Debates of March 1st, 1995

The Budget

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Mr. Speaker, have we gone through 10 minutes with one question and answer? Did I misunderstand you?

[The Deputy Speaker]

The parliamentary secretary is correct. Perhaps that will be a record in this Parliament, that one question and one answer went about nine and a quarter minutes.

[Jerry Pickard, Liberal, Essex—Kent, ON]

Mr. Speaker, I would like to advise you that I will be sharing my time with the member for Cape Breton Highlands-Canso.

It is my privilege to rise in the House today to participate in the budget debate. I compliment the Minister of Finance on a masterful budget the addresses the concerns of the business community, the international markets and the Canadian taxpayer. He has made great strides to bring our deficit under control and meet the targets we set in our election campaign. In 1996-97 we will reach the 3 per cent of GDP target we outlined.

Over the last few days a great deal of speculation about the budget has been replaced by some pretty confident and solid comments about the Canadian economy. They have been addressing the positives in terms of what we have seen in the budget.

Mr. John Bulloch, president of the Canadian Federation of Business, said that it was very believable and very credible. The powerful Canadian Manufacturers Association called the budget the first serious attempt at resolving Canada's books and balancing them properly. The Montreal based bank, the Laurentian Bank of Canada, led the way in cutting its prime rate by one-quarter of one per cent on budget night. Since then and through this week we have seen the Canadian dollar go to a solid 72 cents. At the same time most of our lending institutions announced that they would be cutting their lending rates from one-quarter to one-half per cent. Mortgage rates will be down.

What does this mean to the average Canadian taxpayer? It means that we will have more money in our pockets. Average Canadian taxpayers are making payments on loans and on mortgages. When they come up for renewal they will be paying less for borrowing that dollar. It is a positive point about the Canadian economy. It is the point that will create more spending, bring back consumer confidence and lead us to more jobs.

Over the past 10 years Canadians heard finance ministers Wilson and Mazankowski give budget speeches that promised to reduce the debt and the deficit. Their assumptions and targets were so far off base that year after year we fell well below the targets. They mismanaged the economy badly. When they were elected in 1984 the debt of the country was $168 billion. In nine

short years from 1984 to 1993 they tripled the debt, going from $168 billion to $500 billion.

At the same time, the Canadian government under Wilson and Mazankowski had to keep interest rates high to attract the bulging demand for foreign capital. We as a country became more and more subject to foreign investors. We became more and more a country with rising foreign debt. As a result we needed a major change and the Canadian public was well aware of it. Our Liberal government when elected in 1993 set realistic, achievable goals.

This year's budget, with a total saving of $29 billion over three years, is realistic. It is achievable. As a result, because we based our budget on basic, realistic, achievable goals in our economy, we as a government will create a positive climate that will move forward in a very positive way. I forecast that not just three years down the line but in five years from today, by the year 2000, we will be looking at a no deficit budget. We will be looking at a balance sheet where we can start digging into the debt and reducing it.

What does the budget mean to the average Canadian taxpayer? As I said, money is going to be in their pockets through reduced interest and borrowing costs.

I have heard the opposition complain very bitterly that Canadian taxpayers will have to pay an excise tax on gasoline. Yes, we added 1.5 cents to the cost of a litre of gasoline. There is no question about that. I would suggest that when average Canadian taxpayers fill up their cars once a week they probably put 50 litres in their gas tanks. The increase will amount to 75 cents a week or the price of a cup of coffee. Would they rather pay the price of a cup of coffee and see their mortgage rates go down or, as Reformers would state, have absolutely no expenses? I do not see their logic. I do not see their reasoning. I have talked with a lot of Canadians and they are not upset by the 1.5 cents per litre increase.

There are, however, other people in this dimension. Over the last several months large corporations and banks have announced record profits in their businesses in Canada. They have been targeted to help reduce our deficit, as well they should be. Over the next three years we expect to generate $910 million from tax increases to very prosperous institutions. They as a group have been demanding that the government get spending under control, and they are the group that has a responsibility in helping us do so.

My riding of Essex-Kent in southwestern Ontario is very dependent upon agriculture for its livelihood. It is an industry that producers over half a billion dollars in the two counties of Kent and Essex that I represent. We are very mindful of the partnership between government and the agri-food industry working together in that sector.

The government in streamlining research has designated some areas as centres of agricultural excellence. In southwestern Ontario the Harrow Research Centre will become a national centre of excellence for research in the greenhouse industry and the food processing industry. Streamlining services in Harrow will centre the research where the high concentration of greenhouses and processing crops is. The value added and tax initiatives that very instrumental to Essex and Kent counties will help our economy a great deal.

In the Chatham area we will see an ethanol plant that will have a great impact on the economy. The plant is a result of a real desire on behalf of the government to improve value added production in Canada. The benefits of the initiative have great potential across the country. There are very serious concerns about MMT that is presently being used to boost the octane of most Canadian gasolines. Ethanol is far more environmentally friendly and will be the choice of Canadians in the future.

Liberals can take pride in our legacy of caring for people and ensuring that our seniors will be financially secure. Measures have been introduced to guarantee their incomes and to make certain that over time in the future they will have definite pension plans that will pay to support them. They can be sure that with the studies and discussions presently ongoing the old age security and guaranteed income supplements will remain. The government will remain committed to providing a fair, reasonable and equitable situation for them.

Cash transfers to the provinces have been questioned very much. I was a little appalled this morning when I saw Bob Rae on television complaining about Canadian support to the provincial government. Bob Rae, the premier of Ontario, has totally mismanaged the economy of Ontario. Between 1990 and 1994 the federal government increased its funding for Ontario hospitals, colleges and universities by 26 per cent, while Bob Rae only increased funding to hospitals, colleges and universities by 17 per cent.

What does that mean? It means that Bob Rae did not participate in those services as the federal government has and did not carry his fair share. He mismanaged the economy and downgraded services, accepting totally the transfers from the federal government but not spending them within the province with matching funds.

It has to be made clear in looking at the services that above all we are trying to make certain Canadians across the land get fair and equitable treatment.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, I have some questions for members of the government. They talk about wanting to be fair and treating all regions of Canada fairly. I would like them to take another look at the budget and what they have really done to the Atlantic region.

The Atlantic region last time around took 27 per cent of all the cuts in the last budget and we have 8 per cent of the population. This time around someone has to tell me how they can justify taking away the freight rate subsidies to get our product to market. When they brought down the budget on Monday, 15,000 jobs were jeopardized in the Atlantic region. Members do not know this and backbenchers do not know this, but the Minister of Transport knows it. He made promises to the people in the Atlantic region. They held public meetings. Our people said they would give up ARFAA, the interprovincial subsidy, but that they must have the westbound one in order to keep working. They were led to believe the Minister of Transport agreed.

Does anyone know how they heard that the ARFAA and MFRAA were to be taken from them? They heard it from Peter Gzowski on CBC interviewing the Minister of Transport. I have a list of companies in the Atlantic region that will be affected. The Canadian Manufacturers Association wrote to the Prime Minister about the fact that there had been no dialogue from the Minister of Transport.

We want to be fair and responsible in the Atlantic region. I get tired of hearing people refer to us as have not provinces. Our people believe in the family unit and in work. They want to work.

What are they going to do for all the people in manufacturing? What are they going to do today? I represent a city that has a nuclear power plant and the largest privately owned oil refinery in Canada, and the government took away the weather office. Does the government not know what it is doing? I do not believe it does. This is a very serious situation.

I ask hon. members to revisit what they have done. What has happened to the Atlantic region is devastating to our people. The people are sitting at home today wondering what is going to happen tomorrow because they have not had all the bad news yet. They took the bad news the last time and said: "We are good Canadians. We will accept it". However we cannot accept any more.

I ask members to take another look at it. Where are the 31 members in government from the Atlantic region? Why are they not speaking out for good, honest people who want to work? That is all they are asking for. Government members say they will create jobs; we are still looking for them. They know our transportation costs have been increased by 40 per cent with what they have done by taking away the freight rate subsidies. They cannot compete. They are finished.

I ask hon. members to take another look at what they have done to the Atlantic region, a part of this country. They did not state that the St. Lawrence Seaway would no longer be ice free. When that project came into play it affected my international port. What will you do for the Atlantic region?

[The Deputy Speaker]

I ask all hon. members not to refer to other members as "you".

[Jerry Pickard, Liberal, Essex—Kent, ON]

Mr. Speaker, the question was a little longer than requires a brief reply.

The point to be made is that every region in this country has equal treatment in this budget. There has been a tremendous effort on behalf of the finance department, the minister and the government to make certain every section of this country does have fair and equal treatment.

It is interesting that the member did note that they are losing transportation payments. She was very upset about that. I remember the Mulroney government which took the At and East bill and destroyed travel in the east, in Ontario and all through eastern Canada. I certainly saw it destroy the economy of this country.

Jeffrey Simpson, who is really no friend to the Liberal Party, did support the Tory government and stated very clearly that if Wilson and Mazankowski under the Mulroney government had taken some reasonable action about the economy of this country in the 1980s we would not be in the problem we are today. It is a sin we are here. They created it and they got ripped by the Canadian public for it.

[Francis Leblanc, Liberal, Cape Breton Highlands—Canso, NS]

Mr. Speaker, the member for Saint John wondered where the 31 other Atlantic members were to speak on this budget. I am one of those members and I am proud to support this budget.

It is a very fair budget. It is a budget that responds to the needs of Canada, including Atlantic Canada. It is a budget that will build a strong foundation for future growth in Atlantic Canada and it is the budget that does what nine years of Tory government failed to do, which is the reason why it only has one member from Atlantic Canada in the House of Commons and only one other member in the House of Commons.

I welcome the opportunity to speak on the budget that was tabled on Monday. My remarks will come from two perspectives, as my experience as chair of the House of Commons committee which recently carried out extensive public hearings across Canada on the future of Canada's social programs and as an Atlantic Canadian.

For many, perhaps most of the hundreds of Canadians who appeared before our committee last fall, this budget and what would happen to social programs and to the historic federal commitment to social programs as a result of the growing preoccupation with the deficit was very much on their minds.

Many witnesses expressed suspicion that the comprehensive review of the social security system in Canada which they acknowledged was necessary was nevertheless being used as a smoke screen to slash spending on social programs as a way for the government to achieve its deficit targets.

They wondered about the choice of programs that were being included in this review. Why was the government not focusing more on tax expenditures, in particular about tax breaks to wealthy Canadians and corporations? Should they not be made to shoulder their fair share of the task of deficit reduction?

The report of the human resources development committee which I tabled in this House on February 6 paid careful attention to these concerns and had some specific recommendations for the Minister of Finance to consider as he prepared his budget.

In particular, we urged him to ensure that the balance of deficit reduction measures in his budget addressed the issue of tax fairness in Canada. As well, we urged the government to proceed with the reform of social programs as part of its jobs and growth agenda.

The country's difficult fiscal situation only makes the need to address the accumulated problems which have occurred in our social security system more and not less urgent. We did not say that there should never be any reduction in social spending in Canada. That would have been unrealistic in the current fiscal climate. What we did say was that savings in this area should be achieved as part of a fundamental, comprehensive reform to the system of social security in Canada.

It is one that would respond to today's social security needs like addressing the pressing problem of child poverty, fostering the kind of life long learning culture that will support employment and assist Canadians to find the kind of well paying jobs that have a future in this country and, most important, by stabilizing the overall finances of the federal government by removing the distortions and the disincentives that have grown up around government programs that have been built with the best of intentions for another era and by focusing the resources and the energies of government to those areas where government is best placed to be effected. In short, by getting government right.

The Government of Canada can provide the leadership and the fiscal framework needed to ensure that the social security system and the programs which Canadians across this country told the committee they were so proud of and were so necessary and so much defined our country would be preserved and enhanced for the future.

Does the budget that was released on Monday respond to the concerns of Canadians as reported by a committee? In large measure I believe it does. The committee urged the government to balance efforts to reduce the deficit with measures to promote tax fairness. This budget does that. For example, there are no increases to general income taxes, yet measures are taken to ensure that taxes that are owed are paid.

The large corporations tax is increased by 12.5 per cent and the existing corporations surtax from 3 to 4 per cent. In addition, banks and other large deposit taking institutions will pay a tax on capital, raising $100 million between now and October 1996.

The budget takes dead aim at the system of family trusts. All tax advantages that flow from the establishment of family trusts will be eliminated. The infamous amendment to the so-called 21-year rule that was introduced by the previous government to allow the wealthy to shelter tax through family trusts will be repealed.

In addition, the budget adopts a specific recommendation of the committee that would open up tax expenditures as well as direct expenditures of government to regular parliamentary scrutiny.

With the budget the government reaffirms its commitment to reform of the social security in Canada not as a reckless exercise in slashing programs but as an orderly and thoughtful process of renewal in full partnership with the provinces and in consultation with Canadians.

This budget makes no immediate cuts to the principle elements of the social safety net. What further spending cuts occur only begin in 1996-97 and then only once a framework for a renewed and reformed unemployment insurance system and the implementation of the Canada social transfer are fully in place. These reductions are less than the reductions that have been made in other areas of government. The social programs will have more room in a government which is more rationalized and where the fiscal part of the government is more organized.

The consolidation of the Canada assistance plan and the established program finance transfers into a uniformed block transfer to the provinces follow in the spirit of the committee's reports which recommended that the Canada assistance plan be made into a block transfer in order to give the provinces more flexibility and in order to design reformed and renewed ways of helping people who are on social assistance provide basic supports for their families, also to enhance their access to the job market.

In addition to that the committee also recommended that there be an enhanced effort toward working with the provinces to enhance the child tax credit, working income supplement and other measures that would be made in order to work together to provide more assistance to poor families with children.

In addition, the redesign of the unemployment insurance program announced with this budget is also something that is absolutely necessary. Our committee recommends ways in which the unemployment insurance program can be redesigned and rebuilt in order to foster employability, in order to promote

lifelong learning, in order to allow Canadians to have access to the supports they need to get the jobs of the future.

As an Atlantic Canadian, particularly one who comes from a region where unemployment insurance and other social programs are a very important part and preoccupation, I know they realize there must be changes to this program in order to help Canadians get into the workforce and to help our people relinquish their dependence that has grown on unemployment insurance.

If we as Atlantic Canadians can participate in a renewed unemployment insurance system or an employment insurance system, which is really what it is all about, we could help to create a better foundation for our economy in Atlantic Canada, creating the kinds of jobs we need to have in order to have a stable future there.

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

Mr. Speaker, I too was on the tour with the committee on social program reform with the hon. member for Cape Breton Highlands-Canso. There are some things he has not said, because what everyone talked to us about, everywhere, and the budget makes no mention of, is the matter of job creation.

One of the questions I would like to ask him is why the budget contains no objectives for job creation. There are criteria for the deficit. They decided that, to control the deficit, it had to be brought down to 3 per cent of the GDP. Why did the government not set objectives for itself in terms of job creation? There is nothing about that anywhere in the budget.

At the same time, we are told that banks are going to be taxed in the amount of $100 million. When, however, during the tour of the committee on social program reform, did people tell us that another $700 million should be cut from the unemployment insurance program? As for the block transfer, yes, a possible block transfer for social programs was recommended, but did the committee recommend cutting $7 billion in this area in the next two years? There is a difference between a block transfer and a transfer after cuts are made. There is a significant difference between the two, which I consider important.

I have another question and, in this regard, I can sympathize with the issue raised by the Conservative member who spoke earlier about transportation subsidies and the people who live in the east. It is true that they said: "They want to get us off unemployment insurance". Everyone in Canada knows that nobody goes on unemployment insurance for the fun of it. They are on it because of the way the economy is. At the same time, however, they said: "Give us a period of transition to do it".

Why did the government, in its transportation assistance program for the Atlantic region, not follow the recommendations made by the industry, by the people locally and by the economic development officers and why was there not a gradual decrease in these types of taxes, so that, in three or five years, a new economic situation could be achieved, over which the people in the community would have total control?

[Francis Leblanc, Liberal, Cape Breton Highlands—Canso, NS]

Mr. Speaker, I would like to thank my hon. colleague for his questions.

Firstly, many jobs have in fact been created since the government has been in office, more than 433,000 jobs have been created. These jobs were created thanks to the confidence the government has inspired across Canada, especially in the private sector, and the budget brought down by the finance minister on Monday evening will increase the confidence felt by the private sector, the business community, because the government is taking the necessary measures to tackle Canada's deficit directly, thereby creating jobs and lowering Canada's unemployment rate.

The targets the government has set its sights on are necessary to stabilize public finances and create jobs. We can see the effects already in the falling unemployment rate. Our program's objective is to create jobs.

Among the reforms suggested, we will have the opportunity to work on those relating to unemployment insurance. The new Canadian social transfer will allow the government of Canada, in conjunction with the provinces, to create a new social security net with a greater emphasis on employability.

To repeat, we are laying the foundations necessary for a strong Canadian economy which will result in new jobs being created throughout the country.

That is the government's strategy. We have forged ahead with it, it is working and it will continue to work.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, as I listened to the various Liberal members who have spoken about this marvellous budget of theirs today only one thought comes to my mind, they do not understand fundamental arithmetic.

The Canadian people, the taxpayers, who have been funding all these programs that previous governments have put in based on election promises and credit card funding, have been saying that overspending has to stop. They want to see a balanced budget down the road. They want to see some tax relief down the road.

This red ink budget that the Liberals have delivered by 1997 will add another $100 billion to the debt and will increase the interest payments on that debt to some $51 billion to $52 billion. Can they not get it straight? It is the mountainous debt and the

mountainous interest payments on that debt that are ripping the heart out of the social safety net of the country.

It is not enough today to nibble at the edges of overspending. We need a positive, progressive plan to decrease the deficit to a zero budget. That is what the Canadian people want. They will not get it from the government. It has not been listening to them.

[Francis Leblanc, Liberal, Cape Breton Highlands—Canso, NS]

Mr. Speaker, I beg to differ with the hon. member. We cannot start eliminating the debt until we start to get the deficit down. That is what the government is doing.

Does the hon. member actually believe that by slashing social programs in one fell swoop the deficit will be eliminated faster?

[Diane Ablonczy, Reform, Calgary North, AB]

Mr. Speaker, we in the House should spare a moment of sympathy for the Canadians who, for unknown reasons, are watching the debate on television. We have members opposite saying that it is a wonderful budget, a visionary and perfect budget for the country. Then we have members of our party who are responding to the budget with grave concern and alarm. It is only fair for Canadians to know why there are real concerns about the budget.

It is true that the budget reduces the deficit. Unfortunately the budget and the so-called rolling targets that it contains substantially increase the interest burden. That is the real threat to social programs.

I do not think the finance minister should get a lot of credit for reducing the deficit. As a matter of fact, he had absolutely no choice. Not only are Canadians telling their political leaders that their number one concern is the debt and deficit, our creditors have been sending us strong, unmistakable messages that we had better get our fiscal act together. According to the Wall Street Journal Canada ``has now become an honorary member of the third world in the unmanageability of its debt problem''.

The debt is about $550 billion. By the time the government is finished with us it will be $650 billion. Where is a country like Canada going to be with that kind of debt loading down its future and its young people? Moody's has threatened to remove our coveted AAA bond rating. International lenders everywhere want assurance from the government that a $25 billion deficit is just an interim goal. In fact, the budget sets $25 billion as the goal. Then there is some very nice talk about good intentions down the road. The good intentions of the Liberals for the last 30 years have paved a lot of roads and they all lead down into the debt hole.

Our real concern, which Canadians share, is that the budget will have a profound effect on the future of social security. Contrary to popular belief, Reformers are going to get old. Some of us are quite close to that goal. Reformers get sick. Reformers have disasters strike them. Reformers become unemployed. We are very concerned about the security of every single Canadian. That is why we brought in a plan to stop the horrible interest drain on the social security resources.

The finance minister's refusal to deal with the financial mess that is being caused to social programs by ever-burgeoning interest payments is a missed opportunity for which all Canadians will pay a heavy price. Much of our social program spending is funded and has been funded for years on borrowed money. Every year we borrow money, and that has been every single year, unbelievably, for the last 25 or more years. We increase the size of our interest obligation.

Every increase in the amount we are forced to pay in interest decreases the amount we have left to fund the programs we offer to Canadians. The only hope we have to break this vicious cycle of higher interest payments and less cash for our programs is to quit borrowing. That is exactly what Reformers have proposed; to quite borrowing as fast as possible, in fact by the end of three years.

In order to quit borrowing, social program spending has to be reduced. That is because fully two-thirds of non-interest spending by the federal government is on the social side. Even if we virtually wiped out every other program and function of government, we would still barely balance the books.

Of course many essential government programs cannot be eliminated. Although there is some fat in other non-social spending government programs-and the taxpayers' budget starts by cutting government operations by a full 25 per cent for a $10 billion savings-simple arithmetic dictates that some spending reductions must take place on the social side.

Interestingly enough, even our human resources development minister has figured that out. On page 8 of his discussion paper, which as we know went nowhere, it states:

-the interest costs on that debt are choking governments' ability to deliver services that the public needs and depends on-The larger the debt gets, the bigger the interest costs and the smaller the budget for services-The status quo is not an option.

That is the government's own minister. We have to ask ourselves why is status quo social spending precisely what the finance minister brags he has given us in the budget when another minister is saying that the status quo is not an option? The clue is in the rhetoric with which he has chosen to surround this sensitive issue.

Instead of providing a plan, the finance minister, like the human resources development minister, has again chosen to delay addressing Canada's ailing social programs, letting the cancer spread, letting the patient get sicker and sicker. Why? Because the Liberal government does not have the political guts

and fortitude to do the job, to get social spending under control so that we can preserve social programs for the future.

The Liberal government, knowing full well that the future security of Canadian citizens is in peril, lacks the political fortitude to take bold and decisive steps to effectively address the issue. Even worse, not only are Liberals afraid to deal with the problems in this critical area, they work hard to make Canadians afraid to have it dealt with at all.

How do they do this? By telling Canadians again and again that any plan to safeguard the ability to provide long term security by some reductions in social spending today is too cruel, too heartless, too harmful even to consider. Anyone suggesting such a course of action is immediately set upon and labelled as lacking in compassion and uncaring about the poor and needy.

Clearly Liberals cannot honestly believe this to be true because they are saying, and I quote again from the human resources development minister's discussion paper: "The interest costs on the debt are choking government's ability to deliver services that the public needs and depends on". They know this. One can only conclude that the government is anxious to make a virtue out of what can only be termed a shameful failure to get a grip on its deficit spending habits.

We are treated to loud protests by members opposite. In fact, they can be heard even as I speak, in the background nattering on and on. Any suggestion of spending reductions on the social side, even though they clearly know that government must reduce its expenditures in all areas if we are to have any hope of curbing the interest haemorrhage from the national treasury, is cloaked in inaction with a lot of talk about their commitment to compassion, fairness and equity. However, Canadians are beginning to see through all this nice talk to the lack of substance within.

Nowhere is this made more clear than in last week's unveiling of the Liberal so-called reform of MP pensions. Canadians were treated to the unseemly spectacle of government ministers flatly refusing to lose a nickel of their incredibly rich pension benefits.

This year the Canadian government paid $42 billion in interest. Just think for a moment what we could have done with $42 billion to spend on the citizens of our country. It could have doubled all guaranteed income supplement payments to needy seniors. It could have cut income tax by 20 per cent. It could have given free tuition to 100,000 students. It could have provided $10,000 to 100,000 newly married couples for mortgage down payments. In addition, it could have totally eliminated the GST, something the Liberals promised to do. To put the icing on the cake, it would have paid to build a $500 million skydome in every province, including P.E.I.

We did not have that $42 billion because we had to pay it to the Liberal interest debt they have built up.

The real threat to social spending is Liberal borrowing and deficit. It is not changing in this budget. If not now, when? Canadians and their children will remember the 1995 federal budget as the one which could have and should have but failed to provide a plan to ensure personal security in the years ahead. That it failed to do so will be seen as one of the greatest tragedies of the 35th Parliament.

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

Mr. Speaker, I listened to my colleague's comments. What she seems to ignore in her comments is the reaction from all the financial experts, both at home and abroad.

Almost universally the reaction to this budget from everyone except members of the Reform Party is very positive. In fact, in many glowing terms we hear how the finance minister has turned the corner on this country's debt and deficit problem. Yet the member says there should be no credit for the finance minister. I would remind the hon. member that for nine years the previous government was not able to meet its targets, yet this finance minister has done so two years in a row.

Quite frankly a misstatement was made that $25 billion is the ultimate goal of the finance minister. It is not even fair to say that on the floor of this House. The minister has been quoted publicly many times as stating that the ultimate goal is the total elimination of the deficit and debt. That is the ultimate goal. The minister has made that eminently clear. The research by the Reform Party seems to be awfully selective on these points.

Now to my question for the Reform Party member and the Reform members heckling as I speak. If there is such concern and compassion in the Reform Party for this country's social security system, why did the blue budget plan, the so-called taxpayers' budget of the Reform Party-if ever there was a misnomer that is one-slash so severely the seniors' pension plan? How can that be offered as some concern for the citizens of this country?

[Diane Ablonczy, Reform, Calgary North, AB]

Mr. Speaker, I appreciate the points raised by my hon. friend opposite because they are important issues to address. They are ones that hon. members opposite are always using to justify their position. It is important that Canadians know it does not do that.

First of all, the reaction of the financial markets was positive. It is kind of sad, is it not, that financial markets are so used to governments that do not do anything that there is great relief when there are any cuts in our borrowing.

Not only that, my friends who work in the financial industry tell me that financial markets discount government actions. They are way ahead of government. They are weeks ahead of government and they discounted this budget long ago. They did

not do it the day after; they did it weeks before. That is how financial markets work. Those familiar with financial markets know that.

The hon. member brags that the government has reached its targets although previous governments have not. If you make your targets low, of course you will reach them. It is like a cigarette smoker who cuts back from two packs a day to a pack and a half and then says: "I am quitting smoking". He has a long way to go and so does this budget.

There is no plan to get to zero deficit in this budget. There is nice talk by the finance minister on the side that of course, yes, this is the ultimate goal. If it is a goal, there should be a plan. Instead, the government always refers to its red book target of a $25 billion dollar deficit which is huge.

Our plan is to cut social spending by $15 billion for the simple reason that if you do that, you get to zero borrowing. If you get to zero borrowing, the interest levels off. The interest gets flat. If you do not cut your borrowing, then the interest keeps rising. Once the interest levels off, you know you have the rest of your money to work with. However, if the interest keeps going up, then you have less and less money to work with every single year.

That is exactly what is going to happen under this plan. If members opposite think that cutting spending now to get to a zero deficit is bad, just wait until they see the cuts that will have to be made when our interest gets to $50 billion, $55 billion, $60 billion because this government will not take that kind of action.

[Art Hanger, Reform, Calgary Northeast, AB]

Mr. Speaker, I appreciate the opportunity to speak on the budget. It is a budget that in the opinion of those who get past the initial media kowtowing, the interest group moaning and the Liberal back slapping, is dishonest. It is overrated. It is underachieving and hypocritical. It fails to attack the efficiency and the internal wastefulness of the federal government.

This budget deserves no praise. It lacks will. It lacks solutions. It is not an answer. It is only prolonging the inevitable demise of our social programs, our financial security and our way of life, including that of our children.

What the finance minister has done is altogether typically Liberal. He has made some token reductions which he thinks will placate voters. He has increased taxes in such a way that taxpayers will not know they are being hit hard. Furthermore, he has done some things that, had they been done by any other party with the Liberals in opposition, would have caused the Liberals to explode in outrage and violent criticism. That is the hypocrisy of this budget.

The Reform Party's taxpayers' budget laid out a series of reasonable, manageable cuts to transfers and established programs financing, cuts that would ensure long term health and the continuation of these programs. The Liberals assailed us, as the hon. member is doing right now. They accused us of being heartless, of being uncaring, of bashing the poor. What is the Liberal alternative to this imagined Reform Party heartlessness?

The Liberals will double the fees of refugee claimants. That is really something. That is without a doubt the most blatant hypocrisy I have ever seen from this government or that party. They have done nothing in any promise for the future.

Look at what is going on within the department of immigration. Look at those increased fees that are coming. For a moment, look at the increased fees and the recipients of those fees, the immigration department. If you take an honest look, you will come away with a very different impression about the seriousness of this government, the willingness of this government and the party across the aisle to make real change. You will come away with a very different impression of the will of that party and the intestinal fortitude of the finance minister and especially the immigration minister.

There are two reasons the finance minister together with the immigration minister have decided to increase fees. One is stated and the other is not.

The stated reason is to raise revenue to offset the cuts. In other words, they want to bring more money into the coffers. Charge a little more up front and recover more of the costs of processing and resettlement, as the minister points out. Fair enough. Why should those who apply for immigrant status not pay their way? We are not objecting to that.

There is no good reason for the taxpayer to subsidize the processing of immigrant applications. Remember that if any other party had done this, the Liberals would have fallen all over themselves moaning about taxing the poor, charging more to those who are unable to pay.

The other reason for almost doubling the fees, the unstated reason that observers from both sides of the immigration debate recognize, is to quietly cull a certain percentage of the applicants for immigration. Changing the immigrant mix is a good idea certainly. Both the C.D. Howe Institute and the Fraser Institute agree with the Reform Party that we need to do that. However, doing it this way is cowardly and devious on the part of the Liberals.

[An hon. member]

Why?

[Art Hanger, Reform, Calgary Northeast, AB]

Because you are not stating the reasons.

The immigration minister has had all sorts of opportunities to make changes to immigration that make sense and that are honest but he will not do it. He has had every opportunity to save the Canadian taxpayers a huge amount of money through immigration reform. He did not do it. He would not. He does not have what it takes. If the minister wanted to save money for the taxpayer, he would have saved literally hundreds of millions of

dollars by taking some advice from the Reform Party on refugee determination in Canada.

A month ago, we released our proactive proposals for refugee determination. Those proposals, if enacted, would ensure that the refugee system was more fair to genuine refugees. That was our first goal. The proposal would have ensured that the system was more fair to the taxpayer by cutting back on legal aid and social services for people who had been refused as refugees and were appealing.

We proposed that the Immigration and Refugee Board, that $80 million a year hotbed of patronage, pork and foolish decision making be abolished. We proposed that a refugee determination system, which presently costs $1 billion or more a year to determine a handful of claims, be fundamentally restructured to reduce the number of bogus claims. Accept more genuine refugees from abroad. Doing so would have saved the taxpayers millions of dollars, but the minister would not hear of it.

Here is a short list of some other costs the immigration minister has been afraid to deal with. The total cost of the department has gone up from $581 million to $592 million. Do you call that cost cutting? The corporate service budget has increased from $33 million to an unbelievable $78 million. Is that the minister's idea of government efficiency, to double the budget in one year?

The cost of failed sponsorship is $700 million. Welfare for refugees as estimated in the Vancouver Sun a few days ago is $600 million. Teaching English or French and other settlement services for new immigrants costs $450 million. Quebec's gold plated immigration settlement program costs $90 million. No adjustments are made there at all, one year after another.

On top of all that the justice department will spend an additional $11.6 million on immigration and refugee cases. The Federal Court will spend an additional $11.9 million on handling refugee cases. The RCMP will have to allocate an additional $2.3 million to clean up the messes made by lousy immigration policies. There is $60 million in legal aid.

Of course, there was last year's stupid expenditures: $2,000 for a pizza party hosted by the minister; $2,000 for bookmarks with the minister's photo on them; $100,000 for office furniture for one member in the IRB; another $100,000 for a golden handshake to get rid of that member.

In light of all of these numbers, the increased user fees are just a drop in the bucket. Until this government and this immigration minister come to terms with the fact that Canada's immigration and refugee programs are so lax, so broad, so inefficient and so ridiculously generous as to cost Canadians up to $3 billion a year to accept and settle refugees and immigrants, we are just wasting time.

The government is tilting at windmills. If this government really wants to fix the immigration budget it should not jack up fees before it gets on top of the real problem: Liberal immigration policy. That is the problem.

I say to the people of Canada, to the media, to interested observers of Canada's immigration system around the world, that before they congratulate the finance minister and the immigration minister for taking tough action to fix a tough problem, before this back slapping gets too intense, tell me what is wrong with this picture.

A refugee claimant has just been paid $1,000. Now he sits before an $85,000 a year patronage appointee. Each hour of hearing and preparation time is being run up as a profit by his legal aid attorney. His acceptance is virtually guaranteed since the IRB is little more than an $80 million a year rubber stamp. If he is sick, there are no worries, he has a health card.

In the extremely unlikely event that he is found not to be a refugee, there are no worries. He will just ring up a few more hours for his legal aid attorney, appeal to the taxpayer funded courts, get another hearing before another $85,000 a year IRB member. After this charade has been carried on for three years, the minister gives him an automatic amnesty. It is not a bad deal for $975. Most of us would not even get inside the courtroom door for $975. The refugee claimant and his lawyer can tie up our courts for three years.

This is no exaggeration. Members may not like the illustration. They do not like it because they know it is true. The most tragic aspect of that scenario is that all the time this charade is being played out at the taxpayers' expense, the UN tells us that the most genuine refugees from overseas are being systematically ignored by countries like Canada. Refugees we could process more easily and far more cheaply are being ignored. These are genuine refugees.

People may start realizing now how much of an opportunity there was in 1995 to really rethink government and make fundamental changes. They will realize what a golden opportunity there was to make things work better. Then they will wake up to what was not done and they will be sorely disappointed.

[The Deputy Speaker]

It being 6.15 p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the amendment to the amendment now before the House.

Is it the pleasure of the House to adopt the amendment to the amendment?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour of the amendment to the amendment will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it.

And more than five members having risen: