Debates of March 14th, 1995

The Budget

[Andy Scott, Liberal, Fredericton—York—Sunbury, NB]

Mr. Speaker, I was quite happy to see the hon. member for Sherbrooke here because I wanted to discern his party's position relative to the budget. I was a little disappointed last week when his colleague from Saint John supported the Reform motion calling for the elimination of the deficit within the time of this Parliament.

I did not discern in his speech where he was going in terms of whether it was too tough or not tough enough. Before the last election he proposed the position that the federal government had to work with the provinces to come up with a joint strategy. Do I assume that is no longer the position? Certainly that was indicated last week.

Does the member for Sherbrooke share his colleague's position that the Government of Canada should eliminate the deficit inside this Parliament?

[Jean Charest, Progressive Conservative, Sherbrooke, QC]

Mr. Speaker, I will be happy to answer the question.

There are four things about the budget we think are wrong and need to be addressed. There is no plan or priorities for the country any more with regard to deficit and debt reduction. That means we may run the risk not only of making tough decisions but wrong decisions.

The objective of reducing the deficit to 3 per cent of GDP is not good enough. There should be a clearly enunciated objective of balancing the books within a precise timeframe. Three years is a reasonable timeframe.

Third is its unilateral approach in terms of deficit and debt reduction, which is a complete negation of what a federal country is and how it operates. That puts us in the situation in which we well run the risk of the government's shovelling its deficit and debt problem into the yard of New Brunswick. If it chooses to increase taxes, if it chooses to cut service, we are not going anywhere unless there is a joint effort.

The fourth problem is the hidden agenda. Pension reforms, reform for health care as announced by the Prime Minister are not enunciated in these documents, not clearly laid on the table in terms of the agenda of the government in its document.

[The Deputy Speaker]

My apologies to the member for Strathcona. I am obliged to go back and forth across the House. Therefore I have to go to the government speaker now. I know the member for Strathcona has been waiting for a long time.

[Harold Culbert, Liberal, Carleton—Charlotte, NB]

Mr. Speaker, the hon. Minister of Finance has tabled the budget Canadians asked for, a budget that is tough but fair, that will allow us to gain control of our deficit, one that has been growing out of control for decades.

We cannot afford to repeat these mistakes. Our government has looked to the future. It could be one in which Canadians are told which services they can and cannot afford by foreign creditors or it can be a future in which Canadians decide their priorities and watch them flourish. The government and the majority of Canadians have chosen the latter.

Our government has taken the necessary measures to ensure Canada's future will be bright and prosperous. Tough decisions had to be made and they were. Our government has produced a plan that is viable and attainable.

I would like to quote from the red book which is often used by opposition parties. Where our policy on Canada's fiscal situation was first outlined it says a Liberal government will adopt a two track fiscal policy, matching a drive for jobs and growth with a comprehensive approach to controlling debt and deficits. That is on page 16.

This is exactly what has been done, from our government's agenda of jobs and growth to the budget tabled by the Minister of Finance.

In producing this budget the minister has taken the time to solicit views of Canadians and all members of Parliament and has reacted to their concerns in delivering a budget that re-established its goal to meet the financial commitments and obligations, the same commitments made during the election campaign and reinforced during the 1994 budget.

The plan outlined by the hon. Minister of Finance will break the back of the deficit and enable us to reach our goal of 3 per cent of gross domestic product by 1997.

Projections indicate that our goal will be exceeded this current fiscal year when the deficit is expected to fall as low as $38 billion, $1.7 billion below our target of $39.7 billion for the end of the fiscal year.

As I listened to the Minister of Finance deliver his budget I realized that it reflected the message impressed upon me by constituents in Carleton-Charlotte. It was the same message impressed upon MPs across the country, including the Minister of Finance.

Canadians want to get their debt under control. They want to achieve this through cuts in government spending. The government has heard this message loud and clear. For that reason we have committed to cutting $7 in expenditures for every $1 in increased revenues.

To ensure fairness in the tax system, the government has closed a number of loopholes that benefit large corporations and banks and has avoided increasing the burden on individual and middle class Canadians and their families by refusing to increase personal income tax.

In 1994 a department by department review of all government programs was initiated in which every expenditure in each department was reviewed. As promised, the results of that review were announced in this year's budget.

The government has redefined its own role to ensure that departments focus on the priorities of Canadians. The new government operations will be smaller but more effective and more efficient.

This government has had the foresight to realise that small and medium size businesses are the future of growth in Canada. For this reason the $500,000 capital gains exemption has been maintained for small business and for farmers. Similarly, only minor changes were made to registered retirement savings plan contributions which benefit many working in this sector.

Government spending has been cut dramatically but in a way consistent with the values of Canadians, protecting the most vulnerable in society and cutting government first.

As I mentioned earlier, the budget also promotes the government's agenda for jobs and growth. In 1994 well over 400,000 new jobs were created, most of which were full time, permanent jobs. The economy grew at 4.5 per cent, the largest economic growth of all the G-7 countries. This type of growth will continue to flourish in 1995 as a result of the measures taken in the budget.

I quote from an article in the Ottawa Citizen on March 2:

The boom is back. And, at least temporarily, without inflation. The economy, fuelled by exports and consumer and business spending, steamed ahead at a robust 4.5 per cent pace last year, Statistics Canada said Wednesday.

And growth in the final quarter of 1994 was at a torrid annual rate of 5.9 per cent, the agency said in its latest report card on the economy, which suggests there is more growth to come, the analysts said.

The following quote was also published in the same issue:

The Wall Street Journal , one of the coolest critics of Canada's economic policies, has been warmed a few degrees by the new budget. The influential business newspaper said in an editorial Wednesday that the finance minister's budget ought to be an inspiration to other countries struggling with overextended governments.

The minister has obviously listened to Canadians from Carleton-Charlotte and from across Canada and delivered a budget they wanted; a budget that is tough but fair and will be implemented equitably.

We can now look forward certainly to a better tomorrow for all Canadians in the future as a result of the budget tabled by the Minister of Finance in the House.

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

Mr. Speaker, I want to say to the hon. member who has just spoken, that everyone agrees, in fact, that there is a need to control federal government spending, which has been out of control for a number of years and which has brought us to financial disaster.

In a world where markets are said to be increasingly dealing with internationalization and globalization and where our producers need help in research and development to enable them to deal with worldwide competition, where, in his opinion, is the logic in suddenly stopping all research and development in the area of sheep production by deciding to close the one experimental farm that worked in this area and that had a national mandate across Canada? What message is being sent to sheep producers in Canada when they are told they will have no more support in research and development?

Why was the decision made to take everything away from this sector? Is this not what might be called a poor cut, as compared with others, which could be made where there would be no direct impact on an important sector of agricultural production, such as sheep production-a form of production making agricultural diversification possible, particularly in Quebec and Alberta? What, in his opinion, is the logic behind such a decision?

[Harold Culbert, Liberal, Carleton—Charlotte, NB]

Mr. Speaker, I should agree with the hon. member across the way in his question. He is quite right. Although we take pride in the fact that we must get our debt and deficit under control, we are not the first government that has set goals for bringing it under control. We certainly will be the first government in this century that will meet those goals. The Minister of Finance has made that commitment. The Prime Minister has made that commitment and the House has made that commitment.

Research and development is a priority of this government. It has been stated time and again. The government also believes private enterprise and commercialization can do, as proven in the past, the best job out there in business. Whether in research

and development or small business or industry, they can do it much better than any government level can.

This government is supporting that. It is supporting a partnership with private business and industry. We will continue that support in the future.

[Jesse Flis, Liberal, Parliamentary Secretary to Minister of Foreign Affairs]

Mr. Speaker, I have witnessed many budgets tabled in the House. Usually the next day constituency offices' telephones ring off the hook with complaints, support or whatever.

This year I checked with my constituency office on how many calls it received the day after the budget. My assistant in Parkdale-High Park told me it received one call. That caller said the minister did not go far enough in reducing the deficit.

Because the hon. member works very closely with and listens to his constituents, what kind of reaction did he have from them directly on the budget, positive or negative?

[Harold Culbert, Liberal, Carleton—Charlotte, NB]

Mr. Speaker, I thank my hon. colleague for the question. To be honest, it was an excellent one. Like he I expected my phone to be ringing on the budget. However I can honestly say it did not happen.

Last week we had an opportunity to be back in our constituencies. On Monday I had did an electronic town hall meeting specifically on the budget. The headline in the newspaper the next day was: "First attempt on an electronic town hall meeting" because we had done all the others personally "went very smoothly". There were many questions. Every person in the television studio was very positive about what the government had done in the budget and how it was done fairly and equitably right across Canada for all Canadians.

It was quite different from a radio interview I did on Friday morning. It was supposed to be on the budget. When I arrived at the radio station it was on Bill C-68 or gun control and I was facing a lawyer sitting there debating it from another perspective.

It showed the amount of negative concern there was toward the budget. I found out from my constituents exactly what the hon. member mentioned he heard from his constituents. It was accepted. It was supported. It was tough. It was fair but it was equitable.

[Nick Discepola, Liberal, Vaudreuil, QC]

Mr. Speaker, first of all, I would like to congratulate the Minister of Finance, for delivering a courageous and innovative budget, which, most importantly, takes on the deficit yet respects the red book commitments. This was no easy task and the minister did agreat job.

Having had the honour of sitting on the Standing Committee on Finance, I am very happy to see that the minister incorporated 80 per cent of the committee's recommendations into his budget. This means that the minister took into account the suggestions and concerns that Canadians expressed during the public hearings held nationwide.

This budget takes the steps needed to control the deficit. These budgetary measures are the most rigorous undertaken by a federal government in 50 years. They will permit us to bring the deficit down to 3 per cent of the gross domestic product by 1996-97.

This budget also allows us to meet our goals without increasing personal income taxes for the second consecutive year. The government refuses to reduce the deficit by offloading it onto Canadian taxpayers. Like Canadians as a whole, we believe that we must strive to balance the budget. We will achieve this in a responsible and realistic way without jeopardizing the strides we have taken regarding the economy and on the job front over the past 16 months and without discarding the values and priorities of Canadians.

We use forecasts that are more prudent than the private sector average. The budget anticipates the debt charges in 1995-96 alone will be $7.5 billion above last year's estimates.

This is why we must act now or risk missing our deficit target altogether. The budget takes some tough actions to prevent the probability of failure. To hit our targets we are implementing cumulative savings of some $29 billion over the next three years. This is the largest single set of actions in any budget since World War II. These actions mean changing the size and the shape of government. By 1996-97 program spending will fall from $120 billion to just under $108 billion.

The structural changes we are making will assure that significant deficit reduction continues in 1997-98 and, more important, beyond. The bottom line benefit will be dramatic. By 1996-97 the deficit will be lower than that of any G-7 country.

We have taken measures that will have far-reaching effects and are result oriented.

We have substantially cut spending while at the same time preserving principles that Canadians hold dear, namely economic recovery, protection of the disadvantaged and government streamlining.

If we want our efforts to put our fiscal house in order to be efficient and sustainable, it is imperative that we reconsider the role and structure of government and focus government activities on the priorities set by Canadians.

In this budget, government is brought down to a size we can afford. Cuts were not made blindly, contrary to what the opposition says. The measures announced by the Minister of Finance flow from the comprehensive review of departmental programs and activities we had announced in the 1994 budget and they will continue to pay dividends in the years to come.

Expenditures will be cut by half in some departments. After these measures have been implemented, the public service, including DND, will be reduced by 45,000 positions, or 14 per cent.

The budget reduces the deficit in a way that is consistent with the strong Liberal commitment to social programs. We remain absolutely committed to a fair and sustainable system of protection for seniors who have given so much to the country.

The budget states the basic principles of the so-called hidden agenda the hon. member for Sherbrooke alluded to before. There will be the following: undiminished protection for all seniors who are less well off, including those receiving the guaranteed income supplement; continuation of full indexation to protect seniors from the effects of inflation; provision of old age security benefits on the basis of family income, as is currently the case with the guaranteed income supplement; greater progressivity of the benefits by income level; and, more important, control of program costs.

The role of the state is to do only what it does best. Therefore, some activities should be transferred to other public administrations or entrusted to the private sector. If the federal government does not have to do something, it should not do it. And in the future, this government will not do it.

True, this budget is tough, but it is fair. The Minister of Finance strove to distribute budget cuts fairly among all regions.

We will not reduce the deficit without also reducing provincial transfers. Nonetheless, the cuts we are asking the provinces to absorb are not as deep as the cuts we are facing ourselves, that is, 3 cents for every dollar of provincial revenue.

This budget constitutes additional proof that federalism is dynamic, flexible and not stuck in the status quo. The federal-provincial transfer payments will be replaced with a new consolidated subsidy called the Canada Social Transfer, which will alleviate the constraints that the government may impose in areas of exclusive provincial jurisdiction.

By giving the provinces two years' notice before introducing the Canada Social Transfer, we honoured a red book commitment to "achieve the maximum degree of predictability and stability for each level of government". It is the Quebec government that is deferring all important decisions because of the referendum.

The Leader of the Opposition alleges that this budget is unfair to Quebec. No region suffered more cuts than any other. Under the Canada Social Transfer, transfers to Quebec in 1996-97 will decline by only $350 million. That is a 3 per cent cut compared with 1994-95.

Over that same period, we will reduce federal spending by 7.3 per cent, which is almost double the cuts affecting transfer payments to the provinces. It goes without saying that those who support separation cannot react positively to a budget which demonstrates that Canadian federalism works.

Bloc members oppose the reduction of the subsidy to industrial milk producers. Yet, the Leader of the Opposition himself said that, in an independent Quebec, he would willingly abolish that subsidy. Financial markets did not endorse the claims made by the Quebec Minister of Finance to the effect that the federal budget generates uncertainty. Indeed, all are unanimous in saying that the budget measures will help fiscal consolidation.

Even the editorialists from Quebec recognize that this budget paves the way to a federalism respectful of the provincial fields of jurisdiction. The budget was designed with the best interests of Canada and Canadians in mind, not those of Wall Street. Still, we managed to reassure the financial markets. It is now up to the Quebec government to put an end to the uncertainty by holding its referendum as soon as possible.

[Jean-Guy Chrétien, Bloc, Frontenac, QC]

Mr. Speaker, I think the hon. member for Vaudreuil is to be commended for the stand he took in his speech on this budget. He is to be commended, but I am somewhat critical of his choice of words. I think he should check the definitions in the dictionary, and I am referring to the fact that he called this a "courageous budget".

I would like to remind the hon. member for Vaudreuil that during the last election campaign, the Deputy Prime Minister made the following promise: "Give me a year, and we will get rid of the GST or at least make some changes to improve it. Give me a year, and if we do not, I will resign". Fifteen or sixteen months later, nothing has changed. The only suggestion the finance committee made was to hide it, to camouflage it and make it a little less blatant.

The hon. member's leader, the Prime Minister, the leader of his own party, the Liberal Party of Canada, said: "Give me a day, and I will make some thorough changes in the pension plan for members of Parliament". Fifteen or sixteen months later, nothing has been done yet. And what is on the table is a mere shadow of pension reform.

The present Prime Minister said during the election campaign: "During our first term, I will not raise taxes or personal income tax". So what did he do in last year's budget? They raised $500 million by de-indexing old age security pensions. What did they do this year? The hon. member for Vaudreuil must know that they raised, or will raise, $500 million by taxing every litre of gas an extra 1.5 cents.

But this is the question I would like to put to the hon. member for Vaudreuil, who has a number of dairy farms in his riding. He must be aware of a consensus among dairy farmers in Canada on one milk, one price. By removing 15 per cent of the subsidy on industrial milk this year and another 15 per cent next year, the government is widening the gap. How will he explain to the dairy farmers in his riding that the gap is getting even wider?

And how can he explain to the farmers in his constituency, and I say this in concluding, why in the west, now that the Crow subsidy worth $560 million has been abolished, farmers will receive $1.6 billion in compensation tax free, when our dairy producers will lose 30 per cent of their milk subsidy without receiving any compensation whatsoever?

[Nick Discepola, Liberal, Vaudreuil, QC]

Mr. Speaker, I am pleased to reply to the hon. member, because he started by saying that he did not think this was a courageous budget. He gave three examples which, I suppose, are his three major concerns, namely the GST, the pension plans and personal income tax. The last point raised by the member was the impact of the cuts to agricultural subsidies.

I am convinced that in the riding of Vaudreuil, and elsewhere in Quebec and in Canada, the three points raised by the hon. member are not unanimously perceived as the three major issues. The main concern is government spending and the lack of flexibility resulting from a debt accumulated over many years and which is very costly in terms of its financing.

As you can see in the budget, in spite of cuts of $29 billion over a three-year period, the interest on the debt will increase by roughly $7 billion. This is a courageous budget because, for the first time, a Minister of Finance meets his own objectives in terms of the debt reduction. This is a first in the history of our country.

For the second year in a row, the government has not increased personal income tax. The hon. member forgot to mention that point. As for the pension plan, the member is well aware that we introduced a bill which will be voted on in April.

When it comes to agricultural subsidies, the Bloc Quebecois always tries to compare the East to the West for political expediency. It must be mentioned that, in the West, the subsidy was completely eliminated. The farmers were deprived, without notice, of subsidies amounting to $560 million. This is why a transition period and a compensation are provided. In Quebec and in the East, we are only talking about an annual reduction of 15 per cent, over a two-year period. It is better to get 70 per cent than nothing at all.

In reply to the hon. member's question, I think this is a courageous budget because we tried to be fair. We did not ask more from the provinces than we were prepared to give. We did not ask the small and medium size businesses to do more. We tried to be fair and this is why the budget was well received across Canada, and even in Quebec.

[Hugh Hanrahan, Reform, Edmonton Strathcona, AB]

Mr. Speaker, I appreciate the opportunity to participate in this year's budget debate.

I feel fortunate to be able to have this opportunity to pass on the views of my constituents of Edmonton-Strathcona. The constituents of Edmonton-Strathcona voted for a Reform member of Parliament based primarily on three principles: justice reform, parliamentary reform and, most significantly, fiscal reform.

It is because of the fiscal reform that I became involved in politics. I wanted to ensure that the standard of living which I have enjoyed will be maintained and passed on to my children and to my children's children.

This budget presented by the Liberals does nothing to seriously address the national debt and deficit problem. It has been said that a new government receives only one chance to make the necessary changes, one window of opportunity. This government has had not one but two chances.

The first was a year ago when the government was more concerned about increasing the deficit through increased spending and claiming that the deficit was not a problem. It then spent the rest of the year producing discussion paper after discussion paper while doing nothing.

The second and final narrow window of opportunity which the government has had to balance the budget passed earlier this month when it failed to implement the necessary restructuring in its latest budget.

It is therefore amazing to me that this government can stand before the citizens of Canada and present such a disheartening and ineffective budget. It is another example of Liberal smoke and mirrors. The Liberals state this budget is exactly what the doctor ordered. If this is the prescribed medicine, it not only smells bad and tastes bad but it is totally ineffective. Canadians have been subjected to a clinical trial where they have received nothing but a placebo.

This budget has cut spending by $12 billion over three years with a cut of only $4.1 billion in 1995-96. What the government is not telling Canadians is that we are borrowing more money this year than we did last year even after these poorly placed budget cuts.

The reason for this is extremely painful. It is because the interest payments on the debt are becoming astronomically high because of previous Liberal and Conservative governments and this Liberal government's continuation to run deficit after deficit.

With this Liberal plan Canada will still be running deficits of approximately $25 billion annually by 1997. This is a sad commentary on the government's unwillingness to listen to Canadians. At the end of the day, the national debt will still rise by $100 billion and Canadians will have to cough up nearly $50 billion a year in interest payments. This is a $12 billion increase since the Liberal fat pack came to power.

The Liberals have also managed to introduce a budget which involves short term pain with even longer term pain. What Canadians wanted was a budget which not only controlled spending but a budget which made a concerted effort to begin the process in which the deficit can be eliminated.

This is what we introduced in the taxpayers budget. It was a budget that could have seen the elimination of our national deficit within three years. The Reform Party had its fair share of short term pain. However, it had a light at the end of the tunnel. It was a budget that reflected hope and prosperity, unlike the Liberal budget which reflects doom and despair.

The Liberals have merely postponed the tough decisions until 1997. If they are unwilling to do the right thing now, how can they expect Canadians to believe they will be willing to make the right decisions down the road when those same problems still exist and the tough decisions have become tougher?

They should be honest with Canadians. I know we were with respect to the Reform alternative budget. The Liberals should come clean with Canadians and explain the consequences of their fiscal indecision and ineptitude. It took the Liberals 12 years to add the first $100 billion to the national debt. By the end of this mandate, the Liberals will have added a further $100 billion in only four years. This Liberal fat pack is extremely efficient, efficient overspenders.

Middle class Canadians are asking the same questions the Reformers are. For example, is heating your home a tax loophole? Is having electricity in your home a tax loophole? Is having water a tax loophole? Is having a car a tax loophole?

If the answer to these questions is no, then my constituents, Albertans, and for that matter all Canadians would like answers to the following: Despite this government's promise to limit tax increases to the rich and corporations by closing the so-called tax loopholes, why is it that the middle class has ended up with the burden of paying the majority of this year's nearly $1 billion tax increase in which a $.5 billion gas tax is included?

Why does the Liberal Party exploit Alberta to the extent that it does? Liberal governments have been notorious for abusing Albertans and this government continues the Liberal legacy. First we had the national energy program. Now we have the termination of the Public Utilities Income Tax Transfer Act through which nearly $200 million annually will be taken out of the pockets of Albertans.

While it is true this government did not raise personal income taxes, this government continues to speak out of both sides of its mouth. There is only one taxpayer and taxes did in fact rise by $1 billion this year and will rise by almost another $3 billion by 1997. Instead of tax increases, the government should have looked at the elimination of funding for non-priority items such as multiculturalism or regional development programs such as ACOA, WED or FORD-Q.

The government has taken a step in the right direction in terms of privatization. However, it did not go far enough. Every ministry has one or more areas in which the government is providing a service which is in competition with the private sector or could be done more efficiently by the private sector.

The Department of Canadian Heritage is no different. Due to time constraints I will focus my comments on the CBC. The CBC's primary mandate should be the provision of distinctive, culture specific information and drama programming. In an increasingly multi-channeled environment the current mandate to provide a wide range of programming that informs, enlightens and entertains is too broad. It is also clear that the mandate of the CBC is to provide Canadians with predominantly Canadian programming. However, what Canadians are being subjected to is extremely questionable in terms of meeting the prescribed mandate.

The issue is no longer whether the CBC has adequate funding, as that passed long ago, but rather the structure of the CBC. In particular, the organization has not adjusted to the realities of the marketplace. It is an outdated, highly concentrated and expensive organization.

We must constantly remind ourselves that the Canadian broadcasting environment has changed radically since the conception of the CBC. New technologies, new services, changing viewer tastes and fundamental changes in advertising behaviour

have transformed the broadcasting environment. We must not forget that in a world where the CBC is no longer the only national service, does it make sense to use scarce public funds to subsidize the provision of commercial television programming?

In this new world of broadcasting consisting of many more options to television viewers, public broadcasting cannot effectively maintain its all things to all people objective. It is therefore essential for survival in this multi-channel universe that the public broadcaster be willing to reinvent itself. It is quite evident that the corporation is unwilling to do just that.

When the president of the CBC states that revenues are not its mission, we must therefore as parliamentarians address this area for it. Since revenues are not the mission of the CBC, what is?

How can a private company such as CTV make revenues its mission while still adhering to Canadian content legislation? Last year, CTV spent $488 million on Canadian content. The CBC spends $561 million on Canadian content programming. This is not a huge difference considering we spent over $1 billion for the operation of CBC and nothing on CTV. CTV spends close to the same amount as CBC on Canadian production. The difference is, one is government owned and one is privately owned. One is a drain on the public purse and one adds to the public coffers through taxation and profit.

Had the government privatized CBC television, it could have saved the taxpayers approximately $800 million. This number does not include the revenue which would have been generated from the sale of approximately $1.5 billion in assets which the CBC currently holds.

The government must balance its books, which means all areas of public financing must be evaluated for efficiency and cost effectiveness. It is for these reasons that the Reform Party will not support the budget.

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

Mr. Speaker, I would like to correct the record. I am sure the hon. member did not mean it when he said that it was the Reform Party's objective to do away with the debt in three years. I am sure he meant deficit.

Before the hon. member becomes overly defensive about fuel taxes and the impact on Alberta, he should also remember the tax expenditures that go to the oil patch and have gone there over many years. I do not have a figure for last year but I know thatin 1990 the tax expenditures to the oil patch totalled about$850 million. It is only fair to put some of these things intoperspective.

There has always been an element that would like to privatize the CBC. Most people who think that way think of Canada as a long narrow strip of land that ends at about 150-200 miles north of the American border.

Historically the CBC has been one of the ties that have bound Canada together. No private investor would put a repeater station at Wawa, Ontario, for instance, or be broadcasting to the most remote parts of the country. That is what the CBC does.

The people of Canada pay for that service through their taxes so that every Canadian can feel included and a part of this country. If we were to privatize the CBC, what would inevitably happen would be those unprofitable areas of broadcasting would of necessity have to disappear if station was to show black ink at the end of the day.

I would suggest to the hon. member the CBC does perform a very valuable function. The money can be spent more wisely.

[Hugh Hanrahan, Reform, Edmonton Strathcona, AB]

Mr. Speaker, the hon. member has pressed a number of issues in my speech. With regard to the oil patch expenditures, while I agree that these have been made, they are nothing compared to the national energy program that took billions and billions of dollars out of Alberta.

I would not suggest, however, that we continue funding uneconomic programs, whether they be in oil or whatever commodity we are dealing with. With regard to the taxes on public as opposed to private, when the tax program was in place it was refunded directly by the private companies back to the consumer. In Alberta we have the majority of privately owned gas and electricity organizations. We are giving a tax free holiday to the publicly owned companies in Ontario and Quebec at the expense of Alberta and I believe Nova Scotia. This is grossly unfair to the consumer and to the average citizen in both of those provinces.

With regard to the comment on the CBC, let me deal with the historical aspect. I agree the CBC has played a significant role in the development of Canadian culture. We must remember that was back in the days when we had perhaps two, at most three television networks in the country.

The heritage committee right now is investigating the role of the CBC in a 500 channel universe. If we have a CBC which is costing $1.1 billion at a time when the government is rightly trying to restrict its expenditures, can we afford, when we are cutting back on health, when we are cutting back on education, can we afford the luxury-

[The Deputy Speaker]

I am sorry, the hon. member's time has expired.

[Lee Morrison, Reform, Swift Current—Maple Creek—Assiniboia, SK]

Mr. Speaker, as I sat in the House on February 27 I felt I was in a time warp.

For 20 years we have been hearing the same biased platitudes from Liberal and Conservative finance ministers. The Lib con artists I call them, telling us that they have the deficit in hand, responsibility reigns and everything is going to be all right if people will just be patient and trust them.

When the current Prime Minister was finance minister he announced with a lot of heavy breathing that significant reductions in the deficit can be expected, and then proceeded to set a new record for deficit spending.

In 1982 Allan MacEachen said the government cannot responsibly add to the deficit, and then proceeded to set another record.

In 1990 Michael Wilson stated: "We will reduce the deficit to $28.5 billion next year. We will cut it in half to $14 billion in three more years and we will reduce it further to $10 billion in the next year after that". Plus ça change, plus c'est la même chose.

The government still lives in the same economic fantasy world as its predecessors. It believes it can spend and borrow itself into prosperity.

The Minister of Finance boldly stated in his budget speech that it is time to put our fiscal house in order, a line borrowed from a famous 1989 speech by the leader of the Reform Party. The minister has finally learned to talk the talk, but he made only a feeble attempt to walk the walk. He said that Canadians want clear action and then he proceeded to deliver mush.

Previous finance ministers were able to play budgetary games, sleights of hand for 20 years without making any real spending cuts. I acknowledge that the incumbent did make some real cuts. Thanks to the magic of compound interest he had no luxury of choice. He had to make cuts just to avoid immediate disaster. However he did not have the courage to cut as deeply as necessary to begin to solve the deficit problem.

The proposed $12 billion in cuts are going to hurt but they are going to be offset by additional interest payments which will continue to rise until they reach more than $50 billion in 1997.

What is his program after that? Continued half-hearted cuts until there is nothing left to reduce while annual interest payments continue to rise to $60 billion or $70 billion?

The hon. member for Broadview-Greenwood mentioned the same problem. He said: "We will solve this. We will have a new Bretton Woods agreement. We are going to have this great big international conference so we do not have to clean up our act at home. We will just bring in the IMF and it will solve all our problems for us".

Where does this insanity end? Does the government really intend to continue treading water until it drowns in debt? We cannot perpetually borrow money to give it away to people or entities that do not need it.

Speaker after speaker has risen on the other side of the House to tell us about their compassion. They ooze compassion. Please tell me what is compassionate about destroying the economy of the country?

Canada is like a patient with a gangrenous leg and a tender-hearted but incompetent doctor. That leg should come off but the doctor with misdirected kindness amputates only the foot. When that does not solve the problem, he cuts off a few more inches and then a few inches more, each time subjecting the patient to additional trauma. In the end, the poor devil dies anyway.

The finance minister is fortunate that unlike the incompetent physician, he cannot be sued for malpractice. They are so proud of their transfer programs over there but thanks to 20 years of deficits the biggest single transfer program is now payments to money lenders.

A lot of the transfer payments do not even stay in Canada but are delivered into the hands of financial institutions in Tokyo, New York and Zurich. The Liberals and Conservatives, with their bread and circus approach to governance, have sold us into economic slavery.

It is obscene that this most blessed of countries should be headed for economic collapse and that foreign money lenders are being allowed to continually suck our blood. This is the legacy of Lib-Con economic policy.

The Minister of Finance has refused to face reality in the name of compassion and caring. We are going to continue down that same steep and narrow path to national bankruptcy. What good will his reassuring words do when not too many years from now half or more than half of the national revenue must go into debt service?

What will be his after the fact excuse if the money lenders cut us off and we are no longer able to provide even basic government services, much less social programs? What will he tell the people of Canada when we are unable to help even the poorest of the poor, the old, the sick, the infirm, the weak? How will he explain it when there is no money left, when there is no medicare, when there is no welfare, when there are no old age pensions, no UIC, when there is nothing. Because that is the direction in which we are headed.

The government has again proven through its non-budget that it cannot be trusted with a credit card. For the sake of our children and our grandchildren, it is time to take that credit card away.

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

Mr. Speaker, actually, I agree with what the hon. member was saying when he described the following rather gloomy prospects for the Canadian economy: "We are headed for an economic collapse, and we are going down the steep and narrow path to national bankruptcy".

National bankruptcy is what we see looming as a result of the budget that was brought down this year. This is one of the reasons, just one but a major one, why Quebec would like to separate from Canada. Canada's budgetary and financial affairs are a mess and are leading straight down the road to disaster, to bankruptcy. This is more or less what was said by financial advisers on Wall Street.

Personally, I do not want to see the poor and the elderly in Quebec in a position where they cannot count on the support of social programs, as the hon. member pointed out. This Budget is terribly unfair to people who depend on social programs.

This Budget will cut $100 million annually in funding for social housing alone, a program that is targeted to the poorest members of our society. Single parent families, women, the elderly, people who live alone, welfare recipients: they all belong to the poorest social group in our society. This group will be affected by cuts of $100 million annually, while the banks get off scot-free or almost, with very few cuts, in fact $100 million over two years, the same Canadian banks that last year made a net profit of $4.3 billion. These cuts represent not quite 2 per cent of their net profits.

I may also add that family trusts will not pay a cent.

In concluding, I want to say that I fully sympathize with what the hon. member said, and I would like to ask him the following: If he were in Quebec, would he not agree that the best solution, at least for Quebecers, is sovereignty?

[Lee Morrison, Reform, Swift Current—Maple Creek—Assiniboia, SK]

Mr. Speaker, I thank the hon. member for his very dramatic intervention. One thing puzzles me. I know the hon. member is an economist, yet in his intervention I detected hints of three economic theories all warring in the same breast. I heard a bit of Adam Smith. I heard a bit of Engels perhaps and a great deal of John Maynard Keynes.

As far as his immediate question regarding secession is concerned, is the hon. member suggesting that if they bail out and leave the sinking ship of state they will not be required to man any of the lifeboats? They could get off scot free after having benefited from the largess of deficit spending for lo these 20 years. Now they will leave us holding the bag and take nothing. Is this what the hon. member is saying?

[The Deputy Speaker]

I am sorry, you will not have an opportunity to respond as your time is up. Resuming debate.

[Roseanne Skoke, Liberal, Central Nova, NS]

Mr. Speaker, I rise in the House today in support of the budget tabled by the Minister of Finance.

The fundamental objective of the 1995 budget is sustained growth and job creation. The budget takes far reaching actions to reduce spending and to reshape the role of the federal government in building a stronger, more dynamic Canadian economy.

The budget is aimed at restoring fiscal health and refocusing government on key priorities and needs. It is about getting government right so that Canadians can get the economy right.

It is the biggest Canadian budget since post-war demobilization. It delivers on the commitment to meet our fiscal targets using prudent economic assumptions. It cuts the deficit largely through expenditure reductions. It restructures spending to keep the deficit on a downward track. It puts the government's own house in order to make it smaller, more frugal, better managed and innovative.

It defines a new role for government in the economy. It reforms federal transfers to provinces. It points the way to reform of unemployment insurance and the public pension system. It distributes the burden of restraint fairly among Canadians and the regions of Canada.

The deficit and debt are national problems. The budget distributes the burden of restraint fairly across all regions. Canadians in every region have strongly urged us to bring spending under control. Some individual measures obviously affect certain regions more than others, but looked at as a whole no region is being hit disproportionately.

The budget shows that federalism is flexible and dynamic. Although we are cutting the level of transfer payments, we have given the provinces ample notice as promised and the cuts are less than those we are imposing upon ourselves. The government remains committed to the equalization program, a pillar of Canadian federalism.

The new Canada social transfer will give all provinces greater flexibility in designing social programs while the principles of the Canada Health Act are maintained. The introduction of the Canada social transfer in 1996-97 will deliver funding to the provinces, cash and tax points of $26.9 billion. That is a drop of about $2.5 billion from what provinces could expect under the current system.

That is tough action but let us put it in context. It means that the total of all major transfers, including equalization which is not affected by the budget, will be 4.4 per cent lower than today. By comparison, the cuts in federal spending everywhere else will be 7.3 per cent, a much deeper reduction.

The Canada social transfer will represent a new approach to federal-provincial fiscal relations marked by greater flexibility and accountability for provincial governments and more sustainable financial arrangements for the federal government. By doing so it continues our national evolution toward more mature fiscal relations.

The government is meeting its fiscal target. In the 1994 budget we pledged that the deficit would be reduced to 3 per cent of GDP or $24.3 billion for 1996-97. In the budget we are taking strong measures to ensure that those targets are met even with higher than expected interest rates.

The budget also looks beyond the two-year target because our fiscal reforms will continue to pay off in the years after sustaining our progress toward the government's ultimate goal, a balanced budget.

Our cautious fiscal and economic assumptions make clear the need for tough measures. To hit our targets we are implementing cumulative savings over the next three years of $29 billion. These actions mean changing the size and shape of government. By 1996-97 program spending will fall from $120 billion last year to just under $108 billion. The structural changes we are making will ensure that significant deficit reduction continues in 1997-98 and beyond. The bottom line benefit will be dramatic.

The budget concerns itself with increasing tax fairness. The 1995 budget takes far reaching action to restore the fiscal health that supports a strong and growing economy. The plan also reflects the government's determination to puts its own financial house in order instead of placing the burden on taxpayers.

Over the next three years spending reductions will total $25.3 billion against $3.7 billion in revenue action. That is almost $7 in spending cuts for each $1 in new tax revenue.

Most important, there is no increase in personal income tax rates in the budget. Where tax action is taken it centres on improving the fairness of the tax system. As the finance minister said, the issue of taxes is more than a matter of rates; it is a question of equity.

The budget reflects the results of the program review that was launched a year ago. The budget agenda is not just a plan for smaller government. It is a plan for smarter government and for reforming the structure of the government and how it spends. The size of government will be reduced substantially over the next three years. Departmental spending will be cut by almost 19 per cent from 1994-95 levels. For some departments spending will be halved and in total these actions will deliver a three-year savings of almost $17 billion.

As a result of the sweeping reform of federal programs, the public service will be reduced by 20,000 people this year and by some 45,000 positions over the next three years. For the first time departments will have to prepare three-year business plans and submit the plans to the scrutiny of Parliament and the public.

The impact of the program review budgetary measures has been fairly distributed across all provinces. Some programs have been eliminated or significantly reduced. Other programs have been redesigned or consolidated. There are some particular measures that tend to be concentrated in specific regions.

Of concern to the Atlantic region, and more particular to my riding of Central Nova, is the Atlantic freight subsidy that is being eliminated. However to offset this a five-year, $326 million transition program is being provided. Dairy subsidies will be reduced by 30 per cent over the next two years. Forest resource development agreements with the province will be discontinued. The public utilities income tax transfer payment of $30.4 million to Nova Scotia will be terminated. Regional agency funding will decline by $562 million over the next three fiscal years. ACOA's share of the reduction is $173.5 million or a 31 per cent reduction.

The government remains committed to supporting economic incentives in Atlantic Canada. ACOA has proven to be the most efficient and effective vehicle for delivering on the commitment. In terms of the government's commitment to job creation as promised in the red book, ACOA has shown itself to be part of the solution, having helped to create some 42,000 jobs in Atlantic Canada. ACOA will continue to fulfil a vital role as a source of capital for the region for growing small and medium size business and as a leader for economic development in the region.

In conclusion, the budget marks the beginning of a new era. It underlines the need for an evolving, dynamic, co-operative federalism to meet the challenges facing Canada's economy and its people in a tough, competitive world. It is a challenging budget but also an equitable budget that deserves the support of all members of the House.

[Jean-Guy Chrétien, Bloc, Frontenac, QC]

Mr. Speaker, I listened very attentively to the speech on the budget given by our colleague for Central Nova. However, I must confess that I detected bias in her comments. This hon. member must be on the same team as the Minister of Finance.

She said a few minutes ago that she saw the budget as a source of jobs-there is nothing to be seen. There is absolutely nothing there, less than nothing for job creation in this country, on the contrary. The only good thing the Liberal government has done to create jobs was the $2 billion, which became-because it was a tripartite program-$6 billion.

That was the only good creative thing where jobs could be created, and it should be said that the jobs were temporary. There was $200 million left, and they were threatening to cut it. And the hon. member for Central Nova is telling us that jobs will be created out of this budget. On the contrary, there is nothing.

She spoke of the deficit and of the debt which had become huge, a major problem for the country. This is true. I, however, would remind her that, in 1970, when her team was running the country, the deficit was almost nil-$1 billion and some. It was "improved" again and again. There were of course Mr. Clark's nine months and the preceding government's nine years, but today's $550 billion debt, on which we pay $50 billion in interest a year, is the child of her own party, except for the nine years the Conservatives were in government, before the Liberals returned to power.

I conclude by asking my colleague how she is going to justify to her constituents the fact that they have widened the gap to obtain parity in industrial milk and unprocessed milk in Nova Scotia?

[Roseanne Skoke, Liberal, Central Nova, NS]

Mr. Speaker, the hon. member raised a number of issues.

Let me set the record straight. I am not biased and I am certainly not confused. I have read the budget, I have scrutinized it and I am very proud to support the budget.

With respect to jobs and job creation we should not overlook the numerous job creation strategy programs the Liberals have implemented and are continuing with the budget. We have our youth service corps initiative and all our human resources development programs the people in my riding of Central Nova rely on on a very regular basis. They are creating jobs. I am proud to say we are now underway in implementing our youth service initiative program.

With respect to ACOA and its new role in terms of economic development in our area, we are very proud and pleased to have ACOA involved in economic and regional development and we are looking forward to working very closely with that agency.

We have our infrastructure program. Although there has been some reduction in the funding my riding has benefited significantly and created a number of jobs pursuant to this program and we are looking forward to future initiatives.

We also rely on small business in our area, which creates up to 85 per cent of the jobs in the country. The Liberals are being very active in terms of ensuring small businesses get the venture capital they need, ACOA will be taking a roll there, and also the measures they have taken in terms of ensuring banks recognize small business initiatives.

With respect to dairy subsidies, which affect my riding, there is only a 30 per cent reduction. There is equity in the budget. Every sector, every individual, every business, everyone has been affected by the budget. In terms of dairy subsidies for Nova Scotia there is only a 30 per cent reduction. It is time it became more competitive and cut its costs in terms of management and organization. It is not necessary for the 30 per cent reduction to be passed on to consumers. I trust it will not be in Central Nova.

[Paddy Torsney, Liberal, Burlington, ON]

Mr. Speaker, I rise today in support of the budget handed down by the Minister of Finance.

The main basis for my support is this was a unique process. This was terrific way all Canadians could participate in the budget. Volumes and volumes of material and input from Canadians across the country were received and distributed among parliamentarians and among the general public. The information came in a variety of forms and forums. There were letters, organized mailings, budget workshops, radio call-ins and town hall meetings.

People put forward their ideas, their personal views, their fears and their projections for the future. Canadians took part in the prebudget consultation process and had their voices heard. No rebellion was necessary. True democracy worked and the budget is a result of that.

In Burlington we had a terrific prebudget consultation meeting. It was a great example of public participation, discussion and debate. We had incredible input and ideas from people of all ages, backgrounds and various work experiences. We provided information to them beforehand so they could make an informed contribution. They could weigh the options. They could think about the issues, unlike the Reform Party which asked people to simply check off which percentage and which columns they would like to have done.

Through discussion we reached consensus on many issues and we had good debate and the debate continues on some others. My constituents thought long and hard about the issues. They offered their considered input.

They did not want to have tax increases without government showing leadership and taking responsible action. They indicated, and I certainly support them, constituents give us their precious tax dollars and it is our job to make it work. We must bring some accountability to the process.

There was clear support among participants that spending cuts were inevitable. They asked us to take a good look at our existing programs and the funding mechanisms for them.

In other areas there was no consensus reached. These are complex issues and Canadians are thinking hard about them. The budget addressed my constituents' concerns.

There are some false perceptions out there and perhaps they serve some people's purposes. There is a false perception Canadians are excessively burdened by taxes compared with citizens of other countries. This is wrong.

The hon. member for Beaver River is on record as saying we are among the highest taxed people in the world. This is wrong. Canadian taxes as a percentage of economic activity fall below the average for the 24 industrialized nations of the OECD. However, that kind of statement does not take into account the services Canadians get in return for their hard earned tax dollars.

We must deliver value for money. One great example is our entire medicare program. Even so, Canadians and Burlington residents agreed personal income tax rates should not be raised. The government listened and there were no tax increases.

We are achieving our goals for deficit and debt reduction, but not on the backs of individual Canadians. Our solutions are focused. They are good, efficient government instead of increased taxation.

Canadians recognized difficult decisions had to be made while at the same time it was critical we make strategic investments, that we be smart about where we are going to spend money for the future and to balance our budget.

The Reform Party is quoted in the Calgary Herald , February 7: ``Reform for its part would rapidly slash government spending as to create a fiscal balance while creating a huge social deficit in the form of greater unemployment and social polarization''. This is not the Canada we want.

Our approach is to cut in a fair manner, to lead by example by looking at where to cut in government first. By reducing government spending and undertaking a full program review we have taken the responsible approach. The budget has a 7:1 ratio of spending cuts to revenue increases. These steps will lead the country into a brighter economic future. We are redefining the role of government.

In the area of unemployment Burlington residents are concerned about their neighbours, both in our community and in the broader Canadian context. People must get back to work. The budget continues with our Liberal four-point agenda for jobs and growth. New programs are being developed to ensure people acquire more skills, the youth internship program, the youth service corps. We must address youth unemployment particularly and the school to work transition. We must invest in our future generations now.

Burlington residents suggested the best way to improve job creation is to implement apprenticeship programs, keep pace with innovation and with changes in technology, encourage education and training, encourage free enterprise, eliminate bureaucratic paper work, especially for small businesses. The budget is connected to all our initiatives as a government and to our policies like the social security review.

The area of technology is important. We must be innovative. We must be ready for the future. We must spend wisely and work within our fiscal means. R and D is encouraged through the research and experimental tax incentive, one of the most generous tax incentives in the world. However, it is important it is not abused, and so we have moved to change that.

In the area of small business we must continue to invest in people and in growth. The 1994 budget undertook a small business policy review, realizing entrepreneurs are responsible for creating the majority of new jobs in Canada and for moving our economy forward. With consultation and the release of the report "Building a More Innovative Economy" we have received input from Canadians about how to proceed. The challenge of access to capital remains.

The 1995 budget encourages banks to do a better job of lending to small businesses by encouraging government to work with the banks to develop appropriate benchmarks. These must be achieved.

In my riding of Burlington our local economy is vital and continues to grow. We have many diverse, successful small and medium size businesses such as Colette's Café and Toshiba Office Product Centre, employing a small number of people but growing.

There are many more people, young and old, experienced and inexperienced, who have excellent ideas, great initiative and full support from their friends and families. All they need is financial backing. These are the people who are creating jobs in Canada. These are the people whose entrepreneurial spirit we must foster. They are creating the environment and the jobs for future generations. The government is committed to ensuring they do that.

We are committed to ensuring Burlington and all Canadian businesses are able to succeed, to grow and to add to their employee base. We have fine examples like the companies that started small, Zenon Environmental, Gennum, Thompson-Gordon and Laidlaw. They are leaders in the world in their own fields.

The 1995 budget also put some things in context for Canadians. Our inflation was the lowest of the G-7 nations and our economy grew at a rate of 4.25 per cent, the fastest of the G-7 nations.

Our export growth is strong; 433,000 full time jobs have been created since January 1994. The unemployment rate has fallen by 1.7 percentage points. Our cost competitiveness is the highest in 40 years and yet we remain burdened by high national debt and continue to pay off our interest.

There is optimism. Canadians know we have a rational plan for deficit reduction. We are taking the right steps. We will achieve our deficit targets. In the last year we not only achieved them, we surpassed them by $4.2 billion. We aspired confidence.

Now is the time for hard decisions. We must make forward thinking investments for the future. Our aim is sustainable jobs and growth, with sensitive cuts and responsible spending.

The budget shows our commitment to future generations. We cannot stand idle by the impact of our decisions or past actions. We must not squander limited resources, but use them in an intelligent and effective manner.

Precious Canadian taxpayers' dollars must be put to work effectively. This budget is a terrific step in that plan of action. Canadians are the winners in this budget. They made their voices heard and this budget is there because of them.

I thank the many residents of Burlington who participated in this process. We are all winners. We will have a stronger nation. We will all have better lives.

[Randy White, Reform, Fraser Valley West, BC]

Mr. Speaker, I was overwhelmed by the speech of my colleagues about these mean Reformers here. There is a bit of paranoia among the government members about the budget.

There are a couple of things in particular about her speech that are really intriguing to me. The hon. member suggests the government is going to meet its targets and Canada will be forever thankful when the Liberals meet their targets, three per cent of GDP, approximately $25 billion a year. We would really like to thank this government at the end of its budget exercise for overspending by $25 billion a year. Somehow I am not sure a lot of folks out there think much of that.

What is the idea of overspending by $25 billion a year? Is that is a good idea or a bad idea?

Would the hon. member justify how this Liberal government can mess around with MPs' pensions and come up with $4 million on the old plan and $3.16 million in the new plan, like the minister of immigration. How can they justify that and cut all the other programs back? Maybe they could get rid of the paranoia over there.

[The Speaker]

Like many members, I am interested in paranoia. I am going to let the hon. member think about it for a bit. She will have the floor when we come after question period.

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