Debates of Feb. 28th, 1995

The Budget

[Ronald J. Duhamel, Liberal, St. Boniface, MB]

Mr. Speaker, I welcome the question. First, I am delighted that my colleague acknowledges there have been a number of newspaper articles-I remind myself I am not supposed to use those as props-that have seen the budget rather favourably. They said not only is it a good first step but that it is going in the right direction and that we are going to get there.

There is supposedly no plan. That is not accurate. I know my colleague is a honourable person and he is not trying to suggest anything Machiavellian. There is plan. We have indicated in the red book that 3 per cent of GDP was our objective. Once we have attained that then we are going to eliminate the deficit and start attacking the debt. My colleague knows that.

Mr. Speaker, you know that this other Mr. Speaker is aware of that which I speak. There is a plan. It is as plain as one's nose on one's face, and particularly plain when I talk of myself in that way. There is a plan. We will reach that objective. Subsequent to reaching that objective we will eliminate the deficit, attack the debt, and the country will be on a sound footing.

[René Canuel, Bloc, Matapédia—Matane, QC]

Mr. Speaker, a brief comment. This budget is a little bit like venom to which sugar has been added to make it easier to swallow. Why is it that measures dealing with family trusts have been delayed until 1999, and that nothing is said about measures aimed at senior citizens?

If transfers to the provinces are cut, and this is my question for the member for St. Boniface, how could it not affect the least fortunate, the poorest members of society? Back home, farmers are going to suffer a great deal. The 15 per cent cut this year added to the 15 per cent cut next year is going to hurt them tremendously. Some of them told me this morning that they could hardly manage as it was, and that with these new cuts, it was going to be hell. How can you claim that this is not like venom?

[Ronald J. Duhamel, Liberal, St. Boniface, MB]

Mr. Speaker, I wish to thank the hon. member for his question. Of course, the budget will hurt some Canadians. Let me repeat that this budget is tough, but fair. I do not think that it is harder on any particular group.

There is another consideration. If I am wrong, what can we do collectively to try and counteract this? Now that a decision has been made, what can we do? Asking the reasons for a delay serves no purpose. We all know that, often, consultations must be held. We cannot simply say: "There, it is done." In other cases, time must be given to adjust to new measures. This is, in my opinion, a reasonable approach.

[The Acting Speaker (Mr. Kilger)]

Before the hon. member begins, in the last intervention we heard from the parliamentary secretary. He referred to the hon. member for Lethbridge by his name. Of course we know that is not a practice which is customary. However, I know full well that when I am in the chair and he refers to Mr. Speaker he is not speaking to himself.

[Ray Speaker, Reform, Lethbridge]

Mr. Speaker, in my former life as a member of the Alberta legislature I ran into the same sort of circumstance. I appreciate being recognized in the House and having the opportunity to enter the budget debate today.

Yesterday I listened very carefully and considered what the Minister of Finance presented as the government's plan for Canadians. We heard in the last election about the plan that was going to change everything for Canadians and fix all the problems. During that campaign we were presented with the red book that supposedly had all the answers to all the questions. The problem is that red book is now out of date and does not answer the questions. The red book principles were applied to the budget plan that was presented to us yesterday. It is not good enough for Canadians.

Why is it not good enough? First, if I had to define the budget and describe it, I would say that it is a budget without any conclusion, without any direction and without any real resolution of the major problem that Canadians are facing, a major problem that is only being enhanced and encouraged by the government.

When I say that there is no conclusion, I think of the Minister of Finance in his former responsibility in his private life where he had a fleet of boats on the Great Lakes. The hon. member would never have put a boat on the lake and said: "It sits there. I do not know where it is going and I have no conclusion as to the destiny of that boat". He would not do that. Nor would anybody tell a story without having a conclusion to that story so that we understood where the story was leading us as it was being told to us. This budget does not have its conclusion.

What was the conclusion that we were waiting for as Canadians? I heard it through the media. The member for St. Boniface has said to us as he quoted a number of articles about the budget that people were responding in a certain way.

In the last week to 10 days Canadians, people in the investment community and the media had one question that was paramount in their minds: when will the deficit be eliminated? When will that deficit come to zero?

The answer to that question was not in this budget. That has had a devastating effect in my mind on the confidence of Canadians investing in this country. We do not know where interest rates are going to go, what the value of the dollar will be. We do not know the type of revenue growth that we are going to have because there is a lack of confidence. This government did not have the will nor the courage to put its administration on the line and set up a plan that would reach a proper conclusion, one that must be dealt with in this country.

What did we get out of that budget? As I said a few moments ago as I raised a question in this House, we are left with $100 billion of added debt to the current debt in this country.

In three years of administration of this government by the time we get to 1996-97, $100 billion will be added to the debt. Interest payments from 1994-95 to 1995-96 have gone from $42 billion up to $49.7 billion, over $6 billion in one year of additional cost in terms of our interest.

The following year, in 1996-97, are those interest costs going down? No, they are not. They will be $50.7 billion. We can imagine what that does to the budget, how that affects social programs, how that affects other priorities, how that is going to affect this government in its decision making in terms of expenditure reduction, of reducing the services of the federal government to the Canadian people.

The interest cost is out of hand and is going to continue because there is no plan, there is no conclusion in this budget. What happens after 1996-97? That is a serious question. This government does not know what is going to happen.

It says that maybe in 1996-97 the deficit can go down to $19 billion, that the 3 per cent target is $25 billion. If we get there then we are okay in Canada. That is not true. All we need is a bit of a recession and the $25 billion deficit will start to balloon again up to $25 billion, $30 billion, $40 billion, $50 billion. What is the consequence?

The consequence is that we could add another $100 billion very quickly to the accumulated debt of this country. It will not only be in 1996-97, $603 billion as the Minister of Finance told us yesterday. Most likely by 1998-99 it could be $700 billion. Where then is our interest cost and where is the economy of Canada? We are in a disastrous position.

This governments says do not worry, it is going to be okay, that it is going to come up with a plan to deal with it, it has two years of administration to do something. It has not done anything. In this House we wasted the fiscal year 1994-95 by a do nothing budget. This budget is not much better when we clear away some of the rhetoric that we heard. Do we know what the real expenditure reductions are-$4.1 billion of expenditure reduction. It is heralding it as a great success.

By the time we reach the conclusion of this Parliament or the fiscal year 1996-97, that is not much of a start in dealing with the deficit. We are going to pay the consequences. The softer we are, the liberal approach that we are using is not going to work very well and Canadians are going to pay.

I want to make one more point in my last two minutes. Who pays for this? We are laying on our children and on the future generations of this country at least another $100 billion in debt. That is a crime.

This government stands up here and says in this budget that it did not increase personal income tax. Think of the increase in personal income tax on our next generation. That is only a few years down the road. It will have to pay to pick up this accumulated debt. Think of the imposition that this government has laid on its shoulders, another $100 billion which is its responsibility; not the Conservatives, which was the last government, it is its responsibility.

Think of the increase in personal income tax that is going to happen. Think of the corporations that will have to flee this country because they cannot pay the amount of taxes that will be imposed on them by, who knows, the next Liberal government or another government that has to come in and deal with the circumstances.

That is the crime in this budget. That is the absolute crime. Like never before we need a Reform budget, the taxpayers' budget, which said very clearly to Canadians that taxes should not be increased at this time. That is number one. Number two, we must reduce the expenditures so that the deficit is brought to zero within a three-year period.

This is the responsibility that we should be taking in this House, not this soft hand approach that has been used and one that is leading us into terrible circumstances for the future generations of this country.

I think that has to be taken into consideration. If the government does not, it has to live with the crime. Its members have been the cowards not to deal with the problems that face them, and future generations will look back at this very difficult time that was not dealt with in a responsible way by this government.

[Julian Reed, Liberal, Halton—Peel, ON]

Mr. Speaker, I am very curious to know what kind of discombobulated crystal ball my friend had that he looks into and is able to predict the future four or five years down the road.

I expect he predicted the decline of the Mexican peso. I suspect four years ago he predicted an anticipation of feared inflation in the United States which would raise interest rates.

I expect he must know the answer to when the budget will be balanced ultimately. The minister has taken a position, right or wrong, that he wanted to do it in two-year leaps, in two-year packages, for the simple reason that he had a better chance of predicting what was going to happen in that time.

As we all know, they did not all pan out the way they had been originally predicted. By what curious vision does my hon. friend express the question or bring the challenge to the government that somehow we should be able to say in x number of months or x number of years the budget will be ultimately balanced? My friend may be surprised that it may end up being balanced before both he and I expect.

I would like to know how he projects into the future in the way he seems to be doing.

[Ray Speaker, Reform, Lethbridge]

Mr. Speaker, in all of the presentations we make, whether it is policy or pronouncements in this House, our whole objective is to look forward, not backward. Perhaps that is the difference between the Liberals and the Reform Party.

We all know that when we do forecasts there is a certain amount of risk. When we have the responsibility of government we have to make the best possible projects as we can.

It is obvious that this government is going to reach its 3 per cent of GDP and leave us with a $25 billion deficit in 1996-97. That is obvious. I think it is going to do that. That is not a tough target. That is number one.

Number two is at that period of time we will have added, as I said, $100 billion more to the accumulated debt. That is obvious and predictable.

Number three, after following that, has this government the will to make some kind of projection so that it brings the deficit down to zero? Does it have confidence in itself that it will bring the $25 billion in 1996-97 down to a zero base within the next two years? If the government thinks it can, why does it not say it?

[The Acting Speaker (Mr. Kilger)]

The member is splitting his time with his colleague from Capilano-Howe Sound. I give an undertaking to the member of the official opposition seeking the floor on a question or comment that if he should so choose on the next intervention I will recognize him.

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

Mr. Speaker, I think that without malice it is useful on the occasion of this budget to recall what Liberals used to say on such occasions: "The budget cuts of $6 billion out of general government programs are slash and burn. They will lower the quality of government services that Canadians expect from their federal government as a matter of sacred trust. The firing of 42,000 civil servants is heartless and without compassion". The Liberals would have said it destroys forever the sanctity of labour contracts, it is equivalent to union bashing.

The biggest indignation Liberals in opposition would have reserved would be for the close to $4 billion cuts in transfer payments. They would have said: "It will make it impossible to enforce national standards on health and higher education and; heartless and without compassion on welfare. This is the proverbial slippery slope where Ottawa and the upholders of standards of compassion will lose their grip. The country will fall apart. It will become just like the United States. Oh, my god. There will be beggars on the street. The poor will have to commit crime. People no longer feel like Canadians because when they move from one province to another they will get lower welfare rates, can you imagine that, inferior universities and different health standards".

They would say the deficit problem is being solved on the backs of the poor, those least able to defend themselves. The Liberals in opposition would have said the gasoline tax increase is a tax grab and regressive because of all those with lower and middle incomes who have to use their cars to go to work. Worse, the tax measures did not tax the allegedly obscene profits of banks. They did not raise the tax on the rich or expropriate wealth by an inheritance tax.

The finance minister when he was in opposition used daily question period to ask the government to lower interest rates. He now refuses to. He did not order the governor of the Bank of Canada to lower interest rates and the debt burden. What is wrong?

I am sure the Liberals when in opposition would have used this opportunity to remind the government of broken election promises. The regressive, expensive, annoyingly complicated GST is still there and will be used to grab another $2 billion from Canadians, many of whom are poor. There is still no new day care facility. NAFTA is sucking jobs to Mexico.

The rat pack would have hurled the ultimate insult at the opposition. They would have said: "They are slowly eating their red book". For a summary indictment, these Liberals would have used: "This budget sounds like the agenda of right-wing think tanks and horror or horrors, like the program of the Reform Party". We proudly say that this is so.

I am not a Liberal and I will not use these slogans to criticize this budget. Its shortcomings are fundamental and frightening for anyone familiar with history and the power of compound interest.

During the 1980s my economist colleagues and I would sit at the lunch table at Simon Fraser University. We discussed the successive budgets of Michael Wilson, who sounded just like Paul Martin-like the present Minister of Finance. I apologize, Mr. Speaker.

[The Acting Speaker (Mr. Kilger)]

I would like to remind members to not refer to one another by name, but by riding or ministry.

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

Mr. Wilson would say: "We had to face financial reality. We had to take tough measures that will transform the way the Government of Canada works. In doing so we have turned the corner. We have stabilized the debt to GDP ratio. The next budget will bring it down. We are well on the road to fiscal sustainability".

I will never forget how we all agreed that the stabilization of this ratio during prosperity was not enough. Spending and tax measures to achieve this objective during prosperity will result in deficits once a recession hits again. We were right at that time, not as a matter of ideology, but of simple economic principle.

This budget is déjà vu all over again, except this time there are absolute spending cuts rather than Wilson's magic reductions in previously inflated plans for spending increases. These cuts represent a truly major achievement for which most of the credit must go to the Minister of Finance and some of his colleagues.

The tragedy is that these cuts are too little and too late. With a debt of $550 billion these absolute cuts achieve the same objective as did Wilson's phantom cuts when the debt was half that size.

The cuts of $10 billion in program spending just about match the $9 billion in higher debt service charges on the planned debt level over the life of this budget. The expected increases in revenue due to prosperity and tax measures amount to a staggering $12.7 billion. Yet, these revenue increases only keep constant the debt to GDP ratio.

These facts represent the key to understanding my negative views of this budget. Let me repeat them.

The cuts of $10 billion, however wrenching they may have been, just about match the required increases in debt payment of $9 billion on the planned increased debt over this period. The expected increases in revenue due to prosperity and tax measures amount to a staggering $12.7 billion. Yet, these revenue increases only keep constant the debt to GDP ratio.

The reason for this bottom line is that the biggest spending category in the budget, transfers to persons, which amounts to $37 billion is to remain unchanged. The debt to GDP ratio will never be lowered during prosperity unless this spending category is made to contribute its share to the solution of the country's crisis.

Investors who determine the fate of the dollar and the Canadian interest rate will look at the bottom lines that loom behind the rhetoric and brave actual cuts. They will ask why transfers to persons are unchanged. They will remember the traditional Liberal slogans recalled above and will connect the two. They will not be assured.

Mr. Speaker, I hope for the sake of Canada and my children and yours that my diagnosis is wrong and that Reform will never be able to say we told you so.

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

Mr. Speaker, in listening to my hon. friend I do not know whether he is going forward or backward. He does give me the impression that he is definitely going backward.

Unfortunately there are some things I have to agree with. He does speak to the fact that this government has not really been firm enough in reducing the deficit which is already astronomical. It does not take a rocket scientist to recognize that the longer we delay in resolving the issue, the more pressure we are putting on future generations.

It is the youth of this country who will have to pay. We are being nice to ourselves by not really being more firm but that is where I do not agree with this hon. member. I do not share his lack of feeling and lack of compassion toward people who are getting the screw when there is latitude to demand for example that the banks contribute a bit more.

Would my hon. friend agree with me that it is unfair to ask that banks in Canada contribute $100 million over the next couple of years when we know they have been making incredible profits over the past few years? The Royal Bank last year made $1.2 billion net profit. We are asking these banks to contribute only $100 million and we are cutting and slashing social programs. Does he think that is fair?

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

Mr. Speaker, I believe on economic policy one has to take the longer run view. It does not do to penalize success like the banks have had now for a year or so after having absorbed huge losses for many years. If we do this kind of thing, we will drive out investment in Canada.

Investment in Canada is the source of our prosperity. It is the only source that will raise our living standards by increasing productivity. Without it, it is not possible. Even new technology needs investment to be introduced.

I do not share the judgment that it is wise for the longer run fortune of this country to say to anyone, be it a bank, a corporation, a professional, a gambler, anybody who has had success: "You are not allowed to keep it because there are some people out there who did not invest, who did not have luck, who did not work as hard. They have to get their money from us".

This is not what has made this country great and it is not what will keep this country prosperous. The Reform Party and certainly I will forever defend the system that has gotten us to the standard of living to which we have proudly become accustomed.

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

Mr. Speaker, I listened to the member's remarks and noticed that he wanted to make some serious cuts to the social security program spending.

I have always believed that our responsibility in this Chamber is not to spend all of our time focused on those who are advantaged but to primarily make sure that governance always has a focus on those in our community who are disadvantaged.

I want to read directly from the taxpayers' budget in brief. Under unemployment insurance cuts which is currently $15.6 billion the member is proposing a cut of $3.4 billion by the end of the third year.

Does the member honestly feel that it is good public policy when people are in such a very difficult circumstance of not having a job to take almost a 22 per cent decrease-those are the member's own calculations-from those people who are going through a very difficult period, specifically being unemployed? Is that good public policy?

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

Mr. Speaker, I thank the member for raising this important point. The OECD issued a report in which it said that Canada's unemployment insurance system is an outstanding example of excessive generosity. The Auditor General has a graph which I recommend to the hon. member. It documents this generosity.

If someone in the United States earns $100 and goes on unemployment, he gets $20. In Europe if he earns $100 and goes on unemployment, he gets $30. Does the hon. member know what a person gets in Canada according to the Auditor General? He gets $60, twice the European amount. Is there any heartlessness in taking on the suggestions by the OECD and the Auditor General to reduce this excessive generosity a little bit?

[The Speaker]

It being 2 p.m., pursuant to Standing Order 30(5), the House will now proceed to Statements by Members, pursuant to Standing Order 31.

Black History Month

[Ron MacDonald, Liberal, Dartmouth, NS]

Mr. Speaker, today marks the last day of Black History Month.

As the member of Parliament for Dartmouth I am proud to say that I represent the largest indigenous black communities in Canada, in Preston, North Preston, Cherrybrook and Lake Loon. The Preston communities have a rich and compelling history. It has contributed greatly to the culture of Nova Scotia and indeed all of Canada. Unfortunately for the rest of the country, much of this cultural heritage has been unwritten, instead being passed on from generation to generation by word of mouth.

Students of Cole Harbour High have sought to change this by using modern communications technologies. As a project for Black History Month students have created a site on the Internet's world wide web to give millions of computer users across Canada and around the world a glimpse of this rich heritage.

I ask the House to join with me in congratulating the students involved in this project for their tremendous efforts to bring Nova Scotia's black history to the world.

Taxation

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, we cannot accept that, in his budget, the Minister of Finance is once again attacking the poor while leaving untouched the tax privileges enjoyed by the rich in our society.

That approach, which proposes no tax reform, perpetuates inequities. There is nothing in this budget to eliminate the tax treaties signed with countries considered tax havens, thus allowing large corporations to avoid taxes. There is nothing as well about flags of convenience used by Canadian shipowners and the government itself so that they can employ foreign sailors who pay no taxes to Canada.

To top it all off, the Minister proposes to tackle family trusts only in 1999, while rich families use this loophole to avoid paying their fair share to the government. As radio anchorman Joël le Bigot said, if you hit the humble, you are ready for the federal government.

The Budget

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, yesterday the finance minister delivered his budget and in so doing missed a glorious opportunity.

Canadians want hope. They want truth. They want leadership. But where is the hope when we discover that the compound interest on the deficit the finance minister is projecting, on top of our already huge debt, will cancel out the savings from the cuts announced by the minister? The minister could not even muster the strength to tell us when we will have a balanced budget.

Canadians want the truth. They want to know what will happen to their social programs as compound interest continues to eat up an ever larger share of their tax dollars simply because the government could not make the hard decisions in the budget. On this issue the minister is silent.

Finally, they want leadership. They want a government that will make personal sacrifices. Canadians resent a government that cuts the public service, ups taxes and allows overspending to jeopardize old age security but does not have the character to give up what is the richest, most extravagant pension plan that taxpayers' money can buy.

Agriculture

[John Solomon, NDP, Regina—Lumsden, SK]

Mr. Speaker, the headline in the Regina Leader-Post this morning says it all in one word: devastated. This budget leaves farmers-

[The Speaker]

I would remind the hon. member not to use any props in the House, please.

[John Solomon, NDP, Regina—Lumsden, SK]

Mr. Speaker, this budget leaves farmers reeling in western Canada. It has the effect of a hurricane on agriculture. It will leave a trail of destruction and devastation throughout rural Canada.

It will cost rural families one-third of their net income and one-third the value of their land. Farmers work hard to put food on our tables and only ask to be treated fairly. The Liberal government responds by attacking farmers with ruthless cuts.

The minister of agriculture has betrayed rural Canadians by taking away the Crow benefit, reducing dairy subsidies by 30 per cent and abandoning more rail lines.

Farmers are now trapped between dwindling incomes and little prospect of selling their farms. The treatment the government has shown to rural Canada is unforgivable and will cause

permanent damage to what was once the proud breadbasket of this land. This is a devastating budget for western Canadians and a shameful day for a Liberal government that promised more.

National Forum On Health

[Pat O'Brien, Liberal, London—Middlesex, ON]

Mr. Speaker, with Canada's health care system at a crossroads, the Prime Minister has wisely established the National Forum on Health to develop a vision for Canada's health system into the 21st century. This vision must be capable of achieving a balance between care and health promotion, prevention and protection measures.

From various backgrounds and regions of the country, members of the health forum are seeking to identify national priorities and encouraging dialogue among Canadians on medium and long term health issues. Over the coming months they will focus discussion and assist in developing strategies to improve the health of Canadians.

I am proud that a member of the London community was appointed to the health forum. Ms. Shanti Radcliffe brings to the forum her experience in community based health for youth, women, seniors and immigrants. I commend Ms. Radcliffe and all members of the health forum as they help to ensure Canada has the best health care system in the world.

The Budget

[Brenda Chamberlain, Liberal, Guelph—Wellington, ON]

Mr. Speaker, Guelph-Wellington residents wanted responsible deficit reduction and spending cuts and the Minister of Finance has responded.

They know it is easy to cry for cuts but more difficult to ensure that any deficit reduction is fair and equitable. The budget ensures fairness. They know it is easy to criticize, but more difficult to make the good and necessary decisions which the government has made. They know that it is easy to release figures and offer ideas based on principle rather than reality. Yesterday's budget recognizes that deficit reduction will affect the lives of real people.

The people of Guelph-Wellington are not looking for the easy solutions found in 1-900 numbers and cable programs. They believe in this country and our ability to overcome our problems. They want Canada to succeed. They wanted a tough budget. They wanted spending reductions. They wanted fairness. For their sake, we have delivered.

Referendum Debate

[Nick Discepola, Liberal, Vaudreuil, QC]

Mr. Speaker, a sovereign Quebec would be a country of intolerance, where democracy would be trampled on and ideological dissidence could be equated with treason, depending on the outcome.

When someone like Bourgault brands as racist the anglophones who would democratically vote against their proposal, that is one thing. When someone like Landry says that there is no place for multiculturalism in Quebec society, that is another, but when a democratically elected member of the House maintains that newly arrived Quebecers should not have the right to express their views or vote on such a vital question as the future of their country, that is unacceptable.

On behalf of all English-speaking and newly arrived Quebecers who have chosen to settle, to live and to raise their children in Canada and in Quebec, I demand an apology from the hon. member for Louis-Hébert.

I want to remind the Bourgaults and the Parés of this world that they also come from-