us from doing what we can to influence the government.

Today Reform has taken the unprecedented step of taking a government by the hand and showing it the way to a balanced budget within one term of office, within three years. I do not expect members opposite will be permitted to support such a common sense proposal, but I invite Canadians to continue to demand a return to fiscal sanity in the country.