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.