Debates of April 6th, 1995

Questions On The Order Paper

[The Deputy Speaker]

Is that agreed?

[Some hon. members]

Agreed.

Questions Passed As Orders For Returns

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, in response to popular demand, if Question Nos. 83 and 91, one standing in the name of the hon. member for Saint John, who has been protesting the delay in getting the answer, could be made Orders for Returns, I would be pleased to table those returns immediately.

[The Deputy Speaker]

Is that agreed?

[Some hon. members]

Agreed.

Question No. 83-

[John Cummins, Reform, Delta, BC]

With respect to the Early Stuart and Early Summer sockeye migrations and the Steveston Field Unit of the Department of Fisheries and Oceans and each of the other such Field Units on the Fraser River system and the area covered by each such unit, for the years 1993 and 1994, ( a ) what were the staffing levels at each such unit and what were the staffing levels during weekends and statutory holidays during these migrations, ( b ) did staffing levels allow staff to be on the fishing grounds to conduct complete pre-fishing opening and post fishery clean-up patrols, ( c ) did staffing levels allow for pro-active patrols on a regular basis and full coverage of the native fishery during the open times, ( d ) what level of fishing occurred prior to the opening and the closing of the fishery, ( e ) what was the nature of the monitoring of the mandatory landing sites, were the mandatory landing sites monitored at all times during fishery openings on a regular basis, were there occasions when fishermen desired to land fish at a site but there were no monitored landing sites available, ( f ) did the monitors at the landing sites count the fish as stipulated in the Aboriginal Fisheries Agreements, ( g ) what was the level of catch monitoring and enforcement for Ceremonial Licences, ( h ) what was the level of night fishing and the level and consistency of the monitoring of such fishing and ( i ) what was the number of persons charged with infractions of fisheries regulations?

Return tabled.

Question No. 91-

[Elsie Wayne, Progressive Conservative, Saint John, NB]

For each federal riding, what has been the total amount of financial assistance provided by the Atlantic Canada Opportunities Agency from November 4, 1993 to date?

Return tabled.

The House resumed from April 3 consideration of the motion that Bill C-76, an act to implement certain provisions of the budget tabled in Parliament on February 27, 1995, be read the second time and referred to a committee; and of the amendment.

Budget Implementation Act, 1995

[John Cummins, Reform, Delta, BC]

Mr. Speaker, this morning, in addressing the issue of the budget, I would like to address it with specific reference to fish. I know that hon. members will be relieved to hear that the issue of fish in the budget will be addressed this morning.

Spending on fish will decline appreciably over the next three years. In fact, it will decline by $211 million in the next budget.

Our party believes that government spending is out of control and that serious cuts should be made. That being said, our party recognizes that there are certain responsibilities the government has, including a constitutional responsibility to manage Canada's fisheries resource in a responsible and reasonable manner.

We should not simply go into the Department of Fisheries and Oceans and willy-nilly cut the budget. We have to do it with great care and caution to ensure that this valuable resource, a resource that could in fact be the engine of the economy on both coasts of our country, is protected.

To begin with, I would like to look at a couple of points in the budget and discuss the impact they will have on the fisheries.

The budget indicates that the government will negotiate with the provinces to transfer authorities for freshwater habitat management and other related inland responsibilities. In other words, the government's objective is to transfer its constitutional responsibility for the inland fisheries resource to the provinces. At the outset, that may seem like a reasonable objective. The fact of the matter is, it denies a very critical problem in the country, that is, the difficulty that is faced by many resource-based communities in our country, communities where the resource extraction may be seasonal, where populations are growing, and where transportation routes are very difficult. That is a problem that we must address as a nation. It is a problem that exists not only in the more remote northern regions of the prairie provinces, but it is also a problem that is becoming more and more evident in the province of Newfoundland, for example.

Last spring, in the standing committee hearings on problems in Newfoundland, the same types of social problems that we have heard about for years, which are occurring and have occurred in the northern communities, in prairie provinces and in the territories, are appearing now in Newfoundland because of the loss of a very valuable fisheries resource.

The federal government, in trying to sidestep its responsibilities in this area, will help no one.

Another issue in the budget states: "to integrate the operations and fleet of the Canadian Coast Guard with the Department of Fisheries and Oceans in order to increase efficiency". We are all for increasing efficiency. The issue that must be determined is if we downsize both fleets and use one smaller fleet to cover both objectives, what will be the priority of that fleet? If the priority is maintaining navigation aids when there is an ongoing fishery, what happens to the enforcement in the fisheries resource? By the same token, if the coast guard vessels are going to be diverted to the fishery, what happens to the aids to navigation?

We have to look at combining these two operations, but we must make sure that our priorities and responsibilities are maintained. Simply cutting back on the number of vessels and personnel available is not going to do the job.

This government fell down badly on this point in this past salmon season. In the past the coast guard was given the authority on the west coast to enforce fishery law. This did not happen in the 1994 season.

One instance was reported to me where a coast guard vessel was returning from an operational patrol of Vancouver Island. It was called to the Tsawwassen ferry terminal by the B.C. Ferry Corporation because of illegal fishing activity by Americans in Canadian waters. When the coast guard vessel arrived it did not have the authority to arrest those vessels. All it could do was advise them to leave Canadian waters. They tried to contact the Department of Fisheries and Oceans, but no one was available. At that hour of the day the offices were closed and the only contact they had was with a fisheries officer far up river who said: "I'm monitoring a fishery up here, there is nothing I can do".

We must make sure that our priorities are clearly established if we are going to follow the route the government proposes.

There is a proposal to rationalize commercial fishing harbours, including implementing higher fees for use. I have nothing against paying our own way. My party strongly supports that principle. The last thing we want to do is impose fees on people when they are on their knees. That is the case on both coasts. It is an inappropriate time to increase taxes on the fishing industry when it is hardly able to make a living.

Much of the responsibility for that falls not only on this government, of course, but on previous governments.

The government also seeks to enter into partnerships with the fishing industry and others in the management of capacity, licensing and compliance, and it says it looks to industry to pay more for access privileges, contribute toward the cost of managing the fishery and pay higher fees for services. Again, this comes at a time when mismanagement by the federal government has seriously weakened the ability of the fishing industry to pay, not only on the east coast but also on the west coast.

The collapse of the fishery in 1994 was the direct responsibility and directly attributable to the Minister of Fisheries and Oceans. It was a devastation, the effect of which will take probably 12 years from which to recover on the west coast for that cycle of fish. Yet we are expecting fishermen to pay higher licensing fees when it will be very difficult for them to maintain payments on their boats, let alone absorb higher licensing fees.

The same can be said, of course, for the problems on the east coast.

The cut of $211 million from the budget of the Department of Fisheries and Oceans is something that must be done very carefully, as I suggested earlier.

The Department of Fisheries and Oceans has experienced serious budget cuts over the last two or three years. The effects of those cuts, particularly on the west coast, have been dramatic.

I want to quote the concerns expressed by fisheries officers to the minister on November 2, 1994. The fisheries officers were pointing out the difficulties they have experienced because of budget cuts. They suggested that budget allocations did not provide for the successful delivery of programs and untrained staff members were not able to carry out enforcement controls. The monitoring of the catch was affected and so on.

Three months before the opening of the 1994 fishery season, senior fisheries officials on the west coast were warning of a disaster if the level of enforcement was further downgraded. I will quote from a report by R.K. Carson, area manager, Fraser River division. He says:

The impact of a further-cut will have significant ramifications on the success of the implementation of the AFS agreements along the Fraser River. The reduced level of fishery officers and fishery guardians-will result in non-compliance with terms and conditions of agreements, licences, regulations and loss of control of this fishery. The resource will suffer and we could have another repeat of the `missing sockeye' problems that occurred in the 1992 season.

That is exactly what happened.

In a report by D. Aurel, chief, conservation and protection, New Westminster, it was noted as well that budget cuts would reduce the free trade officer's allotment in the fisheries. He points out that:

-a 1993 investigation into the illegal export of two million pounds of chum salmon has resulted in 15 charges pending against one fish processing company. These types of serious FTA violations cannot be investigated by one officer alone.

The list goes on. However, when we cut in a department like fisheries we must do it with care.

[Maurice Dumas, Bloc, Argenteuil—Papineau, QC]

Mr. Speaker, I welcome this opportunity to speak this morning to the amendment proposed by the hon. member for Saint-Hyacinthe-Bagot. This debate on Bill C-76, on provisions to implement certain changes in the 1995-96 Budget that will affect transfers to the provinces, concerns all Canadians and Quebecers.

I would like to start with a short summary of the major changes introduced by the 1995-96 Budget, after which, as the official opposition's representative for seniors organizations, I will try to show what the federal government has in mind with its plan to reduce old age pensions in 1997.

Transfers to the provinces are not changed by the 1995-96 budget. Today, there are three main transfer programs: Established Programs Financing, $21.73 billion; equalization, $8.87 billion; and the Canada Assistance Plan, $7.95 billion. The federal budget did not make any changes in the equalization program but it has extended the ceiling provision for equalization for a period of five years.

Section 48 in Bill C-76 will deprive Quebec of $650 million in 1996-97. Bill C-76 proposes new national standards for health care and provides for establishing new national standards for social assistance and post-secondary education. This new federalism does not decentralize at all. These national standards will restrict the autonomy of the provinces in their own jurisdictions.

The government is trying to minimize the significance of these cuts, although they are in fact devastating for the provincial governments, especially for Quebec. The government includes tax point transfers in its figures on cuts in transfer payments to the provinces. The federal government has no control over tax transfers paid to the provinces under its main transfer programs.

In fact, all financial transfers, cash transfers paid to the Government of Quebec, will be reduced by 32 per cent between 1994-95 and 1997-98, as a result of cuts in transfers to the provinces.

A sovereign Quebec would lose federal transfer payments but recover the $30 billion in taxes Quebecers are now paying to the federal government.

The latest budget cuts implemented by Bill C-76 will hit the most vulnerable in our society. The Quebec Minister of Finance estimates that these cuts and transfers to the provinces will reduce the federal contribution to social programs funding from 37.8 per cent to 28.5 per cent between 1994-95 and 1997-98. The federal government is intervening in areas that are under provincial jurisdiction and may make additional cuts in the cash portion of transfers to the provinces.

As the official opposition's representative for seniors organizations, I am very concerned about the old age pension reform announced by the government, which will become effective in 1997. In 1994, they said a document would be tabled very shortly, but the government has delayed production of this document, preferring to wait until after the referendum in Quebec.

In fact the government announced that the most disadvantaged seniors will not lose any protection. This means that the pensions of those defined as having high incomes will be reduced and that the reductions in their pensions will not go to raising the pensions of low income seniors, who have only the

assurance that their pensions will not be cut. So, some will have their benefits reduced and no one will receive an increase.

Another important point has to do with family income determining pension eligibility. This measure is unacceptable, since women have fought for financial independence for decades.

It is not a new measure. The government was preparing similar changes to the unemployment insurance plan as part of the social program reform. Given women's general opposition to the idea, the Liberal majority on the Standing Committee on Human Resources Development did not recommend linking benefit levels to family income levels. This is in the report by the committee on social program reform.

It is noteworthy that old age pensions have already been reduced for seniors with an income over $53,000. The Liberals decided, in the last budget, to reduce the tax credit for seniors with an income over $25,000. The federal government is continuing to go after the incomes of seniors, particularly those in the middle class.

Old age pensions are a major source of revenue for seniors. Federal government documents indicate that old age security and guaranteed income supplements accounted for 28.9 per cent of the income of single men; 41.3 per cent of the income of single women and 25.9 per cent of the income of couples, in 1989.

The government announced a review of the Canada pension plan, the CPP, for the fall. The federal and provincial finance ministers are scheduled to meet as part of the five-year review of the Canada pension plan. They will use this opportunity to claim that a review of old age pensions is mandatory.

The federal government does not have to change the old age pension system unless, that is, it wants to cut the budget at the expense of seniors.

Quebec seniors had the opportunity to state their opinions on their future at hearings of the seniors' commission on the future of Quebec. The chairperson of the committee was a minister in the former Conservative government, Monique Vézina. This consultation has shown that seniors across the country have similar concerns, mostly about their social and economic situation.

Quebec is going through a difficult economic period. Some of the witnesses at the hearings told of the problems they are having with unemployment or poverty because of the constant threat of cuts to social programs and the health care system.

Representatives of the Quebec Federation of Senior Citizens (QFSC) told the commission that their organizations were fighting the four main problems affecting seniors: the feeling of uselessness, inactivity, insecurity and isolation. Almost everywhere people are lobbying for society to guarantee seniors their rightful place. Seniors want nothing more than to use their experience for the good of the society they will leave behind for their grandchildren. It is clear that the universality of old age pensions should not be tampered with.

Lucien Bouchard, the Leader of the Official Opposition, recently shared with Quebecers his party's reaction to the federal government's position on pensioners. He said:

After hitting pensioners with annual incomes of more than $26,000 with a tax last year, the federal government has continued to go after them. The Minister of Finance has made it very clear that the universality of old age pensions is definitely a thing of the past, since in the future, pension benefits will be based on combined family income, and this will result in the loss of financial independence for thousands of women. By waiting until after the referendum to cut into social security, the federal Liberals are hiding the negative ramifications of their cuts from Quebecers. Be assured, Mr. Speaker, that the Bloc Quebecois will do its utmost to prevent the government from making the needed spending cuts at the expense of seniors, the unemployed and people who are most in need of health care, post-secondary education and social assistance.

The federal government should cut $2.85 billion more from the Department of National Defence's budget for the next three years instead of looking to seniors' programs next autumn to reduce its deficit.

You can be sure, Mr. Speaker, that, as the official opposition critic for seniors' issues, I pledge to fight any proposal the federal government might make to reduce its deficit at the expense of seniors.

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, the hon. member for Saint-Hyacinthe-Bagot tabled in this House an amendment that I am happy to support.

Bill C-76 is inconsistent and the Minister of Finance should go back to the drawing board and introduce in this Chamber a bill that truly reflects what Canadians want, which is to see more fairness in the government's handling of its fiscal responsibilities.

The absence, or in some cases, the weakness of certain measures in this bill are of particular concern to me. I would like to speak about two of them. First of all, there is the government's science and technology strategy. In his last report, the auditor general deplored the lack of a government strategy with respect to science and technology. He stressed the importance of such a strategy, in light of the liberalization of trade and the new technological era we would be entering in the 21st century.

The government must demonstrate strong leadership in this area, so that Canada can continue to develop technologically and to maintain its competitiveness on international markets. The standard of living of Canadians and Quebecers depends on it. There must be some sign of this leadership in the government's budget. It is the cornerstone of any strategy to put Canadians back to work. Unfortunately, there is not a trace in this budget of

any strategic planning with regard to research, science and technology. Worse yet, the cuts are in the areas of highest performance.

I will give some examples of cuts in the funds made available to granting councils. The minister told us in his 1994 budget that he would not touch the money set aside for granting councils, because of the importance the federal government attached to research and development activities. But now, in a complete about-face, the Minister of Finance is cutting the councils' funding by more than 10 per cent, despite what he announced in the 1994 budget.

In order to better understand the impact of such a decision, let us look at Canada's situation with respect to science and technology. Canada ranks sixth among the G-7 countries, just above Italy, when the size of its budget is considered as a percentage of the gross domestic product. On the other hand, according to the relevant trade journals, given the quality and use of research and the size of its population, Canada ranks second among the G-7 countries, after the United States.

This situation is primarily due to the fact that granting councils award funds to our universities and industries on the basis of merit. And yet, in his report, the auditor general has pointed out the sorry state of our science and technology strategy for the last thirty years. This is not a recent development. For thirty years now the auditor general has criticized this lack of strategy. He recommends that the government focus mainly on the most successful research activities which, in our case, are those financed by granting councils.

It is important to point out that most of the stakeholders consulted by the government, that is, the experts who testified during the consultations held on this issue, stressed that the budgets of granting councils should be maintained. These highly qualified consultants said that if research budgets had to be cut, the government should at least keep at the same level the funds allocated to the granting councils, given the effectiveness and quality of the research projects they accept, and cut elsewhere in the budget.

The government ignored these consultants' recommendations. Not only did it cut the budgets of granting councils and the research budgets of all government departments and agencies, but it has the nerve to continue giving $1 billion in R&D tax incentives to business, arguing that the consultation process is still under way. This clearly shows, once again, that government is holding consultations just for show and to smooth the way for the blind cuts it intends to implement in its budget.

This is not a consultation process, my dear colleagues across the way. This is a case of manipulating public opinion, which really shows this government's deep contempt for the Canadian population. I also want to talk about the inequities in federal spending. The Bloc Quebecois has always deplored the federal government's flagrant inequity in its R&D spending.

In 1990-91, Ontario received a 53 per cent share of federal spending, while Quebec received only a 19.5 per cent share.

The government figures I received this morning show that, since 1985-86, if we exclude the National Capital Region, Ontario has received about 22 per cent or 23 per cent of all federal science and technology research funds every year, while Quebec receives only 17 per cent. If we include the National Capital Region, we realize that Ontario has received 27.9 per cent, almost 30 per cent, every year since 1985-86, while Quebec receives only 3.1 per cent. That is government equity for you.

If we compare what the federal government spends on natural sciences in Ontario and Quebec, we see that Ontario gets between 24 per cent and 26 per cent of federal spending each and every year, while Quebec's share, if we exclude the National Capital Region, is 19.9 per cent. There is still a 6 per cent difference.

Now, if we look at what has been done in the National Capital Region in terms of natural sciences research, the Ontario side of the NCR gets 26.6 per cent while the Quebec side receives 1 per cent.

It does not take a PhD to figure out that 26 less 1 equals a 25 per cent difference. That is what the government calls budget equity.

[Osvaldo Nunez, Bloc, Bourassa, QC]

It is inequitable.

[René Laurin, Bloc, Joliette, QC]

The quality of Quebec's industrial structure cannot justify the low level of federal investment in research and development. Especially since Quebec runs off with more than 30 per cent of grants awarded on merit, which clearly shows Quebec's competitiveness. When our projects are assessed on their merits, we qualify for 30 per cent of the grants, but when the award is motivated by favouritism, Quebec is always outpointed by Ontario, the other most powerful province.

[Some hon. members]

Patronage.

[René Laurin, Bloc, Joliette, QC]

Such an imbalance maintains provincial disparity in research and development funding. And the statistics are not mine, but the government's own. This imbalance has a direct impact on the provinces' rate of growth. In other words, this harmful policy has been operating for years. With this policy, some provinces get R and D funding, while others, like Quebec, get UI funds.

And it goes on and on, year after year, and the government keeps doing nothing about it. We have been denouncing this kind of thing for 15 years now.

Certainly cuts could have been made in other areas. Let me set aside my prepared speech to give you statistics I just received this morning.

Where could more cuts have been made? We, Bloc members, often suggested National Defence. In DND estimates, astronomical amounts could have been saved in forecasting errors alone. For example, $2.8 billion are supposed to be cut over the next three years. Our estimation was that $5 billion could be cut, but DND said this was impossible. The fact is that these forecasts were wrong, and here is why.

Take the closure of the base in Portage la Prairie for example. Savings of $411 million were expected, when in actual fact only $170 million was saved. A $241 million shortfall.

With respect to space training, we were told that the cost of basic training was $200,000 per student, when the actual cost is $700,000, or $500,000 more per student. They make this kind of forecasting errors and come and tell us that they will be able to save $2.8 billion. We cannot be sure of that, Mr. Speaker. There will be more unforeseen deficits.

Improving housekeeping in DND and several other departments would be one way of making funds available for research, research being the seed of successful new products that would promote rapid growth.

We will have a chance to pursue this at a later time.

For now, I suggest that these new statistics should give both the department and the government food for thought. The minister should go back to his drawing board, his operation table, his computations and come back with another set of estimates. This way, perhaps we will be able to see more eye to eye with the government in a few months.

[Ray Speaker, Reform, Lethbridge]

Mr. Speaker, I am glad to have the opportunity to speak to Bill C-76, the budget implementation act.

My Reform colleagues have already addressed the various components of the bill. I would like to broaden the focus and look at the budget as a whole. I want to go through the Liberal government's what I call smoke and mirrors show or budget and show Canadians exactly what was cut in the budget and where it was cut.

Members of the government are misleading the people of Canada in several very important aspects. They are being dishonest in selling the budget. To date they have got away with it. Unfortunately Canadians have not recognized what has happened.

Today I will expose two blatant mistruths I believe are in the Liberal budget and have not been clearly defined to Canadians.

Canadians have been led to believe this was a tough budget which cut spending some $25 billion and that provinces got off easy relative to the cuts the government made in its own backyard.

Reform announced its plan to balance the budget by 1998. We told Canadians in order to do this we would have to reduce spending by some $25 billion, $15 billion of which would come from social program spending.

What was the Liberal reaction to this? The Prime Minister said such a plan would throw Canadians into a deep recession or perhaps a depression. The finance minister called it fiscal savagery and said our plan would gut the nation's social programs. The Minister of Human Resources Development said we would be blow torching the poor.

One week later the Liberals released their budget. On page 65 it says expenditure reductions due specifically to the actions in the budget total $4.1 billion in 1995-96, $9.3 billion in 1996-97 and $11.9 billion in 1997-98. In other words, $25.3 billion would be in spending cuts.

Clearly there is some double talk. When Reform proposes $25 billion in fiscal spending cuts it is fiscal savagery which will hurl the country into depression and throw widows and orphans out on the streets. When the government makes the same proposal it is acting in the best interest of Canadians. It is acting in the best interest of the country. It is being tough but it is being fair. Cutting the deficit is said to increase economic growth in the long run.

The government is not completely hypocritical when it is doing this. It does not actually cut $25.3 billion. It wants the financial markets to believe this, especially Moody's which is still trying to decide whether to downgrade Canada's credit rating.

The truth is these are $25 billion in what I call make believe cuts. They are cuts to money that was never spent and will not be spent. The Liberal budget makes real spending cuts of only $15 billion. This explains why Reform Party's $25 billion in cuts in the taxpayers' budget will eliminate the deficit in three years and why the Liberal budget will leave us with $24 billion of deficit. Clearly the budget was not as tough as the government would have us believe it was.

The second mistruth is that government cuts in its own backyard first and does not offload its deficit problems on to the provinces. Is that true or not? Let us look at it.

It says this on page 65 of the Budget Plan:

The expenditure cuts fall primarily on federal government operations, rather than transfers to provinces or to households-demonstrating that the government's priority has been to get its own house in order first.

Let us look at that statement. Is this true? Do the provinces get off lightly in comparison to other cuts in the budget? The answer

is no and I would like to explain why. Let us look at how much was really cut from the provincial transfers.

On page 51 of the Budget Plan, it shows total transfers falling from $37 billion in 1994-95 to some $34 billion in 19997-98, for a reduction of approximately 4 per cent. This is less than cuts to other areas of spending, which are reduced by some 7 or 8 per cent.

What is hidden in these numbers is the fact that tax point transfers were included in the calculation of the value of the transfer. This is completely misleading to Canadians and is a misleading statement in the budget.

These tax points were given to provinces in 1977. In that year, the measure affected the budgetary position by creating a one-time reduction in revenues. Since that time, these tax points have not added one cent to the annual deficit. They ceased being a budgetary item.

If one looks at the 1994 budget, one will not see any mention of tax points. Indeed, one will not see them in any other budget since 1977. They were included this year solely to confuse Canadians so that they would not realize the magnitude of the cuts that were being made.

Since we have peeled off this tax point veneer, what lies underneath? What is the real truth? Total cash transfers to provinces, which include payments for equalization, health, post-secondary education and welfare will be reduced from $25 billion in 1994-95 to $20 billion in 1997-98.

This is a reduction of $5 billion or 20 per cent. Compare this to cuts being made in two other major areas of spending. The $38 billion in transfers to persons were virtually untouched being reduced by only $500 million, a minor amount.

The $52 billion in departmental spending, which fell under what is called government's program review, will be reduced by a little less than $10 billion or 18 per cent. Clearly the provinces did not get off easy in the budget. They were the biggest victims of the budgetary cuts. They took the major hit.

What is even more amazing is how much was cut specifically from health, education and welfare, the three programs that have been folded into what is now called Canada health and social transfer. Cash transfers for these three programs will fall from $17 billion this year to $10 billion in 1997-98. There will be a reduction of some $7 billion. This represents a major reduction, a 40 per cent reduction in federal cash transfers for health, education and welfare.

Can members imagine what the Liberal opposition would say about a Reform government if it attempted to slash medicare by 40 per cent? This is what the Liberals have done and nobody has picked up on it. The Liberals will still paint the Reformers as fiscal savages. They should look at the brush themselves.

In closing, let me clarify the purpose of my remarks. My intention is not to say that deep spending cuts were inappropriate. To the contrary, the government's budget did not go far enough. There will still be a $25 billion deficit when this party leaves office. In other words, more remains to be done.

It is my sincere hope that once Canadians get beyond the government's smoke and mirrors, we will be able to begin a very serious dialogue with regard to fiscal policy. I hope over the next two to three years people will look at our taxpayers' budget and at the Liberal's budget and debate the strengths and weaknesses of both.

If that can be accomplished, if we can elevate the national debate, the country will be much better off.

[Osvaldo Nunez, Bloc, Bourassa, QC]

Mr. Speaker, I want to discuss Bill C-76, which seeks to implement the 1995-96 budget, as well as the amendment tabled on March 30 by the hon. member for Saint-Hyacinthe-Bagot, an amendment which I support.

The amendment proposes that the bill be read a second time only in six months. In other words, it asks the Minister of Finance to go back to the drawing board, because this is the worse possible budget for poor and ordinary people. However, it is an excellent budget for rich people, banks and major corporations.

I already had the opportunity to denounce this budget, which is tough for the provinces, particularly Quebec, as well as for workers, immigrants and refugees, public servants and poor people.

This budget provides no measures to stimulate employment or economic growth. Its main objective is to cut everywhere, particularly in social programs, unemployment insurance and international assistance. It only targets the poor. This so-called Liberal government is in fact the most conservative government in Canada's history.

Both the government and the Liberal Party are making a sharp turn to the right. This is incredible. For example, over the next three years, the government will reduce by $307 million the money allocated to the Canada Mortgage and Housing Corporation. Yet, social housing is in great need, both in Quebec and in Canada, and particularly in my riding of Bourassa, in Montréal-Nord, where many welfare recipients live and where there is a shortage of such units for them.

I want to briefly comment on the report which was just released by the National Council of Welfare. According to that document, 20.7 per cent of Quebecers live in poverty. Between 1992 and 1993, the number of people living in poverty increased everywhere in Canada. At the national level, the percentage of those living in poverty went up from 16.1 per cent, in 1992, to

17.4 per cent, in 1993. This is a dramatic increase in just one year.

More importantly, child poverty reached a 14-year high by climbing up to 20.8 per cent. In 1993, there were 1,415,000 poor children in Canada. These children are poor because their parents are poor. And the parents are poor because there are not enough jobs in this country. Generally speaking, women are poorer than men. This is shameful.

Nearly half a million more Canadians became poor in 1993. The number of poor grew to nearly 4.8 million Canadians, from 4.3 million the previous year. Half a million more poor people in Canada. It is a tragic situation.

[Translation]

This is shocking. The government should analyse this report carefully and act on it. I ask the government to table a plan to fight poverty in Canada, and I hope more members will express their outrage about this situation: one half million new poor.

Significantly, 50 per cent of these people are working poor. In other words, they are forced to accept unusually low wages. In fact, the minimum wage is a scandal, both federally and provincially.

Although Alberta is one of the richest provinces, it has one of the lowest minimum wages in Canada: $5 an hour. Our colleagues opposite often say we live in Canada, the best country in the world. I think that with these figures, Canada is hardly the wonderful country they say it is.

I said that this government and the Liberal Party are leaning increasingly to the right. A few days ago, we saw the passage of back-to-work legislation in the form of Bill C-77, introduced by the new Minister of Labour, legislation that is a direct attack on the unions and denies them the right to strike, just because the government wants to privatize CN and get even more money for the Treasury.

With this legislation, the government is trying to break the unions and federal employees as well, who are very disturbed about the loss of 45,000 jobs. The government is attacking social programs and the unemployed, instead of attacking unemployment.

On the other hand, the government refuses to pass anti-scab legislation as requested by the unions. Especially in Quebec, where Ogilvie, for instance, whose employees have been on strike for months and months, continues to operate because it hires scabs. Once again, I want to ask the government to introduce anti-scab legislation.

At the Department of Citizenship and Immigration, and I happen to be the official opposition critic on this matter, in 1995-96, according to the budget, spending will total $592.7 million and the department will have the equivalent of 4,645 full-time employees, including 260 in Canadian missions abroad.

It is outrageous, and I mentioned this before in the House, that more than 50 per cent of the department's budget will be self-financing, in other words, about $300 million will come from user fees, especially the new tax on immigration. I think the minister is trying to run his department like a private company. Today it is self-financing, and later he will probably want to make a profit as well.

There have been cuts at the IRB, cuts totalling around $500.7 million. From now on, cases will be heard by only one commissioner, not two. The number of commissioners will be reduced from 175 to 112.

I would like to use the two minutes I have left to say a few words about international aid.

I condemn most vigorously the cuts made in international assistance. This country, which used to have a genuine concern for the problems and well-being of poor countries is no longer the Canada I knew a number of years ago. There have been horrendous cuts in Montreal alone, and in the rest of Quebec and Canada. More than 80 organizations dedicated to promoting public awareness of international assistance will see their funding cut by 100 per cent and will disappear. Cuts totalling $1.3 billion in three years-that is a lot of money. The UN has asked all industrialized countries to spend 0.7 per cent of GDP on international assistance. Canada will be left with a rate of 0.3 per cent.

Finally, I would urge the government not to reduce the programs for older worker adjustment. The unions are very concerned, and the provinces as well. These agreements must be renewed, and I hope the government will try to do something for these workers.

[Cliff Breitkreuz, Reform, Yellowhead, AB]

Mr. Speaker, it is a pleasure to speak in the House on behalf of my constituents about the federal budget.

My constituents tell me time and time again that they are sick and tired of paying for federal government programs that they do not want, they did not ask for and they certainly do not want to pay for. My constituents stop me and ask about Canada's official languages policy. Why do we have this program? Why do we have to pay for it? Today I will confine my budget remarks to bring forward the concerns of my constituents about official languages.

I will start by asking the government on behalf of the people of Yellowhead: Why do we have a Department of Canadian Heritage? Of all the departments in government, the Department of Canadian Heritage is one of the most controversial and

disruptive to the people of Canada. It is in this department that we find huge public funding for highly contentious areas, including the CBC, multiculturalism and of course, official bilingualism. I will be direct. The people of Yellowhead have no use for the Department of Canadian Heritage and its destructive, divisive programs.

They do not know what possible good can result from the funding of the bilingual bonus which cost them and their fellow taxpayers $50 million last year. They do not know what good can result from funding the language police, the Commissioner of Official languages, $11.1 million. They do not know what good can come from funding the Edmonton region of the Alberta Francophone Association to the tune of $103,000 annually plus a grant of $12 million to be spent in a riding containing 945 francophones.

The people of Yellowhead are not sure why they are helping to pay for official languages support, which is projected to cost $253 million this year, a cool quarter of a billion dollars.

It is not my intention to fan the flames of resentment, only to question a policy which has done much to tear the social and linguistic fabric of our nation.

Official bilingualism in Canada is not about promoting the equality of the French and English languages. It is about the promotion of minority language rights to the majority of the population. In fact the Official Languages Act, which entrenched the notion of coast to coast bilingualism in 1969, has been abused by federal governments which operated behind the smoke-screen of keeping Canada together.

The OLA was about appeasement right from the beginning. There are questions as to how this forced language program was to be funded, to be paid for. English Canada protested this imposition and of course it is paying for it.

Pierre Trudeau knew the mathematics involved. He needed to retain power. He needed to retain his stranglehold on Quebec. After all, he had no support from the west. Therefore, the OLA was imposed on all of Canada. Ever since, the Official Languages Act has been used to put out anti-nationalistic fires in Quebec but to no avail. The effects of this firefighting have been severe.

I draw attention to how the Official Languages Act was used in 1976, at a time when great dissension in the province of Quebec was reaching its apex, to put out a fire that threatened national unity. On the eve of the Quebec election, 30,000 federal employees in Quebec threatened to refuse to serve people in English unless they received their bonuses for being bilingual, just like the bonuses bilingual secretaries, stenographers and typists received.

To pacify the civil servants and keep the separatist Parti Quebecois from claiming unfair treatment of francophones, Trudeau caved in and passed the order to pay the bilingual bonus. To top things off and to add insult to injury, the PQ won the election.

Ever since, the bilingual bonus has stuck and has even been extended to bilingual RCMP officers under this Liberal government. I have little doubt this decision was made to cool disparaging attacks from the Bloc.

This policy is discriminatory against unilingual anglophones and francophones. It has created division instead of unity. It is the opposite of what the OLA intended for Canada. The disruption of the merit system has a negative impact on morale.

That was not the only time the master social engineer used the contentious issue of Canada's official languages as an instrument of appeasement at the expense of the majority of Canadians. Trudeau implemented affirmative action in the hiring of public servants.

I draw my colleagues' attention to the Royal Commission on Bilingualism and Biculturalism. It recommended dividing the public service into French language units in which all work would be performed in French, and English language units in which all work would be performed in English. Under this system almost all jobs would be open to unilingual speakers.

It is true that at first there might be a swell of unilingual English jobs, but as anglophone employees retired and francophones joined the public service French language units would expand to eventually include a proportion of jobs equivalent to the French speaking share of the Canadian population. In essence, there would be equitable representation without resorting to affirmative action and without claims of discrimination against either anglophones or francophones. I think all members would agree that such a scenario seems reasonable and fair.

Trudeau, because of political considerations, did not adopt this fair solution. He apparently felt the French language unit would take too long to implement while the separatist threat was an immediate problem. As Trudeau said: "We cannot tell Quebec: Cool it, fellows, in 40 years we will be able to talk to you. We might save some money but we would not save the country". Well we sure have saved the country.

Today it is the unity of the country which is threatened, something that should not be happening if the sacred cow known as official bilingualism had worked, but of course it could not work. This policy has cost billions of dollars to enforce since its inception. We see what Canadian taxpayers are getting in return: among other things, a separatist party as the Official Opposition in the House of Commons.

If policies of the past do not work, perhaps it is time that we stopped them and developed a new framework with which we can all work toward a unified Canada. Canadians resent official bilingualism as it stands now.

I will close by relating an instance which occurred last October. The Commissioner of Official Languages, the language police, visited Jasper National Park to award park officials for their outstanding promotion of French language in the park. A closer examination of the demographics shows just how wasteful the commissioner's junket was. It is illogical to have bilingual services available in Jasper National Park or any other place where there is not sufficient demand.

Last year over 2.4 million people visited the park. The visitors to the campgrounds came from the following regions: Alberta, 35 per cent; British Columbia, 15 per cent; California, Ontario, Washington, Saskatchewan and Manitoba. The origin of people visiting by country was: Canada, 60 per cent; United States, 20 per cent; Germany, 5 per cent; and then England and Switzerland.

Curiously enough, signs in the campgrounds are in French and English and most of the campground staff are required to be bilingual in both official languages. If anything, services should be offered in English and German according to the statistics. Of course that would be ludicrous because the majority of Germans visiting Canada speak English.

Common sense must dictate all government policies. It is time to end tired, old divisive and expensive policies which not only add to our debt but which create problems instead of solving them. The time to end those is now.

[Stéphane Bergeron, Bloc, Verchères, QC]

Mr. Speaker, with your permission, I will ignore the preceding incendiary remarks of my colleague. It is certainly not out of pleasure, but rather out of a sense of duty as an MP, that I rise today to debate Bill C-76, which concerns certain provisions of the budget tabled on February 27 and which implements some of the announced changes in transfers to the provinces.

In fact, this bill is nothing more than the bitter fruit of certain decisions in the latest federal budget. Bill C-76 clearly illustrates the federal government's conspiracy against the provinces. With this bill, the federal government intends literally to offload $7 billion of its debt onto the provinces. To this end, it has already made a mockery of one of its three main programs of transfers to the provinces-the equalization program. Under this program, the provinces will receive $8.87 billion this fiscal year.

The aim of the program is to redistribute wealth within Canada by transferring some of the income of the wealthier provinces to the poorer ones. Since 1982, however, the federal government has imposed a maximum on transfer payments to provinces under the equalization program, tying total payments to growth in Canada's nominal GNP. This capping was renewed in January 1994 for five years under Bill C-3. With this measure, the federal government, be it Liberal or Conservative, has deprived and continues to deprive the provinces of revenues they would normally be entitled to.

As Quebec is one of the provinces, along with the Atlantic provinces, Manitoba and Saskatchewan, receiving federal money through the equalization program, its public finances will suffer enormously as the result of this measure. In fact, Quebec's public finances are already suffering because of this measure. The situation is more difficult for Quebec, because, of all the provinces benefiting from this program, it benefits the least per capita.

By tying maximum total payments to growth in the nominal GNP, the federal government is changing the very nature of the equalization payments, which serve primarily to redistribute wealth among the provinces. There is more. Bill C-76, as announced in the last budget, also provides for the replacement, in 1996-97, of the two other provincial transfer programs-the Canada assistance plan, known as the CAP, and established programs financing-by a new program, the Canada social transfer.

So far, we might consider this combining of two programs into a single one, thus streamlining operations, simplifying structures and so on, to be good news. However, that is the end of the good news. Because, instead of maintaining or increasing the level of transfer payments to the provinces, Ottawa is preparing to cut $2.5 billion in 1996-97 from the budget usually reserved for these payments.

The 1997-98 fiscal year will be even worse, because the federal government plans to cut transfers to the provinces by another $4.5 billion. This is yet another face of the flexible federalism the government is always trying to sell us in this House.

The problem is that the only thing that the government has successfully decentralized is its deficit. Obviously, Quebec will not be spared in the federal government's deficit decentralization operation. In the 1996-97 fiscal year, Quebec's transfer payment will be cut by $650 million, thanks to clause 48 of Bill C-76.

For the 1997-98 fiscal year, we are still unsure of how the federal government intends to determine by how much it will cut transfer payments to the provinces. If it decides to continue using the same formula, Quebec's transfer payment will be cut by $1.2 billion.

Because of the pressure that the richest provinces, like Ontario, are exerting, it looks like the federal government may use a new formula based on the proportion of Canada's population living in each of the provinces.

If the federal government decides to use this formula, Quebec will lose $1.9 billion instead of $1.2 billion, an additional shortfall of $700 million. Unfortunately, chances are that it will use the new formula, because the federal government is not in the habit of calling into question an established formula if it does not intend to change it and especially because of the pressure it is currently getting from the provinces that are better off.

Therefore, all told, Bill C-76 will probably cost the Government of Quebec at least $1.85 billion and at the most, $2.55 billion. As I said before, is this not a fine example of flexible federalism, cost-effective federalism?

After reading the provisions of Bill C-76, one can only wonder how competent and responsible the members of the government really are: they are shirking their responsibility to manage the public purse wisely. In fact, can anyone in the House think of anything easier or more convenient than passing the buck to the provinces, as the Liberal government is currently doing, especially to Quebec?

This sad chapter in the life of the federal government's economic and budgetary policy, if indeed it does have one, shows undeniably just how much of a mess the country's finances are in. Therefore, not only has the federal government either put off until later or offloaded onto the provinces the main deficit reducing measures it announced in the last budget, it also is doing nothing about the thorny issue of Canada's debt.

We must realize that every deficit incurred by the federal government simply adds to Canada's humongous debt. The deficit forecast for 1995-96 is $32.7 billion. Even if the government brought its deficit down to zero this year, at the cost of difficult and harrowing sacrifices, the Canadian debt would continue to grown just the same, inexorably, on account of the applicable interest charges.

Because the federal debt is growing almost exponentially, the portion of the budget going to interest payments alone continues to grow, automatically. This year, the government is facing a substantial increase in the interests to be paid on the debt, with interest charges rising from $42 to $50 billion. This means that, if the government were to simply freeze its spending at the current level, its deficit would increase substantially anyway, also adding to the debt.

A government bent on reducing its deficit would therefore have to cut mercilessly in both spending and programs, if only to offset the rise in the deficit attributable to interest charges. In other words, the debt problem would not remain unresolved in spite of the government's efforts.

As we were able to see earlier, the federal government did not have the courage to tackle its own deficit, simply shifting the problem on to the provinces by gradually cutting transfers. To offset this loss of revenue, the provinces will have to cut services, rise taxes or pass the buck themselves to the municipalities.

But finally, it is always the same people footing the bill: the taxpayers.

It was suggested that the Government of Quebec should put its own fiscal house in order before inviting the people of Quebec to give a decision on sovereignty. But one must realize that it will become increasingly difficult for the Quebec government to make ends meet as tax transfers to the provinces shrink. Let us also keep in mind that, at the time of the first referendum on sovereignty, in 1980, the federal debt was $90 billion. It has now grown to nearly $550 billion and should have passed the $800 billion mark by the year 2000.

In 1980, the federalists doomed Quebecers to Gehenna of hell if they dared venture onto the road to sovereignty-association. If Quebec were to become sovereign, these doomwatchers predicted the dollar would be worth 70 cents, interest rates would skyrocket and the debt would reach several hundred billion. But we got all of that while we were within the Canadian federal system. To top it off, the Canadian Constitution was patriated without Quebec's consent, and we have the current Prime Minister of Canada to thank for that.

To conclude, Quebec will not be spared in the federal government's scheme to shovel the Canadian deficit in the provinces' backyards or the other sneaky measures contained in the budget. Today and in the months to come, the people of Quebec will bear the brunt of this budget, at least until they decide to pull out from this unfair and inefficient system, which is moving ever closer to financial disaster, until they decide to assume responsibility for their own future by going the way of sovereignty.

[Philip Mayfield, Reform, Cariboo—Chilcotin, BC]

Mr. Speaker, "there are times in the progress of a people when fundamental changes must be faced, fundamental choices made and a new course charted". With these words the finance minister tabled what has been called the most important budget in Canadian history. He says it is a budget with one objective, to break the back of the deficit and bring our finances under control.

Canadians will have to judge by the minister's own criteria. They will have to judge whether the fundamental challenge of a deficit elimination been faced. Have fundamental choices been made to meet that challenge? Has the new course really been charted toward federal fiscal responsibility? These are questions I will deal with.

First is the question of whether the deficit elimination challenge has been faced. In the dying days of the Trudeau government a budget was tabled with a then unheard of deficit of over $38 billion.

Michael Wilson six years ago said: "We have a serious problem, our large and growing public debt". The Tories had nine years to balance the books but failed to do so at each and every attempt. The closest they came to a balanced budget was $19 billion.

Now the Liberals are back. The finance minister, as his predecessors before him, says the time has come to deal with this deficit crisis. When one looks at his three-year plan, the final goal is not deficit elimination, it is only modest reduction. If the challenge is a balanced budget, and it must be, given today's economic climate, this challenge has not been met.

Second is the question of whether fundamental choices have been made to meet the deficit challenge. There were clear decisions to be made: the status quo or new direction, continued deficit or no deficit, tax hikes or spending cuts.

The bottom line said it all. Program spending has decreased a mere $5.1 billion out of a total of $163.5 billion. That works out to only 4 per cent of program spending or a mere 3 per cent of total spending. These so-called cuts are a drop in the bucket compared with what must be done to bring our finances under control.

At the same time, there are new business taxes, gasoline taxes and new user fees. Clearly the government has not taken decisive action and has not made the fundamental choices Canadians have been demanding.

Third, regarding the question of whether a new course in government spending has been charted in the budget, clearly for the past 20 years federal governments have followed a course leading from one deficit to the next at an accumulative cost of over $548 billion.

Since the government came to power it has followed that exact pattern, predicting deficits past 1997. No new course has been plotted. It is still business as usual with deficits, deficits, deficits.

Several months ago I asked Cariboo-Chilcotin constituents in a householder survey for their thoughts on cutting the deficit. I placed before them the list of cuts the Reform Party presented to the finance committee and asked whether they agreed with this list.

There was overwhelming support for ending regional development programs, privatizing the CBC, stopping the funding for crown corporations, ending multiculturalism and bilingualism funding, immediately stopping support for special interest groups and downsizing the ministries of agriculture, industry, natural resources, and fisheries and oceans. These are the recommendations of my constituents.

Is the budget fair? The finance minister has been quick to stress the budget spreads the burden. No one escaped the pain, he stressed, and the burden has been borne equally.

Is it fair to Canadians? Is it fair to our families? Is it fair to our children? Is it fair to our grandchildren and great grandchildren and future generations to come? The answer on all counts is firmly no, it is not. It is not fair to thousands of civil servants who could lose their jobs based on their race or sex.

According to the minister of intergovernmental affairs cuts will focus on white males in the civil service despite the fact this violates the Charter of Rights and Freedoms. Families will be strained, careers destroyed and the principles of merit ignored, all for the sake of pacifying radical special interest groups.

It is not fair to the grassroots which will continue to be shouted down on the national scene. Funding for special interests, the political fringes of our society, lives on. The radical agendas will continue to be pushed to centre stage while views and opinions of ordinary Canadians will once again be pushed out the exit doors.

It is not fair to young Canadians, our future workers, our future leaders. For the first time in Canadian history young Canadians are facing a future that will bring them less prosperity than their parents or grandparents. It is these young people and not their parents or grandparents who will eventually have to begin paying off a debt that now totals $548 billion.

The finance minister has put off any major cuts for some time in the distant future. It is our children who will have to deal with his indecisiveness with even higher taxes and fewer social programs.

I have often said I did not enter politics for myself but for my children and for their peers across the country. When I graduated from school the opportunities were virtually limitless. When I wanted a job, I picked my field. When I wanted more schooling, admission was both easy and affordable.

I could count on having a good salary to meet my needs and the needs of my wife and family. All that has changed. Young people no longer have their pick of jobs. They have to take what they can get, often piecing together two or three part time jobs to make ends meet.

Tuitions are rapidly rising, enrolment falling and opportunities becoming fewer and farther apart. There are many reasons for these changes such as high payroll taxes, decreasing funding and economic restructuring but it all comes down to one thing, the debt.

As our debt increases over the next three years, our economy will be even more strained to pay ever more interest on our growing debt, meaning our young people will have even fewer opportunities in the years to come. For their sake we have to tackle the deficit now.

The budget has failed on all counts.

The challenge of deficit elimination has not been faced. The fundamental choices Canadians demanded have not been made. A new course towards fiscal responsibility has not been charted, and this budget has not been fair, as the minister claimed.

Canadians are not looking for another Michael Wilson or Don Mazankowski, both of whom drifted from deficit to deficit. They are looking for decisive action to bring our nation's finances back into balance. I hope this finance minister will show more decisiveness next year than he has this year. The window for opportunity is quickly closing.

I am very pleased that the Reform Party has presented an alternative budget, which the Liberal Party has been invited to review, to copy and to use.

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

Mr. Speaker, in the months before this budget was brought down, the Minister of Finance appeared before the finance committee and made a number of statements, some of which were reported on television. One of them was the following, and I quote: "The total debt of Canada's public sector has now reached 100 per cent of the gross domestic product. The interest alone on this debt exceeded $56 billion last year, close to $39 billion of which were paid by the federal government. This amount may well top $44 billion this year. We have reached the point where the interest on the debt is growing faster than the economy. We are in debt over our heads and this cannot go on. The situation is untenable from the point of view of the laws of the financial market and equally untenable under the laws of compound interest".

To conclude in the words of the minister: "It is as if our country were trying to go up the down escalator". We have all seen young boys trying to do this in the subway. They manage quite nicely, but for the average person, it is not easy. I again quote the minister: "The problem is so monumental that we can no longer rely on economic growth for a solution. Why not? Because the deficit itself is dragging down growth. As long as it goes unchecked, too many investments will be stalled at the planning stage, interest rates will remain high, the rate of employment will go down, and future generations will pay the price".

Canada's debt has become so large that the Canadian government is now in the position of having to borrow billions of dollars annually to pay the interest on it. It is no different than the average person who owes the bank money and who, every year, has to go deeper into debt just to pay the interest charges. Clearly, it is a vicious circle.

Canada's debt, which was $90 billion in 1980, will be $548 billion as at March 31, 1995, and it will keep climbing. In 15 years there has been a 509 per cent increase. We know perfectly well that no ordinary citizen would be able to handle an increase in debt of this magnitude, just as we know that there is no company that could either, without soon falling into bankruptcy, and we are equally well aware that countries are no different. In January 1995, the Wall Street Journal , one of the most prestigious newspapers in New York, mentioned that Canada had now gained third-world-country status in terms of its debt, and even indicated that there was a real possibility that it might go bankrupt.

The minister gave us an idea of what that meant, in a document entitled Creating a Healthy Fiscal Climate , which he released in October 1994. In his presentation, the minister said that a powerful thrust of the debt is firmly anchored in the Canadian economy and is hard to correct. As deficits keep accumulating, interest costs also increase, thus perpetuating the vicious circle. The deficits which result from the interest charges on the current debt contribute to increasing that debt, which continues to grow. For several years now, the Canadian economy has not been strong enough to make revenues grow quickly enough to compensate for the rapid increase in interest charges and, as the minister said, it is not expected that this trend will change in the predictable future.

Following this analysis, the minister tabled a budget which seeks to bring the deficit back to 3 per cent of the gross domestic product, by 1996-97, which means that the deficit would go down from 39.7 to 25 billion dollars. In order to reach that target, the minister intends to make cuts of about $13.4 billion, over the next two years.

What does a budget such as this one tell us? First, it tells ordinary Canadians that the national debt increased, but in an abstract manner.

Indeed, for ordinary citizens, a debt of 200, 300 or 500 billion dollars is something abstract if they do not feel it in their pocket book. However, the major change with this budget is that things will now become very concrete. Canadians will start paying off that debt. Massive cuts are anticipated, including in the UI, welfare and health care programs, and students will have to get into debt to go to school.

This morning the hon. member sitting next to me even mentioned that old age pensions are now in jeopardy, this just after the government announced-and this is no laughing matter-a substantial increase of $0.78 per month, which is not even enough to buy a coffee.

The second conclusion to be drawn from this budget is that, regardless of what we do, as the minister himself told us, the debt will continue to rise. Consequently, the budget cuts which

will affect social services in a few months can only increase in the years to come.

The third conclusion essentially applies to Quebec. For the first time in history, Quebecers will realize just how much it costs to be part of Canada. This will be costly and painful.

As you will recall, the Prime Minister's advisor himself recently went to Toronto to tell the Canadian intelligentsia that, the more Quebec would suffer, the more Quebecers would be tempted to stay in the Canadian Confederation. I will not comment on the morality of this statement. I think that it denotes stupidity more than anything else and that it will have exactly the opposite effect.

Of course, the argument is still the same: it is Quebec's fault. If things are going badly in Canada, it is Quebec's fault. The Prime Minister himself, who did not denounce his special adviser's remarks, thereby agreeing that Quebec should be made to suffer, was quoted in the newspapers yesterday or the day before as saying that if Quebecers rejected sovereignty, interest rates would drop by a few points. He was immediately challenged by the real economists in Canada, who found his comments extremely naive.

I wish to remind the Prime Minister of two little events that clearly show that there is no relation whatsoever between the disastrous state of Canadian public finance and Quebec's political role. At a time of great political stability, in the years that followed the rejection of Quebec sovereignty in 1980, Canada experienced the highest interest rates ever, which rose well beyond 20 per cent. Yet, Quebecers had just said Yes to Canada.

Hon. members will also remember 1986. Who was in power at that time? The Quebec Premier was Mr. Bourassa and the Canadian Prime Minister was Mr. Mulroney. This was, of course, a few years before the Meech Lake and Charlottetown failures. The Parti Quebecois was keeping very quiet in its little corner. Some people were even saying that the PQ was dead. The Bloc Quebecois did not exist. The dollar fell to 69 cents US. And it will probably return to that level very soon. I remind hon. members that there was then no link between the very quiet political situation in Quebec and the economic problems.

Of course, they have always said that it was Quebec's fault and they will continue to do so. They are repeating the same arguments they used in 1980. We remember very clearly what Mr. Trudeau told us: "We are putting our seats on the line in Canada. We are putting our seats on the line at the political level so that changes can be made". There was the patriation in 1982, which was never accepted by Quebecers, followed by the Meech Lake and Charlottetown failures.

They also tried to scare Quebecers-now they want to hurt us, but back then they wanted to scare us-by telling them that if they chose sovereignty, they would be up to their necks in debt, unemployment and taxes. We said Yes to Canada at that time and since then the debt has risen from $90 billion to $548 billion, the unemployment rate has gone from 7.5 per cent to almost 10 per cent, the number of welfare recipients has nearly doubled, and taxes have never been so high. And that is only the beginning.

In the end, by staying in the Canadian Confederation, we have experienced all the problems we were afraid would occur if we became a country. And things will get worse. Let me remind the House that the Wall Street Journal said that Canada was heading toward bankruptcy.

We recently held regional commissions on sovereignty, which attracted a large number of participants throughout Quebec. Quebecers submitted numerous briefs saying that they had two options: staying in the Canadian Confederation or making Quebec a country. They mostly said that they wanted more information.

In closing, I think that we should give Quebecers much more information on sovereignty issues, let the Canadian budget produce its effect and reveal exactly how much it costs to be part of Canada. I sincerely believe that when the right time comes, Quebecers will end up choosing the only possible option: making Quebec a country.

[Bob Speller, Liberal, Haldimand—Norfolk, ON]

Mr. Speaker, I would like to take a few moments to talk about the impact of the budget on my riding of Haldimand-Norfolk, and I would also like to talk a bit about agriculture.

We have heard over the last few days statements made by members of Her Majesty's loyal opposition and members of the Reform Party in terms of fairness in the budget. They are trying to suggest that in agriculture the cuts seem to be either in Quebec or in western Canada and that they are not spread fairly across the country.

When the Minister of Finance set out his budget proposals, and when the debates, negotiations and discussions with various groups were occurring beforehand, within this caucus and in talking to constituents in my riding, understanding the significance of the debt and the deficit and the problems we have there, what has been emphasized is the fact that there needs to be fairness. People across the country are prepared to do whatever is necessary to deal with the government's finances, as long as it is shown that what the government does, it does fairly across the country.

Let us take a look at agriculture. There were three significant areas that were cut in agriculture. The dairy subsidy was reduced by 30 per cent over a two-year period, the WGTA was cut, but,

significantly, there was the centralization of research and development projects.

In terms of the dairy subsidy, obviously, given what is happening with the GATT and given the changes within supply management that are required, all dairy farmers realize that there will be changes and that within the next 20 years they will have to develop ways to compete internationally and not only within the Canadian market. This dairy subsidy reduction of 30 per cent is going to be a hit on dairy farmers. Certainly, dairy farmers will have to do their share in bringing down the deficit.

When I talk to the farmers in my riding, and in fact across Canada, most of them are willing to make that sacrifice to help reduce the debt and the deficit. However, they want to make sure that the sacrifice is also being made by other Canadians.

They speak particularly about social policy reform. They want to ensure that our social policy programs are doing what they need to be doing, that they are doing it efficiently, and that they are not just leaving a whole class of people relying on government handouts. They also talk in terms of trying to cut back on some of the spending we do in that area. I think if they see a firm commitment from the minister and the government, they will be more than willing to take a cut in what they are receiving.

We have seen somewhat of a hiatus there. The minister has indicated we will probably come back sometime in the fall when some of the necessary changes will be made.

I had a very big meeting in my riding with a number of concerned people on the whole question of social policy reform. I received a lot of good ideas. I am sure many members on all sides of the House also held these forums. I know my colleague across the way always likes to hold these open public forums. They are a good thing for members of Parliament to do because they give us an opportunity to hear from our constituents on very important subjects with a wide range of diverse ideas.

A lot of dairy farmers who were in attendance were telling me they understood what the government did. They were not particularly happy that it came out of their pockets but they were prepared to take it as long as they saw the government making firm commitments in other areas.

The Reform Party throughout our earlier discussions on the WGTA gave us an indication it wanted us to scrap it. We wanted to make sure, given some of our GATT commitments, there was adjustment available for those farmers and that the system would still work.

I have a number of concerns in that area as chair of the standing committee on agriculture. We got together with all parties. We decided there should be a subcommittee on transportation to look at these issues. Farmers in western Canada and people who rely on the St. Lawrence seaway have a number of concerns. Hopefully the members of Parliament on the subcommittee, chaired by the hon. member for Malpeque, will be able to do something in that area to make sure the concerns of these farmers are taken into consideration and that the minister of agriculture and the Prime Minister hear first hand some of these concerns.

The $1.6 billion payment, essentially a payment over a two or three-year period, is an adjustment period. The farmers I have been talking to are not very happy it is coming out of their area but they are prepared, as are farmers in other parts of the country and all Canadians, to do their share in terms of bringing down the debt and deficit.

That theme was pretty much what I heard in my riding of Haldimand-Norfolk after I went back after the budget and talked to my constituents. Normally after a budget, even as an opposition member, one should receive about 20 or 30 calls. After this budget I received three calls from constituents. I felt this was an acceptance of the fairness of the budget.

After the budget, as I went around to the different events in my riding I began to learn people accepted the budget, grudgingly granted, but they understood the need to deal with the debt and deficit and the need for cuts. They were prepared to go along with it as long as they felt there was to be more and there was a commitment of fiscal responsibility by the government.

I have talked to the Minister of Finance in caucus and know the commitment is there. We have to deal with the fact that 43 per cent or 44 per cent of our debt is controlled outside of the country and our current account deficit is a problem.

The Minister of Finance indicated he will take the tough steps necessary to deal with that problem. It is a problem for all Canadians. It is a problem for my children and children all across the country. It is something they do not look forward to. We will deal with that problem. We will deal with the question of fairness not only in future budgetary expenditures in terms of the country but also in agriculture as we move along with the co-operation of the opposition and the third party to help Canadian farmers in the future deal with the uncertainties of the new reality in world economic trade.

[Bob Ringma, Reform, Nanaimo—Cowichan, BC]

Mr. Speaker, as we are all aware, on February 27 the finance minister brought down his second budget. That document showed how spending is to be reduced by $4 billion, taxes are up by $1.5 billion and the annual projected deficit will be only $32.7 billion; that is, $32 billion deeper in debt.

The document did not show how the government will spend $50 billion to service the debt this year and how our overall debt will climb by more than $100 billion over the term of the Liberal government. Think of it. We are spending $50 billion to service

the debt. How much could we buy in the way of social services or anything else for $50 billion in a year?

The surprisingly mild public reaction toward the budget seems to indicate Canadians do not fully understand the full extent of our financial situation. Do they realize we are $550 billion in debt and by the time the government ends its mandate we will be $650 billion in debt? I do not think it has quite struck home yet.

It is therefore our job as a responsible opposition to tell Canadians all is not well. We must do much more to tackle our crippling debt and deficit situation. The fact our hon. colleague across the way from Haldimand-Norfolk only received two phone calls on this well illustrates this fact. The public is not aware of the severity of the problem.

What can be done? According to the government it is moving as fast as it possibly can to solve the problem. However, if we look closely at this baby step budget we find that is not the case. More can be done.

Look at my area of responsibility, official languages. I can very easily demonstrate how we can save money without sacrificing service to the public. We will look at my little area but this could be multiplied one dozen or two dozen times by other areas, thus illustrating we can find the money.

To be fair to the government, it has moved quietly even in the area of official languages to trim some of the excess spending, but not enough. The estimates show how approximately $50 million has been taken from official languages spending in the Department of Canadian Heritage. Likewise, there is a small reduction in the budget for the commissioner of official languages.

Again, these are only baby steps in the right direction. There are many more areas that can be reduced or eliminated. Funding of special interest groups is a classic example. We are looking at one little area of detail within overall official languages. This year Canadian heritage alone will spend $28.5 million. Where does this money go? About $1 million will go again this year to Alliance Quebec, a so-called English language rights group in Quebec. I say so-called because it is difficult to truly believe this group is doing any meaningful work to preserve English rights in Quebec.

Earlier this week I stood in the House and asked the government why it would give Alliance Quebec $1.2 million when it has been learned $837,000 of that is being spent on wages, while another $95,000 goes to pay for luxury offices in downtown Montreal. At the same time its membership has sunk to an all time low of about 2,500. This figure was disputed on radio this week by Mr. Hamelin, head of Alliance Quebec, who said its numbers have risen to 3,700. Even if they have, this is down from a membership strength of 15,000 or 20,000 some years ago. What is going on?

The government response to my question on the donation to Alliance Quebec was: "It is important the Canadian government supports minority language groups outside and inside Quebec. That is what we are doing. That is what we will continue to do".

If we examine that answer we will quickly discover it does not make any sense. How can anyone claim that lining the pockets of a few well heeled Liberal friends in the Montreal area does anything to support the anglophone community within Quebec? This group spends 75 per cent of its taxpayer supported budget on wages and rent. What can it actually be doing to support the community it purports to represent?

Worse yet, when my office requested this type of financial information from Alliance Quebec and other similar language groups throughout Canada, we were told that information was not public knowledge and therefore was not available to us. We were told to contact Treasury Board if we wanted information. Treasury Board then told us it could only provide the overall grant information which is readily available in public accounts and therefore of little value. For detailed information we were told to contact Canadian heritage. It in turn told us in most cases it did not not have the information and what it had was not available to us.

I have been fighting this situation for a year and a half in the House trying to get some facts on spending of the government and all I get is sandbagging. This is taxpayers money supposedly being spent for the benefit of all Canadians. The people who provide the funds are not allowed to know how they are spent.

It is only through the persistence of a reporter at La Presse that the information on Alliance Quebec was brought to the attention of the public. It takes a reporter to get it out. This is unacceptable.

It is also interesting to note that official languages may well be the only federal program to have totally escaped the scrutiny of the Auditor General. This program has been in place for a quarter of a century and has never been fully audited. What is going on here? Where is this money being spent? What can we eliminate?

Part V of the 1993-94 public accounts which detail funds for professional special services shows almost $9 million spent in the name of official languages. For example, Privy Council, $900,000; communications, $4 million; transport, $340,000; energy, mines and resources, $500,000; external affairs, $255,000; national defence, $1.6 million, to name a few. How these moneys were spent and for what purpose is a mystery.

Similarly, part VIII of the 1993-94 public accounts shows $273 million for official languages transfer payments; over $270 million of that by communications and $2.5 million by employment and immigration. Again, for what purpose? Only

the people who receive the money know for sure and they are not willing to say.

Surely it makes sense to do a comprehensive audit to find out if all these moneys are being spent wisely. The government lacks the will to do so. It is a sacred cow and it will hang on to it.

If we look closely at the budget we find it simply does not do the job. We cannot afford to stroll toward a zero deficit target. The time for serious action is running out. It may be this year.

In conclusion, I urge the government to take a serious look at spending just in my little area alone on official languages in an effort to get on with the job of deficit elimination, which Canadians will support.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, I am pleased to be able to participate in the debate on the budget. I am certain 10 minutes will not be enough to cover all the ground I would like to cover. I will outline in point form some of the major concerns I have with it.

I have concerns about the fairness of the budget. I would like to debate at greater length the question of fairness with the member for Haldimand-Norfolk but I will not have the time to do that.

One of the reasons the budget has been received as well as it has is the fact that the government has given the impression there have been no tax increases. In many respects there were not the kind of tax increases that had been flagged prior to the budget. The trick, which is as old as the hills, is to get people worried about a bunch of measures and then when the measures are not included in the budget, people are relieved.

The fact is that Canadians will have to fork over more out of their own pockets in a variety of ways. It may not come through taxes but it will certainly come from having to spend more money on services that were previously provided by the government, whether it is in the form of user fees for national parks, decreased health care availability or whatever the case may be. We ought not to be under any illusion that Canadians got a free lunch out of the budget. Hardly.

I am concerned about a number of things in the budget. First and foremost in my mind and in the minds of my constituents is the privatization of the Canadian National Railway. This is something, given the location of the main repair shops of CNR in Transcona, in the riding of Winnipeg Transcona, that is of obvious concern.

It is a measure of how far to the ideological right this Parliament and the Liberal Party in particular have swung. We see the Liberal Party bringing in a measure to privatize the CNR which is something that previously would not only have been thought out of character for them but which goes against the promises many Liberal MPs and Liberal candidates made to railroaders in Winnipeg, and to Manitoba as a province, during the election of 1993.

Many people were under the illusion-I was not-in 1993, given some of the things that have been said by the hon. member for Winnipeg South Centre, the Minister of Human Resources Development, that if the Liberals were elected the bleeding of rail jobs away from Winnipeg toward Edmonton and other places would stop and that Winnipeg would be restored as a transportation hub.

The very opposite has happened. The Minister of Transport makes former Tory ministers of transport almost look like friends of railroaders with some of the things that he has said about railroaders and certainly the policies that he seems to be following.

The privatization of CN in the budget is just the final icing on the cake of the things that have been done to rail by the previous Tory government and now by this government. It is a betrayal of Liberal promises and Liberal policy. It shows just how ideologically bent the Liberals are and how, in spite of everything they said in opposition, once they got in government picked up where the Tories left off and accelerated what used to be known as the Mulroney agenda.

With respect to the Canada social transfer and the block funding of all social spending, again it is a total betrayal of the things the Liberal Party has stood for in opposition and previously in government.

Perhaps the Minister of Finance should have waited until May 8 to have given his budget. Then we could have celebrated the 50th anniversary of the end of the second world war and the end of post-war Canada the same day.

That is basically what the budget did. It declared an end to the kind of society we have been able to build up over the last five decades. It is no coincidence that the end to that era comes at a time when the NDP is severely weakened in Parliament.

The government has no pressure from the left, no criticism from the left, no opposition from the left, at least not the kind it used to have. It gets pushed to the right by my Reform colleagues here. The Bloc Quebecois is preoccupied with its own agenda.

The government and the right wing business Liberals who for so long have had to contend with a left wing contingent in their own party, and with the NDP on their left flank, now are having a heyday. The Minister of Finance is one of those right wing Liberals. He is having his heyday.

I do not know what the Prime Minister is doing. He is letting the Minister of Finance do whatever he likes. It does not matter how much it contravenes what the Liberals have said before.

I am particularly concerned about the effect this is going to have on health care. When does it end? When will the Minister of Health and the Prime Minister get up and say to Ralph Klein in Alberta that enough is enough, that the Canada Health Act is going to be enforced, that we are going to have national standards in the country, and that all this talk about enforcing the Canada Health Act flexibly and the other kinds of things that have been spoken about will come to an end.

It is not going to come to an end. It seems to me that the Liberals have decided that the Canada Health Act is passe and that in various ways they are going to allow it to fade away. They are going to permit provinces to experiment with the dismantling of medicare.

This is something I predicted in 1984 in my final speech on the Canada Health Act. I said that if the federal government was not going to sufficiently fund medicare, sooner or later there would be pressures both from the public, from provincial governments and then in turn from the federal government to dismantle medicare.

Medicare has to be adequately funded if it is going to succeed. That is an insight which in some ways others have brought to bear on this debate. It is not just a question of having national standards. One has to have national standards and appropriate funding. If there is not the appropriate funding, for one thing the federal government cannot withdraw that funding in order to enforce standards, and for another people become disillusioned about the health care system if they feel that in spite of the standards it is not the kind of health care system they expect.

With respect to the Crow benefit and its elimination, again it is another blow not just to railways, farmers and railroaders, it is another capitulation on the part of the government to the global opposition to anything that comes in the form of a subsidy. This ideology against subsidies and against taking into account the realities of a country like Canada is something that is very dangerous for us. In many respects, Canada was built along east-west lines against natural north-south forces. If we are going to cut all the things that bind us together east and west and if we are not going to take them into account any more, we are going to end up with an entirely different country.

Maybe that is what the government wants but that is certainly not what its members said in opposition. It is something that they should be held to account for by the Canadian public.

Even in the administration of the elimination of the Crow benefit, I hope the government will soon tell us how it intends to make absolutely sure that it is the producers who receive the money that is going out as compensation for the elimination of the Crow benefit and not landholders, as may well be the case given the current state of the legislation.

It is not enough for the government to say that the Farm Credit Corporation will make sure that producers get it. The government has to make sure that producers get it, no matter who they are, no matter who owns the land that they rent.

My final point is with respect to the deficit. I listened to my Reform colleague talk about the need to get a grip on the deficit and to take the deficit a lot more seriously than the government is doing.

What I would like to see both the Reform Party and the Liberal government take more seriously is the need to address the real causes of the deficit. In the judgment of NDP members, the real causes of the deficit go back to the tax loopholes which were created in the mid-1970s by a Liberal government and to the high real interest rate policy which has been followed in the country for the last 15 years. It is a combination of those tax loopholes and the high interest rate policy that has created the deficit.

It is not social spending. Social spending has not grown in the way which some have suggested. It has not been the cause of the deficit. It may well be that it will have to be part of the solution, in the sense that it is an obvious area to look at, how we spend the money and whether we could spend it more wisely. However, unless we deal with the high real interest rate policy, unless we deal with monetary policy, unless we deal with how we finance the debt, we are going to continue to have the problem. We will continue to pay out $50 billion in interest every year.

If the interest is the problem, let us look at the interest rate policy which creates the interest we have to pay. Let us look at the role of the Bank of Canada and ask if there are not ways in which it could finance a greater portion of the national debt than it does now in the way that it used to. Let us look at the way private banks have been allowed to print and lend money to the government, at a great profit to them and at a great expense to Canadians, without having to put up the appropriate deposits.

[The Deputy Speaker]

I am sorry, the hon. member's time has expired.