Madam Speaker, education, health and social assistance come under provincial jurisdiction. Over time, however, Ottawa has gradually encroached on these areas of provincial jurisdiction through its spending powers. The provinces must abide by these standards in order to receive federal funds. In seeking to enforce its national standards, the federal government was compelled to put in place a large public service, thus duplicating the provincial public service.
These expenditures, also known as overlap or duplication, are costing us roughly $1 billion a year at the Department of Health and $1.8 billion a year at the Department of Human Resources Development, at a time when there is so much whining about budget difficulties. Bill C-76, an act to implement certain provisions of the budget tabled in Parliament on February 27, 1995, does exactly what its title indicates, that is, allow the government to implement certain measures announced in the finance minister's last budget.
It is crucial that all Quebecers understand this bill, which may appear daunting at first because it deals with financial management links between the federal government and the provinces. These realities are very far removed from our fellow citizens. Quebec men and women have better things to do at supper time than talk about equalization, established programs financing, or the Canada Assistance Plan. It is, however, essential to pay attention because these three programs alone represent transfers to the provinces in the order of $38 billion for 1995-96.
Federal contributions to these programs are falling dramatically and systematically from year to year. According to Quebec's Minister of Finance, "Between 1977 and 1994, the federal government's share of social program funding in Quebec for health, education and social assistance dropped from 47.6 per cent to 37.8 per cent. The finance minister's budget points to a
dramatic decline in the federal share, which would fall to 28.5 per cent by 1997-98".
It is essential that citizens pay attention to equalization, established programs financing and the Canada Assistance Plan, because it is there that the federal government is hiding a large part of its cuts. Some refer to this as the offloading of the federal deficit onto the provinces. These cuts will cost Quebec taxpayers close to $2 billion in 1997-98.
It is essential for the men and women of Quebec to understand how these programs work and the changes proposed today through Bill C-76, because this bill is the basic element of the federal proposal in the referendum debate.
Quebecers may have heard the Minister of Foreign Affairs speak of renewed federalism before the budget was tabled. He travelled throughout Quebec saying, "You just wait and see, after the budget is tabled, we will talk about a new Canada". Others may have heard some federal spokespersons talk about decentralized federalism. The people must be told that these proposals are based on the bill before us today and that is why I urge them to pay particular attention to this bill.
The finance minister's budget wants to impose on us what we rejected in the 1992 referendum. Let us have a closer look at the federal government's proposal as compared to the sovereignty option offered by the Quebec government to its people.
To do so, we must understand how tax transfers are made between the federal government and the provinces. For social assistance, health and education, these transfers are made under three major programs.
The first one, the fiscal equalization program, is prescribed by the constitution. It is the program under which wealth is redistributed among the wealthier and poorer Canadian provinces. Quebec is now one of the poorer provinces. In 1982, the federal government capped the amount of equalization payments.
Last January-that is, January 1994-the Liberal government extended this cap for another five years with Bill C-3. By putting a cap on equalization payments, the federal government is defeating the very purpose of the program, which is to help bridge the gap between wealthier and poorer provinces. Since the equalization program was dealt with in another bill, namely Bill C-3, there is nothing about it in Bill C-76.
The second major program governing fiscal relations between the federal government and the provinces is called established programs financing (EPF). Through this program, the federal government provides financial assistance to the provinces in the areas of health and postsecondary education.
When the EPF was first introduced in 1977, federal transfers were supposed to be calculated on a per capita basis and indexed. But as the federal government sees its financial capability shrink away, it transfers less and less money.
The third major program is the Canada assistance plan, also known as CAP. This program governs federal transfer payments to the provinces for social assistance. In Quebec, the payments made under this program cover 50 per cent of social assistance costs.
What does Bill C-76 provide for regarding established programs financing and the Canada assistance plan? It calls for these programs to be abolished and replaced with a new program called Canadian social transfer. And the proposed changes would take effect in 1996-97.
The Canadian social transfer has two main characteristics. First, it will save the federal government some money. Indeed, the government is taking advantage of this change to substantially reduce its contribution to the new program. The second feature of the CST is the fact that, even if the federal government provides more limited financing, it reserves the right to impose standards and requirements to the provinces, as a condition to that financing.
In 1996-97, the first year of the new system, the federal government will contribute $2.5 billion less than what it is currently providing to the provinces through the programs which it is proposing to replace. In Quebec's case, this means a loss of $650 million. In 1997-98, the resource envelope for the provinces will be reduced by $4.5 billion, which could mean a $1.2-billion loss for Quebec.
All told, the federal government is reducing its current transfers to the provinces for health, social assistance and post-secondary programs by $7 billion. Moreover, it does so while introducing a new program called the Canada Social Transfer.
The government should at least say: "We have run out of money and are forced to stop contributing to the financing of these programs which, in any case, fall under provincial jurisdiction. Consequently, we leave you with the responsibility of managing these programs". If the government did that, it would eliminate duplication and overlapping, and it would also save close to $3 billion in administrative costs. But that is much too simple and logical for this government.
The federal government would rather continue to raise our taxes, on gas, for instance, waste our money by duplicating provincial initiatives, among other things, and reduce by $7 billion, over the next two years, transfers to the provinces. This is what I call to dump the responsibility for the deficit on the provinces.