Debates of March 24th, 1995

The House resumed from March 20 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 third time and passed.

Borrowing Authority Act, 1995-96

[Daphne Jennings, Reform, Mission—Coquitlam, BC]

Mr. Speaker, I appreciate the opportunity to speak on the government's overall fiscal plan.

The budget which deals with raising money and how it is spent and the borrowing powers which make up for the shortfall in revenue go together to make up the government's fiscal plan for the coming financial year. At least that is how an economist might explain it.

In reality, there is no plan to reduce the deficit to zero allowing us to address the country's mounting debt. The budget falls short of pointing out the means by which Canada is to get to ground zero: zero deficit.

As well, the borrowing bill, which has been and is the subject of debate in this Chamber, is usually explained as necessary to make up for the shortfall in revenues, revenues being less than expenditures. In reality the money borrowed has nothing to do with the shortfall in revenues. It is the failure of the government to cut its expenditures which necessitates a borrowing bill of this size.

This is a failure that will haunt us for years to come, for if ever there was a time when the people of Canada were ready to see tough decisions made and leadership shown, it was on February 27. However, the government, afraid that its standing in the polls might suffer, took the tried and true Liberal way out. It put off tough decisions for another day. If it puts these decisions off for more than three years, they will not be this government's decisions to make.

The budget can be compared to a bad science fiction novel or movie. It is lost in time; it is lost in space.

It is lost in time because it comes a year too late and proposes some tough measures, but even they are to start only next year and are phased in over a number of years. If they had begun this year and not been phased in they would have substantially reduced the deficit. This is a major complaint.

It is lost in the broad space or expanse of Canada because it does not meet head on the problems of our economy. It seems to be a classic case of misunderstanding the mood of the people of Canada with this budget.

The space in history, the history of making tough decisions was there for the finance minister and his merry band of followers from the finance department to enter but they declined. They chose instead to nibble around the edges of the problem rather than meet it with courage and a plan for the future.

This is not the type of budget we in the Reform Party would have brought down. This is not the type of fiscal planning the Reform Party could have entered into. It is for these fundamental reasons that I cannot support this budget or any of the bills that flow from it.

What then does the budget do? It raises taxes. The finance minister made grand gestures of self-congratulation for not raising personal income tax. Yes, he is right. He did not.

Instead, he imposed a tax increase for gasoline, a commodity consumed by Canadians rich or poor. As well, changes were made to RRSP rules so that those who receive severance packages when they leave their employment will only be able to contribute $2,000 to an RRSP instead of the current $8,000, harming their future plans for retirement.

The timing is off here as it is with the rest of the budget. Canadians are now entering an era when they are concerned that private pension plans or even the Canada pension plan will not meet their retirement needs.

The rate at which the $40 billion Canada pension plan is deteriorating surprises even those who researched and wrote the 15th statutory actuarial report which was recently tabled in the

House of Commons. The last such report was written and tabled five years ago. Between then and now the report author found that two of the primary reasons for the deterioration have been a doubling of the number of disability claims and a lowering of contributions because of job losses during the recent recession.

As a leading financial adviser and retirement specialist from Vancouver stated recently: "I now look at CPP in the same way that I view UI. We all pay it but many of us will never collect it".

Will the Canada pension plan still exist for baby boomers as they begin to retire 15 or 20 years from now? The chances of CPP as we know it today surviving that long are very slim. I suggest there are none. This reality caught our attention last month when the Liberal government actuarial report concluded that if CPP contributions are not increased and benefits continue as now legislated, the plan which today supposedly contains just over $40 billion will be gone by the year 2015.

This is not only a boomer issue. The future of CPP will have a greater impact on the generation Xers who are destined to struggle in the wake of the baby boomers for at least half their job seeking and working lives.

At present five Canadian workers support each retired CPP collecting pensioner, with middle age boomers making up the majority of today's workers. However, by the time boomers start to collect CPP there will only be two to three workers to support each pensioner. Will the generation Xers, who are having it tougher economically than their boomer parents, be willing or able to pay a lot more in CPP contributions to support their parents' public pensions?

If the government had seriously addressed this year's budget and made the necessary cuts, then Canada could be on the road to recovery and the future for our future senior Canadians would not look so bleak.

Canadians were looking for a tougher budget. If over the last 25 years governments had been responsible, if thousands of dollars had not been given away in unnecessary grants which have already been talked about in this House, if new programs such as multiculturalism had not been devised to initiate help to groups of people who have always been strong enough in their feelings and respect and pride in their distinctive culture to establish and fund their own commemorative centres and festivals, if the past governments had managed the taxpayers' hard earned dollars, their tax dollars instead of mismanaging them, and if the present government would seriously look at cutting programs which drain our resources and seriously cripple the government's ability to maintain necessary seniors programs, the government would not be so desperate to raise more revenue on the backs of those very Canadians who trusted the past Liberal and Conservative governments to spend those tax dollars wisely.

Mr. Speaker, I am beginning to think I am in front of one of the chatty classes I have had over the past 30 years.

The government had an opportunity to put in force measures which, although tough, would actually help the taxpayer and not increase taxes, or revenue in the form of more taxes. However, that is not the case.

What does the government do to collect a little more revenue? It changes the RRSP rules, another hidden tax. If we think that is bad, how about this? Lessen the payouts for unemployment insurance but not the premiums because the government wants to build up a surplus. Unemployment insurance is a payroll tax and by not reducing premiums, another hidden tax is involved. However, this tax-

[The Acting Speaker (Mr. Kilger)]

Order, please. I wonder if I could ask the co-operation of the House to allow whoever might have the floor the opportunity to be heard. Certainly, I am beginning to encounter some difficulty in hearing the member.

While the hon. member for Mission-Coquitlam still has two minutes remaining in her time, I wonder if she could clarify for the Chair whether in fact she will be splitting her time with a colleague.

[Daphne Jennings, Reform, Mission—Coquitlam, BC]

Mr. Speaker, yes, I will be splitting my time. I should have mentioned it beforehand. Thank you for trying to bring a bit of order back to the House.

The government has raised corporate taxes and imposed a tax on bank profits. Who does the government think will pay for these taxes? Maybe it does not know. I can tell everyone these taxes will be paid by the little guy, the consumer. Anyone who believes they will not be passed on to the consumer should immediately sign up for a reality check. There is only one taxpayer: the ordinary taxpayer like you and me.

It is my belief that the tax increases we have seen in the budget are an admission of failure by the government, failure to cut spending sufficiently. Above all, why would the government assume people are willing to go on through a tax increase, paying more for more government? Was the government not listening to the people of Canada? It cannot ignore the people for too much longer.

I am concerned about the long range effect of this budget. While the deficit reduction contained in it amounts to a first tentative step in the right direction, this reduction will be quickly eliminated if interest rates rise or the dollar does not remain strong. If we enter another economic downturn, all calculations will be off considerably.

I am concerned the government will not follow through on its plans to reduce personnel. No matter how governments try, and many have, to reduce the size of the public service, the bureaucrats seem always to prove more resolute in keeping their jobs than politicians are in getting rid of them.

Departments disappear or are amalgamated, but is there a reduction in staff? Not usually. If it does occur, it is usually because the public servant found another public service job in another department. There is no real reduction. We will be watching the government closely to see that it meets its reduction target.

What would the Reform Party have done in these circumstances? Unlike prior opposition parties, people actually do know what we would have done. We set it out quite clearly in the taxpayers budget. The taxpayers budget sets out exactly what we would have cut as far as programs are concerned.

By not following the Reform Party's plan, over $50 billion will be paid to service the national debt in 1996-97. The government's target of having the deficit lower than 3 per cent of the GDP is just nonsense. Either we have a deficit, or we do not. Either we believe it should be eliminated, or we do not.

We believe every effort should be made in the next three years to eliminate the deficit. Once the deficit is eliminated it allows us room to move, room to explore programs that would open up new doors for business and industry. More money would be put back into the economy.

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

Mr. Speaker, I listened carefully to the speech of the hon. member and I think that she certainly deserved our attention, as do all the other members of the House.

She spoke briefly about unemployment insurance, and it is on this subject that I would like to comment and ask a question.

In its budget, the government established a human resources development fund from the surplus that will be generated in the unemployment insurance fund. Does the hon. member not feel it would have been a much better idea to consider a quick reduction in unemployment insurance premiums so that both individuals paying their own premiums and business could enjoy the savings right away and put this money back into the economy? Does she not feel that approach would have a more immediate direct effect on employment than an artificial fund created solely to enable government to get around jurisdictions and intervene in a whole lot of areas under provincial jurisdiction?

Does all of this not strike the hon. member as a course of action that runs contrary to the federal government's fine words about really intending to reduce the size of government? Is it not actually going to increase intervention by the federal government in areas of activity that are not in its jurisdiction and where it has proven to be ineffective?

[Daphne Jennings, Reform, Mission—Coquitlam, BC]

Mr. Speaker, I would like to thank the hon. member for his question although I am surprised he heard anything I did say. I was having difficulty.

I must tell the hon. member the UI program should be exactly what it was designed for when it was first brought in. It is for temporary job loss. It should be sustained by the employees and the employers and only those people. I strongly think there should be no artificial fund. The size of government should be cut down.

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, I was listening to what the Reform member was saying, and I did not have much to add until she made her last point on the topic of the debt. Although the government is dealing with the debt, the way it is doing it is not to her liking. I agree with her. But, I have the impression that the Reform Party takes the following position: any person in debt will have to starve for the next three years.

That seems to be the case, and that is what I am having trouble understanding. Of course, we can cut year after year and try to reduce the debt, strive to reach the three per cent benchmark, but we cannot say, tomorrow, that we will stop eating. I would not be able to keep working, I would not earn very much and I would not be able to pay very much either. I would be interested in hearing how her draconian cuts would reduce over the next three years the some $30 billion deficit we have now and which is mostly caused by the debt, and I agree with her in principle that it must be done. But I would like to know more about her starvation ideology.

[Daphne Jennings, Reform, Mission—Coquitlam, BC]

Mr. Speaker, I thank the member who raised those interesting questions; certainly questions that boggle my mind.

If he would like a real in depth explanation he can get our alternate budget and it would certainly explain it.

There have been a lot of remarks in the House suggesting that people who suggest cutting things are mean, or lean and mean, or are miserable people, or do not care about anyone. I am sick and tired of this. This is a lot of nonsense.

The only way we will ever help anyone, the only way we will sustain medical health for the country, the only way we will help those destitute, those people who need the help, is to stop those who are taking who do not need it. We have to get serious.

No one knows any more than I do. I have been through serious problems. Fortunately I had enough strength to pick up and help myself but others around me were also there to sustain me. Never did I blame anyone for what had happened. I tried my best.

People have to be responsible. Those who cannot we have to help. The bottom line is if we do not get this deficit and debt in control the country will not be able to help anyone. We had better stop laughing about it and get serious.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I am pleased to stand today in what is a very solemn debate. We have been talking on and off about the budget since the Minister of Finance introduced it in the House. We need to begin very seriously asking questions on what is wrong and what we can do to correct it. It is time to lay aside the meaningless rhetoric and deal with reality.

One of the flaws in the thinking of governments past is they have assumed that deficit budgets are okay. In the next few minutes I would like to talk briefly about the urgency of reducing the deficit in order to stop adding to our debt.

A lot of Canadians are not well informed on the budget. A lot of Canadians are of the impression that because there are these cuts our debt is going down. That is not the case at all. Our debt is increasing.

I am not going to say we ought to stop decreasing it this year but we have a soft target which allows the debt to go on and on, even with this present plan if the government meets its stated goal, which the minister has said it will do. He has a neat little couplet which is normally not in my vocabulary. He said they will meet the budget deficit targets.

That is great, but what after that and where are we headed in the long run? I often say that Wayne Gretzky is one of the greatest hockey players but not because he knew where the puck was, not because he knew where it was going, but he knew where it was going to be. He has an uncanny ability to be at the right place. That was because he is able to think ahead. We need to start on behalf of Canadian taxpayers seriously thinking ahead.

Peter Cook in the Globe and Mail just before Christmas said: ``Our government problem is that we have politicians that have ignored deficits and debts for too long and even now put forward inadequate solutions. Rising rates make it less easy to postpone the inevitable. The level of government in Canada is simply too large for the private sector to support and must be cut back to what is affordable, and the sooner the better''.

I ask all listening to consider what wealth is. From what do we derive our standard of living in Canada, which we all enjoy bragging about so much? If we were to ask that question we would realize that primarily our wealth derives from the transformation of our resources into goods that are saleable around the world to ourselves and also to others.

Furthermore, we have people who provide certain services. For example, when I go to the dentist, the amount of material he uses is very small but I benefit greatly from his skill in fixing the problem I have with my teeth at the time.

We have these benefits that derive from creation of real wealth. No matter how you cut it, when we have a large burgeoning government, that is mostly a drain on the production of our wealth.

I admit there are areas where what government is doing is necessary. We have the transportation network probably most efficiently done by government. There are other things which government can do well, but it is not accurate to assume without challenge that unless government is doing it, it will not be done. I resent greatly the implication that the Reform Party's plan will make things worse for so many Canadians. That is not true. Our plan is to stop paying so much interest so that we have more money available for the things we value highly.

Why the hurry? I did a little spread sheet on our present fiscal situation and I took our current debt and I extrapolated it using a very simple assumption. This may not be accurate because we do not know what the future holds. I assumed an 8 per cent rate of interest and I assumed a 3 per cent growth in our economy, both of which are assumptions anyone can make but no one could really defend because we are not able to accurately predict the future.

Who would have ever guessed in the mid 1970s that the interest rates on mortgages would go from 6.5 per cent to 16 per cent? That was not predictable.

When we talk about our debt it is true that if the interest rates rise dramatically, we are captives. There is not a thing we can do about it; neither for our internationally held debt, nor for our domestically held debt because everybody who has lent Canada money will want it back or we will totally blow our credibility.

It is mandatory that we get our debt and deficit under control because with the government's plans, using the assumptions I have stated, 3 per cent growth, 8 per cent interest, by the year 2010, which at my age is right around the corner-when you get to be over 50 the years just fly, 15 years is nothing-our debt will have grown to one trillion dollars. Our annual interest payments, assuming interest is still then only at 8 per cent, will be $80 billion per year. That is $80 billion taken out of the economy just for interest. This is money that will not be available to help poor people, to provide health care and education.

One may ask what the big deal is on this. I did a little calculation and found if our total expenditures were to be brought down rapidly we would very quickly be able to pay off the debt. In other words, if we were able to reduce the rate at which we are adding to the debt to zero, we would call that elimination of the deficit, we would simply stop borrowing. Our plan calls for doing that in three years. If we could reduce the

debt, our interest payments would go down instead of continuing to escalate, which is so important.

We must remember it took the Liberals only 10 years approximately to increase the debt to $100 billion in the 1970s. However, according to the plan we have before us, it will take them only three to four years to add another $100 billion to the debt.

The plan the minister has presented will increase the debt by $100 billion in the next three years. That is not acceptable. It is a premise we reject and it is one which I think all Canadians should be very concerned about, particularly members of the House.

I would like to quote what was said to me by a voter, a taxpayer, from Edmonton Northeast. When we were discussing these things he said to me: "Where were our leaders in the last 30 years? Surely there are experts in the Department of Finance in Ottawa. Surely there are politicians who are businessmen who could think and see what was happening when they were presuming on the future with this borrowing way back then. What was it that motivated them? Where were they? What were they thinking?"

I challenge us all to start thinking right now.

[Jean H. Leroux, Bloc, Shefford, QC]

Mr. Speaker, I listened very attentively to the comments made by my colleague from the Reform Party and I would like to tell this House that the difference between the Reform Party and the Liberal Party is that the former apparently wants to make cuts and take away from this country's middle class and low wage earners, while the latter have hesitations. They do not know whether they should make the wealthy pay more taxes. They do not dare.

During the last recess, I had the pleasure of meeting with one of my constituents, a wise old man, who told me that the rich will end up paying for the deficit because the middle class is overtaxed and the poor do not have any more money. The question I want to ask my colleague is this: Does he not believe that the time has come to collect the money from those who have benefited the most from this system in the last 30 years, namely Canadians and Quebecers who have money today and do not pay their fair share, by taxing them?

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I am going to surprise my hon. colleague by saying I agree with him, there should be a fair tax system.

The Reform Party has said all along that our taxation system should be fair. We believe in a flat rate tax. We think it is certainly reasonable that if a person makes twice as much money he or she should pay twice as much tax. However, the real problem is one of spending.

When we look at what the Liberals have done in terms of the budget, which is what we are debating here, talk about a tax grab from the middle class, the poor and basically from everyone which is being given on the fuel. They tell us a 1.5 cent per litre tax. That is inaccurate. It is a 1.605 cent tax per litre because what we are forgetting is that on the tax is added the GST.

The present government likes taxes on taxes. I did a little calculation. Let us say I want to buy $1 worth of gasoline. I have to earn $2.78 in order to buy it. When I earn $2.78, $1.11 is income tax, leaving me with $1.67. Then I go to the pumps and 67 cents is needed for gasoline tax and I am then left with $1 of gasoline.

When I buy $1 of gasoline and pay $1.78 in tax that is a tax rate of 178 per cent and that applies to everybody, the rich and the poor alike. Everyone who benefits from our transportation system and everyone who drives to work pays that tax. That is a tax grab on the poor as well.

We think taxes ought to be reduced in total. Income tax should be a flat rate tax which is fair. All the areas in which people can avoid paying their fair share of taxes should be reduced.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I wish my hon. colleague from the Reform Party would take the good news to his party because, for the past 15 months, all we have heard the Reform Party suggest is that we continue to deal with the deficit and debt problem on the backs of the workers, the unemployed and the disadvantaged.

As for tax fairness, I would say this is another piece of good news he could pass on to his colleagues because every initiative put forth by the Bloc Quebecois at the finance committee to eliminate unfair advantages flowing from family trusts, to eliminate all those inequities in the tax system that have enabled very high income earners as well as large corporations with large profits not to pay a cent in taxes since 1991, every time we have come up with such an initiative, the Reformists have voted against our proposal.

So, before claiming that they want tax fairness, before claiming that they want to restore fairness in the tax system, I think that the hon. member should go back and check in his party what his party really wants.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, actually I do not need to check with my party. What I said today I got from my party. I think people have not been listening or have not been hearing. We promote tax fairness. We promote reduction of taxes by reducing government expenditures.

There is an important assumption that we must challenge. I believe both members of the Bloc and the Liberals go on the assumption that if the government does not fund it then it will not be done.

If the member were to examine our proposals in detail, he would find that working people are much better off under our proposals than they are under this one. We reject the supposition that it is efficient to send half of our money to Ottawa and there allow politicians and bureaucrats to divide it up and decide who is eligible to get it back.

We are saying that we need to bring back the sense of independence and self-sufficiency which is ultimately best for everyone, particularly the working class.

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

Mr. Speaker, it is always a pleasure to rise when you are in the Chair. I believe I have 20 minutes. You will understand that I want to make sure that this is indeed the case.

I am pleased to participate in the debate on the borrowing authority and, consequently, on the budget. This is the second Liberal budget and we must keep in mind the truly disastrous economic context which affects the unemployed. Once again, the Minister of Finance did not provide anything for the 1.4 million jobless. This budget is particularly unfair to Quebec, primarily because no concrete decentralization measures are proposed. There is no indication of a willingness, on the part of the federal government, to transfer to the provinces fields of jurisdiction which, in many cases, the provinces would be better able to look after.

In the case of Quebec, there is of course the issue of manpower training. As you know, there is a very strong consensus in Quebec, which includes chambers of commerce, unions, as well as the Quebec government. They all agree that Quebec would be better served if its government looked after manpower training which, as you know, is one of the links between social and education policies.

Yet, there is nothing in the budget that leads us to think that the federal government wants to fulfill the commitments it made earlier. As the hon. member for Saint-Hyacinthe-Bagot said repeatedly, this budget is unfair. It is unfair because nothing is done about family trusts. In this issue, the government acted somewhat like Star Trek, in the sense that it announced a measure, but "beamed it up" or rather beamed it forward to some time in the future.

Indeed, it was announced in the budget that the rules governing family trusts would be reviewed; however, the changes will take effect just before the year 2000. What is a family trust? It is a despicable scheme which legally allows a number of wealthy people to avoid paying taxes by using a truly outrageous provision. Yet, nothing is provided in this budget to tackle the problem.

It is also an unfair budget-this has been pointed out repeatedly but it does not hurt to say it again-since farmers in Quebec will lose $32 million, especially dairy producers, a sector which has undergone major consolidation at the instigation of the various governments we have had in Quebec in the past ten years. It is an unfair budget because farmers and dairy producers will lose $32 million, while western producers will receive an additional $2.9 billion.

One of the worst aspects of this budget, and this is one of the areas where the Reform Party and the Bloc Quebecois agree, is that it fails to provide anything in the way of tax reform. Take the banking sector. When we look at who benefited most from the 1982 recession and the subsequent recession, it is clear that the banking sector finished first. The big chartered banks in this country with their many branches across the country have made absolutely outrageous profits during the past few years. And they are the only ones that managed to emerge unscathed from the first and second recession.

Mr. Speaker, do you think the government would have had the guts and the social conscience to tax the profits and capital gains of the banks? Of course not. And that is probably the true measure of this government. A modest tax of $100 million is peanuts. Just look at the banks' profits in 1993-94 alone: $1.2 billion. That being said, we are convinced that the government could have asked the chartered banks in this country to contribute more.

What does the government do? It asks for a piddling $100 million, when the Royal Bank alone, the open-minded bank, made a profit of around $1.2 billion. The government could have asked the banks to contribute more, but it did not. Of course, one does realize there is a definite connection between the financing of certain political parties, and I am not naming any names but I am looking at them, and this timid treatment of the banks.

Another issue that gives cause for concern and which people are worried about, and no wonder, is transfer payments to the provinces.

The issue of transfers to the provinces, as you know, Mr. Speaker, is absolutely central, because it has to do with the balance of relations between the central government and the provinces. It is therefore an absolutely vital issue. Three characteristics are identified with respect to federalism, Canadian federalism, which some of your pages are studying in political science courses across the country.

It is a two level form of government, usually with a central government and a lower level of government, which could be provinces or townships, but there are two levels of government.

It is a system with a constitution providing that the governments are autonomous in all jurisdictions under their authority. A court, in this case the Supreme Court, acts as arbiter in these matters. Why am I saying all this? Because provincial transfers have been and remain the central government's traditional method of destabilizing provincial public finances.

How do you think individual provincial ministers of finance can manage to plan and establish coherent economic development policies, if the central government destabilizes public finances in every province by reducing transfers out of hand, unilaterally and without consultation? Allow me to give you some specific figures in this regard. The federal government will cut $2.5 billion in transfers to the provinces in 1996-97 and $4.5 billion in 1997-98.

These are not insignificant amounts and this will have a major impact on the provinces' ability to plan. In the case of Quebec, transfers will be cut by $700 million in the coming year. This means that Quebec will shoulder 27.1 per cent of the total cuts, whereas it has 24 per cent of the population. Things will not improve in 1997-98, because it will then have to shoulder $1.88 billion in cuts to transfer payments.

What is shocking in all this, and this is where the connection must be made, is that the present cuts to the provinces will obviously be on top of what has been cut since 1982. If you add up all the cuts in transfers to the provinces from 1982 to 1998, you will discover, hon. colleagues, that the provinces will be facing a shortfall of $48 billion. Therefore, Mr. Speaker, you will understand that this way of doing things goes totally against harmony in the federal system.

In any case, and the Government of Quebec is not the one saying so, two premiers from the west who, after reading the Martin budget, declared that it was the death knell for Canada, because there is no way for the provinces to develop coherent economic development policies if the federal government keeps on shamelessly cutting transfer payments. As we all well know, transfer payments are not something theoretical, not just rhetoric; they directly affect the provinces' ability to provide health and education services, and these services are at the heart of our citizens' quality of life.

However, I will focus my speech today on the pitiful trick played on the unemployed. The history annals of Canadian federalism for the early 1990s to the year 2000 will tell the story of the slow and despicable dismantling of the unemployment insurance system. Please remember that unemployment insurance is the only social "insurance" program offered by the Canadian government, "insurance" as opposed to assistance, that is, meaning that workers and their employers share the cost of the unemployment insurance system.

As you all know, in 1990, the Canadian government went as far as completely stopping its contributions to the unemployment insurance fund. This means that, as I speak, Canada is the only western country with an unemployment insurance system where the government does not contribute to its UI fund. This means that virtually all of the benefits paid out to workers are paid for by the work force and their employers.

We must acknowledge the fact that Canadian workers are in mourning. They have been since 1990, because from that point on Conservative and Liberal governments alike have derived a sadistic pleasure from dismantling the unemployment insurance system.

I would just like to remind you of what governments past have done, without, of course, forgetting the Chrétien government, which, led by the Minister of Finance, has disgracefully ganged up on the unemployed.

It all began in 1990 with Minister MacDougall, who dealt the first blow, who made the first attack on the unemployment insurance program. You will recall that in 1990 when the government decided that it would no longer contribute to the unemployment insurance fund, Mrs. MacDougall proposed an increase in the minimum qualifying period and a reduction in the maximum benefit period, with the overall result that, for the first time, a government reduced by 10 per cent its costs of financing the unemployment insurance program.

Not content with this initial assault on the program, in 1993 Mr. Valcourt-whom the voters, thankfully, did not re-elect-came back to the charge and lowered benefits from 60 to 57 per cent of insurable earnings. Remember that in the 1970s, benefits were at 70 per cent of insurable earnings. Now they have dropped to 57 per cent and are often below the poverty level. This is a disgrace.

What does this mean financially? Cuts in benefits of $850 million in 1993 and $1.6 billion the year after. The Liberals are obviously no better than their predecessors. And this is why the Bloc Quebecois has always said that, red or blue in Ottawa, the future is black without the Bloc. What has the Martin budget done for unemployed Canadians in 1994? Increased the minimum qualifying period and reduced the maximum benefit period. And we are not talking about 57 per cent coverage, but about 55 per cent. In 95 per cent of cases, we can expect claimants to get 57 per cent of insurable earnings. This is the kind of social solidarity that this government has decided to have with the unemployed. Did you think that the finance minister was going to stop there? Certainly not. The budget that has just been tabled talks about cutting benefits by $750 million in 1996 and 1.5 billion the following year.

In the early 1940s, UI was intended as a generous program on which all the provinces agreed. It was the first amendment to the Canadian Constitution. Look at what happened to unemployment insurance under the repeated attacks of the Tories and the Liberals. UI has become an exclusion program. In fact, the UI account, which posted a $3 billion deficit in the 1990s, will show a $5 billion surplus at the end of the fiscal year.

One would think that this government would have done the right thing, that it would have shown enough solidarity to use this $5 billion to create and maintain jobs for the unemployed. No, this government shamelessly attacked the unemployed. It will arrange for a surplus to be deposited in a deficit fighting reserve fund, although funding of the UI account does not have anything to do with the government's ongoing operations. The Liberal government has appropriated the Tories' shameful legacy.

Allow me to make a final point. We would have expected the Liberals, in accordance with the red book, to put forward defence industry conversion measures. As we know, 10,000 jobs are threatened in the coming days. That is no secret; it is a well-known fact. Both the aerospace industry and the provinces demand defence conversion measures. This demand is not exclusive to Quebec. What conversion measures did the government take? It did not put forward any concrete measure.

It is unable to plan for the future and use its leverage to help workers. There is no vision. This is an attack against the unemployed. That is why we have no qualms about presenting the golden raspberry award to the Minister of Finance for all he has done.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I realize that my hon. colleague from the official opposition would have needed more time to deal fully with the subject at hand. Nevertheless, I appreciated his hint at the government's failure to keep its word with respect to defence industry conversion. As we know, in my riding of Lévis, MIL Davie's shipyard suffered greatly from the government reneging on its promises, with nearly 2,000 jobs lost last year.

My question will not be on this. Instead, I would like my colleague to give me his thoughts on the Minister of Finance making cuts last year to the Unemployment Insurance Program to reach the financial targets set in his budget, and using the $2.5 billion surplus generated by these cuts to reach his targets. I would like his to tell me: is it right for the Minister of Finance to hit on the disadvantaged to reach his financial targets?

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

Mr. Speaker, you will have noted our colleague's high degree of social concern from his question and I want to thank him for it.

I think that, if we were living in a normal country, a country committed to showing greater solidarity with the workers, the government would have taken this money and used it to implement full employment policies. What is dishonest about the government's decision is that it gives the impression that cutting UI will reduce this government's debt, when in fact, since 1990, the government has nothing to do with UI, except for administration that it does not pay for naturally.

I think we should consider, and urge a number of organized bodies such as the labour movement, with which I understand you are rather closely associated, to consider legal action to have the courts overturn the government's decision to withdraw from the financing of UI while at the same time continuing to deprive workers of services to which they are entitled.

I think that, all together, in this House, we should try to figure out if these shameful and unacceptable measures could not be invalidated through legal action.

[Laurent Lavigne, Bloc, Beauharnois—Salaberry, QC]

Mr. Speaker, I listened with interest to the comments of the hon. member, who gave a good presentation on the Minister of Finance's budget, and who clearly showed that there is a world of difference between the Liberals in opposition and the Liberals in office. I am reminded in particular of Expro, a company in my riding which needs technical and financial support for its conversion. When the Liberals formed the opposition, they were adamant that conversion was the way to go, and they urged Mr. Mulroney to set up a conversion program.

The hon. member made an in-depth review of the Martin budget, and I would appreciate his comments on the discrepancy between the budget and what the Liberals said they would do when they sat in opposition.

[The Acting Speaker (Mr. Kilger)]

Before resuming debate with the hon. member for Hochelaga-Maisonneuve, I may remind the House that members should refer to a minister by his title. For instance, we should say "the Minister of Finance, the hon. Prime Minister", without giving their last name.

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

Mr. Speaker, some team, some question, would you agree? The opposition is in fine fettle.

That being said, I think the hon. member mentioned that the government had the perfect vehicle for setting up a defence conversion program. That vehicle is referred to in English as the DIPP.

The DIPP is the Defence Industry Productivity Program. In the eighties the program had a budget of about $300 million. The Liberals have emasculated the program to the point that next year, its budget will be only $21 million. Actually, the Federal Office of Regional Development, the Department of Industry and the Montreal Urban Community have set up a joint task force which is to make specific recommendations on defence conversion. With the modest sum of $25 million, it would have been possible to conduct market surveys and help businesses

that are involved in defence production to go the route of conversion.

In conclusion, I will say that, in the end, defence conversion is a matter of political will. Today we have the tools to make this happen. However, this government is acting in a very hypocritical way, and speaking out of both sides of its mouth.

Do not despair, the opposition will be there to remind the government of its promises, and we will keep up the pressure on this issue.

[Jean H. Leroux, Bloc, Shefford, QC]

Mr. Speaker, present-day Canadian federalism is a dead end sheet. In the year 2000, the cumulative deficit will be $800 billion, and Quebec Premier Jacques Parizeau said not so long ago that it was high time for Quebec to get out of this system, and that if Quebec decided to stay, their taxes would go up.

In his presentation the hon. member gave us a very clear picture of the current situation. What he said this morning is exactly what all Quebecers are thinking.

Is it not time for Quebecers to consider getting out, to consider doing what the Premier of Quebec suggested?

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

Mr. Speaker, I can only applaud the clairvoyance of the hon. member for Shefford who has an uncanny knack for predicting the future.

What the hon. member is saying is that in the eighties, when we went through the first referendum, scare tactics were used. Remember that at the time, the federal debt was $75 billion. They told us: If you leave the Canadian federation, you will end up with an economy that is not viable.

So we stayed. We stayed, and now we have a debt of $600 billion. What the hon. member is saying is that Quebec has everything it needs, together with its own economic infrastructures, to administer its own finances.

[The Speaker]

My dear colleagues, it being 11 a.m., pursuant to Standing Order 30(5), the House will now proceed to statements by members under Standing Order 31.

Silken Laumann

[John Harvard, Liberal, Winnipeg—St. James, MB]

Mr. Speaker, Silken Laumann says it was a nightmare and that she has been harshly treated. That is an understatement.

What happened to Canada's outstanding rower at the Pan-Am Games in Argentina was unfair, unjust and uncalled for. Let us hope that she was not a pawn in an international game of politics as is perhaps indicated by the premature release of her name before the official report on the incident.

Her story is already familiar to millions around the world. Silken Laumann came down with a cough and cold. As most people do, she took medication. She was told it was an approved remedy for athletes. That was wrong. It was a banned substance. Someone had goofed and it was not Silken Laumann. For that she and her team were stripped of a gold medal.

The Canadian Olympic Association will fight the disqualification. We think it should. Justice demands that Silken Laumann's name be cleared. Ms. Laumann is an honest competitor, known for her integrity and commitment to her sport.

We want her to know that all Canadians are behind her at this difficult time.

Greece

[Roger Pomerleau, Bloc, Anjou—Rivière-Des-Prairies, QC]

Mr. Speaker, tomorrow marks Greece's Independence Day. March 25, 1821 marked the start of the final lap in a long struggle against the Ottoman Empire, which led, a few months later, to the proclamation of independence in Epidaurus in January 1822.

Many people from this community now live here in Canada, and I would like to use this anniversary to briefly recall the debt we owe to the Greeks.

From Socrates to Plato, from Pythagoras to Hippocrates without forgetting Archimedes and Pericles, the Greek civilization has had such an influence on the evolution of thought that we still speak today of the Greek miracle. The Greeks provided the two pillars of modern world: science and democracy.

We offer our best wishes to all Greeks and all those who are Greek at heart on Greece's national day.

Sex Offenders

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

Mr. Speaker, the people in my riding of Okanagan-Shuswap have been especially concerned about an assault committed by a previously convicted sex offender near the beautiful resort area of Malakwa.

To express this concern, Sicamous council sent a letter to the justice minister which included the following:

Whereas persons convicted of many types of sexual offences will be repeat offenders upon release unless they have been given counselling and treatment to prevent further offences, therefore be it resolved that at the end of the prison term if that person has not sought counselling or treatment, and therefore in the opinion of the national parole services or prison authorities will reoffend, that person shall not be released from prison for parole or even at the end of their full sentence until such time as they will no longer be considered a threat to society.

I believe that local government demonstrates far greater concern for the safety of its citizens than anything demonstrated by the minister in Ottawa.