Debates of March 2nd, 1995

Points Of Order

[The Speaker]

The hon. member is absolutely correct that there should be notification given to the Chair as soon as possible. As such, I know the hon. member will want to follow the rules and take the time to put his point of privilege, in all its fullness, at the earliest possible time. However, because it did not arise from question period today, I would rule that the point of privilege will be put off until later.

I thought the hon. member was going to introduce a point of order or did I misunderstand?

[Jean Charest, Progressive Conservative, Sherbrooke, QC]

Mr. Speaker, for the record and to accommodate the rules and all members of the House in fairness, may I suggest that I raise this point of privilege tomorrow after question period so that all members of the House will know that this issue will be raised?

[The Speaker]

The hon. member would know that in accordance with the rules the answer would be yes.

[The Speaker]

My colleagues, we will now proceed to Thursday's usual question.

Business Of The House

[Michel Gauthier, Bloc, Roberval, QC]

Mr. Speaker, this is a difficult question to ask but I will ask my colleague, the Secretary of State for Parliamentary Affairs, to tell us about the business planned not only for the coming days but also for the week following the recess.

[Alfonso Gagliano, Liberal, Secretary of State (Parliamentary Affairs) and Deputy Leader of the Government in the House of Commons]

Mr. Speaker, if I may, I will answer the question.

Today we will continue with second reading of the borrowing bill. When we adjourn tomorrow, we will stand adjourned until Monday, March 13. On that day we will consider the firearms bill. On Tuesday, March 14 and Wednesday, March 15 we will conclude the budget debate.

Mr. Speaker, we intend to designate March 16 and 17 as opposition days.

The House resumed consideration of the motion that Bill C-73, an act to provide borrowing authority for the fiscal year beginning on April 1, 1995, be read the second time and referred to a committee.

Borrowing Authority Act, 1995-96

[David Dingwall, Liberal, Minister of Public Works and Government Services and Minister for the Atlantic Canada Opportunities Agency]

Mr. Speaker, when I began earlier today, I started off with Madam Speaker, was interrupted by Mr. Speaker, and now I have a different Mr. Speaker in the Chair. I would like to be certain that this Mr. Speaker will remain in the Chair for the duration of my short intervention in this debate.

As I said earlier to my colleagues in the House, the Department of Public Works and Government Services has had to sustain some significant reductions. I note my colleague from the Reform Party. No doubt he will have numerous questions for me when we go before committee. I might add he usually asks very good questions.

I want to share with him and other members of the House that we will be commercializing the Canada Communication Group, an aspect of public works and government services. We will be doing away with the stock item supply. We will be going to direct deposit across the board to save the taxpayers significant amounts of money. Cheque production sites will be consolidated in order to save costs to the taxpayer, contributing to the savings we are putting toward the deficit over a three year period of $353 million.

In addition, public works and government services, Treasury Board and all agencies of the Government of Canada have been, presently are and will continue to look at ways in which to make additional savings in terms of the reduction in office space which houses a variety of government departments.

Program review was conducted by my colleague the Minister of Intergovernmental Affairs and had a number of aspects associated with it. One was a vertical examination of all expenditures in each of the departments. As a consequence of that examination, there will be less need for additional space.

I want to be very careful and very prudent. I welcome suggestions from members across the way in terms of how we can do public-private partnering in this regard and how we can have additional savings as it relates to the space requirements we need as a national government across the country.

These savings, as I indicated earlier, will total $353 million and will dislocate 5,263 employees over a three year period. It is very difficult to try to sugarcoat tough decisions, but I want to be clear. Although there will be some dislocation of jobs, many of those jobs will reappear in the private sector. We ought not to downplay the significance the private sector can play in terms of handling some of these services and activities which, prior to the budget, were being conducted by government departments.

The Department of Public Works and Government Services is a common service department. We act in relation to the requests made to us by other departments and agencies of the Government of Canada. Where the opportunity exists, our objective and goal is always to try to get value for the expenditures within our department. We will be vigilant in reaching that goal in the coming months and years. Again I invite the co-operation and suggestions of members opposite to make certain we abide by that objective of value for our money. Where the opportunity exists I hope they will provide us with good, meaningful suggestions.

Canada Mortgage and Housing Corporation is another agency which comes under my responsibility. It has a historic, national and international reputation in the housing sector. Cabinet and the Minister of Finance, in view of the fiscal capacity of the Government of Canada, are giving savings to reduce the deficit in excess of $300 million.

We will be closing over 20 offices across the country. We will be cutting back on our research efforts as a national housing institution. We will be doing away with the scholarship program which has been part and parcel of Canada Mortgage and Housing Corporation for quite some time. If anyone were to suggest that those are not tough, difficult measures, I would think they were being less than candid with themselves and with the House.

I do want to say that the Minister of Finance has given us a balance. On the one hand we still have 600,000 units. It is an expenditure by the government of over $2 billion annually, housing one million Canadians who need the assistance of the state as they try to provide dignity and opportunities for their families and their communities. That expenditure is significant.

It is hoped that over an additional three year period we will be able to have additional savings and will be able to do some things in other sectors. However, I do not want to give a false impression to the House because it would be misleading and very unfair to suggest otherwise.

With the Atlantic Canada Opportunities Agency, the government over a three year period will be reducing its contributions to that agency. I would like to take a moment to explain the mandate of ACOA. The mandate of the Atlantic Canada Op-

portunities Agency is to effectuate where possible economic activities in the Atlantic region.

Those of us who come from the Atlantic region, such as my colleague the hon. member for Dartmouth, will attest to the fact that economic growth in many of our communities is not what we want it to be. We are continually trying to find ways to foster economic growth. We have moved away from a previous set of targets in terms of providing grants to small and medium sized businesses. We have done away with that. We have moved to a system of repayable loans which provides more accountability for all.

There is still a lot of partnering. As an agency of the crown we can partner with the provinces, universities and non-profit organizations. This is done not for the sake of having announcements but for the sake of trying to get communities, the intellectual side, the business side and the non-profit side together, forging a coalition to try to meet the challenge of creating economic activity in the poorer regions.

Much has been said about regional economic development in the past. I am sure much more will be said by those who oppose that forum. Let it be understood that as the minister responsible for one small agency, ACOA, I believe as the red book and the 1994 and 1995 budgets have identified, that regional economies are the backbone of the nation.

There is no question there are differences between the economy of Atlantic Canada and that of Quebec. There are differences between western Canada and the Atlantic region. There are differences between Ontario and the west, be it the prairies or British Columbia. They are different. We must acknowledge that factual thing: a small population base, a widely dispersed people over a large geographical mass. It is our task not to put the blame on those that have come before us and tried to seize the moment and the opportunity by creating through partnerships something that will provide some hope and some dignity to individuals in that region of the country.

All agencies of government were asked to provide moneys to cut the deficit. Fifty person years will be reduced at the Atlantic Canada Opportunities Agency, 15 person years at Enterprise Cape Breton. All aspects are being reviewed.

As members opposite find opportunities to either ask questions or put before me as the minister responsible, as my colleagues in the Atlantic Region do, ways in which we can improve, to cut things and to add to things, I would be happy to hear from them.

I want to make something very clear to those members who sit in the House. I make no apology to any member, any political party, and any representative of the press for standing up for a region which has historically sustained a lot of economic difficulty. As I say to my friends and as I shared with caucus colleagues, we in Atlantic Canada do not want handouts. We want a hand up. Regardless of where they live, Canadians are entitled to that kind of opportunity from the national government.

In the time that I have remaining, I want to briefly touch on the subject of the Royal Canadian Mint. Colleague opposite knows that I have umpteen different agencies for which I am responsible so I am just hitting the highlights of some of them.

With regard to the Royal Canadian Mint, I want to clarify a rumour. It was circulating in Dartmouth, Nova Scotia that the $2 coin we will be issuing will have the picture of the hon. member for Dartmouth on the coin. I want to make it perfectly clear it was a difficult decision I had to make personally, but given what I had to work with I think everyone can understand why I reached the decision I did.

Let the House be aware that the new $2 coin will save taxpayers over a 20-year period a quarter of a billion dollars.

We have gone one step further. We are looking at all of the coins and their composition. We are going to change the composition of those coins in order to reduce their cost, thereby increasing the revenues which will total almost an additional $12 million per year for the 20-year duration of an average coin. That is new revenue for the national government. It is new revenue for the purposes of writing down the deficit of the Government of Canada.

I want Canadians to know that these measures have been taken because we listened to them. I am the minister responsible for public works, government services, and a host of other agencies. I have gone before the standing committee for a record number of times for any minister; three times. I have had good questions from opposition members. I have had good suggestions from opposition members. Equally so, I have had very good quality questions and suggestions from government members. I want to thank them for their help and assistance.

I throw out a challenge to all members of the House. If we are sincere, which I take as a given, of reducing the deficit of the government in the years ahead, they should come forward with solutions. Yes, criticize too because that is part and parcel of the political process. As I have told my exempt staff as well as all of my deputy ministers, it is fine to identify problems but it is more important to identify solutions to those problems.

I know that my time has come to an end but I would be happy to attempt to answer any questions my colleagues may wish to raise at this time.

[Translation]

[Nic Leblanc, Bloc, Longueuil, QC]

Mr. Speaker, the Minister of Public Works said that using $2 coins would result in savings of some $225,000. I wonder how much it will cost to repair our pockets though, because it is going to be a heavy load to carry. My comment is somewhat in line with the sense of humour displayed by the minister when he alluded to the possibility of having his face appear on the new $2 coin.

The closing of some CMHC offices is a more serious issue. I agree that the government must reduce spending. However, I find it hard to understand why the minister decided to close the CMHC office in my riding of Longueuil, since some 1.2 million people live in the Montérégie. I think it would have been justified to keep an office to manage CMHC affairs in that region. That region has a larger population than the province of Nova Scotia where, I imagine, there must be at least one CMHC office. So, I ask the minister: Why he is taking that step and, second, from where will he manage all the properties in the Montérégie?

[David Dingwall, Liberal, Cape Breton—East Richmond, NS]

Mr. Speaker, I thank the hon. member for the question. It is a very legitimate and important question that one would ask of a minister.

My colleague is quite right in making representations to me on the issue. However, I say to him as I say to all members, difficult decisions had to be made by the government relating to the reduction of expenditures.

In the riding adjacent to mine that members refer to quite often as being my district but really is not, we closed the office as well. I do not take any joy as the minister responsible for Canada Mortgage and Housing for having to shut down offices.

Administratively it is important that Canada Mortgage and Housing make those kinds of decisions in order that we can contribute to bringing down the deficit of the Government of Canada. I have had numerous meetings with my colleague the Minister of Finance who did not cherish the fact that we had to reduce those offices.

I want to tell my colleague opposite that his constituents, which he ably represents, will still have the services of representatives from Canada Mortgage and Housing from neighbouring communities.

Notwithstanding reductions at Canada Mortgage and Housing, I received no less than seven or eight interventions from his party. I thought he was to congratulate me on the rent geared to income which was rumoured to go from 25 per cent to 30 per cent. The Minister of Finance and the cabinet have maintained it at 25 per cent.

On the one hand it was difficult to close the office in his constituency. He will still receive quality service from neighbouring communities. On the other hand we have been fair. We have not increased the rent geared to income for those citizens who are occupying our social housing units across the country.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Mr. Speaker, I was hoping the minister would put to rest the terrible rumour I heard that the figure on the new proposed $2 coin might be a soft walled, shiny topped dingy. That did not happen and it is unfortunate.

I want to get down to the matter of his responsibility with regard to ACOA. We know there are several regional development agencies flowing from the federal government: ACOA, western economic diversification, FORD-Q and other northern development agencies.

If someone with a grade five education sat down and thought about it, he or she would realize this whole concept is wrong. First, history tells us it is wrong. It has not worked in his region of Atlantic Canada. We have seen DREE grants, ACOA grants and loan programs for not years but decades and they have not worked. They have been part of a continuation of a depressed economy. In some of these regions they have not solved the problem.

If we think about it, the reasons are obvious. First, the payback of taxpayers' dollars going through the administration here in Ottawa and then back out to the regions is very costly. They are very expensive departments with gold windows that have to be replaced and huge staffs. It is also an opportunity for ministers to have undue influence in the tendering process. It tends to have people come to ministers hat in hand, asking for a grant or a loan.

I know that recently the minister responsible for ACOA has removed the granting program. I believe that is due in large measure to criticism from the Reform caucus that pointed out the blatant pork barrelling and the problems with the whole program of grants.

Now ACOA is restricted to lending funds to business. In fact, they have reduced the lending. However, businesses can get loans from other institutions such as banks and credit unions. Why would we need ACOA to grant loans? It is a very costly way for the taxpayers to help businesses. Also the amount lent out is reduced. Yet we still have the department and the minister responsible as well as his staff. There are not the cuts at the top we need because we are doing less with more.

How can the minister stand in the House and justify ACOA, western economic diversification and other regional development agencies that have failed miserably. They have added poverty to Canada and have been an opportunity for pork barrelling and misuse of federal funds.

[David Dingwall, Liberal, Cape Breton—East Richmond, NS]

Mr. Speaker, such an easy question from an easy representative. The hon. member's assertion is factually incorrect.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Make some sense for once.

[David Dingwall, Liberal, Cape Breton—East Richmond, NS]

I did not interrupt the hon. member when he was speaking. Maybe he can give me the same courtesy.

Let him remember and understand history. Yes, regional economic development programs have not been a raving success. To suggest there have been no successes is factually incorrect. It is factually incorrect to suggest that they have not benefited certain regions. The hon. member should travel the country extensively before he states false and misleading information of that nature.

The hon. member makes the statement that somehow we changed the programming of the Atlantic Canada Opportunities Agency because of the interventions of the Reform Party. The people who changed that program from grants to loans were the business community and business representatives in Atlantic Canada. When I travel Atlantic Canada, which is extensively, I meet with them time and time again. I have listened to what they have said and listened to what the Atlantic Liberal caucus has said and that is the reason we moved from grants to repayable loans.

Finally, the hon. member made reference to a dingy on the coin.

Let me say to the hon. member that yes, the students at the University College of Cape Breton have referred to this wall that they have constructed under an infrastructure program as the "Dingwall".

I want to tell my hon. friend that just the other day I drove by the "Dingwall" in a car with white walls. I want to assure the hon. member that the "Dingwall" is a hell of a lot more effective and durable than the white walls on that car. I think the hon. member knows who I am referring to when I talk about the white walls.

[Michel Guimond, Bloc, Beauport—Montmorency—Orléans, QC]

Mr. Speaker, last Monday, before the Minister of Finance tabled his budget, I was worried because I realized Canada was bankrupt.

This was not my opinion but that of the New York Wall Street Journal , in an article that appeared on January 12, this year, under the heading ``Bankrupt Canada''. I also knew that Moody's in New York had put us under a credit watch and was waiting for the right moment to reduce our credit rating, which would put upward pressure on the deficit and the national debt.

Considering these facts, I knew the Minister of Finance would have to turn the situation around. I thought he would be fair to all taxpayers, however. I would have liked to discuss the main cuts introduced by the Minister of Finance, which are not, in every case, appropriate and transparent, but I am sure my colleagues will do a better job, since these subjects are not my specialty.

As the official opposition critic for transport, I was expecting cuts but I had no idea the Department of Transport was up for sale. I found that out last Monday.

As a result of program review, budgetary cuts will total $1.1 billion or 50.8 per cent of total expenditures forecast from 1995 to 1998. If we include cuts announced in the previous budget, the Department of Transport's spending levels will be reduced by 1.4 billion during the same period. In fact, budgetary savings as a result of program review will total $2.6 billion over three years.

Take, for instance, the transfer of airports to local authorities. The problem, since this is about downloading the deficit to the provinces, is that these transfers to local or provincial authorities will not include the corresponding tax points. That is the problem.

Air Canada was sold, and now Canadian National is on the block. Means of transportation that our ancestors put in place are now being sold off, not as a face saving gesture but to make the government's failure in this respect less palpable. What can we say about all this? Is this supposed to be a spring sale by the federal government? Is this a closing out sale or a panic sale?

Since the Bloc Quebecois arrived in force in Ottawa, we have been in favour of big projects to jump start the economy and replenish the government coffers. In this regard, I spoke a number of times in this House to encourage the government to set up and invest in rapid transport, a high speed train in the Windsor-Quebec City corridor. The budget made no mention of this project. In fact, it indicated that there would be no more mega-projects.

From the start of the budget speech to the end of it, I watched the Department of Transport crumble. I watched the legacy of a century disintegrate. I kept waiting for the comforting announcement of a project that would get the economy moving-a high speed train. But no such luck.

Let us have a look at the coast guard now. We are presented with the integration of the Coast Guard into the Department of Fisheries and Oceans. At first glance, it would seem to be an interesting arrangement, because there is a promise of greater efficiency. But we must look carefully. Even though the budget contains no concrete measures, other than those affecting the fleet, the federal government plans to change the operations and level of service of the Coast Guard. These changes will take the form of cost recovery measures and increased fees.

These measures may jeopardize the competitiveness of ports along the St. Lawrence and of the shipping industry as a whole. Furthermore, part III of the budget estimates includes provisions to merge the Canadian Coast Guard fleet with Fisheries and Oceans, to delegate certain ship inspection activities to classification societies, to transfer to the provinces responsibility for inland waters of lesser importance and for more sound management of public ports, with the potential elimination of certain facilities.

This budget also provides for an increase in service fees, which is tantamount to a hidden tax to be paid by people using such services. This measure targets shipping services of course. Services provided by the Coast Guard benefit the public and for this reason fees for such services should not be increased. An increase in fees for these services, which limit the number of ice jams on the St. Lawrence, would prevent the Coast Guard from saving Canadian lives, ensuring navigation safety and would increase the risk of ecological accidents on the St. Lawrence.

In conclusion, such a fee structure would limit the competitiveness of Quebec ports vis-à-vis their American counterparts and the transport minister and the federal government have known this for a long time. The transport committee, of which I am deputy chairman, is currently undertaking a tour of the country's principal ports. In particular, we have visited Montreal, Quebec City and Mont-Joli in Quebec. We have heard clearly that higher rates would put an end to traffic on the St. Lawrence. Shipowners will prefer to unload their cargo in Halifax, or to forge on to ports in Boston, New York or Baltimore.

Is that the end result the minister hopes to attain? Stem traffic on the St. Lawrence? Steer traffic towards Maritime or American ports? Could it be that he is trying to scare Quebecers by a vision of what could be in store if they separated? It is not fear that has kept Quebecers in confederation for so many years, but the hope that they would be treated fairly, which decision-makers have failed to keep alive.

Quebecers are intelligent enough to figure out what the current government is up to, in particular the Liberal Party of Canada, which has always tried and is still trying to ruin Quebec and to play favourites with other provinces. My case in point is the closing of the Coast Guard college in Sydney, while the Quebec Marine Institute in Rimouski or, for that matter, other institutes in other provinces could have very easily done the same work. This duplication is costing $10 million per year to provincial institutions which could easily have taken over the job.

Now, on to privatizing CN. Canadian National is a Crown corporation that has served Canadians for many years. It is one of the institutions that has made it possible for Canadians from coast to coast to communicate with each other. If it were not for the railways, Western Canada probably would not have been developed to the extent that it has. The government now intends to sell CN, under the pretense that the decision will give society the flexibility needed to quickly make strategic decisions on operations and investments.

Is this an admission by the Minister of Finance that his government is not in a position to make strategic decisions? The sale of CN could cause many problems. Before selling off our economic development tools, we must take several precautions. According to the Nault report, some preparation work must be carried out before CN can be sold, namely reducing the debt, increasing profits and rationalizing the network.

First of all, the eventual buyer must be required to protect the rights of the Canadian people. Let us also keep in mind that the Nault report favours an Air Canada-like privatization process. We will have the opportunity to review these issues and to question the Minister of Transport both in the House and in committee. With regard to the national airport policy, we are told that airport commercialization will continue. Six national airports have already been transferred to local management.

The Quebec government will have to support local groups from small municipalities who want to enter into negotiations with Ottawa. As you can appreciate, Quebec taxpayers will again have to foot the bill for this federal policy.

In conclusion, from what I just said, you can understand that I am far from enthused by the budget trends regarding the Canadian air, sea and ground transportation sector.

This government shows its total lack of imagination. International financial players called for cuts, but the government cut indiscriminately, hitting seniors and the disadvantaged especially hard.

For over a year, we have been asking the minister to establish an integrated transport policy in Canada. This policy would determine what should be transported by rail, by ship, by plane and by road. Without being authoritarian and inflexible, this policy could provide for fiscal incentives favouring the best means of transportation.

Most of the countries in the world are developing rail transportation because it is the cheapest. Here in Canada, we remove rail tracks everywhere and convert them to bike paths. We let trucks with excessive loads onto our roads. The roads are being destroyed and the provinces must invest enormous amounts to maintain them.

Yesterday, I read an editorial by a great Quebecer and Canadian entitled "Imperial Federalism". What an appropriate headline to describe the federal government, whether Conservative or Liberal. They act without consulting, lead by fear, and always repeat the same mistakes. That is Canadian imperialism for you.

This government may feel that Quebecers rejected the Charlottetown Agreement by mistake or because they were in a bad mood. But it would be wrong. Quebecers can see clearly. They want to be part of the solution and not part of the problem. As long as they are in this imperialistic Confederation, the rest of Canada will think that Quebecers are the problem.

The Minister of Finance tried to convince us that his budget was a new form of federalism by attempting to decentralize some areas of jurisdiction, without transferring tax points, providing that Confederation partners comply with national objectives.

Quebec is a nation, a people. It has its own objectives and will never agree to be led by an imperial federalist government.

[Nic Leblanc, Bloc, Longueuil, QC]

Mr. Speaker, I wish to thank the hon. member for his excellent speech. I think he takes the interests of the Quebec transportation industry at heart, and he represents them well.

I would like him to touch on the possible implications of these cuts in transfer payments to the provinces, which the Minister of Finance indicated will be to the tune of $7 billion over the next three years. Transfer cuts mean less money being paid to Quebec. At the same time, the federal government continues to tax Quebec at the same level. Moreover, tax hikes are imposed on Quebecers, representing a deficit of about $6.5 billion for Quebec in taxes alone. Add to that some $2.5 billion less coming back to Quebec every year, and this makes a shortfall of $9 billion for the people of Quebec.

Instead of cutting taxes in Quebec, the federal government is cutting the share Quebec used to get. This makes for a rather significant shortfall, in fact a very significant shortfall for Quebecers. How can this be offset? As the Minister of Finance said, Quebec will have to either reduce public expenditures further or impose tax hikes Quebec taxpayers who are not only seeing their taxes go up instead of down, but receiving about $2.5 billion less from the federal government every year, which is utterly unfair. It is important that the people of Quebec be reminded over and over again of this fact.

How does the transport critic see the transportation industry in Quebec being affected by this drastic drop in overall revenue?

[The Acting Speaker (Mr. Kilger)]

Having been more than generous with the 10 minute period allotted to the hon. member for Beauport-Montmorency-Orléans, I would ask that we get back on the right track, speaking of transportation. So, if he could keep his answer as short as possible, under two minutes in any case.

[Michel Guimond, Bloc, Beauport—Montmorency—Orléans, QC]

Thank you Mr. Speaker for being so understanding.

I will answer the hon. member for Longueuil. The question comes unexpectedly, even though the member and I belong to the same party. We can make a comparison. I am convinced that when a Liberal member asks a question to a Liberal minister during question period, viewers in Canada and Quebec can tell that the answer has already been prepared. However, this is not the case here. I did not expect the question from the hon. member for Longueuil. However, I will try to answer it to the best of my knowledge.

[Some hon. members]

Ah, Ah!

[Michel Guimond, Bloc, Beauport—Montmorency—Orléans, QC]

You can laugh if you want.

My colleague raises an interesting issue. I already had the opportunity to tell the Minister of Transport, in committee, that if the federal government privatizes or commercializes airports, ports and the St. Lawrence Seaway, Quebecers will have to ask themselves this crucial question during the upcoming referendum debate: Are we getting our money's worth, considering that we pay $28 billion in taxes every year to Ottawa?

When the federal government is investing in Quebec, it is not giving anything to Quebecers. When elderly people receive a cheque with the maple leaf on the stub, it is not a donation from the federal: it is money which these people, their spouse or their children have contributed through taxes. Consequently, this question is very much to the point, as is the whole issue of how the provinces will be able to provide the required financing.

For example, the federal government wants to transfer some regional airports. These airports will be managed by the local community, because the provinces have clearly indicated that they do not want those regional airports, and indeed I think they would have been ill-advised to take on that responsibility. I received confidential minutes in which the following issue was raised: If the local authority cannot make a profit with the airport in Sept-Îles, which currently makes $1.9 million in profit annually, what will happen? The federal airport in Sept-Îles will close. Consequently, will our taxes be adjusted accordingly? That is a very good question.

[The Acting Speaker (Mr. Kilger)]

I thank the hon. member for his co-operation. The hon. member for La Prairie.

[Richard Bélisle, Bloc, La Prairie, QC]

Mr. Speaker, I would like to start by drawing the attention of this House to the size of the federal government's debt and the fact that government measures have done so little to change a situation that has now become chronic. The government must balance its budget as soon as possible, because its credit is fading fast.

The 1995-96 estimates tabled by the Minister of Finance show that public debt charges now represent 30 per cent of

government spending, while 22 per cent goes to payments to persons and 16 per cent to payments to other levels of government.

The last two payments combined represent 38 per cent of total spending, barely exceeding public debt charges as a percentage of the total budget. I think it is clear we have a problem when the cost of servicing the debt is only 8 per cent less than what the federal government transfers to Canadians and to the provinces in the form of transfer payments.

Considering the decline in program spending over the next few years and the expected increase in public debt charges, we will soon reach the point where debt charges alone will exceed total transfers to persons and the provinces. In other words, a larger share of our tax dollars will go to investors and people who buy government bonds than to the citizens of this country. Is that the kind of flexible federalism the Minister of Finance wants?

It is clear that the minister's budget has done nothing to stem the growth of the debt. The deficit for the year ending on March 31 would have been $41 billion, not $39.7 billion as forecast in the last budget, if the government had not used the surplus in the Unemployment Insurance Fund to absorb part of the deficit. Normally, the surplus should have been applied to job creation and dealing with the structural unemployment.

The government is still putting off the real decisions until later. The cost of the public debt will increase from the $42 billion it will be at the end of this year to nearly $51 billion in two years' time.

We have to conclude that Liberal carelessness has brought this prosperous country to the brink of bankruptcy. Under the most optimistic scenario, the deficit will not be eliminated before the turn of the century. At that point, the cost of servicing the public debt will be over $60 billion. What waste and what wealth lost. Imagine what we could do with another $60 billion in the government coffers annually.

The government is adding insult to injury. It continues to invade provincial jurisdictions, but without paying any more for the programs for which it imposes national standards on the provinces. Quebec will have the unpleasant job of taxing its citizens in order to comply with the federal standards pertaining to the block funding planned by the present government.

In the end, Quebec will pay, but Ottawa will set the rules. The funding will be decentralized, but decision making power will remain in Ottawa. The federal government is not transferring any tax points in exchange for the reduction in transfer payments to the provinces. The government is doctoring the truth and putting the real decisions off until after the Quebec referendum. The federal contribution to social assistance, health care and education will drop by $7 billion in the next two years. This is a huge amount in terms of health care and education, but, unfortunately, too little to put an end to the deficit.

Overlap with the provinces will not disappear. Program review and efforts at streamlining have focused particularly on departments and agencies that are strictly under federal jurisdiction, where there was no overlap or duplication with the provinces. These departments include the Department of Foreign Affairs and International Trade, National Defence and the Department of Transport.

The federal government is not getting out of areas under provincial jurisdiction, where little streamlining efforts have been focused. While it is chipping away the unemployment insurance program little by little, the government is imposing a temporary tax on bank capital, which will bring in $100 million over the next two years.

During this same period, the unemployed will be contributing $3 billion to deficit reduction, that is, 30 times what is being asked of the banks. This temporary tax represents only a little more than 1 per cent of the banks' annual profits, while the middle class remains overtaxed. Two sets of rules: a temporary tax on bank capital and a permanent tax of up to 50 per cent on the income of middle class families.

There is also the excise tax. The federal excise tax on gasoline is increased immediately by 1.5 cents a litre to help reduce the deficit. Why, then, wait until 1999 to reinstate the 21-year rule for family trusts? Doubtless, to enable these families to find another tax shelter. Always a double standard: one for the monied, another for the workers, the unemployed and the middle class.

The impact of the budget on Montérégie and the riding of La Prairie, which I have the honour to represent in this House, is also devastating. While the Auditor General was saying that we could save close to $1 billion if national defence were better managed, the government decides to close the base at Saint-Hubert, even though Quebec only has 15 per cent of the country's military facilities.

After losing the Royal Military College in Saint-Jean, Quebec and the Montérégie region are losing the base at Saint-Hubert.

Almost 40 per cent of the inhabitants of the town of Brossard, which makes up 55 per cent of the federal riding of La Prairie, are of an origin other than Canadian. Several are recent immigrants, others are political refugees. The budget would impose a fee of $975 per adult immigration request on future immigrants. We should bear in mind that this amount is more than the average annual income in several countries. Is the government opening the door to rich immigrants only? We should ask ourselves this question. Why impose an entrance toll on people who want to come here to improve their economic situation? There is something despicable about reducing the deficit on the backs of people who have yet to set foot on Canadian soil and

whose financial situation is often unstable. Is this the image Canada wants to project as a land of welcome?

Are Canadians so powerless to resolve their deficit problem that they have to tax people who are thinking of settling here? This measure is revolting and should be rejected by Parliament.

In conclusion, I would like to add that the government's borrowing power must be limited and nearing its saturation point if we have to enforce such deficit reduction measures. It is from this perspective that we should examine Bill C-37.

[Martin Cauchon, Liberal, Outremont, QC]

Mr. Speaker, I listened attentively to the remarks made by my colleague from the Bloc Quebecois. It is obvious that when measures taken by the governing party are good ones-because they are in the interest of Quebec as well as Canada-such measures will always be disparaged by the party in opposition whose views are exclusively separatist.

We all know that the business and international communities have responded favourably to the budget brought down by the finance minister. In other words, it is the most responsible budget possible.

The current government said it would control the debt and the deficit, but I would also like to draw to the attention of this House remarks made during the last election campaign by the Right Hon. Prime Minister of Canada who stated that the debt and deficit must be controlled but also that a fair balance must be struck between the government's social role and the reality of budgetary constraints.

To my mind, the finance minister's budget is in every respect consistent with the Liberal philosophy of a fair balance. We will get the deficit down. Indeed, we have reached and ever surpassed our objectives because the deficit is lower than anticipated. In saying that the government has a social role to play which must be maintained, well, with this budget we have fundamentally reconsidered the role of government.

People are saying that block transfers to the provinces are disastrous, I say that is pure grandstanding. I myself was a member of the parliamentary committee on the reform of social programs and I must say that, throughout Canada, people were asking for greater flexibility for the provinces. In Quebec and everywhere, people asked for block transfers. And so when the finance minister says he is rethinking the role of government, it is in fact to restore greater autonomy to the provinces through these block transfers.

What else could people ask for? The block transfers obviously entail some cuts, but we must not lose sight of the fact that the cuts we are imposing with this transfer in regard to the Canada assistance plan, health and post-secondary education is not as harsh as the measures we have imposed on ourselves. We must remember that by making a block transfer to the provinces, we are eliminating some overlaps, thereby reducing administrative costs.

Needless to say, this budget could be described as exemplary and that is why opposition members are trying to discredit it, but they are having a hard time doing so because that is not consistent with their views. This budget has something for Quebec and the other provinces, it gives them greater autonomy. That is what Canada will be like tomorrow and it is the Liberal Party, the present government, which will bring Canada into the next century.

And now, my question. In Quebec, people talk about wanting to regain autonomy in budgetary matters, returning taxation power to the province of Quebec, about having more budgetary capacity come separation. Considering that equalization works to Quebec's advantage-

[The Acting Speaker (Mr. Kilger)]

Order, please. I must take into account the fact that the hon. member was allotted ten minutes with five minutes for questions and comments; that time has almost run out.

[Richard Bélisle, Bloc, La Prairie, QC]

Mr. Speaker, I would like to tell the hon. member for Outremont that what the federal government will be transferring to the provinces in terms of block financing is a thinner envelope, a teeny weeny envelope.

When I mentioned in my remarks that the federal government was adding insult to injury, I was referring to the fact that, historically, as the Prime Minister said earlier today, to have a say, you have to pay. Up until now, the federal government paid. But in the future, while withdrawing financially, thereby passing on to the provinces the dirty job of cutting back social programs, the federal government wants to continue laying down standards, national standards. That is the problem.