Mr. Speaker, I thank you very much for the opportunity to discuss Bill C-76 and the amendments thereto.
I want to make general comments then some specific comments with regard to the amendments.
With regard to the amendments before us that deal with public service measures, we generally support the government's decision to suspend the workforce adjustment directive and eliminate some 45,000 positions in the public service. However, we feel there are some concerns and because of that we have moved Motions 1, 3 and 4.
With regard to our first motion, on clause 3, we are concerned that some employees will be declared surplus and be paid for a period of six months without doing any work. Officials have confirmed to us that this would be possible with the way the bill is written at the present time.
With regard to clause 8, we have concerns that the legislation gives the Public Service Commission too much flexibility in appointing surplus workers to jobs in other departments. We would prefer that the appointments be subject to the competitive process in order to prevent any type of favouritism, cronyism, or unfair competition. We think the commission should be given the power to hold a closed competition confined to surplus employees only.
With regard to clause 8, we are concerned the employment equity programs will be used to further the goals of employment equity during this period of downsizing. As I recall, earlier in this session the minister responsible for the public service mentioned that this would be one of the criteria taken into consideration. We feel that this could happen as a result of people being appointed without competition to jobs that would otherwise be occupied by surplus workers.
Those are the motions that will be looked at with regard to that. My colleague, the critic who is responsible for that in terms of the public service, will be making further comments on those amendments to the House.
I think we have to understand the broader picture and the reason for Bill C-76. Bill C-76 has as its purpose to deal with the fiscal circumstances of Canada. It is to deal with the deficit in some way.
We have to recognize that we have a very serious circumstance. We have said this many times in this House. My hon. colleague from Vancouver points out to me often that every day we have a deficit of some $100 million between the revenue that is available for us to take our responsibilities as a federal government and the expenditures that take place on a daily basis. That is $100 million a day in terms of a deficit. If we put that over a one-year period we have the accumulated deficit of this country, as projected in the current budget for 1995-96, of some $32.7 billion.
If we look at what has happened with regard to the public debt charges during that period of time from 1994-95 to the budget of 1995-96, our debt charges in this country have increased from some $42 billion to $50 billion. They have increased for two very basic reasons. First, the deficit is not being dealt with by this government. It continues to add on to the accumulated debt of the country of some $550 billion today. This is heading toward a major sum. From the government's own figures, it points out that the net public debt by the end of 1995-96 will be some $578 billion and by 1996-97 it is projected to be over $600 billion.
Because of that increased accumulated debt, the interest costs to the Government of Canada continue to increase. This has a major effect on the budget of Canada and the revenue available to administer and take care of the responsibilities that have been delegated to the federal government in this country.
That is certainly one of the factors, the fact that the deficit continues to add to the accumulated debt and that larger accumulated debt creates a larger base on which the interest costs are enormous.
The second factor, which is very obvious to all of us, is the increased interest costs that have occurred during the past year. For example, in the United States the Federal Reserve Bank has increased the interest rates over the last year seven times, and every time the interest rates have increased in the United States it has had a direct effect on the interest rates here in Canada. Over the year, we have had an increase of 3 per cent in interest rates, which has again affected the amount of interest we pay as a government annually.
It is seriously affecting the programs that are to be delivered by the federal government. I have already mentioned that for 1994-95 the cost of our debt charges from the cost of interest was in the $42 billion range. Now in 1995-96 it is projected to be $50 billion. We have had an additional $8 billion of interest costs because of that 3 per cent interest rate increase and also the larger base of debt in this country.
What has that done? It means that in order to try to deal with the deficit we must in some way eliminate expenditures of some $8 billion just to cancel that out. Well, that is not that easy to do. The government has come up with certain measures. For example, it has increased tax revenue by $1.5 billion to $2 billion. Well, that is only 25 per cent of the increased interest costs. Where does the other $6 billion come from?
The government has attempted through other means to secure that expenditure reduction and at the same time in its budget is attempting to reduce the cost of program spending from $118 billion down to $114 billion, a reduction of $4 billion.
If we could have maintained at least the base from which interest is calculated, if we could have stopped the accumulation of debt by eliminating the deficit, we would have had more money to reduce the expenditures of government. There would have been more confidence in the Canadian economy and the interest rates would have been lower because we were balancing the budget or we had a plan to balance the budget.
Missing from the budget is the fact that the Liberal government has not put in place a plan to reduce the deficit from the projected deficit in 1996-97 of $24.3 billion down to zero. It is afraid to take the next step and say to Canadians we are going to take the deficit to zero by this plan. The government is afraid to stick its neck out and make that commitment to Canadians. That is costing us billions of dollars in higher interest rates.
If we had at least held our interest costs in 1995-96 at $42 billion, where they were in 1994-95, rather than the increase of $8 billion I have talked about, we would not have had to reduce our expenditures by $4 billion. We would have had an extra $4 billion to work with. That is what the government should have been looking at.
We can go through all these amendments and all the items we are going to deal with in Bill C-76, but we must get back to the basic problem we are facing. That is, the Government of Canada has not declared to the people that it will balance the budget during the term of this Parliament. It has not clearly said that, and it is incumbent upon them to do so.
Moody's and the Dominion Bond Rating Service have told the Government of Canada clearly: "In order for us to give you a better credit rating, which reflects on interest rates, you must commit to a plan".
As we go through these amendments we must keep in mind the very first item on the agenda, which is dealing with the deficit and stopping the growth of debt, which is destroying the country.