Debates of March 17th, 1995

Supply

[Diane Ablonczy, Reform, Calgary North, AB]

moved:

That, this House urge the government to recognize that the present social programs are failing and to investigate more secure options such as the Registered Personal Security Plan (RPSP), a system of personalized, tax-sheltered, RRSP-like savings accounts to which Canadians could contribute funds to be drawn during periods of unemployment, for personal upgrading/retraining and for retirement income.

Mr. Speaker, It is a tremendous honour and privilege for me today to introduce to the House and to the Canadian public an innovative new concept which the Reform Party believes will help preserve long term personal security for Canadians.

With so much talk lately of cutbacks and change to social programs, citizens are naturally concerned that this will threaten the benefits they have been promised. Although the welfare state is crumbling, Reformers believe that we can work together to build a better and stronger way to provide for ourselves during times such as unemployment and retirement.

Today we place before the House a motion which addresses this vitally important issue of how best to preserve and protect the personal security of Canadians:

That, this House urge the government to recognize that the present social programs are failing and to investigate more secure options such as the Registered Personal Security Plan (RPSP), a system of personalized, tax-sheltered, RRSP-like savings accounts to which Canadians could contribute funds to be drawn during periods of unemployment, for personal upgrading/retraining and for retirement income.

The Reform Party unveiled its registered personal security plan proposal in our taxpayers budget which we released on February 21 of this year. This was as a direct result of a resolution passed by Reform members at our October 1994 assembly:

Resolved that the Reform Party investigate the feasibility of replacing the compulsory, government operated, privately funded taxpayer subsidized unemployment insurance program with a voluntary, personally financed, privately administered, government regulated registered unemployment savings plan.

Since then we have begun the process of discussion and consultation necessary to examine and test the idea both with experts and in the public arena. Through that process we will expand and refine our proposal and determine whether there is support for moving toward this entirely new way of meeting our personal security needs.

The first question Canadians watching this debate will ask is: what is an RPSP or registered personal security plan? Simply put, an RPSP gives us instead of government ownership and control of the moneys we pay into UI and CPP.

The second question Canadians might ask is: why do we need to change; what is the problem with the unemployment insurance program and the Canada pension plan we have now? I suspect that a lot of Canadians have already figured out the answer to this question.

They have seen the report that the CPP fund will run out of money in 20 years. They heard the finance minister in his budget promising a paper on the changes required in the public pension system to ensure its affordability. They know this means something is deeply wrong. It is the same sinking feeling they get when the doctor says: "We need to do a few more tests".

The finance minister also cut unemployment benefits. Of course this was all carefully worded by Liberal spin doctors. The cuts were styled as "unemployment insurance reform" which "will reduce the overall size of the unemployment insurance program by a minimum of 10 per cent".

In spite of this 10 per cent reduction in benefits, Canadian workers will still hand over the same amount of money to the government. The Liberal spin doctors dress this up by promising no increase in premium rates. One would hope not, considering the benefits are being cut.

It would have been more honest for the finance minister to come right out and say that benefits would be cut by 10 per cent or more. In spite of the coy wording, Canadians figured out that they are getting a smaller benefit for the same money. They

worry that it will shrink a lot more as the government sinks deeper into debt.

Over the past 30 years Canadians have been promised that government will meet the lion's share of their most important security needs, but there is increasing evidence that these promises cannot and will not be kept. Our compulsory contributions to government programs have not guaranteed us anything. We are living on borrowed money and mortgaging our children's future to pay for government programs that are simply not working. We would all like to hope that these problems will somehow disappear but in our hearts we know they will not.

Government pension plans as currently constituted do not enhance social security. They pour it down the drain. The government as a pension manager is like an alchemist who can only change gold into lead.

There is something else to consider. Even if we were not losing programs, there are harmful social consequences from encouraging people to depend on government for their personal security. Canadians have a proud tradition of self-reliance, caring for our families and helping those less fortunate.

Many of our citizens have a strong desire to take back control of their resources, their futures and their own welfare. They are willing to be self-reliant and to show compassion for the needy. All they ask is that they be able to keep more of what they earn and that government exercise careful stewardship of necessary tax dollars.

If we move from failing social programs to a new plan, what will be the benefit? The greatest benefit is that your money will go into your own registered personal security plan, RPSP. The money is yours. The interest or profit from the investment of that money is yours. If you die, your loved ones get it. It is your property and your ownership of it does not depend on the management skills or financial health of government.

CPP and UIC turn taxes that are too high into benefits that are too small. The RPSP turns taxes into productive investments and productive investments back into social security. In addition, there are tremendous financial advantages to this type of plan.

Assume that an employee contributes five per cent to an RPSP account monthly, matched by five per cent from his employer. This is about the same amount as the present combined CPP and UI contributions. The employee works from age 20 to age 65. Also assume a moderate investment return of 8 per cent interest compounded quarterly.

A worker earning only $1,000 per month or only $12,000 per year would retire on $3,432 per month before tax for the rest of his life and would leave an inheritance of $514,812 for his family or other beneficiaries. This is someone who earns only $1,000 per month. No doubt this will be astonishing to many people because they have not realized how much more they could receive under an RPSP fund than under the government CPP and UI programs.

Let us look at what an average Canadian wage earner could expect from an RPSP. Someone earning $30,000 or $2,500 per month would retire on $8,580 per month before tax and would leave an inheritance of $1,287,031. Nothing like getting a huge raise when you retire.

The Reform Party will be providing Canadians with tables of such returns for different levels of income which demonstrate why they deserve a whole new system to ensure personal security.

Canada lags behind other countries when it comes to moving toward more rewarding and effective measures in this all important area.

A system similar to the RPSP plan was successfully implemented in the United Kingdom in 1978. Current pensioners were made secure at existing levels of benefits, while future pensioners were given a chance to move into the more attractive retirement option.

Britain's long term pension liability was reduced by more than 30 per cent in the first three years alone of the opting out plan's operation. This guaranteed that future taxpayers will not be overburdened as British baby boomers began to retire.

Chile successfully privatized its pension system more than 15 years ago, in 1981. Like Canada, an increasing number of Chileans were retired compared to citizens still in the workforce. The level of seniors' benefits was exceeding the level of contributions and, like Canada's CPP, Chile's pension plan was a pay as you go scheme.

Because the scheme was broke, Chile moved to a mandatory savings plan requiring employees to place a minimum of 10 per cent of their taxable income into tax sheltered individual retirement accounts managed by competing private sector financial managers.

The results have been remarkable. Private savings in Chile rose from 2.8 per cent of GDP in 1980 to 14.3 per cent in 1991. Very importantly, they have provided investment capital which has been pivotal in the near-miraculous financial renewal of Chile's economy.

I believe that the experiences of the U.K. and Chile provide evidence that there would be tremendous advantages to our own country in looking for similar, innovative solutions to some of the worrisome uncertainties about our own personal security which we see looming on the horizon.

These are some further benefits we see to moving our UI and CPP contributions into our own personal RPSPs. First, working Canadians would be gradually relieved of the burden of paying

government pensions to those who are retired. As our population ages there will be far fewer working Canadians shouldering the cost of the benefit seniors have been promised.

In just 20 years the number of seniors will have increased by 40 per cent. At that time working Canadians will be trying to ensure their own personal security, pay staggering yearly interest rates on the debt we have run up, will still have our debt hanging around their necks like a millstone and, in addition, will be asked to pay our seniors' benefits since nothing has been saved up for that purpose.

Not only do we have an obligation to relive them of that burden to the greatest extent possible, we should ask ourselves whether it is fair that they should be asked to carry such an onerous and unfair load on our behalf. We would be wise to see this coming and fix the problem while we still can.

Second, RPSPs would provide Canadians with much greater retirement income than do the present plans. For example, a Canadian born in 1960 would receive only $2.60 for every dollar paid into CPP. For a Canadian born in 1980 the return drops dramatically to only 80 cents per dollar paid in, a dead loss.

By contrast, moneys invested in an RPSP at even 5 per cent interest would yield an average lifetime return of $3 for every dollar invested. CPP is misnamed. It is not a pension plan but a tax to redistribute income from workers to retirees. If it were a true pension plan, properly invested, it would not be in trouble, it would be rich.

Third, rolling UI premiums into RPSPs would provide substantially more security to the unemployed while also creating an incentive to remain employed. Canadians would have far greater control over their own unemployment income. They would have the security of knowing that their premiums are a long term, personal investment even if they are never unemployed.

The Canadian Institute of Actuaries has shown that after only eight years, UI contributions administered through an RPSP would provide the same level of benefits as the maximum under the current UI program. Of course in subsequent years the rate of growth in the RPSP rapidly out performs the return from premiums paid into the current UI program. In addition, workers would have the enormous satisfaction of control and responsibility for personal well-being.

Fourth, seniors could continue to earn income without having their retirement benefits clawed back as happens today with OAS.

Fifth, RPSPs would benefit the poor. Because UI and CPP contributions are taken off the top of their pay cheques low income Canadians do not have anything left to put into personal savings. Under the Reform RPSP, payroll deductions from CPP and UI would gradually be transformed into automatic payments into each individual's RPSP. This means that many working class Canadians would be able to own a personal security account for the first time ever.

Sixth, moving into RPSPs would generate an enormous pool of capital for productive investment in our country, resulting in a host of new employment opportunities. This would create far more jobs than government spending ever could. Although RPSP managers should be able to invest in government bonds at their own discretion, we would recommend that RPSP moneys should not be accessible by government.

Seventh, these personal security funds would be owned outright by Canadians as their personal property. They would not be vulnerable to government mismanagement or squandering. Prudent regulations would ensure sound investments managed by reputable firms. People do not want their retirement savings put into fur-bearing trout farms.

Eighth, RPSPs would allow and encourage Canadians to free themselves from disabling and uncertain dependence on government and government bureaucracy. A return to the ethic of self-reliance would enrich the spirit and vigour of citizens and the country as a whole.

We have begun the work of researching details which need to be addressed. We want to make the transition from the current unsustainable programs to personal RPSPs in a way which protects those already receiving benefits under the old plans. To achieve that we anticipate a long phase in period. We will decide whether any changes to the tax system are needed to move to RPSPs and we will demonstrate how a new direction in personal security will also benefit the poor in society.

Also to be explored is whether the RPSP should be expanded to provide a savings component to fund education and training and other security needs.

As the Reform Party continues to expand this new personal security concept, it will consult with a broad cross section of knowledgeable Canadians, including tax experts, actuaries, investment managers and technical researchers. It will also find a variety of ways to provide information to Canadians to encourage discussion and ensure an informed debate and decision at the end of the process.

This will include surveying citizens on what they need and want; holding open public meetings to present the concept and hear from Canadians; and creating a concrete proposal summarizing all the research and consultation, which Canadians will be able to judge.

In our view it is critical that we move now to carefully examine the issue of our personal security and options for the future. With every passing year the transition to a better and more workable solution becomes more difficult. This is because our population is aging rapidly. In addition, as our debt balloons and interest payments consume more and more of the national

wealth every year, we lose needed financial flexibility to protect Canadians who already have retired or are nearing retirement.

The World Bank has also pointed out the urgent need to face the imminent problems of our old age security system. Just a few months ago in its report "Averting the Old Age Crisis" the World Bank urged countries with rapidly aging populations and costly welfare state social programs to shift to greater self-reliance and individual initiatives to meet personal security needs.

It is abundantly clear that all Canadians and especially their elected leaders and representatives need to take thoughtful and vigorous action to protect our future personal security and they must do so now. We are dismayed to see the Liberal government bitterly divided on where to take the country when it comes to this important issue. It has utterly failed to bring forward promised proposals for change.

It is disturbingly clear that the people in charge have absolutely no vision for constructive change to a crumbling social system. Canadians desperately need such a vision. They need hope that there is a way to deal with the disaster they see looming ahead and which they know will rob them of the security and protection that every single individual needs and expects.

It is for this reason that the Reform Party is doing everything it can to fill that need for our citizens. This is why it has come forward to introduce a proposal which it believes will provide a positive and beneficial solution to give hope to Canadians on this critical issue.

The experience of other countries in the world, the recommendations of experts and analysts and just plain common sense all lead to the conclusion that a dollar left in the hands of a mother, a father, a family, a student, a senior, a caring and compassionate Canadian is more productive and will provide far greater personal security than a dollar left to be managed by the federal government. Let us get on with the job.

I appeal to Canadians everywhere to examine the emerging concept of the registered personal security plan. Work together with us to shape its direction and determine its details. Do everything you can to ensure that your elected representatives support more workable and effective ways for you to manage your hard earned dollars, to provide needed security for yourself and your family.

I say to Canadians, it is your money, it is your country, it is your future. Reformers believe that registered personal security plans ought to be a part of that future but the status quo will never change unless we work together to make it happen.

I ask for your support as we move to find better alternatives for Canadians in the 21st century.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I listened with attention to the proposals of the member across the way.

It seems to me it is the Reform Party that is divided all over the map. The leader of the Reform Party is in Washington trying to distance himself a little from the right wing agenda. Meanwhile, Reform minions in Ottawa are still talking about the old agenda prior to his departure to Washington where he had somewhat of a conversion although we are not holding our breath in that regard.

I want to ask a question of the member under whose name that motion is today about the registered personal security plans that that party is offering as an alternative to Canadian social programs.

Does she not think there is something deficient in social programs where we do not have the advantages of pooled risk that we have when society as a whole takes care of social programs?

We cannot put money away unless we have money to start with. Our RRSPs are a form of tax shelter. In order to have a tax shelter, we must have money to shelter away to start with.

For people who do not have that, does the hon. member feel they should be condemned to a life of poverty? Does she not think as I do that instead we should have programs to enable people to have better futures, to enable people regardless of their socioeconomic background to improve in life?

Not all of us were born with gold spoons in our mouths.

[Diane Ablonczy, Reform, Calgary North, AB]

Mr. Speaker, it is pretty clear that the Liberals are extremely worried about the fact that our leader is making an extremely positive impact in the country to the south of us. They know that Canadians also are waking up to the common sense, workability and hope that the Reform program offers. I know they are worried. They are trying to tear that down every chance they get, but Canadians are not going to be fooled.

If there were such great advantages to the pooled risks that the member suggests are present in our present programs, why is the benefit of these programs continually being eroded? The government said barely a week ago that unemployment insurance benefits would be cut by 10 per cent or more. Where is the great advantage to the pooled risk there?

This member says: "What about people without no money to squirrel away?" We are talking about how to manage the money we do put away better, UI premiums and CPP premiums. Most Canadians pay those, especially at some point in their life. They

are being terribly mismanaged and wasted by the government programs that this member is trying to defend.

It is time Canadians woke up and started doing something better and safer with their money. We are proposing a plan to do that. We believe we will be supported by Canadians.

[Judy Bethel, Liberal, Edmonton East, AB]

Mr. Speaker, at my town hall meetings in Edmonton East over the past year-we have had many of them-talking about these kinds of reforms, this idea has never come forward. I guess the reason that it did not is that many in society are unable to save.

I see some real discrepancies. For instance, only 14 per cent of tax filers with incomes between $10,000 and $20,000 can make RRSP contributions. How will these people be able to make the savings that are requested? There are other discrepancies as well: 70 per cent of those with incomes above $80,000 contribute to RRSPs.

How can people who earn lower incomes prepare for potential catastrophic events?

[Diane Ablonczy, Reform, Calgary North, AB]

Mr. Speaker, I am not surprised the idea has never come forward in Liberal meetings. It takes leadership to provide new ideas and that is exactly what is missing from the government.

I wish the member had listened to my speech. It would have helped her a great deal. In the speech I noted that workers earning only $1,000 a month, which is the working poor, by investing their UI and CPP forced contributions in RPSPs, would retire under the plan with $3,432 per month before tax. That is what will benefit the poor. No wonder they have no ability to save now. They are forced to pay these moneys to the government, which are mismanaged and poured down the drain. They have nothing left to save.

Why not let them keep their money and save it for this kind of return? It would be a tremendous advantage to the working poor. I believe the member will see that and support it if she examines the proposal objectively.

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

Mr. Speaker, I sat here in utter amazement as I listened to the hon. member for Glengarry-Prescott-Russell ask how people were going to squirrel money away when they do not have any money.

That Liberal member could have answered his own question. He knows very well that over 60 per cent of the income of average working middle class Canadians is being paid out in taxes of all forms. It was a predecessor Liberal government that started the deficit and debt spending which was carried on by the Tory Party. Now we have almost a $500 billion debt and we are servicing that debt with about a $45 billion interest payment. If the incompetence of the Liberal Party back in the mid-seventies had not started this downward slide, Canadian taxpayers would have money left in their paycheques to provide for their own personal security.

It goes back to what we have been saying. It is not fiscally responsible MPs like the Reformers that are the biggest threat to social programs. It is the incompetence of previous governments and the high taxes we pay in the country.

[The Deputy Speaker]

I am not sure those remarks were aimed at the member who was speaking.

[Susan Whelan, Liberal, Parliamentary Secretary to Minister of National Revenue]

Mr. Speaker, I am pleased to rise in the House to debate the hon. member's motion. The hon. member says our social security programs are failing. I fail to see how the hon. member arrived at that conclusion.

Before we began reviewing our social security system we heard from Canadians loud and clear. They wanted us to retain these programs, programs that are interwoven into the social fabric of Canada. That hardly suggests failure. It does not mean, however, that Canadians thought we should just leave them as is.

The government recognized social security programs have served us well for many years but that it was time for an overhaul. It was time to make them relative to the needs of the population of the 1990s. That is why we undertook, with the support of the majority of Canadians, the first step in the process of social security reform.

Hon. members are well aware that we carried out massive consultations across the country. The Minister of Human Resources Development and the Standing Committee on Human Resources Development listened to the views of Canadians from all walks of life. More than 600 groups expressed their opinions on social security reform.

To break it down briefly for hon. members, 20,000 Canadians took part in more than 200 town hall meetings held by MPs from all parties. More than 40,000 people completed and returned social security reform workbooks. We held a series of seminars where there was broad public discussion in 25 communities across the nation. The Minister of Human Resources Development has received more than 3,000 letters from citizens expressing their views on social security reform. Over 7,000 people have accessed the minister's Internet bulletin board on social security reform and more than 35,000 people have called the social security reform hotline to request information or material.

Hon. members will also recall that some of the hearings were rambunctious affairs, to say the least. While it is true that those who voice strong opinions may indicate disagreement with some program policy, one thing it certainly does not indicate is

complacency. Canadians care about their social security programs.

The government realizes it must move ahead with social security reform in a timely and orderly fashion. The budget confirms this point. We know from the excellent budget presented by the Minister of Finance, a budget that is getting higher ratings than "Hockey Night in Canada", that Canadians agree reform of our social security system is moving in the right direction.

We said from the beginning that meaningful social security reform could only take place in the context of a responsible fiscal framework. The budget has given us that framework. The budget clarifies that effective reform of our social security programs is absolutely essential, given that we must operate with limited financial resources. Let me put to rest the unfounded rumours that social security reform is dead. It is anything but dead.

Here is where we are at. We have completed the very successful consultation process. The government is now studying the excellent report of the standing committee. Now that the budget has given us the fiscal parameters within which to operate, the next phase is to carefully develop an overall design.

In other words, it is time for the architecture. The architecture comes before we start rebuilding the programs. It is a logical process. We need to develop a new structure before we abandon the old or the current one. A key part of the process will be consultations between the Minister of Human Resources Development and the provinces. These consultations will seek to establish national principles.

The government believes that Canadians are equal in every part of this great nation. We will strive to ensure that national principles apply to social security programs for all citizens.

Canadians told us that one of the key areas for reform was the unemployment insurance program. Using the input we have received we intend to develop proposals for the UI program that take into account the views of hardworking men and women.

We have already begun to act. Hon. members will recall that the government had enough foresight last year to make provisions that began January 1 of this year. If the government had not acted, UI premiums would have risen to $3.30. Instead they were reduced to $3. It is estimated that the payroll tax relief will create or preserve 40,000 jobs. We will be able to put additional savings from UI reform toward improved employment development services.

There is more good news on the reduction of UI premiums. The economy is performing extremely well and we have every reason to believe it will continue to do so. For that reason we expect to reduce premiums again, possibly next year but certainly by 1997. I want to stress, however, that the government has not yet determined the amount of any cut to the premium rate. The figures we read in the press are only forecasting estimates.

We plan to move ahead with UI reform this fall. As the budget clearly stated, we intend to have new UI legislation in effect no later than July 1, 1996. It is true that we are shooting for at least a 10 per cent target reduction in program expenditure. How fast we reach that target will depend upon the continued good health of the economy. It will depend upon program details that UI officials are currently working on.

While reform of the social security system is an ongoing process, we know it will function more effectively and with significantly reduced administrative costs as part of the new Canada social transfer. The popularity of the budget tells me that Canadians are very excited about the innovative possibilities and the flexibility that the provinces will have to address the needs of their particular residents under CST.

Again I stress national principles and objectives will be very much a part of the new Canada social transfer. The Minister of Human Resources Development will be inviting all provincial governments to work together on developing a set of shared principles and objectives to provide a solid framework for the new CST. This is one way that all governments can reaffirm their commitment to the social well-being of Canadians.

I think all hon. members will agree that the best form of social security is a well paying, rewarding job. Social security reform is very much a part of the government's job and growth agenda.

With that in mind the Minister of Human Resources Development is bringing together the current programs that support Canadians in preparing for and attaining employment. They will be consolidated into a new human resources investment fund. The fund will pool resources from existing programs to develop a more coherent approach, establish priorities and make use of the best tools available to ensure Canadian workers find stable employment.

The human resources investment fund will take a hard look at the role of the federal government. We will ask ourselves what we should be doing and determine the best way to eliminate overlap and duplication. Streamlining and consolidation will mean some savings in the coming two fiscal years. The result will be that federal employment related programs will make the most efficient use of available resources.

The new programming will recognize clear and distinct roles for the federal government and the provinces. We will co-operate with the provinces to deliver services effectively and at the lowest cost possible to Canadian taxpayers. Together we can

ensure that Canadians are capable of functioning at a high level in the rapidly expanding global economy.

We all know that today's motion is based on the ill conceived quasi-budget of the Reform Party and that document in turn owed more than a little to the Reform minority report on social security reform which contained proposals that the member proposing today's motion conceded were not thought through very well before they were rushed into print.

I am most concerned by the Reform's so-called proposals. After examining them it is clear to me that these are old knee-jerk ideas that would move us backward, not forward. I cannot see how Reform's proposals would help Canadians find meaningful employment and reduce social ills such as child poverty.

The Reform Party has come up with the catchy title "Taxpayers' Budget". However when Canadian taxpayers get a close look at it they will see that if we adopted it taxpayers are the ones who would be snagged.

First let us look at the subject of today's motion, the registered personal security plan or RPSP. As I understand it, Reform wants to replace UI, OAS, CPP and some health, education and training programs with an individually based savings plan. This means that when sickness or unemployment strike or when they take their retirement, Canadians will be expected to rely on their own means and the risk pooling features of our current social programs would disappear.

Obviously lower income Canadians would be much more adversely affected by the proposal. I can see nothing in it except for the very well off who would have yet another instrument for feathering their nest egg.

Next let us take Reform's proposals for UI. The party suggests cutting $3.4 billion from the UI program. That is easy to do on paper but the result in real terms would phase out maternity, parental and sickness benefits as well as the fishermen's program. The measure alone would take away maternity benefits from more than 160,000 new mothers, sickness benefits from 150,000 workers who are temporarily unemployed, and badly needed benefits for 30,000 fishermen.

Who will shoulder the burden to help these individuals? Removing regional benefits would affect 1.3 million unemployed workers, which is more than 50 per cent of UI claimants. The Reform Party would slash income support by $4.5 billion. This blanket insensitive approach would drain billions out of the provincial economies-hardly what I would call a responsible move.

This is not what Canadians want. As I have already outlined the government intends to revitalize its UI program. We need to look carefully at how and why people use unemployment insurance and then make adjustments accordingly. We will not wipe out key social benefits like those for maternity leave.

The Reform Party tries to put forward a social conscience with its principle of equality contributions. Its taxpayers' budget states the burden of reduction must fall least heavily on the most vulnerable members of society.

There is no doubt that all hon. members share those sentiments. The trouble is Reform's proposals would have exactly the opposite effect. Instead of helping those most in need, the taxpayers' budget would cut seniors' pensions by $3 billion. How will this measure help vulnerable seniors meet the cost of living?

Reform also proposes that the government eliminate all regional differentiation. How will this help the poorest regions of the country? It also suggests cutting aboriginal programs by 24 per cent. Someone will have to explain to me how this measure will help our aboriginal brothers and sisters who are quite possibly the neediest group in Canada.

The Reform Party's budget suggests cutting the Canada assistance plan transfer payments by 34 per cent and equalization payments by $3 billion, a 35 per cent cut. If the government did that I acknowledge it would certainly lessen the burden on federal coffers. Unfortunately it would devastate the poorest regions of the country. It would place the burden of deficit reduction on the most vulnerable members of society. It would contradict Reform's stated philosophy.

Cuts like these would not renew our social security system. They would outright destroy it. Reform's approach to deficit reduction is simply reckless. It is easy to be reckless when one is not in the driver's seat.

What about the proposal to slash $3 billion from seniors' pensions? The Reform does not provide any details on this proposal maybe because if it had done so it would have had to tell elderly Canadians that more than half of them would see their benefits cut and low income seniors would be among the losers.

The government's approach is to review the needs of seniors into the next century and determine how best to meet those needs. We are not saying there should be no changes. We have never said that. However, a responsible government examines the repercussions of changes before taking action, and that is what we are doing.

Reform wants to replace old age security and the Canada pension plan with an RRSP and registered personal security plan system. The concept has already been tried in the United States. It is called a personal bank account. It actually works very well provided one is fortunate enough to be wealthy. Those less fortunate are out in the cold.

The Liberal Party's policy is for a sound and efficient income system that provides a balance between public pensions and private arrangements. In other words, the government's philoso-

phy on retirement combines realism with compassion, something the Reform Party should thing about.

The Reform Party should also think its proposals through before presenting them and should come clean on how much impact it would have on the lives of Canadians and the social fabric of this great nation.

The government certainly welcomes constructive suggestions from hon. members on the opposite side of the House. The proposals we see in the Reform Party's taxpayers' budget are so poorly thought out that it simply does not give us anything valid to work with.

The popularity of the budget by the Minister of Finance speaks for itself. Canadians recognize that in order to retain strong, viable social programs we have to find the financial resources to fund them. That is why Canadians support the direction the government is taking. With the Canada social transfer we are entering a new era of social policy that will streamline our social security system and bring us into the 21st century.

As a nation that enjoys one of the highest standards of living, there is no doubt in my mind Canadians reject the simplistic notion embodied in today's motion. They know the government is committed to the renewal of Canada's great legacy of social programs. I am sure they share my belief that the Reform Party is in no position to enact the motion before us today.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I listened with interest to this speech. There were a couple of anomalies within it which we should think about.

She indicated this was an old thinking, knee-jerk reaction. To me that is an oxymoron. Knee-jerk is something not thought of before.

The principles we are espousing are based on both experience and thinking. We have found the country did best when there was the least amount of government, when there was less intrusion. To now say we should once again use those principles of self-sufficiency and encourage people to look after themselves and making it possible for them to do that is not knee-jerk. That is good, solid thinking.

The member said Canadians reject this. She said that several times. That is not my experience. I have shared this concept with a number of people for over a year. I am pleased the ideas we had are now coming forward in the House. I have yet to hear a single person indicate anything but enthusiasm for this concept.

With respect to the reduction of old age security benefits, the member made mention that Reform is saying we are going to cut back. I want to make it very clear, I want everyone to know we are forced into this, not by what Reform is doing but what governments over the last 30 years have done. We have run out of money and the Reform policy is to target the remaining money, as little as there is, to those who have true need.

When we are talking about reducing old age security, we are talking about reducing to those who do not need it because they have an income over the national average.

We would be most honest with Canadians if we were to say the Canada pension plan is at risk because we will not have the money. That is the result of Liberal and Conservatives governments. That has to come to an end.

[Susan Whelan, Liberal, Essex—Windsor, ON]

Mr. Speaker, the hon. member has not heard the Prime Minister mention on several occasions that the taxpayers' budget proposed by the Reform Party has forgotten to take into account that our population is aging. The costs of old age security for our seniors will rise every year. It is not in the Reform budget. Maybe the member should take a look at that part and think it through.

The Reform Party constantly claims over and over again that it represents the people, the interests of Canadians and listens to polls and to to Canadians. When 80 per cent of Canadians respond telling us they support public programs for elderly care, does that not send a message to the Reform Party? It should send a message to a party that claims to represent the people. When it hears that 77 per cent support public programs for child care and other programs, does that not send a message? I would think it sends a message.

I would ask the Reform Party to take a look at our budget. Our budget talks about the problems we are going to face. It talks about the fact that we have to deal with old age security and all of our social programs, especially relating to our seniors. The budget has the foresight to deal with that.

Perhaps the Reform Party should actually read the budget.

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Mr. Speaker, our budget does take into account the fact that the population is aging and that our social programs are unsustainable.

The hon. member should realize that in a few short years we will be paying up to 15 per cent of our income into the pension fund alone to meet the expectations of those retiring in a short time.

The member said social security programs are anything but dead. The studies by the Liberal government show the pension plan is in big trouble. There is less than two years of funds in the pension fund for payouts. The liability in this fund is about as great as our national debt, at over $500 billion. That is the liability in this fund.

This does not give Canadians security. It should be immediately obvious to everyone in the House when you have that kind of liability it is not sustainable, the opposite of security.

If individuals had been contributing into a self-managed fund, they would now have more security. The proposal we are putting forward gives the poor people a lot more security than they presently have with the mismanaged pension fund run by the government.

Does the hon. member feel it is worth exploring a means by which we could make a transition from the present unsustainable system to a more secure system that gives individuals more control over their future? Does she not think this concept is worth exploring?

[Susan Whelan, Liberal, Essex—Windsor, ON]

Mr. Speaker, I guess the hon. member was not listening. In the budget the finance minister talked about the fact that we need to review our programs for our seniors.

We have a system in Canada developed by Liberals, a system that met the needs of the 1960s and the 1970s when it was introduced; a system we are trying to up date that will meet the needs of the 1990s and the 21st Century. That is what this Liberal government does and that is what this Liberal government is about. That is what we will do.

The hon. member is not aware, obviously, how programs work in other countries. I am very familiar with how they work. I have an aunt who lives in the United States. I know what happens when you become a senior citizen. I know what happens to programs you have paid into for four years and benefits that are cut off over time. I understand how that system works because I live with that system every day due to a family member who has an illness.

I ask the Reform Party to do a little research into its suggestions before it puts them forward and that it realize what the Liberal government is trying to do.

We recognize things have to change. We started the social security reform and we started the human resources consultations over a year ago. Members on that side took part in them. We are not afraid of that. We are aware of that. We mentioned in the red book that we would deal with the systems and that we would make changes and that is what we are going to do.

[The Speaker]

It being almost 11 a.m. we will now go to Statements by Members.

Jeremy Freiburger

[John Bryden, Liberal, Hamilton—Wentworth, ON]

Mr. Speaker, earlier this week a young man in my riding, while driving at night, was in collision with a trailer portion of a tractor trailer which had turned across the highway. He had no chance to apply the brakes and hit the trailer squarely in front of the rear wheels. The crash impact squashed the roof of the car flat and it took a crane to free it from underneath the trailer.

Firemen who arrived at the scene did not believe that anyone could have survived. Inside the wreckage, jammed beneath an air bag and squeezed on all sides by twisted metal, 18 year old Jeremy Freiburger still lived. Not only did he still live, but when at last he was cut out of the vehicle by the jaws of life, he was uninjured, save for a few cuts and bruises.

His parents were ecstatic with joy. Let this story remind us that life is precious and miracles do happen.

St. Patrick's Day

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Mr. Speaker, today, March 17, is St. Patrick's Day and we want to share the pride of those hundreds of thousands of Canadians and Quebecers of Irish descent whose ancestors left their country in often difficult circumstances to find a new home among us.

With the intermingling of people over time, many of us now have friends and relatives of Irish origin. Their presence has enriched our lives and our societies.

We salute the invaluable contribution of the Ryans, Lanigans, Regans, O'Reillys, Johnsons, Kirkpatricks, Rowans and many others to the development of Quebec and Canada.

Happy St. Patrick's Day everybody!

Multiculturalism

[Anna Terrana, Liberal, Vancouver East, BC]

Mr. Speaker, in British Columbia we have just completed multicultural week, a week of immersion into the understanding of other cultures, a week of sharing with people of all backgrounds.

Next week on March 21, British Columbia and the rest of Canada will celebrate International Day for the Elimination of Racial Discrimination. On March 21, 1966 in South Africa, a group of people holding a peaceful march were shot at and killed.

March 21 has therefore been designated by the United Nations as International Day for the Elimination of Racial Discrimination. Next week, all Canadians will celebrate that day with special ceremonies, and people of all cultures will meet again to learn from one another.

Today, despite the visibility of human rights at the international level, too many tragedies occur throughout the world and discrimination continues to exist.

Let us hope that events like International Day for the Elimination of Racial Discrimination and Multicultural Week will help with the respect of human rights all over the world and bring peace.

Shipping Industry

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

Mr. Speaker, the type of labour management crisis crippling Canada's shipping industry happens all too frequently. This has to be prevented in the future.

This objective can be achieved without labour legislation. The government only has to declare existing railbeds a common carrier accessible to any railroad company. As a result, shippers can switch from the use of struck railroads to others that are still operating.

In addition, the government should remove all restrictions on the use of shipping routes. As a result, if the docks in one city are tied up in a labour dispute, docks in other cities can be used.

Under these conditions, labour disputes in the shipping industry will become extremely rare. The employers and workers know well what the market will bear. Industries hitherto protected from competition by government granted monopolies and regulation are exposed to the healthy winds of competition. They can no longer hold the Canadian public ransom.

I personally urge the Minister of Transport to propose such legislation and deregulation. It can be enacted quickly.

Small Business

[Andy Mitchell, Liberal, Parry Sound—Muskoka, ON]

Mr. Speaker, I rise in the House today to congratulate the finance minister for a budget that keeps Canadian small businesses competitive.

In my riding of Parry Sound-Muskoka as in the rest of the country, small business ventures are often the key to the economy. This budget encourages small business growth. It encourages job creation. It encourages prosperity.

The recent budget is but one part of our government's strategy of jobs and growth. It is already paying dividends. Let us look at some examples.

First, the value of manufacturing shipments was $33.1 billion in January, up 25 per cent in just one year. Second, Statistics Canada's index of leading economic indicators, a measure of future economic growth, was up .5 per cent in February. Third, the manufacturing sector in February created over 53,000 new jobs.

We have, as a government, been successful in creating a climate in which small business can create jobs for Canadians. The minister's budget will accelerate-

Air Canada

[Maurice Dumas, Bloc, Argenteuil—Papineau, QC]

Mr. Speaker, a while ago, Air Canada put ads in major Canadian newspapers, inviting anyone interested in a temporary or permanent position in Toronto to apply.

The ad said that ideally candidates should speak English and French as well as another language such as Japanese, Korean and Mandarin, but that Air Canada would consider applications from individuals who spoke English and one of those other languages.

Bloc members are appalled at Air Canada's move, relegating the French language to a position of secondary importance, as in fact the knowledge of English is the only qualification required for the job.

Let us not forget that, despite privatization, Air Canada remains subject to the Official Languages Act and, therefore, we demand that the provision of the act guaranteeing the respect of the French language be enforced.

Gun Control

[Brent St. Denis, Liberal, Algoma, ON]

Mr. Speaker, as a member of Parliament for a rural riding in northern Ontario, I am well aware of the great concern being expressed by the legal gun owning community in regions all across Canada.

I have met with over 1,000 constituents on this matter and have received an even greater number of letters and phone calls. We can only conclude from this that we must find the proper balance between rural and urban needs on the issue of crime control through gun control.

I am calling on my colleagues who represent urban ridings to hear the message from rural Canada that the law-abiding gun owning community not be the victims under any new gun laws. Rather, let us become partners in the fight against crime and continue to create together the peaceful and secure country we all want.

I will continue to bring forward the concerns of my constituents. They deserve to be heard.

I trust we can all work together to produce common sense firearms measures so that just maybe we can put this issue to rest once and for all. That is the goal I have set for myself as Algoma's MP.

Gun Registry System

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Mr. Speaker, this statement was inspired by Professor Taylor Buckner from Concordia University in his letter to the Globe and Mail on January 30.

In 1994 the RCMP reported there were 151 incidents of police being accused of misusing confidential data. Further, the RCMP were unable to stop this misuse. This is the same database in which the justice minister proposes to list all firearms and their owners.

The RCMP admission proves that the gun registry system could be illegally accessed by criminals to quickly identify those homes with guns and those without. If they want to steal guns they will break into a gun owner's home while the owner is away. If they want to steal valuables or just trash a house they will break into the unarmed homes anytime they want.

Gun control makes crime easier for criminals, not harder. Split Bill C-68 and give-

Yude Henteleff

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

Mr. Speaker, I would like to recognize in the House today Mr. Yude Henteleff of Winnipeg who has been selected to receive a citation for citizenship.

Mr. Henteleff's commitment to improving the lives of special needs individuals has significantly enhanced the lives of many in Manitoba.

As past president of the Learning Disabilities Association of Canada, Mr. Henteleff has worked assiduously to ensure that children and adults with disabilities receive the services they require.

Mr. Henteleff's efforts in championing the human rights of the mentally handicapped and promoting the integration of disabled persons in our society are truly admirable and make him more than deserving of the citation for citizenship.

On behalf of all my colleagues, I congratulate this man who is making society better.

Hear, hear, Mr. Henteleff. Well done.

St. Patrick's Day

[John O'Reilly, Liberal, Victoria—Haliburton, ON]

Mr. Speaker, today is March 17, St. Patrick's Day. There are two types of people in the world: those who are Irish and those who wish they were.

St. Patrick was famous for driving the snakes out of Ireland. Prime Minister O'Chrétien is famous for driving the Tories out of Ottawa.

Happy St. Patrick's Day from the Irish.

Official Record

[Benoît Sauvageau, Bloc, Terrebonne, QC]

Mr. Speaker, in his ruling concerning the question of privilege raised by the Leader of the Official Opposition, the Speaker of the House of Commons mentioned that he had found troubling anomalies in the transcription of the deputy prime minister's comments.

It is unacceptable for members of this House, and especially the deputy prime minister, to tamper with the transcription of our deliberations in order to change the meaning of their public statements.

This practice is all the more reprehensible-

[The Deputy Speaker]

Members are not permitted to comment on the Speaker's rulings.