Debates of March 30th, 1995

Budget Implementation Act, 1995

[The Acting Speaker (Mrs. Maheu)]

Could the hon. member for Saint-Hyacinthe-Bagot repeat his question?

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

Madam Speaker, this is ridiculous. I am not going to repeat all that I said.

[The Acting Speaker (Mrs. Maheu)]

Fine. I was not sure if you were expecting an answer or not.

[Murray Calder, Liberal, Wellington—Grey—Dufferin—Simcoe, ON]

Madam Speaker, I rise to speak on Bill C-76, an act to implement certain provisions of the budget. I am reminded of how different one year in the life of a government can be. A year ago following our first budget we were roundly scolded by both the media and our constituents that we needed to do more to cut the size of government to address the deficit.

One year later we have listened, consulted and acted. Not surprisingly we have a budget that has been roundly praised by the media and our constituents as being pragmatic and realistic, a budget for our times.

There are times when fundamental changes must be faced. For Canadians 1995 is a time when choices and change are still possible without destroying the ideals or the principles we as Canadians hold dear.

The government came into office because it believed that jobs and growth must be the nation's top priority if we are to create a climate of economic well-being for all Canadians. To achieve our goal we must act now to restore the nation's fiscal health.

Over the next three years the actions in the budget will deliver upward of $7 or spending cuts for every $1 of new tax revenue. By 1997-98 the deficit could be brought below $19 billion if interest rates and income growth conform with the average private sector forecast rather than with our cautious assumptions.

After extensive review the budget overhauls how government works and what government does. We must redesign the role of government in the economy. We can no longer design programs with one hand in the taxpayer's pocket. The role of government should extend only to those things that government can do best, leaving the rest to those who can do it better.

The budget puts our priorities into action. Between this fiscal year and 1997-98 annual spending will have decreased by $25.3 billion in expenditure cuts. For example, annual spending will decrease by $1.6 billion in defence, $550 million in foreign assistance, $1.4 billion in transport, $600 million in natural resources, upward to $900 million in human resources development, approximately $200 million in fisheries, $900 million within industry, and almost $450 million in agriculture.

As a result of the cutback and reform of programs the public service will be reduced by 45,000 positions over the next three years, representing approximately 20 per cent of the total government workforce. This is not downsizing government. In my opinion it is right sizing government.

As mentioned, a key principle of the 1995 budget is to redesign the role of government in the economy. The decision to dramatically reduce subsidies to business shows that principle at work. The simple fact is that the subsidies often did more harm to businesses than help them as they fostered a relationship of dependence that had nothing to do with good business practices. That is why the budget cuts business subsidies by 60 per cent, from $3.8 billion last year to $1.5 billion by 1997-98.

Areas where subsidies will drop sharply include agriculture and transportation. We can no longer afford subsidies designed decades ago which today are actually restricting and restraining adaptation, diversification and competitiveness.

Western Grain Transportation Act subsidies are being eliminated for a savings of $2.6 billion over five years. However there will be transition measures. We will make a one-time $1.6 billion payment to prairie landowners and invest a further $300 million to help establish a more efficient grain handling and transportation system. As well we will co-operate with provincial agriculture ministers to develop a national whole farm package. It will encourage innovation and diversification while producing a 30 per cent reduction in federal contributions to agricultural safety nets.

The Atlantic freight subsidies are also being eliminated for a five-year savings of $500 million. This will be balanced by a five-year transition program, including help to modernize the highway system in Atlantic Canada and eastern Quebec.

Our cuts to subsidies extend far beyond the agriculture and transportation sectors. At Industry Canada subsidies will be cut in half, from $525 million in 1994-95 to $264 million in 1997-98. The remaining spending will focus on initiatives in high growth sectors in partnership with the private sector.

A new role for regional development agencies will see them focusing on small and medium size enterprises. However the assistance will rely on loans and repayable contributions rather than on direct subsidies. As a result subsidies from these agencies will drop from $700 million to $234 million over three years.

Subsidies to cultural industries are also being reduced, including an 8 per cent reduction to the postal subsidy. As well we are eliminating the Public Utilities Income Tax Transfer Act which returns to the provinces the taxes paid by privately owned utilities. As a result major energy subsidies will virtually disappear, dropping from $410 million to $8 million.

These subsidy cuts are vital components in restoring Canada's fiscal health. We also recognize that there are times and places where government can and should assist the private sector in today's fast changing global environment.

Nowhere is this more evident than in agriculture and agri-food where the government is committed to a growing, competitive market oriented industry that is profitable and responds to the changing food and non-food needs of domestic and international customers.

In support of its vision for Canada's agriculture and agri-food sector the government will, besides the changes already noted, provide $1 billion in credit guarantees for the export of grains and other agri-food products. The government will enhance trade and market development programs to support exporters and potential exporters through the creation of a new agri-food service, including the agri-food trade network, a new agri-food 2000 program, and the establishment of the agri-food marketing council.

As well it will streamline our research infrastructure and reallocate resources to matching investment initiatives up to $70 million per year by the end of the decade. That is $35 million from government and $35 million from industry, a dollar for dollar match. The government will allocate $60 million per year to enhance the sector's ability to respond effectively to an environment of new market opportunities and fewer subsidies.

The program will support better access to capital, new management skills and better infrastructure including improved access to information and technology.

It will reduce dairy subsidies and undertake consultation with industry on the use of remaining moneys to enhance the industry's competitiveness. Additionally it will eliminate the feed freight assistance subsidy in 1995 and redirect approximately $60 million over the next 10 years to encourage agriculture and agri-food development in Atlantic Canada, eastern Quebec, northern Ontario, British Columbia, Northwest Territories and Yukon.

Under the Farm Improvements and Marketing Co-Operative Loans Act the government is proposing to increase the amount of loan guarantees from $1.5 billion to $3 billion to assist in the process of adaptation and change.

The government's proposals in the agriculture and agri-food sector represent significantly the necessary change. With the current fiscal situation we must shift to activities that enhance the industry's ability to compete and succeed in the marketplace.

In conclusion, for too long governments have known the need for change, the need for renewal, but have lacked the will. The government has consulted with the people of Canada, including the agriculture community. I urge members to pass the bill.

[Len Taylor, NDP, The Battlefords—Meadow Lake, SK]

Madam Speaker, I appreciate the opportunity to ask a question of the member who during his remarks placed a considerable amount of emphasis on agricultural issues, particularly the elimination of the grain freight subsidy which the budget and the bill bring forward.

The single most devastating element of the budget is the elimination of the Crow benefit, the transportation obligation of the government with respect to ensuring that we have agricultural exports of grain.

The member and the government are aware that regardless of what diversification occurs on the prairies and regardless of what value added industries are in place, anywhere from 60 per cent to 80 per cent of grains grown on the prairies will remain for export. As a result the increase in costs for freight will be substantial and the reduction of income for farmers and the communities they support will be substantial.

I know the government has spent some time in calculating how it would eliminate the subsidy and save the departments of transport and agriculture some money. I wonder if the member has seen any analysis or evaluation that points to or substantiates the evidence the government says is available concerning the long term implications of the withdrawal of the Crown benefit from the prairie economy. Has the member seen any analysis, evaluation or study regarding what the elimination of the subsidy will mean to the prairie economy?

[Murray Calder, Liberal, Wellington—Grey—Dufferin—Simcoe, ON]

Madam Speaker, I would like to respond to the hon. member, that I have not seen a report that means to say these studies have been completed. This is an ongoing procedure right now. We have come up with $1.6 billion to anticipate any property loss that will be experienced by prairie land owners and there is a $300 million program there to soften the blow also.

The issue we really have to look at is the commodity of moving potash in the prairie provinces and moving the commodity of wheat. The transportation costs for the two by the railways has to be the same. The farmer cannot carry the extra cost of having his wheat be more expensive to move and still be competitive on the world markets.

That tells me there has to be a unified front of all the industry players. Everybody has to come up with the most efficient, effective way of moving grain for the international markets. That is the process going on right now.

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

Madam Speaker, since the hon. member is so fond of figures, I want to ask him if he realizes that the February 28 budget does nothing to improve the medium term indebtedness of the federal government.

If the hon. member did examine the figures and the assumptions contained in the budget, I want to ask him the following questions: What will be the average annual growth rate of tax revenues, for the next three years, based on the Minister of Finance's budget? What is the average growth rate of operating and program expenditures anticipated in the Minister of Finance's budget? Finally, what is the expected indebtedness level of the federal government in 1997-98, according to the Minister of Finance's budget?

If the hon. member looked at the real consequences of the budget of his colleague, it might be a good idea for him to answer these three questions.

[Murray Calder, Liberal, Wellington—Grey—Dufferin—Simcoe, ON]

Madam Speaker, if I could give the hon. member answers to question like that, I would be a millionaire in the stock markets.

We have listened to the forecast from the private sector as to what the anticipated growth will be for this year and next year. Our assumptions have been lower than that.

I will crunch some figures. We started 1994-95 setting our budget figures at $39.7 billion. That was to be the deficit. By 1996-97 the figure is being set at around $24.3 billion. That is a $15.4 billion cut over two years. We know we are adding to the accumulated public debt which is also costing us.

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

Madam Speaker, first of all, I am delighted with this opportunity to speak to the amendment moved by the hon. member for Saint-Hyacinthe-Bagot.

Since we first came to the House of Commons on October 25, 1993, you have come to recognize the spirited style of the hon. member for Saint-Hyacinthe-Bagot. Although style is not necessarily a guarantee of competence, I think the hon. member for Saint-Hyacinthe-Bagot passes the test. He is both spirited and competent, and I want to commend him on the way he defends the interests of our party and the interests of Quebec.

This motion, and I will read it quickly, says that the hon. member moved, seconded by the hon. member for Châteauguay,

That the motion be amended by deleting all the words after the word "That" and substituting the following therefor:

"Bill C-76, an act to implement certain provisions of the budget tabled in Parliament on February 27, 1995, be not now read a second time but that it be read a second time this day six months hence."

I must say that I do not claim to be as competent as the hon. member for Saint-Hyacinthe-Bagot in this particular area, so I asked him to explain the purpose of this amendment. For the benefit of our listeners, not necessarily in this House but outside the House, I would say that the purpose of this amendment is to let the Minister of Finance go back to the drawing board, to ask him to go back and do his homework.

I have a 16-year old son in high school, and when he shows my wife and me some work that is not up to par, we tell him to go back and do his homework. That is the purpose of the amendment: to ask the Minister of Finance to go back and do his homework.

Why? Because there are a number of questions worth asking Canadians and Quebecers who are listening. Is this budget realistic when fails to mention $6.6 billion in unpaid taxes which are not recovered? Is this budget realistic when it is so reluctant to tax Canada's big corporations? According to the statistics, between 62,000 and 70,000 companies in Canada make a profit and do not pay a cent in taxes. Is that normal? Should a democratic society like ours accept this double standard, when the middle class and the poor are getting poorer and the rich and the big corporations get richer at their expense?

Is this normal? Is this acceptable from a social point of view? I am convinced that all these people who are having lunch in their kitchens, every time they get the mail and see their bills piling up and interest rates go up, all these people wonder whether they will be able to afford a new car two or three years from now. Will this young couple be able to afford a house two or three years from now, a roof over their heads? Will they be doomed to live in poverty? Will our prospects seem better two or three years from now, or are we going to go back into a recession? These are considerations that this legislation totally ignores.

Something else. Are these tax loopholes normal? Is it normal to see millionaires who do not pay taxes and, in some cases, draw unemployment insurance benefits? That takes some doing. In any case, on the Île d'Orléans and the Beaupré flats, people say: "C'est le bout", which means adding insult to injury.

Family trusts. When he brought down his budget on February 27, the Minister of Finance announced that the family trust system would be abolished. He forgot to point out it would be abolished in 1999.

This means, if I am a very rich family that has a family trust, I have until 1999 to adjust to the new rules and to find other tax loopholes, other investment vehicles so that I can continue to shelter these amounts. So the question is whether all this, whether this budget is normal, acceptable and realistic in the Canada and Quebec of 1995.

When I go back to my riding on Fridays and on the weekends, people often stop me at the corner store or at the shopping centre to tell me that it did not hurt as much as they expected. This may be true, but we have to look beyond the words to see how vicious the budget was. I tell these people to wait for the Quebec government to bring down its own budget to see how the federal budget will affect them.

And if I was talking to the people of Ontario, I would tell them to wait and see what kind of problems the Ontario government will have. The budget includes a decentralizing measure whose only aim is to offload part of the deficit onto the provinces and make them pay for something else. We will see how much Ontario and Quebec have been affected, when they bring down their budgets. The finance ministers of the two provinces have already mentioned this, in any case.

It is almost a truism to say that the real budget promised this year will be carried over to next year, once again. Why is the federal government waiting until next year, we might ask? Is it expecting the Quebec referendum to be held in May or June and therefore putting off the offensive cuts in health care, education and social assistance until afterward? I ask you. Is this not the case?

The Minister of Intergovernmental Affairs, however, promised the introduction of flexible federalism. Is this flexible federalism? Now we have a real idea of the cost of the status quo and of a no vote in the upcoming referendum.

Coming back to transportation, which is the field with which, as my party's critic, I am most familiar. I said, in reaction to this budget, that the federal government had decided to hold a garage sale with Transport Canada. Why would I say such a thing?

I said it because the Martin budget announced program review cuts of $1.1 billion, or 50.8 per cent of expenditures between 1995 and 1998. If we include the cuts from the preceding budget, Department of Transport spending will be reduced by $1.4 billion between 1994 and 1998. In fact, the measures in the Martin budget will allow the government to save $2.6 billion in the Department of Transport over three years as a result of the program review.

We should look at what makes us think that the government is getting out of transportation. Well, there are the moves to privatize announced in this budget, the planned commercialization of the air navigation system. First of all, let us be clear that most of the employees affected by rationalization in the government will be transferred to the private sector. A non-profit corporation will be set up, looking after the 5,800 employees now working for the air navigation system.

I would remind the hon. members that our party is not necessarily opposed in principle to the creation of a non-profit corporation in the move to commercialize the air navigation service. However, I and my party still have questions about this plan that we would like answered. Among other things, what would be the value of the assets transferred and what would the transfer cost? Before giving our full blessing, we will need answers to the questions that we will be asking at the appropriate time.

The second sector in which the government has announced plans to privatize is Canadian National. It will be recalled that the report of the government group, composed entirely of Liberal members-no members of the official opposition or the Reform Party were included-recommended that before CN could be put up for sale, its debt should be reduced, its profits increased and the network rationalized, among other things.

Again, it should be pointed out that CP's offer to buy CN for $1.4 billion was totally unacceptable. This point was debated, and we had the opportunity to agree with the government that offering $1.4 billion for CN's assets was totally unacceptable. We do agree on that.

It remains to be seen, however, how much CN's privatization will actually bring in. Let us not forget that CN is the property of Canadian and Quebec taxpayers. So, it should not be sold at bargain price to friends of the regime or those who make donations to the Liberal campaign fund. In that regard, the official opposition will play its role as a watchdog, to see if CN's purchase price reflects its true value.

The Bloc Quebecois is now the only party defending the rights of the workers, including the right to strike in Canada, as evidenced by the NDP's failure to show up last weekend, when special legislation was passed to force resumption of operations in the railway industry. So, we will have to make sure that the rights of CN workers are not trampled in the privatization process, that their rights will be maintained. We will certainly get to talk about this issue again.

Also contemplated in this budget as part of the privatization effort is the commercialization of operations under the national airports policy. A task force was appointed by the Government of Quebec to provide assistance to those municipalities and local groups who wish to undertake negotiations with Ottawa on this subject.

I would like to take this opportunity to congratulate Quebec's labour minister, Jacques Léonard, on taking a very worthwhile initiative in support of municipalities which may be facing airport privatization or even closure, because the problem has not been resolved. Considering that the airport in Sept-Îles lost $1.9 million and the one in Baie-Comeau, $1.2 million, while in Val-d'Or the airport is also running on a deficit, we have to ask ourselves if municipal taxpayers will be able to absorb these deficits?

It is important to bear in mind, when the federal government invests in our regions, these funds are not gifts to us. As a matter of fact, it is our money because, as far as I know, Sept-Îles residents receiving services from the federal government which is building an airport pay federal taxes through automatic payroll deductions or, in the case of professionals, make tax payments, so they are entitled to receive services from the federal government.

A fourth target for privatization in this budget is the motor vehicle testing centre in Blainville, which should remain in the hands of the government but whose operation will be handed over to the private sector in the course of this year. Negotiations are apparently under way. On this particular subject, we reserve comment as we have received information regarding some goings-on that are not very-I do not want to make a religious comment, but my colleague from Chicoutimi is suggesting that I should say not very kosher.

It is true that, like the hon. member, I come from the Saguenay. There seem to be some dubious goings-on with regard to this operation, but I cannot go any further because I want to save this for questioning the Minister of Transport in due course.

This budget provides for the revocation of the Western Grain Transportation Act and the elimination of a $560 million subsidy. This subsidy created, once again, a double standard in Canada, especially in the railway sector.

We realized that in the railway sector-and this comment does not apply only to Quebec-, there are two different criteria to determine the profitability of rail lines in Canada: everything east of Winnipeg had to be profitable in order to survive and continue operating, while everything west of Winnipeg was considered to be a subsidized service. This in turn led to some very strange things. They even discovered that some trainloads of grain were shipped to Vancouver via the port in Thunder Bay just to qualify for the subsidy.

I remember when we were kids and we used to play Monopoly. After going around the board, we would pass "Go" and claim $200 before continuing to circle around. This truly reminds me of a game of Monopoly.

By eliminating this subsidy, the government will put an end to this game of Monopoly. We would like to be supportive and say that this is a good measure, but there is always an unfortunate aspect. In this case, it is the fact that the budget provides compensation-and I hope that farmers of Île d'Orléans and the Beaupré shore will not choke when they hear this-to the tune of $2.9 billion to western agricultural producers.

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

Untaxed.

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

Untaxed, the hon. member for Saint-Hyacinthe-Bagot just pointed out.

We have to ask ourselves whether it is normal or acceptable, in 1995, for a democratic society to implement such provisions. This is why westerners have not been too vocal. They do not complain too much about the fact that the Western Grain Transportation Act will be repealed, because they know that they will get $2.9 billion in compensation.

I say to Quebec agricultural producers: "Put on a smile, the federal taxes you pay will help your competition". These subsidies will help western producers to change their production, and who is to say that they will not replace their grain production with meat, poultry or dairy products. And they will do it all with your federal taxes. This is incredible.

The bill also repeals the Atlantic Region Freight Assistance Act. Subsidies totalling some $99 million, and perhaps as much as $108 million, depending which of the two figures I have is accurate, are provided for the region located east of an imaginary line called the Jackman line, in the Beauce region, including the Gaspé peninsula and all of Atlantic Canada. Again, we are talking about subsidies totalling some $100 million.

This program will be eliminated. As a transitory measure, the budget provides for a five year, $326 million transportation adjustment program. Bloc Quebecois members representing eastern Quebec will probably express their views on this issue, since their region will be eligible for the moneys which will be made available to either improve the highway system or support programs for secondary or tertiary processing.

In any case, I represent the riding of Beauport-Montmorency-Orléans and I am not directly concerned by this issue. However, I think that the residents of eastern Quebec, the lower St. Lawrence region, the Gaspé peninsula and the riding of Bellechasse are in a good position to know how this adjustment fund could be used.

I did meet business owners from that region who told me that, sometimes, this subsidy was ineffective-

[The Acting Speaker (Mrs. Maheu)]

I am sorry to interrupt the hon. member, but the period for debate is over. We now move on to questions and comments.

Since there are no questions, we resume debate. The hon. member for Egmont.

[Joe McGuire, Liberal, Egmont, PE]

Madam Speaker, I will be sharing my time with the hon. member for Algoma. I am happy to have the opportunity to speak in support of Bill C-76, an act to implement certain provisions of the budget tabled in Parliament on February 27.

I speak in support of the bill. I commend the Minister of Finance for the excellent job he has done in developing a budget that has been embraced by an overwhelming majority of Canadian people and international money markets.

On the one hand there have been complaints, as we heard from the Bloc Quebecois, that the minister went too far. On the other hand the consensus of the Reform Party is that we did not go far enough. However, the general consensus of Canadians is that the budget was a reasonable and fair effort to address the problems faced by the nation.

The people of Canada indicated very loudly and clearly that they wanted the minister to move decisively to address the problems of the debt and the deficit. They wanted to see a definitive plan by which the country could be moving toward a balanced budget and beyond to a surplus budget. Canadians also indicated that they did not want any increases in personal income tax, and there was none.

I am happy to say that the fundamental thrust of the budget addresses in a fair, equitable and balanced fashion the demands of the Canadian people. The budget responds to the need to put Canada's fiscal house in order. Granted, there will be some pain but I believe that the burden of deficit reduction has been distributed fairly. The confidence of the Canadian people is being restored as they realize spending is tightening up and that they will be getting better value for their tax dollar.

Many of the provisions in the budget have already been dealt with. Those remaining are being handled today with Bill C-76. However the message is clear and the message is consistent. The government is getting its own house in order. It is downsizing. It is focusing on cutting expenditures and not on raising taxes.

The targets set by the Minister of Finance indicate that we are moving toward the much desired position of a balanced budget. It is reassuring that we are moving in this direction in a fair and humane fashion. We must never lose sight of the fact, though, that some parts of the country are not as economically advantaged as others.

The principles upon which the country was founded require that the federal government maintain a program of redistribution of wealth so that no Canadian should have to endure diminished social security simply because he or she lives in one province as opposed to another. One of the main standards by which we are measured against other countries is the degree of caring and compassion we show to one another. Less fortunate Canadians must be protected.

I realize the system of federal transfers must be reformed. It must become more efficient, more effective and more sustainable. Without this kind of change our capacity to fund would be seriously constrained, maybe even terminated. Some critics say that the proposed changes which consolidate the EPF and CAP into the Canadian social transfer put some social programs at risk. I suggest that without a sustained effort to address our deficit and debt problem the same social programs will be put at even greater risk.

However, in my province of Prince Edward Island there is considerable concern about the possible effects of the new CST. I am sure the Minister of Finance understands that the fact a province has more flexibility and more capacity to be innovative is of minimal value if the resources, the dollars, are not available to work with.

When the minister is negotiating with the provinces I am sure he will keep this in mind. Though the budget document indicates that national standards especially under the Canada Health Act will be maintained, there is still concern in economically disadvantaged areas that there could be some difficulties encountered. It is encouraging that included in the process of change is a commitment to a co-operative approach whereby a new federal-provincial fiscal relationship will be established.

One area about which Canadians were quite vocal was taxation. They wanted no increase in personal income taxes, and there was none. They wanted no changes to RRSPs, and there was virtually none. They wanted health and dental plans left alone, and they were left alone. They wanted big business to pay a fairer share. This has happened with increased taxes on large corporations, a surtax on corporate profits, and a tax on deposit taking institutions.

The public got hit with a small tax it did not particularly want, but I have not heard many complaints about it. That was the 1.5 cent per litre tax on gasoline.

Overall, for every $1 in new revenue the government cuts $7 in spending. That ratio is a fair and balanced way to approach our deficit and debt problem. It is also reflective of the sentiments of the vast majority of the Canadian people.

One of the areas of budget cuts that did impact negatively on P.E.I. involved the transportation subsidies. The cuts to the freight subsidies will be supplemented for a number of years with transitional funding in the amount of $326 million. There were cuts to the dairy industry. The dairy people did expect some cuts there, especially when they saw the Western Grain Transportation Act being abolished.

One thing not counted on in the budget was the hit from Human Resources Development Canada whereby the farmers will suffer the loss in the agriculture employment program. Hopefully over the next few weeks we can develop a program which will ease the burden on the farmers as they ease out of this well used program.

Atlantic Canada is sharing in the pain of deficit reduction. Two items in the budget which had relatively cosmetic treatment, which would seem to be due for major surgery over the next year, are seniors benefits and UI. I am pleased the government is renewing its commitment to seniors so they will have a system of protection that is fair and reliable.

In order to do that the CPP, OAS and GIS must be sustainable. In making the changes that will make it sustainable I asked the Minister of Finance to keep in mind concerns such as those expressed by John G. Bates of Etobicoke. He said:

I'd gladly trade all the benefits that I'm supposed to be getting as a senior for a return to a level playing field for those over and under age 65. -return my right to work beyond age 65-allow me to be eligible for employer paid health and dental plans-allow me to get tax breaks allowed others through RRSPs and work related deductions and credits.

Discrimination because of advancing age is the last bastion of the bigot.

I would caution the Minister of Finance and the Minister of Human Resources Development that frequent UI users are not automatically abusers. In my riding the main industries are fisheries, agriculture, tourism and forestry. They are all seasonal. Workers in these industries are needed every year. Some of them cannot simply be retrained or shipped out to higher employment areas.

I want to use a quote from the columnist Peter H. Nicol in the Ottawa-Carleton Review :

The most significant word to come out of the federal budget speech is the word change. Not the millions of dollars slashed here, the millions of dollars promised there, numbers which are virtually meaningless to those of us who can't balance our cheque books. The word change was the crux of the matter, for it was the first indication that the federal government was prepared to face an issue that the public had been aware of for some time; that is to say that if Canada is going to survive in either the financial or political sense we must make fundamental changes both in our political structures and in our personal lives.

The change the Minister of Finance talked about was not so much in terms of dollars, although they will play a role, but more in the philosophy of government. The minister asked what role the government should play in the lives of the people of the country and the answer he received was less.

Paternalistic government seems to becoming a thing of the past with the government once again becoming a tool instead of a solution. That is no bad thing.

[Translation]

[Gilbert Fillion, Bloc, Chicoutimi, QC]

Madam Speaker, I listened carefully to the hon. member's speech. He started off by saying that one of the objectives of this budget was to put the government's fiscal house in order, in a way that is fair and equitable.

I wonder what he means by fair. Does he realize who is going to bear the brunt of all these budget cuts? The provinces, which will be stuck with billions of dollars they will have to raise themselves.

Young people will be affected by cuts in a number of employment programs and in the money required for post-secondary education. Cuts will also affect the public service, but only the base, not the higher-ups in their ivory towers, with the biggest paychecks and the biggest expense accounts. This morning we heard about the trips these officials make. Not the people who work at the bottom but those who are up there in their ivory towers in each department, the generals who are chauffeured around in their limos. They are not affected by the budget.

I am also thinking of farmers. The hon. member said a few words about them in his speech. Yes, farmers will be affected by cuts to employment and other programs.

I am also thinking of the unemployed. This has almost become a dirty word to members opposite, because to them, the unemployed are just a lazy bunch of beer drinkers. Since last week, they are cheaters as well, and an army of public servants has been recruited to try and recover negligible amounts, while we do not even bother to recover $6.6 billion in taxes outstanding. Most of this amount is owed by large corporations.

When the hon. member talks about everything being fair and equitable, I wonder at whose expense. What is so equitable about it, if everybody can use family trusts and tax loopholes to shelter their money?

Not once did the hon. member mention job creation. What job creation programs has this budget proposed, especially for young people?

[Joe McGuire, Liberal, Egmont, PE]

Madam Speaker, I thank the member for his question.

As we read the newspapers over this past month and a half we saw provincial government after provincial government, New Brunswick, British Columbia, Alberta, Saskatchewan and probably tomorrow Prince Edward Island, coming in with balanced budgets.

The hon. member says we are offloading to the provinces. Is it fair for the provinces to expect the federal government to subsidize the provincial balanced budgets and not address our own budget problems? If he answered that honestly he would say no. We have a major budget problem, not only an accumulated debt but in our annual deficits.

We see provinces balancing their budgets. We know most of the provinces receive transfer payments of one sort or another. They are looking very good in front of their people and getting all kinds of support and applause for doing so. A lot of the money to those provincial governments is coming from the federal government.

I do not think any fair minded provincial premier would say we should not address our budget deficits at all; that we should continue sending money to the provinces and to individuals that we do not have and have to borrow year after year.

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

Madam Speaker, I am pleased to follow my colleague, the member for Egmont, in participating in the debate on our most recent federal budget, a budget which speaks to a whole new attitude toward governance, a new attitude by the people of Canada because they see good leadership.

After many years, finally again they are seeing good leadership in their government; the kind of leadership that breeds confidence. Even though Canadians are having to accept a share in the national effort to reduce our annual deficit and ultimately the debt, they recognize it is a small price for putting the country back on track.

Some of our critics take issue with jobs and say we have not addressed that. Fundamentally the budget is about jobs. We cannot properly take our place on the world stage if our financial house is not in order.

When our finance minister was faced with the challenge of creating a budget, he had to deal with the view of our nation from outside and from within its borders. The view from outside

was we had to deal specifically with the problem of our deficit and debt. If we did not we would pay the price over the short, middle and long run with higher interest rates, more instability with respect to exchange rates, more uncertainty with respect to inflation.

The international marketplace, whether we like it or not, does influence the domestic marketplace. Our finance minister-great credit due to him-has found that delicate balancing point between dealing with the need of the international marketplace to have confidence in the future of our economy while at the same time respecting the need of individual Canadians and their communities to have confidence in their government, to know their federal government is there standing behind them even though we have had to take difficult measures at this time.

No doubt we face more challenging budgets in the years ahead. I can refer to a recent Angus Reid poll that indicated some two-thirds of Canadians who were polled support the budget.

They have concerns. My constituents of Algoma are like other Canadians. They support the budget but they know they will feel the effects one way or another. The budget was fair because Canadians will feel it but they will also know and feel those efforts are worth the trouble.

Our finance minister in finding that balance has created a situation in which the cuts are as evenly spread across the country as possible without hurting the most disadvantaged. As the member for Egmont emphasized, he did it without increasing personal income taxes. That is of great credit to him. He listened to Canadians. He listened to the finance committee, which held prebudget consultations last fall.

I am honoured to be a member of that committee. When we listened to Canadians last fall from all areas, they told us in no uncertain terms we have to do something with the deficit.

The absence of whining among the witnesses was remarkable. The absence of whining after the budget is remarkable. Canadians understand something had to be done. It is testimony to the quality of leadership that the budget met the objectives of the international community and the objectives of most Canadians.

The finance minister had to respect the traditions of the country. One of the most fundamental traditions is the network that is our social safety net. It is one of the features of our country that sets us apart in this world. It is one of the features of this country that makes us one of the most desirable nations in which to live.

All of us are aware the safety net is under review and we are expecting legislation later this year. The best way to secure the safety net is to have a strong and vibrant economy. The government and our finance minister have done just that.

I want to address some of the things my constituents will have to face. We have a transparent government. We consult with people and we share with them what needs to be done.

For some, their deepest worries are about pensions. They need not worry because the minister has done nothing to create concern in that area. In fact, he virtually has not touched the whole issue of RRSPs.

My constituents will have to share with Canadians everywhere as we cut expenditures. Some of those areas include the string of several dozens of small craft harbours in my riding of Algoma in northern Ontario. These are small recreational harbours and some not so small. They have developed over the last 20 or so years in support of tourism in the marine industry.

This government is not throwing out the baby with the bath water. What this government is saying to the provinces and in my case to the local governments: "Work with us, let us find a way to continue these local facilities. Let us do it in a way that gives you more local control over these facilities".

I have spoken to a number of municipal leaders in my riding. The response has been very positive to this government's initiative to say: "Let us partner with you. Let us preserve these facilities. Let us work with you so the local governments can take these over and manage them themselves, instead of having management from Toronto, Ottawa or elsewhere".

Many of my constituents had concerns about the federal RRAP program, which is a CMHC program that assists lower income people with needed home repairs. To the credit of this government the program has not been cut. I want to assure my constituents in that regard. The funding for the rural residential assistance program which was committed in the 1993 campaign is still there. Unfortunately there was a large backlog created in that program because the previous government cut the program. Now many people are lined up who need important work done on their homes so they can safely and healthily live in them.

There is a federal mining research laboratory in Elliot Lake. It is a CANMET lab. Likewise with this lab, the federal government did not say: "We are closing the doors. This laboratory has to be closed because the mining industry in the community is on the verge of total closure". Instead, the federal government has said to the community: "Let us partner. Let us find a way to attract other research into this facility so we can make a more viable research effort in this community. Let us partner with the province; let us partner with the private sector and others to create a viable situation for mine related research and other kinds of research in this community".

The government did not take the old hatchet to programs like we have seen previous governments do, when they had the nerve to even try. When they did do it, it was done without thinking. This government did not and does not do that. A tremendous

amount of forethought has gone into the planning of the required adjustments needed to the finances of this country.

The budget sets us on the road. It is a complement to last year's budget which I believe will lead to a balanced budget in a few years time. It will cause investment, jobs and all the other fruits of economic growth and strength this country and the people of Canada deserve.

[Gilbert Fillion, Bloc, Chicoutimi, QC]

Madam Speaker, I congratulate you on your splendid work in the chair. I listened attentively to my colleague and was surprised by his statement that Canadians across the country expressed confidence in this budget.

I am sure my colleague has not visited Quebec in a very long time, because he would have heard for himself what Quebecers think of the budget. It is easy, of course, to say that we will all have to make small sacrifices, but, it will be those already most disadvantaged, such as the seniors, who will be making most of them.

You know, in a region such as mine, the Saguenay-Lac Saint-Jean region, where unemployment is very high, young people are forced to go elsewhere just to try to find work-unsuccessfully. When we see this happening in pretty well all the regions of Canada and cuts being made to transfers to the provinces, we have to assume that the government does not care about educating young people.

My question concerns these transfers. Does my colleague realize that most of the budget cuts to transfer payments for health care and post-secondary education will be made in 1996, 1997 and 1998? This year's cuts, even though they will hurt, will be smaller than the ones in the years to come.

What is the government's strategy here? Instead of creating jobs, it is pursuing a strategy of showing Quebecers that federalism is effective, which is not true. It is trying to delay the effects of the budget until as long as possible after the referendum.

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

Madam Speaker, I thank the hon. member for Chicoutimi for his comments and question.

I visit Quebec often. When I am in Ottawa I live in Quebec. That should put his concern in that area to rest.

[Gilbert Fillion, Bloc, Chicoutimi, QC]

Where?

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

Near Wakefield in the beautiful Gatineau hills.

The hon. member talked about the transfers and what the federal government is allegedly doing to impair the ability of the provinces to do their job. To spend $63 million and counting on a referendum campaign is not exactly the wisest use of money. I submit to him that Quebecers would like the provincial government to focus its attention on economic issues and not so much on the sovereignty campaign. His message and his question should more fairly be put to his provincial counterparts but nonetheless, I will answer his question.

The strategy is quite transparent. Through the proposed CST, the Canadian social transfer, it is proposed through block funding to give the provinces more jurisdiction over health, post-secondary education and social services within a framework of some form of national standards to be agreed on with the provinces.

There is a strategy. It is transparent. It is obvious. I submit that the member for Chicoutimi should really discuss this with his provincial colleagues.

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

Madam Speaker, in rising to speak to Bill C-76, the budget implementation act, I want to make it clear from the outset that the Reform Party will oppose this bill as a whole.

This bill in some ways is like Bill C-68, the gun control legislation in that it is a bill with more than one part. Some of it is wholly unacceptable, but other parts with some minor changes would be acceptable to the Reform Party of Canada and to me.

Reform currently has a motion before the House to separate the gun control bill into two parts so that we could examine each main idea on its own merits. I wish we could do that with this bill as well. Bill C-76 is an omnibus bill dealing with more than one subject at once. There are public service issues. There are transportation and federal-provincial transfer issues and so on.

Since I am fortunate enough to be critic for renewal in the public service, we have examined the areas which deal with the public service. I have found some things I like and some things I do not like one bit. I am here to say what we like and what we do not like about the public service portion of this bill. I want to expose some very serious shortcomings indeed.

I want to go through the first 10 clauses of the bill. I will give my comments on each of the important clauses and then draw some conclusions from what we have found.

Section 39 of the Public Service Employment Act allows public servants who work in a minister's office for more than three years to bump other public servants, to be appointed in essence without competition. This is unfair in some cases. I am pleased to report that public servants declared surplus will not

be able to be bumped by the staff of the ministers. Those declared surplus in this act will move to the top of the priority list for job offers. That is a fair and reasonable thing to do.

I have been disturbed by other parts of the act. Allow me to quote from a letter written by the President of the Treasury Board to the Professional Institute of the Public Service last July. He was writing about the work force adjustment directive which is an umbrella agreement between Treasury Board and the unions that represent indeterminate or regular full time employees of the Government of Canada.

Members opposite should listen very closely to what the President of the Treasury Board wrote on July 22, 1994: "This government has stated in the past and remains committed to the principle that the employment protection provisions in the work force adjustment directive will only be changed through negotiations".

To me this promise does not speak of unilateral action; it speaks of a process of consensus. What is the main purpose of the first 10 clauses of Bill C-76? The main object is to break a promise. This bill unilaterally without negotiation changes the provisions of the directive.

The government tried to negotiate. It took a long time but not all unions would agree to change the directive. Therefore the government went ahead and broke its promise. Why is this little broken promise so important? I will be glad to tell you why this is so important and every public servant in the federal government should be listening right now.

The government made all sorts of promises during the last election campaign. The Ottawa Citizen reported a few days ago the contents of a brochure sent out during the campaign under the name of a man who today is the minister for renewal in the public service.

The brochure read: "Public servants, enough is enough. The Conservatives have used public servants as scapegoats and treated them with contempt. I pledge to protect public servants against job loss". He is the minister who is sitting in the House now. That is another wonderful promise from the government, but today that promise lies in shreds along with 45,000 public service jobs.

It is ironic that the Liberals in the last election campaign tried to stir up fear among the public servants about what the Reform Party might do to their job security in the days ahead. Many of them put their trust in the Liberal Party, hoping that nothing would be changed, that the words of the minister would hold true. The Liberals were happy, of course, to promise the moon as long as they could get the public service vote.

The President of the Treasury Board was happy to promise that the workforce adjustment directive would only be changed through negotiation. It was easy to promise that. If he was not sure he could deliver on that promise, he never should have made it in the first place. All public servants should beware Liberal promises. They have proven today with this bill that their promises are not worth the paper on which they are written.

As the financial situation of the government becomes more and more serious, more and more promises will have to be broken. In just two years the interest alone on the national debt will be $51 billion. Total program spending will be barely double that, just $108 billion. Social programs and the public service will be reduced to a shell because the Liberal government feels free to make promises but does not intend to lay the fiscal groundwork in order to be able to keep them.

This bears repeating. The threat to social programs and the threat to our public service does not come from fiscally conservative people such as myself. The threat to the public service and social programs comes from people who will not and do not have a plan to balance the budget and bring the deficit to zero. That is where the threat comes from and the budget does not address that.

Further to this concern, I want to say a word about fiscal responsibility. I received an anonymous letter today from a public servant who talks about the air navigation system of the Department of Transport. There are 6,600 employees in this part of the department and the public servant alleges in this letter: "Transport Canada employees expect to be terminated with full severance and cash out packages and immediately be offered the same jobs in a new commercialized air navigation services organization with no interruption. Some retiring people can be expected to be hired back on contract as they are now". That would be a real travesty.

We need assurances from the minister that this will not happen, that it will not be allowed to happen. The public servant who wrote this letter suggests that this boondoggle could cost the taxpayer in excess of $200 million.

We in the Reform Party of Canada will watch the Liberals. We will hold their feet to the fire to make sure that they are not going to merely transfer from the public service an equally expensive and maybe even a more expensive contracted service in another sector, just for the sake of saying they met a bottom line on the job count. That is something that must be watched because the key is fiscal responsibility and economic savings to the government. If it cannot show that, if it cannot prove that, then it should not be axing the jobs to begin with.

With tongue firmly in cheek, I would suggest perhaps that the Reform Party is not as sophisticated as the Liberal Party. The Reform Party sticks to the economic, bald faced facts and offers the unvarnished truth. It is not prepared to promise the world to the public service or to anyone else. Reformers are willing to face the situation as it is and be responsible with taxpayers' dollars. All we promise to do is to act immediately to preserve

what remains of our social programs and what remains of our public service over the long run.

Reform promised the opposite of the Liberals in the last campaign. We promised a smaller government. We promised spending cutbacks. Ironically, the cutbacks that the public service has experienced since the Liberals took power are already and will be in the long run far, far more than what the Reform Party promised under our zero in three plan of the last election.

If Reform had been elected government, the public service cutbacks would have been accomplished a year ago. We would be within one year of balancing our budget. All the worse would be behind us. Interest rates would be lower. Our economy would be growing by leaps and bounds. We would be in a good position to keep our most valuable social programs and the core of our civil service permanently intact. Because of Liberal inaction and because it took 18 months to get the first serious budget on to the table, all public servants will continue to suffer year after year. The government will continue to whittle away at the public service until it is reduced to a shell and no negotiated settlements, no agreements, no three-year suspensions, no promises will mean anything when that happens.

The government has set itself up for another promise. It has only suspended the workforce adjustment directive for three years. Conveniently, this is just beyond the next election. We know what kind of a carrot the government will dangle in front of public servants at that time, don't we?

The government will be expansive. It will be benevolent. During the next election campaign, if the economy is still doing well, it will play to the public service vote. It will promise that the freeze is almost over and the workforce adjustment directive will return. Trust us again, government members will say. However, if the economy is doing poorly the government will play to the taxpayer. It will say that it had to suspend the workforce adjustment directive.

No matter what is done, the government plays to the audience of the day. It is enough to make one a permanent political cynic watching the government flip-flop on its promises.

Public servants will remember the President of the Treasury Board when they are declared surplus under the authority of the bill. They will remember the minister for renewal in the public service and his boastful words during the election campaign. He said: "Public servants, enough is enough. I pledge to protect public servants against job loss". That is a good promise. However, 45,000 jobs later it is a pretty empty promise. He knew it at the time. Yet government members continued to make the promise during the election campaign, knowing full well that when they were on the government side of the House they would not be kept.

I will address another subject, term employees. The incentives, job offers, notice periods and other things which are offered under this bill do not apply to term employees, as opposed to indeterminate or permanent employees. Term employees have no status whatsoever under the workforce adjustment directive. Some of them have worked in government for years, but they have no status.

The 45,000 positions spoken of in the budget are all indeterminate positions. That could mean, for example, that the 24,000 term employees could be laid off at any time, in addition to the 45,000, with absolutely no incentive programs, no retirement packages, no appeal, nothing. I call on the government to treat term employees with fairness and not to lay them off in order to be able to afford more handsome payoffs for some of their own friends in the system.

My concern is with clause 3 of the bill. It lays out a plan for public servants. It empowers the cabinet to offer an early departure incentive and then it gives public servants a choice. They will have 60 days to choose whether to take the offer and go, or to refuse the offer, sit tight and hope for another job. They will remain on staff for a period of six months and then move on to unpaid surplus status for an additional 18 months. If there is no job offer after 18 months, they can be laid off.

The minister's officials have already admitted that a lot of jobs are going to be declared surplus. There will not necessarily be work for the surplus public servant to do when his or her job disappears. Yet under the bill the surplus worker will receive six months' pay regardless, in some cases for doing nothing at all.

All members of the House will remember that the President of the Treasury Board promised just a few weeks ago that no employee would be paid if he or she was not working. This was a fundamental, unbreakable, unshakeable promise on behalf of the President of the Treasury Board; that no one would be paid if there was no work to be done. Yet like so many other promises, this one too has been laid aside by this bill.

I would like to move on to clause 9 of the bill which mandates a change to the Financial Administration Act. Section 7 deals with the delegation of authority. I have real accountability concerns on this one because it says that Treasury Board may authorize any person who is part of the public service of Canada to perform functions or powers that it is able to delegate. That clause reads differently in the Financial Administration Act. The way it currently reads is actually safer, it is more restrictive. It says that anyone authorized under the Treasury Board may under the current regulations "authorize one or more persons under his jurisdiction to exercise or perform any such power or function".

It may be a small thing but it is a dangerous concept. No longer do we have separate jurisdictions. We collapse them all into one. It is a dangerous dilution of accountability and an unwise splitting of ministerial authority.

A deputy minister of Environment Canada could delegate some of his power to an official from National Defence. To which minister would the civil servants then be accountable? In the case of conflict whose orders do they follow? Both ministers would have a valid claim on their services and their actions and indeed both ministers could be held accountable for what they did.

In the end what would happen is a public servant would do something wrong and one minister could say it was really not his department, it was the other minister's department and vice versa, back and forth. Any accountability will be lost. This is a move in the wrong direction.

In the end no one would be accountable for the actions of that type of public servant. I sincerely hope that this clause will never see the light of day. I hope our members will be able to address it more fully in committee.

I want to dwell on clause 8 which gives tremendous power to the Public Service Commission, a power which should not be given to it. I want to talk about the competitive process of job applications for a moment.

Western democracies have always depended on checks and balances. This is born out of a basic mistrust of government, I think a valid mistrust of government. It is an attitude which says: "We think you are doing okay right now, but we don't know what you would do if the checks and balances were not in place". That is why we have opposition parties in the House of Commons. That is why we have opposition parties in committees and so on. It is in order to scrutinize the actions of the government.

Checks and balances are very important. They are vital for the health of a western democracy. When we see that an opposition party, for example, in some third world country is getting mistreated by the government we see that democracy, and that country in general, is in trouble. There are checks and balances right through our system.

One check against nepotism, bribery and other forms of corruption in government is the competitive process. This means that people get jobs through merit and not because they are someone's friend. That process is open to scrutiny. It is fair. It means that we get the best person for the job.

The selection process within the federal government is really quite fair. All the checks and balances are in place to make sure nepotism does not take place.

That is why I feel such concern when I read clause 8 of Bill C-76. We are in a period of flux right now, a flurry of activity, where the departments are downsizing and there is a certain amount of chaos in a big reorganization of government. During this time there is a chance that the vigilance and the controls are not going to be as strong as they have been in the past and as they usually are.

Clause 8 empowers the Public Service Commission during this chaotic and stormy time to appoint an employee without competition to another position within the jurisdiction of the deputy head for which in the opinion of the commission the employee is qualified. This is a dangerous departure from the merit principle.

Reformers believe that a system of checks and balances is the only way to ensure that corruption is weeded out of the system, and the competitive process is the check on the public service that is missing under this clause of the bill.

All sorts of irrelevant qualifications could be used here, anything from "I'm a good friend of the decision maker", to "I'm a relative of somebody else you know", to the pressure that sometimes can be imposed from the outside. That departure from the merit principle is a serious departure that public servants should be very alarmed about. At any rate, people can be appointed without consideration of merit using this clause.

I agree with the idea the commissioner should be able to appoint surplus people to different departments. However, again the merit principle in the competition should continue in that process.

If merit does not need to be a factor in this clause and if the competitive process can fall by the wayside without a backward glance in this clause, the government can use it for other purposes as well. Even under the current regulations of the Public Service Employment Act there is already in place a system under the employment equity plan by which a member of an employment equity group can be appointed to a position in accordance with an employment equity program excluding merit, discrimination and geographic area with no right of appeal. That is a serious departure from the merit principle and something the government should not be delving into. I rest my case.

[Dianne Brushett, Liberal, Cumberland—Colchester, NS]

Madam Speaker, I did enjoy the hon. member Fraser Valley East's speech on the budget. However, I would like to ask him if he has given consideration to the fact the deficit and debt did not

happen overnight. It has accumulated over a period of time. With respect to the budget, we are taking a planned period of time to deal with it very prudently and efficiently.

When the hon. member says we have no plan, we did have a plan and we made promises according to the plan to reduce the deficit. That is the number one priority on Canadians' minds today.

If the member feels the budget is something he cannot vote for, as he has indicated, why was the budget presented a few weeks ago by the Reform Party so heartily rejected by all Canadians and this budget so readily accepted?

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

Madam Speaker, I thank the hon. member for her intervention. It may be jumping to a conclusion to say the Reform Party's alternative budget was not well accepted. When I read editorial comments from the Globe and Mail , when I read the Financial Post , when I read comments from other people who have looked at the substance of our alternative budget, there is widespread acceptance that we must have a balanced budget. Although we may quibble about some details or some finer points, the essence of the argument remains sound that we must have a plan to balance the budget. The Liberal budget has no such plan. In the Liberal budget the hope is to get it down to 3 per cent of GDP, twenty billion or twenty-five billion dollars.

The irony of it is although they can say this may be kinder and gentler because they will not take as many steps as the Reform Party, in essence what they are saying is that with the cuts we see now, we ain't seen nothing yet. To get it from $20 billion down to zero, they will have to make significant, serious cuts.

The interest component of their budget is going from $38 billion to $51 billion in three short years. How can that be a good thing for the Canadian economy? How can that help to preserve social programs? How can that help to preserve the core of the public service? How can they hope to meet the legitimate needs and the legitimate concerns of the needy people when they are promising them that within three years they will spend an additional $13 billion on the interest component of the budget?

There is no compassion in a budget that says there is no plan to balance. The compassion lies in having a plan to balance. When it is balanced we can offer security of social programs, tax relief and some assurance about where we heading into the future. Unless they can offer that, Moody's and the rest of the economic fiscal world will say the budget the Liberals are presenting is not good enough.

[Ronald J. Duhamel, Liberal, Parliamentary Secretary to President of the Treasury Board]

Madam Speaker, I wanted to ask my colleague two questions. How would my colleague explain the fact that Canadians generally and the business community in particular have been extremely supportive of the budget and have also supported the initiative of reducing the deficit at 3 per cent of GDP?

I heard some comments that were not supportive of the government's initiatives with respect to the civil service. Could my colleague tell the House what the Reform Party's options are in reducing the civil service?

Would it provide an early departure initiative, an early retirement initiative? Would it permit counselling? Would it provide other types of assistance such as working with communities for the creation of jobs?

If it is yes, how can he be critical? He should jump up and applaud.

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

Madam Speaker, I thank the member for those questions. They allow me to clarify both the weakness of the Liberal budget and the soundness of the only alternate budget we have seen that will balance the budget in the short term to offer the security I am talking about in the long term.

What the budget does, to give credit, is signify a change in attitude in government spending. For the first time ever we see a government that has actually seen the light and has turned the corner. It has gone from what is a hopeless situation of increasing deficits to one of modest deficits.

The trouble is-this gets down to the security of the public service-there is no security in offering continued deficit budgets. What possible security is there when someone is loosing their house and not making their mortgage payment?

Why does one see cutbacks in health care transfers from the government? Why does one see cutbacks in welfare transfers? Why does one see cutbacks in training, cutbacks in the military, cutbacks of 45,000 in the public service? One sees it because the government cannot balance the budget. Until it can balance the budget there is no security in any of those programs.

When we brought forward our zero in three plan three years ago we proposed a cutback of 15 per cent in the public service because we were up front and honest. A cutback of 15 per cent would have been a cutback of around 30,000 or 35,000 public servants. We were up front about that.

The government went through the election promising no job losses by the minister of public service renewal. He promised something he could not deliver on. We would have had our program in place. The budget would be within one year of being balanced.

There would have been certainly a job loss of 35,000 public servants but already 45,000 public servants are laid off under the budget. We are not done yet. There will be more contracting out. There will be more private and not for profit agencies. There will be more initiatives by the government in years to come to

make sure public servants pay more than their adequate share of pain for the government's inability to balance the budget.

Come to grips with the fact that the best security one can offer the public service is a balanced budget soon so that there is not the continual whittling away year after year the security the public service deserves.

That is what is happening on that side by failing to address the debt and deficit problem.