Madam Speaker, I am pleased to have the opportunity to speak on Bill C-76, an act to implement certain provisions of the 1995 budget. I would like, however, to preface my discussion on the specific aspects of this bill with a few general comments about the budget.
The Liberal agenda with regard to deficit reduction was clearly outlined in the red book and has been reiterated by the Minister of Finance many times over the past 18 months.
Unlike the Reform Party we have not made unrealistic promises to reduce the deficit overnight. Rather we have set, and will continue to set, realistic goals until such time as the deficit is eliminated.
There is no denying that some of the measures announced in this budget are tough. However, the reality is that the time has come to make these changes. The Liberal Party campaigned on providing good government, and this budget underscores that commitment by taking on the challenge of reducing the deficit and modernizing government. I acknowledge that adjustments will have to be made, but I believe that this will be for the long term good of this country.
Personally, I was relieved to note that the cuts announced in the budget are fairly uniform from region to region. Unlike last year, for instance, when I had to deal with the closure of two Canadian forces stations in my riding, Atlantic Canada has not received a disproportionate share of the cuts.
That said, I would now like to concentrate on the bill before us. Where possible I would like to discuss the various aspects of this legislation by focusing on the effect that these measures will have on the province of Nova Scotia and, in particular, my riding of South Shore.
One of the most important facets of this legislation is the establishment of the Canadian health and social transfer. This initiative, which converts established programs financing for health and education and the Canada assistance plan into a single consolidated block transfer, is a fundamental structural change that will result in decisive deficit reduction. The result will be a transfer system that is fiscally sustainable and more effective in meeting contemporary needs.
This approach provides real benefits to both levels of government and will reduce a number of longstanding irritants. For example, the provinces will be free to pursue their own innovative approaches to social security reform and will have more control over how they meet their priorities. They will no longer be subject to rules stipulating that certain expenditures are eligible for cost sharing and others are not. As well, the expense of administering cost sharing will be eliminated.
Some people have expressed concern that this change in funding methods will result in the disintegration of national standards. This is simply not so. The transfer will not be totally unconditional, nor, as the Minister of Finance stated in his budget speech, does flexibility mean a free for all. The principles of the Canada Health Act will continue to be enforced. There will be no change in the principle that provinces must provide social assistance without minimum residency requirements. Rather a set of shared principles and objectives will be developed in concert with the provinces to underly the new transfer.
It is also important to note that the equalization program will remain intact and will continue to grow. This ensures that provinces like Nova Scotia will have the ability to provide all Canadians with a reasonably comparable level of service regardless of where they live. Overall in the Atlantic provinces equalization growth offsets Canada health and social transfer reductions so that overall transfers will increase slightly to these provinces. In fact, in Nova Scotia the percentage change in provincial transfer entitlements has increased by .09 per cent for 1996-97.
The next facet of this bill that I would like to cover is the elimination of the Atlantic freight subsidies under the Atlantic Region Freight Assistance Act and the Maritime Freight Rates Act.
These subsidies were provided to rail, trucking and marine companies to defray the cost of shipping goods within the Atlantic region and to central Canadian markets. However, a recent analysis of this program has shown that they are no longer serving their original purpose.
For instance, almost half of the $99 million spent annually goes to ship goods within provincial boundaries. High tariff barriers that restricted access by regional producers to markets in the United States and abroad no longer exist.
Shipments to central Canada represent a small and declining portion of the Atlantic region's market. In fact, only 13 per cent of goods produced are sent to central Canada. Goods are also being shipped further than need be in order to collect the subsidy.
The elimination of this tariff will lead to increased efficiency and, very importantly, will reduce the burden on taxpayers and shift the cost of providing transportation onto those who use and directly benefit from the system.
I was pleased to note that Transport Canada will be providing $326 million in transitional funding to the Atlantic provinces to alleviate shipper hardship, upgrade highways and transportation infrastructure on a cost shared basis.
By turning away from broad subsidization and toward focused and responsible investment in infrastructure and technology, Transport Canada is helping to build an integrated and affordable national transportation system, something that will benefit all of Atlantic Canada rather than just one specific sector.
Bill C-76 also contains amendments to the workforce adjustment directive, the Public Service Employment Act and the Public Sector Compensation Act that will facilitate a fair and orderly downsizing of the public service.
It is estimated that about 45,000 federal public service jobs will be affected by the measures implemented in this budget as a result of program review. Some of these jobs will be transferred to the private sector. Other reductions will be realized through attrition, voluntary departures and layoffs. The impact that this will have on the Atlantic region has not yet been determined, but all indications are that a large portion of these cuts will be made in the national capital region. This is due to the fact that approximately one-third of the total public service workforce is located in this region.
These cuts are the unfortunate part of the transition from a public service that tries to be all things to all people to one that offers Canadians a more limited number of high value programs and services. The approach taken by previous governments of
implementing across the board cuts is no longer a viable solution.
This government is at the point where such a measure would only result in good programs being penalized and working conditions suffering. For too long federal employees at every level have had to contend with heavier workloads and fewer resources. It is now time for government to change, to streamline its operations. As was noted in the 1994 budget announcement, it is time to ensure that government's diminished resources are directed to the highest priority requirements, to those areas where the federal government is best placed to deliver services.
As a result of this review, it has become necessary for the government to enact changes to the various pieces of legislation that govern the public service. These changes are necessary to achieve our fiscal objectives.
Over the next three years there will be major changes to the way government services are delivered. As a result, some temporary measures are required to ensure that where there is no work there is no pay.
Another measure in this legislation will see the termination of payments under the Public Utilities Income Tax Transfer Act. This program involves the federal government transferring to the provinces and territories 95 per cent of federal income taxes paid by privately owned electrical and gas utilities. In turn, the provinces were to transfer this amount to privately owned utilities. Nova Scotia is the only province that actually utilizes the transfer as it was intended, and I anticipate that Nova Scotia Power and its customers throughout the province will bear the brunt of this budget measure.
I am against this particular cut because it means that power bills in Nova Scotia will increase. However, I realize that other provinces are going to have to deal with the loss of this transfer money as well in one way or another.
In closing, I would like to reiterate my overall support for the 1995 budget. I am very pleased to be part of a government that has the will and determination to tackle this country's deficit problem. It is about time that concrete action was taken.