Debates of March 2nd, 1995

Borrowing Authority Act, 1995-96

[Martin Cauchon, Liberal, Outremont, QC]

That is not true. Read the budget carefully. Go ahead.

[Richard Bélisle, Bloc, La Prairie, QC]

If the hon. member for Outremont will let me finish. Naturally, some social programs have to be maintained, but the problem is this: at this rate, certain cuts have been so poorly targeted that, if you tie program spending to debt charges and the debt continues to grow at the same rate, there will come a time, five or six years down the road, when program spending cuts to the tune of $75 billion will become necessary to match debt charges of $75 billion. The

federal government will then be paying as much on debt service as on all programs provided to individuals and the provinces. We will have a crisis on our hands. That is what this government is leading us into.

[Jean Augustine, Liberal, Parliamentary Secretary to Prime Minister]

Mr. Speaker, I am very pleased to join in the discussion today. For too long in Canada we have been living in a context which ignores the future implications of our actions. The government has done much more than sit back and wring its hands about the serious economic situation of our country.

Canadians and the governments they elect, whether locally, provincially or nationally, have for a long time been well aware of the impact of the deficit, of how it undermines consumer confidence, of how it diminishes our ability to compete internationally, and of how it robs our children of an economically viable future.

More often than not governments did not act, refused to act. On February 27, 1995 the government demonstrated its willingness to act. The government demonstrated its courage and commitment to make the necessary sacrifices to ensure a better future for Canadians. The Liberal government has submitted to the House a framework that will deliver back to our country and to its citizens the confidence and optimism needed to create a strong, dynamic economy, which is necessary in the context of market globalization.

To listen to the members across the way we would think that point has been missed on them. As a member of the human resources development committee of Parliament I am in a position to say that the strong actions taken in the budget reflect our determination to maintain our commitment to the principles of the Canada Health Act and reinforce our commitment to work with the provinces to provide better and more affordable services.

The provinces have always argued that they are closer to the people, that it is their constitutional prerogative to administer social programs in a cost effective way. The Canada social transfer will be negotiated by the Minister of Human Resources Development and will allow them to do just that.

The bottom line is that Canadians want both government levels to work together to manage social programs better. The budget continues the fundamental structural reforms needed to do that. If we do not act now, our social programs will not survive in the future. We care about our systems of health and education. We care about protecting seniors and the most vulnerable in society.

I would like to share with the House some recent experiences in my riding of Etobicoke-Lakeshore. My constituency office receives numerous calls on a daily basis. In the recent days preceding the budget I received well over 800 calls from constituents asking me to convey their thoughts to the minister that personal income taxes should not be raised. This was a message that I as well as other members of the House communicated to the Minister of Finance.

I knew the finance committee had been around the country. We heard Canadians tell us what should be done. I am here to say that the process worked. The views of Canadians are reflected in the budget. I will give some instances.

In my own riding one of my constituents, Mr. Ted Morris, said:

Income tax remains the same, thank God. This is a budget that seems to have deflated indignation.

Mr. Morris also brought the message of a local bank manager happy about the increased value of the Canadian dollar, a local real estate broker pleased with the national unity implications, and a retired department store employee wondering whether the provincial government would follow suit.

To some of the residents in a popular Etobicoke donut shop yesterday morning there was an understanding that governments in the past have lived off their credit cards and that this government was ready to start correcting spending habits.

I have a letter here sent today by fax from a constituent, Mr. Michael Kern. He said:

I am pleased that personal income taxes did not increase. For the moment I feel that the new gas tax is acceptable.

He went on to say:

Over the past several days the media has been monitoring the opposition to the new budget. I am sure that you have seen news reports of the opposition parties giving their critique of the budget. However on the same news reports reactions from the public are usually shown. My opinion of the budget seems to be in line with that of the general public. We are satisfied. It seems that the only people upset are the opposition parties.

I can go on and refer to several other points that he said. He referred to the new immigration policy. He said:

That is not bad, not as bad as groups would make it out to be.

He said:

When you join a social club you have to pay an initiation fee and I believe that the privilege of immigrating to Canada should be no different. The bottom line is this. Mr. Martin has taken the initiative to reduce the deficit, something that previous federal governments seemed to dance around. In addition, Mr. Martin has done so through sensible cutbacks and corporate taxes. I am happy to see that the working Canadian finally does not have to shoulder the responsibility alone. Mrs. Augustine, please accept my congratulations to your government on a practical budget that I feel we can all accept.

I am not certain what messages the Reformers get.

Our government is committed to providing a fair and reliable system of protection for seniors. I know there are several seniors in my riding wo are watching the debate today and who are concerned about protection for seniors, equality, balance and all

the things required to ensure the pension system is sustainable in the long term.

The budget states the basic principle for reform in terms of seniors programs is to ensure the system continues to be affordable and that we have some goals for changes in 1997. The budget states these basic principles: undiminished protection for all seniors who are less well off, including those receiving the GIS; continuing full indexation to protect seniors from inflation; the provision of OAS benefits on the basis of family income, as is now the case with the GIS; greater progressivity of benefits by income level; and control of program costs.

The bottom line remains that Canada is still the best country in the world and remains a model for other nations. With the budget the government has demonstrated leadership. Canadians know that we will continue to benefit from a number of social programs that reflect our understanding of community. These programs are implemented in a way that permits governments to take into account changing times and changing needs.

It is in the spirit of federal-provincial co-operation and to provide the greatest possible opportunity for our economic recovery that I join in the debate and support the budget.

As someone who is an immigrant to the country, I know there are concerns by all who are in the process of applying for permanent residence. As the minister of immigration said, we are all in this together, those who are joining us, those who are here and those who want to be here.

The fee is set out in typical Liberal fashion. As a caring and compassionate government we ensure that no one will be turned away as a result. Loan programs and other ways of assisting are also included in the process.

This is an excellent budget and I call on everyone in the House to endorse it.

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

Mr. Speaker, I listened with interest to the hon. member for Etobicoke-Lakeshore, who told us about the interesting things she sees in the budget. I had the opportunity to travel with the hon. member when the Committee on Human Resources Development criss-crossed the country. I would like to know if the hon. member is as satisfied with the measures announced in the budget as with the lack of certain measures.

Was she not hoping that something would be provided for social housing? Indeed, it is clearly established that the best way to fight poverty in Canada is to provide a dwelling, at a reasonable cost, to people who often have to spend 40, 50 or 60 per cent of their budget on housing, because other forms of assistance are inadequate. Does the member not think that the budget should have provided something in that regard?

During the committee hearings held across the country, did the member hear anyone say that the government had to take $700 million out of the UI fund, as provided in the budget? Did anyone ever tell the committee that cuts should be made to the UI program? When the committee travelled to Rivière-du-Loup, did anyone ask that all transportation subsidies be eliminated immediately, that the whole economic structure of the region be changed without any transition period to adjust, and that the UI fund also be reduced, thus leading people to leave the region? Did the member hear any such thing and is she pleased with this budget as regards social housing and the cuts affecting the unemployment insurance fund and the transportation subsidies?

[Jean Augustine, Liberal, Etobicoke—Lakeshore, ON]

Mr. Speaker, I am pleased to recollect for my hon. friend our experience across the country. Over and over we heard the messages. Maybe we interpreted them with different ears. However, people told us over and over about jobs and the creation of jobs. They told us that the best social security for individuals was the ability to find work and the ability to provide for their families.

It is also important to note that the individuals who spoke to us on a number of issues stressed quite strongly the fact that they wanted the involvement of the federal government. They wanted some principles, some national standards, and some way of operating that would ensure protection and security in the fact that the federal government would provide the necessary support.

As federal legislators, the expectation from us is to ensure that we provide the kind of economic climate in which individuals will find jobs.

[Bob Nault, Liberal, Kenora—Rainy River, ON]

Mr. Speaker, I rise in support of one of the toughest budgets in Canadian history. A tough budget was needed to keep the country on track. It is a budget that Canadians have been calling on the government to table and I am proud to stand in my place today to support it.

We have answered the demands of Canadians with a tough but fair budget. We have taken the necessary fiscal action in a sensitive manner that addresses the priorities of all Canadians. No doubt there is pain involved, but the pain does not hit like a sledgehammer. A sledgehammer would devastate everything around the target. Rather, it is like a bow and arrow. We hit the targets dead on without devastating everything around us.

This budget is the arrow that will hit our deficit target without destroying the foundation we have built.

That is the difference between the budget that was tabled by the finance minister on Monday versus the budget we saw by the Reform Party the week previous. You can cut, but there are ways to cut. I would emphasize that this is the difference between the Liberal Party philosophy and the one across the way.

The 1995-96 the federal budget has gained widespread support. Yes, there is opposition that this budget is too strong or does not go far enough or will spell the end of Canadian society as we know it. The answers to those criticisms are easily found.

The budget comes down squarely at a crossroad for this country. It must be a strong budget as Canada meets the economic and fiscal challenges leading into the next century. If this budget went any further, slashing and burning government spending with reckless abandon, that is just where Canadians would find themselves, abandoned by their government.

As I said before, Liberals do not abandon people. By taking this sensible approach to our fiscal situation, it is this government that will ensure social programs and basic services remain apart of Canadian society.

This is a make or break budget for our deficit situation. We must not impede economic recovery and the potential for growth. By taking the steps contained in this budget, we are directly acting on our fiscal position so that Canada can maintain and not destroy the universal social programs that define this nation.

This budget must satisfy demands of international markets, a reality of living in a global trade environment. The financial community quickly graded this budget with high marks.

Interest rates have dropped and our dollar immediately climbed in the markets. The government did not panic. We listened to Canadian taxpayers, to international markets, to dozens and dozens of interest groups. Then we acted with sensible, intelligent and compassionate approaches.

We are, as the finance ministers says, breaking the back of the deficit. The international community has acknowledged we are on the right track. Many of my constituents have told me that they are impressed with this budget. Canadians obviously approve.

The budget takes necessary steps to secure Canada's fiscal position. The federal budget is just strong enough. The minister of finance has found the right mix of spending cuts and revenue measures to ensure a fiscal trend of deficit reduction.

This budget significantly reduces government spending but is crafted in a way that is fair to all regions of the country. We must bring our finances in order. To do that Canadians everywhere must share, quite frankly, in the price we must pay for fiscal responsibility.

I hasten to add that sharing in the cost of reducing our deficit will not involve paying more tax. We will meet and exceed our deficit reduction targets without an increase in personal taxes.

The government has taken on the challenge of fiscal prudence while maintaining steady economic growth. This is not an easy task. Our choice is to fundamentally change the structure of government. Our focus is on reduced spending and a smaller, smarter government.

I have been a long time supporter of our public sector service. The reality we face as Canadians, and one that must be shared by our public servants, is that government must be streamlined. The public sector must find a way to become more efficient. It is a tough assignment but I am confident that Canada's public servants can bring government into the next century.

If anyone is capable of meeting that challenge, it is the men and women working in the public sector. These professionals are embarking on a difficult transition. I urge our public servants, many of whom I know personally, to apply their skills and to contribute to Canada's future.

We all know that the public sector will lose about 45,000 positions, but last year alone there were almost a half a million new jobs created in Canada. The objective of this delicate budget is to bring the government house in order without upsetting the balance of economic stimulus. A healthy economy will provide jobs for skilled people such as those who will be leaving the public service.

Government supports the creation of new jobs but it is business that does most of the hiring. We will realize savings from cutbacks in government spending but there is also increased revenue from newly created jobs.

My riding is located in northwestern Ontario. It is a region of Canada that can be used as an example of how the budget will impact Canadians. Northwestern Ontario will suffer from spending cuts and revenue measures. We will lose forestry and mining developing funding shared by the federal and provincial governments. The decrease in dairy subsidies will affect us and the gasoline tax will hurt.

I realize, as my constituents do, that we will survive. I think everyone of us realizes that we have to share the burden in one way or another. My riding has never depended on government for its survival. I think the majority of my constituents would rather see government get its act together instead of receiving a handout.

Northwestern Ontario has carved an economic foundation from the resource sectors such as forestry, mining and tourism.

Comprehensive diversification of our regional economy is a long term goal which is progressing.

I am encouraged that this budget, while reducing or eliminating subsidies, is keeping business support programs in place. Small business loans, export and marketplace services and technology support all remain a part of the federal mandate. We are also optimistic about the future of tourism initiatives that have become a federal priority.

The relationship between small business and the banking sector has been a longstanding concern in my riding. When I was in opposition it was something we talked about on numerous occasions, that small business is still not getting a fair shake from the financial institutions in the country.

In the budget the access to capital for the reasonable ventures essential to the economic growth in my region is again going to be a priority of the finance minister. I am still hopeful that sooner or later the banks in this country will realize that without them we cannot get this economy rolling to the extent we believe it can.

Recent increases in the Small Business Loans Act are a positive sign. A region such as northwestern Ontario is dictated by unique circumstances. I also feel the privatization of crown corporations will be received well in this House and in the riding I represent.

I chaired a government task force to study the future of the Canadian National Railway. The commercialization of CN is one of the recommendations in our final report. This action and other commercializations such as Petro-Canada has great potential for the private sector. It puts business in the hands of business people and leaves government with the task of regulating, not operating.

The fearmongering on the issue of social programs is something I want touch on a little. The issue of Canada social transfers does not hold much water in my riding. If we changed the system my constituents would applaud that simply because they are not satisfied with the current structure of social programs as they exist today.

Like many members of the House, I have conducted a survey on social security. The overwhelming response was that social policy must change. This budget sets social policy changes in motion and I applaud that. Once again, the government has not pressed the panic button.

The other side tends to press the panic button to make people concerned about the fact that we are not moving quickly enough. Those who have been here around here a little longer will realize that if we take our time and put the right programs in place those will be the programs that will survive the test of time and they are the kinds of programs that built this country and made it the great place we live in.

If we are to change our system we have to make sure it is a change for the better and not for the worse.

This budget makes it clear that this party is responsible for universal social programs in Canada. It will be this party that brings social policy into the 21st century. Of course the only way we will do that is to ensure we can afford it and this budget does just that.

This is a responsible budget. We are attacking the deficit but we are planning our attack without undue casualties. The social fabric of our nation will survive. We are setting a responsible pace of deficit reduction to preserve economic growth and stability.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, I was interested to hear the hon. member saying his constituents have been very pleased with the budget, especially when the Prime Minister and a number of other Liberal MPs have been saying how this is not a budget they wanted to bring in, that it is an anti-Liberal budget.

I wonder if this actually means the people in central and eastern Canada voted Liberal because they had no other choice and that they actually do not want traditional Liberal budgets or traditional Liberal policies. Polls taken on things like justice and the budget show that Canadians actually want Reform style policies and budgets.

I ask the hon. member whether the fact that he is getting compliments about the budget actually means people do not support Liberal policies.

[Bob Nault, Liberal, Kenora—Rainy River, ON]

Mr. Speaker, as I have on numerous occasions in this place, let me make very clear to my friend across the way that I do not come from central Canada. I come from western Canada. I happen to be the member of Parliament for Kenora-Rainy River, which is in a vast riding in northern Ontario. It is on central time and is so close to Winnipeg we have very western ideas. The riding has been voting Liberal long before I was alive and, yes, there was a Reform candidate who ran in my riding. He was lucky to get his deposit back, the lucky soul that he was.

I can assure this House that my riding, being of very western flavour, believing very strongly in Canada's social programs and fabric, would not have been voting Liberal since the turn of the century if it did not believe in Liberal principles.

If this budget, as is being suggested by the member, were not a Liberal budget I would have heard about it first and foremost in my riding because my riding, as I said, only voted one other way in its history and that was when it lost its way in 1984 when everybody was foolish enough to vote Tory and it went with the

NDP. I can assure members that my constituents learned their lesson that one time and now have gone back to the Liberal fold.

I have received five phone calls on the budget from people who were concerned about social programs. The remainder of the people in my riding have called to say this is a great budget because it sends us down the track. It also recognizes that we did not get into the mess in three years, like the Reform Party seems to suggest, and we will not get out of it in three years as it suggests.

It took us 20 years to get into it and it will take us some time to get out of it. We should use our good, common sense and not tear and gut the heart and soul out of Canada by doing that, but take our time and restructure the economy the way it should be restructured.

[Martin Cauchon, Liberal, Outremont, QC]

Mr. Speaker, I will be brief. I would simply like to add to the comments of my eloquent colleague, who clearly, has done a fair analysis of the budget situation. I would like to add, on the matter of national standards, as I mentioned earlier, that the Minister of Finance created a new transfer in the budget to be called the Canada social transfer.

The opposition is saying that again we are setting national standards for the Canada social transfer. I see nothing wrong in setting national standards. The problem with national standards-and again the opposition is trying to doctor the truth-is that, in the past, the standards were set unilaterally by the federal government. Now what we are saying, and it is in black and white in the budget, is that we are inviting all of the provinces to work together to set national standards jointly and in a spirit of co-operation.

This is the new Canadian federalism, flexible federalism, co-operative federalism. We are not trying to hide the truth or use some form of trickery to take away what is in fact in the budget and what was requested by all of the provinces.

[Bob Nault, Liberal, Kenora—Rainy River, ON]

Mr. Speaker, I want to quickly say to my colleague and to other colleagues in the House that federalism is by far one of the best systems in the world. There is a reason for that. The reason federalism works so well and why other countries wish they had a federal system like ours is because it is fluid. It is not static. The reason federalism works is its ability to be flexible.

Anyone who has analysed where we were when we first became the country of Canada and where we are today with the changes that have taken place has found that we have been able to adapt to tremendous change when necessary. It is the reason this country has been so successful.

If this government keeps on track the way the finance minister has been going, I predict as I did in the last election that by the end of the 1990s we will have our deficit under control. We will be paying off our debt. We will be back on track. We will still be the best country in the world. Our fiscal and monetary policy will be back to where it would have been had we not had that 10 years of Tory rule which messed it all up for us.

[Chuck Strahl, Reform, Fraser Valley East, BC]

Mr. Speaker, as I rise to debate this borrowing bill, I must flag a historic event for the House. We have finally witnessed a budget that, however timid, at least attempts to cut federal spending in real terms.

It has been decades since we have seen this kind of budget and it marks a great victory for the Reform Party of Canada. This budget would have been unheard of only a few years ago. It indicates a stunning conversion on the part of the Liberal Party.

I am delighted the financial markets have reacted positively so that things may go well for our country. Above all, I wish for prosperity and stability for Canada. When that happens I am pleased, no matter who brings down the budget.

However, just as a leopard cannot change its spots, I cannot believe the Liberals have really been converted. The budget was an act of pure necessity, not something done out of the courage of their convictions. The Liberals did the bare minimum they could in order to avert a national financial disaster. Had he had his way, the Prime Minister would have increased spending and taxes even more than he did. He said as much on the CBC program "Morningside" yesterday.

In this respect there is no denying that the presence of the Reform Party of Canada in this House is a bulwark in defence of the taxpayer, a stronghold of protection of the public interest. The Reform Party, working with Canadian taxpayers, can take the credit for this change in direction.

Fifty-two members of this House put sustained pressure for a year and one-half on this government to reduce spending. The government finally responded by adopting a plank from the Reform Party agenda, just as it adopted the agenda of the NDP when that party was a factor in this House.

Although the Liberals have formed the government, there is a new game in town. Today the government is forced to respond to the criticisms from a fiscally responsible opposition, no longer from the loonie left. They still form the government and they still have the numbers in this House to pass any laws they choose, but they no longer possess the moral or political mandate from the people to complete their leftist agenda. The political mandate is passing to the Reform Party of Canada. The Reform Party is now driving the national policy agenda. In that reality, I take great satisfaction.

There is so much more left to be done. So much of the public interest was ignored in this budget. The government went half way, but it could not bear to bring itself all the way in order to defend our economy, to defend our social programs and our future prosperity. I am truly dismayed by several aspects of this budget. All things politically correct were left virtually untouched.

My constituents have indicated clearly, for example, that they want the CBC to be downsized by two-thirds. Instead, it was cut by 4 per cent. Through an extensive survey process my constituents told me that they want the Department of Indian Affairs and Northern Development to be substantially reduced. Instead, the government increased that budget by 12 per cent. Special interest groups are left virtually untouched. The Canada Council was cut by a mere 2 per cent. The National Film Board was cut by just 5 per cent.

I find it disgusting that the government can go ahead and cut UI but not make dramatic reductions to these other agencies. The government has not dealt equitably with the people of Canada in leaving so many institutions unscathed. How can the Liberals start cutting our social safety nets when they refuse first to abolish their own gold plated MP pension plan?

Many budget items simply reflect the power of individual ministers. Why did Cape Breton Development Corporation receive a 69 per cent increase? The fact that it is in the riding of the Minister of Public Works and Government Services may have something to do with it. Why will CIDA be downsized by only 30 people? The Minister of Foreign Affairs swings a lot of weight in cabinet.

As I have already stated, this budget was not about fairness. It is not that I am in disagreement with all of its decisions, but the hypocrisy of this budget makes me question everything the government says. This budget was all about broken promises. The examples are legion.

The government promised never to change the workforce adjustment directive without union consent. It is breaking it. It promised massive changes to social programs. There are none, though there must now be massive changes down the road. It promised not to increase taxes on the middle class but it did it anyway. It promised to reform the GST, but the GST is unchanged. The Prime Minister was to repudiate the NAFTA. Today he praises it. He promised to increase foreign aid to .7 per cent of GDP. On Monday he slashed it by $500 million.

Two years ago the Reform party proposed cutbacks in the public service totalling 30,000 to 35,000 employees, cutbacks which would have been over and done with by now. The Liberals called us callous and uncaring. Now they are gleefully laying off 45,000 public servants. The Minister responsible for Public Service Renewal says that even more layoffs are in the works. That is callous and uncaring.

Farmers will remember the broken promises. Remember how the Liberals would never sign the GATT without strengthening article XI(2)(c). They signed it anyway. Western grain farmers lost the Crow subsidy. They can add to that a new fuel tax and major cuts to farm programs in the agriculture department itself.

This government quite happily kicked farmers in the teeth, but not until after it had won the election. Farmers are willing to do their part, but if cuts in other areas were as serious as the agricultural cuts, we would now have a balanced budget within our sights.

My own constituency is presently facing a grave economic situation because of this budget. It will take a hit all out of proportion to its own numbers. The Hope weather station will be closed next month. More important, Canadian Forces Base Chilliwack in my riding will be closed over the next four years. This will mean $105 million or 7 per cent of all economic activity in Chilliwack will be cut out.

Perhaps the Minister of Finance did not see the study that was released on Monday. It showed that in terms of regional distribution, British Columbia gets $700 million per year less than it should, given its share of the population. Again, we are ready and willing to make sacrifices in B.C., but why would the government increase the regional disparity by taking $100 million more out of British Columbia?

With the possible exception of Cold Lake, Alberta, there is no community in Canada that will suffer more from this budget than Chilliwack. And the Liberals call that fair? I call it shameful. The people of B.C. will one day pass judgment on Liberal policy.

No longer will there be a land forces presence west of the Rocky Mountains. In the case of a natural disaster or civil disorder there will no longer be that natural resource that the people of B.C. can count on. This is short-sighted. It is bad policy in a civil, military and an economic sense. The third largest province in Canada deserves better.

Now I must come to the bill before us. The fatal weakness of the budget is that this bill will work great harm in Canada. In two years Canada will pay $51 billion in interest alone. Program spending will decline to $108 billion and interest payments will increase to half of our program spending. That borrowing bill is nothing more than an enormous social program for foreign investors.

The Minister of Finance decries the Reform taxpayers' budget, but Reform alone faces up to the truth. Because of the interest payments on our national debt, the frightening prospect of the total destruction of many of these programs is looming

directly ahead. We are choking the life out of them by continuing to run huge budget deficits.

After all the Liberal fanfare, the deficit is still huge. It will still be $25 billion two years from now. By then we could well be in the middle of a recession. The American economy is already showing signs of a slowdown. If that continues, or if it happens, our economy will be in a meltdown.

The Minister of Finance criticizes Reformers for suggesting that we adjust social programs now while there is time. In the next breath the government admits it is conducting its own study into the pension situation. By the time it screws up its own courage to act, the cuts it will make to old age pensions will truly be devastating. They will leave seniors in real poverty.

The Liberals can see the numbers as well as anyone. They know what needs to be done to protect our social programs in the future, but they are going to put off action because they do not have the guts to make the tough decisions today. In fact they will heap abuse on Reform suggestions, even if these suggestions are in the public interest, even if they are quietly undertaking to do exactly the same things themselves in an underhanded way.

Last week I tabled a petition with 20,000 names, calling for no new taxes. In a few days I will table 13,000 more names. I personally delivered 2,000 letters from my constituents to the office of the Minister of Finance calling upon him to balance the budget without raising taxes. These people did not get their wish. Canadians wanted a timetable for a balanced budget but the government failed to deliver.

There are simple tests of good government: conscientious control of the public purse; a strong clear vision of and commitment to the public interest that reaches far into the future; attention to regional fairness; and equitable reductions in government spending. I am disappointed that the government has failed these tests.

This budget has failed the Canadian people. No matter how well it is accepted by the markets in the short term, the numbers predict our future in the long term. The government had a chance to mend our social safety net on Monday, but through Bill C-73 it will allow interest payments to tear it to shreds over the coming years.

Shame on the government that it has squirrelled away the past year and a half making budget balancing all that much more tougher than it needed to be. It is a shame it is planning to saddle our nation with another $90 billion in new debt, a debt which will be a pox on our social programs, a curse on our taxation levels, a drag on our job creating businesses and a millstone around the necks of our children and grandchildren, forever and ever, amen.

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

Mr. Speaker, last night I had the opportunity to review the base closures on television. The Chilliwack base is being closed which I understand is part of the member's riding.

There is not a member of Parliament on this side of the House who did not feel the pain that was expressed on that show last night. That is why many of us on this side of the House for the last few months have been trying to communicate to the opposition, to the Reform Party that we should not just be talking about the federal deficit. We should be talking about the human deficit.

What bothers me is that the debate has not expanded beyond the deficit in traditional terms. We have to figure out what we are going to do in the long term. Not only our country but other countries around the world have been faced with fluctuating interest rates. Capital is being pushed around by people who are shorting their own currencies and playing with derivatives and everything else. We as one nation in the G-7 are almost victims of this international game which is being played.

I wish that with the Reform Party members we could expand this debate. Let us not just think about the budget and the tough decisions we have had to make on this side. Make no mistake, we feel the cuts on this side as much as they do. I would venture to say many of us feel them even more. As Liberals it goes against the very grain and soul that brought us to this place, whereas the Reformers seem to be much more conditioned to deep cuts regardless of the human side of it.

Would the member be willing when we return after question period, along with his other colleagues, to maybe enter into a debate on a new and improved Bretton Woods agreement? We should start looking at what we can do to change interest rates, not just for Canada but for all the world. At the rate we are going it is not just Canada that is in trouble. It is the whole world.

[Chuck Strahl, Reform, Fraser Valley East, BC]

Mr. Speaker, I thank the member for his presentation. I understand his first point about the base closures. I realize that base closures have affected many ridings and cross party lines. Some of the Bloc members have had ridings affected. I know many of the Liberals have had closures in their ridings as well.

With the closure of CFB Chilliwack there will no longer be an army base in all of British Columbia. There are 12 bases in Canada. There is not even one in B.C. To me that is a concern. Emergency preparedness is a concern. Even more so, it is a concern that there be a national armed forces presence.

I am concerned that people from B.C. get an opportunity to be trained in Quebec, as I am that Quebecers get an opportunity to be trained in B.C. It is just a matter of equity. I realize I am not singled out in one sense, and yet on the other hand it is a mistake in the long term not to have a land forces presence anywhere in British Columbia. It is short sighted. I realize I share that hurt

with many members on both sides of the House, but it is short sighted.

The member talks about the cuts we want to make regardless of the human side. Reformers have consistently said it is because of the human cost that we have advocated change. It is no fun to be the guy who says we have to make severe cuts and we even have to readjust our expectations in the pension plan. What fun is there in that? The reality is I want to preserve the core of that for people who need it.

By preserving it now in a relatively short order, we can preserve the parts that make Canada great. It is because of the human side. The last point about the Bretton Woods institution, I have a private member's bill on the Order Paper about the accountability of international financial institutions-

[The Speaker]

I regret the member's time has expired.

[Chuck Strahl, Reform, Fraser Valley East, BC]

It is because of the time that he took.

[The Speaker]

With the greatest of respect to members on both sides of the House, the total time is five minutes and I think that has been fulfilled.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, I look forward to the day when I will not have to rise to speak about a borrowing bill.

Liberal members of course, have spent the last few days claiming that the finance minister's budget is the greatest thing to ever bless Canada. They claim that the world financial markets love it and that their constituents love it and all is well. In fact, I would like to thank the member for Broadview-Greenwood for confirming that the budget that the people like so well is not Liberal policy. It simply confirms that people do not want Liberal policies.

Members opposite for the last two days have been claiming the dollar is going up and interest rates are coming down. They say: "Don't worry. Be happy". I think the decline in interest rates has a lot more to do with the amount of money people have put into GICs in the last few days for their RRSPs. It has given the banks a surplus of money that they have to get rid of.

Today the dollar did not continue to go up the way members opposite had hoped. It continued to slump, down to 70.92 today, which is more than a cent and a quarter below the high the day after the budget.

Perhaps this means that the international markets have had time to look a little more closely at the budget and they can see that most of the cuts are deferred until next year while all of the big tax increases occur this year. However, I do think we really have to wait a few weeks before either side decides they have the answer to whether the dollar is going up or down. We need to give the markets time to really continue to study this document.

There are tax increases in the budget that are really going to hurt the average Canadian very much. Liberal MPs must be the only people in the country who think that a penalty tax on banks is not going to affect the loan rates or the service fees or something else that people use at banks.

Liberal MPs must be the only people in the country who think that a 1 per cent increase on the surcharge tax for corporations will not trickle down to price increases or service charge increases.

Liberal MPs must be the only people in the country who think that a 1.5 cent a litre increase in the tax on gasoline will not mean higher prices at the pumps.

Despite all of these deceptive increases in taxes that will hit the average Canadian, the ship is still going down, albeit a little more slowly and with a few less crew on board. In three years the interest payments on the debt will have consumed every single cent the finance minister has saved in his latest budget.

The minister was quoted in the Vancouver Province as saying: ``The light at the end of the tunnel is much closer than any of us might think''. That light is getting larger because there is a locomotive bearing down on us. The finance minister may be going in the right direction but he is on the wrong track. Increased taxes will not bring confidence to the job creators of the country, that is businesses.

I know members opposite think the government creates jobs but it is actually business that creates meaningful and real, long lasting jobs. If businesses do not feel good about the economy they will not expand and create jobs.

Let me compare the finance minister's performance with that of some of the governors in the United States. A constituent in my riding, Mr. John Dickenson, provided me with a tape of a speech made by Governor Carol Whitman of the U.S.A. She is the governor of New Jersey.

Governor Whitman cut business and income taxes three times over a two-year period, a 30 per cent cut in taxes at the same time as she slashed spending to comply with a balanced budget amendment. Opponents, for which we can read Liberals, said: "The sky is falling. The economy will be destroyed". Instead, 60,000 new private sector jobs were created by the private sector and tax revenues actually increased.

The same pattern is evident in state after state. Governor Bill Weld of Massachusetts cut spending by $1.7 billion in his first month in office. He also cut taxes five times and now has the lowest unemployment levels in the United States.

The same month that President Clinton signed the biggest tax increase in history for the American people, Governor John Ingler signed the biggest decrease in Michigan history, bringing the lowest unemployment rate to Michigan in 20 years.

New Zealand has also had similar results from its program of massive cuts to government spending at the same time that the tax system was revised and taxes were reduced.

The proof is there. Zero in three actually works. These examples show that the very best way to put more money into the hands of the poor, of families, of businesses and of everyone is to cut spending and taxes. Tax cuts and spending cuts make it easier for people to buy a home and to improve their standard of living. Things work better when people make their own spending decisions instead of having their spending decisions made by good, old Uncle Liberal government back here in Ottawa.

There is nothing moral, compassionate or virtuous about increasing taxes. I will say that again in case any members opposite were sleeping. There is nothing compassionate, virtuous or moral about increasing taxes. High taxes punish those people who are the most productive in our society. High taxes are a symptom of a government's failure, incompetence and inability to recognize the damage that those high taxes are doing to society.

Even some Liberals have come to realize something is wrong. They realize there is too much crime, too much family violence, too much poverty and too high a debt. Some are even starting to realize that the biggest single social program is the transfer of all that interest payment to the creditors of Canada's debt every year. That is one social program that is still growing.

The government has not realized yet that Liberal policies have caused these problems and these problems will not be solved by throwing even more government money, especially borrowed money, at those problems.

I heard another member talking about compassion earlier. Compassion is something one cannot buy. It is something that comes from within. One does not buy it by throwing dollars at a problem.

I would like to change tack a little and relate a little more about my experience in New Zealand over the Christmas break. I was in New Zealand visiting relatives and I had the opportunity to meet for an hour and a half with the Right Hon. David Lange, who was Prime Minister of New Zealand at the time of the debt crisis in 1984.

I would have laughed if anyone had told me a decade ago I would one day sit with a Labour minister of finance and actually enjoy speaking to him. I came away from the meeting with a great deal of respect for a man who has faced the debt monster, came to grips with it and realized that a free market economy is the best way to deliver healthy social programs.

Mr. Lange said: "We have passed through the age of left and right wing governments to a time where we have maintenance and reforming style governments". Those are the terms we should be using today. This new set of labels put into words a concept I have been struggling with for some time because I knew despite the accusations of the other side of the House, the Reform Party is not a crazy right wing party. We are not either right or left wing.

I will use an example. The members opposite can jeer. I use the example of the 1992 referendum on the Charlottetown accord when all three traditional parties; the NDP, the PCs and the Liberals lined up on the yes side and Reform on the no side. Does that make us left or right? Which one? Neither. It made the three traditional old line parties maintenance style parties. They did not want to change the status quo. We were the reformers, the ones that wanted to change the status quo, make the necessary changes.

Mr. Lange's Labour left wing government became a reforming style government when it had to face the debt monster. During the period following that debt crisis from 1984 to 1994 the National and Labour parties took turns in office, but they were all reforming governments. They continued the program of government spending cuts and tax decreases to generate the necessary stimulus to the economy.

Today New Zealand has a maintenance style of government, National by name, which has projected a $2.5 billion surplus for this year. Last year they had a $900 million surplus and put $800 million more into social programs because of it.

Mr. Lange predicts that New Zealand will have a maintenance style government for the next decade. Unemployment is down to 6.5 per cent and the economy is growing at an annual rate of 6 per cent.

I can see the puzzled looks on the faces of the Liberals. "Please tell me it is not so", they are saying. "Please do not say that the private sector actually creates jobs. Please do not tell us it is better if government is smaller and that it makes spending cuts". Mr. Lange told me that the Canadian Liberal Party is a maintenance style of government. It is just used to keeping things running when things are good and if Canada had to face its problems it needs a reforming style of government to do it.

Mr. Lange also told me in retrospect he wished he had moved faster on the cuts because it was so stimulating to the economy. A decade later, New Zealand has a diversified, free market economy competing in the global marketplace. Exports now include plastic bottles to Japan; wooden boxes to the U.S.A., mozzarella cheese and hamburger beef to Canada; furniture to Singapore; metal castings to Taiwan; aircraft parts to Boeing in Seattle. The free market economy will solve our problems. We should not be borrowing more money. We should be cutting spending.

[The Acting Speaker (Mr. Kilger)]

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Notre-Dame-de-Grâce, World Summit for Social Development; the hon. member for The Battlefords-Meadow Lake, The Budget; the hon. member for Kamouraska-Rivière-du-Loup, The Budget.

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

Mr. Speaker, I listened very carefully to the comments of my colleague. I have heard the same comment day after day from the Reform Party that the Liberals are really very unrealistic about what is happening.

Why did John Bulloch, president of the Canadian Federation of Business, state that our budget was very believable, very credible? Why did John Fund, who wrote a highly critical editorial about Canada's $540 billion debt, congratulate the government for being on the right course?

Could the member please inform me why the powerful Canadian Manufacturers' Association called our budget the first very serious attempt at balancing this country's books? Why is it that yesterday the chartered accountants association in this country congratulated the Liberals and said that we scored four out of five on their questions? We were at the top of the list in the way we responded to the debt and the deficit in this country.

The Canadian bond raters raised Canada's status. Each financial group, each authority on business in this country has come forward one after another. It is not the Liberals. They are not people who have been friends to the Liberals. They are representing very specific business and financial interests in this country. They applaud the steps taken by the minister.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, I would like to congratulate the member opposite for pointing out once again that a successful budget receiving praise from many areas is not a Liberal budget. This confirms what I have been saying time after time this afternoon. People wanted a budget that was not a Liberal budget. They were very pleasantly surprised by the general direction, although not quite far enough. The international markets seem to be telling us that.

Everybody out there wanted a budget that was nothing like a Liberal budget. All the member has done is confirm yet again that people do not want Liberal policies. They do not want Liberal financial answers. They want real reforming budgets, reforming policies and a Reform government.

[Ron MacDonald, Liberal, Dartmouth, NS]

Mr. Speaker, it is never good for me to get up to speak after I have listened to the nonsense and the rhetoric form the other side, particularly the Reform Party.

I have sat in the House for quite a few years. I have listened to a lot of rhetoric in the House. The hon. member's rhetoric is perhaps the most unbelievable I have ever heard. He gave his entire speech talking about experiences in Michigan and New Jersey and the wonderful things that are happening everywhere else but in Canada.

I want to let him know something because he obviously has been out of the country for quite a while. There has been a revolution happening in Canada. It has been a revolution the Liberal Party has created about putting government back where it belongs, serving the public, allowing the free market to proceed.

Guess what? The Canadian public has looked at what we have done. It has not just given us a thumbs up. It has given us a resounding vote of confidence. Today the Angus Reid poll indicated the path we have taken with the recent budget is supported by over 70 per cent of Canadians polled. This was despite the doom and gloom and the nonsense the Reform Party spouts like a loose water cannon daily in this place.

Those members came into this place not because the Canadian public wanted a Reform style of politics but, with the greatest of respect, they came into this place in many ridings because the Tories simply lost the ridings, not because anybody agreed with the policies they had.

I consider myself to be a left leaning Liberal. I happen to believe that the New Democratic Party has a voice that Canadians need to have heard in debate. I look across at the Bloc Quebecois and I have listened to the members opposite. Other than the fact they are horribly misguided with respect to their bent on sovereignty, most of these individuals opposite are Liberals by philosophy. One has to listen to them. They may want to take their province out of Canada but they have an underlying concern for the individuals, for the social policy, for the programs of this country.

I would not call the Reform Party left or right. That would put it on the continuum of common sense. It is right off the mark when it comes to being responsible and reflective of Canadians.

I want to talk a bit about the budget and this borrowing authority. I know the member is new here but even if there were

a balanced budget there is still the need for a borrowing authority of government. The taxes do not come in every single day. They come in mostly at one point in the year. The borrowing authority bill is a time that we can stand up in the House and talk a bit about the fiscal reality of Canada.

When we took over government we took over a government that had lost the confidence of investors not just in Canada but around the world. We took over a government and an institution that had lost the confidence of Canadians.

The Prime Minister said time and time again when he was on the campaign trail that if he did not do anything else as Prime Minister of this country he would put respect back into politics. What we say we will do, we will do. He put most of the main ideas in a thing called the red book. Much to the chagrin of the Reform Party and members opposite, almost daily there is another commitment in the red book fulfilled by the Prime Minister, the cabinet and the Liberals in this government.

That is probably one of the reasons that Canadians, international investors, people who buy Canada savings bonds, people from all over this country and beyond finally sat up and said it is amazing, they can finally have a government in power in Ottawa that says what it means and does what it says it will do.

Let us be realistic here. I have been here seven years. We used to watch and wait for the Tory finance minister to get up and it was like throwing darts with a blindfold on his deficit projections, whether they were going to hit. We wonder why the international community lost confidence in the Canadian dollar. We wonder why it lost confidence in the Canadian economy. It is because the previous ministers of finance who were on the right wing of the spectrum, the Reformers of late, could not add up.

Every time they came in with a projection the international money markets and consumer confidence went right down the toilet. We could hear the big flush every time one of those budgets came in.

Our finance minister put a budget last year and he has not only met the projections, and that is the first time in recent history that has been done, he exceeded the projections. When he walked in this time and put a budget forward and the Canadian public and the people who invest and buy our bonds in the international community and who invest in business in Canada said finally they have somebody in government who is credible. So did the Canadian public in the poll released today.

I want to talk about how we have not abandoned our principles as Liberals. I am a Liberal. During the lead up to this debate and this budget I harboured grave concerns about where we were going as the Liberal Party.

I am one of those individuals who believe in the principles of liberalism, of fairness and equity. I believe the people of this country have a collective right of ownership of the resource that is Canada. While one of the roles of government is to ensure that the free market system works and is attractive to people to come and invest, the Government of Canada has a fundamental responsibility to ensure that wealth is redistributed. That is absolute horror to the ears of the Reform Party. I believe that with every ounce of my being.

When this great debate started and we had this deficit that had to be brought under control I thought we were going to lose our principles. I thought as the Liberal Party we were going to find ourselves following a right wing Reform-Tory agenda. We did not.

I have discovered something. I discovered that we can stand up and defend the vehicles that deliver the programs until the cows come home but if the vehicles are broken they are not going to be able to deliver the programs. The programs are merely a manifestation of the principles. The principles of those programs, our social programs, our transfers to the provinces, our equalization program, EPFs and health care, unemployment insurance, all of those things and all of those programs that we provide as government are merely a way to deliver the Liberal principles of wealth, regeneration and redistribution, of going in and making sure that government has the ability to help those who are least able to help themselves.

I was more than pleased when I heard the budget announced the other night. I was worried there would be an adverse regional impact. I guess once bitten twice shy. To be quite honest, last year I felt that the budget disproportionately hit some of the regions like Atlantic Canada.

I was extremely vocal in my concerns and in my criticisms. Over the last 12 months we have grown as a government and we have learned to listen. We have had the most massive prebudget consultations in the history of this country. We listened, not just to people out on the hustings but also to people in this party and people in the House.

The Minister of Finance has crafted a document I did not think could be done. First, he has satisfied the international investor community that Canada is serious about its deficit and eventually dealing with the debt. Second, he said that we are still a country that believes in the greatness of the resource that is this nation and the rights of the individuals to have their government give them a hand up when necessary. Third, he recognized this country first and foremost is a regional country. The economies in this country because of our geography and our history are regional economies.

The finance minister came in with a budget that did not disproportionately hit any part of this country, that recognizes that the real future of this country is getting our debt and deficit under control while at the same time not throwing the baby out

with the bath water and wherever possible preserving those basic and fundamental principles of Liberalism.

I am not happy that as a result of the burgeoning deficit some of our public servants who have done a tremendous service for Canada have had to go. The President of the Treasury Board has listened. He has come in with a package which is fair and in most cases more than reasonable. We have said to the public servants of Canada that times have changed. Yes, government has to do more with less and our priorities must shift.

With those individuals who have helped to build this country and deliver the programs we are prepared to sit down and be as generous as we can with early retirement, early departure and transfers, if possible, to other programs. No, we are not perfect as a government and this budget is not perfect, but it is the closest thing to perfection in a budget that I have seen and that the Canadian public has seen in many years.

[Nic Leblanc, Bloc, Longueuil, QC]

Mr. Speaker, I would like to ask my friend, the hon. member for Dartmouth, a few questions. I had the opportunity to take a trip with him to Japan, during which we had long discussions. Despite that opportunity, I was still a little surprised to see that he was so proud and happy today, and so impressed with the Minister of Finance's budget.

I fail to see how anyone could be proud, for example, to say that most of the deficit reduction measures will be achieved by offloading the problem onto the provinces. Responsibility for a large part of the federal deficit will be squarely put on the province's shoulders. For example, the Minister of Finance says that Quebec will receive almost $7 billion less from the federal government, which will, of course, continue to tax Quebecers as much as ever.

How can he be proud to see that, in two years' time, Canada will have tacked on another $50 billion to its debt? How can he be proud of that? How can the hon. member for Dartmouth be proud to see that, in two years, Canada's accumulated debt will have climbed to $611 billion? How could we be proud of that? This does not make me in the least bit proud. Therefore, I would simply like the hon. member to answer my question.

Instead of making fiery speeches, he may be better advised to come down from the clouds and realize that, in two years, Canada will obviously have to collect more income tax and impose other taxes. The country will give much less to its citizens, since the interest payments on the debt alone will be at least $50 billion. How could we possibly be proud of that?

[Ron MacDonald, Liberal, Dartmouth, NS]

Mr. Speaker, I thank my hon. colleague for his questions. I have a great deal of respect for the work that he does in Parliament. We have had discussions. I think he should drop this bit about sovereignty because he knows that Canada is a great place and I know he feels that fundamentally.

My colleague has asked me two questions. On the one hand, he has raised a concern about debt downloading to the provinces, that there are cuts in the transfers. I have to say to him that I am concerned about the cuts to transfers. The province of Quebec is much more able to withstand those types of cuts in transfers than places like Newfoundland, Nova Scotia and New Brunswick.

In New Brunswick and Nova Scotia the provincial ministers of finance said the number one wish they had on their wish list going into this budget was not that they did not have their transfers cut, but that the federal government come up with a credible plan for getting its finances in order. If that was not done it would have a major negative impact on the stability of the dollar and interest rates. Every province in the country is individually financing a debt. Their number one priority was to have some credibility from the Minister of Finance.

On transfers to the provinces we cut them by 4.4 per cent. That seems like a lot of money. It is 3 per cent of the revenue of the provinces. However, we cut our own programs, the ones we take credit or blame for, by 7.3 per cent. We cut ourselves more than we cut other people.

With respect to the second question about the debt being too high, I agree with him 100 per cent. However, I do not agree with members of the Reform Party that it is a debt monster and that we should dance to their tune.

We have tried to recognize that the debt is too high but that in order to control the debt we must control the deficit first. We are not prepared to sacrifice that fundamental nature of Canada to satisfy those on the far right, the ones who are off the mat. We are not prepared to go in and sacrifice ourselves to the big debt demon, as the former member said, by slashing programs and dismantling those things that are fundamental to the nature of the country.

I would think the hon. member opposite in a quiet moment would reflect on what we have done. We have probably created another good argument as to why Quebecers would want to stay in Canada. At this point in time, for the first time I might add in a long time, Quebecers just like Nova Scotians have a government in Ottawa that says what it means and when it says something it does it.

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

Mr. Speaker, does the member who just spoke have any sense of embarrassment whatsoever for saying that the red book was still their Bible?

I heard throughout the campaign and many times here that the immigration level would be 300,000 and it is 200,000; that the GST would be gone; that there would be a renegotiation of NAFTA; and there would be no cuts in social programs.

Unfortunately I am running out of time, but the list is so embarrassingly large that if I had made those comments I could not speak for blushing.

[Ron MacDonald, Liberal, Dartmouth, NS]

Mr. Speaker, I agree with the member that there are some embarrassing things going around today, the most embarrassing of which is the dismal performance of the Reform Party's response to the budget that has resulted in its popularity in the country going right down the you know what, Mr. Speaker. We can hear it flushing.