Madam Speaker, I fully intend to prove that what I am saying is relevant to the budget.
I will not deal with all fifteen points raised and agreed by Mr. Côté. One is entitled to query these, however. I did select five which deserve a somewhat different treatment based on facts, on the truth, on genuine scientific methods and not on political bias and the kind of methods for which Mr. Côté is unique or occasionally, on a tissue of lies.
I will address point six in Mr. Côté's document.
Madam Speaker, since you asked the hon. member to sit down and show respect for the official opposition, I think he should show some respect for your decision as well.
Point six. Mr. Côté wonders what was the net benefit to Quebecers from the federal budget. You know what he said? Three billion. In other words, Quebecers get three billion more from the federal government than they contribute to the federal treasury. I say that is not true and is not borne out by the facts.
In 1991, when the Bélanger-Campeau Commission conducted its hearings, even André Raynauld, who is not known for his sovereignist views, concluded on the basis of a genuine analysis of public finances in Quebec and Canada that at the time, we were receiving more or less what we were paying to the federal government. In other words, the taxes we as Quebecers paid into the federal treasury and the transfer payments made by the federal government amounted to about the same, until 1988. Subsequently, we started getting less. And now, after the last two budgets and especially the last one, we see that, according to the experts where there used to be a surplus, there is now a deficit.
Take the Unemployment Insurance Fund. There is no surplus over what employers and employees in Quebec pay in to the fund. There is now a potential loss of $118 million. In other words, what the federal government pays in the form of unemployment insurance benefits in Quebec will be $118 million less than was contributed by Quebec employers and employees. The same applies to transfer payments. Mr. Côté is definitely out to lunch.
Federal transfer payments to Quebec were cut by 32 per cent for the three year period from 1994 to 1997. Therefore, in my opinion, Quebecers are currently in a deficit position when we compare the amount of taxes and income taxes that they pay to federal coffers with what the federal government spends and invests in the province of Quebec.
So, why did Mr. Côté say what he did? Do you know why? Because he took federal spending as a whole and divided it by the population. This methodology is not only dubious, it is also dishonest. As an economist, Mr. Côté has no right to make such a calculation. He does not have the right and, what makes it worse, he knows it. He knows, for example, that Quebec never gets one quarter of research and development spending or agricultural spending, and that, from 1984 to 1993, the federal government only spent 16 per cent of its total investments in Canada in the province of Quebec, although Quebec accounts for one quarter of the population. He knows this but it did not stop him from saying such rubbish.
I am happy to see that I have a few minutes more. I will go on to point 7. What does Mr. Côté say a sovereign Quebec could hope to save by eliminating overlap? No more than $500 million.
How did Mr. Côté arrive at his figures? I am going to let you in on it. I would like to say, though, that I am almost ashamed to tell you because it puts economists in such a bad light. He took 10 per cent of the federal government's operating budget, so 10 per cent of $18 billion is $1.8 billion, and he multiplied it by 25 per cent, which is the population of Quebec, and he got $500 million. Just imagine, Madam Speaker! I have never seen such an analysis, except the utterly preposterous one which the Royal Bank delivered during the Charlottetown debate, according to which almost one half of Canada's population would flee to the United States. Mr. Côté's calculations are not any better.
In 1991, the Bélanger-Campeau Commission, which used exact and scientific sector analysis methods, calculated that, for three items of expenditure alone, Quebec would save $800 million: $289 million in tax and income tax administration; $233 million in the communication and transportation sectors; $275 million in the job training sector (this figure was issued by Gil Rémillard and Marcel Bourbeau).
Using a ludicrous methodology, Mr. Côté says that we will be lucky if we save $500 million overall.
When we speak of duplication and overlap, we are not just speaking of administrative expenses. We are speaking of inconsistent policies, manpower policies that have the federal government going in one direction and the government of Quebec going in another, with the result that at a certain point no one knows what anyone else is doing and there is no more sustainable job creation. These are more of the costs of duplication and overlap.
The endless negotiations on regional development are another example of costly duplication and overlap. They go on for years and years, while entire regions are left hanging. This is the cost of duplication and overlap, not just ordinary administrative costs, especially according to the arbitrary and completely ridiculous method used by Mr. Côté.
Mr. Côté's eighth question was what percentage of the debt would Quebec inherit? He starts out by saying that it will be according to population, therefore 25 per cent. Why would we pay more than our share of the debt today? Why, when Quebecers are covering 23 per cent of the cost of servicing the debt now through the taxes they pay, would they take on 25 per cent the day after sovereignty? Here, already, Mr. Côté seems intent on artificially inflating the figures he is presenting. We are paying 23 per cent of the cost of servicing the debt at the present time and it is too much.
Why is it too much? Because our assets in Quebec do not justify our paying 23 per cent annually to help service the debt. And the Bélanger-Campeau Commission made it very clear, with three international observers who confirmed the commission's calculations. The proportion of assets in Quebec is 18.5 per cent, and it is therefore 18.5 per cent of the debt that the government of Quebec would inherit, with sovereignty.
So, why did Marcel Côté ignore this fact? Why did Mr. Côté, who has a degree in economy, choose to ignore a basic fact, unless he has forgotten what he learned in his economics classes, in which case he can no longer claim to be an economics expert or write books on the costs of sovereignty with titles such as Le rêve de la Terre promise .
One last thing. I would like, at this stage, to say that this man really talked through his hat. He does not know the first thing about the subject and it shows. Third, Mr. Côté wonders if Quebec dairy producers could continue to sell their products to Canada at twice the world price and expect to receive what amounts to several millions in subsidy from Canadian consumers every year.
Three things are incorrect in this short statement. First, it is incorrect to say that the price of dairy products in Canada and Quebec is twice the price on the international market. It is not true. Second, dairy production, which is subject to interprovincial distribution through quotas, is centred on processing milk to make cheese, yogurt, ice cream, mozzarella and what not. This is the part to which an act of Parliament and a federal milk subsidy apply.
If our products in Quebec were not competitive, if they were not competitive in price and quality, they would not sell on the Quebec market, they would not sell on the Ontarian market or even in some specific segments of the American market. They would not anywhere. The fact is that Quebec's milk production is quite competitive and if 50 per cent of all the industrial milk produced in Canada is currently produced in Quebec, it is because we have great producers in Quebec. We have the best, and I dare you to compare the productivity of Quebec milk producers with that of American producers.
What we have been presented with is basically a tissue of fabrications, as a scare tactic, and let me tell you that while cut-throat competition may have characterized international trade before 1947, it is no longer the case. It is no longer a free for all. There are specific rules, the GATT rules or the rules of the World Trade Organization. According to these rules, no GATT member, whether it is Canada, Quebec or the United States, regardless of its size or importance, can block the export of dairy or other products to its territory, for reasons of politics or resentment following a democratic vote by Quebecers in favour of sovereignty. So, Mr. Côté can go back to the drawing board.
As regards the issue being debated here, the official opposition will oppose Bill C-73, which provides borrowing authority to the government, since it is the direct consequence of the Minister of Finance's budget, which is fundamentally unacceptable.