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.